Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
G.R. No. 76265 April 22, 1992
VIRGINIA CALALANG, petitioner,
vs.
REGISTER OF DEEDS OF QUEZON CITY, ADMINISTRATOR OF NATIONAL LAND
TITLES AND DEEDS REGISTRATION ADMINISTRATION, LUCIA DE LA CRUZ,
CONSTANCIO SIMANGAN and IGLESIA NI KRISTO, respondents.
G.R. No. 83280 April 22, 1992
AUGUSTO M. DE LEON, JOSE M. DE CASTRO, JOSE A. PANLILEO, FELICIDAD
VERGARA VDA. DE PINEDA, FERNANDO L. VITUG I, FERNANDO M. VITUG II,
FERNANDO M. VITUG III, FAUSTINO TOBIA, ELENA M. OSTREA and FELISA C.
CRISTOBAL-GENEROSO, petitioners,
vs.
THE HON. COURT OF APPEALS and BISHOP ERAO MANALO, respondents.
GUTIERREZ, JR., J.:
The subject of controversy in these two consolidated petitions is a parcel of land Lot
671-A of the Piedad Estate located in Barrio Culiat, Diliman.
The petitioners are individual lot owners who claim to have bought their respective portions
from Amando Clemente in the 1950's.
Amando Clemente is alleged to be the registered owner of said land evidenced by
Transfer of Certificate Title No. 16212 covering about 81,160 square meters who
converted it into a subdivision known as Clemville Subdivision.
Lot 671-A is actually part of a bigger parcel known as Lot 671 which is claimed by
respondent Iglesia ni Kristo (INK), which bought said property from Lucia dela Cruz in
1975. Dela Cruz was adjudged the rightful owner of Lot 671 in the case of dela Cruz
v. dela Cruz (130 SCRA 666 [1984]). INK began fencing the whole area and placed the
following sign "NO TRESPASSING IGLESIA NI KRISTO PROPERTY SUPREME
COURT CASE NO. 61969, July 25, 1984."
Briefly, the dela Cruz v. dela Cruz case is an action for reconveyance founded on breach
of trust filed by Augustina dela Cruz, et al. against Lucia dela Cruz and INK. Augustina and
her co-plaintiffs charged that the parcel of land purchased by the INK from Lucia dela Cruz
was actually a part of their inheritance share in the estate of their late grandfather,
Policarpio dela Cruz but which, in breach of trust known to the INK, Lucia sold to the latter.
Augustina's suit was originally decided in her favor by the trial court. On appeal to the
Court of Appeals, the judgment was reversed and the questioned sale by Lucia dela Cruz
to the INK was upheld. Consequently, Augustina went to the Supreme Court on a petition
for review on certiorari, docketed as G. R. No. 61969.
On July 25, 1984, the Court rendered a decision in affirming the decision of the Court of
Appeals. The validity of the sale of Lucia to the INK was thereby upheld and the title of INK
to the subject realty (Lot 671) was validated as well.
This Supreme Court decision spawned the two (2) petitions now before us assailing the
validity of Lucia dela Cruz's title over Lot 671 which in turn was sold to INK.
In G.R. No. 76265, petitioner Virginia Calalang alleged that she is the registered owner of
a portion of Lot 671-A (subdivision plan PSD 32221) as evidenced by TCT Nos. 17556,
17564 and 17562. She allegedly came to know of INK'S claim only when a prospective
buyer inspected the land on August 1986 and saw the "no trespassing" sign.
Petitioner Calalang lost no time in inquiring into the status of the land and learned about
the pending consulta case (LRC 1978) filed before the Administrator of the National Land
Titles and Deeds Registration Administration (NLTDRA). This consulta came about when
the Register of Deeds doubted the registrability of the documents presented before it in the
light of his findings that the land affected was covered by two (2) sets of titles issued in the
names of different owners.
On September 9, 1986, the petitioner filed a Motion to Intervene requesting the
Administrator to conduct an investigation of the supposed anomaly committed in
connection with the reconstitution of TCT No. RT-58 in the name of Lucia dela Cruz. This
was denied by the Administrator invoking our ruling in dela Cruz v. dela Cruz to the effect
that TCT RT-58 in the name of respondent Lucia dela Cruz is the valid title. (Rollo, pp. 44-
47) Consequently, a Motion for Reconsideration was filed by herein petitioner but this was
likewise denied by the Administrator on October 20, 1986 on the ground that the issues
raised therein have already been passed upon and that the issues being litigious in nature
cannot be decided in a consulta case "where the only question to be determined is the
registrability of the document presented for registration."
Hence, on October 27, 1986, the petitioner file the instant Special Civil Action
for Certiorari and Prohibition in G.R. No. 76265 against the Administrator of the NLTDRA,
the Register of Deeds of Quezon City and private respondents Lucia dela Cruz,
Constancio Simangan and Iglesia ni Kristo. Lucia dela Cruz and Constancio Simangan
were impleaded as they were predecessors-in-interest of INK.
INK and the Administrator filed their comments on January 5, 1987 and June 29, 1987
respectively. For failure to locate Constancio Simangan's whereabouts despite diligent
efforts and considering further that INK is the indispensable party and the one interested in
upholding the validity of the reconstituted title of respondent Lucia dela Cruz, the petitioner
moved to drop him as respondent. This was granted by the Court in a resolution dated
April 13, 1988. (Rollo, p. 189)
Taking the cue from the Administrator that present certificates of title must be cancelled to
avoid duplication, the Register of Deeds, instead of filing its comment initiated cancellation
proceedings of more than 100 titles, against 81 defendants which included herein
petitioner on the basis of this Court's declaration in the case of dela Cruz that the
reconstituted title of respondent Lucia dela Cruz is the valid title. This petition was filed by

the Office of the Solicitor-General (OSG) on January 5, 1987 with the Regional Trial Court
of Quezon City docketed as Civil Case No. Q-49900.
Consequently, the petitioner moved to dismiss on the ground that the complaint was
premature and maliciously filed with knowledge of the instant petition with this Court. INK,
on the other hand, filed a Motion to Intervene in said case. Claiming ownership over Lot
671, it prayed for damages against some of the defendants namely Augusto de Leon, Jose
M. Panlilio and Felicidad Vda. de Pineda who filed an injunction suit against it (Civil Case
No. Q-45767) with the Regional Trial Court (RTC) of Quezon City on September 12, 1985.
Despite opposition of the petitioner to respondent INK's Motion to Intervene, presiding
Judge Benigno T. Dayaw granted the motion of INK and denied petitioner's Motion to
Dismiss on the ground that the issues raised in the instant petition (G. R. No. 76265) will
not substantially affect said civil case. The subsequent motion for reconsideration filed by
the petitioner was likewise denied considering that no restraining order has been issued
(Rollo, pp. 198-216).
However, instead of filing an answer to the complaint in Civil Case No. Q-49900, the
petitioners filed on July 15, 1988 a supplemental petition before this Court to include as
additional respondent, the Honorable Judge Benigno T. Dayaw and petitioner's children
who were named as defendants in said Civil Case, as additional petitioners. At the same
time the petitioner prayed for a restraining order (Rollo, p.197).
To this supplemental petition, the OSG in behalf of the Republic filed its comment pursuant
to the Court's resolution granting the petitioner's motion for leave to include additional
parties and to admit supplemental petition (Rollo, p. 228).
In the meantime, fire gutted the records of the Register of Deeds in Quezon City, so
respondent Judge required the parties to agree to a stipulation of facts instead of trial.
In G.R. No. 83280, the petitioners alleged that they and/or their predecessors in interest
were issued their corresponding titles to the lots purchased from Amando Clemente in the
1950's yet.
They alleged that they took physical possession of their lots in Clemville Subdivision by
actually occupying the same, declaring them in their names for tax purposes, fencing or
marking them off and entrusting their care to "katiwalas". From the time they acquired their
Torrens Title they and they alone to the exclusion of INK exercised all acts of undisturbed,
peaceful and uninterrupted ownership and possession including the payment of their realty
taxes.
On or about the second week of August, 1985, INK started to enclose the entire Clemville
Subdivision with "sawali" fences with billboards randomly posted which read:
NO TRESPASSING
I.N.C. PROPERTY
SC DECISION
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
2ND DIVISION
G. R. NO. L 61969
JULY 25, 1984
INK also destroyed the concrete/hollow block fence surrounding the lot of petitioner de
Castro and started the construction of housing structures therein. At the same time, it
commenced the delivery of construction materials to the former premises of petitioner
Panlilio to erect a permanent structures of strong materials on it.
Thus, on August 22, 1985, the petitioners filed with the RTC-Branch 101 a petition for
injunction with damages. This case was docketed an Civil Case No. 45767. Later, this
petition was amended to include Elena Ostrea and Feliza C. Cristobal-Generoso as
additional petitioners.
August 25, 1985, presiding Judge Santiago issued a restraining order and set the case for
hearing the writ for preliminary injunction on September 5, 1985.
The September 5 hearing was however, reset to September 19, 1985 with respondent
Erao Manalo volunteering to maintain the status quo until then or until the matter had
been resolved by the trial court.
On September 19, by agreement of the parties and in open court, the Judge issued an
order, granting the parties' motion to enter into a stipulation of facts instead of going on
with the hearing and to maintain the status quo.
In the course of the exchange of pleadings between the parties, the trial judge issued an
Order on December 6, 1985 denying the petitioners' prayer for the issuance of a writ of
preliminary injunction on the grounds that:
From the exchange of written arguments and the authorities cited, it
appears that the petitioners' titles which were issued some ten years
earlier than that of respondent's emanated from a reconstituted TCT
No. RT-52, which covered portion of Lot 671 of the Piedad Estate of
Quezon City. Petitioner's parcels of land are within that estate. This
reconstituted TCT No. RT-52 was the subject of a case, "De la Cruz v.
De la Cruz", 130 SCRA 66 [1984], wherein the Honorable Supreme
Court declared the said reconstituted title null and void.
The principal argument of petitioners that they were not parties thereto
can not be given serious extended discussion as they could acquire no
more rights than the source of their titles. For brevity, at this initial
stage, suffice it to say that under the foregoing discussed
circumstances, the petitioners have not shown a clear and positive right
to a temporary relief. (Emphasis supplied) (Rollo, p. 35)
Assailing this order, the petitioners by way of certiorari elevated the matter to the Court of
Appeals in CA-G.R. SP No. 08146.

On April 9, 1986, the Court of Appeals promulgated a Decision with the following
dispositive portion:
WHEREFORE, the petition is given due course and is hereby
RESOLVED by setting aside the Order dated December 6, 1985 in Civil
Case No. Q-45767 and directing that the application for preliminary
injunctive relief therein be properly heard and evidence for or against
the same be adduced in due course. (Rollo, p. 39)
On February 12, 1987, respondent INK filed with the lower court a motion to dismiss the
petitioners' complaint for injunction on the ground that it does not state a cause of action.
On August 7, 1987, the lower court issued an Order with the following dispositive portion:
WHEREFORE, premises considered, finding respondent's Motion to
Dismiss justified, the instant petition is hereby DISMISSED, with costs
against petitioners. (Rollo, p. 48)
Seeking relief from the dismissal, the petitioners filed the two pleadings, to wit:
1) "Motion for Reconsideration Ad Cautelam" dated September 18,
1987 filed with the RTC, NCR, Branch 101 Quezon City; and
2) "Omnibus Motion Incident to Execution of the Decision dated April 9,
1986" dated September 29, 1987 filed with the Court of Appeals.
On December 10, 1987, the Court of Appeals denied petitioners' Omnibus Motion. The
petitioners' motion for reconsideration was likewise denied in a resolution by the RTC
dated May 4, 1988.
Hence, the instant petition with the following assignment of errors.
THE HONORABLE COURT OF APPEALS, IN ITS DECEMBER 10,
1987 RESOLUTION, ERRED IN HOLDING THAT THE ORDERS OF
DECEMBER 12, 1986 AND AUGUST 7, 1986 RELATE TO
INCIDENTS IN CIVIL CASE NO. 45767 TOTALLY ALIEN TO THE
SUBJECT MATTER OF CA-G.R. SP NO. 08146.
THE HONORABLE COURT OF APPEALS ERRED IN VALIDATING
THE ORDER OF AUGUST 7, 1986. (Rollo, p. 16)
In a resolution dated August 30, 1989, G.R. No. 83280 was consolidated with G.R. No.
76265.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Although other minor issues are involved in these consolidated cases, the principal and
crucial issue that alone needs to be resolved is the applicability of this Court's decision in
the dela Cruz case to these cases now before us.
The petitioners argue that the dela Cruz case could not be applied to them since they were
not parties in that case nor were they ever notified of such case pending between the
parties. The petitioners explained that the de la Cruz case was a case among the heirs of
Policarpio de la Cruz. Since they acquired their properties from an entirely different person,
Amando Clemente and not from any of the heirs of Policarpio de la Cruz, they could not be
considered privies to any of them.
In denying applicability, however, the petitioners assail the Court's ruling that "the
reconstituted title of Lucia dela Cruz over Lot 671 (TCT No. RT 58) was valid. As the
registered and rightful owner, Lucia dela Cruz had the perfect and legal right to sell,
assign, and convert the property to respondent INK who as purchaser for value in good
faith holds the same free from all encumbrances except those noted in said certificate."
With this Court's ruling promulgated in 1984, it is our considered view that the petitioner
can not raise anew the question of ownership of Lucia dela Cruz over Lot 671 which had
been determined by the Court of Appeals and affirmed by the Supreme Court in the dela
Cruz case. Well-settled is the rule enunciated in Church Assistance Program,
Inc. v. Sibulo, 171 SCRA 408 [1989] that:
When a right or fact has been judicially tried and determined by a court
of competent jurisdiction, so long as it remains unreversed, it should be
conclusive upon the parties and those in privity with them in law or
estate.
The Court's ruling has long been final and the issue on ownership of Lot 671 finally
disposed of several years ago. This declaration must be respected and followed in the
instant case applying the principle of res judicata or, otherwise, the rule on conclusiveness
of judgment. The less familiar concept or less terminological usage of res judicata as a rule
on conclusiveness of judgment refers to the situation where the judgment in the prior
action operates as an estoppel only as to the matters actually determined therein or which
were necessarily included therein (De la Cruz v. Court of Appeals, 187 SCRA 165 [1990]).
Inevitably, the dela Cruz ruling should be applied to the present petitions since the facts on
which such decision was predicated continue to be the facts of the case before us now
(See Rivas v. SEC, 190 SCRA 295 [1990]). Even the petitioners substantially adopt the
same findings of facts in their pleadings. The factual inquiry with regards to the history of
Lot 671 has already been laid to rest and may no longer be disturbed. We quote:
The undisputed facts indicate that the parcel of land in question is Lot
671 of the Piedad Estate, GLRO Rec. No. 5975, with an area of 184,
268 square meters, more or less, situated in Barrio Culiat, Quezon
City; that the totality of the Piedad Estate consists of a vast tract of
land, registered on March 12, 1912, in the name of the Philippine
Government, under Original Certificate of Title (OCT) No. 614 of the

Register of Deeds of the Province of Rizal; that when the Piedad Estate
was subdivided (with Lot No. 671 as one of the resulting parcels)
whoever was in possession of a particular lot was given priority and/or
preference in the acquisition thereof provided that the price and the
cost of titling would be paid; that upon such payment, the government
would issue the corresponding certificate of title; that Policarpio dela
Cruz and his wife Luciana Rafael were originally in possession of the
land; that they had three children, namely
(1) Maximo de la Cruz (married to Feliza Yabut);
(2) Filomeno de la Cruz (married to Narcisa Santiago); and
(3) defendant-appellant Lucia de la Cruz (a widow);
that the plaintiffs-appellees herein are the descendants of the two sons
(Maximo and Filomeno) of Policarpio; that on April 25, 1940, Lot
No. 671 was segregated from the totality of the Piedad Estate, covered
by OCT No. 614 and a separate title was issued in the name of
"Eugenia de la Paz, soltera" and "Dorotea de la Cruz, viuda"
(this was Transfer Certificate of Title (TCT) No. 40355 of the Register of
Deeds for the Province of Rizal); that on November 29, 1941, a deed of
sale over Lot No. 671 was executed by Eugenia de la Paz and Dorotea
de la Cruz (the registered owners) in favor of defendant-appellant Lucia
de la Cruz; that said deed of sale was registered with the office of the
Register of Deeds on July 17, 1943 and the corresponding certificate of
title was issued to Lucia de la Cruz; that in 1971, Lucia de la Cruz
obtained from the land registration court a reconstituted title (TCT No.
RT-59 over Lot No. 671), the transfer certificate of title previously
issued to her in 1943 having been lost; that subsequently, Lot No. 671
(this time, already covered by TCT No. RT-58) was subdivided into
three (3) lots, each of which was issued a separate title, as follows:
(a) Lot No. 671-A containing an area of 30,000 square meters and
covered by TCT No. 168320;
(b) Lot No. 671-B, containing an area of 4,268 square meters and
covered by TCT No. 168321; and
(c) Lot No. 671-C, containing an area of 150,000 square meters and
covered by TCT No. 168322;
that meanwhile TCT No. 40355 (already previously issued to and in the
names of Eugenia de la Paz and Dorotea de la Cruz) continued to
exist; that when the title was transferred from the Rizal Registry to the
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Quezon City Registry, from the latter Registry assigned to this TCT a
new number, RT-52; that this same Lot (No. 671) was later subdivided
into two lots, each with a title:
(a) Lot No. 671-A (TCT No. 16212)
(b) Lot No. 671-B (TCT No. 16213)
both in the names of Eugenia de la Paz and Dorotea de la Cruz; that
the second lot (lot No. 671-B, with an area of 103,108 square
meters) was sold on December 17, 1952 to one Narcisa Vda. de
Leon (to whom TCT No. 2009 was later issued); that on May 6,
1964, Narcisa Vda. de Leon transferred the same Lot 671-B to Nieves
Paz Eraa (who was later issued in her own name TCT No. 79971).
The undisputed facts further show that in 1971, Nieves Paz Eraa filed
before the Court of First instance of Quezon City Civil Case No. 16125
for 'quieting of title' against Lucia de la Cruz, et al., praying that TCT
No. RT-58, (the reconstituted title of Lucia de la Cruz), as well as all
titles derived therefrom, be declared null and void; that the case ended
with the parties submitting a compromise agreement with Lucia de la
Cruz, among other things, paying plaintiff Eraa the amount of
P250,000.00 to cover the acquisitive cost of the 103,108 square meters
of land included in the certificate of title of defendant Lucia de la Cruz;
that on July 17, 1975, Lucia de la Cruz sold a portion of Lot No. 671-
C (one of the three portions to which the lot included in RT-58 had been
subdivided, and which portion was covered by TCT No.
168322), consisting of 103,108 square meters to defendant-appellant
Iglesia Ni Cristo, for the amount of P2,108,850.00; that this sale was
later registered in the Registry of Deeds of Quezon City, with a new
title, TCT No. 209554 being issued in the name of the Iglesia Ni Cristo;
that another deed of absolute sale was executed for the remaining
84,356 square meters in favor also of the Iglesia and said sale was
annotated on TCT No. 168322. In view of said sales and the fact that
registration of the involved parcels is now in the name (separately) of
Lucia de la Cruz and the Iglesia Ni Cristo, the present action for
reconveyance with damages was instituted. (Emphasis supplied)
Apparently, there is no mention of Amando Clemente in the above recital of facts. A closer
perusal of the records in G. R. 76265 would, however, reveal that TCT No. 16212 was
issued for Lot 671-A in the name of Amando Clemente on August 9, 1951 per report of the
Acting Administrator of the NLTDRA (Rollo, p. 92). Amando Clemente's TCT No. 16212
emanated from TCT No. 40355 in the name of Eugenia de la Paz and Dorotea dela Cruz.
Thus, Amando Clemente's predecessors-in-interest are Eugenia dela Paz and Dorotea
dela Cruz whom the Court found to have lost their rights over Lot 671 by virtue of the sale
made to Lucia dela Cruz.

The Register of Deeds correctly observed that this is a clear case where there is a
duplication or overlapping of titles issued to different names over the same land which
thereby compelled him to file the consulta case with the NLTDRA:
(1) Lucia dela Cruz's reconstituted title (RT-58) which was divided into 3 Lots, Lot 671-A,
Lot 671-B and Lot 671-C and was subsequently sold to INK;
(2) Eugenia dela Paz and Dorotea dela Cruz's reconstituted title (RT-52) which was
divided into 2 lots, Lot 671-A and Lot 671-B.
Notwithstanding, it is undisputed that Lot 671 was sold to Lucia dela Cruz by Eugenia dela
Paz and Dorotea dela Cruz as evidenced by Entry No. 258, page 7, Vol. 7, Primary Entry
Book of the Registry of Deeds of Manila. (de la Cruz v. de la Cruz, supra, pp. 697-698)
This is a finding which can not be disturbed.
We need not emphasize the fact that the Supreme Court by tradition
and in our system of judicial administration, has the last word on what
the law is. It is the final arbiter of any justiciable controversy. There is
only one Supreme Court from whose decisions all other courts should
take their bearings. Consequently, we cannot and should not review a
case already passed upon by the Highest Tribunal. It is only proper to
allow the case to take its rest. (Church assistance Program, Inc. v.
Sibulo, supra.).
The sale of the land to Lucia dela Cruz and the subsequent registration thereof in the
Primary Book of the Registry of Deeds, Manila constitutes constructive notice to the whole
world. (Heirs of Maria Marasigan v. Intermediate Appellate Court, 152 SCRA 253 [1987];
People v. Reyes, 175 SCRA 597 [1988])
Since it is the act of registration which transfers ownership of the land sold (Government
Service Insurance System v. Court of Appeals, 169 SCRA 244 [1989]). Lot 671 was
already owned by Lucia dela Cruz as early as 1943. Amando Clemente's alleged title
meanwhile which was issued on August 9, 1951 was very much later. Thus, the
petitioners, who merely stepped into the shoes of Amando Clemente cannot claim a better
right over said land. "Prior est temporae, prior est in jura" (he who is first in time is
preferred in right) (Garcia v. Court of Appeals, 95 SCRA 380 [1980]). The fact that Amando
Clemente possessed a certificate of title does not necessarily make him the true owner.
And not being the owner, he cannot transmit any right to nor transfer any title or interest
over the land conveyed (Beaterio del Santisimo Rosario de Molo v. Court of Appeals, 137
SCRA 459 [1985]; Treasurer of the Phil. v. Court of Appeals, 153 SCRA 359 [1987]).
Moreover, the petition for reconstitution of title by Lucia dela Cruz which the court held to
be valid was a proceeding in rem. It is well established that in rem proceedings such as
land registration constitute constructive notice to the whole world. The petitioners cannot
now claim that they were not notified of the reconstitution proceedings over said lot. Under
the facts of the case, the title in the name of Lucia dela Cruz (TCT No. RT 58) has become
indefeasible and incontrovertible.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Likewise, the INK was also issued a Torrens Title over Lot 671 as a result of the sale made
to it by the rightful owner, Lucia dela Cruz in 1975. Under the Torrens System of
registration, the Torrens Title became indefeasible and incontrovertible one year from its
final decree (Tirado v. Sevilla, 188 SCRA 321 [1990]). A Torrens Title is generally a
conclusive evidence of the ownership of the land referred to therein. (Ching v. Court of
Appeals, 181 SCRA 9 [1990]) It is, therefore, too late in the day for the petitioners to
reopen or question the legality of INK's title over Lot 671 at this time.
The petitioners also contend that what INK purchased from Lucia dela Cruz in 1975 was
Lot 671-C-4 LRC 322534 which corresponds roughly to Lot 671-B (Psd-32221) and did not
affect Lot 671-A of Amando Clemente at all. This is, however, belied by the fact that the
sale made by Dorotea dela Cruz to Lucia dela Cruz (as indicated in Entry No. 258) was Lot
671 which was later on conveyed to INK.
In challenging the validity of the reconstitution of Lucia dela Cruz's title, the petitioners are
not alleging fraud, collusion and illegality in the procurement of the certificate of title of
Lucia dela Cruz. It must be recalled that G.R. No. 76265 stemmed merely from
a consulta case with the National Land Titles and Deeds Administration. Undeniably, the
arguments and issues raised by the petitioner require adjudication of facts which, under
the circumstances of this case, we are not prepared to do as this Court is not a trier of
facts. Moreover, the present petition is not the proper remedy in challenging the validity of
certificates of titles since the judicial action required is a direct and not a collateral attack.
(Natalia Realty Corp. v. Vallez, 173 SCRA 534 [1989]).
The Court had this to say:
We note with approval the lower court's patient explanation that, inter
alia the certificate of title issued in the name of the plaintiff in
accordance with the Land Registration Act (Act No. 496) is indefeasible
after the expiration of one year from the entry of the decree of
registration. Under Section 38 thereof, a petition for review of the
decree must be presented within one year after its entry as described
and defined in Section 40 of the same. After the lapse of one year, the
decree of registration becomes incontrovertible and is binding upon and
conclusive against all persons whether or not they were notified of or
participated in the registration proceedings. . . .
Even assuming arguendo that said titles may still be challenged, the
present case does not provide the vehicle for that remedy since the
judicial action required is a direct, and not a collateral attack. In fact,
under the existing law, Section 48 of the Property Registration Decree
expressly provides that a certificate of title cannot be subject to
collateral attack and can be altered, modified or cancelled only in a
direct proceeding in accordance with law. (at p. 542)
In our capacity as the court of last resort, the petitioners try to convince us to look or
inquire into the validity of the reconstitution proceedings initiated by Lucia dela Cruz,
contending that the implementation of de la Cruz ruling would deprive them of their

properties without due process of law. We have looked long and hard into the records of
the case but the facts and circumstances plus law and jurisprudence on the matter do not
warrant such action from the Court. INK's title over Lot 671 which necessarily included Lot
671-A had already become incontrovertible and indefeasible. To reopen or to question the
legality of INK's title would defeat the purpose of our Torrens system which seeks to insure
stability by quieting titled lands and putting to a stop forever any question of the legality of
the registration in the certificate or questions which may arise therefrom. (de la Cruz v. de
la Cruz, supra.) In fairness to INK, as registered owner it is entitled to rest secure in its
land title.
In view of all the foregoing, it would be for the public interest and the maintenance of the
integrity and stability of the Torrens system of land registration that all transfer certificates
of title derived from the reconstituted title of Eugenia dela Paz and Dorotea dela Cruz be
annulled in order to prevent the proliferation of derivative titles which are null and void. The
legality or validity of INK's title over Lot 671 has been settled. The Court has spoken and it
has done so with finality, logically and rightly so as to assure stability in legal relations and
avoid confusion. (see Ver v. Quetulio, 163 SCRA 80 [1988])
WHEREFORE, the petitions in G. R. Nos. 76265 and 83280 are hereby DISMISSED for
lack of merit.
SO ORDERED.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
G.R. Nos. L-21703-04 August 31, 1966
MATEO H. REYES and JUAN H. REYES, petitioners and appellants,
vs.
MATEO RAVAL REYES, respondent and appellee.
Harold M. Hernando for petitioners and appellants.
Rafael Ruiz for respondent and appellee.
REYES, J.B.L., J.:
Direct appeal on pure question of law from an order of the Court of First Instance of Ilocos
Norte, in its Cadastral Cases Nos. 31, L. R. C. Rec. No. 1188, and 42, L. R. C. Rec. No.
1994, denying petitioners' motion to compel respondent to surrender their owners'
duplicates of Original Certificates of Title Nos. 22161 and 8066, as well as from a
subsequent order of the same court, refusing, upon petitioners' motion, to reconsider the
first order of denial.
The undisputed facts are: three brothers, Mateo H., Juan H., and Francisco H., all
surnamed Reyes, are the registered owners of several parcels of land, to wit; Lots Nos.
15891, 15896, 15902 and 15912, of the Laoag (Ilocos Norte) Cadastre, embraced in and
covered by Original Certificate of Title No. 22161, and also Lots Nos. 20481 and 20484, of
the same cadastral survey, embraced in and covered by Original Certificate of Title No.
8066, both of the Registry of Deeds of Ilocos Norte. These titles were issued pursuant to a
decree of registration, dated 31 May 1940.
On 17 July 1962, petitioners Mateo H. Reyes and Juan H. Reyes filed, in the above stated
cadastral cases, a motion for issuance of writs of possession over all the lots covered by
both Certificates of Title above referred to.
Respondent Mateo Raval Reyes opposed the motion, admitting that he is only in
possession of the lots covered by Original Certificate of Title No. 22161, but denying that
he possesses the lots covered by Original Certificate of Title No. 8066; however, he
claimed that he has been in, and is entitled to, the possession thereof (i.e., Lots Nos.
20481 and 20484), having acquired by way of absolute sale (not recorded) from
petitioners' brother, Francisco H. Reyes, the latter's undivided one-third (1/3) share,
interest and participation to these disputed lots.
After due hearing of this appellant, the court a quo issued, on 20 December 1962, the writ
of possession with respect to Lot Nos. 15891 and 15896, which writ was, upon petitioners'
motion for reconsideration, amended, on 7 January 1963, to include all the other lots
covered by both titles.
Respondent did not appeal from this order amending the writ of possession.
Subsequently, petitioners in the above cadastral cases, as plaintiffs, commenced, on 15
January 1963, before the same court of first instance, an ordinary civil action seeking to

recover the products of the disputed lots, or their value, and moral damages against
respondent Mateo Raval Reyes, as defendant. This case was docketed as its Civil Case
No. 3659.
Defendant therein (now respondent M. Raval Reyes) answered the complaint and pleaded
a counterclaim for partition of all the disputed lots, alleging the same ground he had
heretofore raised in his answer and/or opposition to the motion for issuance of writ of
possession, i.e., he is their (plaintiffs') co-owner, he having bought from plaintiffs' brother,
Francisco H. Reyes, the latter's undivided one-third (1/3) share, interest and participation
to these disputed lots.
Pending trial on this ordinary civil case (No. 3659), petitioners presented, on 25 February
1963, in the cadastral cases aforementioned, a motion to compel respondent Mateo Raval
Reyes to surrender and deliver to them the owners' duplicates of Original Certificates of
Title Nos. 22161 and 8066. Respondent opposed this motion.
The court a quo denied petitioners' motion, on the ground that the parcels of land covered
by both titles are subjects of litigation in Civil Case No. 3659 and the same has not yet
been decided on the merits by it. Petitioners subjected the foregoing order to a motion for
reconsideration, but without success; hence, the present appeal.
Petitioners-appellants dispute the above ruling of the trial court contending that, since the
subject matter of Civil Case No. 3659 are not the lots covered by the titles in question but
their products or value, and moral damages, these lots are not in litigation in this ordinary
civil case; and that since respondent had already raised the issue of ownership and
possession of these lots in his opposition to the (petitioners') motion for issuance of writ of
possession and, despite this opposition, the court a quo granted the writ, without any
appeal being taken, respondent is barred and estopped from raising the same issue in the
ordinary civil case, under the principle of res judicata.1wph1.t
On the other hand, respondent-appellee maintains that, having pleaded a counterclaim for
partition of the lots in question in said Civil Case No. 3659, the trial court correctly held that
these lots are subjects of litigation in this ordinary civil case. He also maintains that
petitioners not having impleaded their brother, Francisco H. Reyes, or his heirs, as parties
in their motion for issuance of writ of execution, and because these heirs have not
intervened in this particular incident, the writ of possession issued by the trial court is, at
most, valid only with respect to their (petitioners) undivided two-thirds (2/3) share and
participation in these disputed lots; hence, he concludes that he is not barred and
estopped from raising the issue of ownership and possession of the undivided one-third
(1/3) share and participation of petitioners' brother, Francisco H. Reyes, which share
respondent allegedly bought from the latter.
In their reply brief, petitioners-appellants refute the latter argument of respondent-appellee
by showing that they had previously obtained special authority from the heirs of their
deceased brother to represent them in the proceedings had in the court below.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
The sole issue to be resolved in the instant appeal is: who between petitioners-appellants
or respondent-appellee has a better right to the possession or custody of the disputed
owners' duplicates of certificates of title.
While we agree with the court a quo that the disputed lots are subjects of litigation in Civil
Case No. 3659, it appearing that respondent, as defendant therein, had presented a
counterclaim for partition of the lots covered by the titles, we see no valid and plausible
reason to justify, on this ground, the withholding from the registered owners, such as the
petitioners-appellants herein, the custody and possession of the owners' duplicates of
certificates of title. In a decided case, this Court has already held that the owner of the land
in whose favor and in whose name said land is registered and inscribed in the certificate of
title has a more preferential right to the possession of the owners' duplicate than one
whose name does not appear in the certificate and has yet to establish his right to the
possession thereto. Thus, this Court said:
Como acertadamente dijo el Juzgado, lo unico que se suscita es si Ana Umbao
de Carpio tiene derecho a la possession del duplicado para el dueno del
Certificado de Titulo Original No. 698, con preferencia a la opositora-apelante. A
nuestro juicio, la solucion es clara e ineludible. Hallandose admitido que el
decreto final que se dicto en el expediente catastral en 28 de mayo de 1936, en
relacion con el lote No. 778, fue a favor de Ana Umbao y que el duplicado para
el dueo del Certificado de Titulo Original No. 698 se expidio por el Registrador
de Titulos a favor de la misma es obvious que quien tiene derecho a poseer el
certificado de titulo es ella y no la apelante (art. 41 de la Ley No. 496, tal como
ha sido reformado).
Alega la apelante que ella tiene tanto derecho como la apelada a poseer el titulo
porque el terreno a que se refiere es de la propiedad de las tres hermanas. La
pretension no es meritoria Segun el articulo 41 de la Ley No. 496, conforme ha
sido enmendado, el duplicado para el dueno debe expedirse por el Registrador a
nombre de la persona a cuyo favor se ha decretado el terreno y dispone,
ademas, que dicho duplicado debe entregarsele al dueo inscrito. Si la apelante
cree que tiene derecho a participar en el lote No. 778, como coheredera, debe
ejercitar una accion independiente, encaminada a obtener su participacion. (El
Director de Terrenos contra Abacahin 72 Phil. 326).
It being undisputed that respondent had already availed of an independent civil action to
recover his alleged co-owner's share in the disputed lots by filing a counterclaim for
partition in said Civil Case No. 3659, his rights appear to be amply protected; and
considering that he may also avail of, to better protect his rights thereto, the provision on
notice of lis pendens under Section 24, Rule 14, of the Revised Rules of Court, for the
purpose of recording the fact that the lots covered by the titles in question are litigated in
said Civil Case No. 3659, we again see no justifiable reason for respondent to retain the
custody of the owners' duplicates of certificates of titles.
In view of the above considerations, we deem it unnecessary to pass on the merits of the
second contention of petitioners-appellants.

Wherefore, the orders appealed from should be, as they are hereby, reversed; and, in
accordance with this opinion, respondent Mateo Raval Reyes is hereby ordered to deliver
to petitioners the owners' duplicates of Original Certificates of Title No. 22161 and 8066.
With costs against respondent-appellee, Mateo Raval Reyes.
[G.R. No. 154409. June 21, 2004]
Spouses NOEL and JULIE ABRIGO, petitioners, vs. ROMANA DE VERA, respondent.
DECISION
PANGANIBAN, J.:
Between two buyers of the same immovable property registered under
the Torrens system, the law gives ownership priority to (1) the first registrant in good faith;
(2) then, the first possessor in good faith; and (3) finally, the buyer who in good faith
presents the oldest title. This provision, however, does not apply if the property is not
registered under the Torrens system.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to
set aside the March 21, 2002 Amended Decision[2] and the July 22, 2002 Resolution[3] of
the Court of Appeals (CA) in CA-GR CV No. 62391. The Amended Decision disposed as
follows:
WHEREFORE, the dispositive part of the original DECISION of this case, promulgated on
November 19, 2001, is SET ASIDE and another one is entered AFFIRMING in part
and REVERSING in part the judgment appealed from, as follows:
1. Declaring [Respondent] Romana de Vera the rightful owner and with better
right to possess the property in question, being an innocent purchaser
for value therefor;
2. Declaring Gloria Villafania [liable] to pay the following to [Respondent]
Romana de Vera and to [Petitioner-]Spouses [Noel and Julie] Abrigo, to
wit:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
As to [Respondent] Romana de Vera:
1. P300,000.00 plus 6% per annum as actual damages;
2. P50,000.00 as moral damages;
3. P50,000.00 as exemplary damages;
4. P30,000.00 as attorneys fees; and
5. Cost of suit.
As to [Petitioner-]Spouses [Noel and Julie] Abrigo:
1. P50,000.00 as moral damages;
2. P50,000.00 as exemplary damages;
3. P30,000.00 as attorneys fees;
4. Cost of suit.[4]
The assailed Resolution denied reconsideration.
The Facts
Quoting the trial court, the CA narrated the facts as follows:
As culled from the records, the following are the pertinent antecedents amply summarized
by the trial court:
On May 27, 1993, Gloria Villafania sold a house and lot located at Banaoang, Mangaldan,
Pangasinan and covered by Tax Declaration No. 1406 to Rosenda Tigno-Salazar and
Rosita Cave-Go. The said sale became a subject of a suit for annulment of documents
between the vendor and the vendees.
On December 7, 1993, the Regional Trial Court, Branch 40 of Dagupan City rendered
judgment approving the Compromise Agreement submitted by the parties. In the said
Decision, Gloria Villafania was given one year from the date of the Compromise
Agreement to buy back the house and lot, and failure to do so would mean that the
previous sale in favor of Rosenda Tigno-Salazar and Rosita Cave-Go shall remain valid
and binding and the plaintiff shall voluntarily vacate the premises without need of any
demand. Gloria Villafania failed to buy back the house and lot, so the [vendees] declared
the lot in their name.
Unknown, however to Rosenda Tigno-Salazar and Rosita Cave-Go, Gloria Villafania
obtained a free patent over the parcel of land involved [on March 15, 1988 as evidenced
by OCT No. P-30522]. The said free patent was later on cancelled by TCT No. 212598
on April 11, 1996.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

On October 16, 1997, Rosenda Tigno-Salazar and Rosita Cave-Go, sold the house and lot Petitioners raise for our consideration the issues below:
to the herein [Petitioner-Spouses Noel and Julie Abrigo].
1. Whether or not the deed of sale executed by Gloria Villafania in favor of
On October 23, 1997, Gloria Villafania sold the same house and lot to Romana de Vera x x [R]espondent Romana de Vera is valid.
x. Romana de Vera registered the sale and as a consequence, TCT No. 22515 was issued
in her name.
2. Whether or not the [R]espondent Romana de Vera is a purchaser for value in
good faith.
On November 12, 1997, Romana de Vera filed an action for Forcible Entry and Damages
against [Spouses Noel and Julie Abrigo] before the Municipal Trial Court of Mangaldan, 3. Who between the petitioners and respondent has a better title over the property
Pangasinan docketed as Civil Case No. 1452. On February 25, 1998, the parties therein
in question.[10]
submitted a Motion for Dismissal in view of their agreement in the instant case that neither
of them can physically take possession of the property in question until the instant case is
terminated. Hence the ejectment case was dismissed.[5] In the main, the issues boil down to who between petitioner-spouses and respondent
has a better right to the property.
Thus, on November 21, 1997, [petitioners] filed the instant case [with
the Regional Trial Court of Dagupan City] for the annulment of documents, injunction,
preliminary injunction, restraining order and damages [against respondent and Gloria The Courts Ruling
Villafania].

After the trial on the merits, the lower court rendered the assailed Decision dated January The Petition is bereft of merit.
4, 1999, awarding the properties to [petitioners] as well as damages. Moreover, x x x
Gloria Villafania was ordered to pay [petitioners and private respondent] damages and
attorneys fees.
Main Issue:
Not contented with the assailed Decision, both parties [appealed to the CA].[6] Better Right over the Property

Ruling of the Court of Appeals
In its original Decision promulgated on November 19, 2001, the CA held that a void
title could not give rise to a valid one and hence dismissed the appeal of Private
Respondent Romana de Vera.[7] Since Gloria Villafania had already transferred ownership
to Rosenda Tigno-Salazar and Rosita Cave-Go, the subsequent sale to De Vera was
deemed void.
The CA also dismissed the appeal of Petitioner-Spouses Abrigo and found no
sufficient basis to award them moral and exemplary damages and attorneys fees.
On reconsideration, the CA issued its March 21, 2002 Amended Decision, finding
Respondent De Vera to be a purchaser in good faith and for value. The appellate court
ruled that she had relied in good faith on the Torrens title of her vendor and must thus be
protected.[8]
[9]
Hence, this Petition.
Issues
Petitioners contend that Gloria Villafania could not have transferred the property to
Respondent De Vera because it no longer belonged to her. [11] They further claim that the
sale could not be validated, since respondent was not a purchaser in good faith and for
value.[12]
Law on Double Sale
The present case involves what in legal contemplation was a double sale. On May
27, 1993, Gloria Villafania first sold the disputed property to Rosenda Tigno-Salazar and
Rosita Cave-Go, from whom petitioners, in turn, derived their right. Subsequently,
on October 23, 1997, a second sale was executed by Villafania with Respondent Romana
de Vera.
Article 1544 of the Civil Code states the law on double sale thus:
Art. 1544. If the same thing should have been sold to different vendees, the ownership
shall be transferred to the person who may have first taken possession thereof in good
faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who
in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith
was first in the possession; and, in the absence thereof, to the person who presents the
oldest title, provided there is good faith.
Otherwise stated, the law provides that a double sale of immovables transfers
ownership to (1) the first registrant in good faith; (2) then, the first possessor in good faith;
and (3) finally, the buyer who in good faith presents the oldest title. [13] There is no
ambiguity in the application of this law with respect to lands registered under
the Torrens system.
This principle is in full accord with Section 51 of PD 1529 [14] which provides that no
deed, mortgage, lease or other voluntary instrument -- except a will -- purporting to convey
or affect registered land shall take effect as a conveyance or bind the land until its
registration.[15] Thus, if the sale is not registered, it is binding only between the seller and
the buyer but it does not affect innocent third persons. [16]
In the instant case, both Petitioners Abrigo and respondent registered the sale of the
property. Since neither petitioners nor their predecessors (Tigno-Salazar and Cave-Go)
knew that the property was covered by the Torrens system, they registered their respective
sales under Act 3344.[17] For her part, respondent registered the transaction under
the Torrens system[18] because, during the sale, Villafania had presented the transfer
certificate of title (TCT) covering the property. [19]
Respondent De Vera contends that her registration under the Torrens system should
prevail over that of petitioners who recorded theirs under Act 3344. De Vera relies on the
following insight of Justice Edgardo L. Paras:
x x x If the land is registered under the Land Registration Act (and has therefore a Torrens
Title), and it is sold but the subsequent sale is registered not under the Land Registration
Act but under Act 3344, as amended, such sale is not considered REGISTERED, as the
term is used under Art. 1544 x x x.[20]
We agree with respondent. It is undisputed that Villafania had been issued a free
patent registered as Original Certificate of Title (OCT) No. P-30522.[21] The OCT was later
cancelled by Transfer Certificate of Title (TCT) No. 212598, also in Villafanias name.[22] As
a consequence of the sale, TCT No. 212598 was subsequently cancelled and TCT No.
22515 thereafter issued to respondent.
Soriano v. Heirs of Magali[23] held that registration must be done in the proper registry
in order to bind the land. Since the property in dispute in the present case was already
registered under the Torrens system, petitioners registration of the sale under Act 3344
was not effective for purposes of Article 1544 of the Civil Code.
More recently, in Naawan Community Rural Bank v. Court of Appeals,[24] the Court
upheld the right of a party who had registered the sale of land under the Property
Registration Decree, as opposed to another who had registered a deed of final
conveyance under Act 3344. In that case, the priority in time principle was not applied,
because the land was already covered by the Torrens system at the time the conveyance
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
was registered under Act 3344. For the same reason, inasmuch as the registration of the
sale to Respondent De Vera under the Torrens system was done in good faith, this sale
must be upheld over the sale registered under Act 3344 to Petitioner-Spouses Abrigo.
Radiowealth Finance Co. v. Palileo[25] explained the difference in the rules of
registration under Act 3344 and those under the Torrens system in this wise:
Under Act No. 3344, registration of instruments affecting unregistered lands is without
prejudice to a third party with a better right. The aforequoted phrase has been held by this
Court to mean that the mere registration of a sale in ones favor does not give him any right
over the land if the vendor was not anymore the owner of the land having previously sold
the same to somebody else even if the earlier sale was unrecorded.
The case of Carumba vs. Court of Appeals[26] is a case in point. It was held therein that
Article 1544 of the Civil Code has no application to land not registered under Act No.
496. Like in the case at bar, Carumba dealt with a double sale of the same unregistered
land. The first sale was made by the original owners and was unrecorded while the second
was an execution sale that resulted from a complaint for a sum of money filed against the
said original owners. Applying [Section 33], Rule 39 of the Revised Rules of Court,[27] this
Court held that Article 1544 of the Civil Code cannot be invoked to benefit the purchaser at
the execution sale though the latter was a buyer in good faith and even if this second sale
was registered.It was explained that this is because the purchaser of unregistered land at
a sheriffs execution sale only steps into the shoes of the judgment debtor, and merely
acquires the latters interest in the property sold as of the time the property was levied
upon.
Applying this principle, x x x the execution sale of unregistered land in favor of petitioner is
of no effect because the land no longer belonged to the judgment debtor as of the time of
the said execution sale.[28]
Petitioners cannot validly argue that they were fraudulently misled into believing that
the property was unregistered. A Torrens title, once registered, serves as a notice to the
whole world.[29] All persons must take notice, and no one can plead ignorance of the
registration.[30]
Good-Faith Requirement
We have consistently held that Article 1544 requires the second buyer to acquire the
immovable in good faith and to register it in good faith.[31] Mere registration of title is not
enough; good faith must concur with the registration. [32] We explained the rationale
in Uraca v. Court of Appeals,[33] which we quote:
Under the foregoing, the prior registration of the disputed property by the second buyer
does not by itself confer ownership or a better right over the property. Article 1544 requires
that such registration must be coupled with good faith.Jurisprudence teaches us that (t)he
governing principle is primus tempore, potior jure (first in time, stronger in

right). Knowledge gained by the first buyer of the second sale cannot defeat the first
buyers rights except where the second buyer registers in good faith the second
sale ahead of the first, as provided by the Civil Code. Such knowledge of the first buyer
does not bar her from availing of her rights under the law, among them, to register first her
purchase as against the second buyer. But in converso, knowledge gained by the second
buyer of the first sale defeats his rights even if he is first to register the second sale, since
such knowledge taints his prior registration with bad faith. This is the price exacted by
Article 1544 of the Civil Code for the second buyer being able to displace the first buyer;
that before the second buyer can obtain priority over the first, he must show that he acted
in good faith throughout (i.e. in ignorance of the first sale and of the first buyers rights) ----
from the time of acquisition until the title is transferred to him by registration, or failing
registration, by delivery of possession. [34] (Italics supplied)
Equally important, under Section 44 of PD 1529, every registered owner receiving a
certificate of title pursuant to a decree of registration, and every subsequent purchaser of
registered land taking such certificate for value and in good faith shall hold the same free
from all encumbrances, except those noted and enumerated in the certificate. [35] Thus, a
person dealing with registered land is not required to go behind the registry to determine
the condition of the property, since such condition is noted on the face of the register or
certificate of title.[36] Following this principle, this Court has consistently held as regards
registered land that a purchaser in good faith acquires a good title as against all the
transferees thereof whose rights are not recorded in the Registry of Deeds at the time of
the sale.[37]
Citing Santiago v. Court of Appeals,[38] petitioners contend that their prior registration
under Act 3344 is constructive notice to respondent and negates her good faith at the time
she registered the sale. Santiagoaffirmed the following commentary of Justice Jose C.
Vitug:
The governing principle is prius tempore, potior jure (first in time, stronger in right).
Knowledge by the first buyer of the second sale cannot defeat the first buyer's rights
except when the second buyer first registers in good faith the second sale (Olivares vs.
Gonzales, 159 SCRA 33). Conversely, knowledge gained by the second buyer of the first
sale defeats his rights even if he is first to register, since such knowledge taints his
registration with bad faith (see also Astorga vs. Court of Appeals, G.R. No 58530, 26
December 1984) In Cruz vs. Cabana (G.R. No. 56232, 22 June 1984; 129 SCRA 656), it
was held that it is essential, to merit the protection of Art. 1544, second paragraph, that the
second realty buyer must act in good faith in registering his deed of sale (citing Carbonell
vs. Court of Appeals, 69 SCRA 99, Crisostomo vs. CA, G.R. 95843, 02 September 1992).
xxxxxxxxx
Registration of the second buyer under Act 3344, providing for the registration of all
instruments on land neither covered by the Spanish Mortgage Law nor the Torrens System
(Act 496), cannot improve his standing since Act 3344 itself expresses that registration
thereunder would not prejudice prior rights in good faith (see Carumba vs. Court of
Appeals, 31 SCRA 558). Registration, however, by the first buyer under Act 3344 can
have the effect of constructive notice to the second buyer that can defeat his right
as such buyer in good faith (see Arts. 708-709, Civil Code; see also Revilla vs.
Galindez, 107 Phil. 480; Taguba vs. Peralta, 132 SCRA 700). Art. 1544 has been held to
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
be inapplicable to execution sales of unregistered land, since the purchaser merely steps
into the shoes of the debtor and acquires the latter's interest as of the time the property is
sold (Carumba vs. Court of Appeals, 31 SCRA 558; see also Fabian vs. Smith, Bell & Co.,
8 Phil. 496) or when there is only one sale (Remalante vs. Tibe, 158 SCRA
138).[39] (Emphasis supplied)
Santiago was subsequently applied in Bayoca v. Nogales,[40] which held:
Verily, there is absence of prior registration in good faith by petitioners of the second sale
in their favor. As stated in the Santiago case, registration by the first buyer under Act No.
3344 can have the effect of constructive notice to the second buyer that can defeat his
right as such buyer. On account of the undisputed fact of registration under Act No. 3344
by [the first buyers], necessarily, there is absent good faith in the registration of the sale by
the [second buyers] for which they had been issued certificates of title in their names.
x x x.[41]
Santiago and Bayoca are not in point. In Santiago, the first buyers registered the sale
under the Torrens system, as can be inferred from the issuance of the TCT in their
names.[42] There was no registration under Act 3344. In Bayoca, when the first buyer
registered the sale under Act 3344, the property was still unregistered land. [43] Such
registration was therefore considered effectual.
Furthermore, Revilla and Taguba, which are cited in Santiago, are not on all fours
with the present case. In Revilla, the first buyer did not register the sale. [44] In Taguba,
registration was not an issue.[45]
As can be gathered from the foregoing, constructive notice to the second buyer
through registration under Act 3344 does not apply if the property is registered under
the Torrens system, as in this case.
We quote below the additional commentary of Justice Vitug, which was omitted
in Santiago. This omission was evidently the reason why petitioner misunderstood the
context of the citation therein:
"The registration contemplated under Art. 1544 has been held to refer to registration under
Act 496 Land Registration Act (now PD 1529) which considers the act of registration as the
operative act that binds the land (see Mediante vs. Rosabal, 1 O.G. [12] 900, Garcia vs.
Rosabal, 73 Phil 694). On lands covered by the Torrens System, the purchaser acquires
such rights and interest as they appear in the certificate of title, unaffected by any prior lien
or encumbrance not noted therein. The purchaser is not required to explore farther than
what the Torrens title, upon its face, indicates. The only exception is where the purchaser
has actual knowledge of a flaw or defect in the title of the seller or of such liens or
encumbrances which, as to him, is equivalent to registration (see Sec. 39, Act
496; Bernales vs. IAC, G.R. 75336, 18 October 1988; Hernandez vs. Sales, 69 Phil
744; Tajonera vs. Court of Appeals, L-26677, 27 March 1981),"[46]
Respondent
in Good Faith
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

The Court of Appeals examined the facts to determine whether respondent was an REPUBLIC OF THE PHILIPPINES, G.R. No. 185091
innocent purchaser for value.[47] After its factual findings revealed that Respondent De REPRESENTED BY THE
Vera was in good faith, it explained thus: DEPARTMENT OF EDUCATION
DIVISION OF LIPA CITY (FOR
x x x. Gloria Villafania, [Respondent] De Veras vendor, appears to be the registered PANINSINGIN PRIMARY SCHOOL),
owner. The subject land was, and still is, registered in the name of Gloria Villafania. There Petitioner, Present:
is nothing in her certificate of title and in the circumstances of the transaction or sale which CARPIO, J., Chairperson,
warrant [Respondent] De Vera in supposing that she need[ed] to look beyond the title. She - versus - ABAD,
had no notice of the earlier sale of the land to [petitioners]. She ascertained and verified VILLARAMA, JR.,*
that her vendor was the sole owner and in possession of the subject property by examining PEREZ,** and
her vendors title in the Registry of Deeds and actually going to the premises. There is no MENDOZA, JJ.
evidence in the record showing that when she bought the land on October 23, 1997, she PRIMO MENDOZA and
MARIA LUCERO, Promulgated:
knew or had the slightest notice that the same was under litigation in Civil Case No. D-
10638 of the Regional Trial Court of Dagupan City, Branch 40, between Gloria Villafania Respondents.
August 8, 2010
and [Petitioners] Abrigo. She was not even a party to said case. In sum, she testified
clearly and positively, without any contrary evidence presented by the [petitioners], that
she did not know anything about the earlier sale and claim of the spouses Abrigo, until x --------------------------------------------------------------------------------------- x
after she had bought the same, and only then when she bought the same, and only then
when she brought an ejectment case with the x x x Municipal Court of Mangaldan, known DECISION
as Civil Case No. 1452. To the [Respondent] De Vera, the only legal truth upon which she
had to rely was that the land is registered in the name of Gloria Villafania, her vendor, and
that her title under the law, is absolute and indefeasible. x x x.[48] ABAD, J.:

We find no reason to disturb these findings, which petitioners have not This case is about the propriety of filing an ejectment suit against the
rebutted. Spouses Abrigo base their position only on the general averment that respondent
Government for its failure to acquire ownership of a privately owned property that it had
should have been more vigilant prior to consummating the sale. They argue that had she
inspected the property, she would have found petitioners to be in possession. [49] long used as a school site and to pay just compensation for it.
This argument is contradicted, however, by the spouses own admission that the
parents and the sister of Villafania were still the actual occupants in October 1997, when
Respondent De Vera purchased the property.[50] The family members may reasonably be
assumed to be Villafanias agents, who had not been shown to have notified respondent of The Facts and the Case
the first sale when she conducted an ocular inspection. Thus, good faith on respondents
part stands.
WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs Paninsingin Primary School (PPS) is a public school operated
against petitioners.
by petitioner Republic of the Philippines (the Republic) through the Department of
SO ORDERED.
Education. PPS has been using 1,149 square meters of land in Lipa City, Batangas since

1957 for its school. But the property, a portion of Lots 1923 and 1925, were registered in

the name of respondents Primo and Maria Mendoza (the Mendozas) under Transfer

Certificate of Title (TCT) T-11410.[1]

On March 27, 1962 the Mendozas caused Lots 1923 and 1925 to be

consolidated and subdivided into four lots, as follows:


Lot 1 292 square meters in favor of Claudia Dimayuga
Lot 2 292 square meters in favor of the Mendozas
Lot 3 543 square meters in favor of Gervacio Ronquillo; and
Lot 4 1,149 square meters in favor of the City Government of Lipa[2]
As a result of subdivision, the Register of Deeds partially cancelled TCT T-11410
and issued new titles for Lots 1 and 3 in favor of Dimayuga and Ronquillo, respectively. Lot
2 remained in the name of the Mendozas but no new title was issued in the name of the
City Government of Lipa for Lot 4.[3] Meantime, PPS remained in possession of the
property.
The Republic claimed that, while no title was issued in the name of the City
Government of Lipa, the Mendozas had relinquished to it their right over the school lot as
evidenced by the consolidation and subdivision plan. Further, the property had long been
tax-declared in the name of the City Government and PPS built significant, permanent
improvements on the same. These improvements had also been tax-declared.[4]
The Mendozas claim, on the other hand, that although PPS sought permission from them
to use the property as a school site, they never relinquished their right to it. They allowed
PPS to occupy the property since they had no need for it at that time. Thus, it has
remained registered in their name under the original title, TCT T-11410, which had only
been partially cancelled.
On November 6, 1998 the Mendozas wrote PPS, demanding that it vacate the
disputed property.[5] When PPS declined to do so, on January 12, 1999 the Mendozas filed
a complaint with the Municipal Trial Court in Cities (MTCC) of Lipa City in Civil Case 0002-
99 against PPS for unlawful detainer with application for temporary restraining order and
writ of preliminary injunction.[6]
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
On July 13, 1999 the MTCC rendered a decision, dismissing the complaint on
ground of the Republics immunity from suit.[7] The Mendozas appealed to the Regional
Trial Court (RTC) of Lipa Citywhich ruled that the Republics consent was not necessary
since the action before the MTCC was not against it.[8]
In light of the RTCs decision, the Mendozas filed with the MTCC a motion to
render judgment in the case before it.[9] The MTCC denied the motion, however, saying
that jurisdiction over the case had passed to the RTC upon appeal. [10] Later, the RTC
remanded the case back to the MTCC,[11] which then dismissed the case for insufficiency
of evidence.[12] Consequently, the Mendozas once again appealed to the RTC in Civil Case
2001-0236.
On June 27, 2006 the RTC found in favor of the Mendozas and ordered PPS to
vacate the property. It held that the Mendozas had the better right of possession since they
were its registered owners. PPS, on the other hand, could not produce any document to
prove the transfer of ownership of the land in its favor. [13] PPS moved for reconsideration,
but the RTC denied it.
The Republic, through the Office of the Solicitor General (OSG), appealed the
RTC decision to the Court of Appeals (CA) in CA-G.R. SP 96604 on the grounds that: (1)
the Mendozas were barred by laches from recovering possession of the school lot; (2)
sufficient evidence showed that the Mendozas relinquished ownership of the subject lot to
the City Government of Lipa City for use as school; and (3) Lot 4, Pcs-5019 has long been
declared in the name of the City Government since 1957 for taxation purposes. [14]
In a decision dated February 26, 2008, the CA affirmed the RTC
[15]
decision. Upholding the Torrens system, it emphasized the indefeasibility of
the Mendozas registered title and the imprescriptible nature of their right to eject any
person occupying the property. The CA held that, this being the case, the Republics
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

possession of the property through PPS should be deemed merely a tolerated one that Republic itself admits that no new title was issued to it or to any of its subdivisions for the

could not ripen into ownership. portion that PPS had been occupying since 1957. [19]

The CA also rejected the Republics claim of ownership since it presented no

documentary evidence to prove the transfer of the property in favor of the That the City Government of Lipa tax-declared the property and its improvements

government. Moreover, even assuming that the Mendozas relinquished their right to the in its name cannot defeat the Mendozas title. This Court has allowed tax declarations to

property in 1957 in the governments favor, the latter never took steps to have the title to stand as proof of ownership only in the absence of a certificate of title. [20] Otherwise, they

the property issued in its name or have its right as owner annotated on have little evidentiary weight as proof of ownership. [21]

the Mendozas title. The CA held that, by its omissions, the Republic may be held in

estoppel to claim that the Mendozas were barred by laches from bringing its action. The CA erred, however, in ordering the eviction of PPS from the property that it

With the denial of its motion for reconsideration, the Republic has taken recourse had held as government school site for more than 50 years. The evidence on record

to this Court via petition for review on certiorari under Rule 45. shows that the Mendozas intended to cede the property to the City Government of Lipa

permanently. In fact, they allowed the city to declare the property in its name for tax

The Issue Presented purposes. And when they sought in 1962 to have the bigger lot subdivided into four,

The issue in this case is whether or not the CA erred in holding that the Mendozas earmarked Lot 4, containing 1,149 square meters, for the City Government

the Mendozas were entitled to evict the Republic from the subject property that it had used of Lipa. Under the circumstances, it may be assumed that the Mendozas agreed to

for a public school. transfer ownership of the land to the government, whether to the City Government of Lipa

The Courts Ruling or to the Republic, way back but never got around to do so and the Republic itself

A decree of registration is conclusive upon all persons, including the Government altogether forgot about it. Consequently, the Republic should be deemed entitled to

of the Republic and all its branches, whether or not mentioned by name in the application possession pending the Mendozas formal transfer of ownership to it upon payment of just
[16]
for registration or its notice. Indeed, title to the land, once registered, is compensation.

imprescriptible.[17] No one may acquire it from the registered owner by adverse, open, and The Court holds that, where the owner agrees voluntarily to the taking of his
[18]
notorious possession. Thus, to a registered owner under the Torrens system, the right to property by the government for public use, he thereby waives his right to the institution of a

recover possession of the registered property is equally imprescriptible since possession is formal expropriation proceeding covering such property. Further, as the Court also held

a mere consequence of ownership. in Eusebio v. Luis,[22] the failure for a long time of the owner to question the lack of

expropriation proceedings covering a property that the government had taken constitutes a

Here, the existence and genuineness of the Mendozas title over the property has waiver of his right to gain back possession. The Mendozas remedy is an action for the

not been disputed. While the consolidation and subdivision plan of Lots 1923 and 1925 payment of just compensation, not ejectment.

shows that a 1,149 square meter lot had been designated to the City Government, the
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

[G.R. No. L-7644. November 27, 1956.]

In Republic of the Philippines v. Court of Appeals,[23] the Court affirmed the RTCs
HENRY LITAM, ETC., ET AL., Plaintiffs-Appellants, vs. REMEDIOS R. ESPIRITU, as
power to award just compensation even in the absence of a proper expropriation guardian of the incompetent MARCOSA RIVERA, and ARMINIO
RIVERA, Defendants-Appellees.
proceeding. It held that the RTC can determine just compensation based on the evidence
[G.R. No. L-7645. November 27, 1956]
presented before it in an ordinary civil action for recovery of possession of property or its
IN THE MATTER OF THE INTESTATE OF THE DECEASED RAFAEL LITAM.
value and damages. As to the time when just compensation should be fixed, it is settled GREGORIO DY TAM, Petitioner-Appellant, vs. REMEDIOS R. ESPIRITU, in her
capacity as judicial guardian of the incompetent MARCOSA RIVERA, counter-
that where property was taken without the benefit of expropriation proceedings and its Petitioner, ARMINIO RIVERA, administrator-Appellee.

owner filed an action for recovery of possession before the commencement of

DECISION
expropriation proceedings, it is the value of the property at the time of taking that is
CONCEPCION, J.:
controlling.[24]
This is an appeal from a decision of the Court of First Instance of Rizal in the above
entitled case, which were jointly tried.

Since the MTCC did not have jurisdiction either to evict the Republic from the
land it had taken for public use or to hear and adjudicate the Mendozas right to just
compensation for it, the CA should have ordered the complaint for unlawful detainer
On May 21, 1952, Gregorio Dy Tam instituted Special Proceeding No. 1537 of said court,
entitled In the matter of the Intestate Estate of the Deceased Rafael Litam. The petition
therein filed, dated April 24, 1952, states that Petitioner is the son of Rafael Litam, who
died in Manila on January 10, 1951; chan roblesvirtualawlibrarythat the deceased was
survived by:chanroblesvirtuallawlibrary

dismissed without prejudice to their filing a proper action for recovery of such Li Hong Hap 40 years
Li Ho 37 years
compensation.
Gregorio Dy Tam 33 years
Henry Litam alias Dy Bun Pho 29 years
WHEREFORE, the Court partially GRANTS the petition, REVERSES the
Beatriz Lee Tam alias Lee Giak Ian 27 years
February 26, 2008 decision and the October 20, 2008 resolution of the Court of Appeals in
Elisa Lee Tam alias Lee Giok Bee 25 years
CA-G.R. 96604, and ORDERSthe dismissal of respondents Primo and Maria Mendozas William Litam alias Li Bun Hua 23 years
action for eviction before the Municipal Trial Court in Cities of Lipa City in Civil Case 0002- Luis Litam alias Li Bun Lin 22 years

99 without prejudice to their filing an action for payment of just compensation against the
Republic of the Philippines or, when appropriate, against the City of Lipa.
SO ORDERED.
that the foregoing children of the decedent by a marriage celebrated in China in 1911 with
Sia Khin, now deceased; chan roblesvirtualawlibrarythat after the death of Rafael
Litam, Petitioner and his co-heirs came to know that the decedent had, during the
subsistence of said marriage with Sia Khin, contracted in 1922 in the
Philippines cralaw another marriage with Marcosa Rivera, Filipino citizen; chan
roblesvirtualawlibrarythat the decedent left as his property among others, his one-half
(1/2) share valued at P65,000 in the purported conjugal properties between him and
Marcosa Rivera, which cralaw partnership consisted of the following real property
acquired during the marriage between him and Marcosa Rivera, to
wit:chanroblesvirtuallawlibrary
(1) Three (3) parcels of land covered by Transfer Certificate of Title No. 1228 of the
Registry of Deeds of the province of Pampanga:chanroblesvirtuallawlibrary

(2) One (1) parcel of land covered by Transfer Certificate of Title No. 26011 of the
Registry of Deeds of the province of Bulacan.
and that the decedent had left neither a will nor debt. Petitioner prayed, therefore, that,
after appropriate proceedings, letters of administration be issued to Marcosa Rivera, the
surviving spouse of the decedent. Soon thereafter, Marcosa Rivera filed a counter-
petition:chanroblesvirtuallawlibrary (1) substantially denying the alleged marriage of the
decedent to Sia Khin, as well as the alleged filiation of the persons named in the
petition; chan roblesvirtualawlibrary(2) asserting that the properties described herein are
her paraphernal properties, and that the decedent had left unpaid debts, and certain
properties in Bulan and Casiguran, Sorsogon, and in Virac, Catanduanes, apart from
shares of stock in a private corporation known by the name of Litam Co., Inc.; chan
roblesvirtualawlibraryand (3) praying that her nephew, Arminio Rivera, be appointed
administrator of the intestate estate of the deceased.
In due course, the court granted this petition and letters of administration were issued to
Arminio Rivera, who assumed his duties as such, and, later, submitted an inventory of the
alleged estate of Rafael Litam. Inasmuch as said inventory did not include the properties
mentioned in the petition, dated April 24, 1952, of Gregorio Dy Tam, the latter filed, on
November 29, 1952, a motion for the removal of Rivera as administrator of the
aforementioned estate. This led to a number of incidents hinging on the question whether
said properties belong in common to the decedent and Marcosa Rivera or to the latter
exclusively.
Meanwhile, Remedios R. Espiritu was appointed, in Special Proceeding No. 1709 of the
Court of First Instance of Rizal, guardian of Marcosa Rivera, who had been declared
incompetent. Thereafter, or on April 20, 1953, Gregorio Dy Tam and his alleged brothers
and sisters aforementioned, filed the complaint in Civil Case No. 2071 of the same court,
against Remedios R. Espiritu, as guardian of Marcosa Rivera, and Arminio Rivera. In said
complaint, Plaintiffs therein reproduced substantially the allegations made in the
aforementioned petition of Gregorio Dy Tam dated April 24. 1952, except that the
properties acquired during the existence of marriage between Rafael Litam and Marcosa
Rivera and/or with their joint efforts during the time that they lived as husband and wife
were said to be more than those specified in said petition,
namely:chanroblesvirtuallawlibrary
(1) 3 parcels of land situated in the Municipality of Macabebe, Province of Pampanga,
covered by Transfer Certificate of Title No. 1228 of the Registry of Deeds for the Province
of Pampanga, issued on July 29, 1947;
(2) 2 Parcels of land, together with all buildings and improvements thereon except those
expressly noted in the title as belonging to other persons, situated in the Municipality of
Navotas, Province of Rizal, covered by Transfer Certificate of Title No. 35836 of the
Registry of Deeds for the Province of Rizal, issued on October 4, 1938;
(3) 1 parcel of land situated in the Municipality of Malabon, Province of Rizal, covered by
Transfer Certificate of Title No. 23248 of the Registry of Deeds for the Province of Rizal,
issued on June 12, 1933;
(4) 1 parcel of land situated in Barrio of Kay-Badia, Municipality of Obando, Province of
Bulacan, covered by Transfer Certificate of Title No. 21809 of the Registry of Deeds for the
Province of Bulacan, issued on May 25, 1939;
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
(5) 1 parcel of land (plan psu-93067, swo-16049) situated in Barrio of Quibadia,
Municipality of Obando, Province of Bulacan, covered by Transfer Certificate of Title No.
26011 of the Registry of Deeds for the Province of Bulacan, issued on April 9, 1943;
Other properties are located in Bataan province.
All properties total an assessed value of approximately P150,000.00.
In said complaint, Plaintiffs prayed that the judgment be
rendered:chanroblesvirtuallawlibrary
(1) declaring the aforesaid properties as belonging to the conjugal partnership or tenancy
in common which existed between the deceased Rafael Litam and the incompetent
Marcosa Rivera;
(2) ordering the Defendants to deliver the aforesaid properties to the administration of the
estate of the deceased Rafael Litam (Rule 75, section 2, Rules of Court);
(3) ordering the said Defendants further to render an accounting of the fruits they
collected from the aforesaid properties and to deliver the same to the administration of the
estate of the deceased Rafael Litam;
(4) ordering the said Defendants to pay the administration of the estate of the deceased
Rafael Litam damages in double the value of the fruits mentioned in the preceding
paragraph which they embezzled; chan roblesvirtualawlibraryand
(5) ordering the Defendants to pay the costs. The Plaintiffs further pray for such other
remedy as the Court may deem just and equitable in the premises.
In her answer to the complaint, Marcosa Rivera reiterated, in effect, the allegations in her
counter-petition, dated July 12, 1952, in Special Proceeding No. 1537, and set up some
affirmative and special defenses, as well as a counter-claim for attorneys fees and
damages in the aggregate sum of P110,000.00.
Owning to the identity of the issue raised in said Civil Case No. 2071 and in the
aforementioned incidents in Special Proceeding No. 1537, both were jointly heard. Later
on, the court rendered a decision.
(1) Dismissing Civil Case No. 2071, with costs against the Plaintiffs;
(2) Sentencing the Plaintiff in Civil Case No. 2071, under the Defendants counterclaim,
to pay jointly and severally each of the Defendants the sum of P5,000.00 as actual
damages and P25,000.00 as moral damages;
(3) Declaring that the properties in question, namely:chanroblesvirtuallawlibrary the
fishponds, consisting of three parcels, situated in Macabebe, Pampanga, with Transfer
certificate of Title No. 1228 of the land records of Pampanga, one-half undivided portion of
the fishponds, consisting of two parcels, situated in Navotas, Rizal, covered by Transfer
Certificate of Title No. 35836, the parcel of land with the improvements thereon situated in
Malabon, Rizal, covered by Transfer Certificate of Title No. 23248, both of the land records
of Rizal, and the fishponds, consisting of two parcels, situated in Obando, Bulacan,
covered by Transfer Certificates of Title Nos. 21809 and 26011, both of the land records of
Bulacan, are the exclusive, separate and paraphernal properties of Marcosa Rivera; chan
roblesvirtualawlibraryand

(4) Declaring that the Plaintiffs in Civil Case No. 2071 (who are the same persons alleged
to be children of Rafael Litam in the petition, dated April 24, 1952, filed by the Petitioner in
Sp. Proc. No. 1537) are not the children of the deceased Rafael Litam, and that his only
heir is his surviving wife, Marcosa Rivera.
The two (2) Cases are now before us on appeal taken by the Petitioner in Special
Proceeding No. 1537 and the Plaintiffs in Civil Case No. 2071. The issues for
determination are:chanroblesvirtuallawlibrary (1) Are Appellants the legitimate children of
Rafael Litam? (2) Is Marcosa Rivera the exclusive owner of the properties in question, or
do the same constitute a common property of her and the decedent?
The first issue hinges on whether Rafael Litam and Sia Khin were married in 1911, and
whether Rafael Litam is the father of Appellants herein. In this connection, the lower court
had the following to say:chanroblesvirtuallawlibrary
cralaw the evidence weikhs very heavily in favor of the theory of the Defendants in Civil
Case No. 2071 to the effect that the said deceased Rafael Litam was not married to Sia
Khin and that Plaintiffs, are not the children of the said decedent. The Plaintiffs in Civil
Case No. 2071 and the Petitioner in Sp. Proc. No. 1537 have utterly failed to prove their
alleged status as children of Rafael Litam by a marriage with Sia Khin.
It appears from the evidence presented by the Defendants in civil Case No. 2071 and the
administrator and the counter-Petitioner in Sp. Proc. No. 1537 that there was no such
marriage between the deceased Rafael Litam and Sia Khin and that the Plaintiffs named in
Civil Case No. 2071 are not children of said deceased. The various official and public
documents executed by Rafael Litam himself convincingly show that he had not contracted
any marriage with any person other than Marcosa Rivera, and that he had no child. In the
marriage certificate, (Exhibit 55) it was clearly stated that he was single when he married
Marcosa Rivera on June 10, 1922. In the sworn application for alien certificate of
registration dated July 7, 1950 (Exhibit 1), Rafael Litam unequivocably declared under oath
that he had no child. In the several other documents executed by him and presented in
evidence, (Exhibits 19, 21, 22, 23, 46 and 46-A) Rafael Litam had consistently referred to
Marcosa Rivera alone as his wife; chan roblesvirtualawlibraryhe had never mentioned of
Sia Khin as his wife, or of his alleged children.
The witnesses presented by the Defendants in Civil Case No. 2071 and the administrator
and counter Petitioner in Sp. Proc. No. 1537 positively testified to the effect that they know
that Rafael Litam did not have any child, nor was he married with Sia Khin. An impartial
and disinterested witness, Felipe Cruz, likewise testified that he has known Rafael Litam
even before his marriage with Marcosa Rivera and that said Rafael Litam did not have any
child.
On the other hand, the Plaintiffs in Civil Case No. 2071 and the Petitioner in Sp. Proc. No.
1537 presented in support of their theory the testimony of their lone witness, Luis Litam,
and certain documentary evidence. It is noteworthy that the said Plaintiffs and
said Petitioner did not present in evidence the marriage certificate of Rafael Litam and Sia
Khin, which in the opinion of the Court, is the competent and best evidence of the alleged
marriage between them. No explanation has been given for the non-presentation of said
marriage certificate, nor has there been any showing of its loss. Neither have
said Plaintiffs and said Petitioner presented any competent secondary evidence of the
supposed marriage.
The testimony of the lone witness, Luis Litam, cannot be given any credence and value at
all. His testimony is mostly hearsay, as according to him, he was merely informed by
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Rafael Litam of the latters supposed marriage with Sia Khin. His testimony is
uncorroborated. The court noticed that the said witness was only 22 years old when he
testified, and it appears in the petition filed by the Petitioner in Sp. Proc. No. 1537 that said
witness is the youngest of all the alleged eight children of Rafael Litam. The Court is at a
loss to understand why one or some of the older alleged children of Rafael Litam were not
presented as witnesses in view of the unreliable testimony of Luis Litam, and considering
that older persons are better qualified to testify on the matters sought to be proved which
allegedly happened a long time ago.
The birth certificate presented by the Plaintiff in Civil Case No. 2071 and Petitioner in Sp.
Proc. No. 1537 cannot be given even little consideration, because the name of the father
of the children appearing therein is not Rafael Litam, but different persons. It is very
significant to note that the names of the father of the persons appearing in said birth
certificates are Dy Tham, Li Tam, Lee Tham, Rafael Dy Tam, and that said persons were
born in different places, some in Amoy, China, another Fukien, China, and the other in
Limtao, China. It also appears in said birth certificates that the childrens mothers named
therein are different, some being Sia Khim, others Sia Quien, the other Sia Khun, and still
another Sia Kian. These documents do not establish the identity of the deceased Rafael
Litam and the persons named therein as father. Besides, it does not appear in the said
certificates of birth that Rafael Litam had in any manner intervened in the preparation and
filing thereof.
The other documentary evidence presented by the said Plaintiffs and Petitioner are
entirely immaterial and highly insufficient to prove the alleged marriage between the
deceased Rafael Litam and Sia Khin and the alleged statue of the Plaintiffs as children of
said decedent.
It is, therefore, the finding of this Court that the Plaintiffs named in Civil Case No. 2071 are
not heirs of the said decedent, his only heir being his surviving wife, Marcosa Rivera.
(Emphasis ours.)
The findings of fact thus made in the decision appealed from are borne out by the records
and the conclusion drawn from said facts is, to our mind, substantially correct.
Appellants evidence on this point consists of the testimony of Appellant Li Bun Lin, who
said that he is, also known as Luis Litam; chan roblesvirtualawlibrarythat his co-
Appellants are his brothers and sisters; chan roblesvirtualawlibrarythat their parents are
the decedent and Sia Khin, who were married in China in 1911; chan
roblesvirtualawlibraryand that Sia Khin died in Manila during the Japanese occupation. He
likewise, identified several pictures, marked Exhibits I to S, which were claimed to be
family portraits, but the lower court rejected their admission in evidence. Although we
agree with herein Appellants that this was an error, it is clear to us that said pictures and
the testimony of Luis Litam, as well as the other evidence adverted to in the above-quoted
portion of the decision appealed from, are far from sufficient to outweigh, or even offset,
the evidence in favor of the Appellees.
It should be noted that the decedent had admittedly married Marcosa Rivera in 1922. In
the very petition of Appellant Gregorio Dy Tam, in Special Proceeding No. 1537, dated
April 24, 1952, he alleged that Marcosa Rivera is the surviving spouse of the decedent. In
their complaint in Civil Case No. 2071, Appellants specifically admitted and averred the
existence of the marriage between said Rafael Litam and Marcosa Rivera which would
have been void ab initio, and, hence, inexistent legally, if Appellants pretense were true or
they believed it to be so and that they had lived as husband and wife. Again, although

Gregorio Dy Tam, asserted, in his aforementioned petition, that he and his co-heirs came
to know about the marriage of the decedent and Marcosa Rivera after the death of Rafael
Litam, the very testimony of Li Bun Lin, as witness for the Appellants, show, beyond
doubt, that said Appellants knew, during the lifetime of Rafael Litam that he and Marcosa
Rivera were living in Malabon, Rizal, openly and publicly, as husband and wife, and
regarded her as his lawful wife. Indeed, in the course of his testimony, said Li Bun Lin
alluded to her as his mother. In other words, aside from the circumstance that the
wedding and marital life of Marcosa Rivera and Rafael Litam is undisputed, it is, also, an
established fact that they had the general reputation of being legally married and were so
regarded by the community and by Appellants herein, during the lifetime of Rafael Litam.
Upon the other hand, Appellants maintain, in effect, that Rafael Litam was guilty of the
crime of bigamy; chan roblesvirtualawlibrarythat he had, likewise, willfully and maliciously
falsified public and official documents; chan roblesvirtualawlibraryand that,
although Appellants and Sia Khin were living in Manila and Marcosa Rivera
whom Appellants knew resided only a few kilometers away, in Malabon, Rizal where
Rafael Litam returned daily, after attending to his business in Manila, the decedent had
succeeded, for about thirty (30) years, in keeping each party in complete ignorance of the
nature of his alleged relations with the other. Apart from the highly improbable nature of
the last part of Appellants pretense, it is obvious that the same cannot be sustained unless
the evidence in support thereof is of the strongest possible kind, not only because it entails
the commission by Rafael Litam of grave criminal offenses which are derogatory to his
honor, but, also, because death has sealed his lips, thus depriving him of the most
effective means of defense. The proof for Appellants herein does not satisfy such
requirement.
As regards the title to the properties in dispute, the evidence thereon was analyzed by the
lower court in the following language:chanroblesvirtuallawlibrary
It has been established by the evidence that the properties in question were bought by
Marcosa Rivera with her separate and exclusive money. The fishponds situated in
Obando, Bulacan, covered by Transfer Certificate of Title Nos. 21809 and 26011, the one-
half (1/2) undivided portion of the fishponds situated in Navotas, Rizal with Transfer
Certificate of Title No. 35836, and the property situated in Hulong-Duhat, Malabon, Rizal,
with Transfer Certificate of Title No. 23248 were all purchased by Marcosa Rivera with the
money she earned and accumulated while she was still single; chan
roblesvirtualawlibrarywhile the fishponds situated in Macabebe, Pampanga with Transfer
Certificate of Title No. 1228 were purchased by her with the money she inherited from her
late sister, Rafaela Rivera and with the money she received from the proceeds of the sale
of the pieces of jewelry she inherited from her father Eduardo Rivera and her sister
Rafaela Rivera. The properties in question, having been bought by Marcosa Rivera,
although during her marriage with Rafael Litam, with her exclusive and separate money,
said properties are undeniably her paraphernal properties. (Art. 1396, Spanish Civil Code,
which is the same as Art. 148 of the Civil Code of the Phil.)
Great importance should be given to the documentary evidence,
vis:chanroblesvirtuallawlibrary Exhibits 21, 22, 23, 19, 46 and 46-A, presented by
the Defendants, in Civil Case No. 2071 and the administrator and counter- Petitioner in Sp.
Proc. No. 1537, which prove beyond peradventure of any doubt that the properties in
question are the paraphernal properties of Marcosa Rivera. In Exhibit 21, Rafael Litam
unequivocably declared under his oath that the money paid by Marcosa Rivera for the
fishponds in Obando, Bulacan was her exclusive and separate money which was earned
by her while she was still single. In Exhibits 22 and 23, both dated June 16, 1947, same
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Rafael Litam, also under oath, acknowledge the fact that the sums of P13,000.00 and
P10,000.00 loaned by Marcosa Rivera to the spouses Catalino Pascual and Juliana
Pascual, and to Juliana Pascual, respectively, are the separate and exclusive money of
Marcosa Rivera, in which money Rafael Litam had no interest whatsoever. In Exhibit 19,
same Rafael Litam acknowledged the fact that he had obtained, before the outbreak of the
second world war, from Marcosa Rivera the sum of P135,000.00 which belongs
exclusively to the latter, and that after the liberation, or more specifically, on January 4,
1946, he stole from Marcosa Rivera the further sum of P62,000.00, also belonging
exclusively to the latter, which amounts, totalling P197,000.00, exclusive of interests, have
not, according to the evidence, been paid to her up to the present. In Exhibits 46 and 46-A,
it was acknowledged by Rafael Litam that he had not given any money to his wife,
Marcosa Rivera, and that they have actually adopted a system of separation of property,
each of them not having any interest or participation whatsoever in the property of the
other. These declarations and admission of fact made by Rafael Litam against his interest
are binding upon him, his heirs and successors in interests and third persons as well.
(Secs. 7 & 29, Rule 123, Rules of Court).
The finding of this Court that the properties in question are paraphernal properties of
Marcosa Rivera, having been bought by her with her separate and exclusive money, is
further strengthened by the fact that, as it is clearly disclosed by the evidence when
Marcosa Rivera married Rafael Litam in 1922, she was already rich, she having already
earned and saved money as consignataria while she was still single. It also appears that
she was born of a rich family, her father, Eduardo Rivera, being the owner of fishponds,
commercial and residential lands and buildings, (Exhibits 5 to 18, inclusive), with an
assessed value of around P150,000.00 (Exhibits 25 and 42, inclusive), now worth
approximately a million pesos, and most of which properties as may be seen from the
certificates of title were acquired by him way back in the years 1916 and 1919. When
Eduardo Rivera died on February 5, 1942, his cash and jewelry were inherited by his
eldest daughter, Rafaela Rivera, and when the latter died single on July 2, 1943, Marcosa
Rivera inherited her cash amounting to P150,000.00, Philippine currency, and and her
pieces of jewelry. It is with this amount and with the proceeds of the sale of some of said
pieces of jewelry that Marcosa Rivera purchased the fishponds in question, situated in
Macabebe, Pampanga.
On the other hand, it appears from the evidence that when Rafael Litam was on June 10,
1922, married to Marcosa Rivera, he was poor. He had to borrow from Marcosa Rivera,
the sum of P135,000.00 belonging exclusively to her before the outbreak of the war, and to
steal from her further sum of P62,000.00 after the liberation (Exhibit 10). The said amounts
totalling P197,000.00, exclusive of the stipulated interests, according to the evidence, have
not been paid to Marcosa Rivera up to the present. Rafael Litam did not contribute any
amount of money or labor to the properties in question, as he and Marcosa Rivera
maintained an absolute separation of property (Exhibits 46 and 46-A). Besides, during his
lifetime he used to go his office in Manila everyday.
Another circumstance which clearly proves that the properties in question belong
exclusively to Marcosa Rivera is the established fact that before she became incompetent
sometime in the early part of the year, 1953, she had been administering said properties,
to the exclusion of Rafael Litam. In fact, as may be seen from the very documentary
evidence (Exhibit EE, same as Nxh. 50) presented by the Plaintiffs in Civil Case No. 2071
themselves and Petitioner in Sp. Proc. No. 1537, she alone leased the properties in
question, situated in Macabebe, Pampanga, and the corresponding lease contract, dated
July 13, 1948 was signed by her as lessor and by Rafael Suarez, Jr. as lessees.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Furthermore, the properties in question have been declared in the name of Marcosa
Rivera alone, and she alone pays the real estate taxes due thereon. (Exhibits 43, 44 & 45.)
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
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
above mentioned titles are merely descriptive of the civil status of Marcosa Rivera, the
registered owner of the properties covered by said titles.
On the other hand, the evidence presented by the Plaintiffs in Civil Case No. 2071
and Petitioner in Sp. Proc. No. 1537 in support of their contention that the properties in
question are conjugal is, in the mind of the Court, very weak, unreliable, and mostly
incompetent, and cannot overcome the clear, convincing and almost conclusive proofs
presented by the opposite party. Scant or no consideration at all could be given by the
Court to the immaterial, incompetent and unbelievable testimonies of the witnesses
presented by the said Plaintiffs and Petitioners. The disputable presumption of law that the
properties acquired during the marriage are conjugal properties, upon which legal
presumption said Plaintiffs and Petitioner mainly rely has been decisively overcome by the
overwhelming preponderance of evidence adduced in these cases that the properties in
question are the paraphernal properties of Marcosa Rivera. (Emphasis ours.)
agricultural lands, except by succession. Apart from being based, solely, upon a surmise,
without any evidentiary support, this pretense is refuted by the fact that said residential
property in Hulong-Duhat, Malabon, Rizal, was acquired on April 12, 1933, or prior to the
adoption of our Constitution (see Exhibits Z and AA). Her transactions subsequently
thereto, merely followed, therefore, the pattern of her activities before the drafting of said
fundamental law.
This notwithstanding, we do not believe that Appellants should be sentenced to pay
damages. The petition of Gregorio Dy Tam in Special Proceeding No. 1537 and the
complaint in Civil Case No. 2071 contain nothing derogatory to the good name or
reputation of the herein Appellees. On the contrary, it may be surmised from said
pleadings that Marcosa Rivera had no knowledge of the alleged previous marriage of the
decedent to Sia Khin. Moreover, the records do not show that Appellants have acted in
bad faith.
Likewise, we are of the opinion that the lower court should not have declared, in the
decision appealed from, that Marcosa Rivera is the only heir of the decedent, for such
declaration is improper in Civil Case No. 2071, it being within the exclusive competence of
the court in Special Proceeding No. 1537, in which it is not as yet, in issue, and, will not be,
ordinarily, in issue until the presentation of the project of partition.
Wherefore, with the elimination of the award for damages in favor of the herein Appellees,
and of said declaration of heirship, the decision appealed from is hereby affirmed in all
other respects, with costs against the Appellants. It is SO ORDERED.

Appellants counsel assail the decision appealed from upon the ground that the lower court
had been partial to the Appellees and had not accorded to the Appellants a fair and just
hearing.
As above pointed out, His Honor the trial Judge could have been, and should have been,
more liberal in the reception of evidence. Appellants witnesses (Li Bun Lin, Dominador
Gadi, Benigno Musni and Rafael B. Suarez) should have been allowed to testify on the
alleged title of Rafael Litam to certain properties and on his alleged reasons for the
language used in the public and official documents relied upon by the Appellees. However,
it is apparent to us that said evidence cannot affect the decision in these cases.
The evidenciary value of the testimony of said witnesses would have depended mainly
upon their individual appraisal of certain facts, upon their respective inferences therefrom
and their biases or view points, and upon a number of other factors affecting their
credibility. At best, said testimony could not possibly prevail over the repeated admissions
made by the decedent against his own interest in Exhibits 19, 21, 22, 23, 46 and 46-A
(adverted to in the abovequoted portion of the decision appealed from), which admissions
are corroborated by the fact that the deceased father of Marcosa Rivera was well to
do; chan roblesvirtualawlibrarythat aside from her share in his estate, she had, likewise,
inherited from a sister who died single and without issue; chan roblesvirtualawlibrarythat
the lands in dispute were registered, and some were, also, leased, in her name, instead of
hers and that of the decedent; chan roblesvirtualawlibraryand that the latter lived in her
house in Malabon, Rizal.
Appellants contend that the transactions covered by said Exhibits 19, 21 to 23 and 46 and
46-A, as well as by the other deeds referred to in the decision appealed from, were caused
to be made in the name of Marcosa Rivera, to the exclusion of her husband, in order to
evade the constitutional provision disqualifying foreigners from the acquisition of private

G.R. No. 184148 June 9, 2014
NORA B. CALALANG-PARULAN and ELVIRA B. CALALANG, Petitioners,
vs.
ROSARIO CALALANG-GARCIA, LEONORA CALALANG-SABILE, and CARLITO S.
CALALANG, Respondents.
DECISION
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari assailing the Decision 1 dated December 21,
2007 and Resolution2dated July 25, 2008 of the Thirteenth Division of the Court of Appeals
(CA) in CA-G.R. CV No. 72531. The CA modified the Decision3 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 Complaint4 for Annulment of Sale and Reconveyance of Property filed with the RTC of
Malolos, Bulacan on June 10, 1991, the respondents Rosario Calalang-Garcia, 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.
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 above-mentioned 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. P-28715 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 Sale6 executed by both Pedro Calalang and Elvira B.
Calalang. Accordingly, the Register of Deeds of Bulacan cancelled OCT No. P-2871 and
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
issued Transfer Certificate of Title (TCT) No. 283321 in the name of Nora B. Calalang-
Parulan. 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. 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: 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 50,000.00 for moral
damages; 50,000.00 for attorneys fees and another 50,000.00 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 December 21, 2007. The dispositive portion of the CA
decision reads,
WHEREFORE, in light of the foregoing premises, the Decision dated July 10, 2001of 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 one half(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 50,000.00 for moral
damages; 50,000.00 for attorneys fees and another 50,000.00 for litigation
expenses.
3. Dismissing the defendants counterclaims.
With costs against the defendants.
SO ORDERED.
10
SO ORDERED.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
The CA reversed the factual findings of the trial court and held that Pedro Calalang was
the sole and exclusive owner of 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 Calalang-Garcia, 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. Calalang-Parulan 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 in1984 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 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. Calalang-Parulan.
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.
P-2871 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 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 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.1wphi1
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
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
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
above mentioned 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. Calalang-Parulan 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. Manuel Uy and Sons, Inc., 19 we
proclaimed the fundamental tenets of succession:
The principle of transmission as of the time of the predecessor's 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 in officiousness of the donation inter vivas
(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 in officious donation inter vivas), 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 is GRANTED. The Decision dated
December 21, 2007 and Resolution dated July 25, 2008 of the Thirteenth Division of the
Court of Appeals in CA-G.R. CV No. 72531 are REVERSED 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.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
G.R. No. 159310 February 24, 2009
CAMILO F. BORROMEO, Petitioner,
vs.
ANTONIETTA O. DESCALLAR, Respondent.
DECISION
PUNO, C.J.:
What are the rights of an alien (and his successor-in-interest) who acquired real properties
in the country as against his former Filipina girlfriend in whose sole name the properties
were registered under the Torrens system?
The facts are as follows:
Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983 after he was assigned by
his employer, Simmering-Graz Panker A.G., an Austrian company, to work at a project in
Mindoro. In 1984, he transferred to Cebu and worked at the Naga II Project of the National
Power Corporation. There, he met respondent Antonietta Opalla-Descallar, a separated
mother of two boys who was working as a waitress at St. Moritz Hotel. Jambrich
befriended respondent and asked her to tutor him in English. In dire need of additional
income to support her children, respondent agreed. The tutorials were held in Antoniettas
residence at a squatters area in Gorordo Avenue.
Jambrich and respondent fell in love and decided to live together in a rented house in
Hernan Cortes, Mandaue City. Later, they transferred to their own house and lots at Agro-
Macro Subdivision, Cabancalan, Mandaue City. In the Contracts to Sell dated November
18, 19851 and March 10, 19862 covering the properties, Jambrich and respondent were
referred to as the buyers. A Deed of Absolute Sale dated November 16, 1987 3 was
likewise issued in their favor. However, when the Deed of Absolute Sale was presented for
registration before the Register of Deeds, registration was refused on the ground that
Jambrich was an alien and could not acquire alienable lands of the public domain.
Consequently, Jambrichs name was erased from the document. But it could be noted that
his signature remained on the left hand margin of page 1, beside respondents signature
as buyer on page 3, and at the bottom of page 4 which is the last page. Transfer
Certificate of Title (TCT) Nos. 24790, 24791 and 24792 over the properties were issued in
respondents name alone.
Jambrich also formally adopted respondents two sons in Sp. Proc. No. 39-MAN,4 and per
Decision of the Regional Trial Court of Mandaue City dated May 5, 1988. 5
However, the idyll lasted only until April 1991. By then, respondent found a new boyfriend
while Jambrich began to live with another woman in Danao City. Jambrich supported
respondents sons for only two months after the break up.

Jambrich met petitioner Camilo F. Borromeo sometime in 1986. Petitioner was engaged in
the real estate business. He also built and repaired speedboats as a hobby. In 1989,
Jambrich purchased an engine and some accessories for his boat from petitioner, for
which he became indebted to the latter for about 150,000.00. To pay for his debt, he sold
his rights and interests in the Agro-Macro properties to petitioner for 250,000, as
evidenced by a "Deed of Absolute Sale/Assignment." 6 On July 26, 1991, when petitioner
sought to register the deed of assignment, he discovered that titles to the three lots have
been transferred in the name of respondent, and that the subject property has already
been mortgaged.
On August 2, 1991, petitioner filed a complaint against respondent for recovery of real
property before the Regional Trial Court of Mandaue City. Petitioner alleged that the
Contracts to Sell dated November 18, 1985 and March 10, 1986 and the Deed of Absolute
Sale dated November 16, 1987 over the properties which identified both Jambrich and
respondent as buyers do not reflect the true agreement of the parties since respondent did
not pay a single centavo of the purchase price and was not in fact a buyer; that it was
Jambrich alone who paid for the properties using his exclusive funds; that Jambrich was
the real and absolute owner of the properties; and, that petitioner acquired absolute
ownership by virtue of the Deed of Absolute Sale/Assignment dated July 11, 1991 which
Jambrich executed in his favor.
In her Answer, respondent belied the allegation that she did not pay a single centavo of the
purchase price. On the contrary, she claimed that she "solely and exclusively used her
own personal funds to defray and pay for the purchase price of the subject lots in
question," and that Jambrich, being an alien, was prohibited to acquire or own real
property in the Philippines.
At the trial, respondent presented evidence showing her alleged financial capacity to buy
the disputed property with money from a supposed copra business. Petitioner, in turn,
presented Jambrich as his witness and documentary evidence showing the substantial
salaries which Jambrich received while still employed by the Austrian company,
Simmering-Graz Panker A.G.
In its decision, the court a quo found
Evidence on hand clearly show that at the time of the purchase and acquisition of [the]
properties under litigation that Wilhelm Jambrich was still working and earning much. This
fact of Jambrich earning much is not only supported by documentary evidence but also by
the admission made by the defendant Antoniet[t]a Opalla. So that, Jambrichs financial
capacity to acquire and purchase the properties . . . is not disputed.7
xxx
On the other hand, evidence . . . clearly show that before defendant met Jambrich
sometime in the latter part of 1984, she was only working as a waitress at the St. Moritz
Hotel with an income of 1,000.00 a month and was . . . renting and living only in . . . [a]
room at . . . [a] squatter area at Gorordo Ave., Cebu City; that Jambrich took pity of her
and the situation of her children that he offered her a better life which she readily accepted.
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Land Titles and Deeds (Finals) 2017
In fact, this miserable financial situation of hers and her two children . . . are all stated and
reflected in the Child Study Report dated April 20, 1983 (Exhs. "G" and "G-1") which facts
she supplied to the Social Worker who prepared the same when she was personally
interviewed by her in connection with the adoption of her two children by Wilhelm
Jambrich. So that, if such facts were not true because these are now denied by her . . .
and if it was also true that during this time she was already earning as much as 8,000.00
to 9,000.00 as profit per month from her copra business, it would be highly unbelievable
and impossible for her to be living only in such a miserable condition since it is the
observation of this Court that she is not only an extravagant but also an expensive person
and not thrifty as she wanted to impress this Court in order to have a big saving as clearly
shown by her actuation when she was already cohabiting and living with Jambrich that
according to her . . . the allowance given . . . by him in the amount of $500.00 a month is
not enough to maintain the education and maintenance of her children. 8
This being the case, it is highly improbable and impossible that she could acquire the
properties under litigation or could contribute any amount for their acquisition which
according to her is worth more than 700,000.00 when while she was working as [a]
waitress at St. Moritz Hotel earning 1,000.00 a month as salary and tips of more or less
2,000.00 she could not even provide [for] the daily needs of her family so much so that it
is safe to conclude that she was really in financial distress when she met and accepted the
offer of Jambrich to come and live with him because that was a big financial opportunity for
her and her children who were already abandoned by her husband. 9
xxx
The only probable and possible reason why her name appeared and was included in [the
contracts to sell dated November 18, 1985 and March 10, 1986 and finally, the deed of
absolute sale dated November 16, 1987] as buyer is because as observed by the Court,
she being a scheming and exploitive woman, she has taken advantage of the goodness of
Jambrich who at that time was still bewitched by her beauty, sweetness, and good attitude
shown by her to him since he could still very well provide for everything she needs, he
being earning (sic) much yet at that time. In fact, as observed by this Court, the acquisition
of these properties under litigation was at the time when their relationship was still going
smoothly and harmoniously.10 [Emphasis supplied.]
The dispositive portion of the Decision states:
WHEREFORE, . . . Decision is hereby rendered in favor of the plaintiff and against the
defendant Antoniet[t]a Opalla by:
1) Declaring plaintiff as the owner in fee simple over the residential house of
strong materials and three parcels of land designated as Lot Nos. 1, 3 and 5
which are covered by TCT Nos. 24790, 24791 and 24792 issued by the Register
of Deeds of Mandaue City;
2) Declaring as null and void TCT Nos. 24790, 24791 and 24792 issued in the
name of defendant Antoniet[t]a Descallar by the Register of Deeds of Mandaue
City;

3) Ordering the Register of Deeds of Mandaue City to cancel TCT Nos. 24790,
24791 and 24792 in the name of defendant Antoniet[t]a Descallar and to issue
new ones in the name of plaintiff Camilo F. Borromeo;
4) Declaring the contracts now marked as Exhibits "I," "K" and "L" as avoided
insofar as they appear to convey rights and interests over the properties in
question to the defendant Antoniet[t]a Descallar;
5) Ordering the defendant to pay plaintiff attorneys fees in the amount of
25,000.00 and litigation expenses in the amount of 10,000.00; and,
6) To pay the costs.11
Respondent appealed to the Court of Appeals. In a Decision dated April 10, 2002, 12 the
appellate court reversed the decision of the trial court. In ruling for the respondent, the
Court of Appeals held:
We disagree with the lower courts conclusion. The circumstances involved in the case
cited by the lower court and similar cases decided on by the Supreme Court which upheld
the validity of the title of the subsequent Filipino purchasers are absent in the case at bar.
It should be noted that in said cases, the title to the subject property has been issued in the
name of the alien transferee (Godinez et al., vs. Fong Pak Luen et al., 120 SCRA 223
citing Krivenko vs. Register of Deeds of Manila, 79 Phils. 461; United Church Board for
World Ministries vs. Sebastian, 159 SCRA 446, citing the case of Sarsosa Vda. De
Barsobia vs. Cuenco, 113 SCRA 547; Tejido vs. Zamacoma, 138 SCRA 78). In the case at
bar, the title of the subject property is not in the name of Jambrich but in the name of
defendant-appellant. Thus, Jambrich could not have transferred a property he has no title
thereto.13
Petitioners motion for reconsideration was denied.
Hence, this petition for review.
Petitioner assigns the following errors:
I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING
RESPONDENTS JUDICIAL ADMISSION AND OTHER OVERWHELMING EVIDENCE
ESTABLISHING JAMBRICHS PARTICIPATION, INTEREST AND OWNERSHIP OF THE
PROPERTIES IN QUESTION AS FOUND BY THE HONORABLE TRIAL COURT.
II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
JAMBRICH HAS NO TITLE TO THE PROPERTIES IN QUESTION AND MAY NOT
THEREFORE TRANSFER AND ASSIGN ANY RIGHTS AND INTERESTS IN FAVOR OF
PETITIONER.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE
WELL-REASONED DECISION OF THE TRIAL COURT AND IN IMPOSING DOUBLE
COSTS AGAINST HEREIN PETITIONER (THEN, PLAINTIFF-APPELLEE).14
First, who purchased the subject properties?
The evidence clearly shows, as pointed out by the trial court, who between respondent and
Jambrich possesses the financial capacity to acquire the properties in dispute. At the time
of the acquisition of the properties in 1985 to 1986, Jambrich was gainfully employed at
Simmering-Graz Panker A.G., an Austrian company. He was earning an estimated
monthly salary of 50,000.00. Then, Jambrich was assigned to Syria for almost one year
where his monthly salary was approximately 90,000.00.
On the other hand, respondent was employed as a waitress from 1984 to 1985 with a
monthly salary of not more than 1,000.00. In 1986, when the parcels of land were
acquired, she was unemployed, as admitted by her during the pre-trial conference. Her
allegations of income from a copra business were unsubstantiated. The supposed copra
business was actually the business of her mother and their family, with ten siblings. She
has no license to sell copra, and had not filed any income tax return. All the motorized
bancas of her mother were lost to fire, and the last one left standing was already scrap.
Further, the Child Study Report15 submitted by the Department of Social Welfare and
Development (DSWD) in the adoption proceedings of respondents two sons by Jambrich
disclosed that:
Antonietta tried all types of job to support the children until she was accepted as a waitress
at St. Moritz Restaurant in 1984. At first she had no problem with money because most of
the customers of St. Moritz are (sic) foreigners and they gave good tips but towards the
end of 1984 there were no more foreigners coming because of the situation in the
Philippines at that time. Her financial problem started then. She was even renting a small
room in a squatters area in Gorordo Ave., Cebu City. It was during her time of great
financial distress that she met Wilhelm Jambrich who later offered her a decent place for
herself and her children.16
The DSWD Home Study Report17 further disclosed that:
[Jambrich] was then at the Restaurant of St. Moritz when he saw Antonietta Descallar, one
of the waitresses of the said Restaurants. He made friends with the girl and asked her to
tutor him in [the] English language. Antonietta accepted the offer because she was in need
of additional income to support [her] 2 young children who were abandoned by their father.
Their session was agreed to be scheduled every afternoon at the residence of Antonietta
in the squatters area in Gorordo Avenue, Cebu City. The Austrian was observing the
situation of the family particularly the children who were malnourished. After a few months
sessions, Mr. Jambrich offered to transfer the family into a decent place. He told Antonietta
that the place is not good for the children. Antonietta who was miserable and financially
distressed at that time accepted the offer for the sake of the children. 18
Further, the following additional pieces of evidence point to Jambrich as the source of fund
used to purchase the three parcels of land, and to construct the house thereon:

(1) Respondent Descallar herself affirmed under oath, during her re-direct
examination and during the proceedings for the adoption of her minor children,
that Jambrich was the owner of the properties in question, but that his name was
deleted in the Deed of Absolute Sale because of legal constraints. Nonetheless,
his signature remained in the deed of sale, where he signed as buyer.
(2) The money used to pay the subject parcels of land in installments was in
postdated checks issued by Jambrich. Respondent has never opened any
account with any bank. Receipts of the installment payments were also in the
name of Jambrich and respondent.
(3) In 1986-1987, respondent lived in Syria with Jambrich and her two children
for ten months, where she was completely under the support of Jambrich.
(4) Jambrich executed a Last Will and Testament, where he, as owner,
bequeathed the subject properties to respondent.
Thus, Jambrich has all authority to transfer all his rights, interests and participation over
the subject properties to petitioner by virtue of the Deed of Assignment he executed on
July 11, 1991.
Well-settled is the rule that this Court is not a trier of facts. The findings of fact of the trial
court are accorded great weight and respect, if not finality by this Court, subject to a
number of exceptions. In the instant case, we find no reason to disturb the factual findings
of the trial court. Even the appellate court did not controvert the factual findings of the trial
court. They differed only in their conclusions of law.
Further, the fact that the disputed properties were acquired during the couples
cohabitation also does not help respondent. The rule that co-ownership applies to a man
and a woman living exclusively with each other as husband and wife without the benefit of
marriage, but are otherwise capacitated to marry each other, does not apply. 19 In the
instant case, respondent was still legally married to another when she and Jambrich lived
together. In such an adulterous relationship, no co-ownership exists between the parties. It
is necessary for each of the partners to prove his or her actual contribution to the
acquisition of property in order to be able to lay claim to any portion of it. Presumptions of
co-ownership and equal contribution do not apply. 20
Second, we dispose of the issue of registration of the properties in the name of respondent
alone. Having found that the true buyer of the disputed house and lots was the Austrian
Wilhelm Jambrich, what now is the effect of registration of the properties in the name of
respondent?
It is settled that registration is not a mode of acquiring ownership. 21 It is only a means of
confirming the fact of its existence with notice to the world at large. 22 Certificates of title are
not a source of right. The mere possession of a title does not make one the true owner of
the property. Thus, the mere fact that respondent has the titles of the disputed properties
in her name does not necessarily, conclusively and absolutely make her the owner. The
rule on indefeasibility of title likewise does not apply to respondent. A certificate of title
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
implies that the title is quiet,23and that it is perfect, absolute and indefeasible.24 However,
there are well-defined exceptions to this rule, as when the transferee is not a holder in
good faith and did not acquire the subject properties for a valuable consideration.25 This is
the situation in the instant case. Respondent did not contribute a single centavo in the
acquisition of the properties. She had no income of her own at that time, nor did she have
any savings. She and her two sons were then fully supported by Jambrich.
Respondent argued that aliens are prohibited from acquiring private land. This is embodied
in Section 7, Article XII of the 1987 Constitution,26 which is basically a reproduction of
Section 5, Article XIII of the 1935 Constitution, 27 and Section 14, Article XIV of the 1973
Constitution.28 The capacity to acquire private land is dependent on the capacity "to
acquire or hold lands of the public domain." Private land may be transferred only to
individuals or entities "qualified to acquire or hold lands of the public domain." Only Filipino
citizens or corporations at least 60% of the capital of which is owned by Filipinos are
qualified to acquire or hold lands of the public domain. Thus, as the rule now stands, the
fundamental law explicitly prohibits non-Filipinos from acquiring or holding title to private
lands, except only by way of legal succession or if the acquisition was made by a former
natural-born citizen.29
Therefore, in the instant case, the transfer of land from Agro-Macro Development
Corporation to Jambrich, who is an Austrian, would have been declared invalid if
challenged, had not Jambrich conveyed the properties to petitioner who is a Filipino
citizen. In United Church Board for World Ministries v. Sebastian, 30 the Court reiterated the
consistent ruling in a number of cases31 that if land is invalidly transferred to an alien who
subsequently becomes a Filipino citizen or transfers it to a Filipino, the flaw in the original
transaction is considered cured and the title of the transferee is rendered valid. Applying
United Church Board for World Ministries, the trial court ruled in favor of petitioner, viz.:
[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich of the properties under
litigation [were] void ab initio since [they were] contrary to the Constitution of the
Philippines, he being a foreigner, yet, the acquisition of these properties by plaintiff who is
a Filipino citizen from him, has cured the flaw in the original transaction and the title of the
transferee is valid.
The trial court upheld the sale by Jambrich in favor of petitioner and ordered the
cancellation of the TCTs in the name of respondent. It declared petitioner as owner in fee
simple of the residential house of strong materials and three parcels of land designated as
Lot Nos. 1, 3 and 5, and ordered the Register of Deeds of Mandaue City to issue new
certificates of title in his name. The trial court likewise ordered respondent to pay petitioner
25,000 as attorneys fees and 10,000 as litigation expenses, as well as the costs of suit.
We affirm the Regional Trial Court.
The rationale behind the Courts ruling in United Church Board for World Ministries, as
reiterated in subsequent cases,32 is this since the ban on aliens is intended to preserve
the nations land for future generations of Filipinos, that aim is achieved by making lawful
the acquisition of real estate by aliens who became Filipino citizens by naturalization or
those transfers made by aliens to Filipino citizens. As the property in dispute is already in
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the hands of a qualified person, a Filipino citizen, there would be no more public policy to G.R. No. 202932 October 23, 2013
be protected. The objective of the constitutional provision to keep our lands in Filipino
hands has been achieved. EDILBERTO U. VENTURA JR., Petitioner,
vs.
IN VIEW WHEREOF, the petition is GRANTED. The Decision of the Court of Appeals in SPOUSES PAULINO and EVANGELINE ABUDA, Respondents.
C.A. G.R. CV No. 42929 dated April 10, 2002 and its Resolution dated July 8, 2003 are
REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Mandaue City in CARPIO, J.:
Civil Case No. MAN-1148 is REINSTATED.

The Case
SO ORDERED.

This petition for review on certiorari seeks to annul the Decision1 dated 9 March 2012 of
the Court of Appeals (CA) in CA-G.R. CV No. 92330 and the Resolution2 dated 3 August
2012 denying the motion for reconsideration. The Decision and Resolution dismissed the
Appeal dated 23 October 2009 and affirmed with modification the Decision 3 dated 24
November 2008 of the Regional Trial Court of Manila, Branch 32 (RTC-Manila).

The Facts

The RTC-Manila and the CA found the facts to be as follows:

Socorro Torres (Socorro) and Esteban Abletes (Esteban) were married on 9 June 1980.
Although Socorro and Esteban never had common children, both of them had children
from prior marriages: Esteban had a daughter named Evangeline Abuda (Evangeline), and
Socorro had a son, who was the father of Edilberto U. Ventura, Jr. (Edilberto), the
petitioner in this case.

Evidence shows that Socorro had a prior subsisting marriage to Crispin Roxas (Crispin)
when she married Esteban. Socorro married Crispin on 18 April 1952. This marriage was
not annulled, and Crispin was alive at the time of Socorros marriage to Esteban.

Estebans prior marriage, on the other hand, was dissolved by virtue of his wifes death in
1960. According to Edilberto, sometime in 1968, Esteban purchased a portion of a lot
situated at 2492 State Alley, Bonifacio Street, Vitas, Tondo, Manila (Vitas property). The
remaining portion was thereafter purchased by Evangeline on her fathers behalf sometime
in 1970.4 The Vitas property was covered by Transfer Certificate of Title No. 141782, dated
11 December 1980, issued to "Esteban Abletes, of legal age, Filipino, married to Socorro
Torres."5

Edilberto also claimed that starting 1978, Evangeline and Esteban operated small
business establishments located at 903 and 905 Delpan Street, Tondo, Manila (Delpan
property).6

On 6 September 1997, Esteban sold the Vitas and Delpan properties to Evangeline and
her husband, Paulino Abuda (Paulino).7 According to Edilberto:

when Esteban was diagnosed with colon cancer sometime in 1993, he decided to sell the
Delpan and Vitas properties to Evangeline. Evangeline continued paying the amortizations
on the two (2) properties situated in Delpan Street. The amortizations, together with the
amount of Two Hundred Thousand Pesos (Php 200,000.00), which Esteban requested as
advance payment, were considered part of the purchase price of the Delpan properties.
Evangeline likewise gave her father Fifty Thousand Pesos (Php 50,000.00) for the
purchase of the Vitas properties and she shouldered his medical expenses. 8
Esteban passed away on 11 September 1997, while Socorro passed away on 31 July
1999.
Sometime in 2000, Leonora Urquila (Leonora), the mother of Edilberto, discovered the
sale. Thus, Edilberto, represented by Leonora, filed a Petition for Annulment of Deeds of
Sale before the RTC-Manila. Edilberto alleged that the sale of the properties was
fraudulent because Estebans signature on the deeds of sale was forged. Respondents, on
the other hand, argued that because of Socorros prior marriage to Crispin, her subsequent
marriage to Esteban was null and void. Thus, neither Socorro nor her heirs can claim any
right or interest over the properties purchased by Esteban and respondents. 9
The Ruling of the RTC-Manila
The RTC-Manila dismissed the petition for lack of merit.
The RTC-Manila ruled that the marriage between Socorro and Esteban was void from the
beginning.10 Article 83 of the Civil Code, which was the governing law at the time Esteban
and Socorro were married, provides:
Art. 83. Any marriage subsequently contracted by any person during the lifetime of the first
spouse of such person shall be illegal and void from its performance unless:
1. The first marriage was annulled or dissolved; or
2. The first spouse had been absent for seven consecutive years at the time of
the second marriage without the spouse present having news of the absentee
being alive, or if the absentee, though he has been absent for less than seven
years, is generally considered as dead and believed to be so by the spouse
present at the time of contracting such subsequent marriage, or if the absentee is
presumed dead according to articles 390 and 391. The marriage so contracted
shall be valid in any of the three cases until declared null and void.
During trial, Edilberto offered the testimony of Socorros daughter-in-law Conchita Ventura
(Conchita). In her first affidavit, Conchita claimed that Crispin, who was a seaman, had
been missing and unheard from for 35 years. However, Conchita recanted her earlier
testimony and executed an Affidavit of Retraction. 11
The RTC-Manila ruled that the lack of a judicial decree of nullity does not affect the status
of the union. It applied our ruling in Nial v. Badayog: 12
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Land Titles and Deeds (Finals) 2017
Jurisprudence under the Civil Code states that no judicial decree is necessary in order to
establish the nullity of a marriage. x x x
Under ordinary circumstances, the effect of a void marriage, so far as concerns the
conferring of legal rights upon the parties, is as though no marriage had ever taken place.
And therefore, being good for no legal purpose, its invalidity can be maintained in any
proceeding in which [the] fact of marriage may be material, either direct or collateral, in any
civil court between any parties at any time, whether before or after the death of either or
both the husband and the wife, and upon mere proof of the facts rendering such marriage
void, it will be disregarded or treated as non-existent by the courts.13
According to the RTC-Manila, the Vitas and Delpan properties are not conjugal, and are
governed by Articles 144 and 485 of the Civil Code, to wit:
Art. 144. When a man and a woman live together as husband and wife, but they are not
married, or their marriage is void from the beginning, the property acquired by either or
both of them through their work or industry or their wages and salaries shall be governed
by the rules on co-ownership.
Art. 485. The share of the co-owners, in the benefits as well as in the charges, shall be
proportional to their respective interests. Any stipulation in a contract to the contrary shall
be void.
The portions belonging to the co-owners in the co-ownership shall be presumed equal,
unless the contrary is proved.
The RTC-Manila then determined the respective shares of Socorro and Esteban in the
properties. It found that:
with respect to the property located at 2492 State Alley, Bonifacio St. Vitas, Tondo, Manila
covered by TCT No. 141782, formerly Marcos Road, Magsaysay Village, Tondo, Manila,
[Evangeline] declared that part of it was first acquired by her father Esteban Abletes
sometime in 1968 when he purchased the right of Ampiano Caballegan. Then, in 1970,
she x x x bought the right to one-half of the remaining property occupied by Ampiano
Caballegan. However, during the survey of the National Housing Authority, she allowed the
whole lot to be registered in her fathers name. As proof thereof, she presented Exhibits "8"
to "11" x x x. These documents prove that that she has been an occupant of the said
property in Vitas, Tondo even before her father and Socorro Torres got married in June,
1980.14
Anent the parcels of land and improvements thereon 903 and 905 Del Pan Street, Tondo,
Manila, x x x Evangeline professed that in 1978, before her father met Socorro Torres and
before the construction of the BLISS Project thereat, her father [already had] a bodega of
canvas (lona) and a sewing machine to sew the canvas being sold at 903 Del Pan Street,
Tondo Manila. In 1978, she was also operating Vangies Canvas Store at 905 Del Pan
Street, Tondo, Manila, which was evidenced by Certificate of Registration of Business
Name issued in her favor on 09 November 1998 x x x. When the BLISS project was
constructed in 1980, the property became known as Units D-9 and D-10. At first, her father

[paid] for the amortizations for these two (2) parcels of land but when he got sick with colon
cancer in 1993, he asked respondents to continue paying for the amortizations x x x.
[Evangeline] paid a total of 195,259.52 for Unit D-9 as shown by the 37 pieces of receipts
x x x and the aggregate amount of 188,596.09 for Unit D-10, as evidenced by 36 receipts
x x x.15
The RTC-Manila concluded that Socorro did not contribute any funds for the acquisition of
the properties. Hence, she cannot be considered a co-owner, and her heirs cannot claim
any rights over the Vitas and Delpan properties. 16
Aggrieved, Edilberto filed an appeal before the CA.
The Ruling of the CA
In its Decision17 dated 9 March 2012, the CA sustained the decision of the RTC-Manila.
The dispositive portion of the CA Decision reads:
WHEREFORE, the Appeal is hereby DENIED and the challenged Decision of the court a
quo STANDS. SO ORDERED.18
The CA ruled, however, that the RTC-Manila should have applied Article 148 of the Family
Code, and not Articles 144 and 485 of the Civil Code. Article 148 of the Family Code states
that in unions between a man and a woman who are incapacitated to marry each other:
x x x only the properties acquired by both of the parties through their actual joint
contribution of money, property, or industry shall be owned by them in common in
proportion to their respective contributions. In the absence of proof to the contrary, their
contributions and corresponding shares are presumed to be equal. The same rule and
presumption shall apply to joint deposits of money and evidences of credit.
If one of the parties is validly married to another, his or her share in the co-ownership shall
accrue to the absolute community or conjugal partnership existing in such valid marriage. If
the party who acted in bad faith is not validly married to another, his or her share shall be
forfeited in the manner provided in the last paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.
The CA applied our ruling in Saguid v. Court of Appeals, 19 and held that the foregoing
provision applies "even if the cohabitation or the acquisition of the property occurred before
the effectivity of the Family Code."20 The CA found that Edilberto failed to prove that
Socorro contributed to the purchase of the Vitas and Delpan properties. Edilberto was
unable to provide any documentation evidencing Socorros alleged contribution. 21
On 2 April 2012, Edilberto filed a Motion for Reconsideration, 22 which was denied by the
CA in its Resolution dated 3 August 2012.23
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Land Titles and Deeds (Finals) 2017
Hence, this petition.
The Ruling of this Court
We deny the petition.
Edilberto admitted that in unions between a man and a woman who are incapacitated to
marry each other, the ownership over the properties acquired during the subsistence of
that relationship shall be based on the actual contribution of the parties. He even quoted
our ruling in Borromeo v. Descallar24 in his petition:
It is necessary for each of the partners to prove his or her actual contribution to the
acquisition of property in order to be able to lay claim to any portion of it. Presumptions of
co-ownership and equal contribution do not apply. 25
This is a reiteration of Article 148 of the Family Code, which the CA applied in the assailed
decision:
Art 148. In cases of cohabitation [wherein the parties are incapacitated to marry each
other], only the properties acquired by both of the parties through their actual joint
contribution of money, property, or industry shall be owned by them in common in
proportion to their respective contributions. In the absence of proof to the contrary, their
contributions and corresponding shares are presumed to be equal. The same rule and
presumption shall apply to joint deposits of money and evidences of credit.
If one of the parties is validly married to another, his or her share in the co-ownership shall
accrue to the absolute community or conjugal partnership existing in such valid marriage. If
the party who acted in bad faith is not validly married to another, his or her share shall be
forfeited in the manner provided in the last paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.
Applying the foregoing provision, the Vitas and Delpan properties can be considered
common property if: (1) these were acquired during the cohabitation of Esteban and
Socorro; and (2) there is evidence that the properties were acquired through the parties
actual joint contribution of money, property, or industry.
Edilberto argues that the certificate of title covering the Vitas property shows that the
parcel of land is co-owned by Esteban and Socorro because: (1) the Transfer Certificate of
Title was issued on 11 December 1980, or several months after the parties were married;
and (2) title to the land was issued to "Esteban Abletes, of legal age, married to Socorro
Torres."26
We disagree. The title itself shows that the Vitas property is owned by Esteban
alone.1wphi1 The phrase "married to Socorro Torres" is merely descriptive of his civil
status, and does not show that Socorro co-owned the property. 27The evidence on record
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also shows that Esteban acquired ownership over the Vitas property prior to his marriage G.R. No. 198356, April 20, 2015
to Socorro, even if the certificate of title was issued after the celebration of the marriage.
Registration under the Torrens title system merely confirms, and does not vest title. This ESPERANZA SUPAPO AND THE HEIRS OF ROMEO SUPAPO, NAMELY:
was admitted by Edilberto on page 9 of his petition wherein he quotes an excerpt of our
ESPERANZA, REX EDWARD, RONALD TROY, ROMEO, JR., SHEILA LORENCE, ALL
ruling in Borromeo: SURNAMED SUPAPO, AND SHERYL FORTUNE SUPAPO-
SANDIGAN, Petitioners, v. SPOUSES ROBERTO AND SUSAN DE JESUS, MACARIO
Registration is not a mode of acquiring ownership. It is only a means of confirming the fact BERNARDO, AND THOSE PERSONS CLAIMING RIGHTS UNDER THEM, Respondent.
of its existence with notice to the world at large. Certificates of title are not a source of
right. The mere possession of a title does not make one the true owner of the property. DECISION
Thus, the mere fact that respondent has the titles of the disputed properties in her name
does not necessarily, conclusively and absolutely make her the owner. The rule on
indefeasibility of title likewise does not apply to respondent. A certificate of title implies that BRION, J.:
the title is quiet, and that it is perfect, absolute and indefeasible. However, there are well-
defined exceptions to this rule, as when the transferee is not a holder in good faith and did We resolve the petition for review on certiorari1 filed by petitioners Esperanza Supapo and
not acquire the subject properties for a valuable consideration. Romeo Supapo2 (Spouses Supapo) to assail the February 25, 2011 decision3 and August
25, 2011 resolution4 of the Court of Appeals (CA) in CA-G.R. SP No. 111674.
Edilberto claims that Esteban s actual contribution to the purchase of the Delpan property
was not sufficiently proven since Evangeline shouldered some of the Factual Antecedents
amortizations.28 Thus, the law presumes that Esteban and Socorro jointly contributed to
the acquisition of the Del pan property. The Spouses Supapo filed a complaint5 for accion publiciana against Roberto and Susan
de Jesus (Spouses de Jesus), Macario Bernardo (Macario), and persons claiming rights
We cannot sustain Edilberto s claim. Both the RTC-Manila and the CA found that the under them (collectively, the respondents), with the Metropolitan Trial Court (MeTC) of
Delpan property was acquired prior to the marriage of Esteban and Caloocan City.
Socorro.29 Furthermore, even if payment of the purchase price of the Delpan property was
made by Evangeline, such payment was made on behalf of her father. Article 1238 of the The complaint sought to compel the respondents to vacate a piece of land located in
Civil Code provides: Novaliches, Quezon City, described as Lot 40, Block 5 (subject lot). The subject lot is
covered by Transfer Certificate of Title (TCT) No. C-284416 registered and titled under the
Spouses Supapo's names. The land has an assessed value of thirty-nine thousand nine
Art. 1238. Payment made by a third person who does not intend to be reimbursed by the hundred eighty pesos (39,980.00) as shown in the Declaration of Real Property Value (tax
debtor is deemed to be a donation, which requires the debtor s consent. But the payment declaration) issued by the Office of the City Assessor of Caloocan. 7
is in any case valid as to the creditor who has accepted it.
The Spouses Supapo did not reside on the subject lot. They also did not employ an
Thus, it is clear that Evangeline paid on behalf of her father, and the parties intended that overseer but they made sure to visit at least twice a year. 8 During one of their visits in
the Delpan property would be owned by and registered under the name of Esteban. 1992, they saw two (2) houses built on the subject lot. The houses were built without their
knowledge and permission. They later learned that the Spouses de Jesus occupied one
house while Macario occupied the other one. 9
During trial, the Abuda spouses presented receipts evidencing payments of the
amortizations for the Delpan property.1wphi1 On the other hand, Edilberto failed to show The Spouses Supapo demanded from the respondents the immediate surrender of the
any evidence showing Socorro s alleged monetary contributions. As correctly pointed out subject lot by bringing the dispute before the appropriate Lupong Tagapamayapa.
by the CA: The Lupon issued a Katibayan Upang Makadulog sa Hukuman (certificate to file action) for
failure of the parties to settle amicably. 10
settled is the rule that in civil cases x x x the burden of proof rests upon the party who, as
determined by the pleadings or the nature of the case, asserts the affirmative of an issue. x The Spouses Supapo then filed a criminal case11 against the respondents for violation of
x x. Here it is Appellant who is duty bound to prove the allegations in the complaint which Presidential Decree No. 772 or the Anti-Squatting Law.12 The trial court convicted the
undoubtedly, he miserably failed to do so. 30 respondents. The dispositive portion of the decision reads:

WHEREFORE, the petition is DENIED. The Decision dated 9 March 2012 of the Court of WHEREFORE, in view of all the foregoing, this Court finds accused ROBERTO DE
Appeals in CA-G.R. CV No. 92330 is AFFIRMED. SO ORDERED. JESUS, SUSAN DE JESUS and MACARIO BERNARDO, GUILTY beyond reasonable
doubt for Violation of Presidential Decree No. 772, and each accused is hereby ordered to
pay a fine of ONE THOUSAND PESOS (P1,000.00), and to vacate the subject
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

premises. The RTC Ruling25

SO ORDERED.13 (Emphasis supplied.) The RTC granted the petition for certiorari on two grounds, viz.: (i) the action has
prescribed; and (ii) accion publiciana falls within the exclusive jurisdiction of the RTC.
The respondents appealed their conviction to the CA. 14 While the appeal was pending,
Congress enacted Republic Act (RA) No. 8368, otherwise known as "An Act Repealing It held that in cases where the only issue involved is possession, the MeTC has jurisdiction
Presidential Decree No. 772," which resulted to the dismissal of the criminal case. 15 if the action for forcible entry or unlawful detainer is filed within one (1) year from the time
to demand to vacate was made. Otherwise, the complaint for recovery of possession
On April 30, 1999, the CA's dismissal of the criminal case became final. 16 should be filed before the RTC.

Notwithstanding the dismissal, the Spouses Supapo moved for the execution of the The dispositive portion of the RTC decision reads:
respondents' civil liability, praying that the latter vacate the subject lot. The Regional Trial
Court (RTC) granted the motion and issued the writ of execution. The respondents moved WHEREFORE, premises considered, the instant petition is hereby GRANTED.
for the quashal of the writ but the RTC denied the same. The RTC also denied the
respondents' motion for reconsideration. The Orders dated October 24, 2008 and February 23, 2009 are hereby
declared NULL and VOID.
The respondents thus filed with the CA a petition for certiorari to challenge the RTC's
orders denying the quashal of the writ and the respondent's motion for The Public Respondent is hereby directed to DISMISS Civil Case No. 08-29245 for lack of
reconsideration.17 The CA granted the petition and held that with the repeal of the Anti- jurisdiction.
Squatting Law, the respondents' criminal and civil liabilities were extinguished. 18 The
dispositive portion of the decision reads: SO ORDERED.26

WHEREFORE, premises considered, the petition for certiorari with prayer for injunction
is GRANTED. The orders dated June 5, 2003 and July 24, 2003 of Branch 131 of the
Regional Trial Court of Caloocan City in Criminal Case No. C-45610
are REVERSED and SET ASIDE. Said court is hereby permanently ENJOINED from
further executing or implementing its decision dated March 18, 1996.
In their motion for reconsideration,27 the Spouses Supapo emphasized that the court's
jurisdiction over an action involving title to or possession of land is determined by its
assessed value; that the RTC does not have an exclusive jurisdiction on all complaints
for accion publiciana; and that the assessed value of the subject lot falls within MeTC's
jurisdiction.

SO ORDERED. The RTC denied the petitioners' motion for reconsideration.

The CA, however, underscored that the repeal of the Anti-Squatting Law does not mean It held that although the MeTC had jurisdiction based on the assessed value of the subject
that people now have unbridled license to illegally occupy lands they do not own, and that lot, the Spouses Supapos' cause of action had already prescribed, the action having been
it was not intended to compromise the property rights of legitimate landowners. 19 In cases filed beyond the ten (l0)-year prescriptive period under Article 555 of the Civil Code. 28 As it
of violation of their property rights, the CA noted that recourse may be had in court by filing was not proven when the actual demand to vacate was made, the RTC ruled that the
the proper action for recovery of possession. reckoning period by which the ejectment suit should have been filed is counted from the
time the certificate to file action was issued. The certificate to file action was issued on
The Spouses Supapo thus filed the complaint for action publiciana.20 November 25, 1992, while the complaint for accion publiciana was filed only on March 7,
2008, or more than ten (10) years thereafter.
After filing their Answer,21 the respondents moved to set their affirmative defenses for
preliminary hearing22 and argued that: (1) there is another action pending between the Dissatisfied with the RTC ruling, the Spouses Supapo appealed to the CA.29
same parties; (2) the complaint for accion publiciana is barred by statute of limitations; and
(3) the Spouses Supapo's cause of action is barred by prior judgment. The CA Ruling30

The MeTC Ruling23 The CA dismissed the appeal and held that the complaint for accion publiciana should
have been lodged before the RTC and that the period to file the action had prescribed.
The MeTC denied the motion to set the affirmative defenses for preliminary hearing. It
ruled that the arguments advanced by the respondents are evidentiary in nature, which at The dispositive portion of the CA decision reads:
best can be utilized in the course of the trial. The MeTC likewise denied the respondents'
motion for reconsideration. WHEREFORE, the appeal is DENIED. The Decision dated June 30, 2009 and Order dated
October 19, 2009 are AFFIRMED.
From the MeTC's ruling, the respondents filed a petition for certiorari with the RTC.24
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

SO ORDERED
The Spouses Supapo moved31 but failed32 to secure a reconsideration of the CA decision;
hence, they came to us through the present petition.
The Petition
In seeking reversal of the CA's ruling, the Spouses Supapo essentially argue that:
possession only, not ownership. However, where the parties raise the issue of ownership,
the courts may pass upon the issue to determine who between the parties has the right to
possess the property.35
This adjudication is not a final determination of the issue of ownership; it is only for the
purpose of resolving the issue of possession, where the issue of ownership is inseparably
linked to the issue of possession. The adjudication of the issue of ownership, being
provisional, is not a bar to an action between the same parties involving title to the
property. The adjudication, in short, is not conclusive on the issue of ownership.36

Thus, while we will dissect the Spouses Supapo's claim of ownership over the subject
(1) the MeTC exercises exclusive original jurisdiction over accion publiciana where
property, we will only do so to determine if they or the respondents should have the right of
the assessed value of the property does not exceed P20,000.00, or P50,000.00 if
possession.
the property is located in Metro Manila; and that
(2) prescription had not yet set in because their cause of action is imprescriptible
Having thus determined that the dispute involves possession over a real property, we now
under the Torrens system.
resolve which court has the jurisdiction to hear the case.
The Respondents' Case33
Under Batas Pambansa Bilang 129,37 the jurisdiction of the RTC over actions involving title
to or possession of real property is plenary. 38
The respondents argue that the complaint for accion publiciana was (1) filed in the wrong
court; (2) barred by prescription; and (3) barred by res judicata.
RA No. 7691,39 however, divested the RTC of a portion of its jurisdiction and granted the
Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts the
Issues exclusive and original jurisdiction to hear actions where the assessed value of the property
does not exceed Twenty Thousand Pesos (P20,000.00), or Fifty Thousand Pesos
The issues for resolution are: (P50,000.00), if the property is located in Metro Manila.

I. Whether the MeTC properly acquired jurisdiction; Section 1 of RA No. 7691 states:
II. Whether the cause of action has prescribed; and
III. Whether the complaint for accion publiciana is barred by res judicata. Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary
Reorganization Act of 1980," is hereby amended to read as follows:
Section. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive
Our Ruling original jurisdiction:

The petition is meritorious. (2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, where the assessed value of the property involved exceeds Twenty
We hold that: (1) the MeTC properly acquired jurisdiction; (2) the cause of action has not thousand pesos (P20,000.00) or, for civil actions in Metro Manila, where such value
prescribed; and (3) the complaint is not barred by res judicata. exceeds Fifty thousand pesos (P50,000.00) x x x. (Emphasis supplied.)

Accion Publiciana and Section 3 of the same law provides:

the Jurisdiction of the Section. 3. Section 33 of the same law is hereby amended to read as follows:
MeTC Section. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in Civil Cases. - Metropolitan Trial Courts, Municipal Trial Courts,
Accion publiciana is an ordinary civil proceeding to determine the better right of possession and Municipal Circuit Trial Courts shall exercise:
of realty independent of title. It refers to an ejectment suit filed after the expiration of one
year from the accrual of the cause of action or from the unlawful withholding of possession xxxx
of the realty.34
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of,
In the present case, the Spouses Supapo filed an action for the recovery of possession of real property, or any interest therein where the assessed value of the property or
the subject lot but they based their better right of possession on a claim of ownership. interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value does not exceed Fifty thousand
This Court has held that the objective of the plaintiffs in accion publiciana is to recover
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, possession has lasted longer than one year. But the real right of possession is not
litigation expenses and costs x x x. (Emphasis supplied.) lost till after the lapse of ten years. (Emphasis supplied.)

In view of these amendments, jurisdiction over actions involving title to or possession of The respondents point out that the Spouses Supapo filed the complaint for accion
real property is now determined by its assessed value.40 The assessed value of real publiciana on March 7, 2008 or more than ten (10) years after the certificate to file action
property is its fair market value multiplied by the assessment level. It is synonymous to was issued on November 25, 1992. The respondents contend that the Spouses Supapo
taxable value.41 may no longer recover possession of the subject property, the complaint having been filed
beyond the period provided by law.
In Quinagoran v. Court of Appeals,42 we explained:
Further, while the respondents concede that the Spouses Supapo hold a TCT over the
[D]oes the RTC have jurisdiction over all cases of recovery of possession regardless of the subject property, and assuming a Torrens title is imprescriptible and indefeasible, they
value of the property involved? posit that the latter have lost their right to recover possession because of laches.

The answer is no. The doctrine on which the RTC anchored its denial of petitioner's Motion On their part, the Spouses Supapo admit that they filed the complaint for accion
to Dismiss, as affirmed by the CA that all cases of recovery of possession or accion publiciana more than ten (10) years after the certificate to file action was issued.
publiciana lies with the regional trial courts regardless of the value of the property no Nonetheless, they argue that their cause of action is imprescriptible since the subject
longer holds true. As tilings now stand, a distinction must be made between those property is registered and titled under the Torrens system.
properties the assessed value of which is below P20,000.00, if outside Metro Manila;
and P50,000.00, if within.43 (Emphasis supplied.) We rule that the Spouses Supapo's position is legally correct.

In this regard, the complaint must allege the assessed value of the real property subject of At the core of this controversy is a parcel of land registered under the Torrens system. The
the complaint or the interest thereon to determine which court has jurisdiction over the Spouses Supapo acquired the TCT on the subject lot in 1979. 46 Interestingly, the
action. This is required because the nature of the action and the court with original and respondents do not challenge the existence, authenticity and genuineness of the
exclusive jurisdiction over the same is determined by the material allegations of the Supapo's TCT.47
complaint, the type of relief prayed for by the plaintiff, and the law in effect when the action
is filed, irrespective of whether the plaintiffs are entitled to some or all of the claims In defense, the respondents rest their entire case on the fact that they have allegedly been
asserted therein.44 in actual, public, peaceful and uninterrupted possession of the subject property in the
concept of an owner since 1992. The respondents contend that they built their houses on
In the present case, the Spouses Supapo alleged that the assessed value of the subject the subject lot in good faith. Having possessed the subject lot for more than ten (10) years,
lot, located in Metro Manila, is P39,980.00. This is proven by the tax declaration 45 issued they claim that they can no longer be disturbed in their possession. 48
by the Office of the City Assessor of Caloocan. The respondents do not deny the
genuineness and authenticity of this tax declaration. Under the undisputed facts of this case, we find that the respondents' contentions have no
legal basis.
Given that the Spouses Supapo duly complied with the jurisdictional requirements, we hold
that the MeTC of Caloocan properly acquired jurisdiction over the complaint for accion In a long line of cases, we have consistently ruled that lands covered by a title cannot
publiciana. be acquired by prescription or adverse possession. We have also held that a claim of
acquisitive prescription is baseless when the land involved is a registered land because of
The cause of action Article 112649 of the Civil Code in relation to Act 496 [now, Section 47 of Presidential
has not prescribed Decree (PD) No. 152950].51

The respondents argue that the complaint for accion publiciana is dismissible for being
filed out of time.
They invoke Article 555 of the Civil Code, which states: Art. 555. A possessor may lose his
possession:
xxxx
(4) By the possession of another, subject to the provisions of Article 537, if the new
The Spouses Supapo (as holders of the TCT) enjoy a panoply of benefits under the
Torrens system. The most essential insofar as the present case is concerned is Section 47
of PD No. 1529 which states:
Section 47. Registered land not subject to prescriptions. No title to registered land in
derogation of the title of the registered owner shall be acquired by prescription or adverse
possession.
In addition to the imprescriptibility, the person who holds a Torrens Title over a land is also
entitled to the possession thereof.52 The right to possess and occupy the land is an
attribute and a logical consequence of ownership. 53 Corollary to this rule is the right of the
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

holder of the Torrens Title to eject any person illegally occupying their property. Again, this The action is not barred
right is imprescriptible.54 by prior judgment

In Bishop v. CA,55 we held that even if it be supposed that the holders of the Torrens Title As a last-ditch effort to save their case, the respondents invoke res judicata. They contend
were aware of the other persons' occupation of the property, regardless of the length of that the decision of the CA in CA-G.R. SP No. 78649 barred the filing of the action
that possession, the lawful owners have a right to demand the return of their property at publiciana.
any time as long as the possession was unauthorized or merely tolerated, if at all. 56
To recall, CA-G.R. SP No. 78649 is the petition for certiorari filed by the respondents to
Even if the defendant attacks the Torrens Title because of a purported sale or transfer of challenge the RTC's issuance of the writ enforcing their civil liability (i.e., to vacate the
the property, we still rule in favor of the holder of the Torrens Title if the defendant cannot subject property) arising from their conviction under the Anti-Squatting Law. The CA
adduce, in addition to the deed of sale, a duly-registered certificate of title proving the granted the petition and permanently enjoined the execution of the respondents' conviction
alleged transfer or sale. because their criminal liability had been extinguished by the repeal of the law under which
they were tried and convicted. It follows that their civil liability arising from the crime had
A case in point is Umpoc v. Mercado57 in which we gave greater probative weight to the also been erased.
plaintiffs TCT vis-a-vis the contested unregistered deed of sale of the defendants. Unlike
the defendants in Umpoc, however, the respondents did not adduce a single evidence to The respondents' reliance on the principle of res judicata is misplaced.
refute the Spouses Supapo's TCT. With more reason therefore that we uphold the
indefeasibility and imprescriptibility of the Spouses Supapo's title. Res judicata embraces two concepts: (1) bar by prior judgment as enunciated in Rule 39,
Section 47(b) of the Rules of Civil Procedure; and (2) conclusiveness of judgment in Rule
By respecting the imprescriptibility and indefeasibility of the Spouses Supapo's TCT, this 39, Section 47(c).62
Court merely recognizes the value of the Torrens System in ensuring the stability of real
estate transactions and integrity of land registration. "Bar by prior judgment" means that when a right or fact had already been judicially tried on
the merits and determined by a court of competent jurisdiction, the final judgment or order
We reiterate for the record the policy behind the Torrens System, viz.: shall be conclusive upon the parties and those in privity with them and constitutes an
absolute bar to subsequent actions involving the same claim, demand or cause of action.63
The Government has adopted the Torrens system due to its being the most effective
measure to guarantee the integrity of land titles and to protect their indefeasibility once the The requisites64 for res judicata under the concept of bar by prior judgment are:
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 (1) The former judgment or order must be final;
later that his acquisition was ineffectual after all, which will not only be unfair to him as the
purchaser, but will also erode public confidence in the system and will force land (2) It must be a judgment on the merits;
transactions to be attended by complicated and not necessarily conclusive investigations
and proof of ownership. The further consequence will be that land conflicts can be even (3) It must have been rendered by a court having jurisdiction over the subject matter and
more abrasive, if not even violent.58 the parties; and

With respect to the respondents' defense59 of laches, suffice it to say that the same is (4) There must be between the first and second actions, identity of parties, subject
evidentiary in nature and cannot be established by mere allegations in the pleadings. 60 In matter, and cause of action.
other words, the party alleging laches must adduce in court evidence proving such
allegation. This Court not being a trier of facts cannot rule on this issue; especially so since Res judicata is not present in this case.
the lower courts did not pass upon the same.
While requisites one to three may be present, it is obvious that the there is no identity of
Thus, without solid evidentiary basis, laches cannot be a valid ground to deny the Spouses subject matter, parties and causes of action between the criminal case prosecuted under
Supapo's petition.61 On the contrary, the facts as culled from the records show the clear the Anti-Squatting Law and the civil action for the recovery of the subject property.
intent of the Spouses Supapo to exercise their right over and recover possession of the
subject lot, viz.: (1) they brought the dispute to the appropriate Lupon; (2) they initiated the First, there is no identity of parties. The criminal complaint, although initiated by the
criminal complaint for squatting; and (3) finally, they filed the action publiciana. To our Spouses Supapo, was prosecuted in the name of the people of the Philippines. The accion
mind, these acts negate the allegation of laches. publiciana, on the other hand, was filed by and in the name of the Spouses Supapo.

With these as premises, we cannot but rule that the Spouses Supapo's right to recover Second, there is no identity of subject matter. The criminal case involves the
possession of the subject lot is not barred by prescription. prosecution of a crime under the Anti-Squatting Law while the accion publiciana is an
action to recover possession of the subject property.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

[G.R. No. 108547. February 3, 1997]

And third, there is no identity of causes of action. The people of the Philippines filed
the criminal case to protect and preserve governmental interests by prosecuting persons
who violated the statute. The Spouses Supapo filed the accion publiciana to protect their
proprietary interests over the subject property and recover its possession.
FELICIDAD VDA. DE CABRERA, MARYJANE CABRERA and FELICIDAD
Even casting aside the requirement of identity of causes of action, the defense of res TEOKEMIAN, plaintiff, vs. COURT OF APPEALS and VIRGILIA ORAIS DE
judicata has still no basis. FELICIO, represented by her Attorney-in-Fact, ERNESTO M.
ORAIS, defendants.
The concept of "conclusiveness of judgment" does not require that there is identity of
causes of action provided that there is identity of issue and identity of parties.65 DECISION

Under this particular concept of res judicata, any right, fact, or matter in issue directly TORRES, JR., J.:
adjudicated or necessarily involved in the determination of an action before a competent
court in which judgment is rendered on the merits is conclusively settled by the judgment Assailed in this Petition for Review on Certiorari is the Decision[1] of the respondent
therein and cannot again be litigated between the parties and their privies, whether or not Court of Appeals dated January 7, 1993 in CA-G.R. No. 22407-CV, the dispositive portion
the claim, demand, purpose, or subject matter of the two actions is the same. 66 of which reads:
As already explained, there is no identity of parties between the criminal complaint under
the Anti-Squatting law and the civil action for accion publiciana. For this reason alone, WHEREFORE, the decision of the lower court is hereby REVERSED and judgment is
"collusiveness of judgment" does not apply. hereby entered ordering defendants Felicidad Vda. de Cabrera and Marykane Cabrera to
vacate the portion of Lot 2238 occupied by them and surrender possession thereof to
Even if we assume, for the sake of argument, that there is identity of parties, plaintiff.
"conclusiveness of judgment" still does not apply because there is no identity of issues.
The issue in the criminal case is whether the respondents (accused therein) committed the SO ORDERED.
crime alleged in the information, while the only issue in accion publiciana is whether the
Spouses Supapo have a better right than the respondents to possess and occupy the
subject property. Reversed by the foregoing pronouncements was the decision [2] of the Regional Trial
Court, Branch 7, Baganga, Davao Oriental in Civil Case No. 379, an action for Quieting of
For all these reasons, the defense of res judicata is baseless. Title to Real Property, Damages with Preliminary Injunction. The trial courts disposition
reads:
Final Note
WHEREFORE, the plaintiff is hereby ordered:
As a final note, we stress that our ruling in this case is limited only to the issue of
determining who between the parties has a better right to possession. This adjudication is
(a) to execute a reconveyance within thirty (30) days after this decision shall have become
not a final and binding determination of the issue of ownership. As such, this is not a bar
final and executory in favor of defendant Felicidad Vda. De Cabrera corresponding only to
for the parties or even third persons to file an action for the determination of the issue of
that portion of Lot No. 2239 actually and physically possessed and occupied by the
ownership.
defendant as seen from the sketch plan of Engr. Enecio Magno (Exh. 2) and pinpointed
and identified during the ocular investigation as to its extent and boundaries of the said
WHEREFORE, premises considered, we GRANT the petition, and
portion bought by defendants Felicidad Vda. De Cabrera from Felicidad Teokemian;
consequently REVERSE and SET ASIDE the February 25, 2011 decision and August 25,
2011 resolution of the Court of Appeals in CA-G.R. SP No. 111674.
(b) To reimburse defendants for litigation expenses and attorneys fees in the amount
SO ORDERED. of P7,000.00; and

(c) To pay the cost.

SO ORDERED.

We are restating the facts as determined by the appellate court, viz:


On January 16, 1950, a Deed of Sale (Exh. B) was executed by Daniel Teokemian and
Albertana Teokemian in favor of Andres Orais over a parcel of unregistered land situated
at Abejod, Cateel, Davao Oriental with an area described as 7.3720 hectares. The
property was owned in common by Daniel and Albertana and their sister Felicidad
Teokemian, having inherited the same from their late father, Domingo
Teokemian. However, the Deed of Sale was not signed by Felicidad, although her name
was printed therein as one of the vendors. On January 26, 1950, the parcel of land was
surveyed in the name of Virgilia Orais, daughter of the vendee Andres Orais, and
denominated as Lot No. 2239, PLS-287, Cateel Cadastre. As surveyed, the property had
an area of 11.1000 hectares.
On June 24, 1957, Virgilia Orais was issued Free Patent No. V-79089. Original Certificate
of Title No. P-10908 was issued in her name (Exh. A).
On July 27, 1972, Alberto (sic. Albertana) Teokemian executed a Deed of Absolute Sale
conveying to Elano Cabrera, husband of Felicidad Cabrera, ONE HALF PORTION OF
LOT NO. 2239, Cad-287, eastern portion, containing an area of FIFTY FIVE THOUSAND
FIVE HUNDRED TEN (55,510) SQUARE METERS, more or less (Exh. 3), which portion
supposedly corresponded to the one-third share in Lot 2239 of Felicidad Teokemian who
was not a party to the Deed of Sale earlier executed by her brother and sister in favor of
Andres Orais, Virgilia Orais predecessor-in-interest. It was explained by Felicidad Cabrera
that the Deed of Sale was signed by Albertana Teokemian, not by Felicidad Teokemian,
because the whole of Lot 2239 was adjudicated to Albertana in a decision of a cadastral
court dated June 8, 1965 as evidenced by a Certification of an officer-in-charge of the
Office of the Clerk of Court, RTC, Br. 7, Baganga, Davao Oriental (Exh. 4). Felicidad
Cabrera and her husband immediately took possession of the western portion of Lot 2239.
In 1974 and 1978, Virgilia Orais brothers, Rodolfo and Jimmy Orais went to Cateel, Davao
Oriental and confronted the Cabreras of the latters alleged encroachment and illegal
occupation of their sisters land, but no concrete action on the matter was pursued by
Virgilia Orais until February 11, 1988 when she filed Civil Case No. 379 against Felicidad
Cabrera, now a widow, and her daughter Marykane Cabrera for Quieting of Title to Real
Property, Damages with Preliminary Mandatory Injunction.
The complaint, which was amended on June 22, 1988 by including Felicidad Teokemian
as party defendant (pp. 42-47, Records), alleged that sometime in 1972 and 1973 the late
Elano Cabrera and defendant Felicidad Cabrera, knowing that Lot 2239 was already
registered in the name of the plaintiff, prepared a document of sale and had Felicidad
Teokemian sign it conveying a portion of said lot to them as described in the Sketch Map
(Annex D of the Complaint), after which they entered and possessed said portion and
enjoyed the fruits thereon. Plaintiff further averred that by reason of the document of sale
and the declaration of the property involved in the name of defendant Felicidad Vda. De
Cabrera, there created a cloud of doubt on the formers title on said property.
Plaintiff prayed as follows:
WHEREFORE, premises considered, plaintiff through the undersigned counsel respectfully
prays this Honorable Court that:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
a) After due notice and hearing, a Writ of Preliminary Mandatory Injunction be issued
restraining the defendants from further dispossessing the plaintiff of the land in question;
b) Ordering the defendants to pay jointly the plaintiff the amount of not less than Sixteen
Thousand Two Hundred (P16,200) as total value of the rice produced from the riceland in
question, and the amount of Twenty One Thousand Six Hundred (P21,600.00) Pesos as
the total proceeds of the nuts of the coconut land in question;
c) The Defendants be ordered to pay the plaintiff the amount of Twenty Thousand
(P20,000.00) Pesos and Ten Thousand (P10,000.00) Pesos as litigation expenses;
d) The defendants be ordered to pay Six Thousand (P6,000.00) Pesos for attorneys fees;
Four Hundred (P400.00) Pesos as expenses for every appearance in Court;
e) The document of sale executed by Felicidad Teokemian and the Tax Declarations
issued to the late Elano Cabrera and Felicidad Vda. De Cabrera and the subsequent Tax
Declaration creating a cloud of doubt on the title, possession, rights and interest be
declared null and void for being fraudulent and without any legal basis and inexistent; and
f) Such other reliefs and remedies which this Honorable Court may deem just, proper, and
equitable in the premises.
In their answer with counterclaim (pp.10-18, Records), defendants alleged that they
acquired a portion of Lot 2239 in good faith and for value; that said portion was owned by
Felicidad Teokemian who was not a party to the Deed of Sale executed by Daniel and
Albertana Teokemian on January 16, 1950 in favor of Andres Orais over Lot 2239; that not
having signed the Deed of Sale, Felicidad Teokemians one-third share in Lot 2239 could
not have been legally conveyed to Andres Orais; that Virgilia Orais (successor-in-interest
of Andres Orais) committed fraud in including the portion owned by Felicidad Teokemian in
her applying for free patent over Lot 2239 is concerned pursuant to Art. 1456 of the Civil
Code; and that plaintiff is guilty of laches for not initiating an action against defendants to
recover the western portion of Lot 2239 despite plaintiffs knowledge of defendants
acquisition thereof in 1972, as in fact it was only in 1988 when the complaint for quieting of
title was filed in court.
Defendants prayed, thus:
WHEREFORE, this Honorable Court, after due notice and hearing on the merits of this
case; to issue order or orders;
1. Finding the defendants as the rightful, lawful, and legal owner of that portion which was
sold to them by Felicidad Teokemian and which was included in the title of plaintiff;
2. To find that the plaintiff did not own the said portion and that they have personal
knowledge of the same when the plaintiff filed and secured the title under the
Administrative Proceeding;

3. Finding that the plaintiff is only holding the title to that portion only in an implied trust in
favor of the real owner;
4. Finding the plaintiff legally obligated to cause the segregation of the portion at their
expense and deliver formally the said portion to the real owners, the defendants.
5. To order the plaintiff to execute, prepare and or make any instrument or document to
finally vest in the Defendants absolute, clear and flawless title or ownership over the
portion which the plaintiff holds title in trust in defendants favor.
6. To Order the Plaintiff to pay actual damages in the sum of P2,000.00 as litigation
expense and Attorneys fees in the sum of P5,000.00 in favor of defendants;
7. To direct the plaintiff to account for the share of the real owner of the portion of land
illegally cultivated and planted by plaintiff to rice in favor of FELICIDAD TEOKEMIAN to be
paid thru the Defendants who are the owners, which consisted in ONE THIRD OF THE
RICE HARVEST every year since the year 1950 to 1972 when the portion was sold and
cultivated by defendant based on the computation of income by the plaintiff in Paragraph
16, a paragraph in the Second Cause of Action of the complaint;
and to grant the defendants such other reliefs and remedies proper and equitable in the
premises.[3]
On April 27, 1989, the lower court rendered judgment in favor of defendants and
against the plaintiff, ruling that the latter can no longer recover the western portion of Lot
2239 conveyed in 1972 by Felicidad Teokemian in favor of the late Elano Cabrera and
Felicidad Cabrera due to laches. In support of its findings, the trial court referred to the
Courts pronouncements in Lola vs. Court of Appeals,[4] where it was held that although the
defense of prescription is unavailing to the petitioners, because, admittedly, the title to the
subject lot was still registered in the name of the respondent, still the petitioners have
acquired title to it by virtue of the equitable principle of laches due to the respondents
failure to assert her claim and ownership for thirty-two years; and in Republic vs. Court of
Appeals[5] that, while it is true that by themselves tax receipts and declaration of ownership
for taxation purposes are not incontrovertible evidence of ownership, they become strong
evidence of ownership acquired by prescription when accompanied by proof of actual
possession of the property; and in Miguel vs. Catalino,[6] that even granting appellants
proposition that no prescription lies against their fathers recorded title, their passivity and
inaction for more than thirty four years justifies the defendant appellee in setting up the
equitable defense of laches in his own behalf.
The respondent Court of Appeals reversed such findings upon appeal.
Even as the appellate court observed that the registration made by the plaintiffs was
fraudulent insofar as it involved the one-third interest of Felicidad Teokemian, which was
not included in the sale executed by them and Albertana and Daniel Teokemian, it
nevertheless upheld its effects, on the justification that the defendants action for
reconveyance based on an implied trust had already been barred by
prescription. Furthermore, the action of the plaintiffs is not barred by laches, as was held
by the lower court. Said the appellate court:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
We disagree with the lower courts ruling that plaintiff is barred from bringing an action for
recovery of ownership. Parenthetically, while the complaint filed by plaintiff is designated
as one for quieting of title, the allegations therein show that it is actually for recovery of
ownership/possession.
First. The Deed of Absolute Sale dated May 27, 1972 (Exh. 3) executed by Albertana
Teokemian in favor of Elcano Cabrera over the portion of 55,510 square meters of Lot
2238 which allegedly pertained to the one-third interest of Felicidad Teokemian did not
convey any title to Elcano Cabrera, assuming that Felicidad Teokemian still owned a one-
third portion of Lot 2238 which was already registered in plaintiffs name, considering that
Albertana did not have any authority from Felicidad Teokemian to effect such
conveyance. Consequently, defendants Felicidad vda. De Cabrera and Marykane Cabrera
had acquired no title upon which to anchor their claim of ownership over the one-third
portion. Such being the case, plaintiffs cannot be barred by laches from instituting the
action to quiet title against defendants
xxx
Second. There was no allegation, much less proof, that Lot 2239 had been partitioned
among the co-owners Daniel, Albertana, and Felicidad, all surnamed Teokemian, before
the land was sold to Andres Orais in 1950 when the same was still unregistered. This
being the case, and assuming that Felicidad Teokemian had retained ownership over an
undivided one-third portion of Lot 2239 despite its being titled in plaintiffs name in 1958,
Felicidad Teokemian could only dispose her undivided interest, not a definite portion
described in the Deed of Sale executed on July 27, 1972 (Exh. 3) as eastern part. Worse,
the supposed vendee, Elcano Cabrera, and her successors-in-interest, defendants
Felicidad vda. de Cabrera and Marykane Cabrera, occupied the western portion of Lot
2239, not the eastern portion which was the subject of the sale. Their occupation of a
definite portion of an undivided property, without any color of title, could not have ripened
into ownership on the principle of laches.
Third. As testified to by Jimmy Orais, plaintiffs brother, it was only in 1974 when plaintiff
came to know that her property was occupied by Elcano Cabrera. According to Jimmy, he
and his elder brother Dr. Rodolfo Orais went to the house of Elcano Cabrera three times in
1974 and in 1979 complaining of the latters occupancy of their sisters property. Jimmy
further declared that after Elcano Cabrera was shown plaintiffs title to the property, Elcano
Cabrera proposed a relocation survey of the area to determine whether the premises
occupied by him were included in the plaintiffs title (T.S.N. pp. 39-44, January 3, 1989). It
appears, however, that nothing came out of the proposal to conduct a relocation
survey. From the time plaintiff became aware of Cabreras possession of the western
portion of Lot 2239, which was in 1974, up to the time she instituted the action for quieting
of title in 1988, only fourteen (14) years had elapsed. This case, therefore, has no
congruency with those cases where the Supreme Court ruled that the registered owner is
barred by laches from recovering his property. Thus, in Lola vs. Court of Appeals (145
SCRA 439), the petitioners acquired title to the land owned by respondent by virtue of the
equitable principles of laches due, according to the Supreme Court, to respondents failure
to assert her claims and ownership for thirty-two (32) years. In Miguel vs. Catalino (26
SCRA 234), the Supreme Court said that appellants passivity and inaction for more than
34 years (1928-1962) justifies the defendant-appellee in setting up the equitable defense

of laches in his behalf. In Mejia vs. Gampomana (100 Phil 277), it was held that the original
owners right to recover back the possession of the property and title thereto from the
defendant has by the long period of 37 years and by the patentees inaction and neglect
been converted into a stale demand.
Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained
length of time, to do that which, by the exercise of due diligence, could or should have
been done earlier; it is negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it (Tijam vs. Sibonghanoy, 32
SCRA 29). Since imprescriptibility is one of the basic features of a Torrens title, it is not an
ordinary delay in asserting ones right that will give rise to the application of the principle of
laches, otherwise, registered title can easily be defeated by prescription. This is precisely
the reason why, in the cases cited, the delay or inaction by the registered owners in
asserting their rights was considered unreasonable and unexplained because it took them
from 32 to 37 years to do so. In contrast, the delay in the case at bar was only fourteen
years.
While possession of defendants Felicidad vda. De Cabrera and Marykane Cabrera could
not have ripened into ownership as already discussed, they are possessors in good faith of
the portion occupied by them and, therefore, entitled to the benefits accorded by the Civil
Code as such.[7]
Sisters Felicidad vda. de Cabrera and Marykane Cabrera, together with Felicidad
Teokemian are now before the Court as Petitioners in this Petition for Review on Certiorari,
seeking relief from the respondent courts decision, assigning as errors the following:
A are congruent with the findings of the trial court, thus:
RESPONDENT COURT OF APPEALS ERRED IN RULING THAT PRIVATE
RESPONDENTS COMPLAINT FILED IN 1988 FOR QUIETING OF TITLE WHICH
ACTUALLY IS ONE FOR RECOVERY OF OWNERSHIP AND POSSESSION AS FOUND
BY RESPONDENT COURT IS NOT BARRED BY LACHES BECAUSE:
1. A PERIOD OF 30 YEARS HAD ELAPSED FROM 1958 WHEN TORRENS TITLE WAS
ISSUED TO PRIVATE RESPONDENT TO 1988 WHEN HER COMPLAINT BELOW WAS
FILED DURING WHICH PERIOD OF TIME THE PROPERTY HAS BEEN IN OPEN,
CONTINUOUS AND ADVERSE POSSESSION OF THE ORIGINAL OWNER, FELICIDAD
TEOKEMIAN, FROM 1958, OR EVEN EARLIER IN 1941 WHEN SHE INHERITED THE
PROPERTY, TO 1972 WHEN SHE SOLD IT TO THE CABRERAS WHO CONTINUED
THE PRIOR POSSESSION UNTIL 1988 WHEN PRIVATE RESPONDENTS COMPLAINT
WAS FILED.
2. ASSUMING ARGUENDO RESPONDENT COURTS HOLDING THAT ONLY 14 YEARS HAD
ELAPSED COUNTED FROM 1974 WHEN CABRERAS POSSESSION WAS
QUESTIONED BY PRIVATE RESPONDENTS BROTHERS, STILL THAT PERIOD
CONSTITUTES LACHES.
B the very tardiness of the plaintiffs in pursuing the present action for reconveyance of the
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT LACHES DOES NOT
APPLY BECAUSE WHAT WAS SOLD TO THE CABRERAS WAS A DEFINITE PORTION
OF THE COMMUNITY PROPERTY BEFORE PARTITION, HENCE, VOID AND THAT
ALBERTANA TEOKEMIAN WHO SIGNED THE DOCUMENT OF SALE IN FAVOR OF
THE CABRERAS HAD NO AUTHORITY FROM HER SISTER-CO-OWNER FELICIDAD
TEOKEMIAN TO EXECUTE THE DEED OF CONVEYANCE.[8]
The bone of the petitioners contention rests on the alleged waiver of the plaintiff to
recover any interest she had in the one-third portion of the property inherited by Daniel,
Albertana and Felicidad Teokemian from their late father, Domingo, due to the long period
of time which lapsed from the time the plaintiffs title was registered until the action for
quieting of title was instituted.
We find merit in the petition.
At the outset, it must be observed that the Certificate of Title of the plaintiff, which
was derived from Free Patent No. V-79089, issued in the name of Virgilia Orais, leaves
much to be desired in propriety, considering that the Deed of Sale executed by Daniel and
Albertana Teokemian, on one hand and Andres Orais on the other, did not bear the
signature of Felicidad Teokemian, and therefore, did not cover the latters share.
It was the respondent appellate court which observed that the registration of the
plaintiffs title over the subject property was fraudulent insofar as it involved the one-third
interest of Felicidad Teokemian who did not sign the Deed of Sale in favor of plaintiffs
predecessor-in-interest and, therefore, the latter held that portion as a trustee of an implied
trust for the benefit of Felicidad, pursuant to Art. 1456 of the Civil Code. [9] Needless to
state, these conclusions, being matters of fact, are entitled to our full affirmation, since they
It would seem from the facts of the case that the basis of the right of plaintiff over the land
in litigation specifically Lot No. 2239 now titled in the name of the plaintiff, located at
Buayahon, Abejod, Cateel, Davao Oriental, proceeded from the Deed of Sale executed by
Daniel Teokemian and Albertana Teokemian on January 16, 1950 acknowledged before
Judge Proserador Danao as Notary Ex Oficio. Taking a hard look over the aforesaid deed
of sale (Exh. B) the said document apparently included the third heir of Domingo
Teokemian Felicidad Teokemian because her name was typewritten together with her
sister Albertana and brother Daniel all surnamed Teokemian in the said document. Again
this fact will come to mind that the vendee Andres Orais was anticipating at the time
Felicidad Teokemian will also sell her share in this portion of land (Lot No. 2239) which at
the time of the sale it was still unregistered land. The non-signing of Felicidad Teokemian
over her typewritten name in this deed of sale (Exh. B) will attest to the fact that she did
not sell her share in the lot in question. After this sale the vendee Andres Orais through his
encargado Melecio Capilitan and later Servillano Abarca immediately took possession of
the two third portion of said parcel of land respecting the third portion owned by Felicidad
Teokemian.[10]
However, the appellate court stated further that nonetheless, the plaintiffs attempt to
recover the property is justified because defendant Felicidad Teokemians own action for
reconveyance has already been barred by prescription, [11] which is the same as stating that

subject property has rendered the defendants defense nugatory, and has made the
fortress of the plaintiffs case impregnable.
This conclusion is incorrect. As can be discerned from the established facts, the
Certificates of Title of the vendees Orais are, to say the least, irregular, and were issued in
a calculated move to deprive Felicidad Teokemian of her dominical rights over the property
reserved to her by descent. Plaintiff could not have registered the part reserved to
Felicidad Teokemian, as this was not among those ceded in the Deed of Sale between
Daniel/Albertana Teokemian and Andres Orais. It must be remembered that registration
does not vest title, it is merely evidence of such title over a particular property.
(Embrado vs. Court of Appeals)[12]
The defense of indefeasibility of the Torrens Title does not extend to a transferee
who takes the certificate of title with notice of a flaw in his title. (Anonuevo vs. Court of
Appeals)[13] The principle of indefeasibility of title is unavailing where there was fraud that
attended the issuance of the free patents and titles. (Meneses vs. Court of Appeals) [14]
Be that as it may, that the right of the defendants for reconveyance of the subject
property arising from an implied trust under Article 1456 of the Civil Code is material to the
instant case, such remedy has not yet lapsed, as erroneously submitted by the plaintiffs,
and, is thus, a bar to the plaintiffs action. In the case of Heirs of Jose Olviga vs. Court of
Appeals,[15] we observed that an action for reconveyance of a parcel of land based on
implied or constructive trust prescribes in ten years, the point of reference being the date
of registration of the deed or the date of the issuance of the certificate of title over the
property, but this rule applies only when the plaintiff or the person enforcing the trust is not
in possession of the property, since if a person claiming to be the owner thereof is in actual
possession of the property, as the defendant is in the instant case, the right to seek
reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The
reason for this is that one who is in actual possession of a piece of land claiming to be the
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 by one who is in possession.
As it is, before the period of prescription may start, it must be shown that (a) the
trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui
que trust; (b) such positive acts of repudiation have been made known to the cestui que
trust; and, (c) the evidence thereon is clear and positive. [16]
In the case at bar, the defendant Felicidad Teokemian, and thereafter, the Cabreras,
were in actual possession of the property since it was left to Felicidad Teokemian by her
father in 1941, which possession had not been interrupted, despite the sale of the two-third
portion thereof to the plaintiff in 1950, and the latters procurement of a Certificate of Title
over the subject property in 1957. Until the institution of the present action in 1988,
plaintiffs, likewise, have not displayed any unequivocal act of repudiation, which could be
considered as an assertion of adverse interest from the defendants, which satisfies the
above-quoted requisites. Thus, it cannot be argued that the right of reconveyance on the
part of the defendants, and its use as defense in the present suit, has been lost by
prescription.
On the other hand, the action for reconveyance (quieting of title) of the plaintiff was
instituted only in 1988, that is, thirty years from the time the plaintiffs husband was able to
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
acquire Certificate of Title covering the properties inherited by the Teokemians, and
apparently including that portion belonging to Felicidad Teokemian. In the meantime,
defendant Felicidad vda. De Cabrera and her late husband have been actively in
possession of the same, tilling it, and constructing an irrigation system thereon. This must
surely constitute such tardiness on the part of the plaintiff constituting the basis for laches.
Laches has been defined as the failure or neglect, for an unreasonable and
unexplained length of time, to do that which by exercising due diligence could or should
have been done earlier; it is negligence or omission to assert a right within a reasonable
time, warranting a presumption that the party entitled to assert it either has abandoned it or
declined to assert it.[17] The defense of laches is an equitable one and does not concern
itself with the character of the defendants title, but only with whether or not by reason of
plaintiffs long inaction or inexcusable neglect, he should be barred from asserting his claim
at all, because to allow him to do so would be inequitable and unjust to defendant. Laches
is not concerned merely with lapse of time, unlike prescription. While the latter deals with
the fact of delay, laches deals with the effect of unreasonable delay. [18]
This Court emphasized in Mejia de Lucas vs. Gampona,[19] the reason upon which
the rule is based is not alone the lapse of time during which the neglect to enforce the right
has existed, but the changes of condition which may have arisen during the period in
which there has been neglect. In other words, where a court finds that the position of the
parties has to change, that equitable relief cannot be afforded without doing injustice, or
that the intervening rights of third persons may be destroyed or seriously impaired, it will
not exert its equitable powers in order to save one from the consequences of his own
neglect.
In our jurisdiction, it is an enshrined rule that even a registered owner of property
may be barred from recovering possession of property by virtue of laches. Under the Land
Registration Act (now the Property Registration Decree), no title to registered land in
derogation to that of the registered owner shall be acquired by prescription or adverse
possession. The same is not true with regard to Laches.[20] As we have stated earlier in
Mejia de Lucas vs. Gamponia, while the defendant may not be considered as having
acquired title by virtue of his and his predecessors long continued possession (37 years)
the original owners right to recover back the possession of the property and the title
thereto from the defendant has, by the latters long period of possession and by patentees
inaction and neglect, been converted into a stale demand.
The argument that laches does not apply because what was sold to the Cabreras
was a definite portion of the community property, and, therefore, void, is likewise
untenable.
Under Article 493 of the Civil Code:
Each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and even he may therefore alienate, assign or mortgage it, and even
substitute another person in its enjoyment, except when personal rights are involved. But
the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited
to the portion which may be allotted to him in the division upon the termination of the co-
ownership.
In Go Ong vs. Court of Appeals,[21] this Court ruled that the heirs, as co-owners, shall
each have the full ownership of his part and the fruits and benefits pertaining to it. An heir
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

may, therefore, alienate, assign or mortgage it, and even substitute another person in its ESTRELLA TIONGCO YARED G.R. No. 161360
enjoyment, except when the personal rights are involved. But the effect of the alienation or (Deceased) substituted by CARMEN M.
mortgage, with respect to the co-owners, shall be limited to the portion which may be TIONGCO a.k.a. CARMEN MATILDE B. Present:
allotted to him in the division upon the termination of the co-ownership. TIONGCO,
Petitioner, CORONA, C.J.,
Undisputed is the fact that since the sale of the two-third portion of the subject Chairperson,
property to the plaintiff, the latter had allowed Felicidad Teokemian to occupy that one-third LEONARDO-DE CASTRO,
portion allotted to her. There has, therefore, been a partial partition, where the transferees - versus - BERSAMIN,
of an undivided portion of the land allowed a co-owner of the property to occupy a definite DEL CASTILLO, and
portion thereof and has not disturbed the same, for a period too long to be ignored--the VILLARAMA, JR., JJ.
possessor is in a better condition or right (Potior est conditio possidentis).
JOSE B. TIONGCO and ANTONIO G. Promulgated:
Clearly, the plaintiff in this instance is barred from asserting her alleged right over the
DORONILA, JR.,
portion subject matter in the instant case on the ground that their right has been lost by
Respondents. October 19, 2011
laches. In Bailon-Casilao vs. Court of Appeals, we ruled that:
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
As early as 1923, this Court has ruled that even if a co-owner sells the whole property as
his, the sale will affect only his own share but not those of the other co-owners who did not DECISION
consent to the sale (Punzalan vs. Boon Liat, 44 Phil 320 [1923]). This is because under the
aforementioned codal provision, the sale or other dispostion affects only his undivided VILLARAMA, JR., J.:
share and the transferee gets only what would correspond to his grantor in the partition of
the things owned in common (Ramirez vs. Bautista, 14 Phil 528 [1909]). xxx For Article
494 of the Civil Code explicitly declares: No prescription shall lie in favor of a co-owner or
co-heir so long as he expressly or impliedly recognizes the co-ownership.[22] Before us on appeal by way of a petition for review on certiorari under Rule 45 is
the Court of Appeals (CA) August 28, 2003 Decision [1] which dismissed petitioner Estrella
IN VIEW WHEREOF, the petition is hereby GRANTED. The decision of the Court of
Appeals dated January 7, 1993 is hereby SET ASIDE. The decision of the trial court dated Tiongco Yareds appeal and affirmed the Decision[2] of the Regional Trial Court (RTC),
April 27, 1989 is hereby REINSTATED in toto.
Branch 26, of Iloilo City, dismissing petitioners complaint for annulment of affidavit of
SO ORDERED.
adjudication, deeds of sale and Transfer Certificates of Title (TCTs), reconveyance and
damages. Also assailed is the appellate courts November 27, 2003 Resolution[3] denying
petitioners motion for reconsideration.

The factual antecedents, as culled from the records, follow:

Matilde, Jose, Vicente, and Felipe, all surnamed Tiongco, were born to Atanacio
and Maria Luis Tiongco. Together they were known as the Heirs of Maria Luis de Tiongco.

The present dispute involves three parcels of land namely, Lots 3244, 3246 and
1404, all located in Iloilo City. Lots 3244 and 1404 used to be covered by Original
Certificates of Title (OCTs) Nos. 484 and 1482, respectively, in the names of Matilde (wife
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

of Vicente Rodriguez), Jose (married to Carmen Sonora), Vicente (married to Ursula Based on the records with the Register of Deeds, it also appears that on May 10,
Casador), and Felipe (married to Sabina Montelibano), each in undivided share, while Lot 1974, the same day when the TCTs covering Lots 3244 and 1404 were issued, respondent
3246 used to be covered by OCT No. 368 in the name of Heirs of Maria Luis de Tiongco. [4] Jose sold the said lots to Catalino Torre. TCT Nos. T-37195 and T-37193 were thus
cancelled and TCT Nos. T-37196 and T-37194 were issued in the name of Catalino

While all of the Heirs of Maria Luis de Tiongco have died, they were survived by Torre.[12]

their children and descendants. Among the legitimate children of Jose were petitioner and
Carmelo Tiongco, the father of respondent Jose B. Tiongco. [5] Similarly, the records of the Register of Deeds showed that Lot 3246 was
likewise disposed of by respondent Jose. On March 30, 1979, or barely two days after

Sometime in 1965, petitioner built her house on Lot 1404[6] and sustained herself obtaining TCT No. T-4665, respondent Jose sold Lot 3246 to respondent Antonio G.

by collecting rentals from the tenants of Lots 3244 and 3246. In 1968, petitioner, as one of Doronila, Jr. who was issued TCT No. T-4666 which cancelled TCT No. T-4665. Catalino

the heirs of Jose, filed an adverse claim affecting all the rights, interest and participation of Torre also sold Lots 3244 and 1404 on the same date to Doronila who was issued the

her deceased father on the disputed lots, but the adverse claim was annotated only on corresponding new TCTs.[13] However, just a few days later, or on April 2, 1979, Doronila

OCT No. 484 and OCT No. 1482, respectively covering Lots 3244 and 1404. [7] sold Lot 1404 back to respondent Jose. Lots 3244 and 3246 were also sold back to
respondent on January 17, 1980.[14]

In 1983, respondent Jose prohibited petitioner from collecting rentals from the
tenants of Lots 3244 and 3246. In December 1983, respondent Jose filed a suit for On October 2, 1990, petitioner filed a complaint before the court a quo against

recovery of possession with preliminary injunction against several tenants of Lots 3244 her nephew respondent Jose and respondent Antonio G. Doronila, Jr. Petitioner argued

and 3246 wherein he obtained a judgment in his favor.[8] Respondent Jose also filed a that respondent Jose knowingly and wilfully made untruthful statements in the Affidavit of

case for unlawful detainer with damages against petitioner as she was staying Adjudication because he knew that there were still other living heirs entitled to the said

on Lot 1404. While the RTC, Branch 33, of Iloilo City ruled in respondent Joses favor, the properties.[15] Petitioner claimed that the affidavit was null and void ab initio and as such, it

CA reversed the RTCs decision and ruled in favor of petitioner. [9] As such, respondent did not transmit or convey any right of the original owners of the properties. Any transfer

Jose never took possession of the properties. whatsoever is perforce likewise null and void. [16] Moreover, the petitioner averred that since
respondent Jose executed said documents through fraud, bad faith, illegal manipulation

In 1988, when petitioner inquired at the Office of the Register of Deeds of Iloilo and misrepresentation, Lots 3244 and 1404 should be reconveyed to its original registered

City, she discovered that respondent Jose had already executed an Affidavit of owners and Lot 3246 to the heirs of Maria Luis de Tiongco subject to subsequent partition

Adjudication[10] dated April 17, 1974, declaring that he is the only surviving heir of the among the heirs.[17] Petitioner also posited that granting for the sake of argument that the

registered owners and adjudicating unto himself Lots 3244, 3246 and 1404. Consequently, affidavit of adjudication was simply voidable, respondent Jose became a trustee by

the OCTs of the aforementioned lots were cancelled, and in place thereof, the Register of constructive trust of the property for the benefit of the petitioner. [18]

Deeds of Iloilo City issued TCT No. T-37195 for Lot 3244, TCT No. T-4665 for Lot 3246,
and TCT No. T-37193 for Lot 1404, all in the name of respondent Jose. [11]
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Respondent Jose, for his part, argued that the petitioners father, Jose, was not Petitioner raised the following arguments in the petition, to wit:
an heir of Maria Luis de Tiongco but an heir of Maria Cresencia de Loiz y Gonzalez vda.
A. THE HONORABLE COURT OF APPEALS ERRED IN
De Tiongco. Respondent Jose claimed that he was the only legitimate son and that while it AFFIRMING THE LOWER COURT THAT THE AFFIDAVIT
OF ADJUDICATION EXECUTED BY RESPONDENT JOSE
was true that he has two other siblings, he refused to acknowledge them because they are B. TIONGCO, WHO IS A LAWYER AND IS AWARE OF ITS
NULLITY, IS MERELY VOIDABLE; ON THE CONTRARY,
illegitimate.[19] Respondent Jose denied that the series of sales of the properties was
SAID DOCUMENT IS A COMPLETE NULLITY BECAUSE
fraudulent. He claimed that Lot 3244 was bought by the City of Iloilo from its own auction RESPONDENT JOSE B. TIONGCO HAS MALICIOUSLY
AND IN BAD FAITH ADJUDICATED IN FAVOR OF HIMSELF
sale for tax delinquency and was merely resold to him. Respondent Jose averred that he THE PROPERTIES IN QUESTION OVER WHICH HE, AS A
LAWYER, KNOWS HE HAS NO RIGHTS WHATSOEVER
has been paying real property taxes on the said properties for more than ten (10) years AND HE ALSO KNOWS HAS BEEN IN POSSESSION OF
and that petitioner collected rentals from Lots 3244 and 3246 only because he allowed THE PETITIONER AND HER PREDECESSORS-IN-
INTEREST UNTIL THE PRESENT.
her.[20]
B. THE HONORABLE COURT OF APPEALS ERRED IN
AFFIRMING THE DISMISSAL OF PETITIONERS
COMPLAINT BY THE LOWER COURT ON THE GROUND
After trial, the Iloilo City RTC ruled in favor of respondent Jose. The court a
OF PRESCRIPTION BECAUSE THE RESPONDENT JOSE
quo ruled that prescription has set in since the complaint was filed only on October 2, B. TIONGCOS AFFIDAVIT OF ADJUDICATION, BEING A
TOTAL NULLITY, THE ACTION TO DECLARE SUCH
1990 or some sixteen (16) years after respondent Jose caused to be registered the NULLITY AND OF THOSE SUBSEQUENT TRANSACTIONS
ARISING FROM SAID ADJUDICATION DOES NOT
affidavit of adjudication on May 10, 1974.[21] PRESCRIBE, ESPECIALLY BECAUSE IN THIS CASE THE
PETITIONER AND HER PREDECESSORS-IN-
INTEREST HAVE ALWAYS BEEN IN POSSESSION OF THE
Aggrieved, petitioner appealed to the CA[22] which, however, sustained the trial LOTS IN QUESTION AND RESPONDENT JOSE B.
TIONGCO HAS NEVER BEEN IN POSSESSION
courts ruling. The CA agreed with the trial court that an action for reconveyance can THEREOF.[24]
indeed be barred by prescription. According to the CA, when an action for reconveyance is
C. FURTHER, EVEN IF ARGUENDO, THE AFFIDAVIT OF
based on fraud, it must be filed within four years from discovery of the fraud, and such ADJUDICATION IS VOIDABLE, THE HONORABLE COURT
OF APPEALS STILL ERRED IN AFFIRMING THE
discovery is deemed to have taken place from the issuance of the original certificate of DISMISSAL OF THE COMPLAINT BY THE LOWER COURT
ON THE GROUND OF PRESCRIPTION BECAUSE THE
title. On the other hand, an action for reconveyance based on an implied or constructive
RESPONDENT, JOSE B. TIONGCO, BEING A LAWYER
trust prescribes in ten (10) years from the date of issuance of the original certificate of title AND BEING AWARE OF PETITIONERS OWNERSHIP OF
THE LOTS IN QUESTION, THE SAID AFFIDAVIT OF
or transfer certificate of title. For the rule is that the registration of an instrument in the ADJUDICATION MAKES THE RESPONDENT AN IMPLIED
TRUSTEE THEREOF FOR THE PETITIONER AND THE
Office of the Register of Deeds constitutes constructive notice to the whole world and ACTION FOR RECONVEYANCE BASED ON TRUST DOES
therefore the discovery of fraud is deemed to have taken place at the time of NOT PRESCRIBE SO LONG AS THE BENEFICIARY LIKE
THE PETITIONER HAS BEEN IN ACTUAL PHYSICAL
registration.[23] POSSESSION OF THE PROPERTY SUBJECT THEREOF,
AS HELD IN THE CASE OF VDA. DE CABRERA VS.
COURT OF APPEALS (267 SCRA 339).[25]
Petitioner filed a motion for reconsideration of the above ruling, but the CA as
aforesaid, denied petitioners motion. Hence, the present petition for review on certiorari.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

The only issue in this case is who has a better right over the properties. 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 petition is meritorious.

The Court reiterated such rule in the case of Vda. de Cabrera v. Court of
The Court agrees with the CAs disquisition that an action for reconveyance can
Appeals,[32] wherein we ruled that the imprescriptibility of an action for reconveyance
indeed be barred by prescription. In a long line of cases decided by this Court, we ruled
based on implied or constructive trust applies only when the plaintiff or the person
that an action for reconveyance based on implied or constructive trust must perforce
enforcing the trust is not in possession of the property. In effect, the action for
prescribe in ten (10) years from the issuance of the Torrens title over the property.[26]
reconveyance is an action to quiet the property title, which does not prescribe.

However, there is an exception to this rule. In the case of Heirs of Pomposa

Similarly, in the case of David v. Malay[33] the Court held that there was no doubt
Saludares v. Court of Appeals,[27] the Court reiterating the ruling in Millena v. Court of
about the fact that an action for reconveyance based on an implied trust ordinarily
Appeals,[28] held that there is but one instance when prescription cannot be invoked in an
prescribes in ten (10) years. This rule assumes, however, that there is an actual need to
action for reconveyance, that is, when the plaintiff is in possession of the land to be
initiate that action, for when the right of the true and real owner is recognized, expressly or
reconveyed. In Heirs of Pomposa Saludares,[29] this Court explained that the Court in a
implicitly such as when he remains undisturbed in his possession, the statute of limitation
series of cases,[30] has permitted the filing of an action for reconveyance despite the lapse
would yet be irrelevant. An action for reconveyance, if nonetheless brought, would be in
of more than ten (10) years from the issuance of title to the land and declared that said
the nature of a suit for quieting of title, or its equivalent, an action that is imprescriptible. In
action, when based on fraud, is imprescriptible as long as the land has not passed to an
that case, the Court reiterated the ruling in Faja v. Court of Appeals[34] which we quote:
innocent buyer for value. But in all those cases, the common factual backdrop was that the
x x x There is settled jurisprudence that one who is in actual possession
registered owners were never in possession of the disputed property. The exception was
of a piece of land claiming to be owner thereof may wait until his
based on the theory that registration proceedings could not be used as a shield for fraud or possession is disturbed or his title is attacked before taking steps to
vindicate his right, the reason for the rule being, that his undisturbed
for enriching a person at the expense of another. 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
by one who is in possession. No better situation can be conceived at
In Alfredo v. Borras,[31] the Court ruled that prescription does not run against the the moment for Us to apply this rule on equity than that of herein
petitioners whose mother, Felipa Faja, was in possession of the
plaintiff in actual possession of the disputed land because such plaintiff has a right to wait litigated property for no less than 30 years and was suddenly
confronted with a claim that the land she had been occupying and
until his possession is disturbed or his title is questioned before initiating an action to cultivating all these years, was titled in the name of a third person. We
vindicate his right. His undisturbed possession gives him the continuing right to seek the 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,
aid of a court of equity to determine the nature of the adverse claim of a third party and its 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
effect on his title. The Court held that where the plaintiff in an action for reconveyance of prescription commences to run against such possessor.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

In this case, petitioners possession was disturbed in 1983 when respondent And while it is settled that every person dealing with a property registered under
[35]
Jose filed a case for recovery of possession. The RTC of Iloilo City ruled in the Torrens title need not inquire further but only has to rely on the title, this rule has an

respondent Joses favor but the CA on November 28, 1991, during the pendency of the exception. The exception is when the party has actual knowledge of facts and
[36]
present controversy with the court a quo, ruled in favor of petitioner. Petitioner never circumstances that would impel a reasonably cautious man to make such inquiry or when

lost possession of the said properties, and as such, she is in a position to file the the purchaser has some knowledge of a defect or the lack of title in his vendor or of

complaint with the court a quo to protect her rights and clear whatever doubts has been sufficient facts to induce a reasonably prudent man to inquire into the status of the title of

cast on her title by the issuance of TCTs in respondent Joses name. 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

The Court further observes that the circuitous sale transactions of these vendor appearing on the face of said certificate. One who falls within the exception can

properties from respondent Jose to Catalino Torre, then to Antonio Doronila, Jr., and back neither be denominated an innocent purchaser for value nor a purchaser in good faith and

again to respondent Jose were quite unusual. However, this successive transfers of title hence does not merit the protection of the law. [39]

from one hand to another could not cleanse the illegality of respondent Joses act of

adjudicating to himself all of the disputed properties so as to entitle him to the protection of In this case, when the subject properties were sold to Catalino Torre and

the law as a buyer in good faith. Respondent Jose himself admitted that there exists other subsequently to Doronila, respondent Jose was not in possession of the said properties.

heirs of the registered owners in the OCTs. Even the RTC found that [t]hese allegations Such fact should have put the vendees on guard and should have inquired on the interest

contained in the Affidavit of Adjudication executed by defendant Jose B. Tiongco are false of the respondent Jose regarding the subject properties. [40] But regardless of such defect

because defendant Jose B. Tiongco is not the only surviving heir of Jose Tiongco, Matilde on transfer to third persons, the properties again reverted back to respondent Jose.

Tiongco, Vicente Tiongco and Felipe Tiongco as the latters have other children and Respondent Jose cannot claim lack of knowledge of the defects surrounding the

grandchildren who are also their surviving heirs. [37] cancellation of the OCTs over the properties and benefit from his fraudulent actions. The

subsequent sale of the properties to Catalino Torre and Doronila will not cure the nullity of

In the case of Sandoval v. Court of Appeals,[38] the Court defined an innocent the certificates of title obtained by respondent Jose on the basis of the false and fraudulent

purchaser for value as one who buys property of another, without notice that some other Affidavit of Adjudication.

person has a right to, or interest in, such property and pays a full and fair price for the

same, at the time of such purchase, or before he has notice of the claim or interest of WHEREFORE, the petition for review on certiorari is GRANTED. The August 28,

some other persons in the property. He is one who buys the property with the belief that 2003 Decision and November 27, 2003 Resolution of the Court of Appeals in CA-G.R. CV

the person from whom he receives the thing was the owner and could convey title to the No. 44794 are hereby REVERSED and SET ASIDE. The Register of Deeds of Iloilo City is

property. A purchaser can not close his eyes to facts which should put a reasonable man ordered to RESTORE Original Certificates of Title Nos. 484, 1482, and 368, respectively

on his guard and still claim that he acted in good faith.

 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

G.R. No. 152007 January 22, 2007

covering Lots 3244, 1404 and 3246, under the name/s of the registered original owners

thereof. PROCOPIO TAPUROC, HEIRS OF ANTONIA EBE (Deceased) represented by her

children namely: HEIRS OF CELEDONIA PUTONG, namely: FORTUNATO
ESCUDERO, TERESITA TABALDINA, CONCORDIO E. NEBRIA, PEDRO ESCUDERO
and LUISA PEDRERA; HEIRS OF EUFEMIO PUTONG, namely: RICARDO PUTONG
Furthermore, respondent Atty. Jose B. Tiongco is ORDERED to SHOW and PORFERIA PUTONG; HEIRS OF GREGORIO PUTONG, namely: ROSALIO
PUTONG, PERSEVERANDA LOPEZ, BERNARDO PUTONG and ROSALINDA
CAUSE, within ten (10) days from notice hereof, why he should not be sanctioned as a OMAGAC; HEIRS OF MARIANO PUTONG, namely: SERAPIA DALHOG, TEODORA
AYENG, MARCIANO PUTONG, RESTITUTA LIQUIT, SERAPIA LUAY, FAUSTINO
member of the bar for executing the April 17, 1974 Affidavit of Adjudication and registering PUTONG and SOFRONIA PATROLLA, ALL REPRESENTED BY THEIR ATTORNEY-
IN- FACT, AUREA P. MERCIDOR, Petitioners,
the same with the Register of Deeds.
vs.
CARMELITA LOQUELLANO VDA. DE MENDE and the HEIRS OF EVANS MENDE,
namely: ERIC MITCHEL, ERIC LYNDON, ERIC FERDINAND, JOSE ERIC ERVIN and
No pronouncement as to costs. JENNIFER MILDRED, ALL SURNAMED MENDE and the REGISTER OF DEEDS OF
THE CITY OF TAGBILARAN, Respondents.

SO ORDERED. DECISION

GARCIA, J.:

Under consideration is this petition for review under Rule 45 of the Rules of Court to nullify
and set aside the following issuances of the Court of Appeals (CA) in CA-G.R. CV No.
64548, to wit:

1. Decision1 dated September 21, 2001, affirming an earlier decision of the

Regional Trial Court (RTC) of Tagbilaran City, Branch 47, in an action for
Declaration of Nullity of Deed of Sale, Cancellation of Transfer Certificate of Title
(TCT) No. (8585) T-4767 and all Subsequent Documents and Damages, thereat
commenced by the herein petitioners against the respondents; and

2. Resolution2 dated January 23, 2002, denying the petitioners motion for
reconsideration.

The petition embodies an alternative prayer for this Court to remand the case to the trial
court for the presentation of an expert witness.

The facts:

On September 19, 1996, in the RTC of Tagbilaran City, a Complaint for Declaration of
Nullity of Deed of Sale, Cancellation of TCT No. (8585) T-4767 and all Subsequent
Documents and Damages3 was filed by the petitioners against respondents Carmelita
Loquellano Vda. de Mende, the Heirs of Evans B. Mende, and the Register of Deeds of the
City of Tagbilaran. Thereat docketed as Civil Case No. 5970 and raffled to Branch 47 of
the court, the Complaint alleges that petitioners Procopio Tapuroc and all the successors-
in-interest of deceased co-owner Antonia Ebe are the co-owners, co-heirs and/or

descendants of the original owners of a parcel of land with an area of 5,795 square
meters, more or less, situated in the Barrio (now District) of Booy, Tagbilaran, Bohol and
previously covered by TCT No. 3444; that sometime in 1992, when the petitioners decided
to partition the subject property, they discovered from the Office of the City Assessor that
the title covering the land was already in the name of a certain Evans Mende by virtue of a
Deed of Sale purportedly executed in favor of the latter by their predecessors-in-interest on
December 30, 1967; that said Deed of Sale is a forged document because the alleged
vendors therein, who were Procopio Tapuroc and the predecessors-in-interest of the other
petitioners, did not sign the conveying deed nor receive any consideration therefor; and
that one of the alleged vendors, Antonia Ebe, had already passed away in 1960, or long
before the purported Deed of Sale was said to have been executed in 1967. Petitioners, as
plaintiffs, thus pray for the nullification of the same Deed of Sale, the cancellation of the
title issued pursuant thereto in the name of Evans Mende and the restoration of the
previous title in their names, plus damages.
In their Answer,4 the respondent Mendes, as defendants, denied the material allegations of
the Complaint and averred that the late Evans Mende, husband of respondent Carmelita
Loquellano Vda. de Mende and father of the herein co-respondents, bought the subject
parcel of land from its previous owners on December 12, 1967 as evidenced by a Deed of
Sale duly notarized by Atty. Rodolfo Yap. They further assert that they had been in open,
continuous, and peaceful possession of the land in question from the time of said sale, and
had been religiously paying the realty taxes due thereon. By way of affirmative defense,
the respondents assert that petitioners cause of action, if any, had already prescribed in
view of the unreasonable delay in filing the suit in court, let alone the fact that their
(respondents) title has become indefeasible.
On June 7, 1999, after due proceedings, the trial court came out with its decision 5 finding
that the evidence adduced by the plaintiffs (now petitioners) was insufficient to establish
their claim that the questioned Deed of Sale was a forgery. The court explained that
despite the opportunity given them, the plaintiffs failed to present a handwriting expert to
determine whether the said Deed of Sale was indeed a forged instrument, adding that
laches had already set in because of plaintiffs inaction and neglect in questioning the
supposed forged character of the document after the lapse of more than twenty-nine (29)
years from the time of its execution. Accordingly, the trial court rendered judgment
dismissing the Complaint, thus:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered DISMISSING
the complaint for lack of merit. No compensation for damages, moral, exemplary and
litigation expenses is awarded for failure of plaintiffs (sic) to prove by preponderance of
evidence the existence of malice or bad faith in filing the instant case.
SO ORDERED.
From the adverse decision of the trial court, the petitioners went on appeal to the CA in
CA-G.R. CV No. 64548, faulting the court of origin in ruling that they failed to present
convincing evidence to prove the fact of forgery in the execution of the assailed Deed of
Sale. They likewise faulted the lower court in denying their motion to have the original copy
of the Deed of Sale in dispute and their own Special Power of Attorney containing the
genuine signatures of their predecessors-in-interest, be examined by a handwriting expert.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
As stated at the outset hereof, the appellate court, in its Decision 6 of September 21, 2001,
dismissed the petitioners appeal and affirmed that of the trial court. Their motion for
reconsideration having been denied by the CA in its Resolution 7 of January 23, 2002, the
petitioners are now with this Court via the instant recourse on their main submission that -
THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT
DISMISSED THE APPEAL OF THE PETITIONERS DESPITE SUFFICIENCY OF
SUPPORTING EVIDENCE TO WARRANT A FAVORABLE JUDGMENT ON THE PART
OF THE PETITIONERS,
and presenting for our resolution the following issues:
I
WHETHER OR NOT THE DEED OF SALE ALLEGEDLY EXECUTED ON DECEMBER
30, 1967 BETWEEN THE PETITIONERS PREDECESSORS-IN-INTEREST AND THE
RESPONDENTS IS VALID.
II
WHETHER OR NOT THE COURT OF APPEALS HAS CONTRADICTED ITSELF AND
ARRIVED AT A CONCLUSION CONTRARY TO THE RECORDS, LAW AND THE
APPLICABLE JURISPRUDENCE.
The recourse must fail.
As it is, the petitioners call for a review of the facts of the case. This is evident from the
pleadings they filed with this Court. In their main petition8 and Memorandum,9 the
petitioners emphatically state:
The issue in the case at bar boils down to whether or not the signatures of the petitioners
predecessors-in-interest and Procopio Tapuroc (the only surviving vendor to the alleged
deed of sale) were forged; and if they were, is the declaration of nullity of the said deed of
sale dated December 13, 1967 is proper (sic).
Clearly, the foregoing statement calls for a determination of the truth or falsehood of an
alleged fact, a matter not for this Court to resolve. Well-settled is the rule that factual
questions may not be raised in a petition for review on certiorari. Section 1 of Rule 45 of
the Revised Rules of Court is explicit. It reads:
SECTION 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari
from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan,
the Regional Trial Court or other courts whenever authorized by law, may file with the
Supreme Court a verified petition for review on certiorari. The petition shall raise only
questions of law which must be distinctly set forth. (Emphasis supplied)

Evident it is from the above that the function of the Court in petitions for review on certiorari
is limited to reviewing errors of law that may have been committed by the lower courts.
And, as a matter of sound practice and procedure, the Court defers and accords finality to
the factual findings of trial courts, more so when, as here, such findings are undisturbed by
the appellate court. This factual determination, as a matter of long and sound appellate
practice, deserves great weight and shall not be disturbed on appeal, save only for the
most compelling reasons,10 such as when that determination is clearly without evidentiary
support or when grave abuse of discretion has been committed. 11 This is as it should be
since the Court, in petitions for review of CA decisions under Rule 45 of the Rules of Court,
usually limits its inquiry only to questions of law. Stated otherwise, it is not the function of
the Court to analyze and weigh all over again the evidence or premises supportive of the
factual holdings of lower courts.12 The Court refrains from further scrutiny of factual
findings of trial courts, more so when those findings are affirmed by the CA, as here. To do
otherwise would defeat the very essence of Rule 45 and would convert the Court into a
trier of facts, which it is not meant to be.13
What is more, it appears undisputed that the assailed Deed of Sale is a public document,
having been duly notarized by a certain Atty. Rodolfo Yap who, unfortunately, had already
passed away. Being a notarial instrument, the deed in question is a public document and
as such enjoys the presumption of regularity in its execution. To overthrow that
presumption, sufficient, clear and convincing evidence is required, otherwise the document
should be upheld.14
Petitioners maintain, however, that by merely examining the signatures in the questioned
Deed of Sale and the genuine signatures of their predecessors-in-interest in their Special
Power of Attorney, the glaring dissimilarities between the two sets of signatures are
immediately evident to support their claim of forgery.
We are not convinced.
As a rule, forgery cannot be presumed. It must be proved by clear, positive and convincing
evidence. Mere allegation of forgery is not evidence and the burden of proof lies on the
party alleging it.15 Here, the petitioners failed to discharge their burden.
As it were, the petitioners merely alleged that they filed two motions before the trial court to
have the original copy of the documents in the Office of the Register of Deeds of
Tagbilaran City be examined by handwriting experts but their motions were ignored by the
trial court. They then harp on the excuse that they could not be expected to prove forgery if
the trial court denied them the opportunity to do so.
We are not persuaded.
The trial court correctly ruled that the parties themselves dictate the course and flow of the
presentation of evidence, as well as the witnesses for each side. Considering that the case
before it is civil, not criminal, the lower court certainly cannot, on its own, issue an order
requiring a handwriting expert to appear before it and compare the documents presented
by the parties. It behooves upon the parties themselves to call forth their own set of
witnesses and present their own evidence to bolster their respective claims. If the
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
petitioners failed to present an expert witness, only themselves ought to be blamed. For,
as the trial court itself pointed out in its decision:
x x x. Plaintiffs, despite the opportunity given them by this Court, failed to present a
handwriting expert to determine whether there was indeed forgery in the execution of the
subject Deed of Sale. In the absence of the testimony of the handwriting expert, the
allegations of forgery by the plaintiffs is merely self-serving. Unfortunately, this Court is not
in the position to assess or evaluate the differences and similarities in the questioned
signatures, much less, categorically state whether or not forgery exists. Neither could this
court rely on the observation of the plaintiffs as to the alleged "glaring differences and
dissimilarities" of the questioned signatures. (Underscoring ours)
Moreover, the technical procedure utilized by handwriting experts, while usually helpful in
the examination of forged documents, is not mandatory or indispensable to the
examination or comparison of handwritings.[16]
In Jimenez v. Commission on Ecumenical Mission and Relations of the United
Presbyterian Church in the USA,[17]the Court identified and explained the factors involved
in the examination and comparison of handwritings:
xxx [T]he authenticity of a questioned signature cannot be determined solely upon its
general characteristics, similarities or dissimilarities with the genuine signature.
Dissimilarities as regards spontaneity, rhythm, pressure of the pen, loops in the strokes,
signs of stops, shades, etc., that may be found between the questioned signatures and the
genuine one are not decisive on the question of the formers authenticity. The result of
examinations of questioned handwriting, even with the benefit of aid of experts and
scientific instruments, is, at best, inconclusive. There are other factors that must be taken
into consideration. The position of the writer, the condition of the surface on which the
paper where the questioned signature is written is placed, his state of mind, feelings and
nerves, and the kind of pen and/or paper used, play an important role on the general
appearance of the signature. Unless, therefore, there is, in a given case, absolute
absence, or manifest dearth, of direct or circumstantial competent evidence on the
character of the questioned handwriting, much weight should not be given to characteristic
similarities, or dissimilarities, between that questioned handwriting and an authentic one.
And to determine forgery, the Court in Cesar v. Sandiganbayan18 (quoting Osborn, The
Problem of Proof) wrote:
The process of identification, therefore, must include the determination of the extent, kind,
and significance of this resemblance as well as of the variation. It then becomes necessary
to determine whether the variation is due to the operation of a different personality, or is
only the expected and inevitable variation found in the genuine writing of the same writer. It
is also necessary to decide whether the resemblance is the result of a more or less skillful
imitation, or is the habitual and characteristic resemblance which naturally appears in a
genuine handwriting. When these two questions are correctly answered the whole problem
of identification is solved.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

In the present case, all that the petitioners had to offer by way of evidence on the issue of
forgery was their bare denial that their predecessors-in-interest signed the subject Deed of
Sale. Such denial will not suffice to overcome the presumption of regularity of notarized
documents, to overthrow which, the countervailing evidence must be clear, convincing and
more than merely preponderant.19
Moreover, and as aptly pointed out by the lower court in its decision of June 7, 1999:
However, even if it were true that the signature of Antonia Ebe is forged, it cannot brush
aside the fact that all the heirs of Antonia Ebe, namely: Celedonia Putong, Eufemio
Putong, Gregorio Putong and Mariano Putong all signed in the Deed of Absolute Sale. As
earlier discussed their signatures cannot be said to have been forged as evidence
presented to prove the same is found to be insufficient. Henceforth, all the rightful heirs
who could question the subject sale are themselves signatories of the supposed
questionable transaction.
Meanwhile, granting that Procopio Tapurocs signature found on Exh. C is indeed a
forgery, he testified in open court that he discovered the sale and the fact of Mendes
possession of the subject land in 1967 yet and did not do anything about it.
property for a considerable period of time. With the Mendes possession in this case
having been in the concept of an owner and the land itself registered in their names for
more than thirty (30) years now, their title thereto had become indefeasible and their
possession could no longer be disturbed. The petitioners failure to take the necessary
steps to assert their alleged right for at least twenty-nine (29) years from date of
registration of title is fatal to their cause of action on the ground of laches.
As a final note, we emphasize that a Torrens title cannot be collaterally attacked. The
question on the validity of a Torrens title, whether fraudulently issued or not, can be raised
only in an action expressly instituted for that purpose. The title represented by the
certificate cannot be changed, altered, modified, enlarged, diminished, or cancelled in a
collateral proceeding. The action for the declaration of nullity of deed of sale commenced
by the petitioners in the RTC of Tagbilaran City is not the direct proceeding required by law
to attack a Torrens certificate of title.
WHEREFORE, the instant petition is DENIED and the challenged decision of the CA is
AFFIRMED.
No pronouncement as to costs.

At the other end of the spectrum, the respondents presented sufficient proof of their claim SO ORDERED.
of ownership over the property in dispute. The respondent Mendes maintain that they had
been in continuous, peaceful and open possession of the property since 1967, the year of
the alleged sale, or for more than thirty (30) years now. No less than the petitioners
themselves acknowledged this in their pleadings 20 before this Court. And beginning the
year 1968, the respondents have been religiously paying the realty taxes due on the same
property. Likewise, when TCT No. 3444 was lost, respondent Carmelita Loquellano Vda.
de Mende filed a petition for judicial reconstitution to secure a second owners copy of the
lost title. Said petition went through the proper procedure and thereafter Carmelita was
issued a second owners copy of TCT No. 3444 which was later changed to TCT No.
(8585) T-4767.

All told, we find that the petitioners, who initiated in the court of origin the basic complaint
in this case, have not sufficiently met the burden of proof to sustain their cause.
Additionally, we agree with the CA in ruling that laches had barred the petitioners:

xxx The records show that they [petitioners] did not institute any action against the order of
the then Court of First Instance, 14th Judiciary District. Their inaction and failure to assert
any right, if any, over the disputed lot, bars them from recovering the same as said failure
clearly asserts to laches.

Not to be overlooked is the fact that the petitioners filed their complaint of declaration of
nullity only after twenty-nine (29) years from the execution of the alleged forged deed of
sale. In the meanwhile, title to the property had already been in the name of respondent
Mendes since 1967. The Mendes had been in open, continuous and peaceful possession
of the subject land, and had been religiously paying the realty taxes due thereon. These
are hard facts that ought not to be disregarded. The Court, in a long line of cases, 21 has
uniformly held in favor of the registered owner who had been in possession of a disputed
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

CRESENCIANA TUBO G.R. No. 175720

RODRIGUEZ (now deceased), However, on June 14, 1984, Juanito executed a Deed of Absolute Sale over the
substituted by SUSANA A. LLAGAS,
Petitioner, Present: property in favor of petitioner.[4] Thus, TCT No. 144865 was cancelled and a new TCT No.
Ynares-Santiago, J. (Chairperson),
- versus - Austria-Martinez, 150431 was issued in the name of the petitioner. [5]
Chico-Nazario,
Nachura, and
Reyes, JJ.
EVANGELINE RODRIGUEZ, The case arose when petitioner filed on September 20, 2001 a complaint for
BELEN RODRIGUEZ and Promulgated:
BUENAVENTURA RODRIGUEZ, unlawful detainer against the respondents, alleging that she is the lawful and registered
Respondents. September 11, 2007
owner of the property; and that in 1984, she allowed respondents Evangeline,
x ---------------------------------------------------------------------------------------- x
Buenaventura and Belen, out of kindness and tolerance, to personally occupy units A, B
DECISION
and D, respectively. However, without her knowledge and consent, respondents separately
YNARES-SANTIAGO, J.:
leased the units to Montano Magpantay, Mel Navarro and Socorro Escota, who despite

repeated demands, failed and refused to vacate the premises and to pay the rentals
[1]
This petition for review on certiorari assails the Decision of the Court of Appeals in CA- thereof.[6]
G.R. SP No. 91442 dated June 27, 2006, which set aside the Decision of the Regional

Trial Court (RTC) of Makati City, Branch 134, in Civil Case No. 03-517, and reinstated the In their Answer, respondents claimed ownership over the subject property by
Decision of the Metropolitan Trial Court (MTC) of Makati City, Branch 63, in Civil Case No. succession. They alleged that while petitioner is the registered owner of the property,
75717, dismissing the complaint for ejectment; as well as the Resolution denying the however, she is not the lawful owner thereof because the June 14, 1984 Deed of Absolute
motion for reconsideration. Sale was simulated and void. As in Civil Case No. 01-1641 now pending before the RTC of

Juanito Rodriguez owned a five-door apartment located at San Jose Street, Guadalupe
[2]
Nuevo, Makati City, and covered by TCT No. 144865. On October 27, 1983, Juanito
executed a Huling Habilin at Testamento giving petitioner Cresenciana Tubo Rodriguez,
his live-in partner, apartments D and E, and his children Benjamin Rodriguez (the
deceased husband of respondent Evangeline Rodriguez), apartment A, respondent
[3]
Buenaventura Rodriguez, apartment B, and respondent Belen Rodriguez, apartment C.
Makati City, Branch 141, which they filed to assail the validity of the said sale, respondents
maintain that petitioner exerted undue influence over their father, who at that time was
seriously ill, to agree to the sale of the property for only P20,000.00 after knowing that only
two apartments were given to her in the Huling Habilin at Testamento. Further, she had no
cause of action against them for being a party to the August 23, 1990 Partition Agreement
wherein they recognized each other as co-owners and partitioned the property in
accordance with the provision of the last will and testament. [7]

On February 26, 2002, the MTC rendered a judgment in favor of the respondents and held
that the deed of sale was simulated otherwise petitioner would not have entered into the
Partition Agreement, which legally conferred upon each heir exclusive ownership over their
respective shares, thus:
WHEREFORE, the Complaint is DISMISSED. Plaintiff is
ordered to pay attorneys fees of P10,000.00 and the costs of suit in
favor of defendants.
SO ORDERED.[8]
On appeal, the RTC reversed the decision of the MTC. It held that petitioners
certificate of title is a conclusive evidence of ownership of the land described therein; and
that unless and until said title has been annulled by a court of competent jurisdiction, such
title is existing and valid. This is true also with respect to the deed of sale. The present
action, which involves only the issue of physical or material possession, is not the proper
action to challenge it. Further, the MTC erred when it relied heavily on the Huling Habilin at
Testamento, which was not probated hence has no effect and no right can be claimed
therein. The Partition Agreement which was allegedly entered into pursuant to the Huling
Habilin at Testamento should not also be considered. Thus:
WHEREFORE, premises considered, the decision rendered by the
Metropolitan Trial Court, Branch 63, Makati City, is hereby ordered
REVERSED AND SET ASIDE. Consequently, judgment is hereby
rendered ordering the defendants and all persons claiming rights under
them to vacate the premises and surrender the possession thereof to
the plaintiff. Defendants are likewise ordered to pay jointly and severally
the plaintiff an amount of P5,000.00 a month per unit beginning 13
August 2001 until they finally vacate the premises and the costs of this
suit.
SO ORDERED.[9]
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Aggrieved, respondents filed a petition for review before the Court of Appeals
which reversed and set aside the decision of the RTC and reinstated the decision of the
MTC. It held that the MTC correctly received evidence on ownership since the question of
possession could not be resolved without deciding the issue of ownership. Further,
the Huling Habilin at Testamento transmitted ownership of the specific apartments not only
to the respondents but also to the petitioner; and pursuant thereto, the parties executed
the Partition Agreement in accordance with the wishes of the testator, thus:
WHEREFORE, this Court resolves to REVERSE and SET
ASIDE the Decision of the Regional Trial Court. The decision
dated February 26, 2002 of the Metropolitan Trial Court, Branch
63, Makati City in Civil Case No. 75717 dismissing the complaint for
ejectment is hereby REINSTATED.
SO ORDERED.[10]
The motion for reconsideration was denied hence, petitioner filed the present petition for
review raising the following errors:
I.
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF
LAW AND GRAVE ABUSE OF DISCRETION IN REVERSING AND
SETTING ASIDE THE DECISION OF THE REGIONAL TRIAL COURT
AND REINSTATING THE DECISION OF THE METROPOLITAN TRIAL
COURT DISMISSING PETITIONERS COMPLAINT FOR UNLAWFUL
DETAINER.
II.
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF
LAW AND GRAVE ABUSE OF DISCRETION IN DECLARING THAT
THE PROPERTY, A PARCEL OF LAND UPON WHICH A FIVE-UNIT
APARTMENT STANDS, BECAME THE SUBJECT OF JUANITO
RODRIGUEZS HULING HABILIN AT TESTAMENTO WHEREIN THE
PROPERTY WAS DISTRIBUTED TO HIS HEIRS (HEREIN
RESPONDENTS) INCLUDING THE RESPONDENT (PETITIONER
HEREIN).[11]

Petitioner alleges that as the registered owner of the subject property, she enjoys
the right of possession thereof and that question of ownership cannot be raised in an
ejectment case unless it is intertwined with the issue of possession. While the court may
look into the evidence of title or ownership and possession de jure to determine the nature
of possession, it cannot resolve the issue of ownership because the resolution of said
issue would effect an adjudication on ownership which is not proper in the summary action
for unlawful detainer. Petitioner insists that the Court of Appeals erred in ruling that
the Huling Habilin at Testamento transmitted ownership of the specific apartments
disregarding the fact that the same is not probated yet and that the testator changed or
revoked his will by selling the property to petitioner prior to his death.
Contrarily, respondents pray that the instant petition for review be dismissed since the
resolution of the question of ownership by the MTC and the Court of Appeals was
provisional only to resolve the issue of possession. Petitioner can always avail of legal
remedies to have the issue of ownership passed upon by the proper court. Aware of the
provisional nature of the resolution on ownership in ejectment cases, respondents filed
Civil Case No. 01-1641 to assail the validity of the deed of sale of the property and the
registration thereof in petitioners name.
The petition has merit.
An action for unlawful detainer exists when a person unlawfully withholds possession of
any land or building against or from a lessor, vendor, vendee or other persons, after the
expiration or termination of the right to hold possession, by virtue of any contract, express
or implied.[12] The sole issue to be resolved is the question as to who is entitled to the
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
physical or material possession of the premises or possession de facto.[13] Being a
summary proceeding intended to provide an expeditious means of protecting actual
possession or right to possession of property, the question of title is not involved[14] and
should be raised by the affected party in an appropriate action in the proper court. [15]
However, when the issue of ownership is raised the court is not ousted of its
jurisdiction. Section 16 of Rule 70 of the Rules of Court provides:
SEC 16. Resolving defense of ownership. When the
defendant raises the defense of ownership in his pleadings and the
question of possession cannot be resolved without deciding the issue of
ownership, the issue of ownership shall be resolved only to determine
the issue of possession.
Thus, all that the trial court can do is to make an initial determination of who is the owner of
the property so that it can resolve who is entitled to its possession absent other evidence
to resolve ownership.[16]But this adjudication is only provisional and does not bar or
prejudice an action between the same parties involving title to the property. [17]
In the case at bar, petitioners cause of action for unlawful detainer was based on
her alleged ownership of land covered by TCT No. 150431 and that she merely tolerated
respondents stay thereat.However, when respondents leased the apartments to other
persons without her consent, their possession as well as those persons claiming right
under them became unlawful upon their refusal to vacate the premises and to pay the
rent. On the other hand, respondents assailed petitioners title by claiming that the deed of
sale upon which it was based was simulated and void. They insisted that they were co-
owners thus, they have the right to possess the said property. To prove their claim, they
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

presented the Huling Habilin at Testamento of Juanito Rodriguez and the Partition that can be resolved only in Civil Case No. 01-1641, an action instituted by the

Agreement. respondents for that purpose.

The lower courts considered the following documentary evidence in arriving at We are, thus, left with the deed of sale and the certificate of title over the property to

their respective decisions, albeit the RTC decision contradicts that of the MTC and Court of consider.

Appeals: 1) Huling Habilin at Testamento executed by Juanito Rodriguez on October 27,

1983; 2) Deed of Sale of the property executed by Juanito Rodriguez and the petitioner on We agree with the RTC that a certificate of title is a conclusive evidence of

June 14, 1984; 3) TCT No. 150431 in the name of the petitioner; and 4) the August 23, ownership of the land described therein; the validity of which shall not be subject to a

1990 Partition Agreement executed by both the respondents and the petitioner. collateral attack, especially in an ejectment case which is summary in nature.

Based on the foregoing documentary evidence, we find that there is In Ross Rica Sales Center, Inc. v. Ong,[19] the Court held that:

preponderance of evidence in favor of the petitioners claim. Respondents failed to prove

The long settled rule is that the issue of ownership cannot be
their right of possession, as the Huling Habilin at Testamento and the Partition Agreement subject of a collateral attack.

have no legal effect since the will has not been probated. Before any will can have force or In Apostol v. Court of Appeals, this Court had the occasion to
clarify this:
validity it must be probated. This cannot be dispensed with and is a matter of public
. . . Under Section 48 of Presidential
policy.[18] Article 838 of the Civil Code mandates that [n]o will shall pass either real or Decree No. 1529, a certificate of title shall not be
subject to collateral attack. It cannot be altered,
personal property unless it is proved and allowed in accordance with the Rules of modified or cancelled, except in a direct proceeding
for that purpose in accordance with law. The issue
Court. As the will was not probated, the Partition Agreement which was executed pursuant of the validity of the title of the respondents can only
be assailed in an action expressly instituted for that
thereto can not be given effect. Thus, the fact that petitioner was a party to said agreement purpose. Whether or not the petitioners have the
right to claim ownership over the property is beyond
becomes immaterial in the determination of the issue of possession.
the power of the court a quo to determine in an
action for unlawful detainer.

Moreover, at the time the deed of sale was executed in favor of the petitioner,
Further, in Co v. Militar,[20] it was held that:
Juanito Rodriguez remained the owner thereof since ownership would only pass to his

heirs at the time of his death. Thus, as owner of the property, he had the absolute right to
[T]he Torrens System was adopted in this country because it was
believed to be the most effective measure to guarantee the integrity of
dispose of it during his lifetime. Now, whether or not the disposition was valid is an issue
land titles and to protect their indefeasibility once the claim of
ownership is established and recognized.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

It is settled that a Torrens Certificate of title is indefeasible and binding

upon the whole world unless and until it has been nullified by a court of
competent jurisdiction. Under existing statutory and decisional law, the RUBEN C. CORPUZ, represented by Attorney-in-Fact G.R. No. 183822
power to pass upon the validity of such certificate of title at the first Wenifreda C. Agullana,
instance properly belongs to the Regional Trial Courts in a direct Petitioner,
proceeding for cancellation of title.
-versus-
As the registered owner, petitioner had a right to the possession of the Present:
property, which is one of the attributes of ownership. x x x
CARPIO, J.,
Sps. HILARION AGUSTIN and Chairperson,
JUSTA AGUSTIN, PEREZ,
We emphasize, however, that our ruling on the issue of ownership is only provisional to Respondents. SERENO,
REYES, and
determine who between the parties has the better right of possession. It is, therefore, not PERLAS-BERNABE, JJ.*

conclusive as to the issue of ownership, which is the subject matter of Civil Case No. 01- Promulgated:

1641. Our ruling that petitioner has a better right of possession was arrived at on the basis January 18, 2012

of evidence without prejudice to the eventual outcome of the annulment case, where the

issue as to who has title to the property in question is fully threshed out. As the law now

stands, in an ejectment suit, the question of ownership may be provisionally ruled upon for

the sole purpose of determining who is entitled to possession de facto. x-----------------------------------------------------------x

DECISION

WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals in CA-G.R. SERENO, J.:

SP No. 91442 dated June 27, 2006 is REVERSED and SET ASIDE. The Decision of

the Regional Trial Court ofMakati City, Branch 134, in Civil Case No. 03-517, reversing the This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the

Decision of the Metropolitan Trial Court (MTC) of Makati City, Branch 63, in Civil Case No. Decision[1] dated 08 January 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 90645,

75717, is REINSTATED. which affirmed the Decision of the Regional Trial Court (RTC) of Laoag City and its

Resolution[2] dated 15 July 2008 denying the Motion for Reconsideration. The RTC, in the

SO ORDERED. exercise of its appellate jurisdiction, affirmed the Decision of the Municipal Trial Court

(MTC) of Laoag City, which had dismissed the unlawful detainer case filed by herein

petitioner.

The Factual Antecedents

The Court adopts the findings of fact of the CA as follows:


Ruben C. Corpuz (Ruben) filed a complaint for ejectment against
Spouses Hilarion and Justa Agustin on the allegation that he is the
registered owner of two parcels of land located in Santa
Joaquina, Laoag City covered by TCT No. 12980 issued on
October 29, 1976 by the Laoag City Register of Deeds and with
technical descriptions as follows:
1) A parcel of land (Lot No. 20 of the Cadastral Survey
of Laoag), with improvements thereon, situated in
the barrio of Santa Joaquina, Municipality of Laoag.
Bounded x x x containing an area of five thousand
seven hundred and fifty nine (5,759) square meters
more or less x x x.
2) A parcel of land (Lot No. 11711 of the Cadastral
Survey of Laoag), with the improvements thereon,
situated in the barrio of Santa
Joaquina, Municipality of Laoag. Bounded x x x,
containing an area of twenty thousand seven
hundred and forty five (20,745) square meters, more
or less x x x.
Aforesaid parcels of land were formerly owned by Elias Duldulao in
whose name Original Certificate of Title No. O-1717 was issued.
Duldulao sold said properties on August 27, 1951 to Francisco D.
Corpuz, father of Ruben C. Corpuz. The elder Corpuz allowed
spouses Agustin to occupy subject properties, the latter being
relatives.
Despite demand to vacate, the Agustins refused to leave the
premises.
Ruben alleged further that he has the better right to possess
subject property having acquired the same from his father,
Francisco, who executed a Deed of Quitclaim in his favor on March
15, 1971.
Spouses Agustin, in their Answer, interposed the defense that on
June 5, 1971 Francisco Corpuz, Ruben's father, disposed of
subject property by executing a Deed of Absolute Sale in their favor
for a consideration of Eleven Thousand One Hundred Fifty Pesos
(P11,150.00).
The Municipal Trial Court found for the spouses Agustin and
dismissed the complaint.
In sum, considering the evidence of the defendants
which shows that they entered into and occupied Lot
No. 20 and the 9,657 sq. m. portion of Lot No.
11711 as buyers or owners, disproving the
allegation of the plaintiff that defendants were
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
merely allowed by Francisco Corpuz to occupy the
subject properties, being his relatives, and
considering further the length of time that the
defendants have been in possession, as owners, of
Lot No. 20 and the 9,657 sq. m. portion of Lot No.
11711, and have been continuously exercising their
rights of ownership thereon, this court is of the view
and holds, in so far as this case is concerned, that
the defendants are the ones entitled to the
possession of Lot No. 20 and the 9,657 sq. m.
portion of Lot No. 11711.
WHEREFORE, premises considered, this
case, is hereby dismissed.
SO ORDERED.
On appeal, Branch XVI, Regional Trial Court of Laoag City affirmed
said dismissal, the dispositive portion of said decision states:
WHEREFORE, premises considered, the Appeal is
hereby DISMISSED for lack of merit and the
JUDGMENT of the Municipal Trial Court in Cities,
Branch 01, Laoag City is hereby AFFIRMED, with
costs against the plaintiff-appellant.
SO ORDERED.[3]
Petitioner assailed the Decision of the RTC, affirming the earlier dismissal of the case by
the MTC, by instituting an appeal with the CA. On 08 January 2008, the appellate court
through its Fourteenth Division dismissed his appeal. [4] It noted that his father engaged in
a double sale when he conveyed the disputed properties to petitioner and respondents.
The Quitclaim executed by the elder Corpuz in favor of petitioner was dated 15 March
1971, while the Deed of Sale with respondents was later, on 15 June 1971; both
documents were notarized shortly after their execution. [5] The Quitclaim, which was
subsequently inscribed at the back of Original Certificate of Title (OCT) No. O-1717 on 29
October 1976,[6] resulted in the issuance of Transfer Certificate of Title (TCT) No. T-12980
in the name of petitioner. The Deed of Sale executed with respondents was, however, not
annotated at the back of OCT No. O-1717 and remained unregistered.[7]
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

I. THE HONORABLE COURT OF APPEALS SERIOUSLY

Based on the above findings, the CA ruled that petitioner had knowledge of the ERRED IN FAILING TO CONSIDER THE LEGAL OWNERSHIP
OF PETITIONER ON THE DISPUTED PROPERTY TO CLAIM
sale of the disputed real property executed between Francisco Corpuz, petitioner's father, BETTER RIGHT TO POSSESSION.

and respondents. Due to this conveyance by the elder Corpuz to respondents, the latter's II. THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED IN THE APPRECIATION OF THE ALLEGED SALE IN
possession thereof was in the nature of ownership. Thus, in the context of an unlawful FAVOR OF RESPONDENTS TO RULE THAT THEY HAVE
BETTER RIGHT TO POSSESSION.
detainer case instituted by petitioner against respondents, the appellate court concluded
III. THE HONORABLE COURT OF APPEALS SERIOUSLY
that respondents possession of the property was not by mere tolerance of its former ERRED IN FAILING TO CONSIDER THE CASE OF JACINTO CO
VS. MILITAR, ET AL. (421 SCRA 455) WHICH IS SIMILAR TO
owner petitioner's father but was in the exercise of ownership. [8] THE INSTANT CASE.

IV. THE HONORABLE COURT OF APPEALS SERIOUSLY

The CA noted that petitioner had knowledge of his fathers sale of the properties to ERRED IN DENYING THE PETITION FOR REVIEW RAISED
BEFORE IT.[13]
respondents as early as 1973. However, despite knowledge of the sale, petitioner failed to

initiate any action to annul it and oust respondents from the subject properties. [9] The
Petitioner presents to this Court for resolution the core issue of his Petition: who between
appellate court rejected his contention that, as registered owner of the disputed properties,
the parties has the right to possession of the disputed properties -- petitioner, who is the
he had a better right to possession thereof, compared to the unregistered Deed of Sale
registered owner under TCT No. T-12980; or respondents, who have a notarized yet
relied upon by respondents in their defense of the same properties. The CA ruled that the
unregistered Deed of Absolute Sale over the same properties?
inaction on his part despite knowledge of the sale in 1973 was equivalent to registration of

respondents unregistered deed.[10] In dismissing his appeal, the CA concluded that

The Court's Ruling
respondents possession was not ... anchored on mere tolerance nor on any of the

grounds for forcible entry or unlawful detainer; hence the complaint for ejectment must We DENY the Petition.
[11]
fail. The dispositive portion of the assailed Decision reads: Although this case does not present a novel question of law, there is a need to discuss the

WHEREFORE, in view of the foregoing, the instant petition is hereby nature of an ejectment case for the recovery of physical possession in relation to
DISMISSED. The decision of Branch
XVI, Regional Trial Court of Laoag City in Civil Case No. 13293-16 is the Torrens system. A resolution of the issue would be relevant to the determination of
hereby AFFIRMED.
who has the better right to possession in this unlawful detainer case.

SO ORDERED.[12]
One of the three kinds of action for the recovery of possession of real property is accion

interdictal, or an ejectment proceeding ... which may be either that for forcible entry
The Issues
(detentacion) or unlawful detainer (desahucio), which is a summary action for the recovery
Petitioner assigns the following errors in this Petition for Review on Certiorari:
of physical possession where the dispossession has not lasted for more than one year,

and should be brought in the proper inferior court. [14] In ejectment proceedings, the courts
resolve the basic question of who is entitled to physical possession of the premises,
possession referring to possession de facto, and not possession de jure.[15]
Where the parties to an ejectment case raise the issue of ownership, the courts
may pass upon that issue to determine who between the parties has the better right to
possess the property. However, where the issue of ownership is inseparably linked to that
of possession, adjudication of the ownership issue is not final and binding, but only for the
purpose of resolving the issue of possession. The adjudication of the issue of ownership is
only provisional, and not a bar to an action between the same parties involving title to the
property.[16]
In the instant case, the position of respondents is that they are occupying the disputed
properties as owners, having acquired these from petitioner's father through a Deed of
Absolute Sale executed in 1971. Respondents believe that they cannot be dispossessed of
the disputed properties, since they are the owners and are in actual possession thereof up
to this date. Petitioner, however, rebuts this claim of ownership, contending that he has
registered the disputed properties in his name and has been issued a land title under
the Torrens system. He asserts that, having registered the properties in his name, he is the
recognized owner and consequently has the better right to possession.
Indeed, a title issued under the Torrens system is entitled to all the attributes of property
ownership, which necessarily includes possession. [17] Petitioner is correct that as
a Torrens title holder over the subject properties, he is the rightful owner and is entitled to
possession thereof. However, the lower courts and the appellate court consistently found
that possession of the disputed properties by respondents was in the nature of ownership,
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
and not by mere tolerance of the elder Corpuz. In fact, they have been in continuous, open
and notorious possession of the property for more than 30 years up to this day.
Petitioner cites Jacinto Co v. Rizal Militar, et al.,[18] which has facts and legal
issues identical to those of the instant case. The petitioner therein filed an unlawful
detainer case against the respondents over a disputed property. He had a Torrens title
thereto, while the respondents as actual occupants of the property claimed ownership
thereof based on their unregistered Deeds of Sale. The principal issue was who between
the two parties had the better right to possess the subject property.
This Court resolved the issue by upholding the title holder as the one who had
the better right to possession of the disputed property based on the following justification:
We have, time and again, held that the only issue for resolution in an
unlawful detainer case is physical or material possession of the
property involved, independent of any claim of ownership by any of the
party litigants. Moreover, an ejectment suit is summary in nature and is
not susceptible to circumvention by the simple expedient of asserting
ownership over the property.
In forcible entry and unlawful detainer cases, even if the
defendant raises the question of ownership in his pleadings and the
question of possession cannot be resolved without deciding the issue
of ownership, the lower courts and the Court of Appeals, nonetheless,
have the undoubted competence to provisionally resolve the issue of
ownership for the sole purpose of determining the issue of Possession.
Such decision, however, does not bind the title or affect the
ownership of the land nor is conclusive of the facts therein found in a
case between the same parties upon a different cause of action
involving possession.
In the instant case, the evidence showed that as between the
parties, it is the petitioner who has a Torrens Title to the property.
Respondents merely showed their unregistered deeds of sale in
support of their claims. The Metropolitan Trial Court correctly relied on
the transfer certificate of title in the name of petitioner.
In Tenio-Obsequio v. Court of Appeals, it was held that 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.
It is settled that a Torrens Certificate of title is indefeasible
and binding upon the whole world unless and until it has been nullified
by a court of competent jurisdiction. Under existing statutory and
decisional law, the power to pass upon the validity of such certificate of
title at the first instance properly belongs to the Regional Trial Courts in
a direct proceeding for cancellation of title.
As the registered owner, petitioner had a right to the
possession of the property, which is one of the attributes of his
ownership. Respondents' argument that petitioner is not an innocent
purchaser for value and was guilty of bad faith in having the subject
land registered in his name is a collateral attack on the title of
petitioner, which is not allowed. A certificate of title cannot be subject
to a collateral attack and can be altered, modified or cancelled only in a
direct proceeding in accordance with law. [19]
The pronouncement in Co v. Militar was later reiterated in Spouses Pascual v.
[20] [21]
Spouses Coronel and in Spouses Barias v. Heirs of Bartolome Boneo, et al.,
we consistently held the age-old rule that the person who has a Torrens Title over a land
is entitled to possession thereof.[22]
However, we cannot lose sight of the fact that the present petitioner has instituted an
unlawful detainer case against respondents. It is an established fact that for more than
three decades, the latter have been in continuous possession of the subject property,
which, as such, is in the concept of ownership and not by mere tolerance of petitioners
father. Under these circumstances, petitioner cannot simply oust respondents from
possession through the summary procedure of an ejectment proceeding.
Instructive on this matter is Carbonilla v. Abiera,[23] which reads thus:
Without a doubt, the registered owner of real property is
entitled to its possession. However, the owner cannot simply wrest
possession thereof from whoever is in actual occupation of the
property. To recover possession, he must resort to the proper judicial
remedy and, once he chooses what action to file, he is required to
satisfy the conditions necessary for such action to prosper.
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Land Titles and Deeds (Finals) 2017
In the present case, petitioner opted to file an ejectment case
against respondents. Ejectment casesforcible entry and unlawful
detainerare summary proceedings designed to provide expeditious
means to protect actual possession or the right to possession of the
property involved. The only question that the courts resolve in
ejectment proceedings is: who is entitled to the physical possession of
the premises, that is, to the possession de facto and not to the
possession de jure. It does not even matter if a partys title to the
property is questionable. For this reason, an ejectment case will not
necessarily be decided in favor of one who has presented proof
of ownership of the subject property. Key jurisdictional facts
constitutive of the particular ejectment case filed must be averred in
the complaint and sufficiently proven.
The statements in the complaint that respondents possession
of the building was by mere tolerance of petitioner clearly make out a
case for unlawful detainer. Unlawful detainer involves the persons
withholding from another of the possession of the real property to
which the latter is entitled, after the expiration or termination of the
formers right to hold possession under the contract, either expressed
or implied.
A requisite for a valid cause of action in an unlawful detainer
case is that possession must be originally lawful, and such possession
wherein must have turned unlawful only upon the expiration of the right to
possess. It must be shown that the possession was initially lawful;
hence, the basis of such lawful possession must be established. If, as
in this case, the claim is that such possession is by mere tolerance of
the plaintiff, the acts of tolerance must be proved. (Emphasis supplied.)
In this case, petitioner has not proven that respondents continued possession of
the subject properties was by mere tolerance of his father, except by a mere allegation
thereof. In fact, petitioner has not established when respondents possession of the
properties became unlawful a requisite for a valid cause of action in an unlawful detainer
case.
In Canlas v. Tubil,[24] we enumerated the elements that constitute the sufficiency of
a complaint for unlawful detainer, as follows:
Well-settled is the rule that what determines the nature of the action as
well as the court which has jurisdiction over the case are the allegations
in the complaint. In ejectment cases, the complaint should embody
such statement of facts as to bring the party clearly within the class of
cases for which the statutes provide a remedy, as these proceedings

are summary in nature. The complaint must show enough on its face to
give the court jurisdiction without resort to parol evidence.
Unlawful detainer is an action to recover possession of real
property from one who illegally withholds possession after the
expiration or termination of his right to hold possession under any
contract, express or implied. The possession of the defendant in
unlawful detainer is originally legal but became illegal due to the
expiration or termination of the right to possess.
An unlawful detainer proceeding is summary in nature,
jurisdiction of which lies in the proper municipal trial court or
metropolitan trial court. The action must be brought within one year
from the date of last demand and the issue in said case is the right to
physical possession.
... ... ...
In Cabrera v. Getaruela, the Court held that a complaint sufficiently
alleges a cause of action for unlawful detainer if it recites the following:
(1) initially, possession of property by the defendant was by
contract with or by tolerance of the plaintiff;
(2) eventually, such possession became illegal upon notice
by plaintiff to defendant of the termination of the latters
right of possession;
(3) thereafter, the defendant remained in possession of the
property and deprived the plaintiff of the enjoyment
thereof; and
(4) within one year from the last demand on defendant to
vacate the property, the plaintiff instituted the complaint
for ejectment.
Based on the above, it is obvious that petitioner has not complied with the
requirements sufficient to warrant the success of his unlawful detainer Complaint against
respondents. The lower courts and the CA have consistently upheld the entitlement of
respondents to continued possession of the subject properties, since their possession has
been established as one in the concept of ownership. Thus, the courts correctly dismissed
the unlawful detainer case of petitioner.
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Land Titles and Deeds (Finals) 2017
We concur in the appellate courts findings that petitioners father engaged in a
double sale of the disputed properties. The records of the case show that it took petitioner
more or less five years from 1971 when he acquired the property from his father to 1976
when petitioner registered the conveyance and caused the issuance of the land title
registered in his name under the Torrens system. Respondents, on the other hand,
continued their possession of the properties, but without bothering to register them or to
initiate any action to fortify their ownership.
We cannot, however, sustain the appellate courts conclusion that petitioner's
failure to initiate any action to annul the sale to respondents and oust them from the
disputed properties had the effect of registration of respondents unregistered Deed of
[25]
Absolute Sale. We held thus in Ruiz, Sr. v. Court of Appeals :
(But) where a party has knowledge of a prior existing interest
which is unregistered at that time he acquired a right to the same
land, his knowledge of that prior unregistered interest has the
effect of registration as to him. Knowledge of an unregistered sale is
equivalent to registration. As held in Fernandez v. Court of
Appeals [189 SCRA 780 (1990)],
Section 50 of Act No. 496 (now Sec. 51 of
P.D. 1529), provides that the registration of the deed
is the operative act to bind or affect the land insofar
as third persons are concerned. But where the party
has knowledge of a prior existing interest which is
unregistered at the time he acquired a right to the
same land, his knowledge of that prior unregistered
interest has the effect of registration as to him. The
Torrens system cannot be used as a shield for the
commission of fraud (Gustillo v. Maravilla, 48 Phil.
442). [Emphasis supplied.]
In this case, the Quitclaim executed by the elder Corpuz in favor of petitioner
was executed ahead of the Deed of Sale of respondents. Thus, the sale of the subject
properties by petitioners father to respondents cannot be considered as a prior interest at
the time that petitioner came to know of the transaction.

We also note that, based on the records, respondents do not dispute the existence of TCT
No. T-12980 registered in the name of petitioner. They allege, though, that the land title
issued to him was an act of fraud [26] on his part. We find this argument to be equivalent to
a collateral attack against the Torrens title of petitioner an attack we cannot allow in the
instant unlawful detainer case.
It is settled in jurisprudence that a Torrens certificate of title cannot be the
subject of collateral attack.[27] Such attack must be direct and not by a collateral
proceeding.[28] It is a well-established doctrine that the title represented by the certificate
cannot be changed, altered, modified, enlarged, or diminished in a collateral
proceeding.[29] Considering that this is an unlawful detainer case wherein the sole issue to
be decided is possession de facto rather than possession de jure, a collateral attack by
herein respondents on petitioner's title is proscribed.
Our ruling in the present case is only to resolve the issue of who has the better
right to possession in relation to the issue of disputed ownership of the subject properties.
Questions as to the validity of petitioner's Torrens title can be ventilated in a proper suit
instituted to directly attack its validity, an issue that we cannot resolve definitively in this
unlawful detainer case.
WHEREFORE, in view of the foregoing, we deny the instant Petition for lack of
merit. The Decisions of the Court of Appeals in CA-G.R. SP No. 90645 (dated January 08,
2008), of the Regional Trial Court of Laoag City in Civil Case No. 3111-13293-65, as well
as of the Municipal Trial Court of Laoag City in Civil Case No. 3111 -- all dismissing the
unlawful detainer case of petitioner are AFFIRMED.
We make no pronouncements as to attorney's fees for lack of evidence. SO
ORDERED.
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Land Titles and Deeds (Finals) 2017
G.R. No. 191432, September 02, 2015
TERESA D. TUAZON, Petitioner, v. SPOUSES ANGEL AND MARCOSA
ISAGON, Respondents.
DECISION
BRION, J.:
We resolve the petition for review on certiorari filed by petitioner Teresa Tuazon
(Teresa) to challenge the October 28, 2009 Decision and February 11, 2010 Resolution of
the Court of Appeals in CA-G.R. SP No. 107937, penned by Associate Justice Marlene
Gonzales-Sison with Associate Justices Andres B. Reyes, Jr. and Vicente S.E. Veloso,
concurring.
The Facts
During their lifetime, spouses Melencio Diaz and Dolores Gulay (Dolores) owned Lot 103
of the Santa Rosa Estate, Barangay Aplaya, Sta. Rosa, Laguna, consisting of 499 square
meters (Lot 103). They had three daughters named Maria, Paciencia, and Esperanza.
Melencio and Maria predeceased Dolores. On May 28, 1955, Dolores, Paciencia, and
Esperanza adjudicated Lot 103 to Dolores through a Deed of Extrajudicial Settlement.
Maria's children who were still minors at that time were not included in the settlement.
On March 17, 1956, Dolores sold Lot 103 to Isabel Torres through a Bilihang
Tuluyan (Deed of Absolute Sale). Subsequently, Isabel Torres sold Lot 103 to Teresa on
September 29, 1973.
On October 12, 1973, Maria's children, namely Gloria, Angel, Felix, and Flaviano, all
surnamed Isagon, executed a Deed of Conformity. In this instrument, they honored the
Deed of Extrajudicial Settlement executed by their grandmother and aunts, subject to the
condition that they would get one-sixth of Lot 103 as their share.
Gloria, Felix, and Flaviano also sold their.shares to Teresa. On the other hand, Angel
mortgaged his share to Teresa on October 20, 1975, through a Kasulatan ng Sanglaan.
His share consisted of 20.75 square meters which was one-fourth of the one-sixth share in
the property. Angel Isagon thereafter refused and failed to redeem the mortgaged
property.
Teresa has been paying the real estate taxes due on Lot 103 since 1974 up to the present.
Lot 103 is covered by an undated and reconstituted Transfer Certificate of Title (TCT)
No. (N.A.) RT-1925 issued in Teresa's name.
Sometime in 1972, the petitioner's brother, Antonio Tuazon (Antonio), allowed Spouses
Angel and Marcosa Isagon (respondents) to build a small hut on a portion of Lot 103
without Teresa's knowledge. The respondents and their children were then living by the
seashore and Antonio feared that their house could be swept away by the floods during a
typhoon.
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In 2000, the respondents started to construct a house on the disputed property despite She adds that the only issue in an unlawful detainer case is the physical possession of the
Teresa's protest. For years, however, Teresa tolerated their possession and use of the property. As the registered owner, she has the right to enjoy all the rights of an owner
contested area. under Articles 428 and 429 of the Civil Code, including actual possession.

In 2007, Teresa filed a complaint against the respondents before the Lupon Our Ruling
Tagapamayapa of Barangay Aplaya. The parties failed to reach any amicable settlement.

On January 24, 2007, Teresa sent a final demand letter to respondents to vacate and to We grant the petition.
pay rental fees. The respondents did not reply.
The sole issue here is who has the better right of physical possession between the
On September 11, 2007, Teresa filed a complaint for unlawful detainer against the registered owner as shown in the certificate of title and the mortgagor as shown in
respondents before the Municipal Trial Court in Cities (MTCC), City of Sta. Rosa, Laguna. the Kasulatan ng Sanglaan.
She prayed that the respondents be ordered to vacate the subject property and to pay
compensation for its use and occupancy. While the CA is correct that a mortgage does not transfer ownership, the indefeasibility of
a Torrens title should have been given primary consideration.
In their answer, the respondents alleged that they were occupying the subject property as
owners. They also alleged that Teresa fraudulently obtained TCT No. (N.A.) RT-1925. An action for unlawful detainer is summary in nature and cannot be delayed by a mere
assertion of ownership as a defense.1 When the parties to an ejectment case raise the
The MTCC and RTC Rulings issue of ownership, the court may pass upon that issue only if needed to determine who
between the parties has a better right to possess the property.2 Furthermore, the
The MTCC, in its judgment on January 25, 2008, decided in favor of Teresa and ordered adjudication on the issue of ownership is only provisional, 3 and subject to a separate
the respondents to vacate the subject property and to pay reasonable rent and attorney's proceeding that the parties may initiate to settle the issue of ownership.
fees. The MTCC held that Teresa was the owner of the property as shown by TCT No.
(N.A.) RT-1925, and as owner, she was entitled to enjoy the right of possession over the A person who possesses a title issued under the Torrens system is entitled to all the
subject property. It added that a property registered under the Torrens system could not be attributes of ownership including possession. 4 A certificate of title cannot be subject to a
collaterally attacked in an action for unlawful retainer. collateral attack in an action for unlawful detainer. A collateral attack is made when, in an
action to obtain a different relief, the validity of a certificate of title is questioned. 5
On appeal, the Regional Trial Court (RTC) in Bifian, Laguna, affirmed in toto the decision
of the MTCC. The RTC denied the respondents' motion for reconsideration. In the present case, the respondents alleged in their answer that the certificate of title
issued in the name of Teresa was fraudulently obtained. This defense constitutes a
The CA Ruling collateral attack on the title and should not therefore be entertained. To directly assail the
validity of TCT No. (N.A.) RT-1925, a direct action for reconveyance must be filed. 6

The respondents appealed the RTC's ruling to the CA. In the present case, based on the certificate of title, Teresa is the owner of the subject
property and is entitled to its physical possession.
In its October 28, 2009 Decision, the CA reversed the RTC's ruling. The CA noted that
Angel Isagon executed a real estate mortgage in favor of Teresa over a portion of Lot 103 WHEREFORE, we hereby GRANT the petition for review on certiorari. The Decision dated
but had failed to redeem it. Citing Article 2088 of the Civil Code, the CA concluded that October 28, 2009, and the Resolution dated February 11, 2010, of the Court of Appeals in
Teresa was a mere mortgagee and had no right to eject the respondents. Instead of CA-G.R. SP No. 107937 are hereby REVERSED and SET ASIDE. The decision dated
foreclosing the property, Teresa filed this action for unlawful detainer. The CA added that a October 15, 2008, of Branch 25 of the Regional Trial Court, Bian, Laguna, in Civil Case
mortgage was not an instrument that transferred ownership; thus, the disputed property No. B-7472, is hereby REINSTATED.
still belonged to the respondents.
SO ORDERED.
The Petition

Teresa's present petition for review on certiorari argues that she is the registered owner,
not a mere mortgagee, of the property as shown by TCT No. (N.A.) RT-1925. Section 51 of
Presidential Decree No. 1929 expressly states that registration is the operative act that
conveys registered land. Thus, the TCT is the best proof of ownership.

UDK No. 7671 June 23, 1988
DEVELOPMENT BANK OF THE PHILIPPINES, registrant-appellant,
vs.
THE ACTING REGISTER DEEDS OF NUEVA ECIJA, respondent-appellee.
NARVASA, J.:
This case, rather cut-and-dried as far as factual background is concerned, turns upon a
determination of the true meaning and intendment of Section 56 of Presidential Decree No.
1529, 1 which in part reads:
Sec. 56. Primary Entry Book; fees, certified copies. Each Register of
Deeds shall keep a primary entry book in which, upon payment of the
entry fee, he shall enter, in the order of their reception, all instruments
including copies of writs and processes filed with him relating to
registered land. He shall, as a preliminary process in registration, note
in such book the date, hour and minute of reception of all instruments,
in the order in which they were received. They shall be regarded as
registered from the time so noted, and the memorandum of each
instrument, when made on the certificate of title to which it refers, shall
bear the same date: Provided, that the national government as well as
the provincial and city governments shall be exempt from the payment
of such fees in advance in order to be entitled to entry and registration.
xxx xxx xxx
The facts are few and undisputed. On June 13, 1980, the Development Bank of the
Philippines (hereafter, DBP) presented for registration to the Register of Deeds of Nueva
Ecija, Cabanatuan City, a sheriff's certificate of sale in its favor of two parcels of land
covered by Transfer Certificates of Title Nos. NT-149033 and NT-149034, both in the
names of the spouses Andres Bautista and Marcelina Calison, which said institution had
acquired as the highest bidder at an extrajudicial foreclosure sale. The transaction was
entered as Entry No. 8191 in the Registry's Primary Entry Book and DBP paid the requisite
registration fees on the same day. Annotation of the sale on the covering certificates of title
could not, however be effected because the originals of those certificates were found to be
missing from the files of the Registry, where they were supposed to be kept, and could not
be located. 2 On the advice of the Register of Deeds, DBP instituted proceedings in the
Court of First Instance of Nueva Ecija to reconstitute said certificates, and reconstitution
was ordered by that court in a decision rendered on June 15, 1982. 3 For reasons not
apparent on the record, the certificates of title were reconstituted only on June 19,1984. 4
On June 25, 1984, DBP sought annotation on the reconstituted titles of the certificate of
sale subject of Entry No. 8191 on the basis of that same four-year-old entry. The Acting
Register of Deeds, being in doubt of the proper action to take on the solicitation, took the
matter to the Commissioner of Land Registration by consulta raising two questions: (a)
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Land Titles and Deeds (Finals) 2017
whether the certificate of sale could be registered using the old Entry No. 8191 made in
1980 notwithstanding the fact that the original copies of the reconstituted certificates of title
were issued only on June 19, 1984; and (b) if the first query was answered affirmatively,
whether he could sign the proposed annotation, having assumed his duties only in July
1982.5
The resolution on the consulta held that Entry No. 8191 had been rendered "... ineffective
due to the impossibility of accomplishing registration at the time the document was entered
because of the non-availability of the certificate (sic) of title involved. For said certificate of
sale to be admitted for registration, there is a need for it to be re-entered now that the titles
have been reconstituted upon payment of new entry fees," and by-passed the second
query as having been rendered moot and academic by the answer to the first. 6
Unwilling to accept that result, the DBP appealed the resolution to the Court of Appeals
(then the Intermediate Appellate Court) 7 which, after reviewing the record, certified the
appeal to this Court as involving a question purely of law. 8
The appealed resolution appears to be based upon a reading of the cited Section 56 of PD
No. 1529, and particularly of the provision therein referring to the Register's act of making
a primary entry as " ... a preliminary process in registration ...," as depriving of any effect a
primary entry without a corresponding annotation thereof on the certificate of title to which
the instrument subject of said entry refers.
That view fails to find support from a consideration of entire context of said Section 56
which in another part also provides that the instrument subject of a primary entry "... shall
be regarded as registered from the time so noted ...," and, at the very least, gives such
entry from the moment of its making the effect of putting the whole world on notice of the
existence the instrument on entered. Such effect (of registration) clearly attaches to the
mere making of the entry without regard to the subsequent step of annotating a
memorandum of the instrument subject of the entry on the certificate of title to which it
refers. Indeed, said Section, in also providing that the annotation, "... when made ... shall
bear the same date ..." as the entry, may be said to contemplate unspecified intervals of
time occurring between the making of a primary entry and that of the corresponding
annotation on the certificate of title without robbing the entry of the effect of being
equivalent to registration. Neither, therefore, is the implication in the appealed resolution
that annotation must annotation entry immediately or in short order justified by the
language of Section 56.
Furthermore, it is amply clear that the four-year hiatus between primary entry and
proposed annotation in this case has not been of DBP's making. Though it was under no
necessity to present the owner's duplicates of the certificates of title affected for purposes
of primary entry, since the transaction sought to be recorded was an involuntary
transaction, 9 and the record is silent as to whether it presented them or not, there is
nonetheless every probability that it did so. It was the mortgagee of the lands covered by
those titles and it is usual in mortgage transactions that the owner's duplicates of the
encumbered titles are yielded into the custody of the mortgage until the mortgage is
discharged. Moreover, the certificates of title were reconstituted from the owner's
duplicates, 10 and again it is to be presumed that said duplicates were presented by DBP,
the petitioner in the reconstitution proceedings.

It is, furthermore, admitted that the requisite registration fees were fully paid and that the
certificate of sale was registrable on its face. 11 DBP, therefore, complied with all that was
required of it for purposes of both primary entry and annotation of the certificate of sale. It
cannot be blamed that annotation could not be made contemporaneously with the entry
because the originals of the subject certificates of title were missing and could not be
found, since it had nothing to do with their safekeeping. If anyone was responsible for
failure of annotation, it was the Register of Deeds who was chargeable with the keeping
and custody of those documents.
It does not, therefore, make sense to require DBP to repeat the process of primary entry,
paying anew the entry fees as the appealed resolution disposes, in order to procure
annotation which through no fault on its part, had to be deferred until the originals of the
certificates of title were found or reconstituted. That it is hardly just or equitable to do so
also seems to have occurred to the Solicitor General, who dilutes his argument in support
of the appealed resolution with the suggestion that "... the making of a new entry ... would
be the more orderly procedure," and that DBP should not be made to pay filing fees
anew.12
Jurisprudence on the subject, while it has not been entirely consistent, is not wanting.
In Government vs. Aballe, 13this Court ruled that " ... (a)lthough a notice of attachment has
not been noted on the certificate of title, its notation in the book of entry of the register of
deeds produces all the effects which the law gives to its registration or inscription."
Seemingly, that ruling was abandoned in the wartime case of Basa vs. De la
Rama, 14 where it was held that the entry of an instrument in the primary entry book
produces no legal effect unless a memorandum thereof is noted on the certificate of
title. Villasor vs. Camon, 15 however, clarified that Aballe was never really abandoned or
reversed insofar as it applied to involuntary transactions. Said the Court in that case, which
involved a voluntary transactions a deed of assignment of rights in a parcel of land and
its improvements:
The appellant cannot invoke in support of her contention, the ruling laid
down in the case of Government of the Philippine Islands vs. Aballe, 60
Phil., 986, which was followed in Director of Lands vs. Abad, 61 Phil.
479, to the effect that an attachment entered upon the entry book is
duly registered although the duplicate certificate is not presented at the
time of registration to the register of deeds. Appellant cannot invoked
said ruling, not because it has been abandoned by the Supreme Court
during the Japanese occupation in the case of Bass VS. De la Rama, et
al., ... in which it was said that "we are constrained to abandon the
ruling in said two cases,"- it was not abandoned for the decision was
concurred by only two justices or less than a majority, and said
statement was not necessary or an obiter dictum and against the law,
as correctly stated by the two associate justices who dissented and
only concurred in the result, but because said ruling, subsisting and in
force, does not support appellant's contention, for it is only applicable to
registration of involuntary instruments, such as attachment, or other
liens and adverse claims of any description. This ruling is correct or in
conformity with the provisions of section 72 of Act No. 496, which do
not require the production by the registrant of the duplicate certificate of
the land to be affected, ... (emphasis supplied)
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Land Titles and Deeds (Finals) 2017
The decision in Villasor also quoted with approval the following excerpt from an earlier
case, Philippine National Bank vs. Fernandez. 16
Coming now to the second ground on which the appellant bases his
claims, we find that when Simona Fausa executed the document,
Exhibit 3, on October 17, 1928, conveying her interest in the land to the
appellant, her interest therein had already been attached by the
provincial sheriff and also by him at public auction to the Philippine
National Bank, and the certificate of sale filed in the office of the
register of deeds in accordance with the law (sections 429 and 450 of
the Code of Civil Procedure). It was not necessary for the sheriff to
present the owner's duplicate of the certificate of title when he filed
notice of attachment with the register of deeds, nor was it necessary for
the Philippine National Bank to present the owner's duplicate when the
bank filed its certificate of sale for registration (sections 71 and 72 of
Act No. 496).
Later cases appear to have applied the Aballe ruling that entry in the day book, even
without the corresponding annotation on the certificate of title, is equivalent to, or produces
the effect of, registration to voluntary transactions, provided the requisite fees are paid and
the owner's duplicates of the certificates of title affected are presented. Thus, in Levin vs.
Bass, et al., 17 it was held:
... Under the Torrens system the act of registration is the operative act
to convey and affect the land. Do the entry in the day book of a deed of
sale which was presented and filed together with owner's duplicate
certificate of title which the office of the Registrar of Deeds and full
payment of registration fees constitute a complete act of registration
which operates to convey and affect the land? In voluntary registration,
such as a sale, mortgage, lease and the like, if the owner's duplicate
certificate be not surrendered and presented or if no payment of
registration fees be made within 15 days, entry in the day book of the
deed of sale does not operate to convey and affect the land sold. In
involuntary registration, such as an attachment, levy upon execution, lis
pendens and the like entry thereof in the day book is a sufficient notice
to all persons of such adverse claim. ... The pronouncement of the
court below is to the effect that an innocent purchaser for value has no
right to the property because he is not a holder of a certificate of title to
such property acquired by him for value and in good faith. It amounts to
holding that for failure of the Registrar of Deeds to comply and perform
his duty, an innocent purchaser for value loses that character-he is not
an "innocent holder for value of a certificate of title." ... Neither violence
to, nor stretching of the meaning of, the law would be done, if we
should hold that an innocent purchaser for value of registered land
becomes the registered owner and in contemplation of law the holder of
a certificate thereof the moment he presents the owner's duplicate
certificate of title to the property sold and pays the full amount of
registration fees, because what remains to be done lies not within his
power to perform. The Registrar of Deeds is in duty bound to perform it.
We believe that is a reasonable and practical interpretation of the law
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under considerations-a construction which would lead to no The qualms implicit in the query of the respondent (and present appellee) register of deeds
inconsistency and injustice. (emphasis supplied) about making annotation of an entry effected before he assumed that office are more
imagined than real. He would only be making a memorandum of an instrument and of its
entry based on or reciting details which are already of indubitable record and, pursuant to
A similar ruling was made in Potenciano vs. Dineros, et al., 18 concerning land a deed of
sale of which was entered in the day book upon payment of the corresponding fees and the express command of the law, giving said memorandum the same date as the entry. No
presentation of the owner's duplicate of the covering certificate of title, on November 4, part of that function is exclusive to the incumbent of the office at the time entry was made
1944. However, due to the confusion arising from the bombing of Manila (this having or is forbidden to any of his successors.
happened during the final months of the Japanese Occupation), the papers presented by
the registrant were either lost or destroyed, no certificate of title was issued to him and as WHEREFORE, the appealed resolution of the Acting Commissioner of Land Registration is
far as the records of the Register of Deeds showed, the property remained in the name of SET ASIDE. The respondent-appellee Register of Deeds of Nueva Ecija, or his successor,
the vendor. Another party later sued the vendor, obtained judgment against him and is ordered to annotate on the originals of the reconstituted Transfer Certificates of Title
purchased the property on execution sale. In affirming judgment annulling the execution Nos. NT-149033 and NT-149034 of his Registry a memorandum of the certificate of sale in
sale in an action brought by the original purchaser, this Court held: favor of appellant Development Bank of the Philippines as entered under Entry No. 8191
dated June 13, 1980 of the Primary Entry (Day) Book of said Registry. No pronouncement
The judgment creditor contends that entry of the deed in the day book as to costs.
is not sufficient registration. Both upon law and authority this contention
must be rejected. Section 56 of the Land Registration Act says that SO ORDERED.
deeds relating to registered land shall, upon payment of the filing fees,
be entered in the entry book also called day book in the same
section with notation of the year, month, day, hour, and minute of
their reception and that "they shall be regarded as registered from the
moment so noted." And applying this provision in the cases of Levin vs.
Bass, etc., G.R. Nos. L-4340 to 4346, decided on May 28, 1952, this
Court held that "an innocent purchaser for value of registered land
becomes the registered owner and in contemplation of law the holder of
a certificate thereof the moment he presents and files a duly notarized
and lawful deed of sale and the same is entered on the day book and at
the same time he surrenders or presents the owner's duplicate
certificate of title to the property sold and pays the full amount of
registration fees, because what remains to be done lies not within his
power to perform."

Current doctrine thus seems to be that entry alone produces the effect of registration,
whether the transaction entered is a voluntary or an involuntary one, so long as the
registrant has complied with all that is required of him for purposes of entry and annotation,
and nothing more remains to be done but a duty incumbent solely on the register of deeds.

Therefore, without necessarily holding that annotation of a primary entry on the original of
the certificate of title may be deferred indefinitely without prejudice to the legal effect of
said entry, the Court rules that in the particular situation here obtaining, annotation of the
disputed entry on the reconstituted originals of the certificates of title to which it refers is
entirely proper and justified. To hold said entry "ineffective," as does the appealed
resolution, amounts to declaring that it did not, and does not, protect the registrant (DBP)
from claims arising, or transactions made, thereafter which are adverse to or in derogation
of the rights created or conveyed by the transaction thus entered. That, surely, is a result
that is neither just nor can, by any reasonable interpretation of Section 56 of PD 1529, be
asserted as warranted by its terms.
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Land Titles and Deeds (Finals) 2017

NATIONAL HOUSING AUTHORITY, G.R. No. 149121

Petitioner, Present:

On April 19, 1983, spouses Augusto and Luz Basa loaned from NHA the amount
PUNO, C.J.,
of P556,827.10 secured by a real estate mortgage over their properties covered by
Chairperson,
Transfer Certificates of Title (TCTs) Nos. 287008 and 285413, located at No. 30 San
*
CARPIO, Antonio St., San Francisco del Monte, Quezon City.[2] Spouses Basa did not pay the loan
- versus -
LEONARDO-DE CASTRO, despite repeated demands. To collect its credit, the NHA, on August 9, 1990, filed a

BERSAMIN, and verified petition for extrajudicial foreclosure of mortgage before the Sheriffs Office

in Quezon City, pursuant to Act No. 3135, as amended. [3]

VILLARAMA, JR., JJ.

AUGUSTO BASA, JR., LUZ BASA and

EDUARDO S. BASA, Promulgated:
After notice and publication, the properties were sold at public auction where NHA
Respondents.
emerged as the highest bidder.[4] On April 16, 1991, the sheriffs certificate of sale was
April 20, 2010
registered and annotated only on the owners duplicate copies of the titles in the hands of
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x the respondents, since the titles in the custody of the Register of Deeds were among those

burned down when a fire gutted the City Hall of Quezon City on June 11, 1988.[5]

DECISION

On April 16, 1992, the redemption period expired, [6] without respondents having redeemed

the properties. Shortly thereafter, on April 24, 1992, NHA executed an Affidavit of

LEONARDO-DE CASTRO, J.: Consolidation of Ownership[7]over the foreclosed properties, and the same was inscribed

by the Register of Deeds on the certificates of title in the hand of NHA under Entry No.

6572/T-287008-PR-29207.[8]
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks

to set aside the Amended Decision[1] of the Court of Appeals dated November 27,

2000 and its Resolution dated July 19, 2001 denying the motion for reconsideration of the

National Housing Authority (NHA).

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On June 18, 1992, NHA filed a petition for the issuance of a Writ of Possession. The said registrar.[17] Since the sheriffs certificate was only inscribed on the owners duplicate

petition was granted by the Regional Trial Court (RTC) in an Order [9] dated August 4, 1992. certificate of title, and not on the certificate of title in the possession of the Register of

Deeds, then there was no effective registration and the one-year redemption period had

not even begun to run. Thus, respondents asked the RTC, among others, to declare the

A Writ of Possession[10] was issued on March 9, 1993 by the RTC, ordering spouses foreclosure sale null and void, to allow the respondents to redeem the mortgaged

Augusto and Luz Basa to vacate the subject lots. The writ, however, remained properties in the amount of P21,160.00, and to cancel the Writ of Possession dated March

unserved. This compelled NHA to move for the issuance of an alias writ of possession 9, 1993.

on April 28, 1993.

NHA opposed respondents petition for intervention.[18] It countered that the extrajudicial

Before the RTC could resolve the motion for the issuance of an alias writ of possession, foreclosure sale was conducted validly and made in accordance with Act No. 3135 as

respondents spouses Basa and Eduardo Basa, on June 2, 1993, filed a Motion for Leave evidenced by the publication of the Notice of Sheriffs Sale in the Manila Times in its issues

to Intervene and Petition in Intervention (with Prayer for Temporary Restraining Order dated July 14, 21 and 28, 1990.[19] NHA also said that respondents had been furnished

and/or Writ of Preliminary Injunction).[11] Respondents anchored said petition for with a copy of the Notice of Sheriffs Sale as shown at the bottom portion of said

intervention on Section 8[12] of Act No. 3135, as amended, which gives the notice.[20] NHA maintained that respondents right of redemption had long expired on April

debtor/mortgagor the remedy to petition that the sale be set aside and the writ of 15, 1992 since the certificate of sale was inscribed on their TCT Nos. 285413 and 287008

possession be cancelled. In the said petition for intervention, respondents averred that the a year earlier, or on April 16, 1991. It pointed out that the RTC, via its Order dated August

extrajudicial foreclosure of the subject properties was a nullity since notices were not 4, 1992, had already ruled that respondents right of redemption was already gone without

posted and published, written notices of foreclosure were not given to them, and notices of them exercising said right.Since said order had already attained finality, the ruling therein

sale were not tendered to the occupants of the sold properties, thereby denying them the could no longer be disturbed.

opportunity to ventilate their rights.[13] Respondents likewise insisted that even

assuming arguendo that the foreclosure sale were valid, they were still entitled to redeem

the same since the one-year redemption period from the registration of the sheriffs On January 2, 1995, the RTC issued the first assailed Order [21] with the following

certificate of foreclosure sale had not yet prescribed. [14] Citing Bernardez v. directives: 1) granting the issuance of the alias writ of possession which allowed NHA to

Reyes[15] and Bass v. De la Rama,[16]respondents theorized that the instrument is deemed take possession of the subject properties; 2) admitting the Petition in Intervention and

registered only upon actual inscription on the certificate of title in the custody of the civil treating the same as the petition to set aside sale mentioned in [Sec. 8] of Act No. 3155;

and 3) granting the issuance of a Writ of Preliminary Injunction in favor of respondents that
ordered NHA to refrain from selling or disposing of the contested properties. The pertinent
portion of the order reads:
After examining the record and following precedents x x x this Court
hereby orders:
1. The issuance of an alias writ of possession;
2. Admission of the Petition in Intervention, treating the same
as the petition to set aside sale, etc., mentioned in [Sec. 8] of Act No.
3155;
3. The issuance of a writ of preliminary injunction, after a
BOND in the amount of P20,000.00 had been duly filed by intervenors,
ordering movant National Housing Authority, its agents and/or any other
person acting under its command, to desist and refrain from selling or in
any manner from disposing of the subject properties covered by TCT
Nos. 287008 and 285413 and located at No. 30, San Antonio Street,
San Francisco del Monte, Quezon City, pending the termination of this
proceeding and/or unless a contrary order is issued by this Court;
4. Setting the hearing of the petition in intervention (to set
aside) on March 17, 1995, at 8:30 a.m.[22]
NHA filed a motion for reconsideration[23] assailing the RTCs Order insofar as it admitted
respondents motion for intervention and issued a writ of preliminary injunction. NHA
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argued that respondents should have assailed the foreclosure sale during the hearing in
the petition for the issuance of a Writ of Possession, and not during the hearing in the
petition for the issuance of an alias writ of possession since the petition referred to in
Section 8 of Act No. 3135 pertains to the original petition for the issuance of the Writ of
Possession and not the Motion for the Issuance of an Alias Writ of Possession. NHA
stressed that another reason why the petition for intervention should be denied was the
finality of the Order dated August 4, 1992 declaring respondents right of redemption barred
by prescription. Lastly, NHA asserted that the writ of possession was issued as a matter of
course upon filing of the proper motion and thereby, the court was bereft of discretion.
In the second assailed Order[24] dated September 4, 1995, the RTC denied NHAs motion
for reconsideration reasoning that the admission of the intervention was sanctioned by
Section 8 of Act No. 3135. As to the grant of preliminary injunction, the RTC made the
justification that if the NHA was not restrained, the judgment which may be favorable to
respondents would be ineffectual. The order partly provides:
The motion is without merit. The admission of the intervention is
sanctioned by Sec. 8 of Act No. 3135. And, because, otherwise or if no
preliminary injunction is issued, the movant NHA may, before final
judgment, do or continue the doing of the act with the intervenor asks
the court to restrain, and thus make ineffectual the final judgment
rendered afterwards which may grant the relief sought by the
intervenor.
ACCORDINGLY, the motion for reconsideration is DENIED. [25]
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Undaunted, NHA filed on November 24, 1995, a special civil action for certiorari and sale is to question the validity of the sale through a petition to set aside the sale and to

prohibition before the Court of Appeals. cancel the writ of possession, a summary procedure provided for under Section 112 of the

Land Registration Act. It also observed that the grant of the preliminary injunction by the

RTC was uncalled for as it would effectively defeat the right of NHA to possession, the

The Court of Appeals rendered a Decision[26] dated February 24, 2000, in favor of the latter having been entitled by virtue of the grant of the alias writ of possession.

NHA. It declared null and void the assailed orders of the RTC dated January 2,
Respondents filed a motion for reconsideration. [28] They alleged that since they raised the
1995 and September 4, 1995, to the extent that the said orders admitted the petition in
issue that their right of redemption had not prescribed, said fact should have changed the
intervention and granted the issuance of the preliminary injunction; but it upheld the grant
whole scenario such that the issuance of a writ of possession ceased to be summary in
of the alias writ of possession, thus:
nature and was no longer ministerial. Respondents then concluded that their right to

redeem the properties against NHAs right to the writ of possession must be threshed out in

WHEREFORE, the petition is GRANTED, and the assailed a hearing of the case on its merits.
order of January 2, 1995 is declared NULL AND VOID except for the
portion directing the issuance of an alias writ of possession. Likewise
declared NULL AND VOID is the second assailed order of September
4, 1995 denying the petitioners motion for reconsideration. Let an alias
writ of possession be issued and executed/implemented by the public With regard to the RTC Order dated August 4, 1992 granting the writ of possession which,
respondent without further delay.[27]
according to the NHA, became final and executory, respondents argued that said order did

not constitute res judicataso as to bar the filing of the petition for intervention since the said

order was not a judgment on the merits that could attain finality.
The Court of Appeals defended its affirmation of the RTCs grant of the alias writ of

possession in NHAs favor by saying that it was a necessary consequence after the earlier

writ was left unserved to the party.It further explained that NHA was entitled to the writ of
Also, respondents would like the Court of Appeals to treat the petition for intervention not
possession as a matter of course after the lapse of the redemption period.
only as an opposition to the issuance of the alias writ of possession, but also as a proper

remedy under Section 8 of Act No. 3135, as amended, in view of the various issues raised.

As to the RTCs admission of respondents petition for intervention, the appellate court

opined that it was improperly and erroneously made. The Court of Appeals believed that

the only recourse available to a mortgagor, in this case the respondents, in a foreclosure
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On November 27, 2000, the Court of Appeals, in its Amended Decision, reconsidered its In its memorandum, NHA tendered the following issues:

earlier stance. It declared that the period of redemption had not expired as the certificate of

sale had not been registered or annotated in the original copies of the titles supposedly
1. WHETHER OR NOT THE ANNOTATION OF THE SHERIFFS
kept with the Register of Deeds since said titles were earlier razed by fire. Taking its cue CERTIFICATE OF SALE IN THE PRIMARY ENTRY BOOK
OF THE REGISTER OF DEEDS AND ON THE OWNERS
from Bass v. De la Rama where the Court purportedly made a ruling that entry of a
DUPLICATE TITLE IS SUFFICIENT COMPLIANCE WITH
document, such as sale of real property, in the entry book is insufficient to treat such THE REQUIREMENT OF LAW ON REGISTRATION.

document as registered, unless the same had been annotated on the certificate of title; the

Court of Appeals went on to say that the entry of the certificate of sale in the owners 2. WHETHER OR NOT THE CASE OF BASS VS. DE LA RAMA HAS
BEEN SUPERSEDED.[31]
duplicate of the titles could not have been sufficient to register the same since anyone who

would wish to check with the Register of Deeds would not see any annotation. Thus, entry

made on the owners duplicate of the titles cannot be considered notice that would bind the
Respondents, on the other hand, offered the following as issues:
whole world. Having been deprived of their right of redemption, the Court of Appeals

deemed it proper to allow respondents to intervene. The dispositive part of the amended
I
decision decrees:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING

WHEREFORE, the motion for reconsideration is GRANTED.
Our decision dated February 24, 2000, is RECONSIDERED and SET
ASIDE and the petition DISMISSED.[29]
THAT THE LOWER COURT DID NOT ACT WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
ADMITTING THE RESPONDENTS INTERVENTION AND GRANTING
THE EQUITABLE WRIT OF INJUNCTION THEREBY DISMISSING
THE PETITION FOR CERTIORARI AND PROHIBITION.

Unfazed, NHA filed a motion for reconsideration, which the Court of Appeals denied in II

its July 19, 2001 Resolution, to wit:

ACCORDINGLY, the Motion for Reconsideration dated February 24, WHETHER OR NOT THE INSTANT PETITION COMPLIES WITH THE
2000 is DENIED for lack of merit.[30] REQUIREMENTS OF RULE 45 OF THE RULES OF COURT.[32]

Hence, the instant petition.

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On the procedural aspect, respondents question NHAs alleged failure to include in its NHA faults the Court of Appeals reliance on Bass v. De la Rama since the ruling therein

petition copies of material portions of the record such as pleadings filed in the RTC and the stating that entry and annotation of a sale instrument on the owners duplicate copy only as

Court of Appeals as required under Section 4, Rule 45 of the Rules of Court. Respondents insufficient registration, was already abandoned in Development Bank of the Philippines v.

also pointed out the purported defective verification of NHA in view of the fact that it merely Acting Register of Deeds of Nueva Ecija, where it was allegedly ruled that the primary

stated that the one verifying had read the allegations of the petition and that the same entry alone of the transaction produces the effect of registration so long as the registrant

were true and correct to the best of his knowledge. According to respondents, such has complied with all that is required of him for purposes of entry and annotation.

declarations were not in accordance with the rules which require that a verified pleading
In contrast, respondents submit that annotation of the sheriffs certificate of sale on the
must state that the affiant had read the pleading and that the allegations therein were true
owners copy is inadequate to propel the running of the redemption period. They firmly
and correct based on his personal knowledge and not only to the best of his knowledge.
believe that for the sale instrument to be considered as registered, the inscription must be

As to the merits, NHA stresses that the annotation and entry in the owners made on the reconstituted titles.

duplicate certificate of titles of the sheriffs certificate of sale are sufficient compliance with

the requirement of law on registration. To support this, NHA refers to Land Registration

Administration Circular No. 3 dated December 6, 1988, entitled Entry and Provisional Respondents disagree with NHAs opinion that Bass v. De la Rama was superceded

Registration of Instruments Pending Reconstitution of Title which allegedly authorized all by Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija. They

Registers of Deeds to accept for entry and provisional registration instruments affecting are of the persuasion that the ruling in DBP pertains exclusively to the unique factual

lost or destroyed certificates of title pending reconstitution of the original. The legality and milieu and the issues attendant therein, but not to the instant case where Bass purportedly

validity of the disputed registration on its duplicate copies of the sheriffs certificate of sale, applies. Respondents also assail NHAs citation of Sta. Ignacia Rural Bank, Inc. v. Court of

NHA insists, are backed by this Courts ruling in Development Bank of the Philippines v. Appeals.[34] According to them, said case finds no application to the instant controversy

Acting Register of Deeds of Nueva Ecija,[33] where purportedly, this Court made a because the issue involved in the former was whether the redemption period should be

favorable interpretation of Section 56 of Presidential Decree No. 1529. NHA says that the reckoned from the date of the auction sale or the registration of the certificate of sale,

inscription of the sheriffs certificate of sale only to the owners duplicate copies, but not to which ostensibly is not the bone of contention in this case.

those in the custody of the register of deeds is justified as the latter were burned

down. Thus, it could not be blamed for the non-registration of the sale in the original

copies. Ascribing NHAs inaction to have the burned titles reconstituted, respondents assert that

such neglect should not be used as a justification for the non-inscription in the original titles
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of the certificate of sale.Additionally, respondents insist that the question of whether the In its petition, NHA attached the February 24, 2000 Decision, the November 27,

redemption period should be reckoned from the inscription on the owners duplicate copies 2000 Amended Decision, and the July 19, 2001 Resolution all of the Court of Appeals;

is a factual and legal issue that is appropriately adjudicated in a hearing on the merits of copies of the transfer certificates of title of the disputed properties; and the June 13,

their petition in intervention, and not in the instant special civil action for certiorari and 1994 Order of the Quezon City RTC ordering the reconstitution of the said titles. This Court

prohibition which is limited in scope, namely, whether the RTC committed grave abuse of finds that NHA substantially complied with the requirements under Section 4 of Rule

discretion amounting to lack of jurisdiction in admitting their petition in intervention. 45. The same conclusion was arrived at by this Court in Development Bank of the

Philippines v. Family Foods Manufacturing Co., Ltd.[36] when it was faced with the same

procedural objection, thus:

Respondents reiterate that the issuance of the writ of possession prayed for by NHA

before the RTC is no longer ministerial since it raised the issue of whether their period of
As held by this Court in Air Philippines Corporation v. Zamora:
redemption has already expired.They cite Barican v. Intermediate Appellate Court[35] as the

authority to this argument.

[E]ven if a document is relevant and
We dwell first with the procedural issues before the main controversy. Respondents pertinent to the petition, it need not be appended if it
is shown that the contents thereof can also [be]
contend that the instant petition is dismissible on the ground that NHA failed to attach found in another document already attached to the
petition. Thus, if the material allegations in a position
pleadings filed in the RTC and the Court of Appeals as required under Section 4, Rule 45 paper are summarized in a questioned judgment, it
will suffice that only a certified true copy of the
of the Rules of Court which partly provides:
judgment is attached.

SEC. 4. Contents of petition. The petition shall be filed in Third, a petition lacking an essential
eighteen (18) copies, with the original copy intended for the court being pleading or part of the case record may still be given
indicated as such by the petitioner, and shall x x x (d) be accompanied due course or reinstated (if earlier dismissed) upon
by a clearly legible duplicate original, or a certified true copy of the showing that petitioner later submitted the
judgment or final order or resolution certified by the clerk of court of the documents required, or that it will serve the higher
court a quo and the requisite number of plain copies thereof, and such interest of justice that the case be decided on the
material portions of the record as would support the petition; x x x. merits.

Nevertheless, even if the pleadings and other supporting

documents were not attached to the petition, the dismissal is
unwarranted because the CA records containing the promissory notes
and the real estate and chattel mortgages were elevated to this Court.
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Without a doubt, we have sufficient basis to actually and completely

dispose of the case. The reason for requiring verification in the petition is to secure an assurance that

We must stress that cases should be determined on the the allegations of a pleading are true and correct; are not speculative or merely imagined;
merits, after all parties have been given full opportunity to ventilate their
and have been made in good faith. [37] To achieve this purpose, the verification of a
causes and defenses, rather than on technicalities or procedural
imperfections. In that way, the ends of justice would be served better. pleading is made through an affidavit or sworn statement confirming that the affiant has
Rules of procedure are mere tools designed to expedite the decision or
resolution of cases and other matters pending in court. A strict and rigid read the pleading whose allegations are true and correct of the affiant's personal
application of rules, resulting in technicalities that tend to frustrate
rather than promote substantial justice, must be avoided. In fact, knowledge or based on authentic records. [38]
Section 6 of Rule 1 states that the Rules shall be liberally construed in
order to promote their objective of ensuring the just, speedy and
inexpensive disposition of every action and proceeding.

The General Manager of NHA verified the petition as follows:

Contrary to respondents assertion, NHAs verification conforms to the rule. Section 4, Rule

7 of the Rules of Court states: 3. I have read the allegations contained therein and that the
same are true and correct to the best of my own personal knowledge. [39]

SEC. 4. Verification. Except when otherwise specifically

required by law or rule, pleadings need not be under oath, verified or
accompanied by affidavit.
A reading of the above verification reveals nothing objectionable about it. The affiant

confirmed that he had read the allegations in the petition which were true and correct
A pleading is verified by an affidavit that the affiant has read the
pleading and that the allegations therein are true and correct of his based on his personal knowledge.The addition of the words to the best before the phrase
personal knowledge or based on authentic records. of my personal knowledge did not violate the requirement under Section 4 of Rule 7, it

being sufficient that the affiant declared that the allegations in the petition are true and

A pleading required to be verified which contains a verification based correct based on his personal knowledge.
on information and belief, or upon knowledge, information and belief, or
lacks a proper verification, shall be treated as an unsigned pleading.

Now, as to the merits of the case. The main issue before us is whether the

annotation of the sheriffs certificate of sale on the owners duplicate certificate of titles is
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Land Titles and Deeds (Finals) 2017

sufficient registration considering that the inscription on the original certificates could not Deeds who was chargeable with the keeping and custody of those documents. [42] To

be made as the same got burned. buttress its conclusion, the Court reviewed the relevant jurisprudence starting from

1934. The Court noted that before the Second World War, particularly in Government of
Jurisprudence is replete with analogous cases. Of foremost importance is Development
the Philippine Islands v. Aballe,[43] the prevailing doctrine was an inscription in the book of
[40]
Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija where the Court
entry even without the notation on the certificate of title was considered as satisfactory and
listed cases where the transaction or instrument was annotated not on the original
produced all the effects which the law gave to its registration. During the war, however, the
certificate but somewhere else. In that case, DBP, following the extrajudicial foreclosure
Court observed that there was apparent departure from said ruling since in Bass v. De la
sale where it emerged as the highest bidder, registered with the Register of Deeds the
Rama, the holding was that entry of an instrument in the primary entry book does not
sheriffs certificate of sale in its favor. After it had paid the required fees, said transaction
confer any legal effect without a memorandum thereof inscribed on the certificate of
was entered in the primary entry book. However, the annotation of the said transaction to
title.[44] DBP noted that Bass v. De la Rama, however, survived only for a little while since
the originals of the certificates of title could not be done because the same titles were
later cases appear to have applied the Aballe ruling that entry in the day book, even
missing from the files of the Registry. This prompted DBP to commence reconstitution
without the corresponding annotation on the certificate of title, is equivalent to, or produces
proceedings of the lost titles. Four years had passed before the missing certificates of title
the effect of, registration to voluntary transactions, provided the requisite fees are paid and
were reconstituted. When DBP sought the inscription of the four-year old sale transaction
the owners duplicates of the certificates of title affected are presented.[45]
on the reconstituted titles, the Acting Register of Deeds, being in doubt of the proper action

to take, referred the matter to the Commissioner of the Land Registration Authority These later cases are Levin v. Bass[46] and Potenciano v. Dineros,[47] both of which involve

by consulta, the latter resolved against the annotation of the sale transaction and opined the issue of whether entry in the day book of a deed of sale, payment of the fees, and

that said entry was ineffective due to the impossibility of accomplishing registration at the presentation of the owners duplicate certificate of title constitute a complete act of

time the document was entered because of the non-availability of the certificate (sic) of title registration.[48]

involved.[41] In other words, annotation on the primary book was deemed insufficient

registration. The Court disagreed with this posture. Considering that DBP had paid all the

fees and complied with all the requirements for purposes of both primary entry and Simply, respondents resort to Bass v. De la Rama is futile as the same was abandoned by

annotation of the certificate of sale, the Court declared that mere entry in the primary book the later cases, i.e., Bass, Potenciano and DBP.

was considered sufficient registration since [DBP] cannot be blamed that annotation could

not be made contemporaneously with the entry because the originals of the subject

certificates of title were missing and could not be found, since it had nothing to do with

their safekeeping. If anyone was responsible for failure of annotation, it was the Register of

In the recent case of Autocorp Group v. Court of Appeals,[49] the respondent was awarded
the foreclosed parcels of land. A sheriffs certificate of sale was thereafter issued in its
favor. Thereafter, petitioners in that case filed a complaint before the RTC with a prayer for
the issuance of an ex parte TRO aimed at preventing the Register of Deeds from
registering the said certificate of sale in the name of the respondent and from taking
possession of the subject properties.[50] Before the RTC could issue a TRO, respondent
presented the sheriffs certificate of sale to the Register of Deeds who entered the same
certificate in the primary book, even if the registration fee was paid only the following
day. Four days after, the RTC issued a TRO directing the Register of Deeds to refrain from
registering the said sheriffs certificate of sale. A preliminary injunction was thereafter
issued as the TRO was about to expire. The preliminary injunction was questioned by
therein respondent. One of the main issues raised there was whether the entry of the
certificate of sale in the primary book was equivalent to registration such that the TRO and
the preliminary injunction issues would not lie anymore as the act sought to be restrained
had become an accomplished act. The Court held that the TRO and the preliminary
injunction had already become moot and academic by the earlier entry of the certificate of
sale in the primary entry book which was tantamount to registration, thus:
In fine, petitioners prayer for the issuance of a writ of
injunction, to prevent the register of deeds from registering the subject
certificate of sale, had been rendered moot and academic by the
valid entry of the instrument in the primary entry book. Such entry
is equivalent to registration. Injunction would not lie anymore, as the
act sought to be enjoined had already become a fait accompli or an
accomplished act.[51]
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Indeed, the prevailing rule is that there is effective registration once the registrant has
fulfilled all that is needed of him for purposes of entry and annotation, so that what is left to
be accomplished lies solely on the register of deeds. The Court thus once held:
Current doctrine thus seems to be that entry alone produces the effect
of registration, whether the transaction entered is a voluntary or an
involuntary one, so long as the registrant has complied with all that is
required of him for purposes of entry and annotation, and nothing more
remains to be done but a duty incumbent solely on the register of
deeds.[52]
In the case under consideration, NHA presented the sheriffs certificate of sale to the
Register of Deeds and the same was entered as Entry No. 2873 and said entry was further
annotated in the owners transfer certificate of title. [53] A year later and after the mortgagors
did not redeem the said properties, respondents filed with the Register of Deeds an
Affidavit of Consolidation of Ownership[54]after which the same instrument was presumably
entered into in the day book as the same was annotated in the owners duplicate
copy.[55] Just like in DBP, Levin, Potenciano and Autocorp, NHA followed the procedure in
order to have its sheriffs certificate of sale annotated in the transfer certificates of
title. There would be, therefore, no reason not to apply the ruling in said cases to this
one. It was not NHAs fault that the certificate of sale was not annotated on the transfer
certificates of title which were supposed to be in the custody of the Registrar, since the
same were burned. Neither could NHA be blamed for the fact that there were no
reconstituted titles available during the time of inscription as it had taken the necessary
steps in having the same reconstituted as early as July 15, 1988.[56] NHA did everything
within its power to assert its right.
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Petitioners contend that the aforecited case of DBP is not apropos to

the case at bar. Allegedly, in DBP, the bank not only paid the
registration fees but also presented the owners duplicate certificate of
title. We find no merit in petitioners posture x x x.
While it may be true that, in DBP, the Court ruled that in the particular situation here

obtaining, annotation of the disputed entry on the reconstituted originals of the certificates

of title to which it refers is entirely proper and justified, this does not mean, as respondents xxxx

insist, that the ruling therein applies exclusively to the factual milieu and the issue

obtaining in said case, and not to similar cases. There is nothing in the subject declaration
that categorically states its pro hac vice character. For in truth, what the said statement
really conveys is that the current doctrine that entry in the primary book produces the effect
of registration can be applied in the situation obtaining in that case since the registrant
therein complied with all that was required of it, hence, it was fairly reasonable that its acts
Like in DBP v. Acting Register of Deeds of Nueva Ecija, the instrument
involved in the case at bar, is a sheriffs certificate of sale, We hold now,
as we held therein, that the registrant is under no necessity to present
the owners duplicates of the certificates of title affected, for purposes of
primary entry, as the transaction sought to be recorded is an
involuntary transaction.

be given the effect of registration, just as the Court did in the past cases. In fact the Court
xxxx
there continued with this pronouncement:

x x x Such entry is equivalent to registration. Injunction would

not lie anymore, as the act sought to be enjoined had already become
To hold said entry ineffective, as does the appealed
a fait accompli or an accomplished act.[59]
resolution, amounts to declaring that it did not, and does not, protect
the registrant (DBP) from claims arising, or transactions made,
thereafter which are adverse to or in derogation of the rights created or
conveyed by the transaction thus entered. That, surely, is a result that
is neither just nor can, by any reasonable interpretation of Section 56 of
Presidential Decree No. 1529 be asserted as warranted by its terms.[57]
Moreover, respondents stand on the non-applicability of the DBP case to other cases,

absent any statement thereof to such effect, contravenes the principle of stare

decisis which urges that courts are to apply principles declared in prior decisions that are

substantially similar to a pending case. [60]

What is more, in Autocorp Group v. Court of Appeals,[58] the pertinent DBP ruling was

applied, thereby demonstrating that the said ruling in DBP may be applied to other cases

with similar factual and legal issues, viz:

Since entry of the certificate of sale was validly registered, the redemption period accruing

to respondents commenced therefrom, since the one-year period of redemption is


reckoned from the date of registration of the certificate of sale. [61] It must be noted that
on April 16, 1991, the sheriffs certificate of sale was registered and annotated only on the
owners duplicate copies of the titles and on April 16, 1992, the redemption period expired,
without respondents having redeemed the properties. In fact, on April 24, 1992, NHA
executed an Affidavit of Consolidation of Ownership. Clearly, respondents have lost their
opportunity to redeem the properties in question.
As regards respondents allegation on the defect in the publication and notice requirements
of the extrajudicial foreclosure sale, the same is unavailing. The rule is that it is the
mortgagor who alleges absence of a requisite who has the burden of establishing such
fact.[62] This is so because foreclosure proceedings have in their favor the presumption of
regularity and the burden of evidence to rebut the same is on the party who questions
it.[63] Here, except for their bare allegations, respondents failed to present any evidence to
support them. In addition, NHA stated in its Comment to Motion for Leave of Court to
Intervenethat it had complied with the publication of the Notice of Sheriffs Sale in the
Manila Times in the latters issues dated July 14, 21 and 28, 1990. [64] It also claimed that an
Affidavit of Publication of said newspaper was attached as Annex B in the said
comment.[65] NHA also said that respondents had been furnished with a copy of the Notice
of Sheriffs Sale as shown at the bottom portion of said notice. [66]From all these, it would
tend to show that respondents aspersion of non-compliance with the requirements of
foreclosure sale is a futile attempt to salvage its statutory right to redeem their foreclosed
properties, which right had long been lost by inaction.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Considering that the foreclosure sale and its subsequent registration with the Register of
Deeds were done validly, there is no reason for the non-issuance of the writ of
possession. A writ of possession is an order directing the sheriff to place a person in
possession of a real or personal property, such as when a property is extrajudicially
foreclosed.[67] Section 7 of Act No. 3135 provides for the rule in the issuance of the writ of
possession involving extrajudicial foreclosure sales of real estate mortgage, to wit:
Sec. 7. In any sale made under the provisions of this Act,
the purchaser may petition the [Regional Trial Court] of the province
or place where the property or any part thereof is situated, to give
him possession thereof during the redemption period, furnishing
bond in an amount equivalent to the use of the property for a period
of twelve months, to indemnify the debtor in case it be shown that the
sale was made without violating the mortgage or without complying
with the requirements of this Act. Such petition shall be made under
oath and filed in the form of an ex parte motion in the registration or
cadastral proceedings if the property is registered, or in special
proceedings in the case of property registered under the Mortgage
Law or under section one hundred and ninety-four of the
Administrative Code, or of any other real property encumbered with a
mortgage duly registered in the office of any register of deeds in
accordance with any existing law, and in each case the clerk of the
court shall, upon the filing of such petition, collect the fees specified
in paragraph eleven of section one hundred and fourteen of Act
Numbered Four Hundred and ninety-six, as amended by Act
Numbered Twenty-eight hundred and sixty-six, and the court shall,
upon approval of the bond, order that a writ of possession issue,
addressed to the sheriff of the province in which the property is
situated, who shall execute said order immediately.
This provision of law authorizes the purchaser in a foreclosure sale to apply for a
writ of possession during the redemption period by filing an ex parte motion under oath for
that purpose in the corresponding registration or cadastral proceeding in the case of
property with Torrens title.[68] Upon the filing of such motion and the approval of the

corresponding bond, the law also in express terms directs the court to issue the order for a
writ of possession.[69]
The time-honored precept is that after the consolidation of titles in the buyers name, for
failure of the mortgagor to redeem, the writ of possession becomes a matter of right. [70] Its
issuance to a purchaser in an extrajudicial foreclosure is merely a ministerial
function.[71] The writ of possession issues as a matter of course upon the filing of the
proper motion and the approval of the corresponding bond. The judge issuing the writ
following these express provisions of law neither exercises his official discretion nor
judgment.[72] As such, the court granting the writ cannot be charged with having acted
without jurisdiction or with grave abuse of discretion. [73] To accentuate the writs ministerial
character, the Court disallowed injunction to prohibit its issuance despite a pending action
for annulment of mortgage or the foreclosure itself.[74]
Believing that the instant case does not come within the penumbra of the foregoing rule,
respondents resort to the ruling in Barican v. Intermediate Appellate Court. [75] Unfortunately
for them, the instant case does not even come close to the cited case. There, the Court
deemed it inequitable to issue a writ of possession in favor of the purchaser in the auction
sale considering that the property involved was already in the possession of a third person
by virtue of a deed of sale with assumption of mortgage even before the purchaser could
register the sheriffs certificate of sale. Also, the auction buyer therein unreasonably
deferred to exercise its right to acquire possession over the property. These circumstances
are not present in the instant case.
Moreover, in Fernandez v. Espinoza,[76] the Court refused to apply the ruling
in Barican v. Intermediate Appellate Court [77] and Cometa v. Intermediate Appellate
Court,[78] two cases which are exemptions to the stated rule, reasoning that:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
In Cometa, which actually involved execution of judgment for the
prevailing party in a damages suit, the subject properties were sold at
the public auction at an unusually lower price, while in Barican, the
mortgagee bank took five years from the time of foreclosure before
filing the petition for the issuance of writ of possession. We have
considered these equitable and peculiar circumstances
in Cometa and Barican to justify the relaxation of the otherwise
absolute rule. None of these exceptional circumstances, however,
attended herein so as to place the instant case in the same stature as
that of Cometa and Barican. Instead, the ruling in Vaca v. Court of
Appeals is on all fours with the present petition. In Vaca, there is no
dispute that the property was not redeemed within one year from the
registration of the extrajudicial foreclosure sale; thus, the mortgagee
bank acquired an absolute right, as purchaser, to the issuance of the
writ of possession. Similarly, UOB, as the purchaser at the auction sale
in the instant case, is entitled as a matter of right, to the issuance of the
writ of possession.
Just as in Fernandez, this Court does not see any compelling reason to veer
away from the established rule.
In fine, this Court finds that the Court of Appeals committed reversible error in
ruling that the annotation of NHAs sheriffs certificate of sale on the duplicate certificates of
title was not effective registration and in holding that respondents redemption period had
not expired.
WHEREFORE, premises considered, the instant petition is
hereby GRANTED. The Amended Decision of the Court of Appeals dated November 27,
2000 is SET ASIDE
SO ORDERED.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

DURAWOOD CONSTRUCTION AND G.R. No. 179884

LUMBER SUPPLY, INC., This is a Petition for Review on Certiorari assailing the Decision[1] of the Court of
Present:
Appeals in CA-G.R. SP No. 94479 dated April 18, 2007 and its Resolution [2] dated
Petitioner,

CORONA, C.J., September 18, 2007.

Chairperson,

LEONARDO-DE CASTRO,
On June 3, 2004, petitioner Durawood Construction and Lumber Supply, Inc.
BERSAMIN,
(Durawood) filed an action for sum of money plus damages with a prayer for the issuance
- versus - DEL CASTILLO, and
of a writ of preliminary attachment against LBB Construction and Development Corporation
VILLARAMA, JR., JJ.
(LBB Construction) and its president Leticia Barber (Barber) before the Regional Trial Court

(RTC) of Antipolo. In said suit, which was docketed as Civil Case No. 04-7240, Durawood

Promulgated: prayed for the sum of P665,385.50 as payment for construction materials delivered to LBB

Construction.

CANDICE S. BONA, January 25, 2012

Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x On June 14, 2004, the RTC issued an Order granting Durawoods prayer for the

issuance of a writ of attachment. On June 16, 2004, the corresponding writ was issued.

DECISION
On June 17, 2004, Sheriff Rolando C. Leyva (Sheriff Leyva) levied on a 344-

square meter parcel of land in Richdale Subdivision, Antipolo City covered by Transfer

LEONARDO-DE CASTRO, J.: Certificate of Title (TCT) No. R-17571 in the name of LBB Construction. A Notice of Levy

on Attachment was annotated in TCT No. R-17571s Memorandum of Encumbrances on

the same day, June 17, 2004.


On July 13, 2004, respondent Candice S. Bona (Candice) filed a Motion seeking
leave to intervene in Civil Case No. 04-7240. Attached to said Motion was Candices
Answer in Intervention, her Third Party Claim addressed to Sheriff Leyva, and a copy of
TCT No. R-17571. Candice claimed therein that she is a co-owner of the property covered
by TCT No. R-17571. She alleged that LBB Construction had sold the property to her and
her siblings, Michael Angelo S. Bona, Diane Sheila S. Bona, Glenda May S. Bona and
Johann Louie Sebastian S. Bona, through a Deed of Absolute Sale dated June 2,
2004.Candice asserted that the sale is the subject of Entry No. 30549 dated June 16,
2004 in the books of the Registry of Deeds of Antipolo City, while the levy on
attachment is only Entry No. 30590 dated June 17, 2004. What was attached to the
Motion was a copy of TCT No. R-17571, and not a title in Candice and her co-owners
names.
On August 11, 2004, the RTC issued an Order granting Candices Motion to
Intervene.
LBB Construction and Barber filed their Answer in Civil Case No. 04-7240, but
failed to attend the scheduled hearings, including the pre-trial. Consequently, Durawood
was allowed to present its evidence ex parte.
On July 21, 2005, the RTC rendered its Decision [3] in Civil Case No. 04-7240 in
favor of Durawood. The dispositive portion of the Decision reads:
WHEREFORE, in view of the foregoing consideration,
judgment is rendered in favor of the plaintiff and against the
defendants, viz:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
1. Ordering the defendants to pay plaintiff the sum of Six
Hundred Sixty[-]Five Thousand Three Hundred Eighty[-
]Five Pesos and Fifty Centavos (P665,385.50) plus two
percent (2%) interest per month from May 11, 2004 up to
the present;
2. Ordering the defendants to pay plaintiff twenty-five
percent (25%) of the amount due to the plaintiff by way of
attorneys fees; and
3. To pay the costs of suit.[4]
The Decision became final and executory. On September 12, 2005, Durawood
filed a Motion for the Issuance of a Writ of Execution. On November 15, 2005, the RTC
issued a Writ of Execution. It was when this Writ was about to be enforced that Durawood
discovered the cancellation of TCT No. R-17571 and the issuance of TCT No. R-22522 in
the name of Candice and her siblings.
It would appear from the records that on June 16, 2004, the supposed Register of
Deeds of Antipolo City, Atty. Randy A. Rutaquio (Atty. Rutaquio), cancelled TCT No. R-
17571 and issued TCT No. R-22522 in the name of Candice and her co-owners. The
parties, however, do not dispute that said cancellation of the old TCT and issuance of the
new one was antedated, since Atty. Rutaquio was still the Register of Deeds of Malabon
on said date.[5] According to a certification of the Land Registration Authority, [6] it was a
certain Atty. Edgar D. Santos (Atty. Santos) who was the Acting Register of Deeds of
Antipolo City on June 16, 2004.

Durawood filed a Motion to Reinstate Notice of Levy on Attachment in TCT No. R-
22522 and Cite Atty. Randy A. Rutaquio for Contempt[7] on the following grounds:
5. The cancellation of TCT No. R-17571 and the issuance of
TCT No. R-22522 was made by Atty. Randy A. Rutaquio who, on June
2004, was not the Register of Deeds of Antipolo City. As evidence of
such fact, plaintiff corporation was issued a certification by LRA Human
Resource Management Officer IV Loreto I. Orense that Atty. Edgar D.
Santos was the Acting Register of Deeds of Antipolo City from June 1-
30, 2004.
6. While the Deed of Sale annotated in TCT No. R-17571
appears to have been made on June 16, 2004, the fact of its inscription
was made after that of the levy on attachment as it obviously appears
below and next to it.
7. The records of this case reveal that in the Third Party Claim
filed by Candice Bona sometime in July 2004, there was never any
mention of any recording about a Deed of Absolute Sale in the
Memorandum of Encumbrances in TCT No. R-17571. It is difficult to
comprehend that Atty. Hernando U. Salvador, Bonas lawyer, would
miss mentioning that a Deed of Absolute Sale was inscribed ahead of
the notice of levy on attachment if ever such sale was made on June
16, 2004.
8. Thus, under the circumstances, plaintiff corporation cannot
help speculate that [the] Deed of Sale between LBB Construction and
the Bonas was made to appear to have been recorded a day before the
attachment.
9. While the Notice of Levy on Attachment was inscribed in
TCT No. R-17571 ahead and before of the Deed of Sale between LBB
Construction Co., Inc. and the Bonas, the said notice was not carried
over in TCT No. R-22522 despite the fact that there was no order
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
coming from this Honorable Court dissolving the Writ of Preliminary
Attachment dated June 16, 2004.
10. Randy Rutaquios unauthorized acts of cancelling TCT No.
R-17571 and issuing TCT No. R-22522 without inscribing the Notice of
Levy on Attachment despite the absence of a court order dissolving the
writ of Preliminary Attachment constitute improper conduct tending to
directly or indirectly to impede, obstruct or degrade the administration of
justice.[8]
Atty. Rutaquio filed a Manifestation alleging that the sale was entered in the
Primary Entry Book prior to the Levy on Attachment. The two transactions were assigned to
different examiners and it just so happened that the examiner to whom the levy on
attachment was assigned was able to inscribe the memorandum ahead of the sale,
although the inscription of the sale was entered ahead of the levy. The levy on attachment
was not inscribed on TCT No. R-22522 because allegedly the sale should have priority and
preference. The cancellation of TCT No. R-17571 and the issuance of TCT No. R-22522
was already completed when he took over the position of Atty. Santos as Acting Register of
Deeds and was therefore already clothed with the authority to issue and sign TCT No. R-
22522.
Atty. Rutaquio also submitted a letter dated June 25, 2004 from Atty. Santos to
Land Registration Authority (LRA) Administrator Benedicto B. Ulep (Administrator Ulep)
consulting the latter as regards the registration of the Deed of Absolute Sale and the Notice
of Levy on Attachment.[9] In said letter received by the LRA on July 1, 2004, Atty. Santos
stated that he had not acted on the Deed of Absolute Sale since the required registration
fees were not paid therefor.[10] Administrator Ulep was able to reply to said letter on
October 6, 2004, when Atty. Rutaquio was already the Acting Register of
Deeds.Administrator Ulep stated that since the Deed of Sale was considered registered on
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

June 16, 2004, the same shall take precedence over the Notice of Levy on Attachment

registered on June 17, 2004.[11] Candice filed a Motion for Reconsideration of the above Order. In the meantime,

on March 13, 2006, Sheriff Leyva issued a Notice of Sheriffs Sale setting the sale of the
Acting on the Motion to Reinstate Notice of Levy on Attachment in TCT No. R-
property covered by TCT No. R-22522 at public auction on April 11, 2006 at 10:00 a.m.,
22522 and Cite Atty. Randy A. Rutaquio for Contempt, the RTC issued an Order [12] dated
pursuant to the November 15, 2005 Writ of Execution. Candice filed an Urgent Ex-Parte
March 2, 2006, ruling in favor of Durawood. The RTC gave great weight to the certification
Motion to Order the Branch Sheriff to Desist from the Sale of Intervenors Property for Being
by LRA Human Resource Management Officer IV Loreto I. Orense that Atty. Santos was
Premature, which was granted by the RTC in an Order dated March 29, 2006.
the Acting Register of Deeds from June 1-30, 2004, and held that this proves the fact that

Atty. Santos was the only person authorized to sign and approve all the transactions with
the Registry of Deeds of Antipolo City at the time. Moreover, according to the RTC, the
alienation of LBB Construction in favor of the Bonas without leaving sufficient property to
[13]
pay its obligation is considered by law in fraud of creditor under Articles 1381
1387[14] of the Civil Code.
On March 8, 2006, the new Acting Register of Deeds Jose S. Loriega, Jr.
complied with the March 6, 2006 Order of the RTC by reinstating in TCT No. R-22522 the
Notice of Levy on Attachment in favor of Durawood.
and
On April 7, 2006, the RTC issued an Order denying Candices Motion for
Reconsideration. In said Order, the RTC highlighted its observation that in TCT No. R-

17571, the inscription of the levy on attachment by Atty. Santos dated June 17, 2004 was

in page A (the dorsal portion) of the title, while the supposedly earlier inscription of the
The RTC did not rule on Durawoods prayer to cite Atty. Rutaquio for
Deed of Sale by Atty. Rutaquio dated June 16, 2004 was found in page B (a separate
contempt. The dispositive portion of the March 2, 2006 Order reads:
page) of the title. The RTC found this fact, as well as the above-mentioned certification that

Atty. Santos was the Acting Register of Deeds of Antipolo City from June 1 to 30, 2004,

WHEREFORE, premises considered, the instant motion to sufficient proof of the irregularity of the June 16, 2004 inscription of the Deed of Sale.
reinstate notice of levy on attachment in TCT No. R-22522 now in the
name of the intervenors is hereby GRANTED its non-inscription therein
On April 11, 2006, Sheriff Leyva sold the subject property at public auction
having been made without order of this Court.
for P1,259,727.90 with Durawood being the lone bidder, and issued the corresponding

Certificate of Sale. The sale was inscribed in TCT No. R-22522 on the same date.[16]
The Register of Deeds of Antipolo City is directed to reinstate
the notice of levy on attachment in TCT No. R-22522 in the names of
intervenors immediately upon receipt of this Order.[15]

Candice filed with the Court of Appeals a Petition for Certiorari and Prohibition
assailing the March 2, 2006 and April 7, 2006 Orders of the RTC.
On April 18, 2007, the Court of Appeals rendered the assailed Decision in favor of
Candice. According to the Court of Appeals, the sequence of presentation of the entries in
the TCT cannot control the determination of the rights of the claimants over a disputed
property. It is the registration in the Primary Entry Book (also referred to in other cases as
the day book) that establishes the order of reception of instruments affecting registered
land. As explained by Atty. Rutaquio, the entry in the day book is only the preliminary step
in the registration. The inscription of the levy on attachment on TCT No. R-17571 (which
was made before the inscription of the Deed of Sale on said title) retroacts to the date of
entry in the Primary Entry Book, which is June 17, 2004. However, the inscription of the
Deed of Sale on TCT No. R-17571, although made after the inscription of the levy on
attachment, retroacts to the earlier date of entry in the Primary Entry Book, which is June
16, 2004.
As regards the issuance by Atty. Rutaquio of TCT No. R-22522 on June 16, 2004
despite the fact that he was not yet the Register of Deeds of Antipolo City at that time, the
Court of Appeals held that there was substantial compliance with the National Land Titles
and Deeds Registration Administration (NALTDRA; now the Land Registration Authority
[LRA]) Circular No. 94 on Certificates of title and documents left unsigned by former
Register of Deeds, which provides:
It has been brought to the attention of this Registration that, in
some Registries, there are certificates of title with the full transcriptions
and inscriptions, including the volume and page numbers, the title
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
number, the date and the name of the former Register of Deeds,
already typewritten thereon but which, for some reasons, cannot
anymore be signed by the former official. In such cases and to resolve
this problem, the present Register of Deeds may, without changing or
altering the transcriptions and inscriptions, affix his signature below the
name of the former Register of Deeds but placing the actual date and
time of signing enclosed in parenthesis below his signature.[17]
The Court of Appeals accepted Atty. Rutaquios manifestation that he signed TCT
No. R-22522 subsequent to June 16, 2004, on a date when he was already the Acting
Register of Deeds of Antipolo City.Since the entry in the Primary Entry Book was made at
the time of the incumbency of Atty. Santos, the name of the latter still appears on the
document. According to the Court of Appeals, Candice cannot be made to suffer for the
failure of Atty. Rutaquio to affix the date when he signed the document. Furthermore, a
certificate of title, once registered, cannot be impugned, altered, changed, modified,
enlarged or diminished except in a direct proceeding permitted by law. Finally, an action for
rescission of contracts entered into in fraud of creditors cannot be instituted except when
the party suffering damage has no other legal means to obtain reparation for the same. [18]
The dispositive portion of the Decision reads:
WHEREFORE, in view of the foregoing, the assailed Orders
of public respondent judge ordering the reinstatement of the subject
notice of levy on attachment in TCT No. R-22522 are hereby
ANNULLED and SET ASIDE. As a result thereof, the public auction
sale carried out pursuant to said levy is also declared null and void. [19]
Durawood filed a Motion for Reconsideration, but the same was denied by the
Court of Appeals in its Resolution dated September 18, 2007.
Durawood filed the instant Petition for Review, with the following Assignment of
Errors:
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

I.
All these allegations are specific matters to be resolved by this Court in

determining the overriding issue of the case at bar: whether the Court of Appeals correctly
THE COURT OF APPEALS IGNORED THE FACT THAT NON-
granted Candices Petition for Certiorariand Prohibition on its finding that the RTC
PAYMENT OF THE REQUIRED REGISTRATION FEES BY CANDICE
S. BONA AND HER SIBLINGS DID NOT COMPLETE THE committed grave abuse of discretion in issuing its March 2, 2006 and April 7, 2006
REGISTRATION OF THE DEED OF ABSOLUTE SALE ON JUNE 16,
2004. Orders. In other words, the main issue to be determined by this Court is whether or not

there was grave abuse of discretion in the RTCs order to reinstate the notice of levy on

attachment in TCT No. R-22522. Grave abuse of discretion signifies such capricious and
II.
whimsical exercise of judgment that is equivalent to lack of jurisdiction. The abuse of

discretion must be grave as where the power is exercised in an arbitrary or despotic

THE COURT OF APPEALS GRAVELY ERRED WHEN IT
DISREGARDED THE FACT THAT NALTDRA CIRCULAR NO. 94 WAS manner by reason of passion or personal hostility, and must be so patent and gross as to
NOT COMPLIED WITH BY ATTY. RANDY RUTAQUIO. amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by

or to act all in contemplation of law.[21]

III.
The Court of Appeals, in considering the date of entry in the day book of the

Registry of Deeds as controlling over the presentation of the entries in TCT No. R-17571,
THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO
relied on Section 56 of Presidential Decree No. 1529 which provides that:
CONSIDER THAT THE ENTRIES IN TCT NO. R-17571 (THE
PREDECESSOR OF TCT NO. R-22522) ARE EVIDENCES OF THE SEC. 56. Primary Entry Book; fees; certified copies. Each
FACTS STATED THEREIN. Register of Deeds shall keep a primary entry book in which, upon
payment of the entry fee, he shall enter, in the order of their reception,
all instruments including copies of writs and processes filed with him
relating to registered land. He shall, as a preliminary process in
IV.
registration, note in such book the date, hour and minute of reception of
all instruments, in the order in which they were received. They shall be
regarded as registered from the time so noted, and
THE COURT OF APPEALS OVERLOOKED THE FACT THAT THE the memorandum of each instrument, when made on the
REAL PROPERTY COVERED BY TCT NO. R-17571 AND certificate of title to which it refers, shall bear the same date:
SUBSEQUENTLY BY TCT NO. R-22522 HAS ALREADY BEEN Provided, that the national government as well as the provincial and city
ATTACHED BUT WAS UNILATERALLY RELEASED FROM THE governments shall be exempt from the payment of such fees in
COURTS JURISDICTION BY A USURPER.[20] advance in order to be entitled to entry and registration. (Emphasis
supplied.)

The consequence of the highlighted portion of the above section is two-fold: (1) in
determining the date in which an instrument is considered registered, the reckoning point is
the time of the reception of such instrument as noted in the Primary Entry Book; and (2)
when the memorandum of the instrument is later made on the certificate of title to which it
refers, such memorandum shall bear the same date as that of the reception of the
instrument as noted in the Primary Entry Book. Pursuant to the second consequence
stated above, the Court of Appeals held that Atty. Rutaquio correctly placed the date of
entry in the Primary Entry Book as the date of the memorandum of the registration of the
deed of sale in TCT No. R-17571.
As regards the first consequence, this Court has applied the same in several
cases. Thus, in the old cases of Levin v. Bass,[22] Potenciano
Dineros,[23] and Development Bank of the Philippines v. Acting Register of Deeds of Nueva
Ecija,[24] as well as in the fairly recent cases of Autocorp Group v. Court of
Appeals,[25] Armed Forces and Police Mutual Benefit Association, Inc.
Santiago,[26] and National Housing Authority v. Basa, Jr.,[27] we upheld the entry of
instruments in the Primary Entry Book to be equivalent to registration despite even the
failure to annotate said instruments in the corresponding certificates of title.
Based on this alone, it appears that the RTC was in error when it considered the
registration of the Absolute Deed of Sale on June 16, 2004 inferior to the registration of the
Notice of Levy on Attachment on June 17, 2004 on the ground that the Attachment was
annotated on TCT No. R-17571 earlier than the Deed of Sale. As discussed in the above-
mentioned cases, the annotation in the certificate of title is not determinative of the
effectivity of the registration of the subject instrument.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
However, a close reading of the above-mentioned cases reveals that for the entry
of instruments in the Primary Entry Book to be equivalent to registration, certain
requirements have to be met. Thus, we held in Levin that:
Do the entry in the day book of a deed of sale which was presented and
filed together with the owner's duplicate certificate of title with the office
of the Registrar of Deeds and full payment of registration fees
constitute a complete act of registration which operates to convey and
affect the land? In voluntary registration, such as a sale, mortgage,
lease and the like, if the owner's duplicate certificate be not
surrendered and presented or if no payment of registration fees be
made within 15 days, entry in the day book of the deed of sale
does not operate to convey and affect the land sold. x x x.[28]
Levin, which was decided in 1952, applied Section 56 of the Land Registration
Act[29] which provides:
Sec. 56. Each register of deeds shall keep an entry book in
v. which, upon payment of the filing fee, he shall enter in the order of their
reception all deeds and other voluntary instruments, and all copies of
writs or other process filed with him relating to registered land. He shall
note in such book the year, month, day, hour, and minute of reception
of all instruments in the order in which they were received. They shall
v. be regarded as registered from the time so noted, and the
memorandum of each instrument when made on the certificate of title
to which it refers shall bear the same date; Provided, however, That
no registration, annotation, or memorandum on a certificate of title
shall be made unless the fees prescribed therefor by this Act are
paid within fifteen days' time after the date of the registration of
the deed, instrument, order or document in the entry book or day
book, and in case said fee is not paid within the time above
mentioned, such entry shall be null and void: Provided further, That
the Insular Government and the provincial and municipal governments
need not pay such fees in advance in order to be entitled to entry or
registration. (Emphasis supplied.)

This provision is the precursor of the aforequoted Section 56 of Presidential
Decree No. 1529, which seems to have dispensed with the provision nullifying the
registration if the required fees are not paid:
SEC. 56. Primary Entry Book; fees; certified copies. Each
Register of Deeds shall keep a primary entry book in which, upon
payment of the entry fee, he shall enter, in the order of their reception,
all instruments including copies of writs and processes filed with him
relating to registered land. He shall, as a preliminary process in
registration, note in such book the date, hour and minute of reception of
all instruments, in the order in which they were received. They shall be
regarded as registered from the time so noted, and the memorandum of
each instrument, when made on the certificate of title to which it refers,
shall bear the same date: Provided, that the national government as
well as the provincial and city governments shall be exempt from the
payment of such fees in advance in order to be entitled to entry and
registration.
In Development Bank of the Philippines v. Acting Register of Deeds of Nueva
Ecija,[30] this Court applied the provisions of Presidential Decree No. 1529 and modified the
doctrine as follows:
Current doctrine thus seems to be that entry alone produces
the effect of registration, whether the transaction entered is a voluntary
or an involuntary one, so long as the registrant has complied with
all that is required of him for purposes of entry and annotation,
and nothing more remains to be done but a duty incumbent solely
on the register of deeds.[31]
This pronouncement, which was reiterated in National Housing Authority v. Basa,
Jr.,[32] shows that for the entry to be considered to have the effect of registration, there is
still a need to comply with all that is required for entry and registration, including the
payment of the prescribed fees. Thus, in Autocorp Group v. Court of Appeals,[33] this Court
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
compared the date when the required fees were paid with the therein assailed writ of
preliminary injunction:
Petitioners contend that payment of the entry fee is a
condition sine qua non before any valid entry can be made in the
primary entry book. Allegedly, the Court of Appeals resorted to judicial
legislation when it held that the subsequent payment of the entry fee
was curative and a substantial compliance with the law. Petitioners
claim that the ruling in DBP vs. Acting Register of Deeds of Nueva
Ecija does not apply to this case. As there was no valid registration,
petitioners conclude that the order of the trial court issuing a writ of
preliminary injunction was proper, considering the irregularities present
in the conduct of the extrajudicial foreclosure x x x.
We find the petition bereft of merit.
First. The objection as to the payment of the requisite fees is
unavailing. There is no question that the fees were
paid, albeit belatedly. Respondent bank presented the certificate of sale
to the Office of the Register of Deeds of Cebu City for registration
on January 21, 1999 at 4:30 p.m. As the cashier had already left, the
Office could not receive the payment for entry and registration fees, but
still, the certificate of sale was entered in the primary entry book. The
following day, respondent bank paid the requisite entry and registration
fees. Given the peculiar facts of the case, we agree with the Court of
Appeals that the payment of respondent bank must be deemed to be
substantial compliance with the law; and, the entry of the instrument the
day before, should not be invalidated. In any case, even if we consider
the entry to have been made on January 22, the important fact is that
the entry in the primary entry book was done prior to the issuance of
the writ of injunction [on February 15, 1999; TRO issued on January
25, 1999] by the trial court.[34] (Emphases supplied.)
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

paid the reason for which the same was not immediately acted
Records in the case at bar reveal that as of June 25, 2004, the date of the letter upon by the undersigned.[35]
of Atty. Santos seeking the opinion of the LRA as regards the registration of the Deed of

Sale and the Notice of Levy on Attachment, the required registration fees for the Deed of

Sale has not yet been paid:

25 June 2004 Since there was still no compliance of all that is required x x x for purposes of

[received by the LRA: July 01, entry and annotation[36] of the Deed of Sale as of June 25, 2004, we are constrained to rule
2004] that the registration of the Notice of Levy on Attachment on June 17, 2004 should take

precedence over the former. Considering that the Notice of Levy on Attachment was

HON. BENEDICTO B. ULEP deemed registered earlier than the Deed of Sale, the TCT issued pursuant to the latter

Administrator should contain the annotation of the Attachment.

This Authority
In view of the foregoing, we find that the RTC was, in fact, acting properly when it

ordered the reinstatement of the Notice of Levy on Attachment in TCT No. R-22522. Since

Sir: the RTC cannot be considered as to have acted in grave abuse of its discretion in issuing

such Order, the Petition for Certiorari assailing the same should have been dismissed.

This has reference to the TCT No. R-17571/T-87 registered

WHEREFORE, premises considered, the instant Petition for Review
under the name of LBB Construction and Development Corporation
relative to the Deed of Absolute Sale with Entry No. 30549, which was on Certiorari is hereby GRANTED. The Decision of the Court of Appeals in CA-G.R. SP
sought to be registered on 16 June 2004 at 11:20 a.m. (a photocopy of
which is hereto attached as Annex A). No. 94479 dated April 18, 2007 and its Resolution dated September 18, 2007

are REVERSED and SET ASIDE.

However, on 17 June 2004 at 11:45 a.m. a Notice of Levy on

Attachment (a photocopy of which is hereto attached as Annex B) with
Entry No. 30590 was filed and annotated against TCT No. R-17571/T-
87. SO ORDERED.

In view of the foregoing, we are now in a quandary as to what

proper steps should be taken. It should be noted further that the
required registration fees of the abovementioned sale was not

G.R. No. 199180, July 27, 2016
THELMA RODRIGUEZ, JOINED BY HER HUSBAND, Petitioners, v. SPOUSES JAIME
SIOSON AND ARMI SIOSON, ET AL., Respondents.
DECISION
REYES, J.:
Before the Court is a petition for review1 under Rule 45 of the Rules of Court assailing the
Decision2dated May 26, 2011 and Resolution3 dated October 21, 2011 of the Court of
Appeals (CA) in CA-G.R. CV No. 94867, which nullified the Joint Decision 4 dated August
13, 2009 of the Regional Trial Court (RTC) of Bataan, Branch 3.
The Facts
This petition is the aftermath of a series of sales transactions entered into by Neri delos
Reyes (Neri) over a portion of a property formerly identified as Lot 398, with an area of
22,398 square meters, covered by Transfer Certificate of Title (TCT) No. T-86275 and
registered in the name of "Neri delos Reyes, married to Violeta Lacuata."5chanrobleslaw
Sometime in 1997, the Municipality of Orani, Bataan (Municipality) purchased from Neri an
area of about 1.7 hectare of Lot 398, to be used for the extension of the Municipality's
public market. Among other things, it was agreed that upon full payment of the purchase
price, Neri will surrender the mother title to the Municipality for subdivision of the property
on the condition that Neri will equitably share in the expense thereof. 6chanrobleslaw
Lot 398 was subsequently subdivided into 5 lots: Lot 398-A, Lot 398-B, Lot 398-C, Lot 398-
D, and Lot 398-E. Lots 398-C and 398-D pertain to the portions that were sold to the
Municipality, while Lot 398-E is a road lot. Consequently, only Lots 398-A and 398-B were
left as the remaining portions over which Neri retained absolute title. TCT Nos. T-209894
and T-209895 were then respectively issued over Lots 398-A and 398-B and were both
registered in the name of "Neri delos Reyes, married to Violeta Lacuata." The owner's
duplicate copies of TCT Nos. T-209894 and T-209895, however, were retained by the
Municipality pending Neri's payment of his share in the expenses incurred for the
subdivision of Lot 398. These were placed under the custody of the Municipal Treasurer,
where they continue to remain.7chanrobleslaw
Neri, however, alleged that then Municipal Mayor Mario Zuiga suggested that he sell Lot
398-A to his aunt, petitioner Thelma Rodriguez (Thelma). The Municipality would then
expropriate the same from Thelma. Neri agreed to the suggestion. 8chanrobleslaw
After agreeing to the amount of P1,243,000.00 as the selling price, Thelma, on March 20,
1997, issued a check for said amount payable to Neri. When it fell due, no sufficient funds
were available to cover the check. Consequently, it was agreed that Thelma would pay the
purchase price in installments from March 20, 1997 to September 4, 1997. Thelma,
however, was only able to pay P442,293.50.9chanrobleslaw
On November 12, 2001, Thelma caused the annotation of an adverse claim on TCT No. T-
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
209894.10At about the same time, Thelma saw an announcement that a new Orani
Common Terminal would be built on Lot 398-A. As she has not yet entered into any
agreement regarding the utilization of said lot, Thelma filed a Complaint for
Injunction docketed as Civil Case No. 7394 against then incumbent mayor Efren Pascual,
Jr. (Mayor Pascual), and the Municipality under claim of ownership. To support her claim,
Thelma incorporated in her complaint a copy of an undated and unnotarized deed of
absolute sale allegedly executed by Neri in her favor.11chanrobleslaw
In their joint verified answer, Mayor Pascual and the Municipality acknowledged that
Thelma became the owner of Lot 398-A by way of purchase from Neri.12chanrobleslaw
In 2002, Neri executed an affidavit claiming that the owner's copies of TCT No. T-209894
(covering Lot 398-A) and TCT No. T-209895 (covering Lot 398-B) were lost, which was
annotated on the original copy of TCT No. T-209894 on May 8, 2002.13 Two days after, or
on May 10, 2002, Neri caused the cancellation of Thelma's adverse claim.14 Neri also
caused the reconstitution of new owner's copies of TCT Nos. T-209894 and T-
209895.15 Thereafter, new copies of TCT Nos. T-209894 and T-209895 were issued, and
Neri then sold Lot 398-A to Spouses Jaime and Armi Sioson, Spouses Joan and Joseph
Camacho, and Agnes Samonte (respondents) - in a deed of sale dated November 27,
2002. A special power of attorney was executed by Violeta delos Reyes (Violeta) in favor
of Neri for the purpose. Consequently, TCT No. T-209894 was cancelled, and TCT No. T-
226775 was thus issued in the respondents' names. 16chanrobleslaw
Upon the issuance of TCT No. T-226775, the respondents declared Lot 398-A for tax
purposes and paid them accordingly. They sought to take actual possession thereof by
filling it; however, after they filled said lot with about 40 truckloads of soil/fillings, Thelma
sent two armed blue guards who entered the premises and set up a tent therein. The
respondents brought the matter to the attention of barangay authorities who referred them
to the municipal mayor. As the municipal mayor did not take any action, the respondents
filed a forcible entry case against Thelma before the Municipal Circuit Trial Court of Orani-
Samal, Bataan, docketed as Civil Case No. 843. The said ejectment case is still
pending.17chanrobleslaw
After Thelma learned of the second sale of Lot 398-A, she filed against the respondents a
complaint for the Declaration of Nullity of the Second Sale and TCT No. T-226775 on
February 11, 2003, docketed as Civil Case No. 7664. In support of her claim, Thelma
once again presented a deed of absolute sale executed by Neri in her favor. This time, the
deed of sale she presented was duly signed by her and Neri, witnessed, notarized and
dated April 10, 1997.18chanrobleslaw
The respondents countered that they are innocent purchasers for value having bought Lot
398-A at the time when Thelma's adverse claim was already cancelled. While they admit
Thelma's possession of the subject property, they, however, qualify that possession is
being contested in a separate action for forcible entry. 19chanrobleslaw
The respondents also filed a verified answer-in-intervention in Civil Case No. 7394
(injunction case) contending that they are the present registered owners of Lot 398-A, and
as such, Thelma is not entitled to any relief.20chanrobleslaw
Ruling of the RTC

The RTC jointly heard Civil Case No. 7394 and Civil Case No. 7664 and after trial,
rendered judgment in favor of Thelma. The dispositive portion of the Joint Decision 21 dated
August 13, 2009 reads:ChanRoblesVirtualawlibrary
WHEREFORE, judgment is hereby rendered declaring that:ChanRoblesVirtualawlibrary
1) [Thelma] is entitled to the relief of permanent injunction prayed for in Civil Case No.
7394 against the respondents. Insofar as defendants [Mayor Pascual] and the
[Municipality] are concerned, not only did they acknowledge expressly the ownership of
[Thelma] of Lot 398-A, they have disowned the commission of any act in derogation of
[Thelma's] right of ownership of the lot and did not contest anymore the action of [Thelma]
in said case;
2) Insofar as Civil Case No. 7664 is concerned, the second deed of sale entered into by
[Neri] with the [respondents] is hereby declared null and void, and [TCT] No. T-226775 of
the Registry of Deeds of Bataan which was issued by defendant Register of Deeds
pursuant to said second deed of sale is likewise declared null and void, and accordingly,
the Register of Deeds for the Province of Bataan is ordered to cancel said certificate of title
and to reinstate [TCT] No. T-209894 in the name of [Neri], married to [Violeta];
3) The new owner's copy of [TCT] No. T-209894 is hereby declared null and void as the
original owner's copy is not lost but actually exists and is presently in the custody of the
Municipal Treasurer of Orani, Bataan. In consequence, defendant Register of Deeds of
Bataan is directed to cancel said new owner's copy of [TCT] No. T-209894;
and cralawlawlibrary
4) [The respondents] are hereby ordered to jointly and severally pay to [Thelma] attorney's
fees in the amount of Twenty[-]Five Thousand Pesos (P25,000.00).
All counterclaims of [the respondents] are denied for lack of basis in fact and in law.
No pronouncement as to costs.
SO ORDERED.22chanroblesvirtuallawlibrary
The RTC concluded that by Neri's admission that he sold the subject lot to Thelma for a
consideration of P1,243,000.00, and his acknowledgement receipt of P442,293.50 as
partial payment from the latter, the transaction between Thelma and Neri should be
regarded as an executed contract of sale. Hence, Lot 398-A was subjected to a double
sale when Neri sold the same property to the respondents. 23 The RTC further ruled that
the contract of sale between Neri and the respondents is null and void because it was
transacted and executed at the time when Neri was no longer the owner of Lot 398-A. It
was legally inexistent for lack of object certain. Thereupon, the fact that the respondents
were able to register their acquisition first is of no moment. Registration does not legitimize
a void contract and thus, TCT No. T-226775 should be cancelled.24chanrobleslaw
The respondents moved for reconsideration but it was denied by the RTC per
Order25cralawred dated January 13, 2010. Hence, they elevated their case to the CA.
Ruling of the CA
On May 26, 2011, the CA promulgated the assailed Decision, 26 with the following
dispositive portion:ChanRoblesVirtualawlibrary
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
WHEREFORE, the instant Appeal is GRANTED. The Joint Decision dated August 13,
2009 and the Order dated January 13, 2010 of the [RTC] of Bataan are hereby
declared NULL and VOID insofar as it (1) granted permanent injunction in favor of
[Thelma] in Civil Case No. 7394 against [the respondents];T2) declared null and void the
deed of sale between [Neri] and [the respondents] in Civil Case No. 7664; (3) declared null
and void the [TCT] No. T-226775; (4) ordered the cancellation of [TCT] No. T-226775 and
reinstatement of [TCT] No. T-209894 in the name of [Neri], married to [Violeta]; and (5)
ordered the payment of attorney's fees.
Consequently, the following are hereby declared VALID: (1) the Deed of Sale between
[Neri] and [the respondents]; and (2) the [TCT] No. T-226775 in the names of [the
respondents].
This Decision is without prejudice to any right which [Thelma] may have against [Neri] for
the refund of the amount of Four Hundred Forty-Two Thousand Two Hundred Ninety-
Three and 50/100 Pesos (P442,293.50).
The Complaints in Civil Cases Nos. 7394 and 7664 are hereby DISMISSED.
SO ORDERED.27 (Emphasis in the original)
Contrary to the findings of the RTC, the CA found that the contract between Neri and
Thelma was a mere contract to sell and not a contract of sale; hence, there was no
double sale of Lot 93 8-A. According to the CA, the question of whether or not the
respondents are buyers in good faith is unavailing since the concept of a "buyer in good
faith" finds relevance only in cases of double sale. The CA further stated that even if it is
assumed that the contract between Neri and Thelma was an absolute contract of sale, the
same is nonetheless void for lack of consent of Neri's wife, Violeta, insofar as the object of
the transaction is a conjugal property.
Thelma moved for reconsideration of the CA decision, which was denied for lack of merit in
Resolution28 dated October 21, 2011.
Hence this petition.
Thelma argues that there was double sale and the CA erred in reversing the RTC decision:
(1) by interpreting the sale between Thelma and Neri as a mere contract to sell; (2) by
declaring the deed of sale in favor of Thelma as null and void due to lack of Violeta's
consent or conformity; and (3) by declaring the respondents as buyers in good faith
despite prior registration of Thelma's notice of adverse claim in TCT No. T-209894, and
her actual possession of the subject property. 29chanrobleslaw
Ruling of the Court
The resolution of this case basically rests on the determination of whether the transaction
between Neri and Thelma is a contract of sale or a contract to sell. The rule on double
sale, as provided in Article 1544 of the Civil Code,30 does not apply to a case where there
was a sale to one party of the land itself while the other contract was a mere promise to
sell the land or at most an actual assignment of the right to repurchase the same
land.31chanrobleslaw
Both the RTC and the CA concur in the finding that Neri agreed to sell Lot 398-A to

Thelma for an agreed price of P1,243,000.00. The RTC, however, concluded that by Neri's
admission that he sold the subject lot to Thelma for a consideration of P1,243,000.00, and
that he acknowledged receipt of P442,293.50 as partial payment from the latter, the
transaction between Thelma and Neri should be regarded as an executed contract of sale,
and not a merely executory one. The RTC likewise took into consideration Thelma's
alleged possession of the property and Neri's failure to rescind the contract as indicative of
the nature of their agreement as one of sale. 32chanrobleslaw
On the other hand, the CA ruled that "the contract between Thelma and Neri was a mere
contract to sell, the transfer of ownership over Lot 398-A being conditioned on Thelma's full
payment of the purchase price."33 As regards the existence of the two contracts of sale, the
CA concluded that Thelma admitted on trial that the first deed of sale was only meant to be
an acknowledgment receipt for the down payment she made on the subject lot, and the
second deed of sale was allegedly executed after Thelma pays in full the purchase price of
the lot.
A review of this case shows that the CA ruled in accord with existing jurisprudence.
"The real character of the contract is not the title given, but the intention of the parties." 34 In
this case, there exist two deeds of absolute sale. Though identically worded, the first
contract was undated, not notarized, signed only by Neri, and was presented in Civil Case
No. 7394 for Injunction,35 while the second deed was dated April 10, 1997, notarized on
September 5, 1997, signed by both Neri and Thelma, and was presented in Civil Case No.
7664 for Declaration of Nullity of Deed of Sale and Title.36chanrobleslaw
In determining the nature of the agreement between Thelma and Neri, the CA took note of
these two documents, and, coupled with Thelma's own admissions, correctly found that it
was a mere contract to sell. According to the CA:ChanRoblesVirtualawlibrary
During trial, Thelma explained the apparent disparity between the two (2) "deeds of
absolute sale" by testifying that the undated and unnotarized deed of sale served only as a
"receipt" which was signed by Neri when the latter received the downpayment for the lot.
The dated and notarized deed of sale, on the other hand, was signed by both Thelma and
Neri upon Thelma's alleged full payment of the purchase price:
chanRoblesvirtualLawlibraryx x x
Second, the execution of the "deed of absolute sale" dated August 10, 1997 and the
transfer and delivery of the title to Thelma's name covering Lot No. 398-A were conditioned
upon full payment of the purchase price.
Thelma testified that the "deed of absolute sale" dated August 10, 1997 and which was
attached to Thelma's complaint in Civil Case No. 7664 was signed by her, Neri and their
witnesses only upon full payment of the purchase price. Thelma further testified that she
and Neri agreed to place the amount of the purchase price on the deed of absolute sale
only at the time when Thelma had fully paid the same: x x x37 (Italics ours and emphasis
deleted)
Despite the denomination of their agreement as one of sale, the circumstances tend to
show that Neri agreed to sell the subject property to Thelma on the condition that title and
ownership would pass or be transferred upon the full payment of the purchase price. This
is the very nature of a contract to sell, which is a "bilateral contract whereby the
prospective seller, while expressly reserving the ownership of the property despite delivery
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
thereof to the prospective buyer, binds himself to sell the property exclusively to the
prospective buyer upon fulfillment of the condition agreed upon, i.e., the full payment of the
purchase price."38 As stated by the Court, the agreement to execute a deed of sale upon
full payment of the purchase price "shows that the vendors reserved title to the subject
property until full payment of the purchase price." 39chanrobleslaw
It was likewise established that Thelma was not able to pay the full purchase price, and
that she was only able to pay P442,293.50 of the agreed selling price of P1,243,000.00.
The RTC, in fact, made the following findings: (1) the consideration for Lot 398-A was
P1,243,000.00; (2) Thelma issued a check on March 20, 1997 for said amount, payable to
Neri; (3) the agreement was that the check would only be held by Neri for safekeeping as it
was yet unsure if there was ample funds to cover the check; (4) the check was not covered
by sufficient funds when presented for payment, so Thelma subsequently paid Neri in
installments starting from March 20, 1997 to September 4, 1997; and (5) Neri
acknowledged receipt from Thelma the total amount of P442,293.50. 40chanrobleslaw
To bolster her claim, Thelma insists that she now holds title over the subject property after
Neri allegedly delivered the subject lot to her right after the execution of the sale. 41 There
is, however, nothing on record to support this claim aside from her bare assertions. There
was no testimony or any proof on her part showing when and how she took possession of
the property. At best, what is extant from the records is that Thelma paid taxes on the
property for the years 2000 and 2001, which was three years after the alleged sale. "But
tax declarations, by themselves, are not conclusive evidence of ownership of real
property."42 Aside from this, the tax receipts showed that the property was still declared in
the name of Neri.43chanrobleslaw
Moreover, the alleged delivery of the property, even if true, is irrelevant considering that in
a contract to sell, ownership is retained by the registered owner in spite of the partial
payment of the purchase price and delivery of possession of the property. Thus, in Roque
v. Aguado,44 the Court ruled that since the petitioners have not paid the final installment of
the purchase price, the condition which would have triggered the parties' obligation to enter
into and thereby perfect a contract of sale cannot be deemed to have been fulfilled;
consequently, they "cannot validly claim ownership over the subject portion even if
they had made an initial payment and even took possession of the
x same."45chanrobleslaw
Accordingly, the CA did not commit any reversible error in concluding that "the contract
between Thelma and Neri was a mere contract to sell, the transfer of ownership over Lot
398-A being conditioned on Thelma's full payment of the purchase price. Having failed to
pay the purchase price in full, Thelma cannot claim ownership over Lot 398-A and Neri is
not legally proscribed from alienating the same lot to other buyers." 46chanrobleslaw
Finally, while the CA correctly ruled that the agreement was a contract to sell, the Court,
however, does not share its position that the subject property is a conjugal property, and
as such, the absence of Violeta's consent should be held as among the factors which
could have adversely affected the validity of the purported contract of sale between Neri
and Thelma. This is due to the following reasons: first, the subject property, Lot 398-A, is
registered in the name of "Neri delos Reyes, married to Violeta Lacuata," and so was its
mother lot, Lot 398. In Metropolitan Bank and Trust Company v. Tan,47 it was held that
such form of registration is determinative of the property's nature as paraphemal. That the
only import of the title is that Neri is the owner of the subject property, it being registered in
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

his name alone, and that he is married to Violeta; and second, the record is bereft of proof
that said property was acquired during Neri and Violeta's marriage - such that, the
presumption under Article 116 of the Family Code that properties acquired during the CECILIA AMODIA VDA. DE MELENCION, VENERANDA AMODIA, FELIPE
marriage are presumed to be conjugal cannot apply. AMODIA, EUTIQUIO AMODIA and GO KIM CHUAN, G.R. No. 148846
Petitioners,
WHEREFORE, the petition is DENIED for lack of merit. Accordingly, the Decision dated
May 26, 2011 and Resolution dated October 21, 2011 of the Court of Appeals in CA-G.R.
CV No. 94867 are AFFIRMED.
- versus -
SO ORDERED.

HONORABLE COURT OF APPEALS and

AZNAR BROTHERS REALTY COMPANY,
Respondents.

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

NACHURA, J.:

Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Civil

Procedure seeking the reversal of the Court of Appeals (CA) Decision[2] dated March 30,

2001 and praying that the Decision[3] of the Regional Trial Court (RTC) of Lapu-Lapu City,

dated February 18, 1993, be upheld.

The Facts
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Chuan for and in consideration of P70,000.00. The lost title covering the subject property
The subject property is a 30,351 square meter parcel of land (subject property) particularly
was reconstituted pursuant to Republic Act (RA) No. 26. [14] A reconstituted title particularly
denominated as Lot No. 3368, located at Suba-basbas, Marigondon, Lapu-Lapu
designated as Original Certificate of Title (OCT) No. RO-2899 was issued in the name of
City, Cebu, and part of a total area of 30,777 square meters covered by Transfer
Esteban Bonghanoy[15] and, subsequently, a derivative title (TCT No. 20626) was issued in
Certificate of Title (TCT) No. 20626[4] (entire property) in the name of the late petitioner Go
the name of Go Kim Chuan on December 1, 1989. Thereafter, Go Kim Chuan exercised
Kim Chuan (Go Kim Chuan).[5]
control and dominion over the subject property in an adverse and continuous manner and

in the concept of an owner.

The entire property was originally owned by Esteban Bonghanoy [6] who had only one child,

Juana Bonghanoy-Amodia,[7] mother of the late Leoncia Amodia and petitioners Cecilia On February 14, 1990, AZNAR wrote a letter[16] to petitioners Amodias asking the latter to

Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia, and Eutiquio withdraw and/or nullify the sale entered into between them and Go Kim Chuan. On the

Amodia[8] (the Amodias). The entire property was brought under the operation of the same date, a Notice of Adverse Claim[17] was annotated by AZNAR on TCT No. 20626.

Torrens System.[9] However, the title thereto was lost during the Second World War. Because petitioners did not heed AZNAR's demand, on April 25, 1990, AZNAR filed a case

against petitioners Amodias and Go Kim Chuan for Annulment of Sale and Cancellation of

On July 10, 1964, the Amodias allegedly executed an Extra-Judicial Partition of Real TCT No. 20626[18] alleging that the sale to Go Kim Chuan was an invalid second sale of

Estate with Deed of Absolute Sale[10] whereby they extra-judicially settled the estate of the subject property which had earlier been sold to it. Petitioners Amodias denied that they

Esteban Bonghanoy and conveyed the subject property to respondent Aznar Brothers executed the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale in favor of

Realty Company (AZNAR) for a consideration of P10,200.00. On August 10, 1964, the AZNAR, claiming that their purported signatures thereon were forged. [19] Trial on the merits

said Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered ensued.

under Act 3344[11] as there was no title on file at the Register of Deeds of Lapu-Lapu The RTC's Decision

City (Register of Deeds). Thereafter, AZNAR made some improvements and constructed a On February 18, 1993, the RTC dismissed AZNAR's complaint and declared Go Kim

beach house thereon. Chuan as the real owner of the subject property. The RTC ratiocinated that the signatures

of the Amodias in the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale

On February 18, 1989, petitioners Cecilia Amodia Vda. de Melencion, Veneranda Amodia, executed in favor of AZNAR were found by the document examiner of the Philippine

Felipe Amodia and Eutiquio Amodia[12] (petitioners Amodias) executed a Deed of Extra- Constabulary (PC) Crime Laboratory to be forged, thus, the said deed did not convey

Judicial Settlement with Absolute Sale,[13]conveying the subject property in favor of Go Kim anything in favor of AZNAR. Moreover, the subject property had been brought under the
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Land Titles and Deeds (Finals) 2017

(2) Declaring both the Deed of Extra-judicial

Land Registration Act; hence, all transactions involving the same should have complied Settlement with Absolute Sale dated February
1, 1989 executed by Felipe Amodia, Cecilia
with the said law. Finally, the RTC held that AZNAR failed to show that Go Kim Chuan Amodia, Veneranda A. Ibag
and Eustaquio Amodia in favor of Go Kim
acquired the subject property in bad faith. Chuan and the Transfer Certificate of Title
No. 20626 in the name of Go Kim Chuan
as NULL AND VOID;
Aggrieved, AZNAR appealed the RTC Decision to the CA.[20] (3) Ordering Go Kim Chuan to deliver to the
aforesaid plaintiff-appellant the possession of
the land in question and to execute a
registrable deed of conveyance of the subject
The CA's Decision property to the said plaintiff-appellant.

No costs.
On March 30, 2001, the CA rendered a Decision holding that the Extra-Judicial Partition of
SO ORDERED.[21]
Real Estate with Deed of Absolute Sale executed by the Amodias in favor of AZNAR was

registered ahead of the Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go
Petitioners filed a Motion for Reconsideration[22] which the CA denied in its
Kim Chuan, thus, pursuant to Article 1544 of the New Civil Code, the former deed should
Resolution[23] dated June 5, 2001.
be given preference over the latter; that AZNAR's adverse claim was annotated earlier

than the execution of the Deed of Extra-Judicial Settlement with Absolute Sale in favor of
Hence, this Petition based on the following grounds:
Go Kim Chuan; hence, the latter should have respected said adverse claim and should
I
have made inquiries as to possible defects that may exist in the title over the subject
Lot 3368 was already a registered land under Act 496, thus, the
property; and that in the absence of a final determination by a court of proper jurisdiction registration by respondent of the Deed of Sale in 1964 under Act
3344 produces no legal effect whatsoever;
on the alleged forged signatures of the Amodias in the Extra-Judicial Partition of Real

Estate with Deed of Absolute Sale, the finding of the document examiner was insufficient II

for the RTC to rule in favor of the petitioners.
The CA disposed of the case in this wise:
WHEREFORE, premises considered, the assailed decision
dated February 18, 1993 of the Regional Trial Court of Lapu-Lapu City,
Branch 27, in Civil Case No. 2254-L is hereby REVERSED and SET
ASIDE and a new one is hereby entered as follows:
(1) Declaring plaintiff-appellant Aznar Brothers
Realty Company as the real owner of the land
in question;
Even assuming arguendo that the lot in question was duly registered
under Act 3344 as an unregistered land, it is without prejudice to
better rights and the provision of Article 1544 of the New Civil Code
would be inapplicable;
III
The Honorable Court of Appeals erred in holding that an adverse
claim was already existing at the time the subject land was sold to
petitioner Go Kim Chuan; on the contrary, the latter had purchased
the said land in good faith and for value, without notice of any fact
that would reasonably impel a closer inquiry as to the possibility of a
defect in the vendor's title; and

IV
The Court of Appeals has misapplied the case of Heirs of Severa
Gregorio v. CA, 300 SCRA 565, cited in support of its ruling that the
court a quo committed error in appreciating the testimony of an expert
witness as to the forgery of the first Deed of Sale. [24]
In its Comment[25] dated September 18, 2001, AZNAR argued, among others, that the
Petition is dismissible because the Verification and Certification of Non-forum Shopping
were not signed by all the petitioners, invoking this Court's Decision in the case of Loquias
v. Office of the Ombudsman,[26] and that the same were signed only by one April Socorro
Go, daughter of the late Go Kim Chuan, who did not even appear to be authorized to file
the instant case in behalf of the other petitioners.
In their Reply[27] dated October 22, 2001, petitioners contended that April Socorro Go is
one of the legitimate children and an heir of the late Go Kim Chuan and, as such, she has
personal knowledge of the truth of the facts alleged in the Petition. Petitioners submitted
that they substantially complied with the Rules of Court by attaching the required
Verification and Certification of Non-Forum Shopping and since the same are required
simply to facilitate and promote the orderly administration of justice, compliance therewith
should not be imposed with absolute literalness.
On December 19, 2001, petitioners, through counsel, filed a Motion [28] for Leave to Admit
[29]
Amended Petition for Review on Certiorari (Amended Petition). Petitioners manifested
that they were seeking to correct a defect in the designation of parties and prayed that the
Heirs of Go Kim Chuan, namely, Estrella S. Go, Sonia Beth Go-Reynes, Daryl Go, and
April Socorro Go be impleaded as petitioners instead of the earlier designated petitioners,
Cecilia Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia, Eutiquio Amodia,
and Go Kim Chuan. Counsel for petitioners admitted that he inadvertently included the
petitioners Amodias in the initial Petition for Review on Certiorari (Original Petition), as
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Land Titles and Deeds (Finals) 2017
they were parties before the RTC and CA. The counsel also manifested that he was only
representing the Heirs of Go Kim Chuan in this case. Lastly, he claimed that other than the
substitution of the original petitioners, both the Original Petition and Amended Petition
uniformly raised the same issues and should be given due course in the greater interest of
justice and that the instant Motion was not interposed for delay.
Per directive of the Court,[30] AZNAR filed its Comment[31] on the said motion wherein
AZNAR manifested that it had no serious objection to the admission of the Amended
Petition if the same was intended merely to implead the Heirs of Go Kim Chuan as
petitioners. However, AZNAR interposed strong opposition to the Amended Petition's
admission since the names of the petitioners Amodias were deleted without their written
consent.
In their Reply,[32] the Heirs of Go Kim Chuan, through counsel, claimed that petitioners
Amodias were excluded from the Amended Petition because they can no longer be located
despite diligent efforts exerted by counsel. The counsel claims that after the rendition of
the assailed CA Decision, he sent several letters to petitioners Amodias but they did not
reply; hence, the Heirs of Go Kim Chuan, left with no choice, filed the instant case before
this Court on their own.
The Court issued a Resolution[33] dated September 16, 2002 giving due course to the
Petition and requiring the parties to submit their respective Memoranda.
In their Memorandum,[34] petitioners Heirs of Go Kim Chuan reiterate the same issues
raised in the Original Petition and the Amended Petition. They argue that Act 3344 only
refers to transactions affecting lands or interests therein not previously registered under
the Spanish Mortgage Law or under the Torrens system; that if AZNAR could not have
registered the sale in 1964 under Act 496 because the title over the subject property was

lost, AZNAR should have availed itself of the remedy of reconstitution; that registration
under Act 3344 is without legal effect and could not operate as constructive notice to
petitioners and third persons, hence, may not be used as basis for the application of Art.
1544 of the New Civil Code; that the Notice of Adverse Claim of AZNAR was annotated on
TCT No. 20626 only on February 14, 1990 after the execution of the Deed of Extra-Judicial
Settlement with Absolute Sale in favor of Go Kim Chuan on February 18, 1989, hence, the
CA erred when it held that Go Kim Chuan was not a buyer in good faith for supposedly
having knowledge of such adverse claim; and that the doctrine laid down in Heirs of
Severa Gregorio v. CA[35] is inapplicable since it referred to a case wherein the original
copy of the document under review was not produced in evidence while in the instant
case, the original copy of the Extra-Judicial Partition of Real Estate with Deed of Absolute
Sale executed by the Amodias in favor of AZNAR was presented before the trial court
judge.
On the other hand, in its Memorandum,[36] AZNAR maintains that the Original Petition is
dismissible because the Verification and Certification of Non-Forum Shopping thereof were
not signed by all the petitioners. AZNAR further claims that the Amended Petition was filed
in order to cure a fatal defect which should not be countenanced by this Court. AZNAR
also contends that Go Kim Chuan was a buyer in bad faith as he had prior constructive
notice that the subject property was sold to AZNAR because the sale was registered with
the Register of Deeds under Act 3344; that the 1964 sale was registered under Act 3344
because the subject property was not actually covered by a Torrens title at the time; that
there was no other mode of registration except under Act 3344; that Go Kim Chuan had to
wait for the reconstitution of the lost title, hence, it could not be said that he examined any
certificate of title and could feign ignorance of the sale in favor of AZNAR; that the second
sale did not transfer the subject property to Go Kim Chuan since it was no longer within the
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vendors' power to convey; that with respect to the issue of forgery, the finding of the
document examiner is not conclusive; and that such issue was belied by petitioner
Veneranda Amodia herself when she declared that the negotiated sale in 1964 between
AZNAR and the Amodias was not consummated because the latter did not receive the full
consideration for the subject property.
Before resolving the main issues raised, the Court shall first deal with an apparent
procedural lapse in this case.
Counsel for petitioners filed a Motion for Leave to Admit Amended Petition for Review
on Certiorari in order to implead the Heirs of the late Go Kim Chuan as the new petitioners
and to delete the names of petitioners Amodias because they could no longer be located.
Said petitioners sought the relaxation of the rules so that in the interest of justice, the case
can be decided on the merits. AZNAR opposes the Amended Petition because it was
allegedly filed to cure a fatal defect in the original petition non-compliance with the rules
on Verification and Certification of Non-Forum Shopping.
In this regard, the case of Iglesia ni Cristo v. Ponferrada[37] is instructive, viz.:
The purpose of verification is simply to secure an assurance that the
allegations of the petition (or complaint) have been made in good
faith; or are true and correct, not merely speculative. This requirement
is simply a condition affecting the form of pleadings, and
noncompliance therewith does not necessarily render it fatally
defective. Indeed, verification is only a formal, not a jurisdictional
requirement.
The issue in the present case is not the lack of verification but the
sufficiency of one executed by only one of plaintiffs. This Court held
in Ateneo de Naga University v. Manalo, that the verification
requirement is deemed substantially complied with when, as in the
present case, only one of the heirs-plaintiffs, who has sufficient
knowledge and belief to swear to the truth of the allegations in the
petition (complaint), signed the verification attached to it. Such
verification is deemed sufficient assurance that the matters alleged in
the petition have been made in good faith or are true and correct, not
merely speculative.

The same liberality should likewise be applied to the certification
against forum shopping. The general rule is that the certification must
be signed by all plaintiffs in a case and the signature of only one of
them is insufficient. However, the Court has also stressed in a
number of cases that the rules on forum shopping were designed to
promote and facilitate the orderly administration of justice and thus
should not be interpreted with such absolute literalness as to subvert
its own ultimate and legitimate objective. The rule of substantial
compliance may be availed of with respect to the contents of the
certification. This is because the requirement
of strict compliance with the provisions merely underscores its
mandatory
nature in that the certification cannot be altogether dispensed with or
its requirements completely disregarded.
Thus, we held in Iglesia ni Cristo that the commonality of interest is material and crucial to
relaxation of the Rules.
In the case at bench, the petitioners in the Amended Petition are Heirs of the late Go Kim
Chuan. They represent their predecessor-in-interest in whose favor a title was issued
covering the subject property and said title is sought to be canceled by AZNAR. Clearly,
there is presence of the commonality of interest referred to in Iglesia ni Cristo. Under the
circumstances, the rules may be reasonably and liberally construed to avoid a patent
denial of substantial justice, because it cannot be denied that the ends of justice are better
served when cases are determined on the merits after all parties are given full opportunity
to ventilate their causes and defenses rather than on technicality or some procedural
imperfections.[38]
The Issues
We now proceed to the merits of the case. From the issues raised, there are ultimately two
questions that require resolution:
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Land Titles and Deeds (Finals) 2017
First, did the CA misapply the doctrine in Heirs of Severa Gregorio v. CA in ruling that the
RTC committed an error in appreciating the testimony of an expert witness as to the
forgery of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale?
Second, who between Go Kim Chuan and AZNAR has the better right over the subject
property?
We resolve the first question in the negative.
Forgery cannot be presumed. It must be proved by clear, positive and convincing evidence
and the burden of proof rests on the party alleging forgery. Handwriting experts are usually
helpful in the examination of forged documents because of the technical procedure
involved in analyzing them. But 1resort to these experts is not mandatory or indispensable.
A finding of forgery does not depend entirely on the testimonies of handwriting experts,
because the judge must conduct an independent examination of the questioned
signature in order to arrive at a reasonable conclusion as to its authenticity.[39]
The RTC's finding with respect to the issue of forgery reads:
After a thorough study of the pleadings and evidence of the parties, the
court finds that preponderance of evidence heavily tilts in favor of the
defendants. The document relied upon by the plaintiff in its claim of
ownership over the land in question, the extrajudicial partition and sale,
has been found by the document examiner of the PC Crime Laboratory
to be a forgery. Being a forgery, said document conveyed nothing in
favor of the plaintiff. Hence, plaintiff's claim of ownership over the same
has no more leg to stand on. x x x[40]
While it is true that the original document was produced before the RTC, the finding of
forgery relies wholly on the testimony of the document examiner. It falls short of the
required independent examination to be conducted by the trial court judge. Other than the

statement of the document examiner, the RTC decision contains no other basis to support
its conclusion
of the existence of forgery. Accordingly, the CA was correct in rejecting the RTCs finding
and in applying the doctrine laid down in the case of Heirs of Severa Gregorio v. CA.
However, we resolve the second question in favor of Go Kim Chuan.
Without doubt, we have here a case of double sale of registered land. Apropos is Article
1544 of the New Civil Code which provides:
ART. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall belong
to the person acquiring it who in good faith first recorded it in the
Registry of Property.
Should there be no inscription, the ownership shall pertain to
the person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title, provided
there is good faith.
We have already ruled that the registration contemplated in this provision refers to
registration under the Torrens System, which considers the act of registration as the
operative act[41] that gives validity to the transfer or creates a lien upon the land. [42] This
rule precisely applies to cases involving conflicting rights over registered property and
those of innocent transferees who relied on the clean title of the properties.[43] Thus, we
held that registration must be done in the proper registry in order to bind the same. [44]
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In the case at bench, it is uncontroverted that the subject property was under the operation
of the Torrens System even before the respective conveyances to AZNAR and Go Kim
Chuan were made. AZNAR knew of this, and admits this as fact. Yet, despite this
knowledge, AZNAR registered the sale in its favor under Act 3344 on the contention that at
the time of sale, there was no title on file. We are not persuaded by such a lame excuse.
Act 3344 provides for the system of recording of transactions or claims over unregistered
real estate[45] without prejudice to a third party with a better right. [46] But if the land is
registered under the Land Registration Act (and therefore has a Torrens Title), and it is
sold and the sale is registered not under the Land Registration Act but under Act 3344, as
amended, such sale is not considered registered, as the term is used under Art. 1544 of
the New Civil Code.[47]
In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale in
favor of AZNAR was registered under Act No. 3344 and not under Act No. 496, the said
document is deemed not registered.[48] Rather, it was the sale in favor of Go Kim Chuan
which was registered under Act No. 496.
AZNAR insists that since there was no Torrens title on file in 1964, insofar as the vendors,
AZNAR, and the Register of Deeds are concerned, the subject property was unregistered
at the time. The contention is untenable. The fact that the certificate of title over the
registered land is lost does not convert it into unregistered land. After all, a certificate of
title is merely an evidence of ownership or title over the particular property described
therein.[49] This Court agrees with the petitioners that AZNAR should have availed itself of
the legal remedy of reconstitution of the lost certificate of title, instead of registration under
Act 3344. We note that in Aznar Brothers Realty Company v. Aying,[50]AZNAR, beset with
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Land Titles and Deeds (Finals) 2017

the similar problem of a lost certificate of title over a registered land, sought the the CA declared that Go Kim Chuan was not a buyer in good faith, because he should

reconstitution thereof. It is unfortunate that, in the instant case, despite the sale of the have respected such adverse claim or, at least, inquired into the validity thereof.

subject property way back in 1964 and the existence of the remedy of reconstitution at that
We do not agree.
time, AZNAR opted to register the same under the improper registry (Act 3344) and

allowed such status to lie undisturbed. From 1964 to 1989, AZNAR did not bother to have While factual issues are not within the province of this Court, as it is not a trier of facts and

the lost title reconstituted or even have the subject property declared under its name for is not required to examine the oral and documentary evidence de novo, this Court has the

taxation purposes. Vigilantibus, non dormientibus, jura subveniunt. Laws must come to the authority to review and, in proper cases, reverse the factual findings of lower courts in the

assistance of the vigilant, not of the sleepy. [51] following instances: (a) when the findings of fact of the trial court are in conflict with those

of the appellate court; (b) when the judgment of the appellate court is based on a

Although it is obvious that Go Kim Chuan registered the sale in his favor under Act 496 misapprehension of facts; and, (c) when the appellate court manifestly overlooked certain

while AZNAR did not, we still cannot make an outright award of the subject property to the relevant facts which, if properly considered, would justify a different conclusion.[53]

petitioners solely on that basis. For the law is clear:mere registration of title is not The instant case falls squarely within the foregoing exceptions.

enough. Good faith must accompany the registration.

Concededly, inscription of an adverse claim serves as a warning to third parties dealing

with a piece of real property that someone claims an interest therein or that there is a right
Thus, to be able to enjoy priority status, the second purchaser must be in good faith, i.e.,
superior to that of the titled owner. [54] However, as pointed out by petitioners and as
he must have no knowledge of the previous alienation of the property by the vendor to
admitted by AZNAR, the Notice of Adverse Claim was annotated on TCT No. 20626 only
another. Notably, what is important for this purpose is not whether the second buyer is a
on February 4, 1990, after the lost certificate of title was reconstituted and after the
buyer in good faith, but whether he registers the second sale in good faith, meaning, he
issuance of said TCT in the name of Go Kim Chuan on December 1, 1989. It is, therefore,
does so without knowledge of any defect in the title over the property sold. [52]
absurd to say that Go Kim Chuan should be bound by

an adverse claim which was not previously annotated on the lost title or on the new one, or
To fully resolve the second question, therefore, it is imperative that we determine whether
be shackled by a claim which he did not have any knowledge of.
Go Kim Chuan was a registrant in good faith.

Citing Santiago v. Court of Appeals,[55] AZNAR contends that even if the adverse claim

The CA found that AZNAR registered its Notice of Adverse Claim ahead of the Deed of was annotated on TCT No. 20626 only on February 4, 1990, the prior registration of the

Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan. Because of this, sale in its favor under Act 3344 served as constructive notice to Go Kim Chuan and thus

negates the latter's claim of good faith, since the Court held in that case, Registration,
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Land Titles and Deeds (Finals) 2017

however, by the first buyer under Act 3344 can have the effect of constructive notice to the Finally, it is worth stressing that the Torrens system was adopted in this country because it

second buyer that can defeat his right as such buyer in good faith. was believed to be the most effective measure to guarantee the integrity of land titles and

to insure their indefeasibility once the claim of ownership is established and recognized. If
AZNAR's reliance on Santiago is misplaced. In Santiago, the first buyers registered the
a person purchases a piece of land on the assurance that the seller's title thereto is valid,
sale under the Torrens System, as can be inferred from the issuance of the TCT in their
he should not run the risk of losing his acquisition. If this were permitted, public confidence
names. There was no registration under Act 3344.Conversely, in the instant case, AZNAR
in the system would be eroded and land transactions would have to be attended by
registered the sale in its favor under Act 3344 despite its full knowledge that the subject
complicated and not necessarily conclusive investigations and proof of ownership. [59]
property is under the operation of the Torrens System. To repeat, there can be no

constructive notice to the second buyer through registration under Act 3344 if the property
WHEREFORE, the instant petition for review is GRANTED. The Decision of the Court of
is registered under the Torrens system.[56]
Appeals in CA-G.R. CV No. 51814 is REVERSED and SET ASIDE. The Decision of

Moreover, before buying the subject property, Go Kim Chuan made verifications with the the Regional Trial Court of Lapu-Lapu City, Branch 27, in Civil Case No. 2254-L,

Office of the City Assessor of Lapu-Lapu City and the Register of Deeds. He likewise is REINSTATED. No costs.

visited the premises of the subject property and found that nobody interposed any adverse

claim against the Amodias. After he decided to buy the subject property, he paid all taxes SO ORDERED.

in arrears, caused the publication of the Deed of Extra-Judicial Settlement with Absolute

Sale in a newspaper of general circulation, caused the reconstitution of the lost certificate

of title and caused the issuance of the assailed TCT in his name. [57] Given these

antecedents, good faith on the part of Go Kim Chuan cannot be doubted.

We also note that AZNAR's complaint for cancellation of title contains no allegation that the

(second) purchaser was aware of defects in his title. In the absence of such an allegation

and proof of bad faith, it would be grossly inappropriate for this Court to render judgment

against the purchaser who had already acquired title not only because of lack of evidence,

but also because of the indefeasibility and conclusiveness of such title. [58]

G.R. No. 149238 November 22, 2007
SIXTO ANTONIO, petitioner,
vs.
SPS. SOFRONIO SANTOS & AURORA SANTOS, SPS. LUIS LIBERATO & ANGELINA
LIBERATO and SPS. MARIO CRUZ & VICTORIA CRUZ, respondents.
RESOLUTION
QUISUMBING, J.:
This is an appeal from the Decision1 dated July 31, 2001 of the Court of Appeals in CA-
G.R. CV No. 58246, affirming, with modification, the Decision2 dated October 7, 1997 of
Branch 72, Regional Trial Court (RTC) in Antipolo, Rizal in Civil Case No. 1261-A. The
RTC had dismissed the complaint for Reconveyance, Annulment of Title and Damages
filed by petitioner Sixto Antonio against respondents.
The antecedent facts, culled from the records, are as follows:
On September 19, 1988, petitioner Sixto Antonio filed before Branch 72, RTC, Antipolo,
Rizal, a complaint for Reconveyance, Annulment of Title and Damages against
respondents spouses Sofronio and Aurora Santos, Luis and Angelina Liberato, and Mario
and Victoria Cruz. The complaint was docketed as Civil Case No. 1261-A.
In his complaint,3 Antonio alleged that he is the absolute owner of a 13,159-square meter
parcel of land denominated as Lot No. 11703, CAD 688-D, Cainta-Taytay Cadastre,
situated in Barangay San Juan, Cainta, Rizal. He averred that, as evidenced by certificates
of payment of realty taxes for the years 1918 and 1919, the property was previously owned
by his father and that in 1984, he filed before Branch 71, RTC, Antipolo, Rizal, an
application for the registration of two parcels of land, one of which was Lot No. 11703,
CAD 688-D, situated in Barangay San Juan, Cainta, Rizal. His application was docketed
as Land Registration Case No. 142-A (LRC No. 142-A).
Although the RTC, Branch 71, declared him the true and absolute owner in fee simple of
the two parcels of land he applied for, it set aside its decision with respect to Lot No.
11703, CAD 688-D in an Order dated August 21, 1986, to avoid duplication of issuance of
titles.
Antonio said that after investigation, he discovered that Lot No. 11703, CAD 688-D was
already titled in the name of respondents. He then filed the complaint for Reconveyance,
Annulment of Title and Damages against respondents, averring that respondents
committed fraud in their application for titling because they made it appear in their
application for registration that the subject property was located in Pinagbuhatan, Pasig,
Rizal, when in fact, the property is located in Barangay San Juan, Cainta, Rizal. He added,
respondents also made it appear in their application for registration that the subject
property is bound on the North East by the Pasig River when in fact it is bound on the
North East by the Tapayan River. Furthermore, the Pasig River does not traverse any
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Land Titles and Deeds (Finals) 2017
portion of the jurisdiction of Cainta, Rizal. He argued that Original Certificate of Title No.
108 (OCT No. 108) in respondents names, insofar as it included Lot No. 11703, CAD 688-
D, is, therefore, null and void because it was obtained through fraudulent
misrepresentations and machinations.
In their Answer4 dated July 26, 1989, respondents averred that OCT No. 108 was duly
issued to them by the Register of Deeds for Metro Manila, District II, on May 20, 1977.
They alleged that prior to the issuance of OCT No. 108, they, as registered owners, had
always been in peaceful possession of the property and at no time had Antonio possessed
the property, nor did he ever make any claim against the said property.
The RTC of Antipolo, Rizal, Branch 72, in a Decision dated October 7, 1997 dismissed the
complaint and ordered Antonio to pay respondents moral damages and attorneys fees.
The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered DISMISSING
the instant complaint, and orders plaintiff as follows:
1. To pay defendants Sofronio Santos, Aurora Santos, Sps. Luis Liberato and
Angelina Santos, the amount of P100,000.00 each, by way of moral damages;
2. To pay defendants the amount of P60,000.00, by way of attorneys fees, and
costs of suit.
SO ORDERED.5
The Court of Appeals in a Decision dated July 31, 2001 affirmed with modification the
abovementioned decision by deleting the award of moral damages and attorneys fees.
The dispositive portion of the decision of the Court of Appeals states:
WHEREFORE, with modification deleting [or] setting aside the award for moral
damages and attorneys fees, the decision appealed from is AFFIRMED with
costs against the plaintiff-appellant.
SO ORDERED.6
Hence, the instant petition, raising the following issues:
I.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT
HOLDING THAT THE DECISION IN LAND REGISTRATION CASE NO. 142-A,
LRC RECORD NO. 58707, REGIONAL TRIAL COURT OF ANTIPOLO CITY,
BRANCH 71, IS SUFFICIENT BASIS OF PETITIONERS CLAIM OF RIGHT OF
OWNERSHIP OVER THE PROPERTY SUBJECT OF ACTION FOR
RECONVEYANCE.

II.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN TREATING
PETITIONERS ACTION FOR RECONVEYANCE AS ONE FOR TITLING OF A
PARCEL OF LAND.
III.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT
HOLDING THAT RESPONDENTS HAVE FRAUDULENTLY REGISTERED AND
TITLED SUBJECT PROPERTY IN THEIR NAMES.
IV.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING
THAT RESPONDENTS MOTHER ACQUIRED SUBJECT PROPERTY FROM
HER FATHER, GAVINO SANTOS, WHICH THE LATTER ALLEGEDLY
PURCHASED FROM LADISLAO RIVERA.
V.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING
THE DECISION OF THE COURT A QUO DISMISSING PETITIONERS ACTION
FOR RECONVEYANCE.7
Simply put, the issues raised are: (1) Did the Court of Appeals err in not holding that the
decision in LRC No. 142-A was sufficient basis of petitioners claim of ownership over the
subject property? (2) Did the Court of Appeals and RTC erroneously treat petitioners
action for reconveyance as one for titling of a parcel of land? (3) Did respondents
fraudulently title the subject property in their names? (4) Did the Court of Appeals err in
finding that respondents mother acquired the subject property from her father, Gavino
Santos, who purchased it from Ladislao Rivera? and (5) Did the Court of Appeals err in
affirming the decision of the RTC dismissing petitioners action for reconveyance?
Petitioner argues that the Court of Appeals erred in not holding that the decision in LRC
No. 142-A is sufficient basis for his claim of ownership over the property; in treating his
action for reconveyance as one for titling; in not holding that respondents had fraudulently
registered the property in their names; and in holding that respondents mother had
acquired the subject property from her father, Gavino Santos, who allegedly bought the
property from Ladislao Rivera.
Respondents, on the other hand, in their Comments, 8 contend that they have proved they
have a better title to the property. They argue that petitioners attempt to register Lot No.
11703, CAD 688-D in his name is tainted with fraud, and that petitioner had failed to
adduce any evidence of fraud on their part. They assert that their documentary and
testimonial evidence which were unrebutted by petitioner show original ownership of the
land by Ladislao Rivera from whom their grandfather bought the property.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
After serious consideration, we find that petitioners arguments lack merit.
On the first issue, petitioner argues that in LRC No. 142-A, the RTC of Antipolo, Branch
71, rendered a Decision on January 7, 1986 adjudicating ownership of two lots, including
Lot No. 11703, CAD 688-D, in his favor. He adds that on February 19, 1986, after said
decision has become final and executory, the said RTC issued a certification for issuance
of decree, directing the Land Registration Commission to issue the corresponding decree
of registration. Hence, he argues, his right of ownership over the land has already been
fully established, but no certificate of title was issued to him only because the property was
already registered in the name of respondents.
But we agree with respondents that petitioner cannot rely on the decision in LRC No. 142-
A. As pointed out by the Court of Appeals, even if a title had been issued to petitioner
based on said decision, his title would be of a later date than the title of respondents,
hence inefficacious and ineffective. This Court has ruled that, when two certificates of title
are issued to different persons covering the same land in whole or in part, the earlier in
date must prevail; and in case of successive registrations where more than one certificate
is issued over the same land, the person holding a prior certificate is entitled to the land as
against a person who relies on a subsequent certificate. 9
On the second issue, petitioner contends that it is very apparent the RTC and Court of
Appeals had the notion that his case a quo was not an action for reconveyance, but rather
an application for registration of land where the applicant and oppositor had to prove their
respective registrable titles. This, he adds, could be gleaned from the RTCs findings that
"the claim of plaintiff on the basis of said documents cannot prevail over the adverse,
public, open, peaceful and continuous possession by the defendants over the subject
property," and that "it was indubitably shown that the defendants have occupied said
property since time immemorial while plaintiff has never at anytime taken possession of
said property."
We find petitioners contentions unconvincing. For an action for reconveyance based on
fraud to prosper, this Court has held that the party seeking reconveyance must prove by
clear and convincing evidence his title to the property and the fact of fraud. 10 The RTC, in
making the abovementioned findings, was not treating petitioners action for reconveyance
as one for titling of property. But it was weighing whether petitioner has, by clear and
convincing evidence, proven his title to the property. Moreover, the RTC, in its decision,
discussed the merits of petitioners ground for his action for reconveyance, i.e. whether or
not respondents committed fraud in titling the subject property in their names. The RTC
held that as shown by public records in the custody of the RTC, Pasig City and the Land
Registration Authority, petitioners claim that the property was fraudulently titled in the
names of respondents is baseless. Thus, petitioners contention that the RTC and the
Court of Appeals treated his action for reconveyance as one for titling of property lacks any
persuasive basis.
On the third and fourth issues, we find them to be factual issues, hence beyond our
jurisdiction to resolve. In a petition for review under Rule 45 of the 1997 Rules of Civil
Procedure, this Courts power of review is limited to questions of law only. 11

Note, however, should be taken of the established doctrine that an action for
reconveyance resulting from fraud prescribes four years from the discovery of the fraud.
Such discovery is deemed to have taken place upon the issuance of the certificate of title
over the property. Registration of real property is considered a constructive notice to all
persons, thus, the four-year period shall be counted therefrom.12 It appears that OCT No.
108 was issued to respondents by the Register of Deeds for Metro Manila on May 20,
1977. From the time of registration of the land in the name of respondents on May 20,
1977 to the filing of the complaint on September 19, 1988, more than four years had
already elapsed. Hence, it cannot be denied that petitioners action had already
prescribed.
Based on the foregoing considerations, we find that the Court of Appeals did not err in
affirming the decision of the RTC dismissing petitioners action for reconveyance.
Finally, concerning the deletion of moral damages and attorneys fees, we agree with the
ruling of the Court of Appeals that here an award of moral damages is not warranted since
the record is bereft of any proof that Antonio acted maliciously or in bad faith in filing the
action.13 Neither should attorneys fees be awarded. The accepted rule is that the reason
for the award of attorneys fees must be stated in the text of the trial courts decision;
otherwise, if it is stated only in the dispositive portion of the decision, the same must be
disallowed.14 In this case, we find that the trial courts decision failed to show the reason
for the award of attorneys fees, hence it was properly deleted by the appellate court.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated July
31, 2001 of the Court of Appeals in CA-G.R. CV No. 58246 is AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
G.R. No. 196577 February 25, 2013
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
BARBARA SAMPAGA POBLETE, Respondent.
DECISION
CARPIO, J.:
The Case
This Petition for Review on Certiorari 1 seeks to reverse the Court of Appeals'
Decision2 dated 28 September 20 I 0 and its Resolution3 dated 19 April 2011 in C A-G.R.
CV No. 91666. The Court of Appeals (C A) affirmed in toto the Decision4 of the Regional
Trial Court (RTC) of San Jose, Occidental Mindoro, Branch 46, in Civil Case No. R-1331.
The Facts
The facts, as culled from the records, are as follows:
Petitioner Land Bank of the Philippines (Land Bank) is a banking institution organized and
existing under Philippine laws. Respondent Barbara Sampaga Poblete (Poblete) is the
registered owner of a parcel of land, known as Lot No. 29, with an area of 455 square
meters, located in Buenavista, Sablayan, Occidental Mindoro, under Original Certificate of
Title (OCT) No. P-12026. In October 1997, Poblete obtained a 300,000.00 loan from
Kabalikat ng Pamayanan ng Nagnanais Tumulong at Yumaman Multi-Purpose
Cooperative (Kapantay). Poblete mortgaged Lot No. 29 to Kapantay to guarantee payment
of the loan. Kapantay, in turn, used OCT No. P-12026 as collateral under its Loan Account
No. 97-CC-013 with Land Bank-Sablayan Branch.
In November 1998, Poblete decided to sell Lot No. 29 to pay her loan. She instructed her
son-in-law Domingo Balen (Balen) to look for a buyer. Balen referred Angelito Joseph
Maniego (Maniego) to Poblete. According to Poblete, Maniego agreed to buy Lot No. 29
for 900,000.00, but Maniego suggested that a deed of absolute sale for 300,000.00 be
executed instead to reduce the taxes. Thus, Poblete executed the Deed of Absolute Sale
dated 9 November 1998 (Deed dated 9 November 1998) with 300,000.00 as
consideration.5 In the Deed dated 9 November 1998, Poblete described herself as a
"widow." Poblete, then, asked Balen to deliver the Deed dated 9 November 1998 to
Maniego and to receive the payment in her behalf. Balen testified that he delivered the
Deed dated 9 November 1998 to Maniego. However, Balen stated that he did not receive
from Maniego the agreed purchase price. Maniego told Balen that he would pay the
amount upon his return from the United States. In an Affidavit dated 19 November 1998,
Poblete stated that she agreed to have the payment deposited in her Land Bank Savings
Account.6

Based on a Certification issued by Land Bank-Sablayan Branch Department Manager
Marcelino Pulayan on 20 August 1999, 7 Maniego paid Kapantays Loan Account No. 97-
CC-013 for 448,202.08. On 8 June 2000, Maniego applied for a loan of 1,000,000.00
with Land Bank, using OCT No. P 12026 as collateral. Land Bank alleged that as a
condition for the approval of the loan, the title of the collateral should first be transferred to
Maniego.
On 14 August 2000, pursuant to a Deed of Absolute Sale dated 11 August 2000 (Deed
dated 11 August 2000),8the Register of Deeds of Occidental Mindoro issued Transfer
Certificate of Title (TCT) No. T-20151 in Maniegos name. On 15 August 2000, Maniego
and Land Bank executed a Credit Line Agreement and a Real Estate Mortgage over TCT
No. T- 20151. On the same day, Land Bank released the 1,000,000.00 loan proceeds to
Maniego. Subsequently, Maniego failed to pay the loan with Land Bank. On 4 November
2002, Land Bank filed an Application for Extra-judicial Foreclosure of Real Estate
Mortgage stating that Maniegos total indebtedness amounted to 1,154,388.88.
On 2 December 2002, Poblete filed a Complaint for Nullification of the Deed dated 11
August 2000 and TCT No. T-20151, Reconveyance of Title and Damages with Prayer for
Temporary Restraining Order and/or Issuance of Writ of Preliminary Injunction. Named
defendants were Maniego, Land Bank, the Register of Deeds of Occidental Mindoro and
Elsa Z. Aguirre in her capacity as Acting Clerk of Court of RTC San Jose, Occidental
Mindoro. In her Complaint, Poblete alleged that despite her demands on Maniego, she did
not receive the consideration of 900,000.00 for Lot No. 29. She claimed that without her
knowledge, Maniego used the Deed dated 9 November 1998 to acquire OCT No. P-12026
from Kapantay. Upon her verification with the Register of Deeds, the Deed dated 11
August 2000 was used to obtain TCT No. T-20151. Poblete claimed that the Deed dated
11 August 2000 bearing her and her deceased husbands, Primo Poblete, supposed
signatures was a forgery as their signatures were forged. As proof of the forgery, Poblete
presented the Death Certificate dated 27 April 1996 of her husband and Report No. 294-
502 of the Technical Services Department of the National Bureau of Investigation showing
that the signatures in the Deed dated 11 August 2000 were forgeries. Accordingly, Poblete
also filed a case for estafa through falsification of public document against Maniego and
sought injunction of the impending foreclosure proceeding.
On 7 January 2003, Land Bank filed its Answer with Compulsory Counterclaim and Cross-
claim. Land Bank claimed that it is a mortgagee in good faith and it observed due diligence
prior to approving the loan by verifying Maniegos title with the Office of the Register of
Deeds. Land Bank likewise interposed a cross-claim against Maniego for the payment of
the loan, with interest, penalties and other charges. Maniego, on the other hand,
separately filed his Answer. Maniego denied the allegations of Poblete and claimed that it
was Poblete who forged the Deed dated 11 August 2000. He also alleged that he paid the
consideration of the sale to Poblete and even her loans from Kapantay and Land Bank.
The Ruling of the Regional Trial Court
On 28 December 2007, the RTC of San Jose, Occidental Mindoro, Branch 46, rendered a
Decision in favor of Poblete, the dispositive portion of which reads:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
WHEREFORE, by preponderance of evidence, judgment is hereby rendered in favor of the
plaintiff and against the defendants, as follows:
1. Declaring the Deed of Sale dated August 11, 2000 over O.C.T. No. P-12026,
as null and void;
2. Declaring Transfer of Certificate of Title No. T-20151 as null and void, it having
been issued on the basis of a spurious and forged document;
3. The preliminary [i]njunction issued directing the defendants to refrain from
proceedings [sic] with the auction sale of the plaintiffs properties, dated February
10, 2002, is hereby made permanent;
4. Ordering defendant Angelito Joseph Maniego to return to the plaintiff O.C.T.
No. P-12026; and
5. Ordering defendant Angelito Joseph Maniego to pay plaintiff the amount of
50,000.00, as and for reasonable attorneys fees.
Judgment is furthermore rendered on the cross-claim of defendant Land Bank of the
Philippines against defendant Angelito Joseph Maniego, as follows:
A. Ordering defendant Angelito Joseph Maniego to pay his co-defendant [L]and
Bank of the Philippines his loan with a principal of 1,000,000.00, plus interests,
penalties and other charges thereon; and
B. Ordering defendant Angelito Joseph Maniego to pay the costs of this suit.
SO ORDERED.9
The RTC ruled that the sale between Poblete and Maniego was a nullity. The RTC found
that the agreed consideration was 900,000.00 and Maniego failed to pay the
consideration. Furthermore, the signatures of Poblete and her deceased husband were
proven to be forgeries. The RTC also ruled that Land Bank was not a mortgagee in good
faith because it failed to exercise the diligence required of banking institutions. The RTC
explained that had Land Bank exercised due diligence, it would have known before
approving the loan that the sale between Poblete and Maniego had not been
consummated. Nevertheless, the RTC granted Land Banks cross-claim against Maniego.
In an Order dated 17 March 2008, the RTC denied the Motion for Reconsideration filed by
Land Bank for want of merit. Thereafter, Land Bank and Maniego separately challenged
the RTCs Decision before the CA.
The Ruling of the Court of Appeals

On 28 September 2010, the CA promulgated its Decision affirming in toto the Decision of
the RTC.10 Both Land Bank and Maniego filed their Motions for Reconsideration but the
CA denied both motions on 19 April 2011.11
In a Resolution dated 13 July 2011,12 the Second Division of this Court denied the Petition
for Review on Certiorari filed by Maniego. This Resolution became final and executory on
19 January 2012.
On the other hand, Land Bank filed this petition.
The Issues
Land Bank seeks a reversal and raises the following issues for resolution:
1. THE COURT OF APPEALS (FORMER SPECIAL ELEVENTH DIVISION)
ERRED IN UPHOLDING THE FINDING OF THE TRIAL COURT DECLARING
TCT NO. T-20151 AS NULL AND VOID. THE COURT OF APPEALS
MISCONSTRUED AND MISAPPRECIATED THE EVIDENCE AND THE LAW IN
NOT FINDING TCT NO. T-20151 REGISTERED IN THE NAME OF ANGELITO
JOSEPH MANIEGO AS VALID.
2. THE COURT OF APPEALS (FORMER SPECIAL ELEVENTH DIVISION)
MISCONSTRUED THE EVIDENCE AND THE LAW IN NOT FINDING LAND
BANK A MORTGAGEE IN GOOD FAITH.
3. THE COURT OF APPEALS (FORMER SPECIAL ELEVENTH DIVISION)
MISCONSTRUED THE EVIDENCE AND THE LAW IN NOT FINDING THE
RESPONDENT AND ANGELITO JOSEPH MANIEGO AS IN PARI DELICTO.
4. THE COURT OF APPEALS (FORMER SPECIAL ELEVENTH DIVISION)
ERRED IN NOT APPLYING THE PRINCIPLE OF ESTOPPEL OR LACHES ON
RESPONDENT IN THAT THE PROXIMATE CAUSE OF HER LOSS WAS HER
NEGLIGENCE TO SAFEGUARD HER RIGHTS OVER THE SUBJECT
PROPERTY, THEREBY ENABLING ANGELITO JOSEPH MANIEGO TO
MORTGAGE THE SAME WITH LAND BANK.13
The Ruling of the Court
We do not find merit in the petition.
A petition for review under Rule 45 of the Rules of Court specifically provides that only
questions of law may be raised, subject to exceptional circumstances14 which are not
present in this case. Hence, factual findings of the trial court, especially if affirmed by the
CA, are binding on us.15 In this case, both the RTC and the CA found that the signatures of
Poblete and her deceased husband in the Deed dated 11 August 2000 were forged by
Maniego. In addition, the evidence is preponderant that Maniego did not pay the
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
consideration for the sale. Since the issue on the genuineness of the Deed dated 11
August 2000 is essentially a question of fact, we are not dutybound to analyze and weigh
the evidence again.16
It is a well-entrenched rule, as aptly applied by the CA, that a forged or fraudulent deed is
a nullity and conveys no title.17 Moreover, where the deed of sale states that the purchase
price has been paid but in fact has never been paid, the deed of sale is void ab initio for
lack of consideration.18 Since the Deed dated 11 August 2000 is void, the corresponding
TCT No. T-20151 issued pursuant to the same deed is likewise void. In Yu Bun Guan v.
Ong,19the Court ruled that there was no legal basis for the issuance of the certificate of title
and the CA correctly cancelled the same when the deed of absolute sale was completely
simulated, void and without effect. In Erea v. Querrer-Kauffman,20 the Court held that
when the instrument presented for registration is forged, even if accompanied by the
owners duplicate certificate of title, the registered owner does not thereby lose his title,
and neither does the mortgagee acquire any right or title to the property. In such a case,
the mortgagee under the forged instrument is not a mortgagee protected by law. 21
The issue on the nullity of Maniegos title had already been foreclosed when this Court
denied Maniegos petition for review in the Resolution dated 13 July 2011, which became
final and executory on 19 January 2012.22 It is settled that a decision that has acquired
finality becomes immutable and unalterable and may no longer be modified in any respect,
even if the modification is meant to correct erroneous conclusions of fact or law and
whether it will be made by the court that rendered it or by the highest court of the
land.23 This is without prejudice, however, to the right of Maniego to recover from Poblete
what he paid to Kapantay for the account of Poblete, otherwise there will be unjust
enrichment by Poblete.
Since TCT No. T-20151 has been declared void by final judgment, the Real Estate
Mortgage constituted over it is also void. In a real estate mortgage contract, it is essential
that the mortgagor be the absolute owner of the property to be mortgaged; otherwise, the
mortgage is void.24
Land Bank insists that it is a mortgagee in good faith since it verified Maniegos title, did a
credit investigation, and inspected Lot No. 29. The issue of being a mortgagee in good
faith is a factual matter, which cannot be raised in this petition.25 However, to settle the
issue, we carefully examined the records to determine whether or not Land Bank is a
mortgagee in good faith.1wphi1
There is indeed a situation where, despite the fact that the mortgagor is not the owner of
the mortgaged property, his title being fraudulent, the mortgage contract and any
foreclosure sale arising therefrom are given effect by reason of public policy. 26 This is the
doctrine of "the mortgagee in good faith" based on the rule that buyers or mortgagees
dealing with property covered by a Torrens Certificate of Title are not required to go
beyond what appears on the face of the title. 27 However, it has been consistently held that
this rule does not apply to banks, which are required to observe a higher standard of
diligence.28 A bank whose business is impressed with public interest is expected to
exercise more care and prudence in its dealings than a private individual, even in cases
involving registered lands.29 A bank cannot assume that, simply because the title offered
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

as security is on its face free of any encumbrances or lien, it is relieved of the responsibility
of taking further steps to verify the title and inspect the properties to be mortgaged. 30
Applying the same principles, we do not find Land Bank to be a mortgagee in good faith.
On the allegation that Poblete is in pari delicto with Maniego, we find the principle
inapplicable. The pari delicto rule provides that "when two parties are equally at fault, the
law leaves them as they are and denies recovery by either one of them." 40 We adopt the
factual finding of the RTC and the CA that only Maniego is at fault.

Good faith, or the lack of it, is a question of intention. 31 In ascertaining intention, courts are
necessarily controlled by the evidence as to the conduct and outward acts by which alone
the inward motive may, with safety, be determined. 32
Based on the evidence, Land Bank processed Maniegos loan application upon his
presentation of OCT No. P-12026, which was still under the name of Poblete. Land Bank
even ignored the fact that Kapantay previously used Pobletes title as collateral in its loan
account with Land Bank.33 In Bank of Commerce v. San Pablo, Jr.,34 we held that when
"the person applying for the loan is other than the registered owner of the real property
being mortgaged, [such fact] should have already raised a red flag and which should have
induced the Bank x x x to make inquiries into and confirm x x x [the] authority to mortgage
x x x. A person who deliberately ignores a significant fact that could create suspicion in an
otherwise reasonable person is not an innocent purchaser for value."
Finally, on the issues of estoppel and laches, such were not raised before the trial
court.1wphi1 I fence, we cannot rule upon the same. It is settled that an issue which was
neither alleged in the complaint nor raised during the trial cannot be raised for the tirst time
on appeal, as such a recourse would be offensive to the basic rules of t}1ir play, justice
and due process, since the opposing party would be deprived of the opp01iunity to
introduce evidence rebutting such new issue. 41
WHEREFORE, we DENY the petition. We AFFIRM the 28 September 2010 Decision and
the 19 April 2011 Resolution of the Court of Appeals in CA-Ci.R. CV No. 91666. The
injunction against the foreclosure proceeding, issued by the Regional Trial Court of San
Jose, Occidental Mindoro, Branch 46, is made permanent. Costs against Land Bank.
SO ORDERED.

The records do not even show that Land Bank investigated and inspected the property to
ascertain its actual occupants. Land Bank merely mentioned that it inspected Lot No. 29 to
appraise the value of the property. We take judicial notice of the standard practice of
banks, before approving a loan, to send representatives to the premises of the land offered
as collateral to investigate its real owners. 35 In Prudential Bank v. Kim Hyeun Soon,36 the
Court held that the bank failed to exercise due diligence although its representative
conducted an ocular inspection, because the representative concentrated only on the
appraisal of the property and failed to inquire as to who were the then occupants of the
property.

Land Bank claims that it conditioned the approval of the loan upon the transfer of title to
Maniego, but admits processing the loan based on Maniegos assurances that title would
soon be his.37 Thus, only one day after Maniego obtained TCT No. T-20151 under his
name, Land Bank and Maniego executed a Credit Line Agreement and a Real Estate
Mortgage. Because of Land Banks haste in granting the loan, it appears that Maniegos
loan was already completely processed while the collateral was still in the name of
Poblete. This is also supported by the testimony of Land Bank Customer Assistant
Andresito Osano.38

Where the mortgagee acted with haste in granting the mortgage loan and did not ascertain
the ownership of the land being mortgaged, as well as the authority of the supposed agent
executing the mortgage, it cannot be considered an innocent mortgagee. 39

Since Land Bank is not a mortgagee in good faith, it is not entitled to protection. The
injunction against the foreclosure proceeding in the present case should be made
permanent. Since Lot No. 29 has not been transferred to a third person who is an innocent
purchaser for value, ownership of the lot remains with Poblete. This is without prejudice to
the right of either party to proceed against Maniego.

[G.R. No. 94457. October 16, 1997]
VICTORIA LEGARDA, petitioner, vs. THE HONORABLE COURT OF APPEALS, NEW
CATHAY HOUSE, INC., THE HONORABLE REGIONAL TRIAL COURT OF
QUEZON CITY, BRANCH 94, respondents.
RESOLUTION
ROMERO, J.:
For our resolution is the motion for reconsideration of the March 18, 1991, decision of
the Courts's First Division, filed by private respondents New Cathay House, Inc.
(Cathay). A brief narration of facts is in order.
The parties hereto entered into a lease agreement over a certain Quezon City
property owned by petitioner Victoria Legarda. For some reason or another, she refused to
sign the contract although respondent lessee, Cathay, made a deposit and a down
payment of rentals, prompting the latter to file before the Regional Trial Court of Quezon
City, Branch 94 a complaint[1] against the former for specific performance with preliminary
injunction and damages. The court a quo issued the injunction. In the meantime, Legardas
counsel, noted lawyer Dean Antonio Coronel, requested a 10-day extension of time to file
an answer which the court granted. Atty. Coronel, however, failed to file an answer within
the extended period. His client was eventually declared in default, Cathay was allowed to
present evidence ex-parte, and on March 25, 1985, a judgment by default was reached by
the trial court ordering Legarda to execute the lease contract in favor of, and to pay
damages to, Cathay.
On April 9, 1985, a copy of said decision was served on Atty. Coronel but he took no
action until the judgment became final and executory. A month later, the trial court issued a
writ of execution and a public auction was held where Cathays manager, Roberto V.
Cabrera, Jr., as highest bidder, was awarded the property for P376,500.00 in satisfaction
of the judgment debt. Consequently, a Certificate of Sale was issued by the sheriff on June
27, 1985. Upon failure of Legarda to redeem her property within the one-year redemption
period, a Final Deed of Sale was issued by the sheriff on July 8, 1986, which was
registered by Cabrera with the Register of Deeds three days later. Hence, Legardas
Transfer Certificate of Title (TCT) No. 270814 was cancelled with the issuance of TCT No.
350892 in the name of Cabrera.
Despite the lapse of over a year since the judgment by default became final and
executory, Atty. Coronel made no move on behalf of his client. He did not even inform her
of all these developments. When Legarda did learn of the adverse decision, she
nevertheless did not lose faith in her counsel [2] and prevailed upon him to seek appropriate
relief. Thus, on October 23, 1986, he filed a petition for annulment of judgment with prayer
for the issuance of a writ of preliminary mandatory injunction before the Court of Appeals. [3]
On November 29, 1989, the appellate court rendered a decision affirming the March
25, 1985, decision of the trial court, dismissing the petition for annulment of judgment, and
holding Legarda bound by the negligence of her counsel. It considered her allegation of
fraud by Cathay to be improbable, and added that there was pure and simple negligence
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
on the part of petitioners counsel who failed to file an answer and, later, a petition for relief
from judgment by default. Upon notice of the Court of Appeals decision, Atty. Coronel
again neglected to protect his clients interest by failing to file a motion for reconsideration
or to appeal therefrom until said decision became final on December 21, 1989.
Sometime in March 1990, Legarda learned of the adverse decision of the Court of
Appeals dated November 29, 1989, not from Atty. Coronel but from his secretary. She then
hired a new counsel for the purpose of elevating her case to this Court. The new lawyer
filed a petition for certiorari praying for the annulment of the decision of the trial and
appellate courts and of the sheriffs sale, alleging, among other things, that Legarda lost in
the courts below because her previous lawyer was grossly negligent and inefficient, whose
omissions cannot possibly bind her because this amounted to a violation of her right to due
process of law. She, therefore, asked Cathay (not Cabrera) to reconvey the subject
property to her.
On March 18, 1991, a decision[4] was rendered in this case by Mr. Justice Gancayco,
ruling, inter alia, as follows: (a) granting the petition; (b) nullifying the trial courts decision
dated March 25, 1985, the Court of Appeals decision dated November 29, 1989, the
Sheriffs Certificate of Sale dated June 27, 1985, of the property in question, and the
subsequent final deed of sale covering the same property; and (c) ordering Cathay to
reconvey said property to Legarda, and the Register of Deeds to cancel the registration of
said property in the name of Cathay (not Cabrera) and to issue a new one in Legardas
name.
The Court then declared that Atty. Coronel committed, not just ordinary or simple
negligence, but reckless, inexcusable and gross negligence, which deprived his client of
her property without due process of law. His acts, or the lack of it, should not be allowed to
bind Legarda who has been consigned to penury because her lawyer appeared to have
abandoned her case not once but repeatedly. Thus, the Court ruled against tolerating such
unjust enrichment of Cathay at Legardas expense, and noted that counsels lack of
devotion to duty is so gross and palpable that this Court must come to the aid of his
distraught client.
Aggrieved by this development, Cathay filed the instant motion for reconsideration,
alleging, inter alia, that reconveyance is not possible because the subject property had
already been sold by its owner, Cabrera, even prior to the promulgation of said decision.
By virtue of the Gancayco decision, Cathay was duty bound to return the subject
property to Legarda. The impossibility of this directive is immediately apparent, for two
reasons: First, Cathay neither possessed nor owned the property so it is in no position to
reconvey the same; second, even if it did, ownership over the property had already been
validly transferred to innocent third parties at the time of promulgation of said judgment.
There is no question that the highest bidder at the public auction was Cathays
manager. It has not been shown nor even alleged, however, that Roberto Cabrera had all
the time been acting for or in behalf of Cathay. For all intents and purposes, Cabrera was
simply a vendee whose payment effectively extinguished Legardas liability to Cathay as
the judgment creditor. No proof was ever presented which would reveal that the sale
occurred only on paper, with Cabrera acting as a mere conduit for Cathay. What is clear
from the records is that the auction sale was conducted regularly, that a certificate of sale
and, subsequently, a final deed of sale were issued to Cabrera which allowed him to
consolidate his ownership over the subject property, register it and obtain a title in his own
name, and sell it to Nancy Saw, an innocent purchaser for value, at a premium

price. Nothing on record would demonstrate that Cathay was the beneficiary of the sale
between Cabrera and Saw. Cabrera himself maintained that he was acting in his private
(as distinct from his corporate) capacity[5] when he participated in the bidding.
Since the decision of the Court of Appeals gained finality on December 21, 1989, the
subject property has been sold and ownership thereof transferred no less than three
times, viz.: (a) from Cabrera to Nancy Saw on March 21, 1990, four months after the
decision of the Court of Appeals became final and executory and one year before the
promulgation of the March 18, 1991, decision under reconsideration; (b) from Nancy Saw
to Lily Tanlo Sy Chua on August 7, 1990, more than one year before the Court issued a
temporary restraining order in connection with this case; and (c) from the spouses Victor
and Lily Sy Chua to Janet Chong Luminlun on April 3, 1992. With these transfers,
Cabreras TCT No. 350892 gave way to Saws TCT No. 31672, then to Chuas TCT No.
31673, and finally to Luminluns TCT No. 99143, all issued by the Register of Deeds of
Quezon City on April 3, 1990, August 8, 1990, and November 24, 1993, respectively.
We do not have to belabor the fact that all the successors-in-interest of Cabrera to
the subject lot were transferees for value and in good faith, having relied as they did on the
clean titles of their predecessors. The successive owners were each armed with their own
indefeasible titles which automatically brought them under the aegis of the Torrens
System. As the Court declared in Sandoval v. Court of Appeals, [6] (i)t is settled doctrine
that one who deals with property registered under the Torrens system need not go beyond
the same, but only has to rely on the title. He is charged with notice only of such burdens
and claims as are annotated on the title.[7] In the case at bar, it is not disputed that no
notice of lis pendens was ever annotated on any of the titles of the subsequent
owners. And even if there were such a notice, it would not have created a lien over the
property because the main office of a lien is to warn prospective buyers that the property
they intend to purchase is the subject of a pending litigation. Therefore, since the property
is already in the hands of Luminlun, an innocent purchaser for value, it can no longer be
returned to its original owner by Cabrera, much less by Cathay itself.
Another point to consider, though not raised as an issue in this case, is the fact that
Cabrera was impleaded as a party-respondent only on August 12, 1991, after the
promulgation of the Gancayco decision.[8] The dispositive portion itself ordered Cathay,
instead of Cabrera to reconvey the property to Legarda. Cabrera was never a party to this
case, either as plaintiff-appellee below or as respondent in the present action. Neither did
he ever act as Cathays representative. As we held in the recent case of National Power
Corporation v. NLRC, et al.,[9] (j)urisdiction over a party is acquired by his voluntary
appearance or submission to the court or by the coercive process issued by the court to
him, generally by service of summons.[10] In other words, until Cabrera was impleaded as
party respondent and ordered to file a comment in the August 12, 1991, resolution, the
Court never obtained jurisdiction over him, and to command his principal to reconvey a
piece of property which used to be HIS would not only be inappropriate but would also
constitute a real deprivation of ones property without due process of law.
Assuming arguendo that reconveyance is possible, that Cathay and Cabrera are one
and the same and that Cabreras payment redounded to the benefit of his principal,
reconveyance, under the facts and evidence obtaining in this case, would still not address
the issues raised herein
The application of the sale price to Legardas judgment debt constituted a payment
which extinguished her liability to Cathay as the party in whose favor the obligation to pay
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
damages was established.[11] It was a payment in the sense that Cathay had to resort to a
court-supervised auction sale in order to execute the judgment. [12] With the fulfillment of the
judgment debtors obligation, nothing else was required to be done.
Under the Gancayco ruling, the order of reconveyance was premised on the alleged
gross negligence of Legardas counsel which should not be allowed to bind her as she was
deprived of her property without due process of law.
It is, however, basic that as long as a party was given the opportunity to defend her
interests in due course, she cannot be said to have been denied due process of law, for
this opportunity to be heard is the very essence of due process. The chronology of events
shows that the case took its regular course in the trial and appellate courts but Legardas
counsel failed to act as any ordinary counsel should have acted, his negligence every step
of the way amounting to abandonment, in the words of the Gancayco decision. Yet, it
cannot be denied that the proceedings which led to the filing of this case were not attended
by any irregularity. The judgment by default was valid, so was the ensuing sale at public
auction. If Cabrera was adjudged highest bidder in said auction sale, it was not through
any machination on his part. All of his actuations that led to the final registration of the title
in his name were aboveboard, untainted by any irregularity.
The fact that Cabrera is an officer of Cathay does not make him a purchaser in bad
faith. His act in representing the company was never questioned nor disputed by
Legarda. And while it is true that he won in the bidding, it is likewise true that said bidding
was conducted by the book. There is no call to be alarmed that an official of the company
emerges as the winning bidder since in some cases, the judgment creditor himself
personally participates in the bidding.
There is no gainsaying that Legarda is the judgment debtor here. Her property was
sold at public auction to satisfy the judgment debt. She cannot claim that she was illegally
deprived of her property because such deprivation was done in accordance with the rules
on execution of judgments. Whether the money used to pay for said property came from
the judgment creditor or its representative is not relevant. What is important is that it was
purchased for value. Cabrera parted with real money at the auction. In his Sheriffs
Certificate of Sale dated June 27, 1985, [13] Deputy Sheriff Angelito R. Mendoza
certified, inter alia, that the highest bidder paid to the Deputy Sheriff the said amount
of P376,500.00, the sale price of the levied property. If this does not constitute payment,
what then is it? Had there been no real purchase and payment below, the subject property
would never have been awarded to Cabrera and registered in his name, and the judgment
debt would never have been satisfied. Thus, to require either Cathay or Cabrera to
reconvey the property would be an unlawful intrusion into the lawful exercise of his
proprietary rights over the land in question, an act which would constitute an actual denial
of property without due process of law.
It may be true that the subject lot could have fetched a higher price during the public
auction, as Legarda claims, but the fail to betray any hint of a bid higher than Cabreras
which was bypassed in his favor. Certainly, he could not help it if his bid of
only P376,500.00 was the highest. Moreover, in spite of this allegedly low selling price,
Legarda still failed to redeem her property within the one-year redemption period. She
could not feign ignorance of said sale on account of her counsels failure to so inform her,
because such auction sales comply with requirements of notice and publication under the
Rules of Court. In the absence of any clear and convincing proof that such requirements
were not followed, the presumption of regularity stands. Legarda also claims that she was

in the United States during the redemption period, but she admits that she left the
Philippines only on July 13, 1985, or sixteen days after the auction sale of June 27,
1985. Finally, she admits that her mother Ligaya represented her during her absence. [14] In
short, she was not totally in the dark as to the fate of her property and she could have
exercised her right of redemption if she chose to, but she did not.
Neither Cathay nor Cabrera should be made to suffer for the gross negligence of
Legardas counsel. If she may be said to be innocent because she was ignorant of the acts
of negligence of her counsel, with more reason are respondents truly innocent. As
between two parties who may lose due to the negligence or incompetence of the counsel
of one, the party who was responsible for making it happen should suffer the
consequences. This reflects the basic common law maxim, so succinctly stated by Justice
J.B.L. Reyes, that . . . (B)etween two innocent parties, the one who made it possible for the
wrong to be done should be the one to bear the resulting loss. [15] In this case, it was not
respondents, Legarda, who misjudged and hired the services of the lawyer who practically
abandoned her case and who continued to retain him even after his proven apathy and
negligence.
The Gancayco decision makes much of the fact that Legarda is now consigned to
penury and, therefore, this Court must come to the aid of the distraught client. It must be
remembered that this Court renders decisions, not on the basis of emotions but on its
sound judgment, applying the relevant, appropriate law. Much as it may pity Legarda, or
any losing litigant for that matter, it cannot play the role of a knight in shining armor coming
to the aid of someone, who through her weakness, ignorance or misjudgment may have
been bested in a legal joust which complied with all the rules of legal proceedings.
In Vales v. Villa,[16] this Court warned against the danger of jumping to the aid of a
litigant who commits serious error of judgment resulting in his own loss:
x x x Courts operate not because one person has been defeated or overcome by another,
but because he has been defeated or overcome illegally. Men may do foolish things, make
ridiculous contracts, use miserable judgment, and lose money by them - indeed, all they
have in the world; but not for that alone can the law intervene and restore. There must be,
in addition, a violation of law, the commission of what the law knows as an actionable
wrong, before the courts are authorized to lay hold of the situation and remedy it."
Respondents should not be penalized for Legardas mistake. If the subject property
was at all sold, it was only after the decisions of the trial and appellate courts had gained
finality. These twin judgments, which were nullified by the Gancayco decision, should be
respected and allowed to stand by this Court for having become final and executory.
A judgment may be broadly defined as the decision or sentence of the law given by a
court or other tribunal as the result of proceedings instituted therein. [17] It is a judicial act
which settles the issues, fixes the rights and liabilities of the parties, and determines the
proceeding, and it is regarded as the sentence of the law pronounced by the court on the
action or question before it.[18]
In the case at bar, the trial courts judgment was based on Cathays evidence after
Legarda was declared in default. Damages were duly awarded to Cathay, not whimsically,
but upon proof of its entitlement thereto. The issue of whether the plaintiff (Cathay)
deserved to recover damages because of the defendants (Legardas) refusal to honor their
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
lease agreement was resolved. Consequently, the right of Cathay to be vindicated for such
breach and the liability incurred by Legarda in the process were determined.
This judgment became final when she failed to avail of remedies available to her,
such as filing a motion for reconsideration or appealing the case. At the time, the issues
raised in the complaint had already been determined and disposed of by the trial
court.[19] This is the stage of finality which judgments must at one point or another reach. In
our jurisdiction, a judgment becomes ipso facto final when no appeal is perfected or the
reglementary period to appeal therefrom expires. The necessity of giving finality to
judgments that are not void is self-evident. The interests of society impose it. The opposite
view might make litigations more unendurable than the wrongs (they are) intended to
redress. It would create doubt, real or imaginary, and controversy would constantly arise
as to what the judgment or order was. Public policy and sound practice demand that, at the
risk of occasional errors, judgments of courts should become final at some definite date
fixed by law. The very object for which courts were instituted was to put an end to
controversies.[20] When judgments of lower courts gain finality, they, too, become
inviolable, impervious to modification. They may, then, no longer be reviewed, or in any
way modified directly or indirectly, by a higher court, not even by the Supreme Court. [21] In
other words, once a judgment becomes final, the only errors that may be corrected are
those which are clerical.[22]
From the foregoing precedents, it is readily apparent that the real issue that must be
resolved in this motion for reconsideration is the alleged illegality of the final judgments of
the trial and appellate courts.
Void judgments may be classified into two groups: those rendered by a court without
jurisdiction to do so and those obtained by fraud or collusion. [23] This case must be tested
in light of the guidelines governing the latter class of judgments. In this regard, an action to
annul a judgment on the ground of fraud will not lie unless the fraud is extrinsic or collateral
and facts upon which it is based (have) not been controverted or resolved in the case
where (the) judgment was rendered.[24]Where is the fraud in the case at bar? Was Legarda
unlawfully barred from the proceedings below? Did her counsel sell her out to the
opponent?
It must be noted that, aside from the fact that no extrinsic fraud attended the trial and
resolution of this case, the jurisdiction of the court a quo over the parties and the subject
matter was never raised as an issue by Legarda. Such being the case, the decision of the
trial court cannot be nullified. Errors of judgment, if any, can only be reviewed on appeal,
failing which the decision becomes final and executory, valid and binding upon the parties
in the case and their successors in interest. [25]
At this juncture, it must be pointed out that while Legarda went to the Court of
Appeals claiming precisely that the trial courts decision was fraudulently obtained, she
grounded her petition before the Supreme Court upon her estranged counsels
negligence. This could only imply that at the time she filed her petition for annulment of
judgment, she entertained no notion that Atty. Coronel was being remiss in his duties. It
was only after the appellate courts decision had become final and executory, a writ of
execution issued, the property auctioned off then sold to an innocent purchasers for value,
that she began to protest the alleged negligence of her attorney. In most cases, this would
have been dismissed outright for being dilatory and appearing as an act of desperation on
the part of a vanquished litigant. The Gancayco ruling, unfortunately, ruled otherwise.
Fortunately, we now have an opportunity to rectify a grave error of the past.

WHEREFORE, the Motion for Reconsideration of respondent New Cathay House,
Inc. is hereby GRANTED. Consequently, the decision dated March 18, 1991, of the Courts
First Division is VACATED and SET ASIDE. A new judgment is hereby entered
DISMISSING the instant petition for review and AFFIRMING the November 29, 1989,
decision of the Court of Appeals in CA-G.R. No. SP-10487. Costs against petitioner
Victoria Legarda.
SO ORDERED.
G.R. Nos. 185857-58, June 29, 2016
TRIFONIA D. GABUTAN, DECEASED, HEREIN REPRESENTED BY HER HEIRS,
NAMELY: ERLINDA LLAMES, ELISA ASOK, PRIMITIVO GABUTAN, VALENTINA
YANE; BUNA D. ACTUB, FELISIA TROCIO, CRISANTA D. UBAUB, AND TIRSO
DALONDONAN, DECEASED, HEREIN REPRESENTED BY HIS HEIRS, NAMELY:
MADELYN D. REPOSAR AND JERRY DALONDONAN, MARY JANE GILIG, ALLAN
UBAUB, AND SPOUSES NICOLAS & EVELYN DAILO, Petitioners, v.DANTE D.
NACALABAN, HELEN N. MAANDIG, SUSAN N. SIAO, AND CAGAYAN CAPITOL
COLLEGE, Respondents.
G.R. NOS. 194314-15
DANTE D. NACALABAN, HELEN N. MAANDIG, AND SUSAN N. SIAO, AS HEIRS OF
BALDOMERA D. VDA. DE NACALABAN, Petitioners, v. TRIFONIA D. GABUTAN,
BUNA D. ACTUB, FELISIA D. TROCIO, CRISANTA D. UBAUB, AND TIRSO
DALONDONAN, DECEASED, HEREIN REPRESENTED BY HIS HEIRS, NAMELY:
MADELYN D. REPOSAR AND JERRY DALONDONAN, MARY JANE GILIG, ALLAN
UBAUB, AND SPOUSES NICOLAS & EVELYN DAILO, CAGAYAN CAPITOL
COLLEGE, REPRESENTED BY ITS PRESIDENT, ATTY. CASIMIRO B. SUAREZ, JR.,
PRIVATE Respondent;
HON. LEONCIA R. DIMAGIBA (ASSOCIATE JUSTICE), HON. PAUL L. HERNANDO
(ASSOCIATE JUSTICE), HON. NINA G. ANTONIO-VALENZUELA (ASSOCIATE
JUSTICE), HON. EDGARDO T. LLOREN (ASSOCIATE JUSTICE), HON. MICHAEL P.
ELBINIAS (ASSOCIATE JUSTICE), AND HON. JANE AURORA C. LANTION
(ASSOCIATE JUSTICE, ACTING CHAIRMAN), COURT OF APPEALS, CAGAYAN DE
ORO CITY (FORMER SPECIAL TWENTY-SECOND DIVISION), PUBLICRespondents.
DECISION
JARDELEZA, J.:
Before us are consolidated petitions questioning the Court of Appeals' (CA)
Decision1 dated December 11, 2008 and Resolution2 dated August 17, 2010 in CA-G.R.
CV No. 68960-MIN and CA-G.R. SP No. 53598-MIN.3 In G.R. Nos. 185857-58, the heirs of
Trifonia D. Gabutan and Tirso Dalondonan, Buna D. Actub, Felisia Trocio and Crisanta D.
Ubaub (Gabutan, et al.) filed a partial appeal by way of a petition for review
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
on certiorari,4 seeking to reverse the portion of the CA Decision declaring Cagayan Capital
College (the College) as a buyer in good faith. The other petition, G.R. Nos. 194314-15, is
one for certiorari5 filed by Dante D. Nacalaban, Helen N. Maandig, and Susan N. Siao as
heirs of Baldomera D. Vda. De Nacalaban (Nacalaban, et al.). It seeks to annul the CA
Decision and Resolution which sustained the action for reconveyance filed by Gabutan, et
al.
The Antecedents
On January 25, 1957, Godofredo Nacalaban (Godofredo) purchased an 800-square meter
parcel of prime land (property) in Poblacion, Cagayan de Oro City from Petra, Fortunata,
Francisco and Dolores, all surnamed Daamo. 6 Pursuant to the sale, Transfer Certificate of
Title (TCT) No. T-22597covering the property was issued in the name of Godofredo. He
thereafter built a house on it.8chanrobleslaw
Godofredo died on January 7, 1974.9 ITe was survived by his wife, Baldomera, and their
children, Dante, Helen, and Susan. On March 19, 1979, Baldomera issued a
Certification10 in favor of her mother, Melecia. It provided, in effect, that Baldomera was
allowing her mother to build and occupy a house on the portion of the
property.11 Accordingly, the house was declared for taxation purposes. The tax
declaration12 presented in evidence showed that Melecia owned the building on the land
owned by Godofredo.13chanrobleslaw
Baldomera died on September 11, 1994.14 On July 3, 1996, her children executed an
Extrajudicial Settlement of Estate of Deceased Person with Sale 15 (Extrajudicial Settlement
with Sale) where they adjudicated unto themselves the property and sold it to the College.
On August 22, 1996, TCT No. T-2259 was cancelled and TCT No. T-11184616 covering
the property was issued in the name of the College. 17chanrobleslaw
Melecia died on April 20, 199718 and was survived by her children, Trifonia, Buna, Felisia,
Crisanta, and Tirso.
In a letter19 dated May 5, 1997, the College demanded Trifonia D. Gabutan, Mary Jane
Gilig, Allan Ubaub, and Evelyn Dailo, the heirs of Melecia who were occupying the house
on the property, to vacate the premises.20chanrobleslaw
On July 7, 1997, Gabutan, et al. filed a Complaint for Reconveyance of Real Property,
Declaration of Nullity of Contracts, Partition and Damages with Writ of Preliminary
Attachment and Injunction21against Nacalaban, et al. and the College. They alleged that:
(1) Melecia bought the property using her own money but Godofredo had the Deed of
Absolute Sale executed in his name instead of his mother-in-law;22 (2) Godofredo and
Baldomera were only trustees of the property in favor of the real owner and beneficiary,
Melecia;23 (3) they only knew about the Extrajudicial Settlement with Sale upon verification
with the Registry of Deeds;24 and (4) the College was a buyer in bad faith, being aware
they were co-owners of the property.25cralawredchanrobleslaw
In its Answer with Affirmative Defenses,26 the College claimed that it is a buyer in good
faith and for value, having "made exhaustive investigations and verifications from all
reliable sources" that Melecia and her heirs were staying in the property by mere
tolerance.27 It alleged that: (1) in the tax declaration28 of the residential house, Melecia
admitted that the lot owner is Godofredo;29 (2) the occupancy permit of Melecia was issued

only after Godofredo issued a certification30 to the effect that Melecia was allowed to
occupy a portion of the property;31 and (3) the Extrajudicial Settlement with Sale was
published in three consecutive issues of Mindanao Post, a newspaper of general
circulation.32chanrobleslaw
In their Answer with Counterclaim,33 Nacalaban, et al. denied the allegations of
Gabutan, et al. They claimed to have acquired the property by intestate succession from
their parents, who in their lifetime, exercised unequivocal and absolute ownership over the
property.34 Nacalaban, et al. also set up the defenses of laches and prescription, and
asserted that the action for reconveyance was improper because the property had already
been sold to an innocent purchaser for value. 35chanrobleslaw
On September 10, 1997, the College filed a separate Complaint for Unlawful Detainer and
Damages36with the Municipal Trial Court in Cities (MTCC) against Trifonia, Mary Jane,
Allan, Evelyn and Nicolas Dailo (Heirs of Melecia). In their Answer with Affirmative and/or
Negative Defenses with Compulsory Counterclaim, 37 the Heirs of Melecia claimed that
they own and possess the property in co-ownership with Nacalaban, et al. and Gabutan, et
al. because it was purchased by Melecia, their common predecessor. 38 They also claimed
that the house in which they reside was constructed at her expense.39 The College had
prior knowledge of this co-ownership, and hence, was a purchaser in bad faith.40 The Heirs
of Melecia also raised the defense of forum-shopping in view of the pendency of the action
for reconveyance.41 They then concluded that in view of the issues and the value of the
property, as well, the MTCC had no jurisdiction over the case. 42chanrobleslaw
The MTCC found it had jurisdiction to hear the case and ruled in favor of the
College:43chanrobleslaw
WHEREFORE, JUDGMENT is hereby rendered ordering each of the defendants to:
chanRoblesvirtualLawlibrarya.) Immediately vacate the property of the plaintiff;
b.) Pay the plaintiff the monthly use compensation for the continued use of the property at
the rate of P500.00 per month from MAY 5, 1997 until the property is actually vacated;
c.) Pay the plaintiff Attorney's fees amounting to P5,000.00 per defendant;
d.) Pay for litigation expenses at the rate of P1,000.00 per defendant.
SO ORDERED.44chanroblesvirtuallawlibrary
On appeal, the Regional Trial Court (RTC) affirmed the MTCC's Decision46 in all respects,
except that the Heirs of Melecia were given 30 days from notice to vacate the
property.47 They filed a motion for reconsideration, but it was denied. 49 Thus, the Heirs of
Melecia filed a petition for review50 before the CA, docketed as CA-G.R. SP No.
53598.51chanrobleslaw
Meanwhile, in the reconveyance case, the RTC rendered a Decision in favor of 52
Gabutan, et al. The RTC found the testimonies of their witnesses credible, in that the
money of Melecia was used in buying the property but the name of Godofredo was used
when the title was obtained because Godofredo lived in Cagayan de Oro City while
Melecia lived in Bornay, Gitagum, Misamis Oriental. 53Thus, the RTC held that a trust was
established by operation of law pursuant to Article 1448 of the Civil Code. 54 The dispositive
portion of the RTC's Decision reads:
chanRoblesvirtualLawlibrary
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
WHEREFORE, judgment is hereby rendered, and this Court hereby:
1. Declares that the Spouses Godofredo and Baldomera Nacalaban held the land
covered by Transfer Certificate of Title No. T-2259 issued in the name of
Godofredo Nacalaban married to Baldomera Dalondonan issued on January 13,
1959 in trust for Melecia Vda. de Dalondonan with the Spouses as the trustees
and Melecia Vda. de Dalondonan as the cestui que trust;
2. Declares that upon the death of Melecia Vda. de Dalondonan on August 20,
1997, the ownership and beneficial interest of the foregoing Land passed to the
plaintiffs and individual defendants by operation of law as legal heirs of Melecia
Vda. de Dalondonan;
3. Nullifies the Extrajudicial Settlement of Estate of Deceased Person with Sale
executed by the individual defendants on July 30, 1996 and known as Doc. No.
326; Page No. 67; Book No. XX; Series of 1996 in the Notarial Register of Notary
Public Victoriano M. Jacot with respect to the Extrajudicial settlement by the
individual defendants of the land referred to above;
4. Declares that defendant Cagayan Capitol College was a buyer in good faith and
for value of the land referred to above, and, accordingly, declares that said
defendant now owns the land;
5. Orders defendant Cagayan Capitol College to inform this Court in writing within
thirty (30) days from receipt of this decision the amount of the purchase price of
the land referred to above bought by it from the individual defendants the amount
of which should approximate the prevailing market value of the land at the time of
the purchase;
6. Orders the individual defendants namely, Dante D. Nacalaban, Helen N.
Maandig, and Susan N. Siao, jointly and severally, to deliver and turn over to the
plaintiffs, within thirty (30) days from receipt of this decision, plaintiffs' shares of
the proceeds of the sale of the land referred to above the amount of which is
equivalent to live-sixth (5/6) of said proceeds with the remaining one-sixth (1/6) to
be retained by the individual defendants as their share by virtue of their being the
legal heirs of Baldomera D. Nacalaban;
SO ORDERED.55chanroblesvirtuallawlibrary
Both parties filed separate appeals from this Decision before the CA. 57 In a
Resolution58 dated October 7, 2004, the CA consolidated both appeals.
The C A rendered its Decision59 on December 11, 2008 dismissing the consolidated
appeals and affirming in toto the RTC Decisions in the unlawful detainer case and the
action for reconveyance. The CA held that: (1) the defense of co-ownership based on an
implied trust by a defendant in an unlawful detainer case shall not divest the MTCC of
jurisdiction over the case;60 (2) the dead man's statute does not apply because Gabutan, et
al.'s counsel did not interpose any objection when the testimony of Crisanta Ubaub was
offered and Gabutan, et al.'s counsel even examined her;61 (3) Nacalaban, et al.'s claim
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

that Gabutan, et al.'s witnesses are not competent to testify on matters which took place
before the death of Godofredo and Melecia is without merit because Gabutan, et al. have
not specified these witnesses and such hearsay evidence alluded to; 62 (4) the parole
evidence rule does not apply because Melecia and Nacalaban, et al. were not parties to
the Deed of Conditional Sale;63 (5) the action for reconveyance has not yet prescribed
because Gabutan, et al. are in possession of the property;64 and (6) the College is a buyer
in good faith.65chanrobleslaw
Nacalaban, et al. filed their motion for reconsideration of the CA Decision, but it was
denied in a Resolution66 dated August 17, 2010. Hence, they filed the present petition
for certiorari67 under Rule 65, where they allege that: (1) the action for reconveyance
already expired;68 (2) for an action for reconveyance to prosper, the property should not
have passed into the hands of another who bought the property in good faith and for
value;69 and (3) the title of Godofredo under TCT No. T-2259 which was issued on January
13, 1959 could not be attacked collaterally. 70chanrobleslaw
On the other hand, Gabutan, et al. filed the present petition for review on certiorari 71 under
Rule 45, seeking a partial appeal of the CA Decision. In their petition, Gabutan, et al.
allege that the College is not a buyer in good faith because it did not buy the property from
the registered owner.72 Since Godofredo was the registered owner of the property and not
Nacalaban, et al., the College should have exercised a higher degree of prudence in
establishing their capacity to sell it. 73 Further, despite knowing that other persons
possessed the property, the College did not inquire with Gabutan, et al. the nature of their
stay on the property.74 Under Section 1, paragraph 2, Rule 74 of the Rules of Court, the
publication of the Extrajudicial Settlement with Sale was also without prejudice to claims of
other persons who had no notice or participation thereof. 75 Finally, Gabutan, et al. argue
that they cannot be ejected from the property because there is no evidence to show that
their stay was by mere tolerance, and that Melecia was a builder in good
faith.76chanrobleslaw
remedy
Pursuant to Section 1, Rule 45 of the Rules of Court, 78 the proper remedy to obtain a
reversal of judgment on the merits, final order or resolution is an appeal. The Resolution
dated August 17, 2010 of the CA, which affirmed its Decision dated December 11, 2008,
was a final resolution that disposed of the appeal by Nacalaban, et al. and left nothing
more to be done by the CA in respect to the said case. Thus, Nacalaban, et al. should
have filed an appeal in the form of a petition for review on certiorari and not a petition
for certiorari under Rule 65, which is a special civil action.
Rule 65 is a limited form of review and is a remedy of last recourse. This extraordinary
action lies only where there is no appeal nor plain, speedy and adequate remedy in the
ordinary course of law.79 In Malayang Manggagawa ng Stayfast Phils., Inc. v. National
Labor Relations Comission,80 we held that appeal would still be the proper remedy from a
judgment on the merits, final order or resolution even if the error ascribed to the court
rendering the judgment is its lack of jurisdiction over the subject matter, or the exercise of
power in excess thereof, or grave abuse of discretion in the findings of fact or of law set
out in the decision, order or resolution. The existence and availability of the right of appeal
prohibits the resort to certiorari because one of the requirements for the latter remedy is
that there should be no appeal.81 We have always declared that a petition for certiorari is
not a substitute for an appeal where the latter remedy is available but was lost through
fault or negligence.82chanrobleslaw
Here, Nacalaban, et al. received the assailed Resolution dated August 17, 2010 on
September 7, 2010.83 Under the Rules of Court, they had 15 days or until September 22,
2010 to file an appeal before us. Nacalaban, et al. allowed this period to lapse without
doing so and, instead, filed a petition for certiorari on November 5, 2010. 84 Being the
wrong remedy, the petition of Nacalaban, et al. is, therefore, dismissible. Although there
are exceptions85 to this general rule, none applies in this case.

Considering that the petitions assail the same CA Decision and involve the same parties, In spite of the consolidation we have ordered, we cannot treat the petition of Nacalaban, et
we issued a Resolution77 dated December 13, 2010 consolidating them. al. as one under Rule 45. We have the discretion to treat a Rule 65 petition for certiorari as
a Rule 45 petition for review on certiorari if (1) the petition is filed within the reglementary
The Issues period for filing a petition for review; (2) when errors of judgment are averred; and (3) when
there is sufficient reason to justify the relaxation of the rules. 86 The first and third requisites
are absent in this case. To reiterate, the petition was filed beyond the 15-day reglementary
The issues for resolution are: period of filing a petition for review on certiorari. As will be discussed, we also find no
compelling reason to relax the rules.
chanRoblesvirtualLawlibrary
II. The action for reconveyance
filed by Gabutan, et al.
1. Whether the petition for certiorari of Nacalaban, et al. shall prosper; is proper
2. Whether the action for reconveyance was proper; and
3. Whether the College is a buyer in good faith.
a. An implied resulting trust was
created between Melecia and
Godofredo
Our Ruling

I. The petition for certiorari of We stress at the outset that the question of existence of an implied trust is factual, hence,
Nacalaban, et al. is a wrong ordinarily outside the purview of Rule 45. 87 The resolution of factual issues is the function

of the lower courts whose findings, when aptly supported by evidence, bind us. This is
especially true when the CA affirms the lower court's findings, as in this case. While we,
under established exceptional circumstances, had deviated from this rule, we do not find
this case to be under any of the exceptions.88 Even if we were to disregard these
established doctrinal rules, we would still affirm the assailed CA rulings.
Article 1448 of the Civil Code provides in part that there is an implied trust when property is
sold, and the legal estate is granted to one party but the price is paid by another for the
purpose of having the beneficial interest of the property. The former is the trustee, while
the latter is the beneficiary. The trust created here, which is also referred to as a purchase
money resulting trust,89 occurs when there is (1) an actual payment of money, property or
services, or an equivalent, constituting valuable consideration; (2) and such consideration
must be furnished by the alleged beneficiary of a resulting trust.90 These two elements are
present here.
Gabutan, et al., through the testimonies of Felisia, Crisanta, and Trifonia, established that
Melecia's money was used in buying the property, but its title was placed in Godofredo's
name. She purchased the property because Felisia wanted to build a pharmacy on it. 91 On
one occasion in Melecia's house, and when the entire family was present, Melecia gave
Godofredo the money to purchase the property. 92 Melecia entrusted the money to
Godofredo because he was in Cagayan de Oro, and per Melecia's instruction, the deed of
sale covering the property was placed in his name. 93 It was allegedly her practice to buy
properties and place them in her children's name, but it was understood that she and her
children co-own the properties.94chanrobleslaw
Melecia built a residential building on the property, where her daughter Crisanta and some
of her grandchildren resided.95 Godofredo also thereafter built a house on the property.
Twice, he also mortgaged the property to secure loans. Melecia allowed him to do so
because she trusted him.96After Godofredo's death, and when Baldomera fell ill, there
were family discussions to transfer the title in Melecia's name so Melecia's children can
divide it together with the rest of Melecia's properties. The plans, however, always fell
through.97chanrobleslaw
Both the RTC and CA found credence on these pieces of testimonial evidence that an
implied resulting trust exists. Reliance on these testimonies will not violate the parol
evidence rule, as Nacalaban, et al. once raised. In Tong v. Go Tiat Kun,98 we ruled that
since an implied trust is neither dependent upon an express agreement nor required to be
evidenced by writing, Article 1457 of our Civil Code authorizes the admission of parol
evidence to prove their existence. What is crucial is the intention to create a trust. 99 We
cautioned, however, that the parol evidence that is required to establish the existence of
an implied trust necessarily has to be trustworthy and it cannot rest on loose, equivocal or
indefinite declarations.100 The testimonies of Felisia, Crisanta, and Trifonia satisfy these
requirements. They are consistent and agree in all material points in reference to the
circumstances behind the arrangement between Melecia and Godofredo. We agree with
the RTC when it said that this arrangement among family members is not unusual,
especially in the 1950s.101chanrobleslaw
Nacalaban, et al., on the other hand, denied the arrangement between Melecia and
Godofredo, and maintained that it was really the latter who purchased the property from its
original owners, as evidenced by their possession of the Deed of Conditional Sale and the
title being in Godofredo's name.102 It is telling, however, that Nacalaban, et al. failed to
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provide the details of the sale, specifically with regard to how Godofredo could have been
able to afford the purchase price himself, which would have directly refuted the allegation
that Melecia's money was used in the purchase. As the RTC aptly observed, if Godofredo
really bought the property with his own money, it was surprising that Baldomera did not
transfer the title of the property to her name when Godofredo died in 1974. Baldomera did
not do so until her death in 1994 despite being pressed by her siblings to partition the
property. The RTC correctly deduced that this only meant that Baldomera acknowledged
that the property belongs to Melecia. 103chanrobleslaw
Having established the creation of an implied resulting trust, the action for reconveyance
filed by Gabutan, et al., the heirs of Melecia in whose benefit the trust was created, is
proper. An action for reconveyance is a legal and equitable remedy granted to the rightful
landowner, whose land was wrongfully or erroneously registered in the name of another, to
compel the registered owner to transfer or reconvey the land to him. 104 It will not amount to
a collateral attack on the title, contrary to the allegation of Nacalaban, et al.105 We
explained in Hortiznela v. Tagufa:106chanrobleslaw
x x x As a matter of fact, an action for reconveyance is a recognized remedy, an action in
personam, available to a person whose property has been wrongfully registered under the
Torrens system in another's name. In an action for reconveyance, the decree is not sought
to be set aside. It does not seek to set aside the decree but, respecting it as
incontrovertible and no longer open to review, seeks to transfer or reconvey the land from
the registered owner to the rightful owner. Reconveyance is always available as long as
the property has not passed to an innocent third person for value.
There is no quibble that a certificate of title, like in the case at bench, can only be
questioned through a direct proceeding. The MCTC and the CA, however, failed to take
into account that in a complaint for reconveyance, the decree of registration is respected
as incontrovertible and is not being questioned. What is being sought is the transfer of the
property wrongfully or erroneously registered in another's name to its rightful owner or to
the 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.107chanroblesvirtuallawlibrary
The fact that the property was already titled in Godofredo's name, and later transferred to
the College, is not a hindrance to an action for reconveyance based on an implied trust.
The title did not operate to vest ownership upon the property in favor of the College. As
held in Naval v. Court of Appeals:108chanrobleslaw
xxx Registration of a piece of land under the Torrens System does not create or vest title,
because it is not a mode of acquiring ownership. A certificate of title is merely an evidence
of ownership or title over the particular property described therein. It cannot be used to
protect a usurper from the true owner; nor can it be used as a shield for the commission of
fraud; neither does it permit one to enrich himself at the expense of others. Its issuance in
favor of a particular person does not foreclose the possibility that the real property may be
co-owned with persons not named in the certificate, or that it may be held in trust for
another person by the registered owner.109
Moreover, the body of the Complaint filed by Gabutan, et al. shows that it is not only for the
reconveyance of the property but also for the annulment of TCT No. T-111846 issued in
the name of the College.110 Gabutan, et al. questioned the validity of the sale to the
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College and claimed co-ownership over the property. Thus, we can rule on the validity of grounded on the following: (i) Gabutan, et al.'s claim was never annotated on Godofredo's
TCT No. T-111846 since the Complaint is a direct attack on the title of the College. title; (ii) the Extrajudicial Settlement with Sale was duly published and the College was able
to effect the transfer of the title in its name; (iii) Baldomera issued a certification in favor of
Melecia allowing her to occupy a portion of the lot; and (iv) the tax declaration showed that
b. The action for reconveyance is imprescriptible
because the plaintiffs are in possession of Melecia owned only the building on the land owned by Godofredo.119chanrobleslaw
the property
The RTC reiterated the rule that the buyer of a land registered under the Torrens System
may rely upon the face of the certificate of title and does not have to look beyond it. 120 The
An action for reconveyance based on an implied or a constructive trust prescribes 10 years CA, on the other hand, held that when taken together, these facts would reasonably
from the alleged fraudulent registration or date of issuance of the certificate of title over the constitute enough reason for the College or any buyer to conclude that the property is free
property. However, an action for reconveyance based on implied or constructive trust is from any adverse claim, thereby making any further investigation unnecessary. Absent any
imprescriptible if the plaintiff or the person enforcing the trust is in possession of the showing that the College knew of the actual arrangement between Godofredo and
property. In effect, the action for reconveyance is an action to quiet the property title, which Melecia, it must be deemed a buyer in good faith. 121chanrobleslaw
does not prescribe.111 The reason is that the one who is in actual possession of the land
claiming to be its owner may wait until his possession is disturbed or his title is attacked Gabutan, et al. alleged that the lower courts erred in ruling that the College is a buyer in
before taking steps to vindicate his right. His undisturbed possession gives him a good faith, raising the following: (1) Nacalaban, et al. are not the registered owners of the
continuing right to seek the aid of a court of equity to ascertain and determine the nature of property; Godofredo is the registered owner who died on January 7, 1974; 122 (2) not being
the adverse claim of a third party and its effect on his own title, which right can be claimed the registered owners, the College, as buyer, is expected to examine not only the
only by one who is in possession.112chanrobleslaw certificate of title but all factual circumstances necessary for him to determine if there are
any flaws in the title of the transferor, or in his capacity to transfer the property; 123 and (3)
The fact of actual possession of Gabutan, et al. of the property, during the lifetime of the College knew that other persons possessed the property so it should have first
Melecia and even after her death, is an undisputed and established fact. The College has established the capacity of the Nacalaban children to sell the property. 124chanrobleslaw
even filed an ejectment case against the Heirs of Melecia for this reason. 113 Thus, their
complaint for reconveyance is imprescriptible. It follows, with more reason, that Gabutan, Whether one is a buyer in good faith and whether due diligence and prudence were
et al. cannot be held guilty of laches as the said doctrine, which is one in equity, cannot be exercised are questions of fact.125 As we have already mentioned, only questions of law
set up to resist the enforcement of an imprescriptible legal right. 114chanrobleslaw may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court. We
see an exception, however, to this general rule relative to the finding that the College is a
III.The property shall be reconveyed to the estate of Melecia buyer in good faith. We hold that the RTC's finding that the College is a buyer in good faith,
The Extrajudicial Settlement with Sale executed which finding was upheld by the CA, was based on an obvious misapprehension of facts
between Nacalaban, et al. and the College is void and was clearly not supported by law and jurisprudence.
Having established the creation of an implied resulting trust between Melecia and
Godofredo, the law thereby creates the obligation of the trustee to reconvey the property In Bautista v. Silva,126 we reiterated the requisites for one to be considered a purchaser in
and its title in favor of the true owner. 115 The true owner, Melecia, died in 1997 and was good faith:
succeeded by her children and grandchildren. The property, therefore, must be
reconveyed to her estate. chanRoblesvirtualLawlibrary
A buyer for value in good Faith is one who buys property of another, without notice that
The execution of the Extrajudicial Settlement with Sale between Godofredo's heirs and the some other person has a right to, or interest in, such property and pays full and fair price
College will not defeat the legal obligation to reconvey the property because at the time of for the same, at the time of such purchase, or before he has notice of the claim or interest
its execution in 1996, Melecia was still alive. Hence, Nacalaban, et al. did not have the of some other persons in the property. He buys the property with the welt-founded belief
right or authority to sell the property. Nemo dat quod non habet. One can sell only what that the person from whom he receives the thing had title to the property and capacity to
one owns or is authorized to sell, and the buyer can acquire no more right than what the convey it.
seller can transfer legally.116 Nacalaban, et al. cannot find refuge in their argument that the
property was registered in their father's name and that after his death, his rights passed to To prove good faith, a buyer of registered and titled land need only show that he relied on
them as his legal heirs. To repeat, title to property does not vest ownership but is a mere the face of the title to the property. He need not prove that he made further inquiry for he is
proof that such property has been registered. 117chanrobleslaw not obliged to explore beyond the four corners of the title. Such degree of proof of good
faith, however, is sufficient only when the following
The College is a buyer in bad faith conditions concur: first, the seller is the registered owner of the land; second, the
latter is in possession thereof; and third, at the time of the sale, the buyer was not
Despite the finding that the property was owned by Melecia and upon her death, by her aware of any claim or interest of some other person in the property, or of any defect
heirs, the lower courts still sustained the ownership of the College of the property on the or restriction in the title of the seller or in his capacity to convey title to the property.
ground that it is an innocent purchaser for value. 118 The lower courts' findings are

Absent one or two of the foregoing conditions, then the law itself puts the buyer on notice
and obliges the latter to exercise a higher degree of diligence by scrutinizing the certificate
of title and examining all factual circumstances in order to determine the seller's title and
capacity to transfer any interest in the property. Under such circumstance, it is no longer
sufficient for said buyer to merely show that he relied on the face of the title; he must now
also show that he exercised reasonable precaution by inquiring beyond the title. Failure to
exercise such degree of precaution makes him a buyer in bad faith.127 (Emphasis
supplied.)
Thus, the College, which has the burden to prove the status of being a purchaser in good
faith, is required to prove the concurrence of the above conditions. This onus
probandi cannot be discharged by mere invocation of the legal presumption of good
faith.128 We find that the College failed to discharge this burden.
Firstly, as correctly pointed out by Gabutan, et al., Nacalaban, et al. are not the registered
owners of the property, but Godofredo. In Bautista v. Court of Appeals,129 we held:
chanRoblesvirtualLawlibrary
However, it is important to note that petitioners did not buy the land from the registered
owner, Dionisio Santiago. They bought it from his heirs, Maria dcla Cruz and Jose
Santiago.
Where a purchaser buys from one who is not the registered owner himself, the law
requires a higher degree of prudence even if the land object of the transaction is
registered. One who buys from one who is not the registered owner is expected to
examine not only the certificate of title but all factual circumstances necessary for him to
determine if there are any flaws in the title of the transferor, or in his capacity to transfer
the land.130
Secondly, the College was aware that aside from Nacalaban, et al., the Heirs of Melecia,
were also in possession of the property. The College cited the tax declaration which bore
an annotation that Melecia owned a residential building and Godofredo owned the
lot.131 Also, apart from filing an ejectment case against the Heirs of Melecia, the College
retained part of the purchase price for the demolition of Melecia's building as
well.132chanrobleslaw
In Occea v. Esponilla,133 we held that petitioner-spouses were not purchasers in good
faith when they merely relied on the representation of the seller regarding the nature of
possession of the occupants of the land:
chanRoblesvirtualLawlibrary
In the case at bar, we find that petitioner-spouses failed to prove good faith in their
purchase and registration of the land, x x x At the trial, Tomas Occena admitted that he
found houses built on the land during its ocular inspection prior to his purchase. He relied
on the representation of vendor Arnold that these houses were owned by squatters
and that he was merely tolerating their presence on the land. Tomas should have
verified from the occupants of the land the nature and authority of their possession
instead of merely relying on the representation of the vendor that they were
squatters, having seen for himself that the land was occupied by persons other than
the vendor who was not in possession of the land at that time, x x x134 (Emphasis
supplied.)
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Land Titles and Deeds (Finals) 2017
Although the College in its Answer alleged that it made an exhaustive investigation and
verification from all reliable sources and found that the possession of Melecia and her heirs
was merely tolerated,135 it failed to specify who or what these sources were. There is no
evidence that the College did inquire from Melecia or her heirs themselves, who were
occupying the property, the nature and authority of their possession. It is not far-fetched to
conclude, therefore, that the College merely relied on the representations of the sellers
and the documents they presented. In this regard, the College is not a buyer in good faith.
The "honesty of intention" which constitutes good faith implies a freedom from
knowledge of circumstances which ought to put a person on inquiry.136 If the land
purchased is in the possession of a person other than the vendor, the purchaser must be
wary and must investigate the rights of the actual possessor. 137 Without such inquiry, the
purchaser cannot be said to be in good faith and cannot have any right over the
property.138chanrobleslaw
We are aware that in the ejectment case, the MTCC and RTC ruled in favor of the College.
We emphasize, though, that the ruling on the College's better right of possession was
without prejudice to the eventual outcome of the reconveyance case where the issue of
ownership was fully threshed out. We have held that the sole issue for resolution in an
unlawful detainer case is physical or material possession of the property involved,
independent of any claim of ownership by any of the parties. When the defendant,
however, raises the defense of ownership in his pleadings and the question of possession
cannot be resolved without deciding the issue of ownership, the issue of ownership shall
be resolved only to determine the issue of possession. 139 Thus, the ruling on the ejectment
case is not conclusive as to the issue of ownership. 140chanrobleslaw
WHEREFORE, in view of the foregoing, the petition for certiorari in G.R. Nos. 194314-14
is DENIED and the petition for review on certiorari in G.R. Nos. 185857-58 is GRANTED.
The Decision of the Court of Appeals dated December 11, 2008 and its Resolution dated
August 17, 2010 are AFFIRMED with the following MODIFICATIONS:
1. Cagayan Capitol College is hereby declared a buyer in bad faith, who has no
right to possession and ownership of the property;
2. Nacalaban, et al. are ordered to return the purchase price paid on the property to
the College, plus interest at the rate of six percent (6%) per annum computed
from July 23, 1997141 until the date of finality of this judgment. The total amount
shall thereafter earn interest at the rate of six percent (6%) per annum from the
finality of judgment until its satisfaction;142 and
3. The Register of Deeds is ordered to cancel TCT No. T-l 11846 in the name of the
College.
4. The property should be reconveyed to the Estate of the late Melecia Dalondonan
with the institution of the proper proceedings for its partition and titling.
SO ORDERED.
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Land Titles and Deeds (Finals) 2017

G.R. No. 195825 February 27, 2013 City. The RTC granted Sys petition on August 26, 1997. 7 The Registry of Deeds of
Quezon City then issued a new owners duplicate copy of TCT No. N-165606, which was
SPOUSES ALFONSO AND MARIA ANGELES CUSI, Petitioners, later cancelled by virtue of the deed of absolute sale dated July 14, 1997, and in its stead
the Registry of Deeds of Quezon City issued TCT No. 186142 in Sys name. 8
vs.
LILIA V. DOMINGO, Respondent.
Sy subsequently subdivided the property into two, and sold each half by way of contract to
x-----------------------x sell to Spouses Edgardo and Ramona Liza De Vera and to Spouses Alfonso and Maria
Angeles Cusi. The existence of the individual contracts to sell was annotated on the dorsal
portion of Sys TCT No. 186142 as Entry No. PE-8907/N-186142,9 stating that the
G.R. No. 195871 consideration of the sale was 1,000,000.00 for each set of buyers, or for a total of
2,000,000.00 for the entire property that had an actual worth of not less than
RAMONA LIZA L. DE VERA, Petitioner, 14,000,000.00. TCT No. 186142 in the name of Sy was then cancelled by virtue of the
vs deeds of sale executed between Sy and Spouses De Vera, and between Sy and Spouses
LILIA V. DOMINGO AND SPOUSES RADELIA AND ALFRED SY, Respondents. Cusi, to whom were respectively issued TCT No. 18956810 and TCT No. 189569.11 All the
while, the transactions between Sy and the De Veras, and between Sy and the Cusis were
unknown to Domingo, whose TCT No. N-165606 remained in her undisturbed
DECISION possession.12

BERSAMIN, J.:
Under the Torrens system of land registration, the registered owner of realty cannot be
deprived of her property through fraud, unless a transferee acquires the property as an
innocent purchaser for value. A transferee who acquires the property covered by a
reissued owner's copy of the certificate of title without taking the ordinary precautions of
honest persons in doing business and examining the records of the proper Registry of
Deeds, or who fails to pay the full market value of the property is not considered an
innocent purchaser for value.
Under review in these consolidated appeals is the Decision promulgated on July 16,
2010,1 whereby the Court of Appeals (CA) in CA-G.R. CV No. 90452 affirmed the revised
decision rendered on March 1, 2007 by the Regional Trial Court in Quezon City (RTC)
against the petitioners and their seller.2
It turned out that the construction activities taking place on the property that Domingo
learned about were upon the initiative of the De Veras in the exercise of their dominical
and possessory rights.
Domingo commenced this action against Sy and her spouse, the De Veras and the Cusis
in the RTC, the complaint being docketed as Civil Case No. Q-99-39312 and entitled Lilia
V. Domingo v. Spouses Radelia and Alfred Sy, Spouses Alfonso G. and Maria Angeles S.
Cusi, Spouses Edgardo M. and Ramona Liza L. De Vera, BPI Family Savings Bank and
The Register of Deeds of Quezon City, seeking the annulment or cancellation of titles,
injunction and damages. Domingo applied for the issuance of a writ of preliminary
prohibitory and mandatory injunction, and a temporary restraining order (TRO). 13 The RTC
granted Domingos application for the TRO enjoining the defendants from proceeding with
the construction activities on the property. The RTC later granted her application for the
writ of preliminary injunction.

Antecedents Ruling of the RTC

The property in dispute was a vacant unfenced lot situated in White Plains, Quezon City On September 30, 2003, the RTC rendered a decision,14 disposing:
and covered by Transfer Certificate of Title (TCT) No. N-165606 issued in the name of
respondent Lilia V. Domingo by the Registry of Deeds of Quezon City. It had an area of WHEREFORE, in view of all the foregoing judgment is hereby rendered:
658 square meters.3 In July 1999, Domingo learned that construction activities were being
undertaken on her property without her consent. She soon unearthed the series of
anomalous transactions affecting her property. (a) declaring the sale between Lilia V. Domingo and Radella Sy void and of (sic)
effect;
On July 18, 1997, one Radelia Sy (Sy),4 representing herself as the owner of the property,
petitioned the RTC for the issuance of a new owners copy of Domingos TCT No. N- (b) declaring the Sps. Edgardo and Ramona Liza De Vera and Sps. Alfonso and
165606, appending to her petition a deed of absolute sale dated July 14, 1997 purportedly Maria Angeles Cusi to be purchasers in good faith and for value;
executed in her favor by Domingo;5 and an affidavit of loss dated July 17, 1997,6 whereby
she claimed that her bag containing the owners copy of TCT No. N-165606 had been (c) lifting the writ of preliminary injunction;
snatched from her on July 13, 1997 while she was at the SM City in North EDSA, Quezon
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(d) finding defendant Radella Sy liable to the plaintiff Lilia Domingo liable (sic) for (f) Finding defendant Radelia Sy liable to the plaintiff Lilia V. Domingo liable (sic)
damages, as follows: for damages, as follows:

1. Fourteen Million Pesos (14,000,000.00) representing the value of 1. One Million Pesos (1,000,000.00) representing moral damages;
the property covered by TCT No. 165606 plus legal rate of interest until
fully paid;
2. Five Hundred Thousand Pesos (500,000.00) representing
exemplary damages;
2. One Million Pesos (1,000,000.00) representing moral damages;
3. Five Hundred Thousand Pesos (500,000.00) representing
3. Five Hundred Thousand Pesos (500,000.00) representing attorneys fees;
exemplary damages;
4. Two Hundred Thousand Pesos (200,000.00) representing litigation
4. Five Hundred Thousand Pesos (500,000.00) representing expenses; and,
attorneys fees;
5. Costs of suit.
5. Two Hundred Thousand Pesos (200,000.00) representing litigation
expenses; and
This Decision is without prejudice to whatever civil action for recovery and damages, the
defendants Sps. De Vera and Sps. Cusi may have against defendant Spouses Radelia
6. Costs of Suit. and Alfred Sy.

IT IS SO ORDERED. SO ORDERED.

Acting on the motions for reconsideration separately filed by Sy and Domingo, 15 the RTC Ruling of the CA
reconsidered and set aside its September 30, 2003 decision, and allowed the presentation
of rebuttal and sur-rebuttal evidence. On appeal, the assignment of errors each set of appellants made was as follows:

On March 1, 2007, the RTC rendered a new decision, 16 ruling: Spouses Cusi

WHEREFORE, in view of the foregoing, Judgment is hereby rendered:
(a) Declaring the sale between Lilia Domingo and Radelia Sy void and of no
effect;
(b) Declaring the Sps. Edgardo and Ramona Liza De Vera and Sps. Alfonso and
Maria Angeles Cusi not purchasers in good faith and for value;
(c) TCT Nos. 189568 and 189569 are hereby cancelled and declared Null and
Void Ab Initio;
(d) Directing the Register of Deeds of Quezon City to annotate this Order on TCT
No. 189568 and 189569;
a) THE REGIONAL TRIAL COURT GRAVELY ERRED IN FINDING THAT
DEFENDANTS SPOUSES ALFONSO AND MARIA ANGELES CUSI ARE NOT
PURCHASERS IN GOOD FAITH AND FOR VALUE.
b) THE REGIONAL TRIAL COURT GRAVELY ERRED IN FAILING TO
RESOLVE THE ISSUE OF WHETHER OR NOT CODEFENDANTS SPOUSES
RADELIA SY AND ALFRED SY ARE LIABLE FOR SPOUSES CUSIS CROSS-
CLAIM.
c) THE REGIONAL TRIAL COURT ERRED IN FAILING TO AWARD DAMAGES
AND ATTORNEYS FEES TO DEFENDANTS SPOUSES CUSI. 17
Spouses Sy

(e) TCT No. 165606 in the name of Lilia Domingo is hereby revalidated; and, a) THE TRIAL COURT A QUO ERRED IN HOLDING THAT THE SALE
BETWEEN LILIA DOMINGO AND RADELIA SY VOID AND OF NO EFFECT
AND WAS PROCURRED (sic) THROUGH FRAUDULENT MEANS.

b) THAT THE HONORABLE COURT ERRED IN AWARDING ACTUAL MORAL
DAMAGES, EXEMPLARY DAMAGES AND ATTORNEYS FEES AND
LITIGATION EXPENSES THE SAME BEING NULL AND VOID FOR BEING
CONTRARY TO LAW.
c) THAT THE SAID DECISION IS CONTRARY TO LAW AND
JURISPRUDENCE AND IS NOT SUPPORTED BY EVIDENCE, AS THE SAME
CONTAIN SERIOUS REVERSIBLE ERRORS WHEN THE COURT A QUO
DECLARED THAT TCT NOS. 189568 AND 189569 CANCELLED AND
DECLARED NULL AND VOID AB INITIO.
d) THE INSTANT ASSAILED DECISION OF THE HONORABLE COURT HAVE
(sic) DEPRIVED DEFENDANT[S] SPOUSES SY OF THEIR BASIC
CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW.18
Spouses De Vera
a) THE LOWER COURT ERRED IN HOLDING THAT THE DE VERA SPOUSES
ARE NOT PURCHASERS IN GOOD FAITH AND NOT ENTITLED TO THE
POSSESSION OF THE PROPERTY COVERED BY TCT NO. N-189568.
b) THE LOWER COURT ALSO ERRED IN NOT AWARDING DEFENDANT-
APPELLANT DE VERA HER COUNTERCLAIMS AGAINST PLAINTIFF-
APPELLEE.19
As stated, the CA promulgated its decision on July 16, 2010, affirming the RTC with
modification of the damages to be paid by the Sys to Domingo, viz:
WHEREFORE, premises considered, the instant appeal is denied. Accordingly, the
Decision dated March 1, 2007 of the Regional Trial Court is hereby AFFIRMED with the
modification on the award of damages to be paid by defendants-appellants Spouses
Radelia and Alfred Sy in favor of the plaintiff-appellee Lilia V. Domingo, to wit;
1. 500,000.00 by way of moral damages;
2. 200,000.00 by way of exemplary damages;
3. 100,000.00 as attorneys fees and litigation expenses.
SO ORDERED.20
The CA held that the sale of the property from Domingo to Sy was null and void and
conveyed no title to the latter for being effected by forging the signature of Domingo; that
Sy thereby acquired no right in the property that she could convey to the Cusis and De
Veras as her buyers; that although acknowledging that a purchaser could rely on what
appeared on the face of the certificate of title, the Cusis and De Veras did not have the
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
status of purchasers in good faith and for value by reason of their being aware of Sys TCT
No. 186142 being a reconstituted owners copy, thereby requiring them to conduct an
inquiry or investigation into the status of the title of Sy in the property, and not simply rely
on the face of Sys TCT No. 186142; and that the Cusis and De Veras were also aware of
other facts that should further put them on guard, particularly the several nearly
simultaneous transactions respecting the property, and the undervaluation of the purchase
price from 7,000,000.00/half to only 1,000,000.00/half to enable Sy to pay a lesser
capital gains tax.
The CA later on denied the motions for reconsideration. 21
Issues
Hence, this appeal via petitions for review on certiorari by the Cusis (G.R. No. 195825) and
Ramona Liza L. De Vera22 (G.R. No. 195871).
In G.R. No. 195825, the Cusis submit the following issues:23
I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN
FINDING THAT TRANSFER CERTIFICATE OF TITLE NO. 186142
REGISTERED IN THE NAME OF RADELIA SY IS A RECONSTITUTED TITLE.
II
WHETHER OR NOT THE PETITIONERS ARE BUYERS IN GOOD FAITH AND
FOR VALUE.
III
GRANTING, WITHOUT ADMITTING, THAT THE DECISION OF THE
HONORABLE COURT OF APPEALS IS CORRECT WITH RESPECT TO THE
SECOND ISSUE, WHETHER OR NOT PETITIONERS ARE ENTITLED TO
REIMBURSEMENT OF ALL THE PAYMENTS MADE BY PETITIONERS TO
THEIR CODEFENDANTS SPOUSES ALFRED AND RADELIA SY IN ADDITION
TO DAMAGES AND ATTORNEYS FEES.
In G.R. No. 195871, De Vera asserts that the primordial issue is whether or not she was
an innocent purchaser for value and in good faith.
Ruling of the Court
The petitions for review are bereft of merit.

Firstly, now beyond dispute is the nullity of the transfer of Domingos property to Sy
because both lower courts united in so finding. The unanimity in findings of both the RTC
and the CA on this all-important aspect of the case is now conclusive on the Court in view
of their consistency thereon as well as by reason of such findings being fully supported by
preponderant evidence. We consider to be significant that the Sys no longer came to the
Court for further review, thereby rendering the judgment of the CA on the issue of nullity
final and immutable as to them.
Secondly, the Cusis and De Vera commonly contend that the CA gravely erred in not
considering them to be purchasers in good faith and for value. They argue that Sys TCT
No. 186142 was free of any liens or encumbrances that could have excited their suspicion;
and that they nonetheless even went beyond the task of examining the face of Sys TCT
No. 186142, recounting every single detail of their quest to ascertain the validity of Sys
title, but did not find anything by which to doubt her title.
The Court concurs with the finding by the CA that the Cusis and De Vera were not
purchasers for value and in good faith. The records simply do not support their common
contention in that respect.
Under the Torrens system of land registration,24 the State is required to maintain a register
of landholdings that guarantees indefeasible title to those included in the register. The
system has been instituted to combat the problems of uncertainty, complexity and cost
associated with old title systems that depended upon proof of an unbroken chain of title
back to a good root of title. The State issues an official certificate of title to attest to the fact
that the person named is the owner of the property described therein, subject to such liens
and encumbrances as thereon noted or what the law warrants or reserves. 25
One of the guiding tenets underlying the Torrens system is the curtain principle, in that one
does not need to go behind the certificate of title because it contains all the information
about the title of its holder. This principle dispenses with the need of proving ownership by
long complicated documents kept by the registered owner, which may be necessary under
a private conveyancing system, and assures that all the necessary information regarding
ownership is on the certificate of title. Consequently, the avowed objective of the Torrens
system is to obviate possible conflicts of title by giving the public the right to rely upon the
face of the Torrens certificate and, as a rule, to dispense with the necessity of inquiring
further; on the part of the registered owner, the system gives him complete peace of mind
that he would be secured in his ownership as long as he has not voluntarily disposed of
any right over the covered land.26
The Philippines adopted the Torrens system through Act No. 496,27 also known as
the Land Registration Act, which was approved on November 6, 1902 and took effect on
February 1, 1903. In this jurisdiction, therefore, "a person dealing in registered land has the
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". 28
To obtain a grasp of whether a person has actual knowledge of facts and circumstances
that would impel a reasonably cautious man to make such inquiry, an internal matter,
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Land Titles and Deeds (Finals) 2017
necessitates an analysis of evidence of a persons conduct. 29 That renders the
determination of intent as a factual issue, 30 something that the Court does not normally
involve itself in because of its not being a trier of facts. Indeed, as a rule, the review
function of the Court is limited to a review of the law involved.
But the Court now delves into the facts relating to the issue of innocence of the petitioners
in their purchase of the property, considering that the RTC, through its original decision, at
first regarded them to have been innocent purchasers who were not aware of any flaw or
defect in Sys title based on the fact that the property had been unfenced and vacant. The
RTC also regarded the petitioners making of reasonable verifications as their exercise of
the due diligence required of an ordinary buyer. 31 The RTC later completely turned around
through another decision, however, and it was such decision that the CA affirmed subject
to the modifications of the damages granted to Domingo.
There is no question that the petitioners exerted some effort as buyers to determine
whether the property did rightfully belong to Sy. For one, they did not find any
encumbrance, like a notice of lis pendens, being annotated on the TCT of Sy.
Nonetheless, their observance of a certain degree of diligence within the context of the
principles underlying the Torrens system
was not their only barometer under the law and jurisprudence by which to gauge the
validity of their acquisition of title. As the purchasers of the property, they also came under
the clear obligation to purchase the property not only in good faith but also for value.
Therein lay the problem. The petitioners were shown to have been deficient in their
vigilance as buyers of the property. It was not enough for them to show that the property
was unfenced and vacant; otherwise, it would be too easy for any registered owner to lose
her property, including its possession, through illegal occupation. Nor was it safe for them
to simply rely on the face of Sys TCT No. 186142 in view of the fact that they were aware
that her TCT was derived from a duplicate owners copy reissued by virtue of the loss of
the original duplicate owners copy. That circumstance should have already alerted them to
the need to inquire beyond the face of Sys TCT No. 186142. There were other
circumstances, like the almost simultaneous transactions affecting the property within a
short span of time, as well as the gross undervaluation of the property in the deeds of sale,
ostensibly at the behest of Sy to minimize her liabilities for the capital gains tax, that also
excited suspicion, and required them to be extra-cautious in dealing with Sy on the
property.
To the Court, the CAs treatment of Sys TCT No. 186142 as similar to a reconstituted copy
of a Torrens certificate of title was not unwarranted. In doing so, the CA cited the ruling
in Barstowe Philippines Corporation v. Republic,32 where the Court, quoting from
precedents, opined that "the nature of a reconstituted Transfer Certificate of Title of
registered land is similar to that of a second Owners Duplicate Transfer Certificate of
Title," in that "both are issued, after the proper proceedings, on the representation of the
registered owner that the original of the said TCT or the original of the Owners Duplicate
TCT, respectively, was lost and could not be located or found despite diligent efforts
exerted for that purpose;"33 and that both were "subsequent copies of the originals
thereof," a fact that a "cursory examination of these subsequent copies would show" and

"put on notice of such fact [anyone dealing with such copies who is] thus warned to be
extracareful."34
Verily, the Court has treated a reissued duplicate owners copy of a TCT as merely a
reconstituted certificate of title. In Garcia v. Court of Appeals,35 a case with striking
similarities to this one, an impostor succeeded in tricking a court of law into granting his
petition for the issuance of a duplicate owners copy of the supposedly lost TCT. The
impostor then had the TCT cancelled by presenting a purported deed of sale between him
and the registered owners, both of whom had already been dead for some time, and
another TCT was then issued in the impostors own name. This issuance in the impostors
own name was followed by the issuance of yet another TCT in favor of a third party,
supposedly the buyer of the impostor. In turn, the impostors transferee (already the
registered owner in his own name) mortgaged the property to Spouses Miguel and Adela
Lazaro, who then caused the annotation of the mortgage on the TCT. All the while,
the original duplicate owners copy of the TCT remained in the hands of an heir of the
deceased registered owners with his co-heirs knowledge and consent.
The inevitable litigation ensued, and ultimately ended up with the Court.1wphi1 The
Lazaros, as the mortgagees, claimed good faith, and urged the Court to find in their favor.
But the Court rebuffed their urging, holding instead that they did not deal on the property in
good faith because: (a) "the title of the property mortgaged to the Lazaros was a second
owners duplicate TCT, which is, in effect a reconstituted title. This circumstance should
have alerted them to make the necessary investigation, but they did not;" and (b) their
argument, that "because the TCT of the property on which their mortgage lien was
annotated did not contain the annotation: "Reconstituted title," the treatment of the
reissued duplicate owners copy of the TCT as akin to a reconstituted title did not apply,
had no merit considering that: "The nature of a reconstituted Transfer Certificate of Title of
registered land is similar to that of a second Owner's Duplicate Transfer Certificate of Title.
Both are issued, after the proper proceedings, on the representation of the registered
owner that the original of the said TCT or the original of the Owner's Duplicate TCT,
respectively, was lost and could not be located or found despite diligent efforts exerted for
that purpose. Both, therefore, are subsequent copies of the originals thereof. A cursory
examination of these subsequent copies would show that they are not the originals.
Anyone dealing with such copies are put on notice of such fact and thus warned to be
extra-careful. This warning the mortgagees Lazaros did not heed, or they just ignored it." 36
The fraud committed in Garcia paralleled the fraud committed here.1wphi1 The registered
owner of the property was Domingo, who remained in the custody of her TCT all along; the
impostor was Sy, who succeeded in obtaining a duplicate owners copy; and the Cusis and
the De Veras were similarly situated as the Spouses Lazaro, the mortgagees in Garcia.
The Cusis and the De Veras did not investigate beyond the face of Sys TCT No. 186142,
despite the certificate derived from the reissued duplicate owners copy being akin to a
reconstituted TCT. Thereby, they denied themselves the innocence and good faith they
supposedly clothed themselves with when they dealt with Sy on the property.
The records also show that the forged deed of sale from Domingo to Sy appeared to be
executed on July 14, 1997; that the affidavit of loss by which Sy would later on support her
petition for the issuance of the duplicate owners copy of Domingos TCT No. 165606 was
executed on July 17, 1997, the very same day in which Sy registered the affidavit of loss in
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
the Registry of Deeds of Quezon City; that Sy filed the petition for the issuance of the
duplicate owners copy of Domingos TCT No. 165606; that the RTC granted her petition
on August 26, 1997; and that on October 31, 1997, a real estate mortgage was executed
in favor of one Emma Turingan, with the mortgage being annotated on TCT No. 165606 on
November 10, 1997.
Being the buyers of the registered realty, the Cusis and the De Veras were aware of the
aforementioned several almost simultaneous transactions affecting the property. Their
awareness, if it was not actual, was at least presumed, and ought to have put them on
their guard, for, as the CA pointed out, the RTC observed that "[t]hese almost
simultaneous transactions, particularly the date of the alleged loss of the TCT No. 165606
and the purported Deed of Sale, suffice[d] to arouse suspicion on [the part of] any person
dealing with the subject property."37 Simple prudence would then have impelled them as
honest persons to make deeper inquiries to clear the suspiciousness haunting Sys title.
But they still went on with their respective purchase of the property without making the
deeper inquiries. In that regard, they were not acting in good faith.
Another circumstance indicating that the Cusis and the De Veras were not innocent
purchasers for value was the gross undervaluation of the property in the deeds of sale at
the measly price of 1,000,000.00 for each half when the true market value was then in
the aggregate of at least 14,000,000.00 for the entire property. Even if the undervaluation
was to accommodate the request of Sy to enable her to minimize her liabilities for the
capital gains tax, their acquiescence to the fraud perpetrated against the Government, no
less, still rendered them as parties to the wrongdoing. They were not any less guilty at all.
In the ultimate analysis, their supposed passivity respecting the arrangement to perpetrate
the fraud was not even plausible, because they knew as the buyers that they were not
personally liable for the capital gains taxes and thus had nothing to gain by their
acquiescence. There was simply no acceptable reason for them to have acquiesced to the
fraud, or for them not to have rightfully insisted on the declaration of the full value of the
realty in their deeds of sale. By letting their respective deeds of sale reflect the grossly
inadequate price, they should suffer the consequences, including the inference of their bad
faith in transacting the sales in their favor.
De Vera particularly insists that she and her late husband did not have any hand in the
undervaluation; and that Sy, having prepared the deed of sale, should alone be held
responsible for the undervaluation that had inured only to her benefit as the seller.
However, such insistence was rendered of no consequence herein by the fact that neither
she nor her late husband had seen fit to rectify the undervaluation. It is notable that the De
Veras were contracting parties who appeared to have transacted with full freedom from
undue influence from Sy or anyone else.
Although the petitioners argue that the actual consideration of the sale was nearly
7,000,000.00 for each half of the property, the Court rejects their argument as devoid of
factual basis, for they did not adduce evidence of the actual payment of that amount to Sy.
Accordingly, the recitals of the deeds of sale were controlling on the consideration of the
sales.

Good faith is the honest intention to abstain from taking unconscientious advantage of
another. It means the "freedom from knowledge and circumstances which ought to put a
person on inquiry."38
Given this notion of good faith, therefore, a purchaser in good faith is one who buys the
property of another without notice that some other person has a right to, or interest in, such
property and pays full and fair price for the same. 38 As an examination of the records
shows, the petitioners were not innocent purchasers in good faith and for value. Their
failure to investigate Sy's title despite the nearly simultaneous transactions on the property
that ought to have put them on inquiry manifested their awareness of the flaw in Sy's title.
That they did not also appear to have paid the full price for their share of the property
evinced their not having paid true value. 39
Resultantly, the Court affirms the lower courts, and restores to Domingo her rights of
dominion over the propetiy.
WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals promulgated on
July 16, 201 0; and ORDERS the petitioners to pay the costs of suit.
SO ORDERED.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
G.R. No. 192669 April 21, 2014
RAUL SABERON, JOAN F. SABERON and JACQUELINE SABERON, Petitioners,
vs.
OSCAR VENTANILLA, JR., and CARMEN GLORIA D. VENTANILLA, Respondents.
RESOLUTION
MENDOZA, J.:
For resolution of the Court is a motion for reconsideration of the Court's January 19, 2011
Resolution1 which denied the petition of Raul F. Saberon, Jr., Joan F. Saberon and
Jacqueline F. Saberon (Saberons). In effect, it affirmed the March 12, 2010 Decision 2 and
the June 18, 2010 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 85520,
holding that the June 21, 2005 Decision of the Regional Trial Court, Branch 80, Quezon
City (RTC) in Civil Case No. 96-26486, was correct in, among others, ordering the
cancellation of Transfer Certificate of Title (TCT) Nos. 55396 and 55397 in the name of the
Saberons and Samuel Marquez (Marquez).
This case is an offshoot of two (2) cases involving the same property, docketed as G.R.
No. 82978 and G.R. No. 107282, which had been decided by the Court with finality on
November 22, 1990 and March 16, 1994, respectively.
Antecedent Facts
In the earlier cases, Manila Remnant Co., Inc. (MRCI) was the petitioner, being the owner
of several parcels of land situated in Quezon City, constituting the subdivision known as
Capitol Homes Subdivision Nos. I and II. On July 25, 1972, MRCI entered into a contract
with A.U. Valencia & Co. Inc. (AUVC) entitled "Confirmation of Land Development and
Sales Contract," whereby for a consideration, including sales commission and
management fee, the latter was to develop the aforesaid subdivision with authority to
manage the sales thereof; execute contracts to sell to lot buyers; and issue official
receipts. At that time, the president of AUVC, was Artemio U. Valencia (Valencia).
On March 3, 1970, MRCI and AUVC executed two (2) contracts to sell covering Lots 1 and
2 of Block 17, in favor of Oscar C. Ventanilla, Jr. and Carmen Gloria D. Ventanilla
(Ventanillas), for the combined contract price of 66,571.00 payable monthly for ten (10)
years. The Ventanillas paid the down payment as stipulated in the two (2) contracts.
On March 13, 1970, Valencia, holding out himself as president of MRCI, and without the
knowledge of the Ventanillas, resold the same property to Carlos Crisostomo
(Crisostomo), without any consideration. Valencia transmitted the fictitious contract with
Crisostomo to MRCI while he kept the contracts to sell with the Ventanillas in his private
office files. All the amounts paid by the latter were deposited in Valencias bank account
and remitted to MRCI as payments of Crisostomo. The Ventanillas continued to pay the
monthly installment.

Thereafter, MRCI terminated its business relationship with AUVC on account of
irregularities discovered in its collection and remittances. Consequently, Valencia was
removed as president by the Board of Directors of MRCI. He then stopped transmitting the
Ventanillas monthly installments which at that time, already amounted to 17,925.40 for
Lot 1 and 18,141.95 for Lot 2 (appearing in MRCIs records as credited under the name
of Crisostomo).
On June 8, 1973, AUVC sued MRCI to impugn the abrogation of their agency agreement
before the Court of First Instance, Branch 19, Manila (CFI Manila), which eventually
ordered all lot buyers to deposit their monthly amortizations with the court. On July 17,
1973, AUVC informed the Ventanillas that it was still authorized by the trial court to collect
the monthly amortizations and requested them to continue remitting their payment, with the
assurance that said payments would be deposited later in court.
For AUVCs failure to forward its collections to the trial court as ordered, MRCI caused the
publication of a notice cancelling the contracts to sell of some lot buyers including those of
Crisostomo in whose name the payments of the Ventanillas had been credited.
It was not until March 1978 when the Ventanillas discovered Valencias deception.
Believing that they had already remitted the total amount of 73,122.35 for the two lots,
the Ventanillas offered to pay the balance to MRCI. To their shock, their names as lot
buyers did not appear in MRCIs records. Instead, MRCI showed them a copy of the
contract to sell signed by Valencia, in favor of Crisostomo. MRCI refused the Ventanillas
offer to pay for the remainder of the contract price.
Aggrieved, the Ventanillas commenced an action for specific performance, annulment of
deeds and damages against MRCI, AUVC, and Crisostomo with the Court of First
Instance, Branch 17-B, Quezon City (CFI Quezon City) docketed as Civil Case No. 26411,
where Crisostomo was declared in default for his failure to file an answer.
On November 17, 1980, the CFI Quezon City rendered a decision declaring the contracts
to sell in favor of the Ventanillas as valid and subsisting, and annulling the contract to sell
in favor of Crisostomo. It ordered the MRCI to execute an absolute deed of sale in favor of
the Ventanillas, free from all liens and encumbrances. Damages and attorney's fees in the
total amount of 210,000.00 were also awarded to the Ventanillas for which the MRCI,
AUVC, and Crisostomo were held solidarily liable. The CFI Quezon City ruled further that if
for any reason the transfer of the lots could not be effected, MRCI, AUVC and Crisostomo
would be solidarily liable to the Ventanillas for the reimbursement of the sum of
73,122.35, representing the amount they paid for the two (2) lots, and the legal interest
thereon from March 1970, plus the decreed damages and attorney's fees. Valencia was
also held liable to MRCI for moral and exemplary damages and attorney's fees.
On separate appeals filed by AUVC and MRCI, the CA sustained the CFI Quezon Citys
decision in toto.
The 1990 Case
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
MRCI then filed before this Court a petition for certiorari docketed as G.R. No. 82978, to
review the decision of the CA upholding the solidary liability of MRCI, AUVC and
Crisostomo for the payment of moral and exemplary damages and attorney's fees to the
Ventanillas.
On November 22, 1990, this Court affirmed the decision of the CA and declared the
judgment of the CFI Quezon City immediately executory.
Encouraged by the seeming triumph of their cause, the Ventanillas moved for the issuance
of a writ of execution in Civil Case No. 26411. The writ was issued on May 3, 1991, and
served upon MRCI on May 9, 1991. A notice of levy was annotated in the titles of MRCI on
May 31, 1991.
In a manifestation and motion, however, MRCI alleged that the subject properties could not
longer be delivered to the Ventanillas because they had already been sold to Samuel
Marquez (Marquez) on February 7, 1990, while its petition was pending before this Court.
Nevertheless, MRCI offered to reimburse the amount paid by the Ventanillas, including
legal interest plus damages. MRCI also prayed that its tender of payment be accepted and
that all garnishments on their accounts lifted.
The Ventanillas accepted the amount of 210,000.00 as damages and attorneys fees but
rejected the reimbursement offered by MRCI in lieu of the execution of the absolute deed
of sale. They contended that the alleged sale to Marquez was void, fraudulent, and in
contempt of court and that no claim of ownership over the properties in question had ever
been made by Marquez.
On July 19, 1991, the CFI Quezon City ordered that the garnishment made by the Sheriff
upon the bank account of MRCI could be lifted only upon the deposit to the Court of the
amount of 500,000.00 in cash.
MRCI then moved for reconsideration praying that it be ordered to reimburse the
Ventanillas in the amount of 263,074.10 and that the garnishment of its bank deposit be
lifted. This plea was denied twice by the trial court prompting MRCI to file another petition
for certiorari with the CA, which ruled that the contract to sell in favor of Marquez did not
constitute a legal impediment to the immediate execution of the judgment. Furthermore, it
held that the cash bond fixed by the trial court for the lifting of the garnishment was fair and
reasonable because the value of the lot in question had considerably increased.
The 1994 Case
From the CA, the case was elevated to this Court as G.R. No. 107282 where MRCI argued
that the sale of the properties to Marquez was valid because at the time of the sale, the
issue of the validity of the sale to the Ventanillas had not yet been resolved. Further, there
was no specific injunction against it re-selling the property. As a buyer in good faith,
Marquez had a right to rely on the recitals in the certificate of title. The subject matter of
the controversy having been passed to an innocent purchaser for value, the execution of
the absolute deed of sale in favor of the Ventanillas could not be ordered by the trial court.

The Ventanillas countered that the validity of the sale to them had already been
established even while the previous petition was still awaiting resolution. The petition only
questioned the solidary liability of MRCI to the Ventanillas. Hence, the portion of the
decision ordering MRCI to execute an absolute deed of sale in their favor had already
become final and executory when MRCI failed to appeal it to the Court. Thus, an order
enjoining MRCI from reselling the property in litigation was unnecessary. Besides, the
unusual lack of interest, on the part of Marquez, to protect and assert his right over the
disputed property was, to the Ventanillas, a clear indication that the alleged sale to him
was merely a ploy of MRCI to evade the execution of the absolute deed of sale in their
favor.
On March 16, 1994, the Court settled the controversy in this wise:
The validity of the contract to sell in favor of the Ventanilla spouses is not disputed by the
parties. Even in the previous petition, the recognition of that contract was not assigned as
error of either the trial court or appellate court. The fact that the MRCI did not question the
legality of the award for damages to the Ventanillas also shows that it even then already
acknowledged the validity of the contract to sell in favor of the private respondents.
On top of all this, there are other circumstances that cast suspicion on the validity, not to
say the very existence, of the contract with Marquez.
First, the contract to sell in favor of Marquez was entered into after the lapse of almost ten
years from the rendition of the judgment of the trial court upholding the sale to the
Ventanillas.
Second, the petitioner did not invoke the contract with Marquez during the hearing on the
motion for the issuance of the writ of execution filed by the private respondents. It
disclosed the contract only after the writ of execution had been served upon it.
Third, in its manifestation and motion dated December 21, 1990, the petitioner said it was
ready to deliver the titles to the Ventanillas provided that their counterclaims against
private respondents were paid or offset first. There was no mention of the contract to sell
with Marquez on February 7, 1990.
Fourth, Marquez has not intervened in any of these proceedings to assert and protect his
rights to the subject property as an alleged purchaser in good faith.
At any rate, even if it be assumed that the contract to sell in favor of Marquez is valid, it
cannot prevail over the final and executory judgment ordering MRCI to execute an
absolute deed of sale in favor of the Ventanillas. No less importantly, the records do not
show that Marquez has already paid the supposed balance amounting to 616,000.00 of
the original price of over 800,000.00. (Emphasis supplied)
As it turned out, the execution of the judgment in favor of the Ventanillas was yet far from
fruition. Samuel Cleofe, Register of Deeds for Quezon City (ROD Cleofe) revealed to
them, that on March 11, 1992, MRCI registered a deed of absolute sale to Marquez who
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
eventually sold the same property to the Saberons, which conveyance was registered in
July 1992. ROD Cleofe opined that a judicial order for the cancellation of the titles in the
name of the Saberons was essential before he complied with the writ of execution in Civil
Case No. 26411. Apparently, the notice of levy, through inadvertence, was not carried over
to the title issued to Marquez, the same being a junior encumbrance which was entered
after the contract to sell to Marquez had already been annotated.
Civil Case No. Q-96-26486
Once again, the Ventanillas were constrained to go to court to seek the annulment of the
deed of sale executed between MRCI and Marquez as well as the deed of sale between
Marquez and the Saberons, as the fruits of void conveyances. The case was docketed as
Civil Case No. Q-96-26486 with the Regional Trial Court, Branch 80, Quezon City (RTC).
During the trial, all the defendants, including Edgar Krohn Jr. (Krohn) as President of
MRCI, and Bede Tabalingcos (Tabalingcos) as its legal counsel, filed their respective
answers, except Marquez who was declared in default.
On June 21, 2005, the RTC rendered its decision, the dispositive portion of which reads:
Wherefore, premises considered, judgment is hereby rendered in favour of plaintiffs, the
spouses Oscar and Carmen Ventanilla, and against defendants MRCI, Krohn,
Tabalingcos, Marquez and Saberon, as follows:
(1) Declaring the Transfer Certificated of Title Nos. 55396 and 55397 in the name
of Samuel Marquez, and Transfer Certificates of Title Nos. 63140 and 63141 in
the names of Raul, Jr., Joan and Jacqueline Saberon as null and void;
(2) Ordering defendant MRCI to receive payment of the balance of the purchase
price to be paid by the plaintiffs and to execute a Deed of Absolute Sale in favour
of the plaintiffs, and in case of failure thereof, ordering plaintiffs to consign the
amount with this Court;
(3) Ordering the Register of Deeds to cancel the titles in the name of Marquez
and the Saberons, and to issue new certificates of title in the name of the
spouses Ventanillas upon registration of the Deed of Absolute Sale in favour of
the plaintiffs or proof of their consignment;
(4) Ordering defendant MRCI, Krohn, Tabalingcos and Marquez to pay plaintiffs,
jointly and severally, the sums of:
a. 100,000.00, as moral damages; and
b. 50,000.00, as attorneys fees.

(5) Ordering defendant MRCI, Krohn, Tabalingcos and Marquez to pay
defendants Saberon, jointly and severally, the sum of 7,118,155.88
representing the value of the properties in dispute and the value of the
improvements introduced by defendants Saberon; and
(6) Ordering the defendants to pay the costs of the suit.
Defendants counterclaims are hereby dismissed for lack of merit.
Separate appeals were instituted by MRCI and Tabalingcos, on one hand, and the
Saberons, on the other. The former contended that no fraudulent act could be attributed to
them for the sale of the property to the title of Marquez, considering that ROD Cleofe was
the one who inadvertently omitted the carrying over of the notice of levy to Marquez who
consequently secured a clean title to the lot. MRCI Tabalingcos further claimed that the
sale to Marquez was effected while the previous case was still pending, at a time when
they had every liberty to believe in the legality of their position.
Meanwhile, the Saberons relied on one central argumentthat they were purchasers in
good faith, having relied on the correctness of the certificates of title covering the lots in
question; and therefore, holders of a valid and indefeasible title.
In the assailed decision, the CA made its conclusion hinged on the following findings:
When MRCI executed a Contract to Sell in favor of Marquez in February 1990, it was in
the throes of an appeal from the Decision in Civil Case No. 26411 where its very first
Contracts to Sell to the Ventanillas were upheld over those of Crisostomo. The Marquez
Contract to Sell was in fact the third in a row, and registered a year later, on May 21, 1991,
appears as the first recorded entry in MRCIs titles. The notice of levy in Civil Case No.
26411 came ten days later, on May 31, 1991. Then, in February 1992, MRCI executed a
deed of absolute sale to Marquez and when the new titles were issued in Marquez name,
the notice of levy was not carried over. A few months later, these titles were cancelled by
virtue of a deed of sale to the Saberons and, on the same day, TCT 63140 and 63141
were issued clean to them.
According to the CA, the arguments espoused by MRCI and Tabalingcos were untenable.
The said parties were found guilty of bad faith for selling the lots to Marquez at a time
when litigation as to the validity of the first sale to the Ventanillas was still pending. In other
words, MRCI was sufficiently aware of the Court decision confirming its failure to supervise
and control the affairs of its authorized agent, AUVC, which led to the explicit
pronouncement that the first sale to the Ventanillas was valid. This should have served as
a warning to MRCI that it could no longer deal with the property in deference to the Courts
ruling and affirmation of the trial courts order to execute the deed of sale in favor of the
Ventanillas. Obviously, MRCI took no heed of this caveat. The titles had been transferred
yet again to the Saberons, who claimed to be purchasers in good faith. Unfortunately,
there was an exception to the general rule. The CA cited AFP Mutual Benefit Association
Inc. v. Santiago,4 where the Court ruled that with respect to involuntary liens, an entry of a
notice of levy and attachment in the primary entry or day book of the Registry of Deeds
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
was considered as sufficient notice to all persons that the land was already subject to
attachment. Resultantly, attachment was duly perfected and bound the land.
The Present Petition
Aggrieved by this CA ruling, the Saberons filed the present petition. They claimed that in
1992, a certain Tiks Bautista offered the lots to Raul Saberon, who, after being given
photocopies of the titles to the land, inquired with the Registry of Deeds for Quezon City
(ROD-QC) to verify the authenticity of the same. He found no encumbrances or
annotations on the said titles, other than restrictions for construction and negotiation. As
agreed upon, he paid Marquez the amount of Two Million One Hundred Thousand Pesos
(2,100,000.00) as purchase price for the lots. Upon payment of the real property taxes, a
certification was issued by the Office of the City Treasurer for the purpose of transferring
the title over the property.
Thereafter, Marquez executed the Deed of Absolute Sale in favor of the Saberons. The
ROD-QC then issued TCT Nos. 63140 and 63141 in their names.
Unknown to the Saberons, the former owner of the properties had entered into contracts to
sell with the Ventanillas, way back in 1970. It was only upon receipt of the summons in the
case filed by the Ventanillas with the RTC that they learned of the present controversy.
With the RTC and the CA rulings against their title over the properties, the Saberons now
come to the Court with their vehement insistence that they were purchasers in good faith
and for value. Before purchasing the lots, they exercised due diligence and found no
encumbrance or annotations on the titles. At the same time, the Ventanillas also failed to
rebut the presumption of their good faith as there was no showing that they confederated
with MRCI and its officers to deprive the Ventanillas of their right over the subject
properties.
According to the Saberons, the CA likewise erred in ruling that there was no constructive
notice of the levy made upon the subject lands. They claimed that the appellate court could
not solely rely on AFP Mutual Benefit Association Inc. v. Santiago. 5 Instead, they urged the
Court to interpret
Sections 52 and 42 of Presidential Decree (P.D.) No. 1529 which cover the effects of
registration and the manner thereof; and to examine Section 54 which shows that, in
addition to the filing of the instrument creating, transferring or claiming interest in
registered land less than ownership, a brief memorandum of such shall be made by the
Register of Deeds on the certificate of title and signed by him. Hence, the ruling in AFP,
that an entry of a notice of levy and attachment in the primary entry or day book of the
Registry of Deeds was sufficient notice to all persons that the land was already subject to
such attachment, would be rendered as a superfluity in light of the mandatory character of
the said provision.
The Saberons further pointed that the claim of the Ventanillas over the subject properties
never ripened into ownership as they failed to consign the balance on the purchase price

stipulated on the contracts to sell, thus preventing the obligatory force of the contract from
taking effect.
On October 4, 2010, the Court required the Ventanillas to file their comment to the
petition.6 On January 19, 2011, the Court resolved to deny the Saberons petition for failure
to sufficiently show any reversible error in the assailed judgment by the CA. 7 In its June 15,
2011 Resolution,8 the Court required the Ventanillas to comment on the motion for
reconsideration filed by the Saberons.
Resolution of the Court
At first glance, it would seem that the case involves convoluted issues brought about by
the number of times the Ventanillas were impelled by circumstances to seek judicial action.
Nonetheless, the antecedents would readily reveal that the essential facts are not
disputed: 1) that the subject properties have indeed been the objects of various transfers
effected by MRCI leading to the current controversy between the Saberons and the
Ventanillas; and 2) that prior to the sale to the Saberons, a notice of levy as an
encumbrance was already in existence.
Sections 51 and 52 of P.D. No. 1529 explain the purpose and effects of registering both
voluntary and involuntary instruments, to wit:
Section 51. Conveyance and other dealings by registered owner. An owner of registered
land may convey, mortgage, lease, charge or otherwise deal with the same in accordance
with existing laws. He may use such forms of deeds, mortgages, leases or other voluntary
instruments as are sufficient in law. But no deed, mortgage, lease, or other voluntary
instrument, except a will purporting to convey or affect registered land shall take effect as a
conveyance or bind the land, but shall operate only as a contract between the parties and
as evidence of authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land insofar as third
persons are concerned, and in all cases under this Decree, the registration shall be made
in the office of the Register of Deeds for the province or city where the land lies.
Section 52. Constructive notice upon registration. Every conveyance, mortgage, lease,
lien, attachment, order, judgment, instrument or entry affecting registered land shall, if
registered, filed or entered in the office of the Register of Deeds for the province or city
where the land to which it relates lies, be constructive notice to all persons from the time of
such registering, filing or entering.
These provisions encapsulate the rule that documents, like the certificates of title do not
effect a conveyance of or encumbrances on a parcel of land. Registration is the operative
act that conveys ownership or affects the land insofar as third persons are concerned. By
virtue of registration, a constructive notice to the whole world of such voluntary or
involuntary instrument or court writ or processes, is thereby created.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
The question of utmost relevance to this case, then, is this: whether or not the registration
of the notice of levy had produced constructive notice that would bind third persons despite
the failure of the ROD-QC to annotate the same in the certificates of title?
In answering these questions, the Court is beckoned to rule on two conflicting rights over
the subject properties: the right of the Ventanillas to acquire the title to the registered land
from the moment of inscription of the notice of levy on the day book (or entry book), on one
hand; and the right of the Saberons to rely on what appears on the certificate of title for
purposes of voluntary dealings with the same parcel of land, on the other.
The Saberons maintain that they had no notice of any defect, irregularity or encumbrance
in the titles of the property they purchased. In its decision, however, the RTC pointed out
that their suspicion should have been aroused by the circumstance that Marquez, who was
not engaged in the buy-and-sell business and had the property for only a few months,
would offer the same for sale. Although the RTC found that the Saberons may not be
considered as innocent purchasers for value because of this circumstance, it, nonetheless,
ruled that they, who might well be unwilling victims of the fraudulent scheme employed by
MRCI and Marquez, were entitled to actual and compensatory damages.
To this latter finding, the Court agrees. The Saberons could not be said to have authored
the entanglement they found themselves in. No fault can be attributed to them for relying
on the face of the title presented by Marquez. This is bolstered by the fact that the RTC
decision shows no categorical finding that the Saberons purchase of the lots from
Marquez was tainted with bad faith. That the Saberons should have harbored doubts
against Marquez is too high a standard to impose on a buyer of titled land. This is in
consonance to the rule that the one who deals with property registered under the Torrens
system is charged with notice only of such burdens and claims as are annotated on the
title.9 "All persons dealing with property covered by Torrens certificate of title are not
required to explore further 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."10 These rules remain as essential features of the Torrens system. The present
case does not entail a modification or overturning of these principles.
Be that as it may, no fault can likewise be imputed to the Ventanillas.
In ultimately ruling for the Ventanillas, the courts a quo focused on the superiority of their
notice of levy and the constructive notice against the whole world which it had produced
and which effectively bound third persons including the Saberons.
It has already been established in the two previous cases decided by the Court that the
contracts to sell executed in favor of the Ventanillas are valid and subsisting. Clearly, it has
been acknowledged, even by MRCI, as can be seen in the latters own choice to only
question their solidary liability in the 1990 case and its failure to assign the same as an
error in the 1994 case. In the same vein, the issue on Marquezs title had already been
passed upon and settled in the 1994 case. That he purchased the lots prior to the
annotation of the notice of levy in MRCIs title was of no moment. In fact, the Court
explicitly declared that MRCIs transaction with Marquez "cannot prevail over the final and

executory judgment ordering MRCI to execute an absolute deed of sale in favor of the
Ventanillas."
These favorable findings prompted the Ventanillas to register the notice of levy on the
properties. The records show that on the strength of a final and executory decision by the
Court, they successfully obtained a writ of execution from the RTC and a notice of levy
was then entered, albeit on the primary entry book only. The contract to sell to Marquez
was registered on May 21, 1991, while the notice of levy was issued ten (10) days later, or
on May 31, 1991. In February 1992, MRCI executed the Deed of Sale with Marquez, under
whose name the clean titles, sans the notice of levy, were issued. A year later, or on
March 11, 1992, MRCI registered the deed of sale to Marquez who later sold the same
property to the Saberons.
This complex situation could have been avoided if it were not for the failure of ROD Cleofe
to carry over the notice of levy to Marquezs title, serving as a senior encumbrance that
might have dissuaded the Saberons from purchasing the properties.
The Court agrees with the position of the RTC in rejecting ROD Cleofes theory.
Distinctions between a contract to sell and a contract of sale are well-established in
urisprudence.1wphi1 In a contract of sale, the title to the property passes to the vendee
upon the delivery of the thing sold; in a contract to sell, ownership is, by agreement,
reserved in the vendor and is not to pass to the vendee until full payment of the purchase
price. Otherwise stated, in a contract of sale, the vendor loses ownership over the property
and cannot recover it until and unless the contract is resolved or rescinded; whereas, in a
contract to sell, title is retained by the vendor until full payment of the price. In the latter
contract, payment of the price is a positive suspensive condition, failure of which is not a
breach but an event that prevents the obligation of the vendor to convey title from
becoming effective.11
It is undeniable, therefore, that no title was transferred to Marquez upon the annotation of
the contract to sell on MRCIs title. As correctly found by the trial court, the contract to sell
cannot be substituted by the Deed of Absolute Sale as a "mere conclusion" of the previous
contract since the owners of the properties under the two instruments are different. 12
Considering that the deed of sale in favor of Marquez was of later registration, the notice of
levy should have been carried over to the title as a senior encumbrance.
Corollary to this is the rule that a levy of a judgment debtor creates a lien, which nothing
can subsequently destroy except the very dissolution of the attachment of the levy
itself.13 Prior registration of the lien creates a preference, since the act of registration is the
operative act to convey and affect the land. 14 Jurisprudence dictates that the said lien
continues until the debt is paid, or the sale is had under an execution issued on the
judgment or until the judgment is satisfied, or the attachment is discharged or vacated in
the same manner provided by law. Under no law, not even P.D. No. 1529, is it stated that
an attachment shall be discharged upon sale of the property other than under execution. 15
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Additionally, Section 59 of P.D. No. 1529 provides that, "[i]f, at the time of the transfer,
subsisting encumbrances or annotations appear in the registration book, they shall be
carried over and stated in the new certificate or certificates, except so far as they may be
simultaneously released or discharged." This provision undoubtedly speaks of the
ministerial duty on the part of the Register of Deeds to carry over existing encumbrances
to the certificates of title.
From the foregoing, ROD Cleofes theory that a deed of sale, as a mere conclusion of a
contract to sell, turns into a senior encumbrance which may surpass a notice of levy, has
no leg to stand on. It was, in fact, properly rejected by the courts a quo. Verily, the
controversy at hand arose not from the Ventanillas fault, but from ROD Cleofes misplaced
understanding of his duty under the law.
Surely, the Ventanillas had every right to presume that the Register of Deeds would carry
over the notice of levy to subsequent titles covering the subject properties. The notice was
registered precisely to bind the properties and to serve as caution to third persons who
might potentially deal with the property under the custody of the law. In DBP v. Acting
Register of Deeds of Nueva Ecija,16 the Court ruled that entry alone produced the effect of
registration, whether the transaction entered was a voluntary or involuntary one, so long as
the registrant had complied with all that was required of him for purposes of entry and
annotation, and nothing more remained to be done but a duty incumbent solely on the
Register of Deeds.
While the Court is not unmindful that a buyer is charged with notice only of such burdens
and claims as are annotated on the title, the RTC and the CA are both correct in applying
the rule as to the effects of involuntary registration. In cases of voluntary registration of
documents, an innocent purchaser for value of registered land becomes the registered
owner, and, in contemplation of law the holder of a certificate of title, the moment he
presents and files a duly notarized and valid deed of sale and the same is entered in the
day book and at the same time he surrenders or presents the owner's duplicate certificate
of title covering the land sold and pays the registration fees, because what remains to be
done lies not within his power to perform. The Register of Deeds is duty bound to perform
it.17 In cases of involuntary registration, an entry thereof in the day book is a sufficient
notice to all persons even if the owner's duplicate certificate of title is not presented to the
register of deeds. Therefore, in the registration of an attachment, levy upon execution,
notice of lis pendens, and the like, the entry thereof in the day book is a sufficient notice to
all persons of such adverse claim.18
This rule was reiterated in the more recent case of Armed Forces and Police Mutual
Benefit Association, Inc., v. Santiago,19 as relied upon by the CA. In AFP, the Notice of
Levy was presented for registration in the Registry of Deeds of Pasig City. The Notice was
entered in the Primary Entry Book, but was not annotated on the TCT because the original
copy of the said title on file in the Registry of Deeds was not available at that time. Six (6)
days after the presentation of the Notice of Levy, the Deed of Absolute Sale involving the
same parcel of land was presented for registration and likewise entered. The deed of sale
was examined by the same employee who examined the notice of levy, but she failed to
notice that the title subject of the sale was the same title which was the subject of the
notice of levy earlier presented. Unaware of the previous presentation of the notice of levy,
the Register of Deeds issued a certificate of title in the name of the vendee on the basis of

the deed of sale. The Register of Deeds in AFP immediately requested the vendee to
surrender the documents in light of the mistake discovered so that he could take
appropriate rectification or correction. Settling the issue on whether the notice of levy could
be annotated in the certificate of title, the Court ruled in the affirmative on the ground that
the preference created by the levy on attachment was not diminished by the subsequent
registration of the prior sale. Superiority and preference in rights were given to the
registration of the levy on attachment; although the notice of attachment had not been
noted on the certificate of title, its notation in the book of entry of the Register of Deeds
produced all the effects which the law gave to its registration or inscription, to wit:
Under the rule of notice, it is presumed that the purchaser has examined every
instrument of record affecting the title. Such presumption is irrebuttable. He is charged with
notice of every fact shown by the record and is presumed to know every fact shown by the
record and 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
is a rule of law. The rule must be absolute; any variation would lead to endless confusion
and useless litigation. For these reasons, a declaration from the court that respondent was
in bad faith is not necessary in order that the notice of levy on attachment may be
annotated on TCT No. PT-94912.
The fact that the notice of levy on attachment was not annotated on the original title on file
in the Registry of Deeds, which resulted in its non-annotation on the title TCT No. PT-
94912, should not prejudice petitioner. As long as the requisites required by law in order to
effect attachment are complied with and the appropriate fees duly paid, attachment is duly
perfected. The attachment already binds the land. This is because what remains to be
done lies not within the petitioners power to perform but is a duty incumbent solely on the
Register of Deeds. (Emphasis supplied)
In the case at bench, the notice of levy covering the subject property was annotated in the
entry book of the ROD QC prior to the issuance of a TCT in the name of the Saberons.
Clearly, the Ventanillas levy was placed on record prior to the sale. This shows the
superiority and preference in rights of the Ventanillas over the property as against the
Saberons. In AFP, the Court upheld the registration of the levy on attachment in the
primary entry book as a senior encumbrance despite the mistake of the ROD, the Court
must, a fortiori, sustain the notice of levy registered by the Ventanillas notwithstanding the
nonfeasance of ROD Cleofe. Again, the prevailing rule is that there is effective registration
once the registrant has fulfilled all that is needed of him for purposes of entry and
annotation, so that what is left to be accomplished lies solely on the Register of Deeds. 20
Suffice it to say, no bad faith can be ascribed to the parties alike. Nevertheless, the equal
footing of the parties necessarily tilts in favor of the superiority of the Ventanillas notice of
levy, as discussed.
The Court also sees no reason to dwell in the contention that the rights or interests of the
Ventanillas in the subject properties never ripened into ownership. It bears stressing that
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
the previous decisions discussed herein already sealed the validity of the contract to sell
issued to the Ventanillas decades ago. As found by the RTC, it was MRCIs obstinate
refusal to accept their tender of payment, not to mention the devious transfer of the
property, which caused the decade-long delay of the execution of the deed of sale in their
favor. This is a finding that the Court, which is not a trier of facts, will have to respect.
In the same vein, the attribution of laches against the Ventanillas is flawed. Their failure to
learn about the structures being built on the subject lands and the payment of real property
taxes by the Saberons is not sufficient justification to withhold the declaration of their
ownership over it. Against a different factual milieu, laches may be said to have set it but
not so in this case. While the Ventanillas may have been unaware that improvements were
being erected over the lots, this obliviousness can, by no means, be treated as a lack of
vigilance on their part. It bears stressing that the Ventanillas are now of advanced age and
retired as university professors. Considering the length of litigation which they had to
endure in order to assert their right over the property which they have painstakingly paid
for decades ago, to hold now that they have been remiss in the protection of their rights
would be the height of impropriety, if not injustice. To exact from them an obligation to visit
the land in litigation every so often, lest they be held to have slept on their rights, is
iniquitous and unreasonable. All told, the Ventanillas remain as innocent victims of
deception.
The Court deems it significant to note that the amount of 7,118,115.88 awarded to the
Saberons by the RTC is to be satisfied by MRCI, Krohn, Tabalingcos, and Marquez, who
have not been impleaded as parties to the present petition, thus, rendering the said award
final and executory. The said amount, however, is separate and distinct from those
provided under Article 44821 in relation to Article 54622 of the Civil Code. In the petition, the
Saberons invoked the said provisions, claiming that they are entitled to reimbursement of
all the expenses incurred in the introduction of improvements on the subject lands
amounting to 23,058,822.79.
The Court finds the Saberons to be builders in good faith.
No less than the court a quo observed that "no actual evidence that the Saberons
connived with the MRCI and Marquez to have the titles registered in their names to the
prejudice of the (Ventanillas)" and that what was obvious was that "the Saberons dealt with
clean certificates of titles." Also quite telling on this point is the finding that MRCI, Krohn,
Tabalingcos, and Marquez are liable to the Saberons. The RTC reasoned out in the
following wise:
This Court is not convinced, however that defendants Saberon took part in the fraudulent
scheme employed by the other defendants against the plaintiffs. Although they may not be
considered as innocent purchasers for value shown in the discussion above, this Court is
not ready to conclude that the Saberons joined the other defendants in their efforts to
frustrate plaintiffs rights over the disputed properties. On the contrary, they may be
considered victims of the same fraudulent employed by defendants MRCI and Marquez,
and thus can rightfully claim damages from the same. 23

Consequently, Article 448 in relation to Article 546 of the Civil Code will apply.1wphi1 The
provisions respectively read:
Article 448. The owner of the land on which anything has been built, sow or planted in
good faith, shall have the right to appropriate, as his own the works, sowing, or planting,
after payment of the indemnity provided for in Article 546 and 548, or to oblige the one who
built or planted to pay the price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land and if its value is
considerably more than that of the building or trees. In such case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon the terms of the lease and in case
disagreement, the court shall fix the terms thereof.
Article 546. Necessary expenses shall be refunded to every possessor; but only the
possessor in good faith may retain the thing until he has been reimbursed therefore.
Useful expenses shall be refunded only to the possessor in good faith with the same right
of retention, the person who has defeated him in the possession having the option of
refunding the amount of the expenses or of paying the increase in value which the thing
may have acquired by reason thereof.
Thus, the two options available to the Ventanillas: 1) they may exercise the right to
appropriate after payment of indemnity representing the value of the improvements
introduced and the necessary and useful expenses defrayed on the subject lots; or 2) they
may forego payment of the said indemnity and instead, oblige the Saberons to pay the
price of the land.
Should the Ventanillas elect to appropriate the improvements, the trial court is ordered to
determine the value of the improvements and the necessary and useful expenses after
hearing and reception of evidence. Should the Ventanillas, however, pursue the option to
oblige the Saberons to pay the "price of the land," the trial court is ordered to determine
said price to be paid to the V entanillas.
WHEREFORE, the Motion for Reconsideration is PARTIALLY GRANTED. The appealed
March 12, 2010 Decision and the June 18, 2010 Resolution of the Court of Appeals in CA-
G.R. CV No. 85520 are AFFIRMED with modification in that the Ventanillas are given a
period of sixty ( 60) days from finality of this Resolution to decide whether to pay the
Saberons the value of the improvements and the necessary and useful expenses defrayed
on the 2 lots or to oblige the Saberons to pay them the "price" of said lots. Depending on
the option exercised by the Ventanillas, the case is hereby remanded to the court of origin
for further proceedings as to the determination of reimbursement due to the petitioners or
of the "price" of the subject lots due to the Ventanillas.
SO ORDERED.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
[G.R. No. 128354. April 26, 2005]
HOME BANKERS SAVINGS & TRUST CO., petitioner, vs. THE HONORABLE COURT
OF APPEALS, PABLO N. AREVALO, FRANCISCO A. UY, SPOUSES
LEANDRO A. SORIANO, JR. and LILIAN SORIANO, ALFREDO LIM and
FELISA CHI LIM/ALFREDO LIM, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to annul the Decision[1] of the Court of Appeals (CA) dated November 28, 1996 in
CA-G.R. SP No. 40892 and its Resolution dated February 19, 1997 denying petitioners
motion for reconsideration.
Each of private respondents entered into separate contracts to sell with
TransAmerican Sales and Exposition (TransAmerican) through the latters Owner/General
Manager, Engr. Jesus Garcia, involving certain portions of land covered by Transfer
Certificate of Title (TCT) No. 19155, located at No. 45 Gen. Lim Street, Heroes Hill,
Quezon City, together with one unit three-storey townhouse to be built on each portion, as
follows:
Respondent Pablo N. Arevalo purchased the portion of land denominated as Unit No.
5[2] for the amount of P750,000.00 on August 21, 1988 and had already fully paid the
purchase price on September 3, 1988;
Respondent Alfredo Lim purchased the portion of land denominated as Unit No. 1[3] for the
amount of P800,000.00 on December 22, 1988 and fully paid the same upon execution of
the agreement on the same day;
Respondent Francisco A. Uy purchased the portion of land denominated as Unit No. 6 [4] on
October 29, 1988 in the amount of P800,000.00 payable in installments and had allegedly
made a total payment of P581,507.41. He ordered to stop the payment of all [postdated]
checks from September 1990 to November 1995 on the ground of non-completion of his
unit and had later learned of the foreclosure of the property;
Respondent spouses Leandro A. Soriano, Jr. and Lilian Soriano purchased the portion of
land denominated as Unit No. 3[5] on February 15, 1990 in the amount of P1,600,000.00
and had allegedly made a payment of P669,960.00. They had stopped paying because of
non-completion of the project and had later learned of the foreclosure of the property;
Respondents Alfredo Lim and Santos Lim purchased the portion of land denominated as
Unit No. 7[6] for P700,000.00 on October 1988 and had been fully paid as of March 18,
1989; Santos Lim subsequently sold and assigned his share of the property to private
respondent Felisa Chi Lim on May 12, 1989.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

It is stipulated in their respective contracts that their individual townhouses will be fully 1. Declaring the mortgage executed by and between respondents Engr. Jesus
completed and constructed as per plans and specifications and the respective titles thereto Garcia/TransAmerican Sales and Exposition and Home Bankers Savings and Trust
shall be delivered and transferred to private respondents free from all liens and Company (formerly Home Savings Bank and Trust Company) to be unenforceable as
encumbrances upon their full payment of the purchase price. However, despite repeated against all the complainants;
demands, Garcia/TransAmerican failed to comply with their undertakings.
On May 30, 1989, Engr. Garcia and his wife Lorelie Garcia obtained from petitioner 2. Ordering the Register of Deeds of Quezon City to cancel the annotations of the
Home Bankers Savings and Trust Company (formerly Home Savings Bank and Trust mortgage indebtedness between respondents Engr. Jesus Garcia and Home Bankers
Company) a loan in the amount of P4,000,000.00 and without the prior approval of the Savings and Trust Company (formerly Home Savings Bank and Trust Company);
Housing and Land Use Regulatory Board (HLURB), the spouses mortgaged[7] eight lots
covered by TCT Nos. 3349 to 3356 as collateral. Petitioner registered its mortgage on 3. Ordering, likewise the Register of Deeds of Quezon City to cancel the annotation of the
these titles without any other encumbrance or lien annotated therein. The proceeds of the Certificate of Sale in favor of the respondent Home Bankers Savings and Trust Company
loan were intended for the development of the lots into an eight-unit townhouse project. on the following Transfer Certificates of Title to wit:
However, five out of these eight titles turned out to be private respondents townhouses
subject of the contracts to sell with Garcia/TransAmerican.
1) TCT No. 3350
When the loan became due, Garcia failed to pay his obligation to petitioner. 2) TCT No. 3351
Consequently, petitioner instituted an extrajudicial foreclosure [8] on the subject lots and 3) TCT No. 3352
being the highest bidder in the public auction, a certificate of sale [9] in its favor was issued 4) TCT No. 3354
by the sheriff on February 26, 1990. Subsequently, the sheriffs certificate of sale was 5) TCT No. 3356
registered and annotated on the titles of the subject lots in the Register of Deeds of
Quezon City. 4. Ordering respondent Home Bankers Savings and Trust Company (formerly Home
Savings Bank and Trust Company) to:
On November 8, 1990, private respondents filed a complaint with the Office of
Appeals, Adjudication and Legal Affairs (OAALA), HLURB, against Garcia/TransAmerican
as seller/developer of the property and petitioner, as indispensable party, for non-delivery 4.1. AS TO THE FIRST CAUSE OF ACTION
of titles and non-completion of the subdivision project.[10] They prayed for the completion of
the units, annulment of the mortgage in favor of petitioner, release of the mortgage on the Deliver to Complainant Pablo N. Arevalo TCT No. 3352
lots with fully paid owners and delivery of their titles, and for petitioner to compute free from all liens and encumbrances.
individual loan values of amortizing respondents and to accept payments from them and 4.2. AS TO THE SECOND CAUSE OF ACTION
damages.
Deliver to Complainant Alfredo Lim TCT No. 3356 free
Petitioner filed its Answer contending that private respondents have no cause of from all liens and encumbrances.
action against it; that at the time of the loan application and execution of the promissory
note and real estate mortgage by Garcia, there were no known individual buyers of the 4.3. AS TO THE THIRD CAUSE OF ACTION
subject land nor annotation of any contracts, liens or encumbrances of third persons on the
titles of the subject lots; that the loan was granted and released without notifying HLURB To compute and/or determine the loan value of
as it was not necessary. complainant Francisco A. Uy who was not able to
complete or make full payment and to accept payment
Private respondents filed their Reply and a motion for the judgment on the pleadings. and/or receive amortization from said complainant
Petitioner did not file a rejoinder. Private respondents filed a manifestation reiterating for a Francisco A. Uy and upon full payment to deliver TCT
judgment on their pleadings and asked that the reliefs prayed for be rendered as far as No. 3351 free from all liens and encumbrances.
petitioner was concerned. Upon motion of private respondents, the case against
Garcia/TransAmerican was archived for failure to serve summons on him/it despite efforts 4.4. AS TO THE FOURTH CAUSE OF ACTION
to locate his whereabouts or its office. The case was then considered submitted for
decision. To compute and/or determine the loan value of
Complainant Spouses Leandro A. Soriano, Jr. and Lilian
On August 16, 1991, OAALA rendered its Decision, [11] the dispositive portion of Soriano who were not able to complete or make full
which reads: payment and to accept and/or receive amortization from
said Complainants Soriano and upon full payment to
deliver TCT No. 3354 free from all liens and
WHEREFORE, Judgment is hereby rendered as follows:
encumbrances.

4.5. AS TO THE FIFTH CAUSE OF ACTION
Deliver to complainant Alfredo Lim and Felisa Chi Lim
TCT No. 3350 free from all liens and encumbrances.
without prejudice to its right to require respondent Engr. Jesus Garcia/TransAmerican to
constitute new collaterals in lieu of the said titles sufficient in value to cover the mortgage
obligation.[12]
Petitioner filed an appeal with the Board of Commissioners of the HLURB which
dismissed the same in a decision dated June 15, 1992. [13] Petitioner then elevated the
case to the Office of the President which rendered a decision dated June 30,
1995[14] dismissing the appeal and affirming the June 15, 1992 decision of the HLURB.
Petitioners motion for reconsideration was also denied in a Resolution dated May 7,
1996.[15]
Petitioner filed a petition for review with the CA which, in the herein assailed decision
dated November 28, 1996, denied the petition and affirmed the decision of the Office of the
President. The CA applied the case of Union Bank of the Philippines vs. HLURB, et
al.,[16] where it was held that the act of a subdivision developer of mortgaging the
subdivision without the knowledge and consent of a unit buyer and without the approval of
the National Housing Authority (NHA, now HLURB) is violative of Section 18 of P.D. No.
957 thus, falling under the exclusive jurisdiction of HLURB.
The CA upheld the findings of the OAALA, HLURB that private respondents had
already entered into separate contracts to sell with TransAmerican as early as 1988 while
it was only in 1989 that spouses Garcia applied for a loan with petitioner and executed a
mortgage contract over the subject lots; that the proceeds of the loan were purposely
intended for the development of a property which was the same property subject of the
contracts to sell; that despite the contracts to sell, Garcia/TransAmerican did not apprise
petitioner of the existence of these contracts nor did petitioner exhaust any effort to inquire
into their existence since petitioner merely relied on the purported clean reconstituted titles
in the name of Garcia; that the mortgage of the subject lots without the consent of the
buyers and the authorization of the HLURB is a clear violation of P.D. No. 957; that the
mortgage contract is void and unenforceable against private respondents.
Petitioners motion for reconsideration was denied by the CA in its Resolution dated
February 19, 1997.[17]
Petitioner is now before us raising the following grounds in support of its petition:
A. THE OFFICE OF THE PRESIDENT ERRED IN RULING THAT THE HLURB
HAS JURISDICTION TO NULLIFY OR DECLARE UNENFORCEABLE
THE REAL ESTATE MORTGAGE VALIDLY CONSTITUTED BY THE
OWNER.
B. ASSUMING ARGUENDO THAT THE HLURB HAS JURISDICTION,
RESPONDENT COURT MANIFESTLY ERRED IN FINDING THE REAL
ESTATE MORTGAGE IN FAVOR OF HOME AS INVALID AND
UNENFORCEABLE AGAINST RESPONDENTS.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
C. IN THE EVENT THAT THE DECISION OF THE RESPONDENT COURT
FINDING THE REAL ESTATE MORTGAGE IN FAVOR OF HOME AS
INVALID AND UNENFORCEABLE AGAINST RESPONDENTS IS
UPHELD, THE UNREGISTERED CONTRACTS TO SELL IN FAVOR OF
RESPONDENTS SHOULD ALSO BE HELD VALID ONLY AS TO THE
PARTIES THERETO BUT UNENFORCEABLE AGAINST PETITIONER.
Private respondents filed their Comment and petitioner filed its Reply thereto.
In a Resolution dated February 23, 2004, we gave due course to the petition and
required the parties to submit their respective memoranda which they complied with.
The petition is devoid of merit.
Notably, the issues raised are mere rehash of the issues already passed upon by the
HLURB, the Office of the President and the CA which we uphold as we find no reversible
errors committed.
Petitioner claims that HLURB has no power to declare the mortgage contract over
real property executed between a real estate developer and petitioner, a banking
institution, void or unenforceable, as it is properly within the jurisdiction of the Regional
Trial Court. Petitioner asserts that being a mortgagee of the subject lots and a purchaser in
good faith, it is not a project owner, developer, or dealer contemplated under P.D. No.
1344, the law which expanded the jurisdiction of the NHA; and that since there is no seller-
buyer relationship existing between it and private respondents, HLURB has no jurisdiction
to rule on the validity of the mortgage and to annul foreclosure proceedings.
The argument is untenable.
The CA did not err in affirming the decision of the Office of the President that HLURB
has jurisdiction to declare invalid the mortgage contract executed between
Garcia/TransAmerican and petitioner over the subject lots insofar as private respondents
are concerned. It correctly relied on Union Bank of the Philippines vs. HLURB, et
al.[18] where we squarely ruled on the question of HLURBs jurisdiction to hear and decide a
condominium buyers complaint for: (a) annulment of a real estate mortgage constituted by
the project owner without the consent of the buyer and without the prior written approval of
the NHA; (b) annulment of the foreclosure sale; and (c) annulment of the condominium
certificate of title that was issued to the highest bidder at the foreclosure sale, thus:
. . . The issue in HLURB Case No. REM-062689-4077 is the validity of the real estate
mortgage of Davids condominium unit that FRDC executed in favor of the Union Bank and
Far East Bank without prior approval of the National Housing Authority and the legality of
the title which the mortgage banks acquired as highest bidder therefore in the extrajudicial
foreclosure sale. The applicable provisions of P.D. No. 957, otherwise known as The
Subdivision and Condominium Buyers Protective Decree are quoted hereunder as follows:
Sec. 3. NATIONAL HOUSING AUTHORITY. The National Housing Authority shall have
exclusive jurisdiction to regulate the real estate trade and business in accordance with the
provisions of this Decree.
Section 18. Mortgages No mortgage on any unit or lot shall be made by the owner or
developer without prior written approval of the authority. Such approval shall not be

granted unless it is shown that the proceeds of the mortgage loan shall be used for the
development of the condominium or subdivision project and effective measures have been
provided to ensure such utilization. The loan value of each lot or unit covered by the
mortgage shall be determined and the buyer thereof if any shall be notified before the
release of the loan. The buyer may, at his option, pay his installment for the lot or unit
directly to the mortgagee who shall apply the payments to the corresponding mortgage
indebtedness secured by the particular lot or unit being paid for, with a view to enabling
said buyer to obtain title over the lot or unit promptly after full payment thereof.
P.D. No. 1344 of April 2, 1978 expanded the jurisdiction of the National Housing Authority
to include the following:
Sec. 1. In the exercise of its function to regulate the real estate trade and business and in
addition to its powers provided for in Presidential Decree No. 957, the National Housing
Authority shall have exclusive jurisdiction to hear and decide cases of the following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision
lot or condominium unit buyer against the project owner,
developer, dealer, broker or salesman; and
C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, broker
or salesman.
On February 7, 1981, Executive Order No. 648 transferred the regulatory and quasi-
judicial functions of the NHA to the Human Settlements Regulatory Commission.
Sec. 8. TRANSFER OF FUNCTIONS. The regulatory functions of the National Housing
Authority pursuant to Presidential Decree Nos. 957, 1216, 1344 and other related laws are
hereby transferred to the Commission, together with such applicable personnel,
appropriation, records, equipment and property necessary for the enforcement and
implementation of such functions. Among these regulatory functions are:
1. Regulation of the real estate trade and business:
...
7. Approval of mortgage on any subdivision lot or
condominium unit made by the owner or developer;
...
11. Hear and decide cases on unsound real estate business
practices; claims involving refund filed against project
owners, developers, dealers, brokers, or salesmen; and
cases of specific performance.
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Land Titles and Deeds (Finals) 2017
Executive Order No. 90 dated December 17, 1986 changed the name of the Human
Settlements Regulatory Commission to Housing and Land Use Regulatory Board
(HLURB).
Clearly, FRDCs act of mortgaging the condominium project to Bancom and FEBTC,
without the knowledge and consent of David as buyer of a unit therein, and without the
approval of the NHA (now HLURB) as required by P.D. No. 957, was not only an unsound
real estate business practice but also highly prejudicial to the buyer. David, who has a
cause of action for annulment of the mortgage, the mortgage foreclosure sale, and the
condominium certificate of title that was issued to the UBP and FEBTC as the highest
bidders at the sale. The case falls within the exclusive jurisdiction of the NHA (now
HLURB) as provided in P.D. No. 957 of 1976 and P.D. No. 1344 of 1978.
...
We hold that the jurisdiction of the HLURB to regulate the real estate trade is broad
enough to include jurisdiction over complaints for specific performance of the sale, or
annulment of the mortgage, of a condominium unit, with damages. [19]
Petitioner avers that the Union Bank ruling is not applicable in its case, since it had
no knowledge of any buyer of the subject lots at the time the mortgage was constituted;
that there was no construction in the subject lots at the time petitioner accepted the same
as collateral; that the title to the subject property was still in the process of being
reconstituted and the loan was in fact meant for the development of the subject lots into an
eight-unit townhouse project.
We are not persuaded.
Contrary to petitioners claim that there were no buyers of the subject lots at the time
of the constitution of the mortgage, records show that private respondents Arevalo, Uy,
Alfredo Lim and Santos Lim had entered into contracts to sell with Garcia/TransAmerican
as early as 1988 for their respective lots. In fact, they, except for Uy, had already fully paid
their townhouse units in 1988 without the certificates of title being delivered to them.
Garcia mortgaged the subject lots without their knowledge and consent.
While private respondents spouses Soriano bought the subject lots after the
constitution of the mortgage in favor of petitioner, the subject lots are, as early as 1988,
subdivision lots which as defined under Section 2(e) of P.D. No. 957 to mean any of the
lots, whether residential, commercial, industrial, or recreational in a subdivision
project[20] are entitled to the protection of P.D. No. 957.
Under Section 18 of P.D. No. 957, it is provided that no mortgage on any unit or lot
shall be made by the owner or developer without prior written approval of the authority.
Such approval shall not be granted unless it is shown that the proceeds of the mortgage
loan shall be used for the development of the condominium or subdivision project and
effective measures have been provided to ensure such utilization. As in the Union Bank,
the mortgage was constituted on the subject lots in favor of petitioner without the prior
written approval from the HLURB, thus HLURB has jurisdiction to rule on the validity of the
mortgage.

Notwithstanding that petitioner became the owner of the subject lots by being the
highest bidder in the extrajudicial foreclosure sale, it must be remembered that it was first
a mortgagee of the same. Since the lot was mortgaged in violation of Section 18 of P.D.
No. 957, HLURB has jurisdiction to declare the mortgage void insofar as private
respondents are concerned and to annul the foreclosure sale. In Far East Bank and Trust
Co. vs. Marquez,[21] we held that Section 18 of P.D. No. 957 is a prohibitory law, and acts
committed contrary to it are void. We said:
In determining whether a law is mandatory, it is necessary to ascertain the legislative
intent, as stated by Sen. Arturo M. Tolentino, an authority on civil law:
There is no well-defined rule by which a mandatory or prohibitory law may, in all
circumstances, be distinguished from one which is directory, suppletory, or permissive. In
the determination of this question, the prime object is to ascertain the legislative intention.
Generally speaking, those provisions which are mere matter of form, or which are not
material, do not affect any substantial right, and do not relate to the essence of the thing to
be done, so that compliance is a matter of convenience rather than substance, are
considered to be directory. On the other hand, statutory provisions which relate to matters
of substance, affect substantial rights and are the very essence of the thing required to be
done, are regarded as mandatory.
In Philippine National Bank vs. Office of the President, we had occasion to mull over the
intent of P.D. No. 957 thus:
. . . [T]he unmistakable intent of the law [is] to protect innocent lot buyers from scheming
subdivision developers. As between these small lot buyers and the gigantic financial
institutions which the developers deal with, it is obvious that the law as an instrument of
social justice must favor the weak. Indeed, the petitioner Bank had at its disposal vast
resources with which it could adequately protect its loan activities, and therefore is
presumed to have conducted the usual due diligence checking and ascertaining (whether
thru ocular inspection or other modes of investigation) the actual status, condition,
utilization and occupancy of the property offered as collateral, . . . On the other hand,
private respondents obviously were powerless to discover attempt of the land developer to
hypothecate the property being sold to them. It was precisely in order to deal with this kind
of situation that P.D. No. 957 was enacted, its very essence and intendment being to
provide a protective mantle over helpless citizens who may fall prey to the razzmatazz of
what P.D. No. 957 termed unscrupulous subdivision and condominium sellers.
Concededly, P.D. No. 957 aims to protect innocent lot buyers. Section 18 of the decree
directly addresses the problem of fraud committed against buyers when the lot they have
contracted to purchase, and which they have religiously paid for, is mortgaged without their
knowledge. The avowed purpose of P.D. No. 957 compels the reading of Section 18 as
prohibitory acts committed contrary to it are void. Such construal ensures the attainment of
the purpose of the law: to protect lot buyers, so that they do not end up still homeless
despite having fully paid for their home lots with their hard-earned cash.[22]
Since the mortgage is void, HLURBs orders of the cancellation of the sheriffs certificate of
sale, release of the mortgaged lots and delivery of the corresponding titles to respondents
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
who had fully paid the purchase price of the units are but the necessary consequences of
the invalidity of the mortgage for the protection of private respondents.
Anent the second issue, petitioner contends that since the titles on their face were
free from any claims, liens and encumbrances at the time of the mortgage, it is not obliged
under the law to go beyond the certificates of title registered under the Torrens system and
had every reason to rely on the correctness and validity of those titles.
We are not convinced.
While the cases[23] cited by petitioner held that the mortgagee is not under obligation
to look beyond the certificate of title when on its face, it was free from lien or
encumbrances, the mortgagees therein were considered in good faith as they were totally
innocent and free from negligence or wrongdoing in the transaction. In this case, petitioner
knew that the loan it was extending to Garcia/TransAmerican was for the purpose of the
development of the eight-unit townhouses. Petitioners insistence that prior to the approval
of the loan, it undertook a thorough check on the property and found the titles free from
liens and encumbrances would not suffice. It was incumbent upon petitioner to inquire into
the status of the lots which includes verification on whether Garcia had secured the
authority from the HLURB to mortgage the subject lots. Petitioner failed to do so. We
likewise find petitioner negligent in failing to even ascertain from Garcia if there are buyers
of the lots who turned out to be private respondents. Petitioners want of knowledge due to
its negligence takes the place of registration, thus it is presumed to know the rights of
respondents over the lot. The conversion of the status of petitioner from mortgagee to
buyer-owner will not lessen the importance of such knowledge. [24] Neither will the
conversion set aside the consequence of its negligence as a mortgagee. [25]
Judicial notice can be taken of the uniform practice of banks to investigate, examine
and assess the real estate offered as security for the application of a loan. We cannot
overemphasize the fact that the Bank cannot barefacedly argue that simply because the
title or titles offered as security were clean of any encumbrances or lien, that it was thereby
relieved of taking any other step to verify the over-reaching implications should the
subdivision be auctioned on foreclosure. [26] We find apropos to cite our ruling in Far East
Bank and Trust Co. vs. Marquez, thus:[27]
Petitioner argues that it is an innocent mortgagee whose lien must be respected and
protected, since the title offered as security was clean of any encumbrances or lien. We do
not agree.
. . . As a general rule, where there is nothing on 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 further 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. This
rule, however, admits of an exception as where the purchaser or mortgagee has
knowledge of a defect or lack of title in the vendor, or that he was aware of sufficient facts
to induce a reasonably prudent man to inquire into the status of the property in litigation.
Petitioner bank should have considered that it was dealing with a [townhouse] project that
was already in progress. A reasonable person should have been aware that, to finance the
project, sources of funds could have been used other than the loan, which was intended to
serve the purpose only partially. Hence, there was need to verify whether any part of the
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Land Titles and Deeds (Finals) 2017

property was already the subject of any other contract involving buyers or potential buyers.
In granting the loan, petitioner bank should not have been content merely with a clean title,
considering the presence of circumstances indicating the need for a thorough investigation
of the existence of buyers like respondent. Having been wanting in care and prudence, the
latter cannot be deemed to be an innocent mortgagee.
Petitioner cannot claim to be a mortgagee in good faith. Indeed it was negligent, as found
by the Office of the President and by the CA. Petitioner should not have relied only on the
representation of the mortgagor that the latter had secured all requisite permits and
licenses from the government agencies concerned. The former should have required the
submission of certified true copies of those documents and verified their authenticity
through its own independent effort.
Having been negligent in finding out what respondents rights were over the lot, petitioner
must be deemed to possess constructive knowledge of those rights.
registered owner, for annulment of mortgage and cancellation of title against the
mortgagee, China Bank. We found therein that even without the mortgagor, the true
Mercedes Oliver can prove in her complaint that she is the real person referred in the title
and she is not the same person using the name who entered into a deed of mortgage with
the mortgagee, China Bank.
In the present case, private respondents, in their complaint, alleged that the
mortgage was constituted without the prior written approval of the HLURB which is in
violation of Section 18 of P.D. No. 957. Petitioners admission that it granted and released
the loan without notifying the HLURB because of its belief that it was not necessary to do
so, is fatal to petitioners defense. As a consequence thereof, the mortgage constituted in
favor of petitioner can be declared invalid as against private respondents even without the
presence of Garcia/TransAmerican. It is worthy to mention that the assailed decision was
rendered merely against petitioner and had not made any pronouncement as to
Garcia/TransAmericans liability to private respondents for the non-completion of the
projects; or to herein petitioner, as mortgagee.

As to the third issue, petitioner contends that private respondents were negligent in
failing to register their contracts to sell in accordance with Section 17 of P.D. No. 957; that
private respondents unregistered contracts to sell are binding only on them and
Garcia/TransAmerican but not on petitioner which had no actual or constructive notice of
the sale at the time the mortgage was constituted.
The present case merely involves the liability of petitioner bank to private
respondents as buyers of the lots and townhouse units.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.

We disagree.

Section 17 of P.D. No. 957[28] provides that the seller shall register the contracts to
sell with the Register of Deeds of Quezon City. Thus, it is Garcias responsibility as seller to
register the contracts and petitioner should not blame private respondents for not doing so.
As we have said earlier, considering petitioners negligence in ascertaining the existence or
absence of authority from HLURB for Garcia/TransAmerican to mortgage the subject lots,
petitioner cannot claim to be an innocent purchaser for value and in good faith. Petitioner
is bound by private respondents contracts to sell executed with Garcia/TransAmerican.
The last paragraph of Section 18 of P.D. No. 957 provides that respondents who
have not yet paid in full have the option to pay their installment for the lot directly to the
mortgagee (petitioner) who is required to apply such payments to the corresponding
mortgage indebtedness secured by the particular lot or unit being paid for, with a view to
enabling said buyer to obtain title over the lot or unit promptly after full payment thereof.
Thus, petitioner is obliged to accept the payment of remaining unpaid amortizations,
without prejudice to petitioner banks seeking relief against the subdivision developer. [29]
Notably, although no issue was taken on the fact that the case against
Garcia/TransAmerican, the developer/seller and mortgagor of the subject lots, was
archived for failure to serve summons on him/it as his whereabouts or the office could not
be located, it must be stated that Garcia/TransAmerican is not an indispensable party
since a final determination on the validity of the mortgage over the subject lots can be
rendered against petitioner. Thus, the absence of Garcia/TransAmerican did not hamper
the OAALA from resolving the dispute between private respondents and petitioner.
In China Bank vs. Oliver,[30] we held that the mortgagor, who allegedly
misrepresented herself to be Mercedes M. Oliver, the registered owner of TCT No. S-
50195, is not an indispensable party in a case filed by a person claiming to be the true
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Conformably with Section 8, Rule 39, 1997 Rules of Civil Procedure, execution
in this case can only be implemented as far as what has been decreed in the
COL. FRANCISCO DELA MERCED, G.R. No. 167140 decision dated September 11, 2001, qualified by the Order of this Court dated
substituted by his heirs namely, LUIS January 20, 2003 with respect [to] the payment of attorneys fees.
CESAR DELA MERCED, BLANQUITA
DELA MERCED nee MACATANGAY, and In view thereof, plaintiffs motion for supplemental writ of execution is DENIED.
MARIA OLIVIA M. PAREDES, Present:
SO ORDERED.[4]
CORONA, C.J., Chairperson,
Petitioners, LEONARDO-DE CASTRO,
BERSAMIN,
The September 11, 2001 Decision referred to in the assailed Order was rendered by this Court in
- versus - DEL CASTILLO, and
G.R. No. 140398, entitled Col. Francisco Dela Merced, substituted by his heirs, namely, BLANQUITA
VILLARAMA, JR., JJ.
GOVERNMENT SERVICE INSURANCE E. DELA MERCED, LUIS CESAR DELA MERCED, BLANQUITA E. DELA MERCED (nee
SYSTEM (GSIS) and Spouses VICTOR and
MACATANGAY), and MARIA OLIVIA M. PAREDES, v. GOVERNMENT SERVICE INSURANCE
MILAGROS MANLONGAT,
Promulgated:
SYSTEM (GSIS) and SPOUSES VICTOR and MILAGROS MANLONGAT.[5] The fallo of the said
Respondents. November 23, 2011
x-------------------------------------------------------------------x Decision reads:

DECISION
DEL CASTILLO, J.:
A transferee pendente lite of registered land, whose title bears a notice of a pending litigation involving
his transferors title to the said land, is bound by the outcome of the litigation, whether it be for or
against his transferor. Given this principle, the modification of the final decision against the transferor
in order to include the transferee pendente lite does not violate the doctrine of immutability of final
WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision
of the Court of Appeals is REVERSED AND SET ASIDE. The decision of
the Regional Trial Court of Pasig City, Branch 160, in Civil Case Nos. 51410
and 51470, is REINSTATED. The foreclosure sale of Lot Nos. 6, 7, 8 and 10 of
Block 2 and Lot 8 of Block 8 of the property originally covered by TCT 26105,
and the subsequent certificates of titles issued to GSIS as well as TCT No. PT-
94007 in the name of Elizabeth Manlongat, are declared NULL AND
VOID. The Register of Deeds of Pasig City is ordered to CANCEL all present
certificates of title in the name of GSIS and Elizabeth Manlongat covering the
above-mentioned properties, and to ISSUE new certificates of title over the
same in the name of petitioners as co-owners thereof. Respondents GSIS and
spouses Victor and Milagros Manlongat are ORDERED to pay, jointly and
severally, attorneys fees in the increased amount of P50,000.00, and to pay the
costs.

judgments. His inclusion does not add to or change the judgment; it is only a legal consequence of SO ORDERED.[6]

the established doctrine that a final judgment binds the privy of a litigating party.

G.R. No. 140398 has long attained finality[7] but could not be executed because of the objections

Before the Court is a Petition for Review[1] assailing the validity of the February 9, 2005 Order[2] of raised by the Register of Deeds (RD) and respondent Government Service Insurance System

Branch 160 of the Regional Trial Court (RTC) of Pasig City. The said Order denied petitioners motion (GSIS). These objections, which the trial court found insurmountable in its assailed February 9, 2005

for supplemental writ of execution:[3] Order, are now presented to us for resolution.

Factual antecedents
This case involves five registered parcels of land located within the Antonio Subdivision, Pasig City
Lots 6, 7, 8, and 10 of Block 2 and Lot 8 of Block 8 (subject properties). These lots were originally
owned by, and titled in the name of, Jose C. Zulueta (Zulueta), as evidenced by Transfer Certificate of
Title (TCT) No. 26105.[8] TCT No. 26105 contains several lots, other than the subject properties,
within the Antonio Subdivision.
Later, the Zulueta spouses mortgaged[9] several lots contained in TCT No. 26105 to the GSIS, which
eventually foreclosed on the mortgaged properties, including the subject properties. Upon
consolidation of GSISs ownership, TCT No. 26105 in Zuluetas name was cancelled, and TCT No.
23554[10] was issued in GSISs name.[11]
Upon learning of the foreclosure, petitioners predecessor, Francisco Dela Merced (Dela Merced) filed
a complaint[12] praying for the nullity of the GSIS foreclosure on the subject properties (Lots 6, 7, 8,
and 10 of Block 2 and Lot 8 of Block 8) on the ground that he, not the Zuluetas, was the owner of
these lots at the time of the foreclosure. Dela Merced also impleaded Victor and Milagros
Manlongat,[13] who were claiming Lot 6, Block 2 by virtue of a sale executed by the GSIS in their
daughters (Elizabeth Manlongat) favor.[14] Dela Merced argued that, due to the nullity of GSISs
foreclosure over the subject properties, it had no ownership right that could be transferred to Elizabeth
Manlongat.
Dela Merced caused the annotation of lis pendens[15] on GSISs TCT No. 23554 on September 21,
1984 in order to protect his interests in the subject properties. Dela Merced died in 1988 and was
substituted by his heirs, the petitioners in the instant case.
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Land Titles and Deeds (Finals) 2017
After a protracted litigation, the case reached this Court as G.R. No. 140398. On September 11,
2001, a Decision[16] was rendered in petitioners favor. The Court nullified GSISs foreclosure of the
subject properties because these lots were never part of its mortgage agreement with the Zulueta
spouses. The dispositive portion of said Decision reads:
WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision
of the Court of Appeals is REVERSED AND SET ASIDE. The decision of
the Regional Trial Court of Pasig City, Branch 160, in Civil Case Nos. 51410
and 51470, is REINSTATED. The foreclosure sale of Lot Nos. 6, 7, 8 and 10 of
Block 2 and Lot 8 of Block 8 of the property originally covered by TCT 26105,
and the subsequent certificates of titles issued to GSIS as well as TCT No. PT-
94007 in the name of Elizabeth Manlongat, are declared NULL AND VOID.
The Register of Deeds of Pasig City is ordered to CANCEL all present
certificates of title in the name of GSIS and Elizabeth Manlongat covering the
above-mentioned properties, and to ISSUE new certificates of tile over the
same in the name of petitioners as co-owners thereof. Respondents GSIS and
spouses Victor and Milagros Manlongat are ORDERED to pay, jointly and
severally, attorneys fees in the increased amount of P50,000.00, and to pay the
costs.[17]
Judgment was entered on April 23, 2002.[18]
Pursuant to the finality of the above Decision, petitioners filed a Motion for Execution[19] with Branch
160 of the RTC of Pasig City.
First obstacle:
GSISs alleged exemption from execution
GSIS opposed the motion for execution, citing as basis Section 39 of Republic Act No. 8291 (RA
8291), also known as the GSIS Act of 1997. The said provision allegedly exempts GSIS funds and
properties from attachment, garnishment, execution, levy and other court processes.[20]
On January 20, 2003, the trial court granted petitioners motion for execution; but held in abeyance the
execution of the award of attorneys fees, pending clarification before the higher courts of the issue of
GSISs exemption under Section 39 of RA 8291. The said Order is reproduced below:

Acting on the Motion for Execution filed by the plaintiff herein together with the
opposition of defendant GSIS, and considering that the judgment has already
become final and executory, the same is hereby Granted.
As prayed for, let a writ of execution issue to enforce the judgment of this court.
However, with respect to the payment of attorneys fees in the increased amount
of P50,000.00 which has to be paid jointly and severally by the GSIS and Sps.
Manlongat, the same is held in abeyance as far as GSIS is concerned pending
clarification by the GSIS before the Supreme Court on the issue of whether its
funds and assets are exempt from execution pursuant to Section 39, R.A. 8291,
otherwise known as the GSIS Act of 1997.
SO ORDERED.[21]
A writ of execution was issued on July 24, 2003.[22]
Eventually, GSIS filed with the Court of Appeals (CA) a petition for certiorari and prohibition against
the trial courts implementation of the writ of execution against it.[23] The petition, docketed as CA-G.R.
SP No. 87821, presented the issue whether the trial judge gravely abused her discretion in ordering
execution against GSIS funds and properties despite their alleged express and absolute exemption
from execution, garnishment, and other court processes under Section 39 of RA 8291.[24]
In its October 28, 2005 Decision, the CA dismissed GSISs petition and held that execution may be
enforced against it.[25] The ratio of the appellate court is reproduced in part:
Public respondent court presided by Hon. Amelia A. Fabros did not commit
grave abuse of discretion when it issued the Writ of Execution dated 24 July
2003. It must be considered that the properties which (Lots 6, 7, 8, and 10 of
Block 2 and Lot 8 of Block 8 of Antonio Subdivision) were the subject of the writ
of execution in the instant case are not the properties of petitioner GSIS. In the
court a quos Decision dated October 23, 1987 and reiterated in the Honorable
Supreme Courts Decision dated September 11, 2001, it declared inter alia that
the certificates of title issued to petitioner GSIS pertaining to Lot Nos. 6, 7, 8, and
10 of Block 2 and Lot 8 of Block 8 are null and void and further directed inter
alia the Register of Deeds of Pasig City to cancel all the present certificates of
title in the name of petitioner GSIS. x x x[26]
xxxx
[P]etitioner GSIS has no interest over the subject properties and x x x had never
validly acquired ownership thereof. x x x[27] Therefore, any and all [rights] that
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
petitioner GSIS may have on the subject properties were non-existent from the
very beginning. Verily, the court a quowas right then in issuing the writ of
execution dated 24 July 2003 and that petitioner GSIS claim that it should be
exempted from execution has no basis in fact and in law.[28]
xxxx
We lay stress that the pronouncement made in the abovementioned SC circular
and in the case of Commissioner of Public Highways vs. San Diego, cited in the
Armovit case find no application in the case at bar. It must be noted that the
properties referred to therein are those owned by government which could not
be seized under writ of execution to satisfy such judgment because to do so,
there is a necessity for the corresponding appropriation of public funds by
Congress before the same could be disbursed. In this instant case, it has
already been settled that the herein properties involved are not owned by
petitioner GSIS; hence, there is no prohibition that the same could be executed
and that there is no public funds involved which require the corresponding
appropriation thereof. x x x[29]
xxxx
In fine, the execution of the subject properties is proper for to assert otherwise,
would be depriving private respondents dela Merced and Paredes of their
properties without due process of law as it had been clearly established on
record that they really owned the subject properties.To sustain petitioner GSIS
view that it should be exempt from execution would be putting the subject
properties beyond the reach of the rightful owners thereof x x x. Likewise, to
uphold petitioner GSIS theory would inevitably lead to a disastrous
consequence and lend imprimatur to deprivation of property without due
process of law. Additionally, to grant petitioner GSIS prayer that the subject
properties be exempt from execution without any factual and legal basis thereof
would resultantly remain the same in the custody or control of petitioner GSIS
which unjustly enriches itself at the expense of private respondents dela Merced
and Paredes and who the latter could be deprived of the beneficial
use/ownership thereof when in the very first place they were able to establish
the ownership thereof. Every person who through an act or performance by
another, or any other means, acquires or comes into possession of something
at the expense of the latter without just or legal ground, shall return the same to
him.[30]
xxxx
WHEREFORE, premises considered, the instant PETITION FOR
CERTIORARI and PROHIBITION is hereby DISMISSED. Accordingly, the Writ
of Execution dated 24 July 2003 and the Order dated 16 September 2004 both
rendered by the Regional Trial Court of Pasig City, Branch 160 stand.
SO ORDERED. [31]
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

GSISs motion for reconsideration of the above Decision was denied in the June 30, 2006 Resolution these two lots. The RD thus suggested that the parties provide him with these relevant information

of the appellate court.[32] GSIS appealed the CA Decision to this Court[33] but the petition was denied in before he can proceed.

a Resolution dated February 12, 2007,[34]which denial was entered in the Book of Judgments on

October 2, 2007.[35] In order to address these difficulties, petitioners filed before the trial court a Motion for Supplemental
Second obstacle:
Alleged inadequacy of the fallo Writ of Execution.[39] They prayed for a supplemental writ ordering the RD to cancel the titles over Lots

7 and 8 of Block 2 in GSISs name or in the name of other subsequent transferees; and directing the

After the resolution of the issue of GSISs exemption, petitioners encountered more problems with the GSIS and the Bureau of Lands to supply the RD with the technical descriptions of Lot 10, Block 2,

execution of the September 11, 2001 Decision in G.R. No. 140398. According to the RD of Pasig and Lot 8, Block 8.[40]

City, Policarpio Espenesin, he could not enforce the Decision in G.R. No. 140398 as worded.

The order to cancel the titles of GSIS over Lots 7 and 8 of Block 2 allegedly could not be enforced GSIS opposed the issuance of a supplemental writ of execution.[41]

because GSIS no longer had title over these two lots. GSIS had already conveyed these lots in 1985

and 1988 to Diogenes Bartolome (Lot 8) and Antonio Dimaguila [Dimaguila] (Lot 7), respectively. At On February 9, 2005, Judge Amelia A. Fabros issued the assailed order denying petitioners motion

present, Lot 7 of Block 2 is titled in Dimaguilas name (TCT No. PT-67466)[36] while Lot 8 of Block 2 is for supplemental writ of execution.

titled in the name of Bartolomes assignee, Zenaida Victorino [Victorino] (TCT No. 53031).[37] While

both titles contain notices of lis pendens carried over from GSISs title,[38] the RD claimed that the writ Respondents arguments

of execution must first be modified to include the cancellation of derivative titles of the GSIS title.

The Manlongats could not be served with copies of the Courts resolutions; hence the Court

The RD also found difficulty in implementing the order to cancel GSISs titles over Lot 10 of Block 2 dispensed with their comment.[42]

and Lot 8 of Block 8 and to issue new ones in petitioners name because no such individual titles exist

in his records. The RD posited that these two lots must still be included in GSISs mother title, TCT GSIS argues that petitioners motion was properly denied because it seeks

No. 23554. The RD opined that he cannot cancel GSISs mother title, even if it contains Lot 10 of to modify a final and executory Decision. The September 11, 2001 Decision in G.R. No. 140398 only

Block 2 and Lot 8 of Block 8 because it would affect other lots that might still be included therein. ordered the cancellation of GSISs titles over the subject properties. It did not order the cancellation of

all derivative titles of GSISs transferees; nor did it order the GSIS to perform acts such as providing

The RD further lamented that assuming he could cancel GSISs mother title with respect to Lot 10 of the RD with the technical descriptions for Lot 10, Block 2 and Lot 8, Block 8. GSIS maintains that a

Block 2 and Lot 8 of Block 8, there is still no way that he could issue new titles over these lots in supplemental writ that includes such additional orders is null and void for non-conformity with the

petitioners name. This is because his office has no information regarding the technical descriptions for judgment.

Further, GSIS argues that the inclusion of derivative titles in the September 11, 2001 Decision in G.R.
No. 140398 would deprive the holders of these derivative titles their day in court. GSIS opines that the
holders of the derivative titles are not bound by the judgment against GSIS because these holders
are strangers to the action between GSIS and petitioners.
Lastly, GSIS again raises its earlier argument that the September 11, 2001 Decision in G.R. No.
140398 cannot be enforced because of GSISs exemption from court processes under RA 8291.
Petitioners arguments
Petitioners counter that the September 11, 2001 Decision in G.R. No. 140398 can be enforced
against GSISs transferees pendente lite because these transferees were given notice of the
pendency of the case by virtue of the notice of lis pendens that had been inscribed on GSISs TCT
No. 23554 as early as September 21, 1984. In fact, when TCT No. 23554 was cancelled with respect
to Lots 7 and 8 of Block 2 in order to issue new titles in Dimaguilas and Victorinos names, this notice
was carried over to their respective titles. Moreover, the conveyance of these lots to Victorino and
Dimaguila transpired in 1985 and 1988, respectively; clearly during the pendency of the case and with
notice of the questions surrounding GSISs ownership over these properties.
As transferees pendente lite, Dimaguilas and Victorinos titles are proper subjects of writs of execution
[43]
even if they were not actual parties to the case. Petitioners cite Voluntad v. Spouses Dizon as their
authority.[44]
With regard to the issuance of new titles for Lot 10, Block 2 and Lot 8, Block 8, petitioners argue that
GSIS can be compelled to provide the RD with their respective technical descriptions. This power is
granted to the courts under Section 10, Rule 39 of the Rules of Court.[45]
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Petitioners maintain that execution of the Decision in G.R. No. 140398 should not be confined to the
literal terms contained only in the fallo or the dispositive portion.[46]
As regards GSISs alleged exemption, petitioners posit that the GSIS can no longer raise the issue of
exemption from execution given that the CA had already rendered its Decision on that question in
CA-G.R. SP No. 87821. The said Decision was affirmed by this Court in G.R. No. 173391 through
our February 12, 2007 Resolution[47] and entry of judgment in that case was made on October 2,
2007.[48]
Issues
Can GSIS still raise the issue of exemption?
Whether a final and executory judgment against GSIS and Manlongat can be enforced against their
successors-in-interest or holders of derivative titles
Whether an order to cancel title to a particular property includes an order to provide technical
descriptions and segregate it from its mother title
Our Ruling
On the issue of GSISs exemption
The issue of GSISs alleged exemption under RA 8291 had been finally decided against GSIS in G.R.
No. 173391, when this Court denied GSISs petition for review. The denial rendered the CA Decision
in CA-G.R. SP No. 87821 final and executory. GSISs attempt to resurrect the same issue by
interjecting the same in this proceeding is barred by the principle of law of the case, which states
that determinations of questions of law will generally be held to govern a case throughout all its
subsequent stages where such determination has already been made on a prior appeal to a court of
last resort.[49] The Decision in G.R. No. 173391 allowing the execution of the judgment against GSIS
is the law of the case and controls the proceedings below which are already in the execution stage.

Enforcement of judgment against
transferees pendente lite
A notice of lis pendens is an announcement to the whole world that a particular real property is in
litigation, serving as a warning that one who acquires an interest over said property does so at his
own risk, or that he gambles on the result of the litigation over the said property.[50] The effect of the
annotation of lis pendens on future transactions over the subject property is discussed by an authority
on land titles and registration:
Once a notice of lis pendens has been duly registered, any cancellation or
issuance of the title of the land involved as well as any subsequent transaction
affecting the same, would have to be subject to the outcome of the litigation. In
other words, upon the termination of the litigation there can be no risk of losing
the property or any part thereof as a result of any conveyance of the land or any
encumbrance that may be made thereon posterior to the filing of the notice of lis
pendens.[51]
It is not disputed that petitioners caused the annotation of lis pendens on TCT No. 23554, which
[52]
covers Lots 7 and 8 of Block 2, as early as September 21, 1984. On July 29, 1985 and August 24,
1998, TCT No. 23554 was cancelled with respect to Lots 7 and 8 of Block 2 and new individual titles
were issued to Victorino and Dimaguila. Both titles had the notice of lis pendens which was carried
over from TCT No. 23554. Ineluctably, both Victorino and Dimaguila had notice of the litigation
involving GSISs ownership over the subject properties, and were bound by the outcome of the
litigation. When a transferee pendente lite takes property with notice of lis pendens, such transferee
undertakes to respect the outcome of the litigation. As held in Selph v. Vda. de Aguilar,[53] an order to
cancel the transferors title may be enforced against his transferee, whose title is expressly subject to
the outcome of the litigation by the fact of the annotation of lis pendens.
The existence of these entries on Dimaguilas and Victorinos titles bars any defense of good
faith[54] against petitioners and effectively makes Dimaguila and Victorino mere privies of GSIS and
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
subject to whatever rights GSIS might have in the subject properties, which (as it turns out) is none at
all. What Dimaguila and Victorino possess are derivative titles of the GSISs title over Lots 7 and 8 of
Block 2, which this Court has finally adjudicated to be null and void. Given the legal maxim that a
spring cannot rise higher than its source, it follows that Dimaguilas and Victorinos titles, or any other
title over the subject properties that are derived from TCT No. 23554 of the GSIS, are likewise null
and void. As explained by this Court in another case, the title obtained by the transferee pendente
lite affords him no special protection; he cannot invoke the rights of a purchaser in good faith and
cannot acquire better rights than those of his predecessor-in-interest.[55]
In Voluntad v. Spouses Dizon,[56] the Court allowed the issuance of an alias
writ of execution against the transferees pendente lite, who had knowledge of the pending litigation on
the basis of the annotation of the notice of lis pendens on their titles. The Court clarified therein that
there was no need for the victorious [parties] to file a separate action to enforce their right to recover
the property as against the new registered owners.[57]
In Associated Bank v. Pronstroller,[58] the Court affirmed the judgments of the trial and appellate courts
cancelling the titles of the spouses Vaca, who were transferees pendente lite of Associated Bank,
despite the fact that the spouses Vaca were not parties to the case between Associated Bank and
the Pronstrollers. The Court explained therein:
Admittedly, during the pendency of the case, respondents timely registered a
notice of lis pendens to warn the whole world that the property was the subject
of a pending litigation.
Lis pendens, which literally means pending suit, refers to the jurisdiction, power
or control which a court acquires over property involved in a suit, pending the
continuance of the action, and until final judgment. Founded upon public policy
and necessity, lis pendens is intended to keep the properties in litigation within
the power of the court until the litigation is terminated, and to prevent the defeat
of the judgment or decree by subsequent alienation. x x x
The filing of a notice of lis pendens has a twofold effect: (1) to keep the subject
matter of the litigation within the power of the court until the entry of the final
judgment to prevent the defeat of the final judgment by successive alienations;
and (2) to bind a purchaser, bona fide or not, of the land subject of the litigation
to the judgment or decree that the court will promulgate subsequently.

This registration, therefore, gives the court clear authority to cancel the title of the
spouses Vaca, since the sale of the subject property was made after the notice
of lis pendens. x x x[59]
Upon Associated Banks MR, the spouses Vaca filed a motion to intervene arguing that they had a
real interest in assailing the July 14, 2008 Decision, which ordered the cancellation of their title. The
Court denied the intervention. It was held that the interests of the spouses Vaca in the subject
property were properly represented in the action by their transferor/vendor Associated Bank, which
was already a party thereto. As transferees pendente lite, the spouses Vaca stand exactly in the
shoes of their predecessor-in-interest, Associated Bank.[60]
The Court cannot accept GSISs theory that the dispositive portion of the Decision in G.R. No. 140398
is enforceable only against GSISs title because it does not contain the phrase and all its derivative
titles. GSISs narrow interpretation would render nugatory the principle that a final judgment against a
party is binding on his privies and successors-in-interest. We cannot sustain this
interpretation. In Cabresos v. Judge Tiro,[61] the Court upheld the respondent judges issuance of an
alias writ of execution against the successors-in-interest of the losing litigant despite the fact that these
successors-in-interest were not mentioned in the judgment and were never parties to the case. The
Court explained that an action is binding on the privies of the litigants even if such privies are not
literally parties to the action. Their inclusion in the writ of execution does not vary or exceed the terms
of the judgment. In the same way, the inclusion of the derivative titles in the writ of execution will not
alter the Decision in G.R. No. 140398 ordering the cancellation of GSISs title.
Cancellation of title
The RD claimed that it cannot execute the order to cancel the GSISs titles over Lot 10, Block 2
and Lot 8, Block 8 because it has no record of GSISs title over these two lots. The RD theorized that
these lots are included in a mother title in GSISs possession and would still have to be segregated
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Land Titles and Deeds (Finals) 2017
therefrom. To effectuate such segregation, the RD needed the technical descriptions of the two lots
and the mother title. Thus, petitioners ask that the GSIS be compelled to surrender its title over, as
well as the technical descriptions of, Lot 10, Block 2 and Lot 8, Block 8.
GSIS refused to turn over the needed documents and information, claiming that these acts go
beyond what were ordered in the Decision in G.R. No. 140398. GSISs protestations ring hollow.
The order contained in the Decision in G.R. No. 140398 is for the RD to cancel GSISs titles over Lot
10, Block 2 and Lot 8, Block 8, inter alia. Whether these titles are individual or contained in a mother
title is of no consequence. The RD has to cause their cancellation. If the cancellation can only be
carried out by requiring GSIS or the Bureau of Lands to provide the necessary information, then they
can be compelled to do so. Otherwise, the Courts decision would be rendered inefficacious,
and GSIS would retain ostensible ownership over the lots by the simple expedience that they are
included in a mother title, instead of individual titles. That result is manifestly contrary to the Courts
ruling and would subvert the very purpose of bringing this case for a complete resolution.
A similar predicament was ruled upon by the Court in Republic Surety and Insurance Co., Inc. v.
Intermediate Appellate Court.[62] In that case, the Court declared that Republic Mines had no right to
the property involved but during the execution, the RD refused to cancel the TCT in Republic Mines
name on the ground that the dispositive portion of the trial courts Decision did not order the RD to
cancel the title and to revive the old title in favor of the victorious party. The Court held that the missing
order to cancel and revive should be deemed implied in the trial courts decision. Speaking through
Justice Feliciano, the Court explained thus:
What is involved here is not what is ordinarily regarded as a clerical error in the
dispositive part of the decision of the Court of First Instance, which type of error
is perhaps best typified by an error in arithmetical computation. At the same
time, what is involved here is not a correction of an erroneous judgment or
dispositive portion of a judgment. What we believe is involved here is in the
nature of an inadvertent omission on the part of the Court of First Instance x x x,
of what might be described as a logical follow-through of something set forth
both in the body of the decision and in the dispositive portion thereof: the
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

inevitable follow-through, or translation into, operational or behavioral terms, of

the annulment of the Deed of Sale with Assumption of Mortgage, from which GSISs objection that these orders cannot be enforced because they do not literally appear in the
petitioners' title or claim of title embodied in TCT 133153 flows. The dispositive
portion of the decision itself declares the nullity ab initio of the simulated Deed of Decision in G.R. No. 140398 is unreasonable. GSIS would have the Court spell out the wheres,
Sale with Assumption of Mortgage and instructed the petitioners and all persons
claiming under them to vacate the subject premises and to turn over possession whys, and hows of the execution. GSIS wants a dispositive portion that is a step-by-step detailed
thereof to the respondent-spouses. Paragraph B of the same dispositive portion,
confirming the real estate mortgage executed by the respondent-spouses also description of what needs to be done for purposes of execution. This expectation is unreasonable
necessarily assumes that Title No. 133153 in the name of petitioner Republic
Mines is null and void and therefore to be cancelled, since it is indispensable and absurd.
that the mortgagors have title to the real property given under mortgage to the
creditor (Article 2085 [2], Civil Code).[63]

xxxx WHEREFORE, the petition is GRANTED. The February 9, 2005 Order of Branch 160 of

the Regional Trial Court of Pasig City is REVERSED and SET ASIDE. The September 11, 2001
There are powerful considerations of an equitable nature which impel us to the
conclusions we reach here. Substantial justice cannot be served if
Decision in G.R. No. 140398 is clarified to read as follows:
the petitioner Republic Mines, having absolutely no right, legal or equitable, to
the property involved, its claim thereto being based upon a transaction which
was not only simulated but also immoral and unconscionable, should be WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision
allowed to retain the Transfer Certificate of Title in its name. The petitioner would
of the Court of Appeals is REVERSED AND SET ASIDE.
thereby be in a position to inflict infinite mischief upon the respondent-spouses
The decision of the Regional Trial Court of Pasig City, Branch 160, in Civil Case
whom they deprived for 15 years of the possession of the property of which they
Nos. 51410 and 51470, is REINSTATED. The foreclosure sale of Lot Nos. 6, 7,
were and are lawful owners, and whom they compelled to litigate for 15 years to
8 and 10 of Block 2 and Lot 8 of Block 8 of the property originally covered by
recover their own property. The judicial process as we know it and as
TCT No. 26105, and the subsequent certificates of titles issued to GSIS as well
administered by this Court cannot permit such a situation to subsist. It cannot be
as TCT No. PT-94007 in the name of Elizabeth Manlongat, and their
an adequate remedy for the respondent-spouses to have to start once more in respective derivative titles are declared NULL AND VOID.
the Court of First Instance, to ask that court to clarify its own judgment, a
process which could be prolonged by the filing of petitions for review in the Court The Register of Deeds of Pasig City is ordered to CANCEL all present
of Appeals and eventually in this Court once more. Public policy of the most
certificates of title covering the above-mentioned properties, whether
fundamental and insistent kind requires that litigation must at last come to an contained in individual titles or in a mother title, in the name of GSIS and
end if it is not to become more pernicious and unbearable than the very injustice
Elizabeth Manlongat, or in the name of their privies, successors-in-interest
or wrong sought to be corrected thereby. That public policy demands that we
or transferees pendente lite, and to ISSUE new certificates of title over the
cut this knot here and now.[64]
same in the name of petitioners as co-owners thereof.

GSIS and the Bureau of Lands are ordered to supply the necessary
When a judgment calls for the issuance of a new title in favor of the winning party (as in the instant
documents and information for the proper enforcement of the above
orders.
case), it logically follows that the judgment also requires the losing party to surrender its title for

cancellation. It is the only sensible way by which the decision may be enforced. To this end, Respondents GSIS and spouses Victor and Milagros Manlongat are
ORDERED to pay, jointly and severally, attorneys fees in the increased amount
petitioners can obtain a court order requiring the registered owner to surrender the same and directing of P50,000.00, and to pay the costs.
SO ORDERED.
the entry of a new certificate of title in petitioners favor.[65] The trial court should have granted
The trial court is ordered to ISSUE the writ of execution in accordance with the above clarified
petitioners motion for supplemental writ of execution as it had authority to issue the necessary orders
dispositive portion.
to aid the execution of the final judgment.[66]
GSIS is seriously warned not to further delay the execution of this case.

SO ORDERED.

G.R. No. 204280, November 09, 2016
EVELYN V. RUIZ, Petitioner, v. BERNARDO F. DIMAILIG, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari assails the October 22, 2012 Decision1 of the Court
of Appeals (CA) in CA-GR. CV No. 95046 which reversed and set aside the November
26,2009 Decision2 and the March 19, 2010 Order3 of the Regional Trial Court (RTC) of
Cavite City, Branch 16 in Civil Case No. N-7573. The CA declared void the Real Estate
Mortgage (REM) constituted on the property covered by Transfer Certificate of title (TCT)
No. T-361747.
Factual Antecedents
Respondent Bernardo F. Dimailig (Bernardo) was the registered owner of a parcel of land
covered by TCT No. T-361747 located in Alapan, Imus, Cavite. 4 In October 1997, he
entrusted the owner's copy of the said TCT to his brother, Jovannie, 5 who in turn gave the
title to Editha Sanggalang (Editha), a broker, for its intended sale. However, in January
1998, the property was mortgaged to Evelyn V. Ruiz (Evelyn) as evidenced by a Deed of
REM6 without Bernardo's knowledge and consent. Hence, Bernardo instituted this suit for
annulment of the Deed of REM.7
In her Answer,8 Evelyn contended that she met Jovannie when she inspected the subject
property and assured her that Bernardo owned the property and his title thereto was
genuine. She further claimed that Jovannie mortgaged the property to her. She also
insisted that as a mortgagee in good faith and for value, the REM cannot be annulled and
that she had the right to keep the owner's copy of TCT No. T-361747 until the loan was
fully paid to her.
During pre-trial the parties arrived at the following stipulations:9
1. That x x x it was not [Bernardo] who signed as mortgagor in the subject Deed of Real
Estate Mortgage.
2. That there was a demand letter sent to [Evelyn] x x x to cause a release of mortgage on
the subject property.
3. The x x x controversy [was referred] to the Barangay for conciliation and mediation.
[4.] That Jovannie x x x is the brother of [Bernardo].chanroblesvirtuallawlibrary
Thereafter, trial on the merits ensued.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Bernardo testified that when he went abroad on October 19, 1997, he left the owner's copy
of the TCT of the subject property to Jovannie as they intended to sell the subject
property.10 However, on January 26, 1998, a REM was executed on the subject property.
Bernardo argued that his alleged signature appearing therein was merely forged11 as he
was still abroad at that time. When he learned in September or November 1998 that Editha
mortgaged the subject property, he personally told Evelyn that the REM was fake and
demanded the return of his title. Not heeding his request, he filed a complaint for estafa
through falsification of public document against Editha and Evelyn. The criminal case
against Evelyn was dismissed12 while Editha was found guilty as charged. 13
Jovannie also took the witness stand. He testified that sometime in December 1997,
Editha convinced him to surrender the owner's copy of TCT No. T-361747 which she
would show her buyer.14Subsequently, however, Editha informed him that she misplaced
the title. Hence, he executed in August 199815 an affidavit of loss and registered it with the
Register of Deeds (RD).16 In September 1998, Editha finally admitted that the title was not
lost but was in Evelyn's possession because of the REM. 17 Upon learning this, Jovannie
inquired from Evelyn if Editha mortgaged Bernardo's property to her. Purportedly, Evelyn
confirmed said mortgage and told him that she would not return the owner's copy of TCT
No. T-361747 unless Editha pay the loan,18 Jovannie also alleged that he told Evelyn that
Bernardo's alleged signature in the REM was not genuine since he was abroad at the time
of its execution.19
On the other hand, Evelyn maintained that she was a mortgagee in good faith. She
testified that sales agents - Editha, Corazon Encarnacion, and a certain Parani, - and a
person introducing himself as ''Bernardo" mortgaged the subject property to her for
P300,000.00 payable within a period of three months. 20 She asserted that even after the
expiration of said period, "Bernardo" failed to pay the loan. 21
Evelyn narrated that before accepting the mortgage of the subject property, she, the sales
agents, her aunt, and Bernardo," visited the property. She pointed out that her
companions inspected it while she stayed in the vehicle as she was still recuperating from
an operation.22 She admitted that she neither verified from the neighborhood the owner of
the property nor approached the occupant thereof. 23
Moreover, Evelyn asserted that when the Deed of REM was executed, the person who
introduced himself as Bernardo presented a community tax certificate and his picture as
proof of identity.24 She admitted that she did not ask for any identification card from
"Bernardo."25cralawred
Contrary to the allegation in her Answer that Jovannie mortgaged the property, Evelyn
clarified that she met Jovannie for the first time when he went to her house and told her
that Bernardo could not have mortgaged the property to her as he was abroad. 26
Corazon Abella Ruiz (Corazon), the sister-in-law of Evelyn, was presented to corroborate
her testimony. Corazon averred that in January 1998, she accompanied Evelyn and
several others in inspecting the subject property. 27 The day after the inspection, Evelyn
and "Bernardo'' executed the Deed of REM in the office of a certain Atty. Ignacio; Evelyn

handed P300,000.00 to Editha, not to "Bernardo;"28 in turn, Editha handed to Evelyn the
owner's copy of TCT No. T-361747.29
Ruling of the Regional Trial Court
On November 26, 2009, the RTC dismissed the Complaint. It held that while Bernardo was
the registered owner of the subject property, Evelyn was a mortgagee in good faith
because she was unaware that the person who represented himself as Bernardo was an
impostor. It noted that Evelyn caused the verification of the title of the property with the RD
and found the same to be free from any lien or encumbrance. Evelyn also inspected the
property and met Jovannie during such inspection. Finally, the RTC declared that there
was no showing of any circumstance that would cause Evelyn to doubt the validity of the
title or the property covered by it. In fine, Evelyn did all that was necessary before parting
with her money and entering Into the REM.
On March 19, 2010, the RTC denied Bernardo's Motion for Reconsideration. Thus, he
appealed to the CA.
Ruling of the Court of Appeals
On October 22, 2012, the CA rendered the assailed Decision reversing and setting aside
the RTC Decision. The decretal portion of the CA Decision
reads: ChanRoblesVirtualawlibrary
WHEREFORE, the appeal is GRANTED. The assailed dispositions of the RTC are
REVERSED and SET ASIDE. Tile complaint of Bernardo F. Dimailig is GRANTED. The
Deed of Real Estate Mortgage constituted on the real property covered by TCT No. T-
361747 of the Registry of Deeds for the Province of Cavite, registered in his name, is
DECLARED null and void. Evelyn V. Ruiz is ORDERED to reconvey or return to him the
owner's duplicate copy of the said title. His claims for the payment of attorney's fees and
costs of suits are DENIED. Costs against Evelyn V. Ruiz.
SO ORDERED.30
The CA held that the "innocent purchaser (mortgagor in this case) for value protected by
law is one who purchases a titled land by virtue of a deed executed by the registered
owner himself, not by a forged deed."31 Since the Deed of REM was forged, and the title to
the subject property is still in the name of the rightful owner, and the mortgagor is a
different person who only pretended to be the owner, then Evelyn cannot seek protection
from the cloak of the principle of mortgagee in good faith. The CA held that in this case,
''the registered owner will not personally lose his title." 32
The CA further decreed that Evelyn's claim of good faith cannot stand as she failed to
verify the real identity of the person introduced by Editha as Bernardo. It noted that the
impostor did not even exhibit any identification card to prove his identity; and, by Evelyn's
admission, she merely relied on the representation of Editha relative to the identity of
"Bernardo." It also held that Evelyn transacted only with Editha despite the fact that the
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
purported owner was present during the inspection of the property, and during the
execution of the REM.
In sum, the CA ruled that for being a forged instrument, the Deed of REM was a nullity,
and the owner's copy of TCT No. T-361747 must be returned to its rightful owner,
Bernardo.
Issue
Hence, Evelyn filed this Petition raising the sole assignment of error as
follows: ChanRoblesVirtualawlibrary
[T]he Court of Appeals erred in holding that petitioner is not a mortgagee in good faith
despite the presence of substantial evidence to support such conclusion of fact. 33
Petitioners Arguments
Petitioner insists that she is a mortgagee in good faith. She claims that she was totally
unaware of the fraudulent acts employed by Editha, Jovannie, and the impostor to obtain a
loan from her. She stresses that a person dealing with a property covered by a certificate
of title is not required to look beyond what appears on the face of the title.
Respondent's Arguments
Bernardo, on his end, contends that since the person who mortgaged the property was a
mere impostor, then Evelyn cannot claim that she was a mortgagee in good faith. This is
because a mortgage is void where the mortgagor has no title at all to the property subject
of such mortgage.
Bernardo asserts that there were circumstances that should have aroused suspicion on
the part of Evelyn relative to the mortgagor's title over the property. He specifies that
throughout the negotiation of the mortgage, Evelyn transacted only with Editha, not with
"Bernardo," despite the fact that Editha and the other real estate agents who assisted
Evelyn in the mortgage transaction were not armed with a power of attorney.
Bernardo likewise stresses that although Evelyn caused the inspection of the subject
property, she herself admitted that she did not alight from the vehicle during the inspection,
and she failed to verify the actual occupant of the property.
Our Ruling
The Petition is without merit.
As a rule, the issue of whether a person is a mortgagee in good faith is not within the ambit
of a Rule 45 Petition. The determination of presence or absence of good faith, and of

negligence factual matters, which are outside the scope of a petition for review
on certiorari.34 Nevertheless, this rule allows certain exceptions including cases where the
RTC and the CA arrived at different or conflicting factual findings, 35 as in the case at
bench. As such, the Court deems it necessary to re-examine and re-evaluate the factual
findings of the CA as they differ with those of the RTC.
No valid mortgage will arise unless the mortgagor has a valid title or ownership over the
mortgaged property. By way of exception, a mortgagee can invoke that he or she derived
title even if the mortgagor's title on the property is defective, if he or she acted in good
faith. In such instance, the mortgagee must prove that no circumstance that should have
aroused her suspicion on the veracity of the mortgagor's title on the property was
disregarded.36
Such doctrine of mortgagee in good faith presupposes "that the mortgagor, who is not the
rightful owner of the property, has already succeeded in obtaining a Torrens title over the
property in his name and that, after obtaining the said title, he succeeds in mortgaging the
property to another who relies on what appears on the said title."37 In short, the doctrine of
mortgagee in good faith assumes that the title to the subject property had already
been transferred or registered in the name of the impostor who thereafter transacts with a
mortgagee who acted in good faith. In the case at bench, it must be emphasized that the
title remained to be registered in the name of Bernardo, the rightful and real owner, and
not in the name of the impostor.
The burden of proof that one is a mortgagee in good faith and for value lies with the person
who claims such status. A mortgagee cannot simply ignore facts that should have put a
reasonable person on guard, and thereafter claim that he or she acted in good truth under
the belief that the mortgagor's title is not defective. 38 And, such good faith entails an honest
intention to refrain from taking unconscientious advantage of another. 39
In other words, in order for a mortgagee to invoke the doctrine of mortgagee in good faith,
the impostor must have succeeded in obtaining a Torrens title in his name and thereafter
in mortgaging the property. Where the mortgagor is an impostor who only pretended to be
the registered owner, and acting on such pretense, mortgaged the property to another, the
mortgagor evidently did not succeed in having the property titled in his or her name, and
the mortgagee cannot rely on such pretense as what appears on the title is not the
impostor's name but that of the registered owner. 40
In this case, Evelyn insists that she is a mortgagee in good faith and for value. Thus, she
has the burden to prove such claim and must provide necessary evidence to support the
same. Unfortunately, Evelyn failed to discharge her burden.
First, the Deed of REM was established to be a forged instrument. As aptly discussed by
the CA, Bernardo did not and could not have executed it as he was abroad at the time of
its execution, to wit: ChanRoblesVirtualawlibrary
Verily, Bernardo could not have affixed his signature on the said deed on January 26, 1998
for he left the Philippines on October 19, 1997, x x x and only returned to the Philippines
on March 21, 1998. Not only that, his signature on his Seafarer's Identification and Record
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Book is remarkably different from the signature on the assailed mortgage contract. The
variance is obvious even to the untrained eye. This is further bolstered by Evelyn's
admission that Bernardo was not the one who represented himself as the registered owner
of the subject property and was not the one who signed the questioned contract. Thus,
there can be no denying the fact that the signature on the Deed of Real Estate Mortgage
was not affixed or signed by the same person. 41
In fact, during pre-trial, both parties agreed that it was not Bernardo who signed as the
mortgagor in the Deed of REM. It was only an impostor - representing himself as Bernardo
- who mortgaged the property. This impostor is not only without rightful ownership on the
mortgaged property, he also has no Torrens title in his own name involving said property.
Simply put, for being a forged instrument, the Deed of REM is a nullity and conveys no
title.42
Second, Evelyn cannot invoke the protection given to a mortgagee in good faith. As
discussed, the title to the subject property remained registered in the name of Bernardo. It
was not transferred to the impostor's name when Evelyn transacted with the latter. Hence,
the principle of mortgagee in good faith finds no application; correspondingly, Evelyn
cannot not seek refuge therefrom.
Third, even assuming that the impostor has caused the property to be titled in his name as
if he had rightful ownership thereof, Evelyn would still not be deemed a mortgagee in good
faith. This is because Evelyn did not take the necessary steps to determine any defect in
the title of the alleged owner of the mortgaged property. She deliberately ignored pertinent
facts that should have aroused suspicion on the veracity of the title of the mortgagor
"Bernardo."43
One, while ''Bernardo" introduced himself to Evelyn as the owner of the property, he did
not present any proof of identification. To recall, he only exhibited his community tax
certificate and a picture when he introduced himself to Evelyn. Bernardo's" failure to
sufficiently establish his identity should have aroused suspicion on the part of Evelyn
whether the person she was transacting with is the real Bernardo or a mere impostor. She
should have investigated further and verified the identity of "Bernardo" but she failed to do
so. She even admitted that she did not at all ask for any identification card from
"Bernardo."
Two, Evelyn also ignored the fact that "Bernardo" did not participate in the
negotiations/transactions leading to the execution of the Deed of REM. Notably, no power
of attorney was given to Editha who supposedly transacted in behalf of Bernardo. Despite
"Bernardo's" presence during the ocular inspection of the property and execution of the
mortgage contract, it was Editha who transacted with Evelyn. As gathered from the
testimony of Corazon, after the execution of the deed, Evelyn handed the loan amount of
P300,000.00 to Editha, not to "Bernardo," and it was Editha who handed to Evelyn the
owner's copy of TCT No. T-361747.
Three, Evelyn likewise failed to ascertain the supposed title of "Bernardo" over the
property. Evelyn admitted that during the ocular inspection, she remained in the vehicle.

She did not inquire from the subject property's occupant or from the occupants of the
surrounding properties if they knew "Bernardo" and whether or not he owned the subject
property.
Notably, the RTC misapprehended certain facts when it held that Evelyn inspected the
property and met Jovannie during the inspection. By her own account, Evelyn clarified that
she met Jovannie for the first time only when the latter visited her house to inform her that
an impostor mortgaged Bernardo's property to her.
Four, the Court observes that Evelyn hastily granted the loan and entered into the
mortgage contract. As also testified by Corazon, a day after the supposed ocular
inspection on the property, Evelyn and "Bernardo" executed the Deed of REM even
without Evelyn verifying the identity of the property's occupant as well as the right of the
mortgagor, if any, over the same. Indeed, where the mortgagee acted with haste in
granting the loan, without first determining the ownership of the property being mortgaged,
the mortgagee cannot be considered as an innocent mortgagee in good faith. 44
Thus, considering that the mortgage contract was forged as it was entered into by Evelyn
with an impostor, the registered owner of the property, Bernardo, correspondingly did not
lose his title thereon, and Evelyn did not acquire any right or title on the property and
cannot invoke that she is a mortgagee in good faith and for value. 45
WHEREFORE, the Petition is DENIED. Accordingly, the October 22, 2012 Decision of the
Court of Appeals in CA-G.R. CV No. 95046 is AFFIRMED.
SO ORDERED.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
G.R. No. 169890 March 12, 2007
FELICIANO ESGUERRA, CANUTO ESGUERRA, JUSTA ESGUERRA, ANGEL
ESGUERRA, FIDELA ESGUERRA, CLARA ESGUERRA, and PEDRO
ESGUERRA, Petitioners,
vs.
VIRGINIA TRINIDAD, PRIMITIVA TRINIDAD, and THE REGISTER OF DEEDS OF
MEYCAUAYAN, BULACAN, Respondents.
DECISION
CARPIO MORALES, J.:
Involved in the present controversy are two parcels of land located in Camalig,
Meycauayan, Bulacan.
Felipe Esguerra and Praxedes de Vera (Esguerra spouses) were the owners of several
parcels of land in Camalig, Meycauayan, Bulacan among them a 35,284-square meter
parcel of land covered by Tax Declaration No. 10374, half of which (17,642 square meters)
they sold to their grandchildren, herein petitioners Feliciano, Canuto, Justa, Angel, Fidela,
Clara and Pedro, all surnamed Esguerra; and a 23,989-square meter
parcel of land covered by Tax Declaration No. 12080, 23,489 square meters of which they
also sold to petitioners, and the remaining 500 square meters they sold to their other
grandchildren, the brothers Eulalio and Julian Trinidad (Trinidad brothers).
Also sold to the Trinidad brothers were a 7,048-square meter parcel of land covered by
Tax Declaration No. 9059, a 4,618-square meter parcel of land covered by Tax Declaration
No. 12081, and a 768-square meter parcel of land covered by Tax Declaration No. 13989.
The Esguerra spouses executed the necessary Deed of Sale in favor of petitioners on
August 11, 1937,1 and that in favor of the Trinidad brothers on August 17, 1937. 2 Both
documents were executed before notary public Maximo Abao.
Eulalio Trinidad later sold his share of the land to his daughters-respondents herein, via a
notarized Kasulatan ng Bilihang Tuluyan ng Lupa3 dated October 13, 1965. A portion of
the land consisting of 1,693 square meters was later assigned Lot No. 3593 during a
cadastral survey conducted in the late 1960s.
On respondents application for registration of title, the then Court of First Instance (CFI) of
Bulacan, by Decision4of February 20, 1967, awarded Lot No. 3593 in their favor in Land
Registration Case No. N-323-V. Pursuant to the Decision, the Land Registration
Commission (LRC, now the Land Registration Authority [LRA]) issued Decree No. N-
114039 by virtue of which the Register of Deeds of Bulacan issued OCT No. 0-36315 in the
name of respondents.

Meanwhile, under a notarized Bilihan ng Lupa6 dated November 10, 1958, petitioners sold
to respondents parents Eulalio Trinidad and Damiana Rodeadilla (Trinidad spouses) a
portion of about 5,000 square meters of the 23,489-square meter of land which they
previously acquired from the Esguerra spouses. 7
During the same cadastral survey conducted in the late 1960s, it was discovered that the
about 5,000-square meter portion of petitioners parcel of land sold to the Trinidad spouses
which was assigned Lot No. 3591 actually measured 6,268 square meters.
In a subsequent application for registration of title over Lot No. 3591, docketed as Land
Registration Case No. N-335-V, the CFI, by Decision8 of August 21, 1972, awarded Lot
No. 3591 in favor of Eulalio Trinidad. Pursuant to the Decision, the LRC issued Decree No.
N-149491 by virtue of which the Register of Deeds of Bulacan issued OCT No. 0-64989 in
the name of Trinidad.
Upon the death of the Trinidad spouses, Lot No. 3591 covered by OCT No. 0-6498 was
transmitted to respondents by succession.
Petitioners, alleging that upon verification with the LRA they discovered the issuance of the
above-stated two OCTs, filed on August 29, 1994 before the Regional Trial Court (RTC) of
Malolos, Bulacan two separate complaints for their nullification on the ground that they
were procured through fraud or misrepresentation.
In the first complaint, docketed as Civil Case No. 737-M-94, petitioners sought the
cancellation of OCT No. 0-3631.
In the other complaint, docketed as Civil Case No. 738-M-94, petitioners sought the
cancellation of OCT No. 0-6498.
Both cases were consolidated and tried before Branch 79 of the RTC which, after trial,
dismissed the cases by Joint Decision10 of May 15, 1997.
Their appeal with the Court of Appeals having been dismissed by Decision of February 28,
2005, a reconsideration of which was, by Resolution of October 3, 2005,11 denied,
petitioners filed the instant petition.
Petitioners fault the appellate court
1. . . . in misappreciating the fact that the act of the respondent Eulalio Trinidad in
acquiring the property from Felipe Esguerra constituted fraud.
2. . . . in the [i]nterpretation and application of the provisions of Article 1542 of the
New Civil Code.
3. . . . in ruling that there is prescription, res judicata, and violation of the non-
[forum] shopping.12
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
In their Comment, respondents assailed the petition as lacking verification and certification
against forum shopping and failing to attach to it an affidavit of service and material
portions of the record in support thereof. Petitioners counter that the procedural
deficiencies have been mooted by the filing of a Compliance.
A check of the rollo shows that attached to the petition are an Affidavit of Service dated
November 21, 2005 and the appellate courts Decision of February 28, 2005 and
Resolution of October 3, 2005; and that on January 16, 2006 or almost three months
following the last day to file the petition, petitioners submitted, not at their own instance, 13 a
Verification and Sworn Certification on Non-Forum Shopping signed by petitioner Pedro
Esguerra who cited honest and excusable mistake behind the omission to submit the
same.
This Court has strictly enforced the requirement of verification and certification, obedience
to which and to other procedural rules is needed if fair results are to be expected
therefrom.14 While exceptional cases have been considered to correct patent injustice
concomitant to a liberal application of the rules of procedure, there should be an effort on
the part of the party invoking liberality to advance a reasonable or meritorious explanation
for his failure to comply with the rules. 15 In petitioners case, no such explanation has been
advanced.
With regard to petitioners failure to attach material portions of the record in support of the
petition, this requirement is not a mere technicality but an essential requisite for the
determination of prima facie basis for giving due course to the petition. 16 As a rule, a
petition which lacks copies of essential pleadings and portions of the case record may be
dismissed. Much discretion is left to the reviewing court, however, to determine the
necessity for such copies as the exact nature of the pleadings and portions of the case
record which must accompany a petition is not specified. 17
At all events, technicality aside, the petition must be denied.
It is settled that fraud is a question of fact and the circumstances constituting the same
must be alleged and proved in the court below.18
In the present cases, as did the trial court, the appellate court found no fraud in
respondents acquisition and registration of the land, viz:
. . . Appellant Pedro Esguerra even testified that he does not know how appellees were
able to secure a title over the lot in question and that they never sold Lot No. 3593 to
Virginia Trinidad since it is part of the whole lot of 23,489 square meters. The said
testimony is a mere conclusion on the part of appellants. On the other hand, the evidence
shows that appellees acquired title over the subject property by virtue of a deed of sale
executed by their father Eulalio Trinidad in their favor.
xxxx

[T]hey failed to establish that appellees acquisition of the certificate of title is fraudulent. In
fact, in their two complaints, appellants acknowledged that appellees observed and took
the initial procedural steps in the registration of the land, thus ruling out fraud in the
acquisition of the certificate of title. . . .19
Factual findings of the trial court, when affirmed by the Court of Appeals, are final,
conclusive and binding on this Court, 20 which is not a trier of facts,21 hence, bereft of
function under Rule 45 to examine and weigh the probative value of the evidence
presented,22 its jurisdiction being limited only to the review and revision of errors of
law.23 Albeit there are exceptions24 to this rule, the cases at bar do not fall thereunder,
there being no showing that the trial and appellate courts overlooked matters which, if
considered, would alter their outcome.
Under the Torrens System, an OCT enjoys a presumption of validity, which correlatively
carries a strong presumption that the provisions of the law governing the registration of
land which led to its issuance have been duly followed. 25 Fraud being a serious charge, it
must be supported by clear and convincing proof. 26 Petitioners failed to discharge the
burden of proof, however.
On the questioned interpretation and application by the appellate court of Article 1542 of
the Civil Code reading:
In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a
unit of measure or number, there shall be no increase or decrease of the price, although
there be a greater or less areas or number than that stated in the contract.
The same rule shall be applied when two or more immovables are sold for a single price;
but if, besides mentioning the boundaries, which is indispensable in every conveyance of
real estate, its area or number should be designated in the contract, the vendor shall be
bound to deliver all that is included within said boundaries, even when it exceeds the area
or number specified in the contract; and, should he not be able to do so, he shall suffer a
reduction in the price, in proportion to what is lacking in the area or number, unless the
contract is rescinded because the vendee does not accede to the failure to deliver what
has been stipulated. (Emphasis and underscoring supplied),
while petitioners admittedly sold Lot No. 3591 to the Trinidad spouses, they contend that
what they sold were only 5,000 square meters and not 6,268 square meters, and thus
claim the excess of 1,268 square meters.
In sales involving real estate, the parties may choose between two types of pricing
agreement: a unit price contract wherein the purchase price is determined by way of
reference to a stated rate per unit area (e.g., 1,000 per square meter), or a lump sum
contract which states a full purchase price for an immovable the area of which may be
declared based on an estimate or where both the area and boundaries are stated (e.g., 1
million for 1,000 square meters, etc.). In Rudolf Lietz, Inc. v. Court of Appeals,27 the Court
discussed the distinction:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
. . . In a unit price contract, the statement of area of immovable is not conclusive and the
price may be reduced or increased depending on the area actually delivered. If the vendor
delivers less than the area agreed upon, the vendee may oblige the vendor to deliver all
that may be stated in the contract or demand for the proportionate reduction of the
purchase price if delivery is not possible. If the vendor delivers more than the area stated
in the contract, the vendee has the option to accept only the amount agreed upon or to
accept the whole area, provided he pays for the additional area at the contract rate.
xxxx
In the case where the area of the immovable is stated in the contract based on an
estimate, the actual area delivered may not measure up exactly with the area stated in the
contract. According to Article 1542 of the Civil Code, in the sale of real estate, made for a
lump sum and not at the rate of a certain sum for a unit of measure or number, there shall
be no increase or decrease of the price, although there be a greater or less areas or
number than that stated in the contract. . . .
xxxx
Where both the area and the boundaries of the immovable are declared, the area covered
within the boundaries of the immovable prevails over the stated area. In cases of conflict
between areas and boundaries, it is the latter which should prevail. What really defines a
piece of ground is not the area, calculated with more or less certainty, mentioned in its
description, but the boundaries therein laid down, as enclosing the land and indicating its
limits. In a contract of sale of land in a mass, it is well established that the specific
boundaries stated in the contract must control over any statement with respect to the area
contained within its boundaries. It is not of vital consequence that a deed or contract of
sale of land should disclose the area with mathematical accuracy. It is sufficient if its extent
is objectively indicated with sufficient precision to enable one to identify it. An error as to
the superficial area is immaterial. Thus, the obligation of the vendor is to deliver everything
within the boundaries, inasmuch as it is the entirety thereof that distinguishes the
determinate object.28 (Emphasis and underscoring supplied)
The courts below correctly characterized the sale of Lot No. 3591 as one involving a lump
sum contract. The Bilihan ng Lupa shows that the parties agreed on the purchase price of
1,000.00 on a predetermined, albeit unsurveyed, area of 5,000 square meters and not on
a particular rate per unit area. As noted by the Court of Appeals, the identity of the realty
was sufficiently described as riceland:
It is clear from the afore-quoted Bilihan ng Lupa that what appellants sold to Eulalio was
the "bahaging palayan." Though measured as 5,000 square meters, more or less, such
measurement is only an approximation, and not an exact measurement. Moreover, we
take note of the fact that the said deed of sale mentioned the boundaries covering the
whole area of 33,489 square meters, including the "bahaging palayan." Had appellants
intended to sell only a portion of the "bahaging palayan," they could have stated the
specific area in the deed of sale and not the entire "bahaging palayan" . . . .29
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

In fine, under Article 1542, what is controlling is the entire land included within the Answer. Contrary to petitioners claim, however, the records reveal that respondents raised
boundaries, regardless of whether the real area should be greater or smaller than that their objection in their Amended Answers 37 filed in both cases.
recited in the deed. This is particularly true since the area of the land in OCT No. 0-6498
was described in the deed as "humigit kumulang," that is, more or less.30
IN FINE, it is a fundamental principle in land registration that a certificate of title serves as
evidence of an indefeasible and incontrovertible title to the property in favor of the person
A caveat is in order, however. The use of "more or less" or similar words in designating whose name appears therein. Such indefeasibility commences after the lapse or expiration
quantity covers only a reasonable excess or deficiency. A vendee of land sold in gross or of one year from the date of entry of the decree of registration when all persons are
with the description "more or less" with reference to its area does not thereby ipso considered to have a constructive notice of the title to the property. After the lapse of one
facto take all risk of quantity in the land.31 year, therefore, title to the property can no longer be contested. This system was so
effected in order to quiet title to land.38
Numerical data are not of course the sole gauge of unreasonableness of the excess or
deficiency in area. Courts must consider a host of other factors. In one case,32 the Court
found substantial discrepancy in area due to contemporaneous circumstances. Citing
change in the physical nature of the property, it was therein established that the excess
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court
area at the southern portion was a product of reclamation, which explained why the lands of Appeals are AFFIRMED.
technical description in the deed of sale indicated the seashore as its southern boundary,
hence, the inclusion of the reclaimed area was declared unreasonable.
Costs against petitioners.
In OCT No. 0-6498, the increase by a fourth of a fraction of the area indicated in the deed
of sale cannot be considered as an unreasonable excess. Most importantly, the SO ORDERED.
circumstances attendant to the inclusion of the excess area bare nothing atypical or
significant to hint at unreasonableness. It must be noted that the land was not yet
technically surveyed at the time of the sale. As vendors who themselves executed
the Bilihan ng Lupa, petitioners may rightly be presumed to have acquired a good estimate
of the value and area of the bahaging palayan.

As for the last assigned error, the appellate court, in finding that the complaints were time-
barred, noted that when the complaints were filed in 1994, more than 27 years had
elapsed from the issuance of OCT No. 0-3631 and more than 20 years from the issuance
of OCT No. 0-6498. The prescriptive period of one (1) year had thus set in.1awphi1.nt

Petitioners reliance on Agne v. Director of Lands33 is misplaced since the cancellation of

title was predicated not on the ground of fraud but on want of jurisdiction. Even assuming
that petitioners actions are in the nature of a suit for quieting of title, which is
imprescriptible, the actions still necessarily fail since petitioners failed to establish the
existence of fraud.

A word on Republic Act No. 716034 which was raised by petitioners in their petition. It
expressly requires the parties to undergo a conciliation process under the Katarungang
Pambarangay, as a precondition to filing a complaint in court, 35 non-compliance with this
condition precedent does not prevent a court of competent jurisdiction from exercising its
power of adjudication over a case unless the defendants object thereto. The objection
should be seasonably made before the court first taking cognizance of the complaint, and
must be raised in the Answer or in such other pleading allowed under the Rules of Court. 36

While petitioners admittedly failed to comply with the requirement of barangay conciliation,
they assert that respondents waived such objection when they failed to raise it in their

G.R. No. 148225 March 3, 2010
CARMEN DEL PRADO, Petitioner,
vs.
SPOUSES ANTONIO L. CABALLERO and LEONARDA CABALLERO, Respondents.
DECISION
NACHURA, J.:
This is a petition for review on certiorari of the decision 1 of the Court of Appeals (CA) dated
September 26, 2000 and its resolution denying the motion for reconsideration thereof.
The facts are as follows:
In a judgment rendered on February 1, 1985 in Cadastral Case No. N-6 (LRC Rec. No. N-
611), Judge Juan Y. Reyes of the Regional Trial Court (RTC) of Cebu City, Branch 14,
adjudicated in favor of Spouses Antonio L. Caballero and Leonarda B. Caballero several
parcels of land situated in Guba, Cebu City, one of which was Cadastral Lot No. 11909,
the subject of this controversy.2 On May 21, 1987, Antonio Caballero moved for the
issuance of the final decree of registration for their lots. 3 Consequently, on May 25, 1987,
the same court, through then Presiding Judge Renato C. Dacudao, ordered the National
Land Titles and Deeds Registration Administration to issue the decree of registration and
the corresponding titles of the lots in favor of the Caballeros.4
On June 11, 1990, respondents sold to petitioner, Carmen del Prado, Lot No. 11909 on the
basis of the tax declaration covering the property. The pertinent portion of the deed of sale
reads as follows:
That we, Spouses ANTONIO L. CABALLERO and LEONARDA B. CABALLERO, Filipinos,
both of legal age and residents of Talamban, Cebu City, Philippines, for and in
consideration of the sum of FORTY THOUSAND PESOS (40,000.00), Philippine
Currency, paid by CARMEN DEL PRADO, Filipino, of legal age, single and a resident of
Sikatuna St., Cebu City, Philippines, the receipt of which is full is hereby acknowledged, do
by these presents SELL, CEDE, TRANSFER, ASSIGN & CONVEY unto the said
CARMEN DEL PRADO, her heirs, assigns and/or successors-in-interest, one (1)
unregistered parcel of land, situated at Guba, Cebu City, Philippines, and more particularly
described and bounded, as follows:
"A parcel of land known as Cad. Lot No. 11909, bounded as follows:
North : Lot 11903
East : Lot 11908
West : Lot 11910
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
South : Lot 11858 & 11912
containing an area of 4,000 square meters, more or less, covered by Tax Dec. No. 00787
of the Cebu City Assessors Office, Cebu City." of which parcel of land we are the absolute
and lawful owners.
Original Certificate of Title (OCT) No. 1305, covering Lot No. 11909, was issued only on
November 15, 1990, and entered in the "Registration Book" of the City of Cebu on
December 19, 1990.5 Therein, the technical description of Lot No. 11909 states that said
lot measures about 14,457 square meters, more or less.6
On March 20, 1991, petitioner filed in the same cadastral proceedings a "Petition for
Registration of Document Under Presidential Decree (P.D.) 1529" 7 in order that a
certificate of title be issued in her name, covering the whole Lot No. 11909. In the petition,
petitioner alleged that the tenor of the instrument of sale indicated that the sale was for a
lump sum or cuerpo cierto, in which case, the vendor was bound to deliver all that was
included within said boundaries even when it exceeded the area specified in the contract.
Respondents opposed, on the main ground that only 4,000 sq m of Lot No. 11909 was
sold to petitioner. They claimed that the sale was not for a cuerpo cierto. They moved for
the outright dismissal of the petition on grounds of prescription and lack of jurisdiction.
After trial on the merits, the court found that petitioner had established a clear and positive
right to Lot No. 11909. The intended sale between the parties was for a lump sum, since
there was no evidence presented that the property was sold for a price per unit. It was
apparent that the subject matter of the sale was the parcel of land, known as Cadastral Lot
No. 11909, and not only a portion thereof.8
Thus, on August 2, 1993, the court a quo rendered its decision with the following
dispositive portion:
WHEREFORE, premises considered, the petition is hereby granted and judgment is
hereby rendered in favor of herein petitioner. The Register of Deeds of the City of Cebu is
hereby ordered and directed to effect the registration in his office of the Deed of Absolute
Sale between Spouses Antonio Caballero and Leonarda Caballero and Petitioner, Carmen
del Prado dated June 11, 1990 covering Lot No. 11909 after payment of all fees prescribed
by law. Additionally, the Register of Deeds of the City of Cebu is hereby ordered to cancel
Original Certificate No. 1305 in the name of Antonio Caballero and Leonarda Caballero
and the Transfer Certificate of Title be issued in the name of Petitioner Carmen del Prado
covering the entire parcel of land known as Cadastral Lot No. 11909.9
An appeal was duly filed. On September 26, 2000, the CA promulgated the assailed
decision, reversing and setting aside the decision of the RTC.
The CA no longer touched on the character of the sale, because it found that petitioner
availed herself of an improper remedy. The "petition for registration of document" is not
one of the remedies provided under P.D. No. 1529, after the original registration has been
effected. Thus, the CA ruled that the lower court committed an error when it assumed

jurisdiction over the petition, which prayed for a remedy not sanctioned under the Property
Registration Decree. Accordingly, the CA disposed, as follows:
IN VIEW OF ALL THE FOREGOING, the appealed decision is REVERSED and SET
ASIDE and a new one entered dismissing the petition for lack of jurisdiction. No
pronouncement as to costs.10
Aggrieved, petitioner filed the instant petition, raising the following issues:
I. WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ERROR IN
MAKING FINDINGS OF FACT CONTRARY TO THAT OF THE TRIAL COURT[;]
II. WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ERROR IN
FAILING TO RULE THAT THE SALE OF THE LOT IS FOR A LUMP SUM OR CUERPO
CIERTO[;]
III. WHETHER OR NOT THE COURT A QUO HAS JURISDICTION OVER THE PETITION
FOR REGISTRATION OF THE DEED OF ABSOLUTE SALE DATED 11 JUNE 1990
EXECUTED BETWEEN HEREIN PETITIONER AND RESPONDENTS[.]11
The core issue in this case is whether or not the sale of the land was for a lump sum or
not.
Petitioner asserts that the plain language of the Deed of Sale shows that it is a sale of a
real estate for a lump sum, governed under Article 1542 of the Civil Code. 12 In the contract,
it was stated that the land contains an area of 4,000 sq m more or less, bounded on the
North by Lot No. 11903, on the East by Lot No. 11908, on the South by Lot Nos. 11858 &
11912, and on the West by Lot No. 11910. When the OCT was issued, the area of Lot No.
11909 was declared to be 14,475 sq m, with an excess of 10,475 sq m. In accordance with
Article 1542, respondents are, therefore, duty-bound to deliver the whole area within the
boundaries stated, without any corresponding increase in the price. Thus, petitioner
concludes that she is entitled to have the certificate of title, covering the whole Lot No.
11909, which was originally issued in the names of respondents, transferred to her name.
We do not agree.
In Esguerra v. Trinidad,13 the Court had occasion to discuss the matter of sales involving
real estates. The Courts pronouncement is quite instructive:
In sales involving real estate, the parties may choose between two types of pricing
agreement: a unit price contract wherein the purchase price is determined by way of
reference to a stated rate per unit area (e.g., 1,000 per square meter), or a lump sum
contract which states a full purchase price for an immovable the area of which may be
declared based on the estimate or where both the area and boundaries are stated (e.g.,
1 million for 1,000 square meters, etc.). In Rudolf Lietz, Inc. v. Court of Appeals (478
SCRA 451), the Court discussed the distinction:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
"In a unit price contract, the statement of area of immovable is not conclusive and the
price may be reduced or increased depending on the area actually delivered. If the vendor
delivers less than the area agreed upon, the vendee may oblige the vendor to deliver all
that may be stated in the contract or demand for the proportionate reduction of the
purchase price if delivery is not possible. If the vendor delivers more than the area stated
in the contract, the vendee has the option to accept only the amount agreed upon or to
accept the whole area, provided he pays for the additional area at the contract rate.
xxxx
In the case where the area of an immovable is stated in the contract based on an estimate,
the actual area delivered may not measure up exactly with the area stated in the contract.
According to Article 1542 of the Civil Code, in the sale of real estate, made for a lump sum
and not at the rate of a certain sum for a unit of measure or number, there shall be no
increase or decrease of the price, although there be a greater or less areas or number
than that stated in the contract. . . .
xxxx
Where both the area and the boundaries of the immovable are declared, the area covered
within the boundaries of the immovable prevails over the stated area. In cases of conflict
between areas and boundaries, it is the latter which should prevail. What really defines a
piece of ground is not the area, calculated with more or less certainty, mentioned in its
description, but the boundaries therein laid down, as enclosing the land and indicating its
limits. In a contract of sale of land in a mass, it is well established that the specific
boundaries stated in the contract must control over any statement with respect to the area
contained within its boundaries. It is not of vital consequence that a deed or contract of
sale of land should disclose the area with mathematical accuracy. It is sufficient if its extent
is objectively indicated with sufficient precision to enable one to identify it. An error as to
the superficial area is immaterial. Thus, the obligation of the vendor is to deliver everything
within the boundaries, inasmuch as it is the entirety thereof that distinguishes the
determinate object.14
The Court, however, clarified that the rule laid down in Article 1542 is not hard and fast and
admits of an exception. It held:
A caveat is in order, however. The use of "more or less" or similar words in designating
quantity covers only a reasonable excess or deficiency. A vendee of land sold in gross or
with the description "more or less" with reference to its area does not thereby ipso facto
take all risk of quantity in the land..
Numerical data are not of course the sole gauge of unreasonableness of the excess or
deficiency in area. Courts must consider a host of other factors. In one case (see Roble v.
Arbasa, 414 Phil. 343 [2001]), the Court found substantial discrepancy in area due to
contemporaneous circumstances. Citing change in the physical nature of the property, it
was therein established that the excess area at the southern portion was a product of
reclamation, which explained why the lands technical description in the deed of sale
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

indicated the seashore as its southern boundary, hence, the inclusion of the reclaimed WHEREFORE, the petition is DENIED.
area was declared unreasonable.15
SO ORDERED.
In the instant case, the deed of sale is not one of a unit price contract. The parties agreed
on the purchase price of 40,000.00 for a predetermined area of 4,000 sq m, more or less, G.R. No. 170540
bounded on the North by Lot No. 11903, on the East by Lot No. 11908, on the South by
Lot Nos. 11858 & 11912, and on the West by Lot No. 11910. In a contract of sale of land in
a mass, the specific boundaries stated in the contract must control over any other Present:
statement, with respect to the area contained within its boundaries. 161avvphi1

QUISUMBING,** J.,
Blacks Law Dictionary17 defines the phrase "more or less" to mean:
CARPIO, J., Chairperson,
About; substantially; or approximately; implying that both parties assume the risk of any
ordinary discrepancy. The words are intended to cover slight or unimportant inaccuracies CHICO-NAZARIO,
in quantity, Carter v. Finch, 186 Ark. 954, 57 S.W.2d 408; and are ordinarily to be EUFEMIA BALATICO VDA.
interpreted as taking care of unsubstantial differences or differences of small importance DE AGATEP,
compared to the whole number of items transferred. Petitioner, PERALTA, and

ABAD,*** JJ.
Clearly, the discrepancy of 10,475 sq m cannot be considered a slight difference in
quantity. The difference in the area is obviously sizeable and too substantial to be - versus -
overlooked. It is not a reasonable excess or deficiency that should be deemed included in
the deed of sale.
Promulgated:
ROBERTA* L.
We take exception to the avowed rule that this Court is not a trier of facts. After an RODRIGUEZ and NATALIA
October 28, 2009
assiduous scrutiny of the records, we lend credence to respondents claim that they AGUINALDO VDA. DE
intended to sell only 4,000 sq m of the whole Lot No. 11909, contrary to the findings of the LIM,
lower court. The records reveal that when the parties made an ocular inspection, petitioner Respondents.
specifically pointed to that portion of the lot, which she preferred to purchase, since there x---------------------------------------------------x
were mango trees planted and a deep well thereon. After the sale, respondents delivered
and segregated the area of 4,000 sq m in favor of petitioner by fencing off the area of
10,475 sq m belonging to them.18
DECISION
Contracts are the law between the contracting parties. Sale, by its very nature, is a
consensual contract, because it is perfected by mere consent. The essential elements of a
contract of sale are the following: (a) consent or meeting of the minds, that is, consent to
transfer ownership in exchange for the price; (b) determinate subject matter; and (c) price
certain in money or its equivalent. All these elements are present in the instant case. 19 PERALTA, J.

More importantly, we find no reversible error in the decision of the CA. Petitioners
recourse, by filing the petition for registration in the same cadastral case, was improper. It
is a fundamental principle in land registration 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. Such indefeasibility commences after one year from the date of entry of Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court
the decree of registration.20 Inasmuch as the petition for registration of document did not
interrupt the running of the period to file the appropriate petition for review and considering seeking the reversal and setting aside of the Decision [1] of the Court of Appeals (CA) dated
that the prescribed one-year period had long since expired, the decree of registration, as
well as the certificate of title issued in favor of respondents, had become incontrovertible. 21 September 9, 2005 in CA-G.R. CV No. 83163which affirmed the May 12, 2004 Decision of
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

the Regional Trial Court (RTC) of Aparri, Cagayan, Branch 8, in Civil Case No. 08-298. with barbed wire and introduced improvements thereon. Subsequently, Agatep died in

Petitioner also assails the CA Resolution[2] dated November 16, 2005 denying her motion 1978. Despite his death, his heirs, including herein petitioner, continued to possess the

for reconsideration. property.

The factual and procedural antecedents of the case are as follows: In July 1992, the subject lot was included among PNB's acquired assets for sale. Later on,

an invitation to bid was duly published. On April 20, 1993, the disputed parcel of land was

The present case arose from a dispute involving a parcel of land located at Zinundungan, sold to herein respondent Roberta L. Rodriguez (Rodriguez), who is the daughter of

Lasam, Cagayan with an area of 1,377 square meters and covered by Transfer Certificate respondent Lim.[8] Subsequently, TCT No. T-65894, in the name of PNB, was canceled

of Title (TCT) No. T-10759 of the Register of Deeds of the Province of Cagayan.[3] and a new title (TCT No. T-89400) was issued in the name of Rodriguez. [9]

On January 27, 1995, herein petitioner filed a Complaint [10] for reconveyance and/or
The subject property was previously owned by herein respondent Natalia Aguinaldo Vda.
damages with the RTC of Aparri, Cagayan against herein respondents.
de Lim. On July 18, 1975, Lim mortgaged the lot to the Philippine National Bank (PNB),

Tuguegarao Branch, to secure a loan of P30,000.00 which she obtained from the said
Later, the complaint was amended to implead PNB as a party-defendant.[11]
bank. The mortgage contract was duly annotated on TCT No. T-10759. Lim was not able

to pay her loan prompting PNB to foreclose the property. On April 13, 1983, the subject
On January 20, 2000, the RTC dismissed the amended complaint for failure of herein
parcel of land was sold at public auction to PNB as the highest bidder. [4] Lim failed to
petitioner (then plaintiff) to file her Pre-Trial Brief.[12] Petitioner filed a motion for
redeem the property. After the expiration of the one-year redemption period allowed by
reconsideration but the RTC denied it. Thereafter, trial ensued.
law, PNB consolidated its ownership over the disputed land. [5] As a consequence, TCT No.

T-10759 in the name of Lim was canceled and a new certificate of title (TCT No. T-65894)
On May 12, 2004, the RTC rendered judgment in favor of herein respondents. [13] The
was issued in the name of PNB on November 8, 1985.[6]
dispositive portion of the Decision reads as follows:

WHEREFORE, the Court hereby renders judgment to wit:

Meanwhile, on August 18, 1976, while the mortgage was still in effect, Lim sold the subject
1. Dismiss the instant complaint for reconveyance for lack of merit;
property to herein petitioner's husband, Isaac Agatep (Agatep), for a sum 2. Sustain the legality of TCT No. 10559[14] in the name of
defendant Roberta Rodriguez; and
of P18,000.00.[7] However, the sale was not registered. Neither did Lim deliver the title to
3. Award actual damages in favor of plaintiff Eufemia Balatico Vda. de
petitioner or her husband. Nonetheless, Agatep took possession of the same, fenced it Agatep against defendant Natalia Aguinaldo Vda. de Lim in the amount
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

of Php18,000.00 with legal interest to be computed from the filing of the

instant case up to the full completion of its payment.
SO DECIDED.[15]
In awarding damages in favor of herein petitioner, the RTC ruled that Lim enriched herself
IV.2. IN HOLDING THAT NOTWITHSTANDING THE DISMISSAL OF
THE AMENDED COMPLAINT AS AGAINST PNB, THE TRIAL COURT
IN ITS DECISION NONETHELESS FULLY PASSED UPON THE
MERITS OF APPELLANT'S CAUSE OF ACTION AGAINST THE SAID
MORTGAGEE BANK, THE APPELLATE COURT COMMITTED A
REVERSIBLE ERROR;

at the expense of petitioner and her husband by benefiting from the proceeds of the sale
IV.3. AS A NECESSARY CONSEQUENCE OF THE ERROR IV.2, THE
but failing to deliver the object of such sale. Hence, on grounds of justice and equity, RULING OF THE APPELLATE COURT THAT PNB IS A
MORTGAGEE, BUYER AND LATER SELLER IN GOOD FAITH, IS A
petitioner should be awarded an adequate compensation for the value of the loss suffered. REVERSIBLE ERROR;

IV.4. THE DECISION, ANNEX A, ERRED IN REJECTING

Herein petitioner filed an appeal with the CA contending that the RTC erred in not PETITIONER'S ARGUMENTS THAT PNB DID NOT ACQUIRE
OWNERSHIP OVER THE PROPERTY IN QUESTION;
considering the merit of the evidence and arguments proven and submitted by petitioner on
IV.5. THE DECISION, ANNEX A, ERRED IN RULING THAT
the issues defined and agreed upon by the parties. Petitioner also averred that the RTC PETITIONER'S CONTENTION THAT THE TRIAL COURT DECIDED
THE CASE UPON SUCH ISSUES DIFFERENT FROM THOSE
erred in deciding the case on issues different from those defined and agreed upon by the AGREED UPON DURING THE PRE-TRIAL CONFERENCE
DESERVES SCANT CONSIDERATION; AND
parties during the pre-trial conference and that the trial court further erred in dismissing the

amended complaint. IV.6. THE DECISION, ANNEX A, ERRED IN RULING THAT

PETITIONER IS NOT ENTITLED TO HER CAUSE OF ACTION OF
RECONVEYANCE.[16]

On September 9, 2005, the CA rendered its Decision dismissing herein petitioner's appeal In her first assigned error, petitioner contends that Section 6, Rule 18 of the Rules of Court

for lack of merit and affirming the assailed Decision of the RTC. does not require another pre-trial, as well as the filing of another pre-trial brief, when the

complaint is amended to implead another defendant.

Petitioner filed a motion for reconsideration, but the CA denied it in its Resolution

dated November 16, 2005.

The Court does not agree.

In Tiu v. Middleton,[17] the Court, giving emphasis on the importance of a pre-trial, held that:
Hence, the present petition with the following assignment of errors:
Pre-trial is an answer to the clarion call for the speedy disposition of
cases. Although it was discretionary under the 1940 Rules of Court, it
IV.1. IN AFFIRMING THE DECISION OF THE TRIAL COURT IN
was made mandatory under the 1964 Rules and the subsequent
DISMISSING THE AMENDED COMPLAINT AGAINST THE PNB, THE
amendments in 1997. Hailed as the most important procedural
APPELLATE COURT COMMITTED A REVERSIBLE ERROR;

innovation in Anglo-Saxon justice in the nineteenth century, pre-trial
seeks to achieve the following:
(a) The possibility of an amicable settlement or of a
submission to alternative modes of dispute
resolution;
(b) The simplification of the issues;
(c) The necessity or desirability of amendments to
the pleadings;
(d) The possibility of obtaining stipulations or
admissions of facts and of documents to avoid
unnecessary proof;
(e) The limitation of the number of witnesses;
(f) The advisability of a preliminary reference of
issues to a commissioner;
(g) The propriety of rendering judgment on the
pleadings, or summary judgment, or of dismissing
the action should a valid ground therefor be found to
exist;
(h) The advisability or necessity of suspending the
proceedings; and
(i) Such other matters as may aid in the prompt
disposition of the action.[18]
In consonance with these objectives, Section 6, Rule 18 of the Rules of Court, as
amended, provides:
SEC. 6. Pre-trial brief. The parties shall file with the court and serve on
the adverse party, in such manner as shall ensure their receipt thereof
at least three (3) days before the date of the pre-trial, their respective
pre-trial briefs which shall contain, among others:
(a) A statement of their willingness to enter into
amicable settlement or alternative modes of
dispute resolution, indicating the desired
terms thereof;
(b) A summary of admitted facts and proposed
stipulation of facts;
(c) The issues to be tried or resolved;
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
(d) The documents or exhibits to be presented,
stating the purpose thereof;
(e) A manifestation of their having availed, or their
intention to avail, themselves of discovery
procedures or referral to commissioners; and
(f) The number and names of the witnesses, and the
substance of their respective testimonies.
Failure to file the pre-trial brief shall have the same effect as failure to
appear at the pre-trial.
The pre-trial brief serves as a guide during the pre-trial conference so as to simplify,
abbreviate and expedite the trial if not to dispense with it. It is a devise essential to the
speedy disposition of disputes, and parties cannot brush it aside as a mere
technicality.[19] In addition, pre-trial rules are not to be belittled or dismissed, because their
non-observance may result in prejudice to a partys substantive rights. Like all rules, they
should be followed except only for the most persuasive of reasons when they may be
relaxed to relieve a litigant of an injustice not commensurate with the degree of his
thought[less]ness in not complying with the procedure. [20]
Petitioner posits that even if an amended complaint is filed for the purpose of impleading
another party as defendant, where no additional cause of action was alleged and the
amount of prayer for damages in the original complaint was the same, another pre-trial is
not required and a second pre-trial brief need not be filed.
It must be pointed out, however, that in the cases [21] cited by petitioner to support her
argument, the Court found no need for a second pre-trial precisely because there are no
additional causes of action alleged and the impleaded defendants merely adopted and
repleaded all the pleadings of the original defendants. Petitioner's reliance on the above-
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

cited cases is misplaced because, in the present case, the RTC correctly found that trial court.[23] Considering the circumstances established on record in the instant case, the

petitioner had a separate cause of action against PNB. A separate cause of action Court finds no cogent reason to set aside the order of the RTC dismissing the complaint of

necessarily means additional cause of action. Moreover, the defenses adopted by PNB are petitioner against PNB.

completely different from the defenses of Lim and Rodriguez, necessitating a separate

determination of the matters enumerated under Section 6, Rule 18 of the Rules of Court With respect to the second and third assignment of errors, petitioner argues that the CA

insofar as PNB and petitioner are concerned. On these bases, we find no error in the ruling erred in sustaining the RTC when it passed upon the merits of petitioner's cause of action

of the CA which sustained the trial court's dismissal of the amended complaint against against PNB notwithstanding the fact that the complaint against the latter was already

PNB for failure of petitioner to file her pre-trial brief. dismissed. Petitioner contends that a person who was not impleaded in a case could not

be bound by the decision rendered therein. Petitioner then proceeds to conclude that the

Corollarily, Sections 4 and 5 of the same Rule state: CA erred in sustaining the trial court's finding that PNB was a mortgagee, buyer and seller

in good faith.
Sec. 4. Appearance of parties. It shall be the duty of the parties and
their counsel to appear at the pre-trial. The non-appearance of a party
may be excused only if a valid cause is shown therefor or if a
representative shall appear in his behalf fully authorized in writing to The Court is not persuaded.
enter into an amicable settlement, to submit to alternative modes of
dispute resolution, and to enter into stipulations or admissions of facts
and of documents.
It is true that the judgment of the trial and appellate courts in the present case could not
Sec. 5. Effect of failure to appear. The failure of the plaintiff to appear
when so required pursuant to the next preceding section shall be cause bind the PNB for the latter is not a party to the case. However, this does not mean that the
for dismissal of the action. The dismissal shall be with prejudice, unless
otherwise ordered by the court. x x x trial and appellate courts are precluded from making findings which are necessary for a

just, complete and proper resolution of the issues raised in the present case. The Court

In the present case, the Court observes that in the Order of the RTC dated June 6, finds no error in the determination by the trial and appellate courts of the question of

2000,[22] the trial court noted the absence of both the petitioner and her counsel during the whether or not PNB was a mortgagee, buyer and, later on, seller in good faith as this

scheduled pre-trial conference with respect to the amended complaint impleading PNB. would bear upon the ultimate issue of whether petitioner is entitled to reconveyance.

Under the above-quoted Rules, such absence is an additional ground to dismiss the action

against PNB. Petitioner insists that PNB is not a mortgagee in good faith asserting that, if it only

exercised due diligence, it would have found out that petitioner and her husband were

Whether an order of dismissal should be maintained under the circumstances of a already in adverse possession of the subject property as early as two years before the

particular case or whether it should be set aside depends on the sound discretion of the same was sold to them. This claim, however, is contradicted by no less than petitioner's
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Land Titles and Deeds (Finals) 2017

averments in her Brief filed with the CA wherein she stated that [i]mmediately after the

sale, the land was delivered to Isaac Agatep x x x Since that time up to the present, Isaac The Court finds petitioner's arguments untenable.

Agatep and after his death, the Appellant have been in continuous, uninterrupted, adverse

and public possession of the said parcel of land. [24] The foregoing assertion only shows that The Court's ruling in Manuel R. Dulay Enterprises, Inc. v. Court of Appeals [26] is instructive,

petitioner's husband took possession of the subject lot only after the same was sold to him. to wit:

Petitioner's contention that private respondent Torres never acquired

In any case, the Court finds no error in the findings of both the RTC and the CA that PNB ownership over the subject property since the latter was never in actual
possession of the subject property nor was the property delivered to
is indeed an innocent mortgagee for value. When the lots were mortgaged to PNB by Lim, him is also without merit.

the titles thereto were in the latter's name, and they showed neither vice nor infirmity. In Paragraph 1, Article 1498 of the New Civil Code provides:

accepting the mortgage, PNB was not required to make any further investigation of the When the sale is made through a public instrument, the
execution thereof shall be equivalent to the delivery
titles to the properties being given as security, and could rely entirely on what was stated in of the thing which is the object of the contract, if
from the deed the contrary does not appear or
the aforesaid title. The public interest in upholding the indefeasibility of a certificate of title,
cannot clearly be inferred.
as evidence of the lawful ownership of the land or of any encumbrance thereon, protects a
Under the aforementioned article, the mere execution of the deed of
buyer or mortgagee who, in good faith, relies upon what appears on the face of the sale in a public document is equivalent to the delivery of the property.
Likewise, this Court had held that:
certificate of title.[25]
It is settled that the buyer in a foreclosure
sale becomes the absolute owner of the
property purchased if it is not redeemed during the
period of one year after the registration of the sale.
As such, he is entitled to the possession of the said
In her fourth assigned error, petitioner contends that PNB did not acquire ownership over
property and can demand it at any time following the
the disputed lot because the said property was not delivered to it. Petitioner asserts that consolidation of ownership in his name and the
issuance to him of a new transfer certificate of title.
the execution of a public document does not constitute sufficient delivery to PNB, The buyer can, in fact, demand possession of the
land even during the redemption period except that
considering that the subject property is in the adverse possession, under claim of he has to post a bond in accordance with Section 7
of Act No. 3133, as amended. No such bond is
ownership, of petitioner and her predecessor-in-interest. Petitioner further assails the ruling required after the redemption period if the property
is not redeemed. Possession of the land then
of the CA that PNB, who was the buyer in the foreclosure sale, became the absolute becomes an absolute right of the purchaser as
confirmed owner.
owner of the property purchased when it consolidated its ownership thereof for failure of
Therefore, prior physical delivery or possession is not legally required
the mortgagor Lim to redeem the subject property during the period of one year after the since the execution of the Deed of Sale is deemed equivalent to
delivery.[27]
registration of the sale.
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Land Titles and Deeds (Finals) 2017

by the latter. Their possession of the disputed lot could not, therefore, be considered as a

This ruling was reiterated in Spouses Sabio v. The International Corporate Bank, legal impediment which could prevent PNB from acquiring ownership and possession

Inc.[28] wherein it was held that: thereof.

Notwithstanding the presence of illegal occupants on the subject

property, transfer of ownership by symbolic delivery under Article 1498 It bears to reiterate the undisputed fact, in the instant case, that Lim mortgaged the subject
can still be effected through the execution of the deed of conveyance.
As we held in Power Commercial and Industrial Corp. v. Court of property to PNB prior to selling the same to petitioner's husband. Settled is the rule that a
Appeals [274 SCRA 597, 610], the key word is control, not possession,
of the subject property. Considering that the deed of conveyance mortgage is an accessory contract intended to secure the performance of the principal
proposed by respondents did not stipulate or infer that petitioners could
not exercise control over said property, delivery can be effected obligation. One of its characteristics is that it is inseparable from the property. It adheres to
through the mere execution of said deed.
the property regardless of who its owner may subsequently be. [30]
x x x It is sufficient that there are no legal impediments to prevent
petitioners from gaining physical possession of the subject property. As
stated above, prior physical delivery or possession is not legally
required and the execution of the deed of sale or conveyance is
deemed equivalent to delivery. This deed operates as a formal or This is true even in the case of a real estate mortgage because, pursuant to Article 2126 of
symbolic delivery of the property sold and authorizes the buyer or
the Civil Code, the mortgage directly and immediately subjects the property upon which it
transferee to use the document as proof of ownership. Nothing more is
required.[29]
is imposed, whoever the possessor may be, to the fulfillment of the obligation for whose

security it was constituted. It is inseparable from the property mortgaged as it is a right in

rem - a lien on the property whoever its owner may be. It subsists notwithstanding a
Thus, the execution of the Deed of Sale in favor of PNB, after the expiration of the
change in ownership; in short, the personality of the owner is disregarded. Thus, all
redemption period, is deemed equivalent to delivery.
subsequent purchasers must respect the mortgage whether the transfer to them be with or

without the consent of the mortgagee, for such mortgage until discharged follows the
As to petitioner's contention that the execution of a public document in favor of PNB did not
property.[31]
constitute sufficient delivery to it because the property involved is in the actual and adverse

possession of petitioner and her husband, it must be noted that petitioner and her
Petitioner avers that she and her husband were not aware of the mortgage contract which
husband's possession of the disputed lot is derived from their right as buyers of the subject
was executed between PNB and Lim prior to the sale of the subject property by the latter
parcel of land. As buyers or transferees, petitioner and her husband simply stepped into
to her husband. The fact remains, however, that the mortgage was registered and
the shoes of Lim, who, prior to selling the subject property to them, mortgaged the same to
annotated on the certificate of title covering the subject property.
PNB. As Lim's successors-in-interest, their possession could not be said to be adverse to

that of Lim. Thus, they are also bound to recognize and respect the mortgage entered into
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It is settled that registration in the public registry is notice to the whole world. [32] Every necessary implication are as much integral parts of the pre-trial order as those that are

conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry expressly stipulated.[35] In the case before us, a cursory reading of the issues enumerated

affecting registered land shall, if registered, filed or entered in the Office of the Register of in the Pre-Trial Order of the RTC would readily show that the complete and proper

Deeds of the province or city where the land to which it relates lies, be constructive notice resolution of these issues would necessarily include all other matters pertinent to

to all persons from the time of such registering, filing or entering. [33] Under the rule of determining whether herein petitioner is the lawful owner of the subject property and is,

notice, it is presumed that the purchaser has examined every instrument of record therefore, entitled to reconveyance. It would be illogical not to touch on the question of

affecting the title. Such presumption may not be rebutted. He is charged with notice of whether the mortgage contract between Lim and PNB is binding on petitioner and her

every fact shown by the record and is presumed to know every fact shown by the record husband or whether PNB lawfully foreclosed and acquired ownership of the subject

and to know every fact which an examination of the record would have disclosed. This property because a resolution of these issues is determinative of whether there are no

presumption cannot be overcome by any claim of innocence or good faith. Otherwise, the impediments in petitioner and her husband's acquisition of ownership of the disputed lot.

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 Coming to the last assigned error, the Court agrees with the disquisition of the CA that an

any more than one may be permitted to show that he was ignorant of the provisions of the action for reconveyance is one that seeks to transfer property, wrongfully registered by

law. The rule that all persons must take notice of the facts which the public record contains another, to its rightful and legal owner. [36] From the foregoing discussions, the Court finds

is a rule of law. The rule must be absolute; any variation would lead to endless confusion no sufficient reason to depart from the findings of the RTC and the CA that, based on the

and useless litigation.[34] In the present case, since the mortgage contract was registered, evidence on record, there was no wrongful registration of the property, first in the name of

petitioner may not claim lack of knowledge thereof as a valid defense. The subsequent PNB as the purchaser when the property was auctioned and, subsequently, in the name of

sale of the property to petitioner's husband cannot defeat the rights of PNB as the respondent Rodriguez who bought the subject property when the same was offered for

mortgagee and, subsequently, the purchaser at the auction sale whose rights were derived sale by PNB. Hence, the CA did not commit error in affirming the RTC's dismissal of herein

from a prior mortgage validly registered. petitioner's complaint for reconveyance.

In her fifth assignment of error, petitioner contends that the trial court deviated from the WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court

issues identified in the Pre-Trial Order and that the case was decided on issues different of Appeals, dated September 9, 2005 and November 16, 2005, respectively, in CA-G.R.

from those agreed upon during the pre-trial. Settled is the rule that a pre-trial order is not CV No. 83163 are AFFIRMED.

meant to be a detailed catalogue of each and every issue that is to be or may be taken up

during the trial. Issues that are impliedly included therein or may be inferable therefrom by SO ORDERED.
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Land Titles and Deeds (Finals) 2017

JOSEPH L. SY, NELSON GOLPEO and JOHN TAN, G.R. No. 154450
This is a petition for review on certiorari under Rule 45 of the Rules of Court of the
Petitioners,
Decision of the Court of Appeals (CA) dated July 23, 2002 in CA-G.R. CV No. 53314.

The case originated from an action for reconveyance of a large tract of land
- versus -
Present: in Caloocan City before the Regional Trial Court (RTC), Branch 129, Caloocan City,

entitled Nicolas Capistrano, Jr. v. Nenita F. Scott, Spouses Juanito and Josefina Jamilar,
NICOLAS CAPISTRANO, JR., substituted by JOSEFA B.
CAPISTRANO, REMEDIOS TERESITA B. CAPISTRANO and YNARES-SANTIAGO, J., Joseph L. Sy, Nelson Golpeo and John Tan, and the Register of
MARIO GREGORIO B. CAPISTRANO; NENITA F. SCOTT;
Deeds, Caloocan City. Said case was docketed as Civil Case No. C-15791.
SPS. JUANITO JAMILAR and JOSEFINA JAMILAR; SPS. Chairperson,
MARIANO GILTURA and ADELA GILTURA,
AUSTRIA-MARTINEZ, The antecedents are as follows:
Respondents.
CHICO-NAZARIO,
Sometime in 1980, Nenita Scott (Scott) approached respondent Nicolas Capistrano, Jr.
NACHURA, and
(Capistrano) and offered her services to help him sell his 13,785 square meters of land
REYES, JJ.
covered by Transfer Certificate of Title (TCT) No. 76496 of the Register of Deeds of

Caloocan City. Capistrano gave her a temporary authority to sell which expired without any

Promulgated: sale transaction being made. To his shock, he discovered later that TCT No. 76496, which

was in his name, had already been cancelled on June 24, 1992 and a new one, TCT No.

July 28, 2008 249959, issued over the same property on the same date to Josefina A. Jamilar. TCT No.

249959 likewise had already been cancelled and replaced by three (3) TCTs (Nos.

251524, 251525, and 251526), all in the names of the Jamilar spouses. TCT Nos. 251524
x------------------------------------------------------------------------------------x
and 251526 had also been cancelled and replaced by TCT Nos. 262286 and 262287

issued to Nelson Golpeo and John B. Tan, respectively.

Upon further inquiries, Capistrano also discovered the following:

RESOLUTION

NACHURA, J.: 1. The cancellation of his TCT No. 76496 and the issuance
of TCT No. 249959 to Jamilar were based upon two (2) deeds
of sale, i.e., a Deed of Absolute Sale purportedly executed by
him in favor of Scott on March 9, 1980 and a Deed of

Absolute Sale allegedly executed by Scott in favor of Jamilar
on May 17, 1990.
2. The supposed 1980 sale from him to Scott was
for P150,000.00; but despite the lapse of more than 10 years
thereafter, the alleged 1990 sale from Scott to Jamilar was
also for P150,000.00.
3. Both deeds were presented for registration simultaneously
on June 24, 1992.
4. Although the deed in favor of Scott states that it was
executed on March 9, 1980, the annotation thereof at the
back of TCT No. 76496 states that the date of the instrument
is March 9, 1990.
5. Even if there was no direct sale from Capistrano to
Jamilar, the transfer of title was made directly to the latter. No
TCT was issued in favor of Scott.
6. The issuance of TCT No. 249959 in favor of Jamilar was
with the help of Joseph Sy, who provided for (sic) money for
the payment of the capital gains tax, documentary stamps,
transfer fees and other expenses of registration of the deeds
of sale.
7. On July 8, 1992, an Affidavit of Adverse Claim was
annotated at the back of Jamilars TCT No. 249959 at the
instance of Sy, Golpeo, and Tan under a Contract to Sell in
their favor by the Jamilar spouses. Said contract was
executed sometime in May, 1992 when the title to the
property was still in the name of Capistrano.
8. Around July 28, 1992, upon request of the Jamilar
spouses, TCT No. 249959 was cancelled and three (3) new
certificates of title (TCT Nos. 251524, 251525, and 251526)
all in the name of Jamilar on the basis of an alleged
subdivision plan (No. Psd-13-011917) without Capistranos
knowledge and consent as registered owner. The notice of
adverse claim of Sy, Golpeo, and Tan was carried over to the
three new titles.
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Land Titles and Deeds (Finals) 2017
9. Around August 18, 1992, Sy, Golpeo, and Tan filed Civil
Case No. C-15551 against the Jamilars and another couple,
the Giltura spouses, for alleged violations of the Contract to
Sell. They caused a notice of lis pendens to be annotated on
the three (3) TCTs in Jamilars name. Said civil case, however,
was not prosecuted.
10. On January 26, 1993, a Deed of Absolute Sale was
executed by the Jamilars and the Gilturas, in favor of Golpeo
and Tan. Thus, TCT Nos. 251524 and 251526 were cancelled
and TCT Nos. 262286 and 262287 were issued to Golpeo
and Tan, respectively. TCT No. 251525 remained in the name
of Jamilar.[1]
Thus, the action for reconveyance filed by Capistrano, alleging that his and his
wifes signatures on the purported deed of absolute sale in favor of Scott were forgeries;
that the owners duplicate copy of TCT No. 76496 in his name had always been in his
possession; and that Scott, the Jamilar spouses, Golpeo, and Tan were not innocent
purchasers for value because they all participated in defrauding him of his
property. Capistrano claimed P1,000,000.00 from all defendants as moral
damages, P100,000.00 as exemplary damages; and P100,000.00 as attorneys fees.
In their Answer with Counterclaim, the Jamilar spouses denied the allegations in
the complaint and claimed that Capistrano had no cause of action against them, as there
was no privity of transaction between them; the issuance of TCT No. 249959 in their
names was proper, valid, and legal; and that Capistrano was in estoppel. By way of
counterclaim, they sought P50,000.00 as actual damages, P50,000.00 as moral
damages, P50,000.00 as exemplary damages, and P50,000.00 as attorneys fees.
In their Answer, Sy, Golpeo, and Tan denied the allegations in the complaint and
alleged that Capistrano had no cause of action against them; that at the time they bought
the property from the Jamilars and the Gilturas as unregistered owners, there was nothing
in the certificates of title that would indicate any vice in its ownership; that a buyer in good
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Land Titles and Deeds (Finals) 2017

faith of a registered realty need not look beyond the Torrens title to search for any defect; Thereafter, trial on the merits ensued.

and that they were innocent purchasers of the land for value. As counterclaim, they
Subsequently, the trial court decided in favor of Capistrano. In its Decision
sought P500,000.00 as moral damages and P50,000.00 as attorneys fees.
dated May 7, 1996, adopting the theory of Capistrano as presented in his memorandum,

the trial court rendered judgment as follows:

In her Answer with Cross-claim, Scott denied the allegations in the complaint and

alleged that she had no knowledge or any actual participation in the execution of the deeds 1. Declaring plaintiff herein as the absolute owner of the
parcel of land located at the Tala Estate,
of sale in her favor and the Jamilars; that she only knew of the purported conveyances
Bagumbong, Caloocan City and covered by TCT No. 76496;
when she received a copy of the complaint; that her signatures appearing in both deeds of
2. Ordering defendant Register of Deeds to cause the
sale were forgeries; that when her authority to sell the land expired, she had no other cancellation of TCT No. 251525 registered in the name of
defendant Josefina Jamilar;
dealings with it; that she never received any amount of money as alleged consideration for

the property; and that, even if she were the owner, she would never have sold it at so low
3. Ordering defendant Register of Deeds to cause the
a price.
cancellation of TCT Nos. 262286 and 262287 registered in
the names of defendants Nelson Golpeo and John B. Tan;
By way of Cross-claim against Sy, Golpeo, Tan, and the Jamilars, Scott alleged

that when she was looking for a buyer of the property, the Jamilars helped her locate the
4. Ordering defendant Register of Deeds to cause the
property, and they became conversant with the details of the ownership and other
issuance to plaintiff of three (3) new TCTs, in replacement of
particulars thereof; that only the other defendants were responsible for the seeming the aforesaid TCTs Nos. 251525, 262286 and 262287;

criminal conspiracy in defrauding Capistrano; that in the event she would be held liable to

him, her other co-defendants should be ordered to reimburse her of whatever amount she 5. Ordering all the private defendants in the above-captioned
case to pay plaintiff, jointly and severally, the reduced amount
may be made to pay Capistrano; that she was entitled to P50,000.00 as moral damages
of P400,000.00 as moral damages;
and P50,000.00 as attorneys fees from her co-defendants due to their fraudulent conduct.

Later, Sy, Golpeo, and Tan filed a third-party complaint against the Giltura 6. Ordering all the private defendants in the above-captioned
case to pay to plaintiff, jointly and severally, the reduced sum
spouses who were the Jamilars alleged co-vendors of the subject property. of P50,000.00 as exemplary damages;

7. Ordering all the private defendants in the above-captioned
case to pay plaintiffs counsel, jointly and severally, the
reduced amount of P70,000.00 as attorneys fees, plus costs
of suit;
8. Ordering the dismissal of defendants Sy, Golpeo and
Tans Cross-Claim against defendant spouses Jamilar;
9. Ordering the dismissal of defendants Sy, Golpeo and
Tans Third-Party Complaint against defendant spouses
Giltura; and
10. Ordering the dismissal of the Counterclaims against
plaintiff.
SO ORDERED.[2]
On appeal, the CA, in its Decision dated July 23, 2002, affirmed the Decision of the trial
court with the modification that the Jamilar spouses were ordered to return to Sy, Golpeo,
and Tan the amount of P1,679,260.00 representing their full payment for the property, with
legal interest thereon from the date of the filing of the complaint until full payment.
Hence, this petition, with petitioners insisting that they were innocent purchasers for value
of the parcels of land covered by TCT Nos. 262286 and 262287. They claim that when
they negotiated with the Jamilars for the purchase of the property, although the title thereto
was still in the name of Capistrano, the documents shown to them the court order directing
the issuance of a new owners duplicate copy of TCT No. 76496, the new owners duplicate
copy thereof, the tax declaration, the deed of absolute sale between Capistrano and Scott,
the deed of absolute sale between Scott and Jamilar, and the real estate tax receipts there
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Land Titles and Deeds (Finals) 2017
was nothing that aroused their suspicion so as to compel them to look beyond the Torrens
title. They asseverated that there was nothing wrong in financing the cancellation of
Capistranos title and the issuance of titles to the Jamilars because the money they spent
therefor was considered part of the purchase price they paid for their property.
In their Comment, the heirs of Capistrano, who were substituted after the latters
death, reiterated the factual circumstances which should have alerted the petitioners to
conduct further investigation, thus
(a) Why the Deed of Absolute Sale supposedly executed by
Capistrano had remained unregistered for so
long, i.e., from March 9, 1980 up to June 1992, when they
were negotiating with the Jamilars and the Gilturas for their
purchase of the subject property;
(b) Whether or not the owners copy of Capistranos certificate
of title had really been lost;
(c) Whether Capistrano really sold his property to Scott and
whether Scott actually sold it to the Jamilars, which matters
were easily ascertainable as both Capistrano and Scott were
still alive and their names appear on so many documents;
(d) Why the consideration for both the March 9, 1980 sale and
the May 17, 1990 sale was the same (P150,000.00), despite
the lapse of more than 10 years;
(e) Why the price was so low (P10.88 per square meter, both
in 1980 and in 1990) when the petitioners were willing to pay
and actually paid P150.00 per square meter in May 1992; and
(f) Whether or not both deeds of sale were authentic. [3]
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In addition, the heirs of Capistrano pointed out that petitioners entered into By the same token, we agree with the CA when it held that the deed of sale between Scott

negotiations over the property, not with the registered owner thereof, but only with those and the Jamilars was also forged, as it noted the stark differences between the signatures

claiming ownership thereof based on questionable deeds of sale. of Scott in the deed of sale and those in her handwritten letters to Capistrano.

The petition should be denied. The arguments proffered by petitioners all pertain Second. In finding that the Jamilar spouses were not innocent purchasers for value of the

to factual issues which have already been passed upon by both the trial court and the CA. subject property, the CA properly held that they should have known that the signatures of

Scott and Capistrano were forgeries due to the patent variance of the signatures in the two
Findings of facts of the CA are final and conclusive and cannot be reviewed on appeal, as
deeds of sale shown to them by Scott, when Scott presented to them the deeds of sale,
long as they are based on substantial evidence. While, admittedly, there are exceptions to
one allegedly executed by Capistrano in her favor covering his property; and the other
this rule such as: (a) when the conclusion is a finding grounded entirely on speculations,
allegedly executed by Scott in favor of Capistrano over her property, the P40,000.00
surmises or conjectures; (b) when the inference made is manifestly mistaken, absurd or
consideration for which ostensibly constituted her initial and partial payment for the sale of
impossible; (c) when there is grave abuse of discretion; (d) when the judgment is based on
Capistranos property to her.
a misapprehension of facts; (e) when the findings of facts are conflicting; (f) when the CA,

in making its findings, went beyond the issues of the case and the same were contrary to The CA also correctly found the Gilturas not innocent purchasers for value, because they

the admissions of both the appellant and appellee. [4] Not one of these exceptional failed to check the veracity of the allegation of Jamilar that he acquired the property from

circumstances is present in this case. Capistrano.

First. The CA was correct in upholding the finding of the trial court that the purported sale In ruling that Sy was not an innocent purchaser for value, we share the observation of the

of the property from Capistrano to Scott was a forgery, and resort to a handwriting expert appellate court that Sy knew that the title to the property was still in the name of

was not even necessary as the specimen signature submitted by Capistrano during trial Capistrano, but failed to verify the claim of the Jamilar spouses regarding the transfer of

showed marked variance from that found in the deed of absolute sale. The technical ownership of the property by asking for the copies of the deeds of absolute sale between

procedure utilized by handwriting experts, while usually helpful in the examination of Capistrano and Scott, and between Scott and Jamilar. Sy should have likewise inquired

forged documents, is not mandatory or indispensable to the examination or comparison of why the Gilturas had to affix their conformity to the contract to sell by asking for a copy of

handwritings.[5] the deed of sale between the Jamilars and the Gilturas. Had Sy done so, he would have

learned that the Jamilars claimed that they purchased the property from Capistrano and

not from Scott.

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We also note, as found by both the trial court and the CA, Tans testimony that he, Golpeo despite the claim that Capistrano sold his property to Scott and it was Scott who sold the

and Sy are brothers, he and Golpeo having been adopted by Sys father. Tan also testified same to the Jamilars.

that he and Golpeo were privy to the transaction between Sy and the Jamilars and the
In light of the foregoing disquisitions, based on the evidence on record, we find
Gilturas, as shown by their collective act of filing a complaint for specific performance to
no error in the findings of the CA as to warrant a discretionary judicial review by this Court.
enforce the contract to sell.

WHEREFORE, the petition is DENIED DUE COURSE for failure to establish reversible
Also noteworthy and something that would have ordinarily aroused suspicion is the fact
error on the part of the Court of Appeals. Costs against petitioners.
that even before the supposed execution of the deed of sale by Scott in favor of the

Jamilars, the latter had already caused the subdivision of the property into nine (9) lots,

with the title to the property still in the name of Capistrano.

SO ORDERED.

Notable likewise is that the owners duplicate copy of TCT No. 76496 in the name of

Capistrano had always been in his possession since he gave Scott only a photocopy

thereof pursuant to the latters authority to look for a buyer of the property. On the other

hand, the Jamilars were able to acquire a new owners duplicate copy thereof by filing an

affidavit of loss and a petition for the issuance of another owners duplicate copy of TCT

No. 76496. The minimum requirement of a good faith buyer is that the vendee of the real

property should at least see the owners duplicate copy of the title. [6] A person who deals

with registered land through someone who is not the registered owner is expected to look

beyond the certificate of title and examine all the factual circumstances thereof in order to

determine if the vendor has the capacity to transfer any interest in the land. He has the

duty to ascertain the identity of the person with whom he is dealing and the latters legal

authority to convey.[7]

Finally, there is the questionable cancellation of the certificate of title of Capistrano which

resulted in the immediate issuance of a certificate of title in favor of the Jamilar spouses
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Land Titles and Deeds (Finals) 2017

DOMINGO REALTY, INC. G.R. No. 126236 On November 19, 1981, petitioner Domingo Realty filed its November 15, 1981
and AYALA STEEL
MANUFACTURING CO., INC., Complaint[3] with the Pasay City RTC against Antonio M. Acero, who conducted business
Petitioners,
Present: under the firm name A.M. Acero Trading,[4] David Victorio, John Doe, and Peter Doe, for

QUISUMBING, J., Chairperson, recovery of possession of three (3) parcels of land located in Cupang, Muntinlupa, Metro
- versus - CARPIO,
CARPIO MORALES, Manila, covered by (1) Transfer Certificate of Title (TCT) No. (75600) S-107639-Land
TINGA, and
VELASCO, JR., JJ. Records of Rizal; (2) TCT No. (67006) S-107640-Land Records of Rizal; and (3) TCT No.

COURT OF APPEALS and Promulgated: (67007) S-107643-Land Records of Rizal (the subject properties). The said lots have an
ANTONIO M. ACERO,
aggregate area of 26,705 square meters, more or less, on a portion of which Acero had
Respondents. January 26, 2007
x-----------------------------------------------------------------------------------------x
constructed a factory building for the manufacture of hollow blocks, as alleged by Domingo
DECISION
Realty.
VELASCO, JR., J.:

Good judgment comes from experience, and often experience comes On January 4, 1982, defendants Acero and Victorio filed their December 21,
from bad judgment.
Rita Mae Brown 1981 Answer[5] to the Complaint in Civil Case No. 9581-P. Acero alleged that he merely

leased the land from his co-defendant David Victorio, who, in turn, claimed to own the
The Case
property on which the hollow blocks factory of Acero stood. In the Answer, Victorio

assailed the validity of the TCTs of Domingo Realty, alleging that the said TCTs emanated
This Petition for Review on Certiorari, under Rule 45 of the Revised Rules of
from spurious deeds of sale, and claimed that he and his predecessors-in-interest had
Court, seeks the reversal of the October 31, 1995 Decision [1] of the Court of Appeals (CA)
been in possession of the property for more than 70 years.
in CA-G.R. SP No. 33407, entitled Antonio M. Acero v. Hon. Sofronio G. Sayo, et al.,

which annulled the December 7, 1987 Decision based on a Compromise Agreement

On December 3, 1987, Mariano Yu representing Domingo Realty, Luis Recato
among petitioner Domingo Realty, Inc. (Domingo Realty), respondent Antonio M. Acero,
Dy[6], and Antonio M. Acero, all assisted by counsels, executed a Compromise Agreement,
and defendant Luis Recato Dy in Civil Case No. 9581-P before the Pasay City Regional
which contained the following stipulations, to wit:
Trial Court (RTC), Branch CXI; and the August 28, 1996 Resolution [2] of the CA which

denied petitioners Motion for Reconsideration of its October 31, 1995 Decision. 1. That defendants admit and recognize the ownership of the
plaintiff over the property subject of this case, covered by TCT
No. S-107639 (75600), S-107643 (67007), and S-107640
(67006) with a total area of 26,705 square meters;
The Facts
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2. That defendant Luis Recato Dy admits and recognizes that

his title covered by TCT No. 108027 has been proven not to be
genuine and that the area indicated therein is inside the To implement the said Decision, Domingo Realty filed its January 21,
property of the plaintiff;
1988 Motion[8] asking the trial court for permission to conduct a re-survey of the subject
3. That defendant Acero admits that the property he is presently
occupying by way of lease is encroaching on a portion of the properties, which was granted in the January 22, 1988 Order.[9]
property of the plaintiff and assume[s] and undertakes to
vacate, remove and clear any and all structures erected inside
the property of the plaintiff by himself and other third parties,
duly authorized and/or who have an existing agreement with On February 2, 1988, respondent Acero filed his January 29, 1988 Motion to Nullify the
defendant Acero, and shall deliver said portion of the property
of the plaintiff free and clear of any unauthorized structures, Compromise Agreement,[10] claiming that the January 22, 1988 Order authorizing the
shanties, occupants, squatters or lessees within a period of
sixty (60) days from date of signing of this compromise survey plan of petitioner Domingo Realty as the basis of a resurvey would violate the
agreement. Should defendant Acero fail in his obligation to
Compromise Agreement since the whole area he occupied would be adjudged as owned
vacate, remove and clear the structures erected inside the
property of the plaintiff within the period of 60 days afore-
by the realty firm.
mentioned, plaintiff shall be entitled to a writ of execution for the
immediate demolition or removal of said structure to fully
implement this agreement; and ejectment of all squatters and
occupants and lessees, including the dependents to fully On March 18, 1988, Acero filed a Motion to Resurvey, [11] whereby it was alleged that the
implement this agreement;
parties agreed to have the disputed lots re-surveyed by the Bureau of Lands. Thus, the
4. That plaintiff admits and recognizes that defendant Luis
Recato Dy bought and occupied the property in good faith and trial court issued the March 21, 1988 Order[12]directing the Director of Lands to conduct a
for value whereas defendant Acero leased the portion of said
property likewise in good faith and for value hereby waives re-survey of the subject properties.
absolutely and unconditionally all claims including attorneys
fees against both defendants in all cases pending in any court
whether by virtue of any judgment or under the present
complaint and undertake to withdraw and/or move to dismiss In his June 9, 1989 Report, Elpidio T. De Lara, Chief of the Technical Services Division of
the same under the spirit of this agreement;
the Lands Management Section of the National Capital Region - Department of
5. That defendants likewise waive all claims for damages
including attorneys fees against the plaintiff; Environment and Natural Resources, submitted to the trial court Verification Survey Plan

6. That plaintiff acknowledges the benefit done by defendant No. Vs-13-000135. In the said Verification Survey Plan, petitioners TCTs covered the
Luis Recato Dy on the property by incurring expenses in
protecting and preserving the property by way of construction of entire land occupied by the respondents hollow block factory.[13]
perimeter fence and maintaining a caretaker therein and plaintiff
has agreed to pay Luis Recato Dy the amount of P100,000.00
upon approval of this agreement by this Honorable Court.[7]
On April 10, 1990, petitioner Ayala Steel Manufacturing Co., Inc. (Ayala Steel) filed its

March 30, 1990 Motion for Substitution alleging that it had purchased the subject lots,
Acting on the Compromise Agreement, the Pasay City RTC rendered
attaching to the motion TCT Nos. 152528, 152529, and 152530 all in its name, as proof of
the December 7, 1987 Decision which adopted the aforequoted six (6) stipulations and
purchase.[14]
approved the Compromise Agreement.
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The said motion was opposed by Acero claiming that this case has already been being occupied by respondent, which is about 2,000 square meters, more or less. He

terminated in accordance with the compromise agreement of the parties, hence, reiterated the same contentions in his December 21, 1991 Manifestation.[21]

substitution will no longer be necessary and justified under the circumstances. [15] The

motion was not resolved which explains why both transferor Domingo Realty and On January 13, 1992, respondent filed a Motion to Modify Order Dated 6 December

transferee Ayala Steel are co-petitioners in the instant petition. 91,[22] claiming that the said Order modified the Compromise Agreement considering that it

allegedly involved only 1,357 square meters and not the entire lot;[23] and if not amended,

In its December 28, 1990 Order,[16] the trial court directed Acero to conduct his own re- the Order would deviate from the principle that no man shall enrich himself at the expense

survey of the lots based on the technical description appearing in the TCTs of Domingo of the other.

Realty and to have the re-survey plans approved by the Bureau of Lands. The Order
In its January 15, 1992 Order,[24] the trial court approved the issuance of a Writ of
resulted from Aceros contention that he occupied only 2,000 square meters of petitioners
Execution to enforce the December 7, 1987 Decision. On February 3, 1992, respondent
property.
Acero subsequently filed a Motion for Reconsideration[25]of the January 15, 1992 Order

arguing that the Order was premature and that Verification Survey Plan No. Vs-13-000135
Acero employed the services of Engr. Eligio L. Cruz who came up with Verification Survey
violated the Compromise Agreement.
Plan No. Vs-13-000185. However, when the said Verification Survey Plan was presented
On January 18, 1992, the Pasay City Hall was gutted by fire, destroying the records of the
to the Bureau of Lands for approval, it was rejected because Engr. Cruz failed to comply
lower court, including those of this case. Thus, after reconstituting the records, the trial
with the requirements of the Bureau.[17]
court issued the October 6, 1992 Order,[26] reiterating its January 15, 1992 Order and
On April 8, 1991, petitioners filed a Manifestation with Motion praying for the denial of
ordering the issuance of a Writ of Execution.
respondents Motion to Nullify the Compromise Agreement and for the approval of

Verification Survey Plan No. Vs-13-000135 prepared by Engr. Lara of the Bureau of
On October 23, 1992, respondent filed a Manifestation and Compliance,[27] alleging that
Lands. The Pasay City RTC issued the December 6, 1991 Order[18] denying respondent
Verification Survey Plan No. Vs-13-000185 had been approved by the Regional Director of
Aceros Motion to Nullify the Compromise Agreement. As a consequence, petitioners filed a
the DENR; thus, he moved for the annulment of the October 6, 1992 Order granting the
Motion for Execution on December 10, 1991.[19]
Writ of Execution in favor of petitioners.

On January 6, 1992, respondent filed an undated Manifestation [20] claiming, among others,
Given the conflicting Verification Survey Plans of the parties, the trial court issued
that it was on record that the Compromise Agreement was only as to a portion of the land
the October 11, 1993 Order[28] requiring the Bureau of Lands Director to determine which

of the two survey plans was correct.

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Subsequently, Regional Technical Director Eriberto V. Almazan of the Land Registration On October 31, 1995, the CA promulgated the assailed Decision, the fallo of which reads:

Authority issued the November 24, 1993 Order[29] cancelling Verification Survey Plan No.
IN VIEW OF THE FOREGOING, the petition for certiorari
Vs-13-000185, submitted by Engineer Eligio Cruz, who was hired by respondent Acero, is GRANTED and the Orders of respondent court
dated December 6, 1991, January 15, 1992, October 6, 1992,
and declared Verification Survey Plan No. Vs-13-000135, submitted by Engineer Lara of and January 12, 1994, and February 1, 1994 are SET
ASIDE. In the interest of justice, and consistent with the views
the Bureau of Lands, as the correct Plan. expressed by this Court, the Compromise Judgment dated
December 7, 1987 of respondent court is likewise SET
ASIDE. Respondent Court is likewise directed to proceed with
the hearing of Civil Case No. 9581-P on the merits and
Thereafter, petitioners filed their January 12, 1994 Ex-parte Manifestation with determine, once and for all, the respective proprietary rights of
the litigants thereto.
Motion,[30] praying for the implementation of the Writ of Execution against the disputed
SO ORDERED.[35]
lands, which was granted in the January 12, 1994 Order.[31]

In discarding the December 7, 1987 Decision based on the Compromise Agreement, the
Respondents Motion for Reconsideration[32] of the January 12, 1994 Order was denied in
appellate court ratiocinated that David Victorio, the alleged lessor of Acero, was not a party
the February 1, 1994 Order[33] of the Pasay City RTC.
to the Compromise Agreement; thus, there would always remain the probability that he

might eventually resurface and assail the Compromise Agreement, giving rise to another
Aggrieved, respondent Acero filed before the CA his February 23, 1994 Petition for
suit. Moreover, the CA found the Compromise Agreement vague, not having stipulated a
Certiorari and Mandamus with Urgent Prayer for Issuance of a Temporary Restraining
mutually agreed upon surveyor, who would survey the properties using as a basis, survey
Order,[34] under Rule 65 of the Rules of Court, against petitioners and Judge Sofronio G.
plans acceptable to both, and to thereafter submit a report to the court. [36]
Sayo as presiding judge of the lower court. In the petition, respondent sought to nullify and

set aside the RTC Orders dated December 6, 1991, January 15, 1992, October 6, 1992,
Likewise, the CA sustained Aceros belief that he would only have to vacate a portion of the
January 12, 1994, and February 1, 1994, all of which pertain to the execution of the
property he was presently occupying, which was tantamount to a mistake that served as
December 7, 1987 Decision on the Compromise Agreement. Significantly, respondent did
basis for the nullification of the Compromise Agreement entered into.
not seek the annulment of said judgment but merely reiterated the issue that under the

Compromise Agreement, he would only be vacating a portion of the property he was

On January 17, 1996, petitioners filed a Motion for Reconsideration [37] of the adverse
occupying.
Decision, which was consequently rejected in the CAs August 28, 1996 Resolution.

Thus, the instant petition is in our hands.

The Ruling of the Court of Appeals
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Land Titles and Deeds (Finals) 2017

Restated, the issues are:

The Issues I.

WHETHER THE PETITION BEFORE THE COURT OF

APPEALS WAS FILED OUT OF TIME OR BARRED BY
The issues as stated in the petition are as follows: LACHES;

II.
1. THE RESPONDENT COURT OF APPEALS ERRED IN
NULLIFYING AND SETTING ASIDE JUDGMENT ON WHETHER THE NON-INCLUSION OF DAVID VICTORIO
COMPROMISE AGREEMENT AND THE COMPROMISE WOULD NULLIFY THE COMPROMISE AGREEMENT;
AGREEMENT ITSELF AS WELL AS THE SUBSEQUENT
ORDERS OF THE COURT A QUO THOUGH THERE IS NO
MOTION TO SET ASIDE THE JUDGMENT ON THE
COMPROMISE AGREEMENT BEFORE THE COURT A QUO
ON THE GROUND OF FRAUD, MISTAKE OR DURESS;
2. THE RESPONDENT COURT OF APPEALS ERRED IN III.
NULLIFYING AND SETTING ASIDE THE JUDGMENT ON
COMPROMISE AGREEMENT AND THE COMPROMISE WHETHER THE JUDGMENT ON COMPROMISE
AGREEMENT ITSELF AS WELL AS THE SUBSEQUENT AGREEMENT SHOULD BE SET ASIDE ON THE GROUND OF
ORDERS OF THE COURT OF QUO [SIC] THOUGH IN THE VAGUENESS; AND
PETITION FOR CERTIORARI AND MANDAMUS BEFORE
RESPONDENT COURT OF APPEALS, PRIVATE IV.
RESPONDENT ARGUED THAT JUDGMENT ON
COMPROMISE AGREEMENT IS FINAL, EXECUTORY, WHETHER THE JUDGMENT ON COMPROMISE
IMMUTABLE AND UNALTERABLE; AGREEMENT SHOULD BE SET ASIDE ON THE GROUND OF
MISTAKE.
3. THE RESPONDENT COURT OF APPEALS ERRED IN
NULLIFYING AND SETTING ASIDE JUDGMENT ON
COMPROMISE AGREEMENT AND THE COMPROMISE
AGREEMENT ITSELF AS WELL AS THE SUBSEQUENT The Courts Ruling
ORDERS OF THE COURT A QUO BASED ON FRAUD OR
MISTAKE THOUGH SAID ISSUES WERE NOT RAISED
BEFORE THE COURT A QUO, AND NO EVIDENCE WAS
INTRODUCED TO SUBSTANTIATE FRAUD OR MISTAKE The petition is meritorious.
BEFORE THE COURT A QUO;

4. THE RESPONDENT COURT OF APPEALS ERRED WHEN

IT RULED THAT THE NON-INCLUSION OF ONE OF THE The preliminary issue involves the query of what proper remedy is available to a party who
PARTIES IN THIS CASE, AND THE VAGUENESS OF THE
COMPROMISE AGREEMENT ARE GROUNDS TO NULLIFY believes that his consent in a compromise agreement was vitiated by mistake upon which
AND SET ASIDE THE COMPROMISE AGREEMENT; AND
a judgment was rendered by a court of law.
5. THE RESPONDENT COURT OF APPEALS ERRED WHEN
IT ENTERTAINED THE PETITION FOR CERTIORARI AND There is no question that a contract where the consent is given through mistake,
MANDAMUS THOUGH IT WAS FILED BEYOND
REASONABLE TIME IF NOT BARRED BY LACHES.[38] violence, intimidation, undue influence, or fraud is voidable under Article 1330 of the Civil

Code. If the contract assumes the form of a Compromise Agreement between the parties
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Land Titles and Deeds (Finals) 2017

in a civil case, then a judgment rendered on the basis of such covenant is final,

unappealable, and immediately executory. If one of the parties claims that his consent was If the 15-day period for taking an appeal has lapsed, then the aggrieved party can avail of

obtained through fraud, mistake, or duress, he must file a motion with the trial court that Rule 38 by filing a petition for relief from judgment which should be done within 60 days

approved the compromise agreement to reconsider the judgment and nullify or set aside after the petitioner learns of the judgment, but not more than six (6) months after such

said contract on any of the said grounds for annulment of contract within 15 days from judgment or final order was entered. Prior to the effectivity of the 1997 Rules of Civil

notice of judgment. Under Rule 37, said party can either file a motion for new trial or Procedure in 1997, if the court denies the petition under Rule 38, the remedy is to appeal

reconsideration. A party can file a motion for new trial based on fraud, accident or mistake, from the order of denial and not from the judgment since said decision has already

excusable negligence, or newly discovered evidence. become final and already unappealable.[41] However, in the appeal from said order, the

appellant may likewise assail the judgment. Under the 1997 Rules of Civil Procedure, the

On the other hand, a party may decide to seek the recall or modification of the judgment by aggrieved party can no longer appeal from the order denying the petition since this is

means of a motion for reconsideration on the ground that the decision or final order is proscribed under Section 1 of Rule 41. The remedy of the party is to file a special civil

contrary to law if the consent was procured through fraud, mistake, or duress. Thus, the action for certiorari under Rule 65 from the order rejecting the petition for relief from

motion for a new trial or motion for reconsideration is the readily available remedy for a judgment.

party to challenge a judgment if the 15-day period from receipt of judgment for taking an

appeal has not yet expired. This motion is the most plain, speedy, and adequate remedy in The records of the case reveal the following:

law to assail a judgment based on a compromise agreement which, even if it is

immediately executory, can still be annulled for vices of consent or forgery. [39] 1. December 3, 1987 the parties signed the Compromise Agreement;

Prior to the effectivity of the 1997 Rules of Civil Procedure on July 1, 1997, an order 2. December 7, 1987 a decision/judgment was rendered based on the December 3,

denying a motion for new trial or reconsideration was not appealable since the judgment in 1987 Compromise Agreement;

the case is not yet final. The remedy is to appeal from the challenged decision and the

denial of the motion for reconsideration or new trial is assigned as an error in the 3. February 2, 1988 Acero filed a Motion to Nullify the Compromise Agreement;

appeal.[40] Under the present [1997] Rules of Civil Procedure, the same rule was

maintained that the order denying said motion is still unappealable and the rule is still to 4. December 6, 1991 the trial court denied Aceros Motion to Nullify the Compromise

appeal from the judgment and not from the order rejecting the motion for Agreement;

reconsideration/new trial.
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5. December 11, 1991 defendant Acero received the December 6, 1991 Order which then Acero should have filed an appeal from the December 7, 1987 Decision and assigned

denied said motion;[42] as error the December 6, 1991 Order denying said motion pursuant to the rules existing

prior to the 1997 Rules of Civil Procedure. He failed to file such appeal but instead filed a

6. December 26, 1991 the 15-day period to appeal to the CA expired by the failure of petition for certiorari under Rule 65 with the CA on April 4, 1994. This is prejudicial to

defendant Acero to file an appeal with said appellate court; respondent Acero as the special civil action of certiorari is not the proper remedy. If the

aggrieved party does not interpose a timely appeal from the adverse decision, a special

7. January 15, 1992 the trial court issued the Order which granted petitioners motion for civil action for certiorari is not available as a substitute for a lost appeal.[43]

the issuance of a Writ of Execution;

8. October 6, 1992 the trial court reiterated its January 15, 1992 Order directing the What respondent Acero should have done was to file a petition for relief from judgment

issuance of a Writ of Execution after the records of the case were lost in a fire that gutted when he became aware that he lost his right of appeal on December 26, 1991. Even with

the Pasay City Hall; this approach, defendant Acero was also remiss.

9. January 12, 1994 the trial court issued the Order which directed the implementation of In sum, the petition for certiorari instituted by respondent Acero with the CA is a wrong

the Writ of Execution prayed for by petitioners; remedy; a simple appeal to the CA would have sufficed. Since the certiorari action is an

improper legal action, the petition should have been rejected outright by the CA.

10. February 1, 1994 the trial court issued the Order which denied respondents Motion for

Reconsideration of its January 12, 1994 Order; and Assuming arguendo that a petition for certiorari with the CA is the appropriate remedy, still,

said petition was filed out of time.

11. April 4, 1994 Acero filed with the CA a petition for certiorari in CA-G.R. SP No. 33407

entitled Antonio M. Acero v. Domingo Realty, Inc., et al. The petition before the CA was filed prior to the effectivity of the 1997 Rules of Court when

there was still no prescribed period within which to file said petition, unlike in the present

In his undated Manifestation, respondent Acero admitted having received a copy of Section 4 of Rule 65 wherein a Petition for Certiorari and Mandamus must be filed within

the December 7, 1987 Decision on December 11, 1987. However, it was only on February 60 days from notice of the judgment, final order, or resolution appealed from, or of the

2, 1988 when he filed a Motion to Nullify the Compromise Agreement which was discarded denial of the petitioners motion for new trial or reconsideration after notice of judgment.

for lack of merit by the trial court on December 6, 1991. If the Motion to Nullify the

Compromise Agreement is treated as a motion for reconsideration and/or for new trial, Section 4, Rule 65 previously read:

Section 4. Where petition filed.The petition may be filed in the
Supreme Court, or, if it relates to the acts or omissions of an
inferior court, or of a corporation, board or officer or person, in a
Court of First Instance having jurisdiction thereof. It may also be
filed in the Court of Appeals if it is in aid of its appellate
jurisdiction.
Petitions for certiorari under Rules 43, 44 and 45 shall be filed
with the Supreme Court.
Before the 1997 Rules of Civil Procedure became effective on July 1, 1997, the yardstick
to determine the timeliness of a petition for certiorari under Rule 65 was the
reasonableness of the time that had elapsed from receipt of notice of the assailed order/s
of the trial court up to the filing of the appeal with the CA. [44] In a number of cases, the
Court ruled that reasonable time can be pegged at three (3) months. [45]
In the present case, the Order denying the Motion to Nullify the Compromise Agreement
was issued on December 6, 1991. The petition for certiorari was filed on April 4, 1994. The
period of two (2) years and four (4) months cannot be considered fair and reasonable. With
respect to the January 15, 1992 Order granting the writ of execution and the October 6,
1992 Order directing the issuance of the writ, it is evident that the petition before the CA
was filed more than three (3) months after the receipt by respondent Acero of said orders
and the filing of the petition is likewise unreasonably delayed.
On the second issue, petitioners assail the ruling of the appellate court that David Victorio
who is claimed to be the lessor of Acero, and who is impleaded as a defendant in Civil
Case No. 9581-P, was not made a party to the Compromise Agreement and hence, he
may later assail the compromise agreement as not binding upon him, thereby giving rise to
another suit.[46]
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We find merit in petitioners position.
The CA was unable to cite a law or jurisprudence that supports the annulment of a
compromise agreement if one of the parties in a case is not included in the settlement. The
only legal effect of the non-inclusion of a party in a compromise agreement is that said
party cannot be bound by the terms of the agreement. The Compromise Agreement shall
however be valid and binding as to the parties who signed thereto. [47]
The issue of ownership between petitioners and David Victorio can be threshed out by the
trial court in Civil Case No. 9581-P. The proper thing to do is to remand the case for
continuation of the proceedings between petitioners and defendant David Victorio but not
to annul the partial judgment between petitioners and respondent Acero which has been
pending execution for 20 years.
With regard to the third issue, petitioners assail the ruling of the CA that the Compromise
Agreement is vague as there is still a need to determine the exact metes and bounds of
the encroachment on the petitioners lot.
The object of a contract, in order to be considered as certain, need not specify
such object with absolute certainty. It is enough that the object is determinable in order for
it to be considered as certain. Article 1349 of the Civil Code provides:
Article 1349. The object of every contract must be determinate
as to its kind. The fact that the quantity is not determinate shall
not be an obstacle to the existence of the contract, provided it is
possible to determine the same, without the need of a new
contract between the parties.

In the instant case, the title over the subject property contains a technical description that
provides the metes and bounds of the property of petitioners. Such technical description is
the final determinant of the extent of the property of petitioners. Thus, the area of
petitioners property is determinable based on the technical descriptions contained in the
TCTs.
Notably, the determination made by the Bureau of Landsthat Verification Survey
Plan No. Vs-13-000135 is the correct Planis controlling and shall prevail over Verification
Survey Plan No. Vs-13-000185 submitted by Acero. Findings of fact by administrative
agencies, having acquired expertise in their field of specialization, must be given great
weight by this Court.[48] Even if the exact area of encroachment is not specified in the
agreement, it can still be determined from the technical description of the title of plaintiff
which defendant Acero admitted to be correct. Thus, the object of the Compromise
Agreement is considered determinate and specific.
Moreover, vagueness is defined in Blacks Law Dictionary as: indefinite, uncertain; not
susceptible of being understood.
A perusal of the entire Compromise Agreement will negate any contention that there is
vagueness in its provisions. It must be remembered that in the interpretation of contracts,
an instrument must be construed so as to give effect to all the provisions of these
contracts.[49] Thus, the Compromise Agreement must be considered as a whole.
The alleged vagueness revolves around the term portion in paragraph three (3) of the
Compromise Agreement,[50] taken together with paragraph one (1) which we quote:
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Land Titles and Deeds (Finals) 2017
1. That defendants admit and recognize the ownership of
the plaintiff over the property subject of this case, covered
by TCT No. S-107639 (75600), S-107643 (67007), and S-
107640 (67006) with a total area of 26,705 square meters;
xxxx
3. That defendant Acero admits that the property he is
presently occupying by way of lease is encroaching on
a portion of the property of the plaintiff and assume and
undertakes to vacate, remove and clear any and all
structures erected inside the property of the plaintiff by
himself and other third parties, duly authorized and/or who have
an existing agreement with defendant Acero, and shall deliver
said portion of the property of the plaintiff free and clear of any
unauthorized structures, shanties, occupants, squatters or
lessees within a period of sixty (60) days from date of signing of
this compromise agreement. Should defendant Acero fail in his
obligation to vacate, remove and clear the structures erected
inside the property of the plaintiff within the period of 60 days
afore-mentioned, plaintiff shall be entitled to a writ of execution
for the immediate demolition or removal of said structure to fully
implement this agreement; and ejectment of all squatters and
occupants and lessees, including the dependents to fully
implement this agreement. (Emphasis supplied.)
Respondent harps on their contention that the term portion in paragraph 3 of the
Compromise Agreement refers to the property which they are occupying. Respondents
interpretation of paragraph 3 of the Compromise Agreement is mistaken as it is anchored
on his belief that the encroachment on the property of petitioners is only a portion and not
the entire lot he is occupying. This is apparent from his Supplement to his Petition for
Certiorari and Mandamus where he explained:
Petitioner [Acero] entered into this agreement because of
his well-founded belief and conviction that a portion of the
property he is occupying encroaches only a portion of the
property of private respondent. In fine, only a portion of the property
petitioner is occupying (not all of it) encroaches on a portion of the
property of private respondent.[51]

This contention is incorrect. The agreement is clear that respondent Acero
admitted that the property he is presently occupying by way of lease is encroaching on
a portion of the property of the plaintiff. Thus, whether it is only a portion or the entire lot
Acero is leasing that will be affected by the agreement is of no importance. What controls
is the encroachment on the lot of petitioner Domingo Realty regardless of whether the
entire lot or only a portion occupied by Acero will be covered by the encroachment.
While it may be the honest belief of respondent Acero that only a portion of the lot he is
occupying encroaches on the 26,705-square meter lot of petitioner Domingo Realty and
later, Ayala Steel, the Court finds that the true and real agreement between the parties is
that any encroachment by respondent Acero on the lot of petitioners will be surrendered to
the latter. This is apparent from the undertaking in paragraph 3 that defendant Acero
undertakes to vacate, remove and clear any and all structures erected inside the property
of the plaintiff. This prestation results from the admission against the interest of respondent
Acero that he admits and recognizes the ownership of the plaintiff (Domingo Realty) over
the subject lot. The controlling word therefore is encroachmentwhether it involves a
portion of or the entire lot claimed by defendant David Victorio. To reiterate, the word
portion refers to petitioners lot and not that of Aceros. Contrary to the disposition of the CA,
we rule that the terms of the Compromise Agreement are clear and leave no doubt upon
the intent of the parties that respondent Acero will vacate, remove, and clear any and all
structures erected inside petitioners property, the ownership of which is not denied by
him. The literal meaning of the stipulations in the Compromise Agreement will control
under Article 1370 of the Civil Code. Thus, the alleged vagueness in the object of the
agreement cannot be made an excuse for its nullification.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Finally, with regard to the fourth issue, petitioners question the finding of the CA that the
compromise judgment can be set aside on the ground of mistake under Article 2038 of the
Civil Code, because respondent Acero gave his consent to the Compromise Agreement in
good faith that he would only vacate a portion of his lot in favor of petitioner Domingo
Realty.
We rule otherwise.
Articles 2038 and 1330 of the Civil Code allow a party to a contract, on the ground of
mistake, to nullify a compromise agreement, viz:
Article 2038. A compromise in which there is mistake, fraud,
violence, intimidation, undue influence, or falsity of documents,
is subject to the provisions of Article 1330 of this Code.
Article 1330. A contract where the consent is given
through mistake, violence, intimidation, undue influence, or
fraud is voidable (emphasis supplied).
Mistake has been defined as a misunderstanding of the meaning or implication of
something or a wrong action or statement proceeding from a faulty judgment x x x.[52]
Article 1333 of the Civil Code of the Philippines however states that there is no mistake if
the party alleging it knew the doubt, contingency or risk affecting the object of the contract.
Under this provision of law, it is presumed that the parties to a contract know and
understand the import of their agreement. Thus, civil law expert Arturo M. Tolentino opined
that:
To invalidate consent, the error must be excusable. It must be
real error, and not one that could have been avoided by the

party alleging it. The error must arise from facts unknown to
him. He cannot allege an error which refers to a fact known to
him, or which he should have known by ordinary diligent
examination of the facts. An error so patent and obvious that
nobody could have made it, or one which could have been
avoided by ordinary prudence, cannot be invoked by the
one who made it in order to annul his contract. A mistake
that is caused by manifest negligence cannot invalidate a
juridical act.[53] (Emphasis supplied.)
Prior to the execution of the Compromise Agreement, respondent Acero was already
aware of the technical description of the titled lots of petitioner Domingo Realty and more
so, of the boundaries and area of the lot he leased from David Victorio. Before consenting
to the agreement, he could have simply hired a geodetic engineer to conduct a verification
survey and determine the actual encroachment of the area he was leasing on the titled lot
of petitioner Domingo Realty. Had he undertaken such a precautionary measure, he would
have known that the entire area he was occupying intruded into the titled lot of petitioners
and possibly, he would not have signed the agreement.
In this factual milieu, respondent Acero could have easily averted the alleged mistake in
the contract; but through palpable neglect, he failed to undertake the measures expected
of a person of ordinary prudence. Without doubt, this kind of mistake cannot be resorted to
by respondent Acero as a ground to nullify an otherwise clear, legal, and valid agreement,
even though the document may become adverse and even ruinous to his business.
Moreover, respondent failed to state in the Compromise Agreement that he intended to
vacate only a portion of the property he was leasing. Such provision being beneficial to
respondent, he, in the exercise of the proper diligence required, should have made sure
that such matter was specified in the Compromise Agreement. Respondent Aceros failure
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
to have the said stipulation incorporated in the Compromise Agreement is negligence on
his part and insufficient to abrogate said agreement.
In Torres v. Court of Appeals,[54] which was also cited in LL and Company Development
and Agro-Industrial Corporation v. Huang Chao Chun,[55] it was held that:
Under Article 1315 of the Civil Code, contracts bind the parties
not only to what has been expressly stipulated, but also to all
necessary consequences thereof, as follows:
ART. 1315. Contracts are perfected by mere
consent, and from that moment the parties
are bound not only to the fulfillment of what
has been expressly stipulated but also to all
the consequences which, according to their
nature, may be in keeping with good faith,
usage and law.
It is undisputed that petitioners are educated and are thus
presumed to have understood the terms of the contract they
voluntarily signed. If it was not in consonance with their
expectations, they should have objected to it and insisted on the
provisions they wanted.
Courts are not authorized to extricate parties from the
necessary consequences of their acts, and the fact that the
contractual stipulations may turn out to be financially
disadvantageous will not relieve parties thereto of their
obligations. They cannot now disavow the relationship formed
from such agreement due to their supposed misunderstanding
of its terms.
The mere fact that the Compromise Agreement favors one party does not render it
invalid. We ruled in Amarante v. Court of Appeals that:
Compromises are generally to be favored and cannot be set
aside if the parties acted in good faith and made reciprocal
concessions to each other in order to terminate a case. This
holds true even if all the gains appear to be on one side
and all the sacrifices on the other (emphasis supplied).[56]

One final note. While the Court can commiserate with respondent Acero in his sad plight,
nonetheless we have no power to make or alter contracts in order to save him from the
adverse stipulations in the Compromise Agreement.Hopefully this case will serve as a
precaution to prospective parties to a contract involving titled lands for them to exercise the
diligence of a reasonably prudent person by undertaking measures to ensure the legality of
the title and the accurate metes and bounds of the lot embraced in the title. It is advisable
that such parties (1) verify the origin, history, authenticity, and validity of the title with the
Office of the Register of Deeds and the Land Registration Authority; (2) engage the
services of a competent and reliable geodetic engineer to verify the boundary, metes, and
bounds of the lot subject of said title based on the technical description in the said title and
the approved survey plan in the Land Management Bureau; (3) conduct an actual ocular
inspection of the lot; (4) inquire from the owners and possessors of adjoining lots with
respect to the true and legal ownership of the lot in question; (5) put up signs that said lot
is being purchased, leased, or encumbered; and (6) undertake such other measures to
make the general public aware that said lot will be subject to alienation, lease, or
encumbrance by the parties. Respondent Acero, for all his woes, may have a legal
recourse against lessor David Victorio who inveigled him to lease the lot which turned out
to be owned by another.
WHEREFORE, the petition is hereby GRANTED and the assailed Decision and
Resolution of the CA are REVERSED. The questioned Orders of the Pasay City RTC
dated December 6, 1991, January 15, 1992, October 6, 1992, January 12, 1994, and
February 1, 1994, including the Decision dated December 7, 1987, are AFFIRMED. The
case is remanded to the Pasay RTC, Branch III for further proceedings with respect to
petitioner Domingo Realtys November 15, 1981 Complaint [57] against one of the
defendants, David Victorio. No costs. SO ORDERED.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
G.R. No. 204369 September 17, 2014
ENRIQUETA M. LOCSIN, Petitioner,
vs.
BERNARDO HIZON, CARLOS HIZON, SPS. JOSE MANUEL & LOURDES
GUEVARA, Respondents.
DECISION
VELASCO, JR., J.:
Nature of the Case
Before Us is a Petition for Review on Certiorari under Rule 45 assailing the Decision 1 and
Resolution of the Court of Appeals (CA), dated June 6, 2012 and October 30, 2012,
respectively, in CA-G.R. CV No. 96659 entitled Enriqueta M Locsin v. Marylou Bolos, et al.
In reversing the ruling of the trial court, the CA held that respondents are innocent
purchasers in good faith and for value of the subject property.
The Facts
Petitioner Enriqueta M. Locsin (Locsin) was the registered owner of a 760-sq.m. lot
covered by Transfer Certificate of Title (TCT) No. 235094, located at 49 Don Vicente St.,
Don Antonio Heights Subdivision, Brgy. Holy Spirit, Capitol, Quezon City. In 1992, she filed
an ejectment case, Civil Case No. 38-6633,2 against one Billy Aceron (Aceron) before the
Metropolitan Trial Court, Branch 3 8 in Quezon City (MTC) to recover possession over the
land in issue. Eventually, the two entered into a compromise agreement, which the MTC
approved on August 6, 1993.3
Locsin later went to the United States without knowing whether Aceron has complied with
his part of the bargain under the compromise agreement. In spite of her absence,
however, she continued to pay the real property taxes on the subject lot.
In 1994, after discovering thather copy of TCT No. 235094 was missing, Locsin filed a
petition for administrative reconstruction in order to secure a new one, TCT No. RT-97467.
Sometime in early 2002, she then requested her counsel to check the status of the subject
lot. It was then that they discovered the following:
1. One Marylou Bolos (Bolos) had TCT No. RT-97467 cancelled on February 11,
1999, and then secured a new one, TCT No. N-200074, in her favor by
registering a Deed of Absolute Sale dated November 3, 1979 allegedly executed
by Locsin with the Registry of Deeds;
2. Bolos later sold the subject lot to Bernardo Hizon (Bernardo) for PhP 1.5
million, but it was titled under Carlos Hizons (Carlos) name on August 12, 1999.
Carlos is Bernardos son;

3. On October 1, 1999, Bernardo, claiming to be the owner of the property, filed a
Motion for Issuance of Writ of Execution for the enforcement of the court-
approved compromise agreement in Civil Case No. 38-6633;
4. The property was already occupied and was, in fact, up for sale.
On May 9, 2002, Locsin, through counsel, sent Carlos a letter requesting the return of the
property since her signature in the purported deed of sale in favor of Bolos was a forgery.
In a letter-reply dated May 20, 2002, Carlos denied Locsins request, claiming that he was
unaware of any defect or flaw in Bolos title and he is, thus, an innocent purchaser for
value and good faith. On June 13, 2002,4 Bernardo met with Locsins counsel and
discussed the possibility of a compromise. He ended the meeting with a promise to come
up with a win-win situation for his son and Locsin, a promise which turned out to be
deceitful, for, on July 15, 2002, Locsin learned that Carlos had already sold the property for
PhP 1.5 million to his sister and her husband, herein respondents Lourdes and Jose
Manuel Guevara (spouses Guevara), respectively, who, as early as May 24, 2002, had a
new certificate of title, TCT No. N-237083, issued in their names. The spouses Guevara
then immediately mortgaged the said property to secure a PhP 2.5 million loan/credit
facility with Damar Credit Corporation (DCC).
It was against the foregoing backdrop of events that Locsin filed an action for
reconveyance, annulment ofTCT No. N-237083, the cancellation of the mortgage lien
annotated thereon, and damages, against Bolos, Bernardo, Carlos, the Sps. Guevara,
DCC, and the Register of Deeds, Quezon City, docketed as Civil Case No. Q-02-47925,
which was tried by the Regional Trial Court, Branch 77 in Quezon City (RTC). The charges
against DCC, however, weredropped on joint motion ofthe parties. This is in view of the
cancellation of the mortgage for failure of the spouses Guevara to avail of the loan/credit
facility DCC extended in their favor.5
Ruling of the Trial Court
On November 19, 2010, the RTC rendered a Decision6 dismissing the complaint and
finding for respondents,as defendants thereat, holding that: (a) there is insufficient
evidence to showthat Locsins signature in the Deed of Absolute Sale between her and
Bolos is a forgery; (b) the questioned deed is a public document, having been notarized;
thus, it has, in its favor, the presumption of regularity; (c) Locsin cannot simply rely on the
apparent difference of the signatures in the deed and in the documents presented by her
to prove her allegation of forgery; (d) the transfers of title from Bolos to Carlos and from
Carlos to the spouses Guevara are valid and regular; (e) Bernardo, Carlos, and the
spouses Guevara are all buyers in good faith. Aggrieved, petitioner appealed the case to
the CA.
Ruling of the Court of Appeals
The CA, in its assailed Decision, ruled that it was erroneous for the RTC to hold that
Locsin failed to prove that her signature was forged. In its appreciation of the evidence, the
CA found that, indeed, Locsins signature in the Deed of Absolute Sale in favor of Bolos
differs from her signatures in the other documents offered as evidence.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
The CA, however, affirmed the RTCs finding that herein respondents are innocent
purchasers for value. Citing Casimiro Development Corp. v. Renato L. Mateo, 7 the
appellate court held that respondents, having dealt with property registered under the
Torrens System, need not go beyond the certificate of title, but only has to rely on the said
certificate. Moreover, as the CA added, any notice of defect or flaw in the title of the vendor
should encompass facts and circumstances that would impel a reasonably prudent man to
inquire into the status of the title of the property in order to amount to bad faith.
Accordingly, the CA ruled that Locsin can no longer recover the subject lot. 8 Hence, the
insant petition.
Arguments
Petitioner Locsin insists that Bernardo was well aware, at the time he purchased the
subject property, of a possible defect in Bolos title since he knew that another person,
Aceron, was then occupying the lot in issue. 9 As a matter of fact, Bernardo even moved for
the execution of the compromise agreement between Locsin and Aceron inCivil Case No.
38-6633 in order to enforce to oust Aceron of his possession over the property. 10
Thus, petitioner maintains that Bernardo, knowing as he did the incidents involving the
subject property,should have acted as a reasonably diligent buyer in verifying the
authenticity of Bolostitle instead of closing his eyes to the possibility of a defecttherein.
Essentially, petitioner argues that Bernardos stubborn refusal to make an inquiry beyond
the face of Bolos title is indicative of his lack of prudence in protecting himself from
possible defects or flaws therein, and consequently bars him from interposing the
protection accorded toan innocent purchaser for value.
As regards Carlos and the Sps. Guevaras admissions and testimonies, petitioner points
out that when these are placed side-by-side with the concurrent circumstances in the case,
it is readily revealed that the transfer from the former to the latter was only simulated and
intended to keep the property out of petitioners reach.
For their part, respondents maintain that they had the right to rely solely upon the face of
Bolos clean title, considering that it was free from any lien or encumbrance. They are not
even required, so they claim, to check on the validity of the sale from which they derived
their title.11 Too, respondents claim that their knowledge of Acerons possession cannot be
the basis for an allegation of bad faith, for the property was purchased on an "asis where-
is" basis. The Issue
Considering that the finding of the CAthat Locsins signature in the Deed of Absolute Sale
in favor of Bolos was indeed bogus commands itself for concurrence, the resolution of the
present petition lies on this singular issuewhether or not respondents are innocent
purchasers for value.12
The Courts Ruling
The petition is meritorious.

Procedural issue
As a general rule, only questions of law may be raised in a petition for review on
certiorari.13 This Court is not a trier offacts; and in the exercise of the power of review, we
do not normally undertake the re-examination of the evidence presented by the contending
parties during the trial of the case.14 This rule, however, admits of exceptions.For one, the
findings of fact of the CA will not bind the parties in cases where the inference made on the
evidence is mistaken, as here.15
That being said, we now proceed to the core of the controversy.
Precautionary measures for buyers of real property
An innocent purchaser for value is one who buys the property of another without notice
that some other person has a right to or interest in it, and who pays a full and fair price
atthe time of the purchase or before receiving any notice of another persons claim. 16 As
such, a defective title or one the procurement of which is tainted with fraud and
misrepresentationmay be the source of a completely legal and valid title, provided that
the buyer is an innocent third person who, in good faith, relied on the correctness of the
certificate of title, or an innocent purchaser for value. 17
Complementing this is the mirror doctrine which echoes the doctrinal rule that every
person dealing with registered land may safely rely on the correctness of the certificate of
title issued therefor and is in no way obliged to go beyond the certificate to determine the
condition of the property.18 The recognized exceptions to this rule are stated as follows:
[A] person dealing with registeredland 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 of a defect or the lack of title in
his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the
status of the title of the property in litigation. 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. 19 (emphasis
added)
Thus, in Domingo Realty, Inc. v. CA,20 we emphasized the need for prospective parties to
a contract involving titled lands to exercise the diligence of a reasonably prudent person in
ensuring the legality of the title, and the accuracy of the metes and bounds of the lot
embraced therein, by undertaking precautionary measures, such as:
1. Verifying the origin, history, authenticity, and validity of the title with the Office
of the Register of Deeds and the Land Registration Authority;
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
2. Engaging the services of a competent and reliable geodetic engineer to verify
the boundary,metes, and bounds of the lot subject of said title based on the
technical description in the said title and the approved survey plan in the Land
Management Bureau;
3. Conducting an actual ocular inspection of the lot;
4. Inquiring from the owners and possessors of adjoining lots with respect to the
true and legal ownership of the lot in question;
5. Putting up of signs that said lot is being purchased, leased, or encumbered;
and
6. Undertaking such other measures to make the general public aware that said
lot will be subject to alienation, lease, or encumbrance by the parties.
In the case at bar, Bolos certificate of title was concededly free from liens and
encumbrances on its face. However, the failure of Carlos and the spouses Guevara to
exercise the necessary level ofcaution in light of the factual milieu surrounding the
sequence of transfers from Bolos to respondents bars the application of the mirror doctrine
and inspires the Courts concurrence withpetitioners proposition.
Carlos is not an innocent purchaser for value
Foremost, the Court is of the view that Bernardo negotiated with Bolos for the property as
Carlos agent. This is bolstered by the fact that he was the one who arranged for the
saleand eventual registration of the property in Carlos favor. Carlos testified during the
May 27, 2009 hearing:21
Q: Are you privy with the negotiations between your father, Mr. Bernardo Hizon, and your
co-defendant, Marylou Bolos, the alleged seller?
A: No, Maam.
Q: Do you remember having signed a Deed of Absolute Sale, dated August 12, 1999?
A: Yes, Maam.
Q: And, at that time that you have signed the Deed, was Marylou Bolos present?
A: No, Maam.
Q: Who negotiated and arranged for the sale of the property between Marylou Bolos and
you? A: It was my father. (emphasis ours)

Consistent with the rule that the principal is chargeable and bound by the knowledge of, or
notice to, his agent received in that capacity, 22 any information available and known to
Bernardo is deemed similarly available and known to Carlos, including the following:
1. Bernardo knew that Bolos, from whom he purchased the subject property,
never acquired possession over the lot. As a matter of fact, in his March 11, 2009
direct testimony,23 Bernardo admitted having knowledge of Acerons lot
possession as well as the compromise agreement between petitioner and
Aceron.
2. Bolos purported Deed of Sale was executed on November 3, 1979 but the
ejectment case commenced by Locsin against Aceron was in 1992, or thirteen
(13)years after the property was supposedly transferred to Bolos.
3. The August 6, 1993 Judgment,24 issued by the MTC on the compromise
agreement between Locsin and Aceron, clearly stated therein that "[o]n August 2,
1993,the parties [Aceron and Locsin] submitted to [the MTC] for approval a
Compromise Agreement dated July 28, 1993." It further indicated that "[Aceron]
acknowledges [Locsins] right of possessionto [the subject property], being the
registered owner thereof."
Having knowledge of the foregoing facts, Bernardo and Carlos, to our mind, should have
been impelled to investigate the reason behind the arrangement. They should have been
pressed to inquire into the status of the title of the property in litigation in order to protect
Carlos interest. It should have struck them as odd that it was Locsin, not Bolos, who
sought the recovery of possession by commencing an ejectment case against Aceron, and
even entered into a compromiseagreement with the latter years afterthe purported sale in
Bolos favor. Instead, Bernardo and Carlos took inconsistent positions when they argued
for the validity of the transfer of the property in favor of Bolos, but in the same breath
prayed for the enforcement of the compromise agreement entered into by Locsin.
At this point it is well to emphasize that entering into a compromise agreement is an act of
strict dominion.25 If Bolos already acquired ownership of the property as early as 1979, it
should have been her who entered into a compromise agreement with Aceron in 1993, not
her predecessor-in-interest, Locsin, who, theoretically, had already divested herself of
ownership thereof.
The spouses Guevara are not innocent purchasers for value
As regards the transfer of the property from Carlos to the spouses Guevara, We find the
existence of the sale highly suspicious. For one, there is a dearth of evidence to support
the respondent spouses position that the sale was a bona fide transaction. Evenif we
repeatedly sift through the evidence on record, still we cannot findany document, contract,
or deed evidencing the sale in favor of the spouses Guevara. The same goes for the
purported payment of the purchase price of the property in the amount of PhP 1.5 million in
favor of Carlos. As a matter of fact, the only documentary evidence that they presented
were as follows:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
1. Deed of Sale between Locsin and Bolos;
2. TCT No. 200074 issued in Bolos name;
3. TCT No. N-205332 in Carlos name;
4. TCT No. N-237083 in the nameof the Sps. Guevara.
To bridge the gap in their documentary evidence, respondents proffer their own
testimonies explaining the circumstances surrounding the alleged sale. 26 However, basic is
the rule that bare and self-serving allegations, unsubstantiated by evidence, are not
equivalent to proof under the Rules.27 As such, we cannot give credence to their
representations that the sale between them actually transpired.
Furthermore, and noticeably enough,the transfer from Carlos to the spouses Guevara was
effected only fifteen(15) days after Locsin demanded the surrender of the property
fromCarlos. Reviewing the timeline:
May 9, 2002: Locsins counsel sent a letter to Carlos, requesting that he return the
property to Locsin since the latters signature in the purported deed of sale between her
and Bolos was a forgery.
May 20, 2002:Carlos counsel replied to Locsins May 9, 2002 letter, claiming that Carlos
was unaware of any defect or flaw in Bolos title, making him an innocent purchaserof the
subject property.
May 24, 2002: The Sps. Guevara allegedly purchased the property from Carlos.
When Bernardo met with Locsinscounsel on June 13, 2002, and personally made a
commitment to comeup with a win-win situation for his son and Locsin, he knew fully well,
too,that the property had already been purportedly transferred to his daughter and son-in-
law, the spouses Guevara, for he, no less, facilitated the same. This, to us, isglaring
evidence of bad faith and an apparent intention to mislead Locsin into believing that she
could no longer recover the subject property.
Also, the fact that Lourdes Guevara and Carlos are siblings, and that Carlos agent in his
dealings concerning the property is his own father, renders incredible the argument
thatLourdes had no knowledge whatsoever of Locsins claim of ownership atthe time of the
purported sale.
Indeed, the fact that the spouses Guevara never intended to be the owner in good faith
and for value of the lot is further made manifest by their lack of interest in protecting
themselvesin the case. It does not even appear in their testimonies that they, at the very
least, intended to vigilantly protect their claim over the property and prevent Locsin take it
away from them. What they did was to simply appoint Bernardo as their attorney-in-fact to
handle the situation and never bothered acquainting themselves with the developments in
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

the case.28 To be sure, respondent Jose Manuel Guevara was not even presented asa erase the fact that her property rights were unlawfully invaded by respondents, entitling her
witness in the case. to nominal damages.

There is also strong reason to believethat even the mortgage in favor of DCC was a mere
ploy tomake it appear that the Sps. Guevara exercised acts of dominion over the subject
property. This is so considering the proximity between the propertys registration in their
names and its being subjected to the mortgage. Most telling is that the credit line secured
by the mortgage was never used by the spouses, resulting in the mortgages cancellation
and the exclusion of DCC as a party in Civil Case No. Q-02-47925.1wphi1
These circumstances, taken altogether, strongly indicate that Carlos and the spouses
Guevara failed to exercise the necessary level of caution expected of a bona fide buyer
and even performed acts that are highly suspect. Consequently, this Court could not give
respondents the protection accorded to innocent purchasers in good faith and for value.
Locsin is entitled to nominal damages
We now delve into petitioners prayer for exemplary damages, attorneys fees, and costs of
suit. Here, the Court notes that petitioner failed to specifically pray that moral damages be
awarded. Additionally, she never invoked any of the grounds that would have warranted
the award of moral damages. As can be gleaned from the records, lacking from her
testimony is any claim that she suffered any form of physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, or any other similar circumstance. 29 Thus, we are constrained to refrain from
awarding moral damages in favor of petitioner.
In the same vein, exemplary damages cannot be awarded in favor of petitioner. Well-
settled that this species of damages is allowed only in addition to moral damages such that
no exemplary damages can be awarded unless the claimant first establishes his clear right
to moral damages.30 Consequently, despite our finding that respondents acted in a
fraudulent manner, petitioners claim for exemplary damages is unavailing at this point.
As to the amount to be awarded, it bears stressing that the same is addressed to the
sound discretion ofthe court, taking into account the relevant circumstances. 34 Considering
the length of time petitioner was deprived of her property and the bad faith attending
respondents actuations in the extant case, we find the amount of seventy-five thousand
pesos (PhP 75,000) as sufficient nominal damages. Moreover, respondents should be held
jointly and severally liable for the said amount, attorneys fees in the amount of an
additional seventy-fivethousand pesos (PhP 75,000), and the costs of the suit.
WHEREFORE, in light of the foregoing, the Petition is hereby GRANTED. The assailed
Decision of the Court of Appeals dated June 6, 2012 in CA-G.R. CV No. 96659 affirming
the Decision of the Regional Trial Court, Branch 77, Quezon City, in Civil Case No. Q-02-
47925; as well as its Resolution dated October 30, 2012, denying reconsideration thereof,
are hereby REVERSED and SET ASIDE. TCT No. N-200074 in the name of Marylou
Bolos, and the titles descending therefrom, namely, TCT Nos. N-205332 and N-237083 in
the name of Carlos Hizon, and the Spouses Jose Manuel & Lourdes Guevara,
respectively, are hereby declared NULL and VOID. Respondents and all other persons
acting under their authority are hereby DIRECTED to surrender possession of the subject
property in favor of petitioner. Respondents Bernardo Hizon, Carlos Hizon, and the
spouses Jose Manuel and Lourdes Guevara shall jointly and severally pay petitioner PhP
75,000 as nominal damages, PhP 75,000 as attorney's fees, and costs of suit.
The Register of Deeds of Quezon City is hereby ORDERED to (1) cancel TCT No. N-
237083; (2) reinstate TCT No. RT-97467; and (3) reissue TCT No. RT-97467 in favor of
petitioner, without requiring from petitioner payment for any and all expenses in performing
the three acts.
SO ORDERED.

Nevertheless, we find an award for nominal damages to be in order. Under prevailing

jurisprudence, nominal damages are "recoverable where a legal right is technically violated
and must be vindicated against an invasion that has produced no actual present loss of
any kind or where there has been a breach of contract and no substantial injury or actual
damages whatsoever have been or can be shown."31 As expounded in Almeda v.
Cario,32 a violation of the plaintiffs right, even if only technical, is sufficient to support an
award of nominal damages. So long as there is a showing of a violation of the right of the
plaintiff, as herein petitioner, an award of nominal damages is proper. 33

In the case at bar, this Court recognizes that petitioner was unduly deprived of her
ownership rights overthe property, and was compelled to litigate for its recovery, for almost
ten (10) years. Clearly, this could have entitled her to actual or compensatory damages
had she quantified and proved, during trial, the amounts which could have accrued in her
favor, including commercial fruits such as reasonable rent covering the pendency of the
case. Nonetheless, petitioners failure to prove actual or compensatory damages does not

[G. R. No. 102377. July 5, 1996]
ALFREDO SAJONAS and CONCHITA SAJONAS, petitioners, vs. THE COURT OF
APPEALS, DOMINGO A. PILARES, SHERIFF ROBERTO GARCIA OF
QUEZON CITY and REGISTER OF DEEDS OF MARIKINA, respondents.
DECISION
TORRES, JR., J.:
A word or group of words conveys intentions. When used truncatedly, its meaning
disappears and breeds conflict. Thus, it is written - By thy words shalt thou be justified, and
by thy words shalt thou be condemned. (Matthew, 12:37)
Construing the new words of a statute separately is the raison detre of this appeal.
Essentially, the case before us is for cancellation of the inscription of a Notice of Levy
on Execution from a certificate of Title covering a parcel of real property. The inscription
was caused to be made by the private respondent on Transfer Certificate of Title No. N-
79073 of the Register of Deeds of Marikina, issued in the name of the spouses Ernesto B.
Uychocde and Lucita Jarin, and was later carried over to and annotated on Transfer
Certificate of Title No. N-109417 of the same registry, issued in the name of the spouses
Alfredo Sajonas and Conchita R. Sajonas, who purchased the parcel of land from the
Uychocdes, and are now the petitioners in this case.
The facts are not disputed, and are hereby reproduced as follows:
On September 22, 1983, the spouses Ernesto Uychocde and Lucita Jarin agreed to sell a
parcel of residential land located in Antipolo, Rizal to the spouses Alfredo Sajonas and
Conchita R. Sajonas on installment basis as evidenced by a Contract to Sell dated
September 22, 1983. The property was registered in the names of the Uychocde spouses
under TCT No. N-79073 of the Register of Deeds of Marikina, Rizal. On August 27, 1984,
the Sajonas couple caused the annotation of an adverse claim based on the said Contract
to Sell on the title of the subject property, which was inscribed as Entry No. 116017. Upon
full payment of the purchase price, the Uychocdes executed a Deed of Sale involving the
property in question in favor of the Sajonas couple on September 4, 1984. The deed of
absolute sale was registered almost a year after, or on August 28, 1985.
Meanwhile, it appears that Domingo Pilares (defendant-appellant) filed Civil Case No. Q-
28850 for collection of sum of money against Ernesto Uychocde. On June 25, 1980, a
Compromise Agreement was entered into by the parties in the said case under which
Ernesto Uychocde acknowledged his monetary obligation to Domingo Pilares amounting to
P27,800 and agreed to pay the same in two years from June 25, 1980. When Uychocde
failed to comply with his undertaking in the compromise agreement, defendant-appellant
Pilares moved for the issuance of a writ of execution to enforce the decision based on the
compromise agreement, which the court granted in its order dated August 3,
1982. Accordingly, a writ of execution was issued on August 12, 1982 by the CFI of
Quezon City where the civil case was pending. Pursuant to the order of execution dated
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
August 3, 1982, a notice of levy on execution was issued on February 12, 1985. On
February 12, 1985, defendant sheriff Roberto Garcia of Quezon City presented said notice
of levy on execution before the Register of Deeds of Marikina and the same was annotated
at the back of TCT No. 79073 as Entry No. 123283.
When the deed of absolute sale dated September 4 1984 was registered on August 28,
1985, TCT No. N-79073 was cancelled and in lieu thereof, TCT No. N-109417 was ssued
in the name of the Sajonas couple. The notice of levy on execution annotated by
defendant sheriff was carried over to the new title. On October 21, 1985, the Sajonas
couple filed a Third Party Claim with the sheriff of Quezon City, hence the auction sale of
the subject property did not push through as scheduled.
On January 10, 1986, the Sajonas spouses demanded the cancellation of the notice of
levy on execution upon defendant-appellant Pilares, through a letter to their lawyer, Atty.
Melchor Flores. Despite said demand, defendant-appellant Pilares refused to cause the
cancellation of said annotation. In view thereof, plaintiffs-appellees filed this complaint
dated January 11, 1986 on February 5, 1986.[1]
The Sajonases filed their complaint[2] in the Regional Trial Court of Rizal, Branch 71,
against Domingo Pilares, the judgment creditor of the Uychocdes. The relevant portion of
the complaint alleges:
7. That at the time the notice of levy was annotated by the defendant, the Uychocde
spouses, debtors of the defendant, have already transferred, conveyed and assigned all
their title, rights and interests to the plaintiffs and there was no more title, rights or interests
therein which the defendant could levy upon;
8. That the annotation of the levy on execution which was carried over to the title of said
plaintiffs is illegal and invalid and was made in utter bad faith, in view of the existence of
the Adverse Claim annotated by the plaintiffs on the corresponding title of the Uychocde
spouses;
9. That a demand was made by the plaintiffs upon the defendant Domingo A. Pilares, to
cause the cancellation of the said notice of levy but the latter, without justifiable reason and
with the sole purpose of harassing and embarrassing the plaintiffs ignored and refused
plaintiffs demand;
10. That in view of the neglect, failure and refusal of the defendant to cause the
cancellation of the notice of levy on execution, the plaintiffs were compelled to litigate and
engage the services of the undersigned counsel, to protect their rights and interests, for
which they agreed to pay attorneys fees in the amount of P10,000 and appearance fees of
P500 per day in court.[3]
Pilares filed his answer with compulsory counterclaim[4] on March 8, 1986, raising
special and affirmative defenses, the relevant portions of which are as follows:
10. Plaintiff has no cause of action against herein defendants;

11. Assuming, without however admitting that they filed an adverse claim against the
property covered by TCT No. 79073 registered under the name of spouses Ernesto
Uychocde on August 27, 1984, the same ceases to have any legal force and effect (30)
days thereafter pursuant to Section 70 of P.D. 1529;
12. The Notice of Levy annotated at the back of TCT No. 79073 being effected pursuant to
the Writ of Execution dated August 31, 1982, duly issued by the CFI (now RTC) of Quezon
City proceeding from a decision rendered in Civil Case No. 28859 in favor of herein
defendant against Ernesto Uychocde, is undoubtedly proper and appropriate because the
property is registered in the name of the judgment debtor and is not among those
exempted from execution;
13. Assuming without admitting that the property subject matter of this case was in fact
sold by the registered owner in favor of the herein plaintiffs, the sale is the null and void
(sic) and without any legal force and effect because it was done in fraud of a judgment
creditor, the defendant Pilares.[5]
Pilares likewise sought moral and exemplary damages in a counterclaim against the
Sajonas spouses. The parties appeared at pre-trial proceedings on January 21,
1987,[6] after which, trial on the merits ensued.
The trial court rendered its decision on February 15, 1989.[7] It found in favor of the
Sajonas couple, and ordered the cancellation of the Notice of Levy from Transfer
Certificate of Title No. N-109417.
The court a quo stated, thus:
After going over the evidence presented by the parties, the court finds that although the
title of the subject matter of the Notice of Levy on Execution was still in the name of the
Spouses Uychocde when the same was annotated on the said title, an earlier Affidavit of
Adverse Claim was annotated on the same title by the plaintiffs who earlier bought said
property from the Uychocdes.
It is a well settled rule in this jurisdiction (Guidote vs. Maravilla, 48 Phil. 442) that actual
notice of an adverse claim is equivalent to registration and the subsequent registration of
the Notice of Levy could not have any legal effect in any respect on account of prior
inscription of the adverse claim annotated on the title of the Uychocdes.
xxx xxx xxx
On the issue of whether or not plaintiffs are buyers in good faith of the property of the
spouses Uychocde even notwithstanding the claim of the defendant that said sale
executed by the spouses was made in fraud of creditors, the Court finds that the evidence
in this instance is bare of any indication that said plaintiffs as purchasers had notice
beforehand of the claim of the defendant over said property or that the same is involved in
a litigation between said spouses and the defendant. Good faith is the opposite of fraud
and bad faith, and the existence of any bad faith must be established by competent
proof.[8] (Cai vs. Henson, 51 Phil 606)
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
xxx xxx xxx
In view of the foregoing, the Court renders judgment in favor of the plaintiffs and against
the defendant Pilares, as follows:
1. Ordering the cancellation of the Notice of Levy on Execution annotated on Transfer
Certificate of Title No. N-109417.
2. Ordering said defendant to pay the amount of P5,000 as attorneys fees.
3. Dismissing the Counterclaim interposed by said defendant.
Said defendant is likewise ordered to pay the costs.
Dissatisfied, Pilares appealed to the Court of Appeals [9], assigning errors on the part
of the lower court. The appellate court reversed the lower courts decision, and upheld the
annotation of the levy on execution on the certificate of title, thus:
WHEREFORE, the decision of the lower court dated February 15, 1989 is reversed and
set aside and this complaint is dismissed.
Costs against the plaintiffs-appellees."[10]
The Sajonas couple are now before us, on a Petition for Review on Certiorari[11],
praying inter alia to set aside the Court of Appeals decision, and to reinstate that of the
Regional Trial Court.
Private respondent filed his Comment[12] on March 5, 1992, after which, the parties
were ordered to file their respective Memoranda. Private respondent complied thereto on
April 27, 1994[13], while petitioners were able to submit their Memorandum on September
29, 1992.[14]
Petitioner assigns the following as errors of the appellate court, to wit:
I
THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON THE 30-DAY PERIOD
FOR ADVERSE CLAIM UNDER SECTION 70 OF P.D. NO. 1529 IS ABSOLUTE
INASMUCH AS IT FAILED TO READ OR CONSTRUE THE PROVISION IN ITS
ENTIRETY AND TO RECONCILE THE APPARENT INCONSISTENCY WITHIN THE
PROVISION IN ORDER TO GIVE EFFECT TO IT AS A WHOLE.
II
THE LOWER COURT ERRED IN INTERPRETING SECTION 70 OF P.D. NO. 1529 IN
SUCH WISE ON THE GROUND THAT IT VIOLATES PETITIONERS SUBSTANTIAL
RIGHT TO DUE PROCESS.

Primarily, we are being asked to ascertain who among the parties in suit has a better
right over the property in question. The petitioners derive their claim from the right of
ownership arising from a perfected contract of absolute sale between them and the
registered owners of the property, such right being attested to by the notice of adverse
claim[15] annotated on TCT No. N-79073 as early as August 27, 1984. Private respondent
on the other hand, claims the right to levy on the property, and have it sold on execution to
satisfy his judgment credit, arising from Civil Case No. Q-28850[16] against the Uychocdes,
from whose title, petitioners derived their own.
Concededly, annotation of an adverse claim is a measure designed to protect the
interest of a person over a piece of real property where the registration of such interest or
right is not otherwise provided for by the Land Registration Act or Act 496 (now P.D. 1529
or the Property Registration Decree), and serves a warning to third parties dealing with
said property that someone is claiming an interest on the same or a better right than that of
the registered owner thereof. Such notice is registered by filing a sworn statement with the
Register of Deeds of the province where the property is located, setting forth the basis of
the claimed right together with other dates pertinent thereto. [17]
The registration of an adverse claim is expressly recognized under Section 70 of
P.D. No. 1529.*
Noting the changes made in the terminology of the provisions of the law, private
respondent interpreted this to mean that a Notice of Adverse Claim remains effective only
for a period of 30 days from its annotation, and does not automatically lose its force
afterwards. Private respondent further maintains that the notice of adverse claim was
annotated on August 27, 1984, hence, it will be effective only up to September 26, 1984,
after which it will no longer have any binding force and effect pursuant to Section 70 of
P.D. No. 1529. Thus, the sale in favor of the petitioners by the Uychocdes was made in
order to defraud their creditor (Pilares), as the same was executed subsequent to their
having defaulted in the payment of their obligation based on a compromise agreement. [18]
The respondent appellate court upheld private respondents theory when it ruled:
The above stated conclusion of the lower court is based on the premise that the adverse
claim filed by plaintiffs-appellees is still effective despite the lapse of 30 days from the date
of registration. However, under the provisions of Section 70 of P.D. 1529, an adverse claim
shall be effective only for a period of 30 days from the date of its registration. The provision
of this Decree is clear and specific.
xxx xxx xxx
It should be noted that the adverse claim provision in Section 110 of the Land Registration
Act (Act 496) does not provide for a period of effectivity of the annotation of an adverse
claim. P.D. No. 1529, however, now specifically provides for only 30 days. If the intention
of the law was for the adverse claim to remain effective until cancelled by petition of the
interested party, then the aforecited provision in P.D. No. 1529 stating the period of
effectivity would not have been inserted in the law.
Since the adverse claim was annotated On August 27, 1984, it was effective only until
September 26, 1984. Hence, when the defendant sheriff annotated the notice of levy on
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
execution on February 12, 1985, said adverse claim was already ineffective. It cannot be
said that actual or prior knowledge of the existence of the adverse claim on the Uychocdes
title is equivalent to registration inasmuch as the adverse claim was already ineffective
when the notice of levy on execution was annotated. Thus, the act of defendant sheriff in
annotating the notice of levy on execution was proper and justified.
The appellate court relied on the rule of statutory construction that Section 70 is
specific and unambiguous and hence, needs no interpretation nor
construction.[19] Perforce, the appellate court stated, the provision was clear enough to
warrant immediate enforcement, and no interpretation was needed to give it force and
effect. A fortiori, an adverse claim shall be effective only for a period of thirty (30) days
from the date of its registration, after which it shall be without force and effect.Continuing,
the court further stated;
. . . clearly, the issue now has been reduced to one of preference- which should be
preferred between the notice of levy on execution and the deed of absolute sale. The Deed
of Absolute Sale was executed on September 4, 1984, but was registered only on August
28, 1985, while the notice of levy on execution was annotated six (6) months prior to the
registration of the sale on February 12, 1985.
In the case of Landig vs. U.S. Commercial Co., 89 Phil 638 it was held that where a sale is
recorded later than an attachment, although the former is of an earlier date, the sale must
give way to the attachment on the ground that the act of registration is the operative act to
affect the land. A similar ruling was restated in Campillo vs. Court of Appeals (129 SCRA
513).
xxx xxx xxx
The reason for these rulings may be found in Section 51 of P.D. 1529, otherwise known as
the Property Registration Decree, which provides as follows:
Section 51. Conveyance and other dealings by the registered owner.- An owner of
registered land may convey, mortgage, lease, charge, or otherwise deal with the same in
accordance with existing laws. He may use such forms of deeds, mortgages, leases or
other voluntary instruments as are sufficient in law. But no deed, mortgage, lease or other
voluntary instrument, except a will purporting to convey or affect registered land shall take
effect as a conveyance or bind the land, but shall operate only as a contract between the
parties and as evidence of authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land in so far as
third persons are concerned, and in all cases under the Decree, the registration shall be
made in the office of the Register of Deeds for the province or city where the land
lies. (Italics supplied by the lower court.)
Under the Torrens system, registration is the operative act which gives validity to the
transfer or creates a lien upon the land. A person dealing with registered land is not
required to go behind the register to determine the condition of the property. He is only

charged with notice of the burdens on the property which are noted on the face of the
register or certificate of title.[20]
Although we have relied on the foregoing rule, in many cases coming before us, the
same, however, does not fit in the case at bar. While it is the act of registration which is the
operative act which conveys or affects the land insofar as third persons are concerned, it is
likewise true, that the subsequent sale of property covered by a Certificate of Title cannot
prevail over an adverse claim, duly sworn to and annotated on the certificate of title
previous to the sale.[21] While it is true that under the provisions of the Property
Registration Decree, deeds of conveyance of property registered under the system, or any
interest therein only take effect as a conveyance to bind the land upon its registration, and
that a purchaser is not required to explore further 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, nonetheless, this rule is not absolute. Thus, one who buys from the
registered owner need not have to look behind the certificate of title, he is, nevertheless,
bound by the liens and encumbrances annotated thereon. One who buys without checking
the vendors title takes all the risks and losses consequent to such failure. [22]
In PNB vs. Court of Appeals, we held that the subsequent sale of the property to the
De Castro spouses cannot prevail over the adverse claim of Perez, which was inscribed on
the banks certificate of title on October 6, 1958. That should have put said spouses on
notice, and they can claim no better legal right over and above that of Perez. The TCT
issued in the spouses names on July, 1959 also carried the said annotation of adverse
claim. Consequently, they are not entitled to any interest on the price they paid for the
property.[23]
Then again, in Gardner vs. Court of Appeals, we said that the statement of
respondent court in its resolution of reversal that until the validity of an adverse claim is
determined judicially, it cannot be considered a flaw in the vendors title contradicts the very
object of adverse claims. As stated earlier, the annotation of an adverse claim is a
measure designed to protect the interest of a person over a piece of real property, and
serves as a notice and warning to third parties dealing with said property that someone is
claiming an interest on the same or has a better right than the registered owner thereof. A
subsequent sale cannot prevail over the adverse claim which was previously annotated in
the certificate of title over the property.[24]
The question may be posed, was the adverse claim inscribed in the Transfer
Certificate of Title No. N-109417 still in force when private respondent caused the notice of
levy on execution to be registered and annotated in the said title, considering that more
than thirty days had already lapsed since it was annotated? This is a decisive factor in the
resolution of this instant case.
If the adverse claim was still in effect, then respondents are charged with knowledge
of pre-existing interest over the subject property, and thus, petitioners are entitled to the
cancellation of the notice of levy attached to the certificate of title.
For a definitive answer to this query, we refer to the law itself. Section 110 of Act 496
or the Land Registration Act reads:
Sec. 110. Whoever claims any part or interest in registered lands adverse to the registered
owner, arising subsequent to the date of the original registration, may, if no other provision
is made in this Act for registering the same, make a statement in writing setting forth fully
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
his alleged right or interest, and how or under whom acquired, and a reference to the
volume and page of the certificate of title of the registered owner, and a description of the
land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants
residence, and designate a place at which all notices may be served upon him. The
statement shall be entitled to registration as an adverse claim, and the court, upon a
petition of any party in interest, shall grant a speedy hearing upon the question of the
validity of such adverse claim and shall enter such decree therein as justice and equity
may require. If the claim is adjudged to be invalid, the registration shall be cancelled. If in
any case, the court after notice and hearing shall find that a claim thus registered was
frivolous or vexatious, it may tax the adverse claimant double or treble the costs in its
discretion.
The validity of the above-mentioned rules on adverse claims has to be reexamined in
the light of the changes introduced by P.D. 1529, which provides:
Sec. 70 Adverse Claim- Whoever claims any part or interest in registered land adverse to
the registered owner, arising subsequent to the date of the original registration, may, if no
other provision is made in this decree for registering the same, make a statement in writing
setting forth fully his alleged right or interest, and how or under whom acquired, a
reference to the number of certificate of title of the registered owner, the name of the
registered owner, and a description of the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants
residence, and a place at which all notices may be served upon him. This statement shall
be entitled to registration as an adverse claim on the certificate of title. The adverse claim
shall be effective for a period of thirty days from the date of registration. After the lapse of
said period, the annotation of adverse claim may be cancelled upon filing of a
verified petition therefor by the party in interest: Provided, however, that after cancellation,
no second adverse claim based on the same ground shall be registered by the same
claimant.
Before the lapse of thirty days aforesaid, any party in interest may file a petition in the
Court of First Instance where the land is situated for the cancellation of the adverse claim,
and the court shall grant a speedy hearing upon the question of the validity of such
adverse claim, and shall render judgment as may be just and equitable. If the adverse
claim is adjudged to be invalid, the registration thereof shall be ordered cancelled. If, in any
case, the court, after notice and hearing shall find that the adverse claim thus registered
was frivolous, it may fine the claimant in an amount not less than one thousand pesos, nor
more than five thousand pesos, in its discretion. Before the lapse of thirty days, the
claimant may withdraw his adverse claim by filing with the Register of Deeds a sworn
petition to that effect. (Italics ours)
In construing the law aforesaid, care should be taken that every part thereof be given
effect and a construction that could render a provision inoperative should be avoided, and
inconsistent provisions should be reconciled whenever possible as parts of a harmonious
whole.[25] For taken in solitude, a word or phrase might easily convey a meaning quite

different from the one actually intended and evident when a word or phrase is considered
with those with which it is associated.[26] In ascertaining the period of effectivity of an
inscription of adverse claim, we must read the law in its entirety. Sentence three,
paragraph two of Section 70 of P.D. 1529 provides:
The adverse claim shall be effective for a period of thirty days from the date of registration.
At first blush, the provision in question would seem to restrict the effectivity of the
adverse claim to thirty days. But the above provision cannot and should not be treated
separately, but should be read in relation to the sentence following, which reads:
After the lapse of said period, the annotation of adverse claim may be cancelled upon filing
of a verified petition therefor by the party in interest.
If the rationale of the law was for the adverse claim to ipso facto lose force and effect
after the lapse of thirty days, then it would not have been necessary to include the
foregoing caveat to clarify and complete the rule. For then, no adverse claim need be
cancelled. If it has been automatically terminated by mere lapse of time, the law would not
have required the party in interest to do a useless act.
A statutes clauses and phrases must not be taken separately, but in its relation to the
statutes totality. Each statute must, in fact, be construed as to harmonize it with the pre-
existing body of laws. Unless clearly repugnant, provisions of statutes must be
reconciled. The printed pages of the published Act, its history, origin, and its purposes may
be examined by the courts in their construction. [27] An eminent authority on the subject
matter states the rule candidly:
A statute is passed as a whole and not in parts or sections, and is animated by one
general purpose and intent. Consequently, each part or section should be construed in
connection with every other part or section so as to produce a harmonious whole. It is not
proper to confine its intention to the one section construed. It is always an unsafe way of
construing a statute or contract to divide it by a process of etymological dissection, into
separate words, and then apply to each, thus separated from the context, some particular
meaning to be attached to any word or phrase usually to be ascertained from the
context.[28]
Construing the provision as a whole would reconcile the apparent inconsistency
between the portions of the law such that the provision on cancellation of adverse claim by
verified petition would serve to qualify the provision on the effectivity period. The law, taken
together, simply means that the cancellation of the adverse claim is still necessary to
render it ineffective, otherwise, the inscription will remain annotated and shall continue as
a lien upon the property. For if the adverse claim has already ceased to be effective upon
the lapse of said period, its cancellation is no longer necessary and the process of
cancellation would be a useless ceremony.[29]
It should be noted that the law employs the phrase may be cancelled, which
obviously indicates, as inherent in its decision making power, that the court may or may
not order the cancellation of an adverse claim, notwithstanding such provision limiting the
effectivity of an adverse claim for thirty days from the date of registration. The court cannot
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
be bound by such period as it would be inconsistent with the very authority vested in it. A
fortiori, the limitation on the period of effectivity is immaterial in determining the validity or
invalidity of an adverse claim which is the principal issue to be decided in the court
hearing. It will therefore depend upon the evidence at a proper hearing for the court to
determine whether it will order the cancellation of the adverse claim or not. [30]
To interpret the effectivity period of the adverse claim as absolute and without
qualification limited to thirty days defeats the very purpose for which the statute provides
for the remedy of an inscription of adverse claim, as the annotation of an adverse claim is
a measure designed to protect the interest of a person over a piece of real property where
the registration of such interest or right is not otherwise provided for by the Land
Registration Act or Act 496 (now P.D. 1529 or the Property Registration Decree), and
serves as a warning to third parties dealing with said property that someone is claiming an
interest or the same or a better right than the registered owner thereof.[31]
The reason why the law provides for a hearing where the validity of the adverse
claim is to be threshed out is to afford the adverse claimant an opportunity to be heard,
providing a venue where the propriety of his claimed interest can be established or
revoked, all for the purpose of determining at last the existence of any encumbrance on
the title arising from such adverse claim. This is in line with the provision immediately
following:
Provided, however, that after cancellation, no second adverse claim shall be registered by
the same claimant.
Should the adverse claimant fail to sustain his interest in the property, the adverse
claimant will be precluded from registering a second adverse claim based on the same
ground.
It was held that validity or efficaciousness of the claim may only be determined by the
Court upon petition by an interested party, in which event, the Court shall order the
immediate hearing thereof and make the proper adjudication as justice and equity may
warrant. And it is only when such claim is found unmeritorious that the registration of the
adverse claim may be cancelled, thereby protecting the interest of the adverse claimant
and giving notice and warning to third parties. [32]
In sum, the disputed inscription of adverse claim on the Transfer Certificate of Title
No. N-79073 was still in effect on February 12, 1985 when Quezon City Sheriff Roberto
Garcia annotated the notice of levy on execution thereto. Consequently, he is charged with
knowledge that the property sought to be levied upon on execution was encumbered by an
interest the same as or better than that of the registered owner thereof. Such notice of levy
cannot prevail over the existing adverse claim inscribed on the certificate of title in favor of
the petitioners. This can be deduced from the pertinent provision of the Rules of Court, to
wit:
Section 16. Effect of levy on execution as to third persons- The levy on execution shall
create a lien in favor of the judgment creditor over the right, title and interest of the
judgment debtor in such property at the time of the levy, subject to liens or encumbrances
then existing. (Italics supplied)

To hold otherwise would be to deprive petitioners of their property, who waited a long
time to complete payments on their property, convinced that their interest was amply
protected by the inscribed adverse claim.
As lucidly observed by the trial court in the challenged decision:
True, the foregoing section provides that an adverse claim shall be effective for a period of
thirty days from the date of registration. Does this mean however, that the plaintiffs thereby
lost their right over the property in question? Stated in another, did the lapse of the thirty
day period automatically nullify the contract to sell between the plaintiffs and the
Uychocdes thereby depriving the former of their vested right over the property?
It is respectfully submitted that it did not.[33]
As to whether or not the petitioners are buyers in good faith of the subject property,
the same should be made to rest on the findings of the trial court. As pointedly observed
by the appellate court, there is no question that plaintiffs-appellees were not aware of the
pending case filed by Pilares against Uychocde at the time of the sale of the property by
the latter in their favor. This was clearly elicited from the testimony of Conchita Sajonas,
wife of plaintiff, during cross-examination on April 21, 1988.[34]
ATTY. REYES
Q - Madam Witness, when Engr. Uychocde and his wife offered to you and
your husband the property subject matter of this case, they showed you
the owners transfer certificate, is it not?
A - Yes, sir.
Q - That was shown to you the very first time that this lot was offered to you for
sale?
A - Yes.
Q - After you were shown a copy of the title and after you were informed that
they are desirous in selling the same, did you and your husband decide
to buy the same?
A - No, we did not decide right after seeing the title. Of course, we visited...
Q - No, you just answer my question. You did not immediately decide?
A - Yes.
Q - When did you finally decide to buy the same?
A - After seeing the site and after verifying from the Register of Deeds in
Marikina that it is free from encumbrances, that was the time we decided.
Q - How soon after you were offered this lot did you verify the exact location
and the genuineness of the title, as soon after this was offered to you?
A - I think its one week after they were offered.[35]
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
A purchaser in good faith and for value is one who buys property of another without
notice that some other person has a right to or interest in such property and pays a full and
fair price for the same, at the time of such purchase, or before he has notice of the claims
or interest of some other person in the property. [36] Good faith consists in an honest
intention to abstain from taking any unconscientious advantage of another. [37] Thus, the
claim of the private respondent that the sale executed by the spouses was made in fraud
of creditors has no basis in fact, there being no evidence that the petitioners had any
knowledge or notice of the debt of the Uychocdes in favor of the private respondents, nor
of any claim by the latter over the Uychocdes properties or that the same was involved in
any litigation between said spouses and the private respondent. While it may be stated
that good faith is presumed, conversely, bad faith must be established by competent proof
by the party alleging the same. Sans such proof, the petitioners are deemed to be
purchasers in good faith, and their interest in the subject property must not be disturbed.
At any rate, the Land Registration Act (Property Registration Decree) guarantees to
every purchaser of registered land in good faith that they can take and hold the same free
from any and all prior claims, liens and encumbrances except those set forth on the
Certificate of Title and those expressly mentioned in the ACT as having been preserved
against it. Otherwise, the efficacy of the conclusiveness of the Certificate of Title which the
Torrens system seeks to insure would be futile and nugatory. [38]
ACCORDINGLY, the assailed decision of the respondent Court of Appeals dated
October 17, 1991 is hereby REVERSED and SET ASIDE. The decision of the Regional
Trial Court dated February 15, 1989 finding for the cancellation of the notice of levy on
execution from Transfer Certificate of Title No. N-109417 is hereby REINSTATED.
The inscription of the notice of levy on execution on TCT No. N-109417 is hereby
CANCELLED.
Costs against private respondent.
SO ORDERED.

G.R. No. 142687 July 20, 2006
SPOUSES FRANCISCO and BERNARDINA RODRIGUEZ, petitioners,
vs.
HON. COURT OF APPEALS, SPOUSES CHRISTOPHER and MA. ANGELICA
BARRAMEDA, and SPOUSES ANTONIO and MARIDEL CALINGO, respondents.
DECISION
PUNO, J.:
This is a petition for review of the decision of the Court of Appeals dated September 7,
1999 in CA-G.R. CV No. 48772 and its resolution dated March 31, 2000. The Court of
Appeals reversed the decision of the Regional Trial Court of Makati in Civil Case No. 92-
3524.
The facts show that herein respondent Spouses Antonio and Maridel Calingo (respondents
Calingo) were the registered owners of a house and lot located at No. 7903 Redwood
Street, Marcelo Green Village, Paraaque, Metro Manila. The property was mortgaged to
the Development Bank of the Philippines, which mortgage was later absorbed by the
Home Mutual Development Fund (HMDF) or Pag-ibig.
On April 27, 1992, respondents Calingo and respondent Spouses Christopher and Ma.
Angelica Barrameda (respondents Barrameda) entered into a contract of sale with
assumption of mortgage where the former sold to the latter the property in question and
the latter assumed to pay the outstanding loan balance to the Development Bank of the
Philippines.1 Respondents Barrameda issued two checks in the amounts of P150,000.00
and P528,539.76, for which respondents Calingo issued a receipt dated April 24, 1992. 2
In a letter dated April 23, 1992, respondent Antonio S. Calingo informed HMDF/Pag-ibig
about the sale of the property with assumption of mortgage. Said letter, however, together
with an affidavit by respondents Calingo, was served upon HMDF/Pag-ibig on October 2,
1992.3
On May 29, 1992, respondents Barrameda filed with the Register of Deeds of Paraaque
an affidavit of adverse claim on the property. The adverse claim was inscribed at the back
of the certificate of title as Entry No. 3439. 4
On June 1, 1992, respondent Ma. Angelica Paez-Barrameda wrote HMDF, Mortgage and
Loans Division informing the office that they have purchased the subject property from the
Calingo spouses and that they filed a notice of adverse claim with the Register of Deeds of
Paraaque. They also sought assistance from said office as regards the procedure for the
full settlement of the loan arrearages and the transfer of the property in their names.5
Respondents Barrameda moved into the property on June 2, 1992.
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Land Titles and Deeds (Finals) 2017
On July 13, 1992, a notice of levy with attachment on real property by virtue of a writ of
execution was annotated at the back of the certificate of title of the property in question.
The writ of execution was issued by Judge Salvador Abad Santos, Regional Trial Court of
Makati, Branch 65 in connection with Civil Case No. 88-2159 involving a claim by herein
petitioners, Spouses Francisco and Bernardina Rodriguez, against respondents Calingo.
Judge Abad Santos issued the writ in favor of petitioners Rodriguez. 6
On July 21, 1992, petitioners counsel, Atty. Nelson A. Loyola, sent a letter to respondents
Barrameda inquiring about the basis of their occupation of the property in question.
On August 21, 1992, respondents Barrameda remitted to respondents Calingo the amount
of P364,992.07 to complete the payment of the agreed purchase price. Respondents
Calingo acknowledged receipt of said amount and waived all their rights to the property in
favor of the Barrameda spouses. They also guaranteed that the property was clear and
free from any liens and encumbrances, except the real estate mortgage assumed by
respondents Barrameda.7
On October 7, 1992, respondents Barrameda executed a joint affidavit stating that they are
the owners of the property in question by virtue of a deed of sale with assumption of
mortgage; that they registered an affidavit of adverse claim with the Register of Deeds of
Paraaque; that the Sheriff of the Regional Trial Court, Branch 65, Makati, Sheriff Manuel
C. Dolor, levied said property despite their adverse claim; and that they have acquired the
property long before the levy was made, and therefore, said levy was illegal. They served
a copy of the affidavit on petitioners counsel, Atty. Loyola, who made a reply thereto on
October 15, 1992.
In his letter to Christopher Barrameda dated October 15, 1992, Atty. Loyola pointed out
that the alleged deed of sale with assumption of mortgage was not registered with the
Register of Deeds and that the records of the HMDF show that the property is owned by
the Calingo spouses. He urged the Barrameda spouses to confer with the petitioners to
amicably settle the controversy.8
On November 9, 1992, respondents Barrameda found a Notice of Sheriffs Sale posted on
their front gate, announcing the auction sale of their house and lot on December 3, 1992 at
10:00 in the morning.9
On November 20, 1992, pursuant to Rule 39, Section 17 of the Revised Rules of Court,
respondents Barrameda served a Notice of Third Party Claim upon Sheriff Manuel C.
Dolor, accompanied by their affidavit of title.
On December 2, 1992, respondents Barrameda filed with the Regional Trial Court of
Makati a petition for quieting of title with prayer for preliminary injunction. The petition
prayed, among others, that the execution sale of the property be enjoined, the notice of
levy and attachment inscribed on the certificate of title be cancelled, and that respondents
Barrameda be declared the lawful and sole owners of the property in question. 10
The trial court ruled in favor of herein petitioners and dismissed respondents Barramedas
petition for quieting of title. It ruled that the annotation of respondents Barramedas

adverse claim at the back of the certificate of title was insufficient to establish their claim
over the property. It said that respondents Barrameda, as buyers of the property, should
have registered the title in their names. Furthermore, respondents Barramedas adverse
claim had lost its efficacy after the lapse of thirty days in accordance with the provisions of
the Land Registration Act. The trial court also found that there was collusion between
respondents Barrameda and respondents Calingo to transfer the property to defraud third
parties who may have a claim against the Calingos. 11
The Court of Appeals, however, reversed the decision of the trial court. Citing the ruling
in Sajonas v. Court of Appeals,12 the appellate court held that respondents Barramedas
adverse claim inscribed on the certificate of title was still effective at the time the property
was levied on execution. It said:
Therefore, the disputed inscription of adverse claim on TCT No. 83612/57286
was still in effect on July 13, 1992 when the Rodriguezes caused the annotation
of the notice of levy on execution thereto. Consequently, they are charged with
knowledge that the property sought to be levied upon on execution was
encumbered by an interest the same as or better than that of the registered
owner thereof. Such notice of levy cannot prevail over the existing adverse claim
inscribed on the certificate of title in favor of the Barramedas. xxx
The court held, therefore, that the notice of levy could not prevail over respondents
Barramedas adverse claim.
Petitioners moved for a reconsideration of the appellate courts ruling, but the motion was
denied.
Hence, this petition. Petitioners essentially argue that the remedy of a petition for quieting
of title was not available to respondents Barrameda as they did not have a valid title to the
property in question; that the affidavit of adverse claim inscribed by respondents
Barrameda at the back of the certificate of title was not sufficient to establish their claim to
the property; and there was collusion between respondents Barrameda and respondents
Calingo.
The principal issue that needs to be resolved in this case is whether respondents
Barramedas adverse claim on the property should prevail over the levy on execution
issued by another court in satisfaction of a judgment against respondents Calingo.
We hold that it cannot.
Respondents Barrameda anchor their claim on the property on the deed of sale with
assumption of mortgage executed by them and respondents Calingo on April 27, 1992.
The Property Registration Decree13 requires that such document be registered with the
Register of Deeds in order to be binding on third persons. The law provides:
Sec. 51. Conveyance and other dealings by registered owner. An owner of
registered land may convey, mortgage, lease, charge or otherwise deal with the
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
same in accordance with existing laws. He may use such forms of deeds,
mortgages, leases or other voluntary instruments as are sufficient in law. But no
deed, mortgage, lease, or other voluntary instrument, except a will
purporting to convey or affect registered land shall take effect as a
conveyance or bind the land, but shall operate only as a contract between
the parties and as evidence of authority to the Register of Deeds to make
registration.
The act of registration shall be the operative act to convey or affect the land
insofar as third persons are concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register of Deeds for the province
or city where the land lies. (emphasis supplied)
It is admitted in this case that the deed of sale with assumption of mortgage was not
registered, but instead, respondents Barrameda filed an affidavit of adverse claim with the
Register of Deeds. The question now is whether the adverse claim is sufficient to bind third
parties such as herein petitioners.
In L.P. Leviste and Company, Inc. v. Noblejas,14 we explained when an inscription of an
adverse claim is sufficient to affect third parties, thus:
The basis of respondent Villanuevas adverse claim was an agreement to sell
executed in her favor by Garcia Realty. An agreement to sell is a voluntary
instrument as it is a wilful act of the registered owner. As such voluntary
instrument, Section 50 of Act No. 496 [now Presidential Decree No. 1529]
expressly provides that the act of registration shall be the operative act to convey
and affect the land. And Section 55 of the same Act requires the presentation of
the owners duplicate certificate of title for the registration of any deed or
voluntary instrument. As the agreement to sell involves an interest less than an
estate in fee simple, the same should have been registered by filing it with the
Register of Deeds who, in turn, makes a brief memorandum thereof upon the
original and owners duplicate certificate of title. The reason for requiring the
production of the owners duplicate certificate in the registration of a voluntary
instrument is that, being a wilful act of the registered owner, it is to be presumed
that he is interested in registering the instrument and would willingly surrender,
present or produce his duplicate certificate of title to the Register of Deeds in
order to accomplish such registration. However, where the owner refuses to
surrender the duplicate certificate for the annotation of the voluntary
instrument, the grantee may file with the Register of Deeds a statement
setting forth his adverse claim, as provided for in Section 110 of Act No.
496. In such a case, the annotation of the instrument upon the entry book is
sufficient to affect the real estate to which it relates, although Section 72 of Act
No. 496 imposes upon the Register of Deeds the duty to require the production
by the [r]egistered owner of his duplicate certificate for the inscription of the
adverse claim. The annotation of an adverse claim is a measure designed to
protect the interest of a person over a piece of real property where the
registration of such interest or right is not otherwise provided for by the
Land Registration Act, and serves as a notice and warning to third parties
dealing with said property that someone is claiming an interest on the
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Land Titles and Deeds (Finals) 2017

same or a better right than the registered owner thereof. (emphases IN VIEW WHEREOF, the petition is GRANTED. The assailed decision and resolution of
supplied) the Court of Appeals are SET ASIDE and the decision of the Regional Trial Court, Makati
in Civil Case No. 92-3524 is REINSTATED. No cost. SO ORDERED.
In the case at bar, the reason given for the non-registration of the deed of sale with
assumption of mortgage was that the owners duplicate copy of the certificate of title was in
the possession of HMDF. It was not shown, however, that either respondents Barrameda
or respondents Calingo exerted any effort to retrieve the owners duplicate copy from the
HMDF for the purpose of registering the deed of sale with assumption of mortgage. In fact,
the parties did not even seek to obtain the consent of, much less inform, the HMDF of the
sale of the property. This, despite the provision in the contract of mortgage prohibiting the G.R. No. 187824 November 17, 2010
mortgagor (respondents Calingo) from selling or disposing the property without the written
consent of the mortgagee.15 Respondents Calingo, as party to the contract of mortgage, FILINVEST DEVELOPMENT CORPORATION, Petitioner,
are charged with the knowledge of such provision and are bound to comply therewith. vs.
Apparently, there was haste in disposing the property that respondents Calingo informed GOLDEN HAVEN MEMORIAL PARK, INC., Respondent.
HMDF of the sale only on October 2, 1992 when they served a copy of their letter to said
office regarding the transfer of the property to respondents Barrameda. There was no
reason for the parties failure to seek the approval of the HMDF to the sale as it appears x - - - - - - - - - - - - - - - - - - - - - - -x
from the letter of respondent Angelica Paez-Barrameda to HMDF that they were ready to
pay in full the balance of the loan plus interest. What is more suspect is that the judgment G.R. No. 188265
against respondents Calingo ordering them to pay the petitioners the sum
of P1,159,355.90 was rendered on January 28, 1992, before the sale of the property on
GOLDEN HAVEN MEMORIAL PARK, INC. Petitioner,
April 27, 1992. We also find it unsettling that respondents Barrameda, without any
vs.
reservation or inquiry, readily remitted to respondents Calingo the full payment for the
FILINVEST DEVELOPMENT CORPORATION, Respondent.
property on August 21, 1992 despite knowledge of the levy on execution over the property
in July of the same year. Any prudent buyer of real property, before parting with his money,
is expected to first ensure that the title to the property he is about to purchase is clear and DECISION
free from any liabilities and that the sellers have the proper authority to deal on the
property. ABAD, J.:

Again, we stress that the annotation of an adverse claim is a measure designed to protect
the interest of a person over a piece of property where the registration of such interest
or right is not otherwise provided for by the law on registration of real
property. Section 70 of Presidential Decree No. 1529 is clear:
Sec. 70. Adverse claim. Whoever claims any part or interest in registered land
adverse to the registered owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this Decree for registering
the same, make a statement in writing setting forth his alleged right or interest,
and how or under whom acquired, a reference to the number of the certificate of
title of the registered owner, the name of the registered owner, and a description
of the land in which the right or interest is claimed. xxx
The deed of sale with assumption of mortgage executed by respondents Calingo and
Barrameda is a registrable instrument. In order to bind third parties, it must be registered
with the Office of the Register of Deeds. It was not shown in this case that there was
justifiable reason why the deed could not be registered. Hence, the remedy of adverse
claim cannot substitute for registration.
These cases are about which of two real estate developers, both buyers of the same
lands, acted in good faith and has a better title to the same.
The Facts and the Case
Petronila Yap (Yap), Victoriano and Policarpio Vivar (the Vivars), Benjamin Cruz (Cruz),
Juan Aquino (Aquino), Gideon Corpuz (Corpuz), and Francisco Sobremesana
(Sobremesana), and some other relatives inherited a parcel of land in Las Pias City
covered by Transfer Certificate of Title (TCT) 67462 RT-1. Subsequently, the heirs had the
land divided into 13 lots and, in a judicial partition, the court distributed four of the lots as
follows: a) Lots 1 and 12 to Aquino; b) Lot 2 to Corpuz and Sobremesana; and (c) Lot 6 to
Yap, Cruz, and the Vivars. The other lots were distributed to the other heirs.
On March 6, 1989 Yap, acting for herself and for Cruz and the Vivars, executed an
agreement to sell Lot 6 in favor of Golden Haven Memorial Park, Inc. (GHM), payable in
three installments. On July 31, 1989 another heir, Aquino, acting for himself and for
Corpuz and Sobremesana, also executed an agreement to sell Lots 1, 2, and 12 in favor of
GHM, payable in the same manner. In both instances, GHM paid the first installment upon
execution of the contract.

On August 4, 1989 GHM caused to be annotated a Notice of Adverse Claim on TCT 67462
RT-1. On September 20, 1989 the sellers of the four lots wrote GHM that they were still
working on the titling of the lots in their names and wanted to know if GHM was still
interested in proceeding with their agreements. GHM replied in the affirmative on
September 21, 1989 and said that it was just waiting for the sellers titles so it can pay the
second installments.
Sometime in August of 1989, Filinvest Development Corporation (Filinvest) applied for the
transfer in its name of the titles over Lots 2, 4, and 5 but the Las Pias Register of Deeds
declined its application. Upon inquiry, Filinvest learned that Lot 8, a lot belonging to some
other heir or heirs and covered by the same mother title, had been sold to Household
Development Corporation (HDC), a sister company of GHM, and HDC held the owners
duplicate copy of that title. Filinvest immediately filed against HDC a petition for the
surrender and cancellation of the co-owners duplicate copy of TCT 67462 RT-1. Filinvest
alleged that it bought Lots 1, 2, 6, and 12 of the property from their respective owners as
evidenced by three deeds of absolute sale in its favor dated September 10, November 18,
and December 29, 1989 and that Filinvest was entitled to the registrations of such sales.
On January 14, 1991 GHM filed against the sellers and Filinvest a complaint for the
annulment of the deeds of sale issued in the latters favor before the Regional Trial Court
(RTC) of Las Pias City in Civil Case 91-098. On March 16, 2006 the RTC rendered a
decision after trial, declaring the contracts to sell executed by some of the heirs in GHMs
favor valid and enforceable and the sale in favor of Filinvest null and void. Only Filinvest
appealed among the defendants.
On November 25, 2008 the Court of Appeals (CA) affirmed the RTC decision with respect
to the validity of the contract to sell Lot 6 in GHMs favor. But the CA declared the
contracts to sell Lots 1, 2, and 12 in GHMs favor void and the sale of the same lots in
favor of Filinvest valid.
Both parties filed their petitions for review before this Court, Filinvest in G.R. 187824, and
GHM in G.R. 188265.
The Issue Presented
The issue presented in these cases is whether or not the contracts to sell that the sellers
executed in GHMs favor covering the same lots sold to Filinvest are valid and enforceable.
The Courts Ruling
To prove good faith, the rule is that the buyer of registered land needs only show that he
relied on the title that covers the property. But this is true only when, at the time of the sale,
the buyer was unaware of any adverse claim to the property. 1 Otherwise, the law requires
the buyer to exercise a higher degree of diligence before proceeding with his purchase. He
must examine not only the certificate of title, but also the sellers right and capacity to
transfer any interest in the property.2 In such a situation, the buyer must show that he
exercised reasonable precaution by inquiring beyond the four corners of the title. 3 Failing in
these, he may be deemed a buyer in bad faith.4
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Land Titles and Deeds (Finals) 2017
Here, Filinvest was on notice that GHM had caused to be annotated on TCT 67462 RT-1,
the mother title, as early as August 4, 1989 a notice of adverse claim covering Lot 6. This
notwithstanding, Filinvest still proceeded to buy Lots 1, 2, 6, and 12 on September 10,
November 18, and December 29, 1989.
Filinvest of course contends that, although the title carried a notice of adverse claim, that
notice was only with respect to seller Yaps interest in Lot 6 and it did not affect Lots 1, 2,
12, and the remaining interests in Lot 6. The Court disagrees.
The annotation of an adverse claim is intended to protect the claimants interest in the
property.1avvphi1 The notice is a warning to third parties dealing with the property that
someone claims an interest in it or asserts a better right than the registered owner. 5 Such
notice constitutes, by operation of law, notice to the whole world.6 Here, although the
notice of adverse claim pertained to only one lot and Filinvest wanted to acquire interest in
some other lots under the same title, the notice served as warning to it that one of the
owners was engaged in double selling.
What is more, upon inquiry with the Register of Deeds of Las Pias, Filinvest also learned
that the heirs of Andres Aldana sold Lot 8 to HDC and turned over the co-owners
duplicate copy of TCT 67462 RT-1 to that company which had since then kept the title.
Filinvest (referred to below as FDC) admits this fact in its petition, 7 thus:
Sometime in August 1989, FDC applied with the Register of Deeds of Las Pias for the
transfer and registration of Lots 2, 4, and 5 in its name and surrendered the co-owners
duplicate copy of TCT No. (67462) RT-1 given to it by the Vivar family, but the Register of
Deeds of Las Pias City refused to do the transfer of title in the name of FDC and instead
demanded from FDC to surrender as well the other co-owner's duplicate copy of TCT No.
(67462) RT-1 which was issued to the heirs of Andres Aldana. Upon further inquiry, FDC
came to know that the heirs of Andres Aldana sold Lot 8 and delivered their co-owner's
duplicate copy of TCT No. (67462) RT-1 to Household Development Corporation, a sister
company of respondent GHMPI. FDC made representations to Household Development
Corporation for the surrender of said co-owner's duplicate copy of TCT No. (67462) RT-1
to the Register of Deeds of Las Pias City, but Household Development Corporation
refused to do so.
Filinvests knowledge that GHM, a competitor, had bought Lot 6 in which Filinvest was
interested, that GHM had annotated an adverse claim to that Lot 6, and that GHM had
physical possession of the title, should have put Filinvest on its toes regarding the
prospects it faced if it bought the other lots covered by the title in question. Filinvest should
have investigated the true status of Lots 1, 2, 6, and 12 by asking GHM the size and shape
of its interest in the lands covered by the same title, especially since both companies were
engaged in the business of developing lands. One who has knowledge of facts which
should have put him upon such inquiry and investigation cannot claim that he has acquired
title to the property in good faith as against the true owner of the land or of an interest in it.8
The Court upholds the validity of the contracts between GHM and its sellers. As the trial
court aptly observed, GHM entered into valid contracts with its sellers but the latter simply
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Land Titles and Deeds (Finals) 2017

and knowingly refused without just cause to honor their obligations. The sellers apparently FLOR MARTINEZ, represented by MACARIO MARTINEZ, G.R. No. 166536
had a sudden change of heart when they found out that Filinvest was willing to pay more. authorized representative and Attorney-in-Fact,

As to the award of exemplary damages, the Court sustains the CA ruling. This species of Petitioner,
damages is allowed only in addition to moral damages such that exemplary damages Present:
cannot be awarded unless the claimant first establishes a clear right to moral
damages.9 Here, since GHM failed to prove that it is entitled to moral damages, the RTCs
award of exemplary damages had no basis. But the grant of attorneys fees is proper. As
the RTC noted, this case has been pending since 1991, or for 19 years now. GHM was CARPIO,* J.,
forced to litigate and incur expenses in order to protect its rights and interests.
CORONA, J., Chairperson,
WHEREFORE, the Court GRANTS the petition in G.R. 188265 and DISMISSES the - versus -
petition in G.R. 187824. The Court likewise REVERSES and SETS ASIDE the decision of VELASCO, JR.,
the Court of Appeals dated November 25, 2008 in CA-G.R. CV 89448, and REINSTATES
the decision of the Regional Trial Court in Civil Case 91-098 dated March 16, 2006 with NACHURA, and
the MODIFICATION that the award of exemplary damages is DELETED.
PERALTA, JJ.
SO ORDERED.

ERNESTO G. GARCIA and EDILBERTO M. BRUA,

Promulgated:
Respondents.

February 4, 2010

x-----------------------------------------------------------------------------------------x

DECISION

PERALTA, J.:

Before us is a special civil action for certiorari under Rule 65 of the Rules of Court to annul

and set aside the Decision[1] dated August 12, 2004 and the Resolution[2] dated November

18, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 61591, which reversed and set

aside the Decision[3] dated April 15, 1998 and Order[4] dated August 11, 1998 of the

Regional Trial Court (RTC) of Pasig, Branch 267, in Special Civil Action No. 574.

The factual antecedents are as follows:

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Land Titles and Deeds (Finals) 2017

Respondent Edilberto Brua was the registered owner of a parcel of land located in Deed of Sale with the Registry of Deeds of Rizal on October 24 1991, and a new TCT No.

Mandaluyong, Rizal, covered by Transfer Certificate of Title (TCT) No. 346026 of the 5204[10] was issued in the names of respondent Garcia and his wife. However, the

Registry of Deeds of Rizal, which is the subject matter of this case. The property was first annotations at the back of the previous title were carried over to the new title, to wit: Entry

mortgaged to the Government Service Insurance System (GSIS), and such mortgage was No. 56837, a Notice of Levy on Attachment and/or Levy inscribed on January 8,

annotated at the back of TCT No. 346026 as Entry No. 91370, inscribed on June 5, 1981;[11] Entry No. 2881 showing a Notice of Levy on Execution in favor of petitioner Flor

1974.[5] On February 5, 1980,respondent Brua obtained a loan from his brother-in-law, Martinez, which was inscribed on July 11, 1988; [12] Entry No. 3706, which was a Certificate

respondent Ernesto Garcia, in the amount of One Hundred Fifty Thousand Pesos of Sale in favor of petitioner inscribed on September 2, 1988; [13] Entry No. 72854, which

(P150,000.00) and, to secure the payment of said loan, respondent Brua mortgaged the was a Notice of Levy on Execution in favor of Pilipinas Bank inscribed on December 8,

subjectproperty to respondent Garcia, as evidenced by a Deed of Real Estate 1981;[14] and Entry No. 16611 inscribed on October 24, 1991, which was the cancellation

Mortgage[6] executed in respondent Garcia's favor. Since the title to the subject property of respondent Brua's mortgage with GSIS.[15]

was in the possession of the GSIS and respondent Garcia could not register the Deed of
It appeared that the annotations found at the back of the title of the subject property in
Real Estate Mortgage, he then executed an Affidavit of Adverse Claim[7] and registered it
favor of petitioner, i.e., Notice of Levy on Attachment and/or Levy, Notice of Levy on
with the Registry of Deeds of Rizal on June 23, 1980 as Entry No. 49853/T-
Execution, and Certificate of Sale, were all made in connection with petitioner's action for
346026,[8] which remained uncanceled up to this time.
Collection of Sum of Money, which she filed against respondent Brua at the RTC of Makati

Sometime in October 1991, respondent Brua requested respondent Garcia to pay the City, Branch 60, docketed as Civil Case No. 39633. In that case, a decision was rendered

former's loan with the GSIS, so that the title to the subject property would be released to in favor of petitioner, where the RTC ordered respondent Brua to pay the former the

the latter. Respondent Garcia then paid GSIS the amount of P400,000.00 and, thus, the amount of P244,594.10, representing the value of the dishonored checks plus 12% interest

title to the subject property was released to him. per annum as damages and the premium paid by petitioner for the attachment bond. The

decision became final and executory as respondent Brua failed to appeal the same, and a

notice of levy on execution was issued. A public auction was subsequently conducted,

On October 22, 1991, a Deed of Absolute Sale[9] was executed between respondents where the subject property was awarded to petitioner as the sole bidder in the amount

Garcia and Brua over the subject property, where respondent Brua sold the property in the of P10,000.00, and a Certificate of Sale was issued in her favor.

amount of P705,000.00. In the same deed, it was stated that the subject property was only
The annotation of Pilipinas Bank's Notice of Levy on Execution annotated as Entry No.
a partial payment of respondent Brua's mortgage indebtedness to respondent Garcia,
72854 on the title of the subject property was by virtue of a civil case filed by Filipinas
which he could no longer redeem from the latter. Respondent Garcia then registered the
Manufacturers Bank, now known as Pilipinas Bank, against respondent Brua.

On February 9, 1994, respondents Garcia and Brua filed with the RTC of Pasig, Branch
267, an Action to Quiet Title, initially against petitioner due to the encumbrances/liens
annotated on respondent Garcia's new title. They contended that these
encumbrances/liens were registered subsequent to the annotation of respondent Garcia's
adverse claim made in 1980, and prayed that these be canceled. Subsequently, the
complaint was amended to include Pilipinas Bank as an additional defendant. Petitioner
and Pilipinas Bank filed their respective Answers thereto.
Trial thereafter ensued.
On April 15, 1998, the RTC rendered its decision dismissing respondent Garcia's action for
quieting of title, the dispositive portion of which reads:
WHEREFORE, PREMISES CONSIDERED, the instant
complaint is hereby dismissed for lack of merit and judgment is hereby
rendered in favor of defendants Flor Martinez and Pilipinas Bank as
against plaintiffs Ernesto Garcia and Edilberto Brua who are further
directed to pay both defendants attorney's fees in the amount
of P50,000.00 each.
Accordingly, the judicial inscriptions particularly, Entry No.
3706/T-346026, annotation of certificate of sale and Entry No. 72854/T-
346026 are held to be valid, subsisting liens which do not constitute a
cloud on Transfer Certificate of Title No. 5204. [16]
In so ruling, the RTC found that the adverse claim which respondent Garcia caused to be
annotated on the previous title of the subject property, i.e, TCT No. 346026, on June 23,
1980 was predicated on his interest as a mortgagee of a loan of P150,000.00, which he
extended to respondent Brua; that respondent Garcia's adverse interest was merely that of
a second mortgagee, as he was not yet the purchaser of the subject property as of said
date; that when the judicial liens, i.e., Notice of Levy on Attachment and/or Levy and
Notice of Levy on Execution, were caused to be registered by petitioner on respondent
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Land Titles and Deeds (Finals) 2017
Brua's title on January 8, 1981 and July 8, 1998, respectively, by virtue ofpetitioner being
adjudged judgment creditor by Branch 60 of RTC Makati, respondent Garcia's claim
became inferior to that of petitioner. The RTC said that respondent Garcia's inaction to
preserve his adverse claim as a second mortgagee, which was inscribed on June 23,
1980, and his sudden decision to redeem and purchase the subject property from the
GSIS in October 1991 -- when petitioner's Notice of Levy on Attachment and/or Levy,
Notice of Levy on Execution and Certificate of Sale were already inscribed at the back of
respondent Brua's title -- showed bad faith on the part of respondent Garcia; that
respondent Brua did not even testify or participate in the case, except when he was
impleaded as a plaintiff in the case. The RTC did not give credit to respondent Garcia's
claim that he and respondent Brua had no prior knowledge of the occurrence of a public
auction and the consequent annotation of the certificate of sale, and found respondent
Garcia to be a buyer in bad faith of the subject property.
The RTC also ruled that the Notice of Levy on Execution, which was annotated on
December 8, 1981 as Entry No. 72854 on respondent Brua's title arising from Civil Case
No. 7262 entitled Pilipinas Bank v. Edilberto Brua, was a valid levy on the subject property
in favor of Pilipinas Bank. The levy could not be canceled, as this would impair the interest
of the bank which had been decided upon by a co-equal court. The RTC found that the
sale between respondents appeared to be tainted with bad faith, which constrained
petitioner and Pilipinas Bank from engaging the services of lawyers; thus, the award of
attorney's fees in the latter's favor.
Respondents' motion for reconsideration was denied by the RTC on August 11, 1998.
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Respondents filed their appeal with the CA. However, respondent Brua failed to file his could not claim that she was a purchaser in good faith, since respondent Garcia's adverse

appellant's brief; thus, his appeal was considered abandoned and dismissed. Petitioner claim was entered on June 23, 1980, eight years ahead of petitioner's Certificate of Sale

and Pilipinas Bank filed their respective appellees' briefs. on September 2, 1988; that when the Notice of Levy on Execution in favor of Pilipinas

Bank was annotated on respondent Brua's title, the sheriff who caused the annotation was
On August 12, 2004, the CA reversed and set aside the RTC decision, the dispositive
charged with knowledge that the property sought to be levied upon on execution was
portion of which reads:
encumbered by an interest, which was the same if not better than that of the registered
WHEREFORE, the appealed Decision dated April 15, 1998 is
REVERSED and SET ASIDE. Granting the instant appeal, Entry No. owner thereof; and that such notice of levy could not prevail over the existing adverse
72854 (Notice of Levy on Execution in favor of Pilipinas Bank), Entry
claim of respondent Garcia inscribed on the title as can be deduced from Section 12, Rule
No. 2881 (Notice of Levy on Execution in favor of Flor Martinez) and
Entry No. 3706 (Certificate of Sale in favor of Flor Martinez) inscribed in 39 of the Rules of Court.
TCT No. 346026 and carried over to TCT No. 5204, are hereby
CANCELLED.[17]
The CA found that the RTC erred in concluding that respondent Garcia was a purchaser in

The CA said that a subsequent sale of property covered by a certificate of title cannot bad faith, since his adverse claim was entered in respondent Brua's title in 1980, and

prevail over an adverse claim, duly sworn to and annotated on the certificate of title respondent Garcia could not have foretold at the time he caused such annotation of

previous to the sale; that while one who buys a property from the registered owner need adverse claim that petitioner would purchase the same property eight years thereafter; and

not have to look behind the title, he is nevertheless bound by the liens and encumbrances that while good faith is presumed, bad faith must be established by competent proof by the

annotated thereon; and, thus, one who buys without checking the vendor's title takes all party alleging the same; and, thus, in the absence of respondent Garcia's bad faith, he is

the risks and losses consequent to such failure. The CA found that in order to protect his deemed to be a purchaser in good faith, and his interest in the property must not be

interest, respondent Garcia executed an Affidavit of Adverse Claim on June 23, 1980, disturbed.

annotated it on the title of the subject property under Entry No. 49853 and it has remained
The CA also found that a Notice of Adverse Claim remains valid even after the lapse of 30
uncanceled up to this time; that such adverse claim was registered prior to the inscription
days, as provided for in Sec. 70 of Presidential Decree No. (PD) 1529 pursuant to our
of the Certificate of Sale in favor of petitioner under Entry No. 3706 and Pilipinas Bank's
ruling in Sajonas v. CA; that since no petition was filed by petitioner for the cancellation
Notice of Levy on Execution under Entry No. 72854; that the prior registration of
of respondent Garcia's Notice of Adverse Claim, the adverse claim subsisted and his
respondent Garcia's adverse claim effectively gave petitioner and Pilipinas Bank notice
rights over the subject property must consequently be upheld.
of the former's right to the subject property and, thus, petitioner was deemed to have

knowledge of respondent Garcia's claim and could not be considered as a buyer in good Petitioners motion for reconsideration was denied by the CA in a Resolution dated

faith at the time she purchased the subject property in the public auction; that petitioner November 18, 2004.
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September 2, 1988, which necessarily included the adverse claim of respondent Garcia in

the amount of P150,000.00.

Petitioner is now before us via a petition for certiorari under Rule 65, alleging grave abuse

of discretion amounting to lack or excess of jurisdiction committed by the CA in issuing its In his Comment, respondent Garcia claims that the petition faces outright dismissal,

assailed decision and resolution. since the appropriate remedy of the petitioner should have been a petition for review under

Rule 45 which had already lapsed; that when the CAreversed the RTC decision, such
Petitioner contends that respondent Garcia's adverse claim is nothing but a notice that he
action did not constitute grave abuse of discretion since it had legal basis; that any lien or
has an interest adverse to that of respondent Brua to the extent of P150,000.00, which
adverse claim earlier inscribed prevails over those liens or adverse claims inscribed
was the amount of the loan secured by a Deed of Real Estate Mortgage executed by
subsequent thereto.
respondent Brua in favor of respondent Garcia; that the adverse claim cannot be said to be

superior to a final sale conducted by the sheriff by authority of the court pursuant to a Respondent Brua did not file his comment. Thus, we dispensed with the filing of the

judgment that has attained finality; that Sajonas v. CA, on which the CA anchored its same in a Resolution dated June 19, 2006.

decision, differs from this case, since the adverse claim made in the title by therein
Petitioner filed her Reply, arguing that a petition for certiorari may be availed of where
petitioner Sajonas was by virtue of a contract to sell; that unlike in this case, respondent
appeal is inadequate and ineffectual.
Garcia caused the annotation of his adverse claim as a mortgagee of respondent Brua in

the amount of P150,000.00 in 1980; and respondent Garcia's payment of the GSIS loan in The parties submitted their respective memoranda as required in Our Resolution dated

1991, upon the request of respondent Brua, was presumably for the reason that August 30, 2006.

respondent Brua could no longer discharge the GSIS obligation; and to avoid the
We dismiss the petition.
foreclosure of the property by the GSIS, respondent Brua asked Garcia to redeem it; that

respondent Garcia's adverse claim in 1980 was not as a vendee of the property like Petitioner should have filed a petition for review under Rule 45 of the Rules of Court

in Sajonas, but merely as a mortgagee. instead of a petition for certiorari under Rule 65, since she is assailing the CA decision and

resolution which are final judgments. Rule 45 clearly provides that decisions, final orders or

resolutions of the CA in any case, i.e., regardless of the nature of the action or

Petitioner admits that respondent Garcia, as a mortgagee on the basis of which an proceedings involved, may be appealed to us by filing a petition for review, which is just a

adverse claim was inscribed on the title of the subject property, is protected by Sec. 12, continuation of the appellate process over the original case. [18] And the petition for review

Rule 39 of the Rules of Court; and, thus, petitioner knows that she is obliged as a vendee must be filed within fifteen (15) days from notice of the judgment or final order or resolution

in the public sale to pay liens and encumbrances then existing at the time of the sale on
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appealed from, or of the denial of petitioner's motion for a new trial or reconsideration filed (3) when the writs issued are null; (4) when the questioned order amounts to an

in due time after notice of the judgment.[19] oppressive exercise of judicial authority, [25] which we find to be not present in this

case. Notably, petitioner did not even fail to advance an explanation why appeal was not

In this case, petitioner received a copy of the CA Resolution denying her motion for availed of, nor was there any showing that the issue raised in the petition

reconsideration on November 24, 2004; and, thus, under Rule 45, she has 15 days from for certiorari could not be raised on appeal. Concomitant to a liberal application of the rules

receipt of such resolution, or until December 9, 2004, to file a petition for review. However, of procedure should be an effort on the part of the party invoking liberality to adequately

petitioner did not file a petition for review; instead, she filed a petition for certiorari under explain his failure to abide by the rules. [26]

Rule 65 on January 24, 2005.[20] Hence, the CA decision and resolution have already

attained finality, and petitioner has lost her right to appeal.

In fact, the argument raised by petitioner, i.e., that the Court of Appeals had no legal

A petition for certiorari under Rule 65 is proper if a tribunal, a board or an officer exercising authority to vary the findings of the trial court and substitute its own conclusion, which

judicial or quasi-judicial functions has acted without or in excess of jurisdiction or with were patently contrary to the trial court's findings, and conclusion, relates to the wisdom

grave abuse of discretion amounting to lack or excess of jurisdiction and there is no and soundness of the assailed CA decision and resolution. Where the issue or question

appeal, or any plain, speedy and adequate remedy in the ordinary course of law. [21] In this involved affects the wisdom or legal soundness of the decision not the jurisdiction of the

case, petitioner had the remedy of appeal, and it was the speedy and adequate remedy in court to render said decision the same is beyond the province of a special civil action

the ordinary course of law. Thus, a special civil action for certiorari cannot be used as a for certiorari.[27] Erroneous findings and conclusions do not render the appellate court

substitute for an appeal that the petitioner has already lost. Certiorari cannot be allowed vulnerable to the corrective writ of certiorari, for where the court has jurisdiction over the

when a party to a case fails to appeal a judgment to the proper forum despite the case, even if its findings are not correct, these would, at the most, constitute errors of law

availability of that remedy, certiorari not being a substitute for a lost appeal.[22] Certiorari and not abuse of discretion correctible by certiorari.[28] For if every error committed by the

will not be a cure for failure to timely file a petition for review on certiorari under Rule 45.[23] trial court or quasi-judicial agency were to be the proper subject of review by certiorari,

While there are instances where the extraordinary remedy of certiorari may be resorted to then trial would never end, and the dockets of appellate courts would be clogged beyond

despite the availability of an appeal, the long line of decisions denying the special civil measure.[29]

action for certiorari, either before appeal was availed of or in instances where the appeal

period had lapsed, far outnumber the instances where certiorari was given due Even if we consider this petition for certiorari under Rule 65, it must be shown that the CA

course.[24] The few significant exceptions are: (1) when public welfare and the committed grave abuse of discretion equivalent to lack or excess of jurisdiction, and not

advancement of public policy dictate; (2) when the broader interests of justice so require; mere errors of judgment, for the petition to be granted. [30] As we said, certiorari is not a
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remedy for errors of judgment, which are correctible by appeal. By grave abuse of as or better than that of the registered owner thereof. [34] Thus, no grave abuse of discretion

discretion is meant such capricious and whimsical exercise of judgment as is equivalent to was committed by the CA when it held that the notice of levy and subsequent sale of the

lack of jurisdiction, and mere abuse of discretion is not enough -- it must be grave.[31] subject property could not prevail over respondent Garcia's existing adverse claim

inscribed on respondent Brua's certificate of title.

Petitioner contends that the adverse claim of respondent Garcia inscribed on the title of the

subject property is but a notice that the latter has an interest adverse to respondent Brua's
The annotation of an adverse claim is a measure designed to protect the interest of a
title, to the extent of P150,000.00 secured by a real estate mortgage, and such
person over a piece of real property, where the registration of such interest or right is not
adverse claim cannot be considered superior to that of a final sale conducted by the sheriff
otherwise provided for by the Land Registration Act or Act No. 496 (now P.D. No.1529 or
by virtue of a court judgment that has attained finality.
the Property Registration Decree), and serves a warning to third parties dealing with said
Sec. 12, Rule 39 of the Rules of Court provides:
property that someone is claiming an interest on the same or a better right than that of the
SEC. 12. Effect of levy on execution as to third persons. The levy on
execution shall create a lien in favor of the judgment obligee over the registered owner thereof.[35]
right, title and interest of the judgment obligor in such property at the
time of the levy, subject to liens and encumbrances then existing.
Petitioner cannot be considered as a buyer in good faith. A purchaser in good faith and for

Clearly, the levy does not make the judgment creditor the owner of the property levied value is one who buys the property of another without notice that some other person has a

upon. He merely obtains a lien.[32] Such levy on execution is subject and subordinate to all right to or interest in such property and pays a full and fair price for the same at the time of

valid claims and liens existing against the property at the time the execution lien attached, such purchase, or before he has notice of the claims or interest of some other person in

such as real estate mortgages.[33] the property.[36] Here, petitioner admitted on cross-examination that when she registered

Respondent Garcia's adverse claim, which refers to the deed of mortgage executed by her notice of attachment in 1981 and the levy on execution on July 11, 1988, she already

respondent Brua in his favor, was annotated on respondent Brua's title registered with the saw respondent Garcia's adverse claim inscribed on respondent Brua's title on June 23,

Registry of Deeds of Rizal on June 23, 1980 as Entry No. 49853. The adverse claim was 1980.[37]

already existing when the Notice of Levy on Execution, as well as the Certificate of Sale in

favor of petitioner, was inscribed on July 11, 1988 and September 2, 1988, respectively; Petitioner claims that Sajonas v. CA[38] is not applicable, since the adverse claim registered

and, hence, the adverse claim is sufficient to constitute constructive notice to petitioner on the title of the subject property made by the Sajonases in 1984 was by virtue of a

regarding the subject property. When petitioner registered her Notice of Levy on Execution contract to sell, so that when the full purchase price was eventually paid on September 4,

on the title of the subject property, she was charged with the knowledge that the subject 1984, a deed of sale of the property was subsequently executed and registered in the

property sought to be levied upon on execution was encumbered by an interest the same Registry of Deeds of Marikina on August 28, 1985; that when the respondent therein
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registered his notice levy on execution on February 12, 1985, such notice of levy could not

have precedence over the adverse claim, because there was no more property to levy As in that case, the adverse claim of respondent Garcia based on the Deed of Mortgage

upon. In this case, however, respondent Garcia caused the annotation of his adverse claim executed by respondent Brua over the subject land in the formers favor was existing when

only as a mortgagee of respondent Brua in the amount of P150,000.00 in 1980. The the Notice of Levy on Execution was inscribed in favor of petitioner. Although the deed of

subsequent deed of sale was executed in 1991 between respondents Garcia and Brua sale between respondents Brua and Garcia was done after the notice of levy on execution

after the former paid the latter's loan from with the GSIS.When a new title was issued in and certificate of sale were inscribed on the title, it was clearly stated in the deed that the

respondent Garcia's name, the notice of levy on execution and the certificate of sale were subject property was only a partial payment for respondent Brua's mortgage indebtedness

already annotated on the title of the subject property; and, thus, the sale in favor of to respondent Garcia, which the former could no longer redeem from the latter. Thus, the

respondent Garcia could not prevail over the previous auction sale in petitioner's favor. sale of the subject property by respondent Brua to respondent Garcia was by reason of

respondent Brua's prior loan from respondent Garcia, which was secured by a mortgage

We are not impressed. on the subject property; and this mortgage was registered and already existing on the title

of the subject property when the Notice of Levy on Execution and Certificate of Sale in

The issue posed in Sajonas was whether the adverse claim inscribed on TCT No. N- favor of petitioner were inscribed thereon. Thus, petitioner's claim over the subject property

190417 was still in force when private respondent therein caused the annotation of the must yield to the earlier encumbrance registered by respondent Garcia.

notice of levy on execution on the title; if the adverse claim was still in effect, then

respondent therein was charged with the knowledge of pre-existing interest over the WHEREFORE, the petition is DISMISSED. The Decision dated August 12, 2004 and

subject property and, thus, the Sajonases were entitled to the cancellation of the notice of Resolution dated November 18, 2004 of the Court of Appeals in CA-G.R. CV No. 61591

levy inscribed on the title. are AFFIRMED.

We ruled in Sajonas that the inscription of the adverse claim on the title of the subject
SO ORDERED.
property was still in effect on February 12, 1985, when the sheriff annotated the notice of

levy on execution in favor of respondent therein; that respondent therein was charged with

knowledge that the subject property sought to be levied upon on execution was

encumbered by an interest the same as or better than that of the registered owner thereof.

We then said that such notice of levy could not prevail over the existing adverse claim

inscribed on the certificate of title in favor of the Sajonases.

 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

ESTANISLAO PADILLA, JR. G.R. No. 141256

Petitioner,
Present: Petitioner and his wife are the registered owners of the following real properties:
PANGANIBAN, J., Chairman
SANDOVAL-GUTIERREZ, Lot Nos. 2904-A (covered by TCT No. T-36090), 2312-C-5 (covered by TCT No. T-3849),
- v e r s u s - CORONA,
CARPIO MORALES
and GARCIA, JJ. and 2654 (covered by TCT No. T-8053), all situated in Bago City.

PHILIPPINE PRODUCERS
COOPERATIVE MARKETING Respondent is a marketing cooperative which had a money claim against
ASSOCIATION, INC.,
Respondent. Promulgated:
petitioner.
July 15, 2005

x----------------------------------------------x
On April 24, 1987, respondent filed a civil case against petitioner for collection of

DECISION a sum of money in the Regional Trial Court of Bacolod City. [6] Despite receipt of summons

CORONA, J.:
on May 18, 1987, petitioner (then defendant) opted not to file an answer. [7] On March 3,

In implementing the involuntary transfer of title of real property levied and sold on 1988, respondent (then plaintiff) moved to have petitioner-defendant declared in default,

execution, is it enough for the executing party to file a motion with the court which which the trial court granted on April 15, 1988. [8] Respondent presented its evidence on

rendered judgment, or does he need to file a separate action with the Regional Trial October 9, 1989.[9] On November 28, 1989, the trial court rendered a decision in

Court? respondents favor.[10] Petitioner was furnished a copy of this decision by mail on November

This is a petition for review on certiorari [1] from a decision 29, 1989 but, because of his failure to claim it, the copy was returned. [11]

of the Court of Appeals in CA-G.R. CV No. 53085,[2] and its resolution denying
On May 31, 1990, the Court issued a writ of execution. On June 4, 1990, the

reconsideration,[3] both of which affirmed the orders of the Regional Trial Court of Bacolod
three lots (Lot 2904-A, Lot 2312-C-5 and Lot 2654), all of the Bago Cadastre and

City, Branch 51.[4]

registered in petitioners name, were levied by virtue of that writ. On July 4, 1990, sheriff

The undisputed facts of the case follow.[5] Renato T. Arimas auctioned off the lots to satisfy the judgment, with respondent as the

only bidder. On July 10, 1990, ex-officio provincial sheriff and clerk of court Antonio Arbis
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executed a certificate of sale in favor of respondent. On August 13, 1990, the certificate of of the judgment was barred by prescription, given that the motion was filed more than 5

sale was recorded in the Register of Deeds.[12] years after the writ of execution was issued on March 23, 1990. [16] He also argues that

respondent failed to follow the correct procedure for the cancellation of a certificate of title
When petitioner failed to exercise his right of redemption within the 12-month
and the issuance of a new one, which is contained in Section 107 of PD 1529. [17]
period allowed by law, the court, on motion of respondent, ordered on February 5, 1992

the issuance of a writ of possession for the sheriff to cause the delivery of the physical In its comment,[18] respondent claims that the motion dated May 15, 1995 to

possession of the properties in favor of respondent. [13] direct the RD to issue new certificates of title was but a continuation of the series of events

that began with the decision in its favor on November 28, 1989, and from there, the auction
On May 17, 1995, respondent filed a motion to direct the Register of Deeds to
of the properties and the issuance of a certificate of sale in 1990.
issue new titles over the properties in its name, alleging that the Register of Deeds (RD) of

Bago City would not issue new titles (in respondents name) unless the owners copies were
The two principal issues for consideration are:
first surrendered to him. Respondent countered that such surrender was impossible
(1) whether or not respondents right to have new titles issued in its name is now
because this was an involuntary sale and the owners copies were with petitioner. [14]
barred by prescription and
On July 3, 1995, the trial court issued an order granting the motion. In a
(2) whether or not the motion in question is the proper remedy for cancelling
subsequent order dated August 8, 1995, it denied petitioners motion for reconsideration.
petitioners certificates of title and new ones issued in its name.
Petitioner appealed. Four years later, the Court of Appeals rendered the assailed decision

affirming the order of the trial court. On the first issue, we rule that the respondents right to petition the court for the

Petitioner contends that respondents motion for the RD to cancel the existing issuance of new certificates of title has not yet prescribed.

certificates of title and issue new ones in its name was in fact a real action and that the
In Heirs of Blancaflor vs. Court of Appeals, [19] Sarmiento Trading Corporation,
motion was procedurally infirm because respondent did not furnish him a copy. [15] He also
predecessor-in-interest of the private respondent Greater Manila Equipment Marketing
claims that under Section 6 of Rule 39 of the 1997 Rules of Civil Procedure, the execution

Corporation, secured a writ of execution in 1968 by virtue of which it levied real property
belonging to petitioners predecessor-in-interest, Blancaflor. When the property was
auctioned, Sarmiento Trading bid successfully and, in 1970, after the lapse of the one-year
redemption period, consolidated its ownership over the lot.
Sarmiento Trading then filed a petition with the Court of First Instance to order
the cancellation of Blancaflors title and the issuance of a new one in its name. In 1972,
Sarmiento Trading sold the lot to private respondent which, at the time, went by the name
Sarmiento Distributors Corporation.
In 1988, the Deputy Register of Deeds of Iloilo wrote to Blancaflor requesting him
to surrender his owners duplicate copy of the TCT. Blancaflor did not comply and the RD
refused to issue a new title. On May 25, 1989, private respondent filed a petition in the
Regional Trial Court praying that the petitioners be ordered to surrender the owners
duplicate copy of the title. The petitioners refused, claiming that respondents cause of
action had already prescribed. Ruling otherwise, we stated:
It is settled that execution is enforced by the fact of levy
and sale. The result of such execution salewith Sarmiento Trading
Corporation as the highest bidderwas that title to Lot No. 22 of TCT
No. 14749 vested immediately in the purchaser subject only to the
judgment debtors right to repurchase. Therefore, upon Sarmiento
Trading Corporations purchase of Lot No. 22 covered by TCT No.
14749 at the auction sale, private respondents successor-in-
interest had acquired a right over said title.
The right acquired by the purchaser at an execution sale is
inchoate and does not become absolute until after the expiration of the
redemption period without the right of redemption having been
exercised. But inchoate though it be, it is like any other right, entitled to
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Land Titles and Deeds (Finals) 2017
protection and must be respected until extinguished by
redemption. Gaudencio Blancaflor was not able to redeem his
property after the expiration of the redemption period, which was
12 months after the entry or annotation of the certificate of sale
made on the back of TCT No. 14749. Consequently, he had been
divested of all his rights to the property. (underscoring ours)
In this case, the rule being invoked by petitioner [20] states:
SEC. 6. Execution by motion or by independent action.A final
and executory judgment or order may be executed on motion within
five (5) years from the date of its entry. After the lapse of such time,
and before it is barred by the statute of limitations, a judgment may be
enforced by action. The revived judgment may also be enforced by
motion within five (5) years from the date of its entry and thereafter by
action before it is barred by the statute of limitations.
As should be evident from Blancaflor, petitioner Padillas reliance on Section 6 of
Rule 39 of the 1997 Revised Rules of Civil Procedure is misplaced. The fact of levy and
sale constitutes execution, and not the action for the issuance of a new title. Here,
because the levy and sale of the properties took place in June and July of 1990,
respectively, or less than a year after the decision became final and executory, the
respondent clearly exercised its rights in timely fashion.
In addition, petitioner himself admits his failure to redeem the properties within
the one-year period by adopting the facts stated in the Court of Appeals decision. [21] There
is thus no doubt he had been divested of his ownership of the contested lots.
Respondents position hinges on petitioners failure to redeem the properties 12
months after the certificate of sale was recorded in the Register of Deeds on August 13,

1990. There is no uncertainty about respondents having become the new lawful owner of
the lots in question by virtue of the levy and the execution sale.
On the other hand, the issue of whether to acquire new titles by mere motion or
through a separate petition is an entirely different matter.
Petitioner is correct in assailing as improper respondents filing of a mere motion for the
cancellation of the old TCTs and the issuance of new ones as a result of petitioners refusal
to surrender his owners duplicate TCTs.
Indeed, this called for a separate cadastral action initiated via petition.
Section 107 of PD 1529,[22] formerly Section 111 of Act 496,[23] provides:
Sec. 107. Surrender of withheld duplicate certificates.Where it is
necessary to issue a new certificate of title pursuant to any involuntary
instrument which divests the title of the registered owner against his
consent or where a voluntary instrument cannot be registered by
reason of the refusal or failure of the holder to surrender the owners
duplicate certificate of title, the party in interest may file a petition in
court to compel the surrender of the same to the Register of Deeds.
The court, after hearing, may order the registered owner or any person
withholding the duplicate certificate to surrender the same, and direct
the entry of a new certificate or memorandum upon such surrender. If
the person withholding the duplicate certificate is not amenable to the
process of the court, or if for any reason the outstanding owners
duplicate certificate cannot be delivered, the court may order the
annulment of the same as well as the issuance of a new certificate of
title in lieu thereof. Such new certificate and all duplicates thereof shall
contain a memorandum of the annulment of the outstanding duplicate.
Respondent alleges that it resorted to filing the contested motion because it could
not obtain new certificates of title, considering that petitioner refused to surrender his
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Land Titles and Deeds (Finals) 2017
owners duplicate TCTs. This contention is incorrect. The proper course of action was to file
a petition in court, rather than merely move, for the issuance of new titles. This was the
procedure followed in Blancaflor by Sarmiento Trading which was in more or less the same
situation as the respondent in this case: [24]
Petitioners reliance on prescription and laches is unavailing
in this instance. It was proper for Sarmiento Trading Corporation to
file a petition with the Court of First Instance of Iloilo, acting as a
cadastral court, for the cancellation of TCT No. 14749 in the name of
Gaudencio Blancaflor and the issuance of another in its name. This is
a procedure provided for under Section 78 of Act No. 496 and Section
75 of PD No. 1529
Section 78 of Act 496 reads:
Sec. 78. Upon the expiration of the time, if any allowed by law for
redemption after registered land has been sold on any execution, or
taken or sold for the enforcement of any lien of any description, the
person claiming under the execution or under any deed or other
instrument made in the course of the proceedings to levy such
execution or enforce any lien, may petition the court for the entry of a
new certificate to him, and the application may be granted: Provided,
however, That every new certificate entered under this section shall
contain a memorandum of the nature of the proceeding on which it is
based: Provided, further, That at any time prior to the entry of a new
certificate the registered owner may pursue all his lawful remedies to
impeach or annul proceedings under execution or to enforce liens of
any description.
Section 75 of PD 1529 provides:
Sec. 75. Application for new certificate upon expiration of
redemption period.Upon the expiration of the time, if any, allowed by
law for redemption after the registered land has been sold on
execution, or taken or sold for the enforcement of a lien of any
description, except a mortgage lien, the purchaser at such sale or
anyone claiming under him may petition the court for the entry of a
new certificate to him.
Before the entry of a new certificate of title, the registered
owner may pursue all legal and equitable remedies to impeach or
annul such proceedings.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Regional Trial Court of Bacolod City ordering the Register of Deeds of Bago City to issue

It is clear that PD 1529 provides the solution to respondents quandary. The

new certificates of title in favor of respondent is ANULLED. SO ORDERED.

reasons behind the law make a lot of sense; it provides due process to a registered

landowner (in this case the petitioner) and prevents the fraudulent or mistaken conveyance
RUBEN C. REYES, G.R. No. 185620

of land, the value of which may exceed the judgment obligation. Petitioner contends that Petitioner,

only his interest in the subject lots, and not that of his wife who was not a party to the suit,
Present:
should have been subjected to execution, and he should have had the opportunity to prove

as much. CARPIO, J.,

Chairperson,
While we certainly will not condone any attempt by petitioner to frustrate the ends
BRION,
- versus -
of justice the only way to describe his refusal to surrender his owners duplicates of the
PEREZ,

certificates of title despite the final and executory judgment against him respondent, on SERENO, and

the other hand, cannot simply disregard proper procedure for the issuance to it of new REYES, JJ.

certificates of title. There was a law on the matter and respondent should have followed it.

In any event, respondent can still file the proper petition with the cadastral court Promulgated:
TANG SOAT ING (JOANNA TANG)
for the issuance of new titles in its name.
and ANDO G. SY,
December 14, 2011
Respondents.
WHEREFORE, the instant petition is hereby GRANTED. The decision of the
x-------------------------------------------------------------------------------------------x
Court of Appeals in CA-G.R. CV No. 53085 is hereby REVERSED. The order of the

DECISION

PEREZ, J.:
Challenged in this petition for review on certiorari under Rule 45 of the Rules of Court is
the Decision[1] of the Court of Appeals in CA-G.R. SP No. 96913 annulling and setting
aside the Orders[2] of the Regional Trial Court (RTC), Branch 7, Malolos, Bulacan which
denied respondents Tang Soat Ings (Joanna Tangs) and Ando Sys Opposition (To MFR
Farm, Inc.s Motion dated 25 April 2006) and Motion (To declare void the sale of the
property covered by TCT No. 198753) dated May 23, 2006.
The controversy arose from a complaint for Enforcement of Easement and Damages with
Prayer for Preliminary Injunction and Restraining Order filed by MFR Farms, Inc. (MFR)
against respondents docketed as Civil Case No. 1245-M. MFR complained of respondents
commercial and industrial use of their property covered by Transfer Certificate of Title
(TCT) No. T-198753, and sought the enforcement of the encumbrance contained in their
title. MFR likewise asked for the payment of damages suffered by its pig farm resulting
from respondents illegal use of their property.
After trial, the RTC granted MFRs complaint and specifically held that:
x x x [Respondents] have defied the clear undertaking stated in the title
to the subject property to limit the use thereof to purposes not
commercial or industrial in character. x x x [U]sing the land as a
chemical processing site and as a storage facility for chemicals is
devoting it to industrial purposes, which is not allowed under the
subsisting encumbrance on the property.
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Land Titles and Deeds (Finals) 2017
x x x [R]elief is owing to [MFR], but the grant thereof is rendered all the
more imperative in light of the manifestly injurious effects which the
business of [respondents] is causing to the neighboring estate, if not to
the entire locality. x x x By more than mere preponderance of evidence
has it been established that the gaseous by-products of the chemical
manufacturing process are outright pollutants which cause direct and
manifest harm to humans and animals alike, not to mention other living
things.
xxxx
WHEREFORE, judgment is hereby rendered: (a) ordering [respondents] to desist from the
further conduct of industrial or commercial activities on the parcel of land covered by TCT
No. T-198753 of the Registry of Deeds of Bulacan, particularly the manufacture and
storage of chemicals thereat, including the construction of buildings intended for purposes
prohibited by the title to the property; (b) making permanent the injunctions issued by this
Courts orders of May 3, 1982 and December 7, 1983; (c) ordering [respondents] to pay
[MFR] actual damages in the amount of Six hundred Thirty-Nine Thousand Six hundred
Fifty (P639,650.00) Pesos, with legal rate of Twelve (12%) percent interest from the filing
of the complaint on January 15, 1982, until the same is fully paid; (d) ordering
[respondents] to pay [MFR] exemplary damages in the amount One Hundred Thousand
(P100,000.00) Pesos by way of example of correction for the public good; (e) ordering
[respondents] to pay MFR attorneys fees in the amount of One Hundred Thousand
(P100,000.00) Pesos and to pay the costs of suit.[3]
On appeal by respondents docketed as CA G.R. CV No. 37808, the Court of
Appeals affirmed with modification the ruling of the RTC: the Court of Appeals reduced the
rate of interest to six percent (6%) and deleted the award of exemplary damages and
attorneys fees.[4]
MFR and respondents filed separate appeals by certiorari[5] to this Court
questioning the appellate courts ruling. Unfortunately for the parties, we dismissed both
appeals for late payment of legal fees and late filing of the petition. [6] By December 1,
1997, the decision of the Court of Appeals in CA G.R. CV No. 37808 became final and
executory, and was recorded in the Book of Entries of Judgment. [7]
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

about the papers he received. The caretaker also told the undersigned
On September 28, 1998, upon motion of MFR, the RTC issued a Writ of that he [did] not know what the lawyer said. [10]
Execution.[8] Pursuant thereto, the Branch Clerk of Court commanded the Sheriff of RTC,
A few days thereafter, on January 7, 1999, Sheriff Legaspi presented the Writ of
Branch 7, Malolos, Bulacan, Mr. Leovino Legaspi (Sheriff Legaspi), to execute the
Execution and the Notice of Levy on Execution of Real Property[11] covering TCT No. T-
Decision dated September 12, 1991 as modified by the Court of Appeals. [9] Sheriff Legaspi
198753 to the Register of Deeds of Bulacan Province.
was likewise ordered to accomplish a return of the proceedings taken thereon in

accordance with Section 14, Rule 39 of the Rules of Court.

On January 4, 1999, Sheriff Legaspi submitted a Sheriffs Report manifesting:

On February 4, 1999, the Notice of Levy was inscribed on TCT No. T-198753.[12]

That on October 2, 1998[,] the undersigned was in receipt of the Writ of

Execution issued by Hon. Danilo A. Manalastas for service thereof;
On May 7, 1999, Sheriff Legaspi issued a Notice of Sale on Execution of Real

Property[13] which he likewise posted on the following places:

That on October 9, 1998[,] the undersigned served copy of the Writ of
Execution and copy of the Notice dated October 9, 1998 to
[respondent] Tang Soat Ing giving him five (5) days to comply [with] his
obligations under the Writ of Execution, thru Rodolfo Mendez, caretaker (a) The Bulletin Board of Municipal Hall of San Jose del Monte,
of the [respondents], at Tungkong Mangga, San Jose del Monte, Bulacan;
Bulacan. The undersigned inquired from the said caretaker about the
personal properties of Tang Soat Ing but he was told that Tang Soat Ing (b) The Bulletin Board of the Church of San Jose del Monte, Bulacan;
has no more properties and the factory located in the compound is
being leased to other people; (c) The Bulletin Board of the Chapel of Gaya-gaya, San Jose del
Monte, Bulacan;

That on December 10, 1998[,] the undersigned went back to Tang Soat
Ing at Tungkong Mangga, Sa Jose del Monte, Bulacan but said person
was not there and also Rodolfo Mendez was not around because he
was in Manila;
(d) The Bulletin Board of the main entrance of the Provincial Capitol
Building of Malolos, Bulacan; and
(e) The Posting Board of the Office of the Ex-Officio Sheriff located at
the back of the Bulwagan ng Katarungan Building, Malolos,
Bulacan.[14]

That on December 28, 1998[,] the undersigned went back to Tungkong On June 12, 19 & 26, 1999, the Notice of Sale on Execution of Real Property
Mangga, San Jose del Monte, Bulacan and talked to the caretaker[,]
was published in The Times Newsweekly.[15]
Rodolfo Mendez[,] and asked him what happened to the papers he
gave to [respondent] Tang Soat Ing. The caretaker said that
[respondent Tang Soat Ing] called his lawyer and informed [the latter]

On July 19, 1999, at the public auction of the subject property covered by TCT No. T-
198753, MFR was declared as the highest bidder. On even date, Sheriff Legaspi issued a
Certificate of Sale[16] which was registered with the Register of Deeds of Bulacan Province.
After more than five (5) years, on September 17, 2004, with respondents failing to exercise
their right of redemption, MFR filed a Motion[17] asking the RTC to issue an order directing
the Register of Deeds of Bulacan Province to cancel TCT No. T-198753 in the name of
respondents, and issue a new certificate of title in the name of MFR.
On September 28, 2004, the RTC denied the Motion holding that a mere motion is not
sufficient for the cancellation of a certificate of title. The RTC ruled that under Section
107[18] of Presidential Decree No. 1529, the Property Registration Decree, a petition and a
hearing are required for the issuance of a new certificate of title.
On December 1, 2004, MFR filed a Petition[19] in the same case, under the same docket
number, Civil Case No. 1245-M, before the same execution court. In this new petition,
MFR impleaded the Register of Deeds as additional defendant and prayed for the same
reliefs as those prayed for in their previous motion with an additional prayer for the
issuance of an order directing respondents to immediately surrender the Owners Duplicate
Copy of TCT No. T-198753.
On three separate occasions, December 9, 2004 and February 8 and 17, 2005,
respondents, through their counsel of record, Atty. T. J. Sumawang (Atty. Sumawang),
received a copy of the Petition.[20]
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Land Titles and Deeds (Finals) 2017
Respondents failed to file an Answer or any responsive pleading to MFRs
Petition. Consequently, MFR moved to declare respondents in default. The Motion to
Declare Respondents in Default was served on Atty. Sumawang on June 11, 2005.
The RTC granted MFRs Motion to Declare Respondents in Default: thereafter, MFR
presented evidence ex-parte.
During presentation of evidence ex-parte, MFR filed a Motion for Substitution of Party
Petitioner attaching thereto a Deed of Transfer of Interest declaring petitioner Ruben C.
Reyes (Reyes) acquisition of MFRs rights over the subject property. On January 2, 2006,
the RTC issued an Order granting this latest motion: MFR was substituted by Reyes as
party-petitioner.
In an Order dated January 10, 2006, the RTC granted the Petition, thus:
WHEREFORE, finding merit in the instant petition, the same is hereby
granted. Accordingly, defendant/private respondent Tang Soat Ing
(Joanna Tang) is hereby directed to surrender to the Court her
duplicate owners copy of TCT No. T-198753 within thirty (30) days from
receipt of this Order. In [the event said] defendant/private respondent
fails to surrender such owners duplicate copy as directed hereinabove,
the Register of Deeds of Bulacan is hereby directed to cancel TCT No.
T-198753 and issue in lieu thereof a new owners duplicate certificate of
title in the name of Ruben C. Reyes, who has substituted [MFR] by
virtue of a Deed of Transfer of Interest and pursuant to the order of this
court dated January 02, 2006.[21]
Copies of the Order were separately served on Atty. Sumawang, Atty. Anacleto Diaz
(Reyes counsel) and the Register of Deeds of Bulacan Province on January 20
and February 2, 2006, respectively.[22] However, service thereof to respondents counsel
was returned and rendered impossible. Apparently, Atty. Sumawang had already died in
December 2005.[23]

On April 27, 2006, Reyes filed another Motion praying that the Register of Deeds of
Bulacan Province be directed to cancel TCT No. T-198753 in the name of respondents
and to issue a new one in his (Reyes) name.
On May 19, 2006, new counsel for respondents entered its appearance. Forthwith, on May
23, 2006, respondents, through their new counsel, filed the previously adverted to
Opposition and Motion,[24] opposing Reyes April 27, 2006Motion and moving to declare
void the sale of the subject property.
After an exchange of pleadings from the parties, the RTC issued the Order denying
respondents Opposition and Motion for lack of merit. The RTC ruled that, Section 107 of
PD 1529 does not categorically state that the petition x x x should be in the form of a
separate, distinct and original action to be filed in another court, as otherwise it will create
a situation in which the final judgment of a court, and its enforcement, may be subject to a
review of, or even reversal by another court of co-equal jurisdiction.[25] As regards the
motion to declare void the execution sale of the subject property covered by TCT No. T-
198753, the RTC noted that there was substantial compliance with the requirements of
[Section 15, Rule 39 of the Rules of Court evidenced] in the Sheriffs Report dated January
4, 1999, as well as the publication and posting requirements, extant in the records of this
case.[26] In conclusion, the RTC ruled that respondents are estopped from questioning the
proceedings, after keeping silent thereon for a long time, despite notice thereof.
Respondents filed a Motion for Reconsideration which the RTC denied in its Order
dated October 20, 2006.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Gaining no reprieve from the RTC, respondents filed a petition for certiorari before the
Court of Appeals seeking to: (1) nullify the trial courts twin Orders dated July 17, 2006 and
October 20, 2006, respectively; and (2) declare void the execution proceedings relating to
the sale of the subject property and the cancellation of TCT No. T-198753.
In yet another turn of events, the appellate court annulled and set aside the July 17,
2006 and October 20, 2006 Orders of the RTC:
WHEREFORE, the Petition is GRANTED and the Orders issued on
July 17 and October 20, 2006 are ANNULLED and SET ASIDE. The
public auction sale of the property held on July 19, 1999 is declared
invald and the Certificate of Sale issued by Sheriff Leovino G. Legaspi
on July 19, 1999 in favor of [petitioner Reyes, substituting MFR]
covering the parcel of land embraced in Transfer Certificate of Title No.
T-198753 is likewise declared null and void. [27]
Aggrieved, Reyes filed a Motion for Reconsideration which resulted in another exchange of
pleadings between the parties. On December 9, 2008, the Court of Appeals denied the
motion.
Hence, this impasse with the following issues for our resolution:
1. Whether the execution sale of the subject property covered by TCT No. T-198753 is
void;
2. Proceeding from the validity of the execution sale and the consolidation of Reyes
ownership over the subject property, whether Section 107 of Presidential Decree No. 1529
contemplates the filing of a separate cadastral case before the RTC acting as a land
registration court.
The petition is partially impressed with merit.

In declaring void the execution sale, the appellate court noted that petitioner did not strictly
comply with the requirements of Section 15, Rule 39 of the Rules of Court. The Court of
Appeals relied on our holding in Villaceran v. Beltejar,[28] an administrative case finding
therein respondent Sheriff guilty of simple neglect of duty for failure to strictly comply with
the rules on execution sale. The Court of Appeals ruled that the deficiencies in the notice
of execution sale were substantial and of such nature as to prevent the court from applying
the presumption of regularity in the performance of official functions by Sheriff Legaspi at
the time of the execution sale. On this score, the Court of Appeals pointed out that it was
incumbent upon Reyes part to prove that the requirements of the law on execution sale
have been fully complied with.
We disagree.
Contrary to the Court of Appeals holding, the burden of evidence to prove lack of
compliance with Section 15, Rule 39 of the Rules of Court rests on the party claiming lack
thereof i.e., respondents.
In Venzon v. Spouses Juan,[29] we declared that the judgment debtor, as herein
respondents, alleging lack of compliance with the posting and publication requirements of
the auction sale in accordance with the rules, is behooved to prove such allegation. We
held, thus:
x x x. Whoever asserts a right dependent for its existence upon a
negative, must establish the truth of the negative by a
preponderance of the evidence. This must be the rule, or it must
follow that rights, of which a negative forms an essential element,
may be enforced without proof. Thus, whenever the [partys] right
depends upon the truth of a negative, upon him is cast the onus
probandi, except in cases where the matter is peculiarly within the
knowledge of the adverse party.
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Land Titles and Deeds (Finals) 2017
It was error, therefore, for the trial court to hold that:
Defendants did not present evidence to rebut the no notice
allegation of the plaintiff. Although in the defendant spouses
pre-trial brief, there is that general allegation that the auction
sale was made in accordance with law, however, there is no
showing in the record that the requirements with respect to
publication/posting of notices were complied with by the
defendants.
Deliberating on the absence of notice, the fact that the plaintiff
did not come to know that Lot 12 was being subjected to an
auction sale proves two things: one, that no notice was posted
in the place where the property is located [and, two, that]
there was no auction sale that took place on March 30, 1992.
...
Further, the defendants, particularly defendant sheriff, who is
the most competent person to testify that a written notice of
sale was made and posted in accordance with law, was not
presented to the witness stand. Neither was a document
presented like Sheriffs Certificate of Posting to attest to the
fact that a written notice of sale was posted before the
property was allegedly sold at public auction. In fact, the
record is silent as (to) where the auction sale was conducted.
By ruling in the foregoing manner, the trial court
incorrectly shifted the plaintiffs burden of proof to the
defendants. It is true that the fact of posting and publication of the
notices is a matter peculiarly within the knowledge of the Deputy
Sheriff. However, the trial court did not acquire jurisdiction over
him, as he was not served with summons. At the time of the filing of
the complaint, he was no longer connected with the Caloocan RTC,
Branch 126, which issued the writ of execution. Hence, he could not
testify in his own behalf.

x x x [T]he duty imposed by Section [18] (c) is reposed upon the
sheriff, who is charged with the enforcement of the writ.
Respondent spouses had a right to presume that he had regularly
performed his duty. It was not incumbent upon them to present
him as a witness for, in the absence of the sheriff, the burden to
prove lack of posting and publication remained with
petitioner.[30] (Emphasis supplied)
Respondents made no attempt to meet this burden of evidence, simply
maintaining lack of notice of the entire proceedings (execution and issuance of a new title
over the subject property) before the trial court.
We cannot subscribe to respondents belated posturing. The disputable
presumption that official duty has been regularly performed was not overcome by
respondents.[31] The documents on record lead us to the inevitable conclusion that
respondents had constructive, if not actual, notice of the execution proceedings from the
issuance of the Writ of Execution, the levy on the subject property,[32] its subjection to
execution sale, up to and until the proceedings in the RTC relating to the issuance of a
new certificate of title over the subject property. Certainly, respondents are precluded from
feigning ignorance of MFR (substituted by Reyes) staking a claim thereon.
There was substantial compliance with Section 15, Rule 39 of the Rules of Court:
the documents in support thereof, i.e., the Certificate of Posting issued by Sheriff Legaspi
and the Affidavit of Publication executed by the publisher of The Times Newsweekly,
appear to be in order.[33] In this case, the purpose of giving notice through posting and
publication under Section 15(c) of the same ruleto let the public know of the sale to the end
that the best price or a better bid may be made possible to minimize prejudice to the
judgment debtorwas realized.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Another thing militates against respondents claim of lack of knowledge of the
encumbrance on their propertythe separate registrations of: (1) the Notice of Levy on TCT
No. T-198753; (2) the Certificate of Sale.
In this jurisdiction, we adhere to the doctrine that registration in a public
registry works as constructive notice to the whole world. [34] Section 51 of Act No. 496, as
amended by Section 52 of Presidential Decree No. 1529, provides:
SECTION 52. Constructive notice upon registration.Every
conveyance, mortgage, lease, lien, attachment, order, judgment,
instrument or entry affecting registered land shall, if registered, filed
or entered in the Office of the Register of Deeds for the province or
city where the land to which it relates lies, be constructive notice
to all persons from the time of such registering, filing, or entering.
And, quite undeniably, respondents had constructive notice that their property is subject of
execution proceedings arising from their judgment debt and in danger of forfeiture to
their judgment creditor.
Respondents consistently flouted the judgment in Civil Case No. 1245-M, as
amended by the Decision of the Court of Appeals in CA G.R. CV No. 37808, which
became final and executory on December 1, 1997, by their utter failure to respond to the
processes of the RTC in the execution proceedings despite their receipt of notice at each
stage thereof. At the very least, respondents attack on the validity of the execution
proceedings, culminating in the execution sale of the subject property, is barred by laches.
Laches is the failure or neglect, for an unreasonable and unexplained length of
time, to do that which by exercising due diligence could or should have been done earlier;
it is negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it or declined to assert
it.[35] Laches thus operates as a bar in equity.[36]

We hearken to the time-honored rule anchored on public policy:
[R]elief will be denied to a litigant whose claim or demand has become
"stale," or who has acquiesced for an unreasonable length of time, or
who has not been vigilant or who has slept on his rights either by
negligence, folly or inattention. In other words, public policy requires, for
peace of society, the discouragement of claims grown stale for
non-assertion; thus laches is an impediment to the assertion or
enforcement of a right which has become, under the circumstances,
inequitable or unfair to permit.[37] (Emphasis supplied)
The records bear out that as of October 9, 1998, and on two occasions
thereafter, December 10 & 28, 1998, Sheriff Legaspi served a copy of the Writ of
Execution on respondents, and followed up thereon. With no action forthcoming from
respondents, who are ostensibly evading payment of their judgment debt, the Sheriff
correctly levied on the subject property. For more than five (5) years from the execution
sale thereof, with respondents not exercising their right of redemption, up to the filing of a
Motion, and subsequently, a Petition for the issuance of a new certificate of title over the
property in Reyes name, respondents made no effort to settle their judgment debt, much
less, to ascertain the status of the execution proceedings against them and the levy on,
and consequent sale of, their property. Truly significant is the fact that eight (8) years had
lapsed, from the time respondents received a copy of the Writ of Execution in October
1998 until they, through their new counsel, filed the Opposition and Motion in May 2006,
before respondents were prodded into action.
We find obvious respondents brazen ploy to forestall and thwart the execution of
a final and executory judgment against them. The death of their counsel, Atty. Sumawang,
and their engagement of a new one, does not minimize the hard fact that respondents had
notice of, not only the execution proceedings, but also, the proceedings on the issuance of
a new title over the subject property. Yet, respondents did not act on any of these notices
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
which were duly received by Atty. Sumawang. Respondents Motion to nullify the execution
proceedings, from the levy on the subject property and sale thereof, is an afterthought, a
last-ditch effort to evade payment of their judgment debt. Their claim of ignorance of the
execution proceedings flies in the face of the documents on record. This bare-faced claim
cannot trump the disputable presumption that a person takes ordinary care of his
concerns.[38] Consequently, respondents are estopped and barred from assailing the
execution proceedings before the RTC.
Time and again, we have held that once a judgment becomes final and
executory, the prevailing party should not be denied the fruits of his victory by some
subterfuge devised by the losing party.[39] We completely agree with the RTCs disquisition,
thus:
Finally, after [MFR] had filed the petition in question pursuant to and in
compliance with the order of this court dated September 28, 2004, to
which no answer or any responsive pleading was filed by respondents
or thru their lawyer, as the latter was certainly notified of the
proceedings in said petition, respondents cannot now assail said
proceedings after keeping silent thereon for a long time, and if indeed
there was neglect on the part of their lawyer in informing them of or in
taking part in said proceedings, such negligence of their counsel binds
them as client. There is likewise an evident lack of prudence and due
diligence on the part of the respondents by their failure to inform this
court of the withdrawal of their former counsel for a long period of time,
and they cannot now, by feigning ignorance of the proceedings had in
the petition in question, assail the same thru a new counsel. In other
words, respondents cannot be allowed to keep silent on or refuse to
participate in proceedings that they know were taking place in
connection with a final judgment rendered against them and then
suddenly, after said proceedings were long terminated, come to court to
question the same through a new counsel. The respondents are clearly
in estoppel. Also, the court finds no practical purpose and benefit in
sustaining the theory posited by respondents which, aside from the
reasons advanced earlier, will have no other effect than to further
unduly delay the execution of a judgment that had long acquired
finality.[40]
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

xxxx
Notwithstanding the validity of the execution sale and Reyes consolidation of
Respondents are clearly estopped from assailing the proceedings in
ownership over the subject property upon the lapse of the redemption period, we hold that
question by their failure or refusal to participate therein despite their or
their counsels knowledge thereof, and it would be unjust for the plaintiff Section 107 of Presidential Decree No. 1529 contemplates the filing of a separate and
to allow respondents to put in issue the validity of said proceedings at
this late stage, thru another counsel, as they are bound by the action or original action before the RTC, acting as a land registration court.
inaction of their former counsel.[41]

Reyes argues that to require him to file his petition in another court would unduly
The Court of Appeals reliance on Villaceran v. Beltejar[42] is
divest the RTC of its jurisdiction to enforce its final and executory decision. Reyes invokes
misplaced. Villaceran is an administrative case finding the Sheriff guilty of simple neglect
our ruling in Natalia Realty, Inc. v. Court of Appeals [44] where we declared that jurisdiction
of duty for failure to strictly comply with the rules on execution sale. We held therein that
of the court to execute its judgment continues even after the judgment has become final for
there was no substantial compliance by the Sheriff with Section 15(c), Rule 39 of the
the purpose of enforcement of judgment.[45]
Rules of Court. Our declaration that [n]o reason exists not to apply the principle in the

extrajudicial foreclosure sales of real property (statutory requirements of posting and Reyes reasoning is off tangent. Natalia is inapplicable because the execution

publication must be strictly complied with since non-compliance could constitute a proceedings in this case have been completed and was terminated upon the execution

jurisdictional defect that would invalidate the sale) to execution sales of real property under sale of the subject property. Reyes already consolidated ownership over the subject

Rule 39 of the Rules of Court[43] is an obiter which should not be definitive of the facts property; as owner, he has a right to have the same registered in his name. This transfer of

obtaining herein. title to the subject property in Reyes name is no longer part of the execution proceedings:

the fact of levy and sale constitutes execution, not so is the action for the issuance of a
The facts of this case demonstrate respondents stubborn refusal to comply with
new title.[46]
the judgment against them by claiming lack of notice of the execution proceedings. We

reiterate that this claim is belied by the evidence on record and cannot invalidate the Indeed, the subsequent filing of a separate and original action for the titling of the

enforcement and execution of a final and executory judgment of this Court. On the whole, subject property in Reyes name, no longer involves the execution of the judgment in Civil

respondents silence and inaction for eight (8) years from the time the subject property was Case No. 1245-M.

validly levied upon by the RTC, bars them from claiming invalidity of the execution
Section 107 of the Property Registration Decree falls under PETITIONS AND
proceedings.
ACTIONS AFTER ORIGINAL REGISTRATION, Chapter X thereof. The provision reads:

SECTION 107. Surrender of withhold duplicate certificates. Where it is

necessary to issue a new certificate of title pursuant to any involuntary

instrument which divests the title of the registered owner against his
consent or where a voluntary instrument cannot be registered by
reason of the refusal or failure of the holder to surrender the owner's
duplicate certificate of title, the party in interest may file a petition in
court to compel surrender of the same to the Register of Deeds. The
court, after hearing, may order the registered owner or any person
withholding the duplicate certificate to surrender the same, and direct
the entry of a new certificate or memorandum upon such surrender. If
the person withholding the duplicate certificate is not amenable to the
process of the court, or if not any reason the outstanding owner's
duplicate certificate cannot be delivered, the court may order the
annulment of the same as well as the issuance of a new certificate of
title in lieu thereof. Such new certificate and all duplicates thereof shall
contain a memorandum of the annulment of the outstanding duplicate.
That a succeeding registration of property in anothers name, after its original
registration, contemplates a separate original action is reinforced by our ruling in Padilla v.
Philippine Producers Cooperative Marketing Association, Inc. [47] Answering the question:
In implementing the involuntary transfer of title of real property levied and sold on
execution, is it enough for the executing party to file a motion with the court which
rendered judgment, or does he need to file a separate action with the Regional Trial Court,
we unequivocally declared, thus:
Petitioner is correct in assailing as improper respondents filing
of a mere motion for the cancellation of the old TCTs and the issuance
of new ones as a result of petitioners refusal to surrender his owners
duplicate TCTs.
Indeed, this called for a separate cadastral action initiated
via petition.
Section 107 of PD 1529, formerly Section 111 of Act 496,
provides:
xxxx
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Respondent alleges that it resorted to filing the contested
motion because it could not obtain new certificates of title, considering
that petitioner refused to surrender his owners duplicate TCTs. This
contention is incorrect. The proper course of action was to file a
petition in court, rather than merely move, for the issuance of new
titles. This was the procedure followed in Blancaflor by Sarmiento
Trading which was in more or less the same situation as the
respondent in this case:
Petitioners reliance on prescription and laches is
unavailing in this instance. It was proper for Sarmiento
Trading Corporation to file a petition with the Court of
First Instance of Iloilo, acting as a cadastral court, for the
cancellation of TCT No. 14749 in the name of Gaudencio
Blancaflor and the issuance of another in its name. This is a
procedure provided for under Section 78 of Act No. 496 and
Section 75 of PD No. 1529. . . .
Section 78 of Act 496 reads:
Sec. 78. Upon the expiration of the time, if any
allowed by law for redemption after registered land has been
sold on any execution, or taken or sold for the enforcement of
any lien of any description, the person claiming under the
execution or under any deed or other instrument made in the
course of the proceedings to levy such execution or enforce
any lien, may petition the court for the entry of a new
certificate to him, and the application may be
granted: Provided, however, That every new certificate
entered under this section shall contain a memorandum of the
nature of the proceeding on which it is based: Provided,
further, That at any time prior to the entry of a new certificate
the registered owner may pursue all his lawful remedies to
impeach or annul proceedings under execution or to enforce
liens of any description.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Section 75 of PD 1529 provides:

1. The public auction sale of the subject property covered by TCT No. T-198753 on July

19, 1999 is declared VALID;

Sec. 75. Application for new certificate upon
expiration of redemption period. Upon the expiration of the 2. The Certificate of Sale issued by Sheriff Leovino Legaspi on July 19, 1999 in favor of
time, if any, allowed by law for redemption after the registered
land has been sold on execution, or taken or sold for the MFR Farms, Inc. (substituted by petitioner Ruben C. Reyes) covering the parcel of land
enforcement of a lien of any description, except a mortgage
lien, the purchaser at such sale or anyone claiming under him embraced in Transfer Certificate of Title No. T-198753 is likewise declared VALID; and
may petition the court for the entry of a new certificate to him.
3. The Petition[49] dated October 29, 2004 filed by MFR Farms, Inc. (substituted
Before the entry of a new certificate of title, the
registered owner may pursue all legal and equitable remedies by Ruben C. Reyes) is DISMISSED without prejudice to re-filing as a separate original
to impeach or annul such proceedings.
action pursuant to Section 107 of Presidential Decree No. 1529.
It is clear that PD 1529 provides the solution to respondents
quandary. The reasons behind the law make a lot of sense; it provides
SO ORDERED.
due process to a registered landowner (in this case the petitioner) and
prevents the fraudulent or mistaken conveyance of land, the value of
which may exceed the judgment obligation. x x x.

While we certainly will not condone any attempt by petitioner

to frustrate the ends of justice the only way to describe his refusal to
surrender his owners duplicates of the certificates of title despite the
final and executory judgment against him respondent, on the other
hand, cannot simply disregard proper procedure for the issuance
to it of new certificates of title. There was a law on the matter and
respondent should have followed it.

In any event, respondent can still file the proper petition

with the cadastral court for the issuance of new titles in its
name.[48] (Emphasis supplied).

Plainly, Reyes must institute a separate cadastral action initiated via petition.

WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of Appeals

in CA G.R. SP No. 96913 annulling and setting aside the Orders dated July 17, 2006 and

October 20, 2006 issued by the Regional Trial Court, Branch 7, Malolos, Bulacan in Civil

Case No. 1245-M is MODIFIED:


[G.R. No. 136283. February 29, 2000]
VIEWMASTER CONSTRUCTION CORPORATION, petitioner, vs. HON. REYNALDO Y.
MAULIT in his official capacity as administrator of the Land Registration Authority;
and EDGARDO CASTRO, acting register of deeds of Las Pias, Metro
Manila; respondents.
DECISION
PANGANIBAN, J.:
A notice of lis pendens may be registered when an action or a proceeding directly affects
the title to the land or the buildings thereon; or the possession, the use or the occupation
thereof. Hence, the registration of such notice should be allowed if the litigation involves
the enforcement of an agreement for the co-development of a parcel of land. h Y
Statement of the Case
Before us is a Petition for Review on Certiorari [1] assailing the February 27, 1998
Decision[2] of the Court of Appeals (CA)[3] in CA- GR SP No. 39649 and its November 12,
1998 Resolution[4] denying reconsideration. The assailed Decision affirmed the
Resolution[5] of the Land Registration Authority (LRA) in Consulta No. 2381, which ruled as
follows:
"PREMISES CONSIDERED, this Authority is of the considered view
and so holds that the Notice of Lis Pendens subject of this consulta is
not registrable."[6]
The Facts
The undisputed facts were summarized by the Court of Appeals as follows:
"The subject property is known as the Las Pias property registered in
the name of Peltan Development Inc. (now State Properties
Corporation) covered by Transfer Certificate of Title No. (S-17992)
12473-A situated in Barrio Tindig na Manga, Las Pias, Rizal.
"The Chiong/Roxas family collectively owns and controls State
Investment Trust, Inc. (formerly State Investment House, Inc.) and is
the major shareholder of the following corporations, namely: State Land
Investment Corporation, Philippine Development and Industrial
Corporation and Stronghold Realty Development.
"Sometime in 1995, the said family decided to give control and
ownership over the said corporations to only one member of the family,
through the process of bidding among the family members/stockholders
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
of the said companies. It was agreed that the bidder who acquires 51%
or more of the said companies shall be deemed the winner.
"Defendant Allen Roxas, one of the stockholders of State Investment
Trust, Inc. applied for a loan with First Metro Investment, Inc. (First
Metro for brevity) in the amount of P36,500,000.00 in order to
participate in the bidding. Es msc
"First Metro granted Allen Roxas' loan application without collateral
provided, however, that he procure a guarantor/surety/solidary co-
debtor to secure the payment of the said loan.
"Petitioner Viewmaster agreed to act as guarantor for the
aforementioned loan in consideration for its participation in a Joint
Venture Project to co-develop the real estate assets of State
Investment Trust, Inc.
"After a series of negotiations, petitioner Viewmaster and defendant
Allen Roxas agreed that should the latter prevail and win in the bidding,
he shall sell to petitioner fifty percent (50%) of the total eventual
acquisitions of shares of stock in the State Investment Trust, Inc., at a
purchase price equivalent to the successful bid price per share plus an
additiona1 ten percent (10%) per share.
"As a result of the loans granted by First Metro in consideration of and
upon the guaranty of petitioner Viewmaster, defendant Allen Roxas,
eventually gained control and ownership of State Investment Trust, Inc.
"However, notwithstanding the lapse of two (2) years since defendant
Allen Roxas became the controlling stockholder of State Investment
Trust, Inc., he failed to take the necessary action to implement the Joint
Venture Project with petitioner Viewmaster to co-develop the subject
properties.
"Thus, petitioner's counsel wrote defendant Allen Roxas, reiterating
petitioner's demand to comply with the agreement to co-develop the
Las Pias Property and to set in operation all the necessary steps
towards the realization of the said project.
"On September 8, 1995, petitioner Viewmaster filed a Complaint for
Specific Performance, Enforcement of Implied Trust and Damages
against State Investment Trust, Inc. Northeast Land Development, Inc.,
State Properties Corporation (formerly Peltan Development, Inc.) and
defendant Allen Roxas, in his capacity as Vice-Chairman of State
Investment Trust, Inc., and Chairman of Northeast Land Development,
Inc., State Properties Corporation, which was docketed as Civil Case
No.65277. Esmm is

"On September 11,1995, petitioner Viewmaster filed a Notice of Lis
Pendens with the Register of Deeds of Quezon City and Las Pias for
the annotation of a Notice of Lis Pendens on Transfer Certificate of Title
No. (S-17992) 12473- A, registered in the name of Peltan
Development, Inc. (now State Properties Corporation).
"In a letter dated September 15, 1995, the respondent Register of
Deeds of Las Pias denied the request for annotation of the Notice of Lis
Pendens on the following grounds:
1. the request for annotation and the complaint [do] not contain an
adequate description of the subject property;
2. petitioner's action only has an incidental effect on the property in
question. Esmso
"On September 20, 1995, petitioner filed an appeal to the respondent
Land Registration Authority, which was docketed as Consulta No. 2381.
"On December 14, 1995, the Respondent Land Registration Authority
issued the assailed Resolution holding that petitioner's 'Notice of Lis
Pendens' was not registrable."[7]
Ruling of the Court of Appeals
In affirming the ruling of the LRA, the Court of Appeals held that petitioner failed to
adequately describe the subject property in the Complaint and in the application for the
registration of a notice of lis pendens. The CA noted that while Transfer Certificate of Title
No. (S-17992) 12473-A indicated six parcels of land, petitioner's application mentioned
only one parcel.
Moreover, the CA also ruled that a notice of lis pendens may be registered only when an
action directly affects the title to or possession of the real property. In the present case, the
proceedings instituted by petitioner affected the title or possession incidentally only, not
directly.
Hence, this Petition.[8]
Issues
Petitioner submits for the consideration of the Court the following issues:
"I
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Whether or not the petitioner failed to adequately describe the subject
property in its complaint and in the notice of lis pendens Mse sm
II
Whether or not the Las Pias property is directly involved in Civil Case
No. 65277."[9]
The Court's Ruling
The Petition is meritorious.
First Issue: Description of Property
Petitioner contends that the absence of the property's technical description in either the
notice of lis pendens or the Complaint is not a sufficient ground for rejecting its application,
because a copy of TCT No. (S-17992) 12473-A specifically describing the property was
attached to and made an integral part of both documents.
On the other hand, respondents argue that petitioner failed to provide an accurate
description of the Las Pias property, which was merely referred to as a "parcel of land."
The notice of lis pendens described the property as follows:
"A parcel of land situated in the Barrio of Tindig na Manga, Municipality
of Las Pias, Province of Rizal x x x containing an area of Seven
Hundred Eighty Six Thousand One Hundred Sixty Seven (786,167)
square meters, more or less."
By itself, the above does not adequately describe the subject property, pursuant to Section
14 of Rule 13 of the Rules of Court and Section 76 of Presidential Decree (PD) No.1529. It
does not distinguish the said property from other properties similarly located in the Barrio
of Tindig na Manga, Municipality of Las Pias, Province of Rizal. Indeed, by the above
description alone, it would be impossible to identify the property.
In the paragraph directly preceding the description quoted above, however, petitioner
specifically stated that the property referred to in the notice of lis pendens was the same
parcel of land covered by TCT No. (S-17992) 12473-A:
"Please be notified that on 08 September 1995, the [p]laintiff in the
above-entitled case filed an action against the above-named
[d]efendants for specific performance, enforcement of an implied trust
and damages, now pending in the Regional Trial Court of Pasig,
Branch 166, which action involves a parcel of land covered by Transfer
Certificate Title (TCT) No. (S-17992) 12473-A, registered in the name
of Peltan Development Incorporated which changed its corporate name

to State Properties Corporation, one of the [d]efendants in the aforesaid
case. The said parcel of land is more particu1arly described as
follows: Ex sm
'A parcel of land situated in the Barrio of Tindig na
Manga, Municipality of Las Pias, Province of Rizal x
x x containing an area of Seven Hundred Eighty Six
Thousand One Hundred Sixty Seven (786,167)
square meters, more or less.'
"Request is therefore made [for] your good office to record this notice of
pendency of the aforementioned action in TCT No. (S-17992) 12473-A
for all legal purposes."[10]
As earlier noted, a copy of the TCT was attached to and made an integral part of both
documents. Consequently, the notice of lis pendens submitted for registration, taken as a
whole, leaves no doubt as to the identity of the property, the technical description of which
appears on the attached TCT. We stress that the main purpose of the requirement that the
notice should contain a technical description of the property is to ensure that the same can
be distinguished and readily identified. In this case, we agree with petitioner that there was
substantial compliance with this requirement.
Second Issue: Property Directly Involved
In upholding the LRA, the Court of Appeals held that "the doctrine of lis pendens has no
application to a proceeding in which the only object sought is the recovery of [a] money
judgment, though the title [to] or right or possession [of] a property may be incidentally
affected. It is thus essential that the property be directly affected where the relief sought in
the action or suit includes the recovery of possession, or the enforcement [thereof], or an
adjudication between the conflicting claims of title, possession or right of possession to
specific property, or requiring its transfer or sale." [11]
On the other hand, petitioner contends that the civil case subject of the notice of lis
pendens directly involved the land in question, because it prayed for the enforcement of a
prior agreement between herein petitioner and Defendant Allen Roxas to co-develop the
latter's property.
We agree with the petitioner. A notice of lis pendens, which literally means "pending suit,"
may involve actions that deal not only with the title or possession of a property, but even
with the use or occupation thereof. Thus, Section 76 of PD 1529 reads: Jjjuris
"Sec. 76. Notice of lis pendens. -- No action to recover possession of
real estate, or to quiet title thereto, or to remove clouds upon the title
thereof, or for partition, or other proceedings of any kind in court directly
affecting the title to land or the use or occupation thereof or the
buildings thereon, and no judgment, and no proceeding to vacate or
reverse any judgment, shall have any effect upon registered land as
against persons other than the parties thereto, unless a memorandum
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
or notice stating the institution of such action or proceeding and the
court wherein the same is pending, as well as the date of the institution
thereof, together with a reference to the number of the certificate of title,
and an adequate description of the land affected and the registered
owner thereof, shall have been filed and registered."
In Magdalena Homeowners Association, Inc. v. Court of Appeals, [12] the Court did not
confine the availability of lis pendens to cases involving the title to or possession of real
property. Thus, it held:
"According to Section 24, Rule 14[13] of the Rules of Court and Section
76 of Presidential Decree No.1529, a notice of lis pendens is proper in
the following cases, viz.:
a).......An action to recover possession of real estate;
b).......An action to quiet title thereto;
c).......An action to remove clouds thereon;
d).......An action for partition; and
e).......Any other proceedings of any kind in Court directly affecting the
title to the land or the use or occupation hereof or the buildings
thereon."
In Villanueva v. Court of Appeals,[14] this Court further declared that the rule of lis
pendens applied to suits brought "to establish an equitable estate, interest, or right in
specific real property or to enforce any lien, charge, or encumbrance against it x x x."
Thus, this Court observed that the said notice pertained to the following: Sjcj
"x x x all suits or actions which directly affect real property and not only
those which involve the question of title, but also those which are
brought to establish an equitable estate, interest, or right, in specific
real property or to enforce any lien, charge, or encumbrance against it,
there being in some cases a lis pendens, although at the
commencement of the suit there is no present vested interest, claim, or
lien in or on the property which it seeks to charge. It has also been held
to apply in the case of a proceeding to declare an absolute deed of
mortgage, or to redeem from a foreclosure sale, or to establish a trust,
or to suits for the settlement and adjustment of partnership interests."
In the present case, petitioner's Complaint docketed as Civil Case No. 65277 clearly
warrants the registration of a notice of lis pendens. The Complaint prayed for the following
reliefs: Scjj

"1. Render judgment ordering the Defendant Allen Roxas to sell fifty
percent (50%) of his shareholdings in Defendant State Investment to
Plaintiff at the price equivalent to the successful bid price per share plus
an additional ten percent (10%) per share and directing Defendants to
co-develop with the Plaintiff the subject real properties;
2. Render judgment ordering the Defendant Allen Roxas to:
a. Pay the Plaintiff the amount of at least Twenty Million Pesos
(P20,000,000.00) and/or such other amounts as may be proven during
the course of the trial, by way of actual damages;
b. Pay the Plaintiff the amount of at least One Million Pesos
(P1,000,000.00), by way of moral damages;
c. Pay the Plaintiff the amount of at least One Million Pesos
(P1,000,000.00), by way of exemplary damages;
d. Pay the Plaintiff the amount of Two Hundred Fifty Thousand Pesos
(P250,000.00) by way of attorney's fees; and
e. Pay expenses of litigation and costs of suit."[15]
Undeniably, the prayer that Defendant Allen Roxas be ordered to sell 50 percent of his
shareholdings in State Investment does not directly involve title to the property and is
therefore not a proper subject of a notice of lis pendens. Neither do the various amounts of
damages prayed for justify such annotation.
We disagree, however, with the Court of Appeals and the respondents that the prayer for
the co-development of the land was merely incidental to the sale of shares of defendant
company. Jjsc
The Complaint shows that the loan obtained by Allen Roxas (one of the defendants in the
civil case) from First Metro was guaranteed by petitioner for two distinct considerations: (a)
to enable it to purchase 50 percent of the stocks that the said defendant may acquire in
State Investment and (b) to co-develop with the defendants the Quezon City and the Las
Pias properties of the corporation. In other words, the co-development of the said
properties is a separate undertaking that did not arise from petitioner's acquisition of the
defendant's shares in the corporation. To repeat, the co-development is not merely
auxiliary or incidental to the purchase of the shares; it is a distinct consideration for
Viewmaster's guaranty.[16]
Hence, by virtue of the alleged agreement with Allen Roxas, petitioner has a direct -- not
merely incidental -- interest in the Las Pias property. Contrary to respondents'
contention,[17] the action involves not only the collection of a money judgment, but also the
enforcement of petitioner's right to co-develop and use the property.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
The Court must stress that the purpose of lis pendens is (1) to protect the rights of the
party causing the registration thereof [18] and (2) to advise third persons who purchase or
contract on the subject property that they do so at their peril and subject to the result of the
pending litigation.[19] One who deals with property subject of a notice of lis pendens cannot
acquire better rights than those of his predecessors-in-interest.[20] In Tanchoco v.
Aquino,[21] the Court held:
"x x x. _ The doctrine of lis pendens is founded upon reason of public
policy and necessity, the purpose of which is to keep the subject matter
of the litigation within the power of the court until the judgment or
decree shall have been entered; otherwise, by successive alienations
pending the litigation, its judgment or decree shall be rendered abortive
and impossible of execution. Purchasers pendente lite of the property
subject of the litigation after the notice of lis pendens is inscribed in the
Office of the Register of Deeds are bound by the judgment against their
predecessors. x x x."
Without a notice of lis pendens, a third party who acquires the property after relying only
on the Certificate of Title would be deemed a purchaser in good faith. Against such third
party, the supposed rights of petitioner cannot be enforced, because the former is not
bound by the property owner's undertakings not annotated in the TCT. [22] Kyle
Likewise, there exists the possibility that the res of the civil case would leave the control of
the court and render ineffectual a judgment therein. Indeed, according to petitioner, it was
not even informed when Allen Roxas exchanged the Quezon City property for shares of
stock in Northeast Land Development, Inc. [23] Hence, it maintains that there is a clear risk
that the same thing would be done with the Las Pias property.
In this light, the CA ruling left unprotected petitioner's claim of co-development over the
Las Pias property. Hence, until the conflicting rights and interests are threshed out in the
civil case pending before the RTC, it will be in the best interest of the parties and the public
at large that a notice of the suit be given to the whole world.
The Court is not here saying that petitioner is entitled to the reliefs prayed for in its
Complaint pending in the RTC. Verily, there is no requirement that the right to or the
interest in the property subject of a lis pendens be proven by the applicant. The Rule
merely requires that an affirmative relief be claimed. [24] A notation of lis pendens neither
affects the merits of a case nor creates a right or a lien. [25] It merely protects the applicant's
rights, which will be determined during the trial.
WHEREFORE, the Petition is hereby GRANTED and the assailed Decision of the Court of
Appeals REVERSED and SET ASIDE. The Las Pias Register of Deeds is directed to
cause the annotation of lis pendens in TCT No. (S-17992) 12473-A. No costs.
SO ORDERED.

[G.R. No. 148568. March 20, 2003]
ATLANTIC ERECTORS, INC., petitioner, vs. HERBAL COVE REALTY
CORPORATION, respondent.
DECISION
PANGANIBAN, J.:
The pendency of a simple collection suit arising from the alleged nonpayment of
construction services, materials, unrealized income and damages does not justify the
annotation of a notice of lis pendens on the title to a property where construction has been
done.
Statement of the Case
Before the Court is a Petition for Review on Certiorari [1] under Rule 45 of the Rules of
Court, challenging the May 30, 2000 Decision[2] of the Court of Appeals (CA) in CA-GR SP
No. 56432. The dispositive portion of the Decision is reproduced as follows:
WHEREFORE, the petition is granted and the assailed November 4, 1998 and October 22,
1999 orders annulled and set aside. The July 30, 1998 order of respondent judge is
reinstated granting the cancellation of the notices of lis pendens subject of this petition. [3]
In its July 21, 2001 Resolution,[4] the CA denied petitioners Motion for
Reconsideration.
The Facts
The factual antecedents of the case are summarized by the CA in this wise:
On June 20, 1996, [respondent] and [petitioner] entered into a Construction Contract
whereby the former agreed to construct four (4) units of [townhouses] designated as 16-A,
16-B, 17-A and 17-B and one (1) single detached unit for an original contract price
of P15,726,745.19 which was late[r] adjusted to P16,726,745.19 as a result of additional
works. The contract period is 180 days commencing [on] July 7, 1996 and to terminate on
January 7, 1997. [Petitioner] claimed that the said period was not followed due to reasons
attributable to [respondent], namely: suspension orders, additional works, force majeure,
and unjustifiable acts of omission or delay on the part of said [respondent]. [Respondent],
however, denied such claim and instead pointed to [petitioner] as having exceeded the 180
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
day contract period aggravated by defective workmanship and utilization of materials
which are not in compliance with specifications.
xxxxxxxxx
On November 21, 1997, [petitioner] filed a complaint for sum of money with damages (Civil
Case No. 97-2707) with the Regional Trial Court of Makati entitled Atlantic Erectors,
Incorporated vs. Herbal Cove Realty Corp. and Ernest C. Escal[e]r. This case was raffled
to Branch 137, x x x Judge Santiago J. Ranada presiding. In said initiatory pleading,
[petitioner] AEI asked for the following reliefs:
AFTER DUE NOTICE AND HEARING, to order x x x defendant to:
1. Pay plaintiff the sum of P4,854,229.94 for the unpaid construction services already
rendered;
2. To x x x pay plaintiff the sum of P1,595,551.00 for the construction materials, equipment
and tools of plaintiff held by defendant;
3. To x x x pay plaintiff the sum of P2,250,000.00 for the [loss] x x x of expected income
from the construction project;
4. [T]o x x x pay plaintiff the sum of P800,000.00 for the cost of income by way of rental
from the equipment of plaintiff held by defendants;
5. To x x x pay plaintiff the sum of P5,000,000.00 for moral damages;
6. To x x x pay plaintiff the sum of P5,000,000.00 for exemplary damages;
7. To x x x pay plaintiff the sum equivalent of 25% of the total money claim
plus P200,000.00 acceptance fee and P2,500.00 per court appearance;
8. To x x x pay the cost of suit.
On the same day of November 21, 1997, [petitioner] filed a notice of lis pendens for
annotation of the pendency of Civil Case No. 97-707 on titles TCTs nos. T-30228, 30229,
30230, 30231 and 30232. When the lots covered by said titles were subsequently
subdivided into 50 lots, the notices of lis pendens were carried over to the titles of the
subdivided lots, i.e., Transfer Certificate of Title Nos. T-36179 to T-36226 and T-36245 to
T-36246 of the Register of Deeds of Tagaytay City.
On January 30, 1998, [respondent] and x x x Ernest L. Escaler, filed a Motion to Dismiss
[petitioners] Complaint for lack of jurisdiction and for failure to state a cause of action. They
claimed [that] the Makati RTC has no jurisdiction over the subject matter of the case

because the parties Construction Contract contained a clause requiring them to submit
their dispute to arbitration.
xxxxxxxxx
On March 17, 1998, [RTC Judge Ranada] dismissed the Complaint as against
[respondent] for [petitioners] failure to comply with a condition precedent to the filing of a
court action which is the prior resort to arbitration and as against x x x Escaler for failure of the
Complaint to state a cause of action x x x.
[Petitioner] filed a Motion for Reconsideration of the March 17, 1998 dismissal
order. [Respondent] filed its Opposition thereto.
On April 24, 1998, [respondent] filed a Motion to Cancel Notice of Lis Pendens. It argued
that the notices of lis pendens are without basis because [petitioners] action is a purely
personal action to collect a sum of money and recover damages and x x x does not directly
affect title to, use or possession of real property.
In his July 30, 1998 Order, [Judge Ranada] granted [respondents] Motion to Cancel Notice
of Lis Pendens x x x:
[Petitioner] filed a Motion for Reconsideration of the aforesaid July 30, 1998 Order to which
[respondent] filed an Opposition.
In a November 4, 1998 Order, [Judge Ranada,] while finding no merit in the grounds raised
by [petitioner] in its Motion for Reconsideration, reversed his July 30, 1998 Order and
reinstated the notices of lis pendens, as follows:
1. The Court finds no merit in plaintiffs contention that in dismissing the above-entitled
case for lack of jurisdiction, and at the same time granting defendant Herbal Coves motion
to cancel notice of lis pendens, the Court [took] an inconsistent posture. The Rules provide
that prior to the transmittal of the original record on appeal, the court may issue orders for
the protection and preservation of the rights of the parties which do not involve any matter
litigated by the appeal (3rd par., Sec. 10, Rule 41). Even as it declared itself without
jurisdiction, this Court still has power to act on incidents in this case, such as acting on
motions for reconsideration, for correction, for lifting of lis pendens, or approving appeals,
etc.
As correctly argued by defendant Herbal Cove, a notice of lis pendens serves only as a
precautionary measure or warning to prospective buyers of a property that there is a
pending litigation involving the same.
The Court notes that when it issued the Order of 30 July 1998 lifting the notice of lis
pendens, there was as yet no appeal filed by plaintiff. Subsequently, on 10 September
1998, after a notice of appeal was filed by plaintiff on 4 September 1998, the Branch Clerk
of Court was ordered by the Court to elevate the entire records of the above-entitled case
to the Court of Appeals. It therefore results that the above-entitled case is still
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
pending. After a careful consideration of all matters relevant to the lis pendens, the Court
believes that justice will be better served by setting aside the Order of 30 July 1998.
On November 27, 1998, [respondent] filed a Motion for Reconsideration of the November
4, 1998 Order arguing that allowing the notice of lis pendens to remain annotated on the
titles would defeat, not serve, the ends of justice and that equitable considerations cannot
be resorted to when there is an applicable provision of law.
xxxxxxxxx
On October 22, 1999, [Judge Ranada] issued an order denying [respondents] Motion for
Reconsideration of the November 4, 1998 Order for lack of sufficient merit. [5]
Thereafter, Respondent Herbal Cove filed with the CA a Petition for Certiorari.
Ruling of the Court of Appeals
Setting aside the Orders of the RTC dated November 4, 1998 and October 22, 1999,
the CA reinstated the formers July 30, 1998 Order [6] granting Herbal Coves Motion to
Cancel the Notice of Lis Pendens. According to the appellate court, the re-annotation of
those notices was improper for want of any legal basis. It specifically cited Section 76 of
Presidential Decree No. 1529 (the Property Registration Decree). The decree provides that
the registration of such notices is allowed only when court proceedings directly affect the
title to, or the use or the occupation of, the land or any building thereon.
The CA opined that the Complaint filed by petitioner in Civil Case No. 97-2707 was
intended purely to collect a sum of money and to recover damages. The appellate court
ruled that the Complaint did not aver any ownership claim to the subject land or any right
of possession over the buildings constructed thereon. It further declared that absent any
claim on the title to the buildings or on the possession thereof, the notices of lis
pendens had no leg to stand on.
Likewise, the CA held that Judge Ranada should have maintained the notice
cancellations, which he had directed in his July 30, 1998 Order. Those notices were no
longer necessary to protect the rights of petitioner, inasmuch as it could have procured
protective relief from the Construction Industry Arbitral Commission (CIAC), where
provisional remedies were available. The CA also mentioned petitioners admission that
there was already a pending case before the CIAC, which in fact rendered a decision on
March 11, 1999.
The appellate court further explained that the re-annotation of the Notice of Lis
Pendens was no longer warranted after the court a quo had ruled that the latter had no
jurisdiction over the case. The former held that the rationale behind the principle of lis
pendens -- to keep the subject matter of the litigation within the power of the court until the
entry of final judgment -- was no longer applicable. The reason for such inapplicability was
that the Makati RTC already declared that it had no jurisdiction or power over the subject
matter of the case.

Finally, the CA opined that petitioners Complaint had not alleged or claimed, as basis
for the continued annotation of the Notice of Lis Pendens, the lien of contractors and
laborers under Article 2242 of the New Civil Code. Moreover, petitioner had not even
referred to any lien of whatever nature. Verily, the CA ruled that the failure to allege and
claim the contractors lien did not warrant the continued annotation on the property titles of
Respondent Herbal Cove.
Hence, this Petition.[7]
The Issues
Petitioner raises the following issues for our consideration:
I. Whether or not money claims representing cost of materials [for] and labor
[on] the houses constructed on a property [are] a proper lien for annotation
of lis pendens on the property title[.]
II. Whether or not the trial court[,] after having declared itself without jurisdiction
to try the case[,] may still decide on [the] substantial issue of the case.[8]
This Courts Ruling
The Petition has no merit.
First Issue:
Proper Basis for a
Notice of Lis Pendens
Petitioner avers that its money claim on the cost of labor and materials for the
townhouses it constructed on the respondents land is a proper lien that justifies the
annotation of a notice of lis pendens on the land titles. According to petitioner, the money
claim constitutes a lien that can be enforced to secure payment for the said obligations. It
argues that, to preserve the alleged improvement it had made on the subject land, such
annotation on the property titles of respondent is necessary.
On the other hand, Respondent Herbal Cove argues that the annotation is bereft of any
factual or legal basis, because petitioners Complaint[9] does not directly affect the title to the
property, or the use or the possession thereof. It also claims that petitioners Complaint did
not assert ownership of the property or any right to possess it. Moreover, respondent attacks
as baseless the annotation of the Notice of Lis Pendens through the enforcement of a
contractors lien under Article 2242 of the Civil Code. It points out that the said provision
applies only to cases in which there are several creditors carrying on a legal action against
an insolvent debtor.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
As a general rule, the only instances in which a notice of lis pendens may be availed
of are as follows: (a) an action to recover possession of real estate; (b) an action for
partition; and (c) any other court proceedings that directly affect the title to the land or the
building thereon or the use or the occupation thereof.[10] Additionally, this Court has held
that resorting to lis pendens is not necessarily confined to cases that involve title to or
possession of real property. This annotation also applies to suits seeking to establish a
right to, or an equitable estate or interest in, a specific real property; or to enforce a lien, a
charge or an encumbrance against it.[11]
Apparently, petitioner proceeds on the premise that its money claim involves the
enforcement of a lien. Since the money claim is for the nonpayment of materials and labor
used in the construction of townhouses, the lien referred to would have to be that provided
under Article 2242 of the Civil Code. This provision describes a contractors lien over an
immovable property as follows:
Art. 2242. With reference to specific immovable property and real rights of the debtor, the
following claims, mortgages and liens shall be preferred, and shall constitute an
encumbrance on the immovable or real right:
xxxxxxxxx
(3) Claims of laborers, masons, mechanics and other workmen, as well as of architects,
engineers and contractors, engaged in the construction, reconstruction or repair of
buildings, canals or other works, upon said buildings, canals or other works;
(4) Claims of furnishers of materials used in the construction, reconstruction, or repair of
buildings, canals or other works, upon said buildings, canals or other works[.] (Emphasis
supplied)
However, a careful examination of petitioners Complaint, as well as the reliefs it
seeks, reveals that no such lien or interest over the property was ever alleged. The
Complaint merely asked for the payment of construction services and materials plus
damages, without mentioning -- much less asserting -- a lien or an encumbrance over the
property. Verily, it was a purely personal action and a simple collection case. It did not
contain any material averment of any enforceable right, interest or lien in connection with
the subject property.
As it is, petitioners money claim cannot be characterized as an action that involves
the enforcement of a lien or an encumbrance, one that would thus warrant the annotation
of the Notice of Lis Pendens. Indeed, the nature of an action is determined by the
allegations of the complaint.[12]
Even assuming that petitioner had sufficiently alleged such lien or encumbrance in its
Complaint, the annotation of the Notice of Lis Pendens would still be unjustified, because a
complaint for collection and damages is not the proper mode for the enforcement of a
contractors lien.
In J.L. Bernardo Construction v. Court of Appeals,[13] the Court explained the concept
of a contractors lien under Article 2242 of the Civil Code and the proper mode for its
enforcement as follows:

Articles 2241 and 2242 of the Civil Code enumerates certain credits which enjoy
preference with respect to specific personal or real property of the debtor. Specifically,
the contractors lien claimed by the petitioners is granted under the third paragraph
of Article 2242 which provides that the claims of contractors engaged in the
construction, reconstruction or repair of buildings or other works shall be preferred
with respect to the specific building or other immovable property constructed.
However, Article 2242 finds application when there is a concurrence of credits, i.e.,
when the same specific property of the debtor is subjected to the claims of several
creditors and the value of such property of the debtor is insufficient to pay in full all
the creditors.In such a situation, the question of preference will arise, that is, there will be
a need to determine which of the creditors will be paid ahead of the others. Fundamental
tenets of due process will dictate that this statutory lien should then only be
enforced in the context of some kind of a proceeding where the claims of all the
preferred creditors may be bindingly adjudicated, such as insolvency
proceedings.[14] (Emphasis supplied)
Clearly then, neither Article 2242 of the Civil Code nor the enforcement of the lien
thereunder is applicable here, because petitioners Complaint failed to satisfy the foregoing
requirements. Nowhere does it show that respondents property was subject to the claims
of other creditors or was insufficient to pay for all concurring debts. Moreover, the
Complaint did not pertain to insolvency proceedings or to any other action in which the
adjudication of claims of preferred creditors could be ascertained.
Another factor negates the argument of petitioner that its money claim involves the
enforcement of a lien or the assertion of title to or possession of the subject property: the
fact that it filed its action with the RTC of Makati, which is undisputedly bereft of any
jurisdiction over respondents property in Tagaytay City. Certainly, actions affecting title to
or possession of real property or the assertion of any interest therein should be
commenced and tried in the proper court that has jurisdiction over the area, where the real
property involved or a portion thereof is situated. [15] If petitioner really intended to assert its
claim or enforce its supposed lien, interest or right over respondents subject properties, it
would have instituted the proper proceedings or filed a real action with the RTC of
Tagaytay City, which clearly had jurisdiction over those properties. [16]
Narciso Pea, a leading authority on the subject of land titles and registration, gives
an explicit exposition on the inapplicability of the doctrine of lis pendens to certain actions
and proceedings that specifically include money claims. He explains in this wise:
By express provision of law, the doctrine of lis pendens does not apply to attachments,
levies of execution, or to proceedings for the probate of wills, or for administration of the
estate of deceased persons in the Court of First Instance. Also, it is held generally that the
doctrine of lis pendens has no application to a proceeding in which the only object
sought is the recovery of a money judgment, though the title or right of possession
to property be incidentally affected. It is essential that the property be directly affected,
as where the relief sought in the action or suit includes the recovery of possession, or the
enforcement of a lien, or an adjudication between conflicting claims of title, possession, or
the right of possession to specific property, or requiring its transfer or sale [17] (Emphasis
supplied)
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Pea adds that even if a party initially avails itself of a notice of lis pendens upon the
filing of a case in court, such notice is rendered nugatory if the case turns out to be a
purely personal action. We quote him as follows:
It may be possible also that the case when commenced may justify a resort to lis pendens,
but during the progress thereof, it develops to be purely a personal action for damages or
otherwise. In such event, the notice of lis pendens has become functus
officio.[18](Emphasis supplied)
Thus, when a complaint or an action is determined by the courts to be in personam,
the rationale for or purpose of the notice of lis pendens ceases to exist. To be sure, this
Court has expressly and categorically declared that the annotation of a notice of lis
pendens on titles to properties is not proper in cases wherein the proceedings instituted
are actions in personam.[19]
Second Issue:
Jurisdiction of the Trial Court
Petitioner argues that the RTC had no jurisdiction to issue the Order canceling the
Notice of Lis Pendens as well as the Order reinstating it. Supposedly, since both Orders
were issued by the trial court without jurisdiction, the annotation made by the Register of
Deeds of Tagaytay City must remain in force.
Petitioner avers that the trial court finally declared that the latter had no jurisdiction
over the case on July 27, 1998, in an Order denying the formers Motion for
Reconsideration of the March 17, 1998 Order dismissing the Complaint. Petitioner insists
that the subsequent July 30, 1998 Order cancelling the subject Notice of Lis Pendens is
void, because it was issued by a court that had no more jurisdiction over the case.
Rule 41 of the 1997 Rules on Civil Procedure, which governs appeals from regional
trial courts, expressly provides that RTCs lose jurisdiction over a case when an appeal is
filed. The rule reads thus:
SEC. 9. Perfection of appeal; effect thereof. -- A partys appeal by notice of appeal is
deemed perfected as to him upon the filing of the notice of appeal in due time.
xxxxxxxxx
In appeals by notice of appeal, the court loses jurisdiction over the case upon the
perfection of the appeals filed in due time and the expiration of the time to appeal of
the other parties. (Emphasis supplied)
On the basis of the foregoing rule, the trial court lost jurisdiction over the case only
on August 31, 1998, when petitioner filed its Notice of Appeal. [20] Thus, any order issued
by the RTC prior to that date should be considered valid, because the court still had
jurisdiction over the case. Accordingly, it still had the authority or jurisdiction to issue the
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

July 30, 1998 Order canceling the Notice of Lis Pendens. On the other hand, G.R. No. 189477 February 26, 2014
the November 4, 1998 Order that set aside the July 30, 1998Order and reinstated that
Notice should be considered without force and effect, because it was issued by the trial HOMEOWNERS SAVINGS AND LOAN BANK, Petitioner-Appellant,
court after it had already lost jurisdiction.
vs.
In any case, even if we were to adopt petitioners theory that both the July 30, 1998 ASUNCION P. FELONIA and LYDIA C. DE GUZMAN, represented by MARIBEL
and the November 4, 1998 Orders were void for having been issued without jurisdiction, FRIAS, Respondents-Appellees.
the annotation is still improper for lack of factual and legal bases. MARIE MICHELLE P. DELGADO, REGISTER OF DEEDS OF LAS PINAS CITY and
RHANDOLFO B. AMANSEC, in his capacity as Clerk of Court Ex-Officio Sheriff,
As discussed previously, erroneously misplaced is the reliance of petitioner on the Office of the Clerk of Court, Las Pias City,Respondents-Defendants.
premise that its money claim is an action for the enforcement of a contractors lien. Verily,
the annotation of the Notice of Lis Pendens on the subject property titles should not have DECISION
been made in the first place. The Complaint filed before the Makati RTC -- for the
collection of a sum of money and for damages -- did not provide sufficient legal basis for
such annotation. PEREZ, J.:

Finally, petitioner vehemently insists that the trial court had no jurisdiction to cancel
Assailed in this Petition for Review on Certiorari is the Decision 1 and Resolution2 of the
the Notice. Yet, the former filed before the CA an appeal, docketed as CA-GR CV No.
Court of Appeals (CA), in CA-G.R. CV No. 87540, which affirmed with modifications, the
65647,[21] questioning the RTCs dismissal of the Complaint for lack of
Decision3 of the Regional Trial Court (RTC), reinstating the title of respondents Asuncion
jurisdiction. Moreover, it must be remembered that it was petitioner which had initially
Felonia (Felonia) and Lydia de Guzman (De Guzman) and cancelling the title of Marie
invoked the jurisdiction of the trial court when the former sought a judgment for the
Michelle Delgado (Delgado).
recovery of money and damages against respondent. Yet again, it was also petitioner
which assailed that same jurisdiction for issuing an order unfavorable to the formers
cause. Indeed, parties cannot invoke the jurisdiction of a court to secure affirmative relief, The facts as culled from the records are as follows:
then repudiate or question that same jurisdiction after obtaining or failing to obtain such
relief.[22] Felonia and De Guzman were the registered owners of a parcel of land consisting of 532
WHEREFORE, the Petition is hereby DENIED and the assailed square meters with a five-bedroom house, covered by Transfer of Certificate of Title (TCT)
Decision AFFIRMED. Costs against petitioner. No. T-402 issued by the register of deeds of Las Pias City.

SO ORDERED. Sometime in June 1990, Felonia and De Guzman mortgaged the property to Delgado to
secure the loan in the amount of 1,655,000.00. However, instead of a real estate
mortgage, the parties executed a Deed of Absolute Sale with an Option to Repurchase. 4

On 20 December 1991, Felonia and De Guzman filed an action for Reformation of

Contract (Reformation case), docketed as Civil Case No. 91-59654, before the RTC of
Manila. On the findings that it is "very apparent that the transaction had between the
parties is one of a mortgage and not a deed of sale with right to repurchase," 5 the RTC, on
21 March 1995 rendered a judgment favorable to Felonia and De Guzman. Thus:

WHEREFORE, judgment is hereby rendered directing the [Felonia and De Guzman] and
the [Delgado] to execute a deed of mortgage over the property in question taking into
account the payments made and the imposition of the legal interests on the principal loan.

On the other hand, the counterclaim is hereby dismissed for lack of merit.

No pronouncements as to attorneys fees and damages in both instances as the parties

must bear their respective expenses incident to this suit.6

Aggrieved, Delgado elevated the case to the CA where it was docketed as CA-G.R. CV
No. 49317. The CA affirmed the trial court decision. On 16 October 2000, the CA decision
became final and executory.7
Inspite of the pendency of the Reformation case in which she was the defendant, Delgado
filed a "Petition for Consolidation of Ownership of Property Sold with an Option to
Repurchase and Issuance of a New Certificate of Title" (Consolidation case) in the RTC of
Las Pias, on 20 June 1994.8 After an ex-parte hearing, the RTC ordered the issuance of a
new title under Delgados name, thus:
WHEREFORE, judgment is rendered-
1. Declaring [DELGADO] as absolute owner of the subject parcel of land covered
by Transfer Certificate of Title No. T-402 of the Register of Deeds of Las Pias,
Metro Manila;
2. Ordering the Register of Deeds of Las Pias, Metro Manila to cancel Transfer
Certificate of Title No. T-402 and issue in lieu thereof a new certificate of title and
owners duplicate copy thereof in the name of [DELGADO]. 9
By virtue of the RTC decision, Delgado transferred the title to her name. Hence, TCT No.
T-402, registered in the names of Felonia and De Guzman, was canceled and TCT No.
44848 in the name of Delgado, was issued.
Aggrieved, Felonia and De Guzman elevated the case to the CA through a Petition for
Annulment of Judgment.10
Meanwhile, on 2 June 1995, Delgado mortgaged the subject property to Homeowners
Savings and Loan Bank (HSLB) using her newly registered title. Three (3) days later, or on
5 June 1995, HSLB caused the annotation of the mortgage.
On 14 September 1995, Felonia and De Guzman caused the annotation of a Notice of Lis
Pendens on Delgados title, TCT No. 44848. The Notice states:
Entry No. 8219/T-44848 NOTICE OF LIS PENDENS filed by Atty. Humberto A.
Jambora, Counsel for the Plaintiff, that a case been commenced in the RTC, Branch 38,
Manila, entitled ASUNCION P. FELONIA and LYDIA DE GUZMAN thru VERONICA P.
BELMONTE, as Atty-in-fact (Plaintiffs) v.s. MARIE MICHELLE DELGADO defendant in
Civil Case No. 91-59654 for Reformation of Instrument.
Copy on file in this Registry.
Date of Instrument Sept. 11, 1995
Date of Inscription Sept. 14, 1995 at 9:55 a.m.11
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
On 20 November1997, HSLB foreclosed the subject property and later consolidated
ownership in its favor, causing the issuance of a new title in its name, TCT No. 64668.
On 27 October 2000, the CA annulled and set aside the decision of the RTC, Las Pias
City in the Consolidation case. The decision of the CA, declaring Felonia and De Guzman
as the absolute owners of the subject property and ordering the cancellation of Delgados
title, became final and executory on 1 December 2000. 12 Thus:
WHEREFORE, the petition is GRANTED and the subject judgment of the court a quo is
ANNULLED and SET ASIDE.13
On 29 April 2003, Felonia and De Guzman, represented by Maribel Frias (Frias), claiming
to be the absolute owners of the subject property, instituted the instant complaint against
Delgado, HSLB, Register of Deeds of Las Pias City and Rhandolfo B. Amansec before
the RTC of Las Pias City for Nullity of Mortgage and Foreclosure Sale, Annulment of
Titles of Delgado and HSLB, and finally, Reconveyance of Possession and Ownership of
the subject property in their favor.
As defendant, HSLB asserted that Felonia and De Guzman are barred from laches as they
had slept on their rights to timely annotate, by way of Notice of Lis Pendens, the pendency
of the Reformation case. HSLB also claimed that it should not be bound by the decisions
of the CA in the Reformation and Consolidation cases because it was not a party therein.
Finally, HSLB asserted that it was a mortgagee in good faith because the mortgage
between Delgado and HSLB was annotated on the title on 5 June 1995, whereas the
Notice of Lis Pendens was annotated only on 14 September 1995.
After trial, the RTC ruled in favor of Felonia and De Guzman as the absolute owners of the
subject property. The dispositive portion of the RTC decision reads:
WHEREFORE, premises considered, the Court hereby finds for the [Felonia and De
Guzman] with references to the decision of the Court of Appeals in CA-G.R. CV No. 49317
and CA-G.R. SP No. 43711 as THESE TWO DECISIONS CANNOT BE IGNORED and
against [Delgado] and [HSLB], Register of Deeds of Las Pias City ordering the (sic) as
follows:
1. The Register of Deeds of Las Pias City to cancel Transfer Certificate of Title
Nos. 44848 and T-64668 as null and void and reinstating Transfer Certificate of
Title No. T-402 which shall contain a memorandum of the fact and shall in all
respect be entitled to like faith and credit as the original certificate of title and
shall, thereafter be regarded as such for all intents and purposes under the law;
2. Declaring the Mortgage Sheriffs Sale and the Certificate of Sale issued in
favor of HSLB null and void, without prejudice to whatever rights the said Bank
may have against [Delgado];

3. Ordering [Delgado] to pay [Felonia and De Guzman] the amount of
PH500,000.00 for compensatory damages;
4. Ordering [Delgado] to pay [Felonia and De Guzman] the amount of
PH500,000.00 for exemplary damages;
5. Ordering [Delgado] to pay [Felonia and De Guzman] the amount of
PH500,000.00 for moral damages;
6. Ordering [Delgado] to pay 20% of the total obligations as and by way of
attorneys fees;
7. Ordering [Delgado] to pay cost of suit.14
On appeal, the CA affirmed with modifications the trial court decision. The dispositive
portion of the appealed Decision reads:
WHEREFORE, in the light of the foregoing, the decision appealed from is AFFIRMED with
the MODIFICATIONS that the awards of actual damages and attorneys fees are
DELETED, moral and exemplary damages are REDUCED to 50,000.00 each, and
Delgado is ordered to pay the appellees 25,000.00 as nominal damages. 15
Hence, this petition.
Notably, HSLB does not question the affirmance by the CA of the trial courts ruling that
TCT No. 44848, the certificate of title of its mortgagor-vendor, and TCT No. 64668, the
certificate of title that was secured by virtue of the Sheriffs sale in its favor, should be
cancelled "as null and void" and that TCT No. T-402 in the name of Felonia and De
Guzman should be reinstated.
Recognizing the validity of TCT No. T-402 restored in the name of Felonia and De
Guzman, petitioners pray that the decision of the CA be modified "to the effect that the
mortgage lien in favor of petitioner HSLB annotated as entry No. 4708-12 on TCT No.
44848 be [ordered] carried over on TCT No. T-402 after it is reinstated in the name of
[Felonia and De Guzman]."16
Proceeding from the ruling of the CA that it is a mortgagee in good faith, HSLB argues that
a denial of its prayer would run counter to jurisprudence giving protection to a mortgagee
in good faith by reason of public policy.
We cannot grant the prayer of petitioner. The priorly registered mortgage lien of HSLB is
now worthless.
Arguably, HSLB was initially a mortgagee in good faith. In Bank of Commerce v. San
Pablo, Jr.,17 the doctrine of mortgagee in good faith was explained:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
There is, however, a situation where, despite the fact that the mortgagor is not the owner
of the mortgaged property, his title being fraudulent, the mortgage contract and any
foreclosure sale arising there from are given effect by reason of public policy. This is the
doctrine of "the mortgagee in good faith" based on the rule that all persons dealing with
property covered by the Torrens Certificates of Title, as buyers or mortgagees, are not
required to go beyond what appears on the face of the title. The public interest in
upholding indefeasibility of a certificate of title, as evidence of lawful ownership of the land
or of any encumbrance thereon, protects a buyer or mortgagee who, in good faith, relied
upon what appears on the face of the certificate of title.
When the property was mortgaged to HSLB, the registered owner of the subject property
was Delgado who had in her name TCT No. 44848. Thus, HSLB cannot be faulted in
relying on the face of Delgados title. The records indicate that Delgado was at the time of
the mortgage in possession of the subject property and Delgados title did not contain any
annotation that would arouse HSLBs suspicion. HSLB, as a mortgagee, had a right to rely
in good faith on Delgados title, and in the absence of any sign that might arouse
suspicion, HSLB had no obligation to undertake further investigation. As held by this Court
in Cebu International Finance Corp. v.
CA:18
The prevailing jurisprudence is that a mortgagee has a right to rely in good faith on the
certificate of title of the mortgagor of the property given as security and in the absence of
any sign that might arouse suspicion, has no obligation to undertake further investigation.
Hence, even if the mortgagor is not the rightful owner of, or does not have a valid title to,
the mortgaged property, the mortgagee or transferee in good faith is nonetheless entitled
to protection.
However, the rights of the parties to the present case are defined not by the determination
of whether or not HSLB is a mortgagee in good faith, but of whether or not HSLB is a
purchaser in good faith. And, HSLB is not such a purchaser.
A purchaser in good faith is defined as one who buys a property without notice that some
other person has a right to, or interest in, the property and pays full and fair price at the
time of purchase or before he has notice of the claim or interest of other persons in the
property.19
When a prospective buyer is faced with facts and circumstances as to arouse his
suspicion, he must take precautionary steps to qualify as a purchaser in good faith. In
Spouses Mathay v. CA,20 we determined the duty of a prospective buyer:
Although it is a recognized principle that a person dealing on a registered land need not go
beyond its certificate of title, it is also a firmly settled rule that where there are
circumstances which would put a party on guard and prompt him to investigate or inspect
the property being sold to him, such as the presence of occupants/tenants thereon, it is of
course, expected from the purchaser of a valued piece of land to inquire first into the status
or nature of possession of the occupants, i.e., whether or not the occupants possess the
land en concepto de dueo, in the concept of the owner. As is the common practice in the

real estate industry, an ocular inspection of the premises involved is a safeguard a
cautious and prudent purchaser usually takes. Should he find out that the land he intends
to buy is occupied by anybody else other than the seller who, as in this case, is not in
actual possession, it would then be incumbent upon the purchaser to verify the extent of
the occupants possessory rights. The failure of a prospective buyer to take such
precautionary steps would mean negligence on his part and would thereby preclude him
from claiming or invoking the rights of a purchaser in good faith.
In the case at bar, HSLB utterly failed to take the necessary precautions.1wphi1 At the
time the subject property was mortgaged, there was yet no annotated Notice of Lis
Pendens. However, at the time HSLB purchased the subject property, the Notice of Lis
Pendens was already annotated on the title. 21
Lis pendens is a Latin term which literally means, "a pending suit or a pending litigation"
while a notice of lis pendens is an announcement to the whole world that a real property is
in litigation, serving as a warning that anyone who acquires an interest over the property
does so at his/her own risk, or that he/she gambles on the result of the litigation over the
property.22 It is a warning to prospective buyers to take precautions and investigate the
pending litigation.
The purpose of a notice of lis pendens is to protect the rights of the registrant while the
case is pending resolution or decision. With the notice of lis pendens duly recorded and
remaining uncancelled, the registrant could rest secure that he/she will not lose the
property or any part thereof during litigation.
The doctrine of lis pendens is founded upon reason of public policy and necessity, the
purpose of which is to keep the subject matter of the litigation within the Courts jurisdiction
until the judgment or the decree have been entered; otherwise, by successive alienations
pending the litigation, its judgment or decree shall be rendered abortive and impossible of
execution.23
Indeed, at the time HSLB bought the subject property, HSLB had actual knowledge of the
annotated Notice of Lis Pendens. Instead of heeding the same, HSLB continued with the
purchase knowing the legal repercussions a notice of lis pendens entails. HSLB took upon
itself the risk that the Notice of Lis Pendens leads to.1wphi1 As correctly found by the CA,
"the notice of lis pendens was annotated on 14 September 1995, whereas the foreclosure
sale, where the appellant was declared as the highest bidder, took place sometime in
1997. There is no doubt that at the time appellant purchased the subject property, it was
aware of the pending litigation concerning the same property and thus, the title issued in its
favor was subject to the outcome of said litigation."24
This ruling is in accord with Rehabilitation Finance Corp. v. Morales, 25 which underscored
the significance of a lis pendens, then defined in Sec. 24, Rule 7 now Sec. 14 of Rule 13 in
relation to a mortgage priorly annotated on the title covering the property. Thus:
The notice of lis pendens in question was annotated on the back of the certificate of title as
a necessary incident of the civil action to recover the ownership of the property affected by
it. The mortgage executed in favor of petitioner corporation was annotated on the same
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
title prior to the annotation of the notice of lis pendens; but when petitioner bought the
property as the highest bidder at the auction sale made as an aftermath of the foreclosure
of the mortgage, the title already bore the notice of lis pendens. Held: While the notice of
lis pendens cannot affect petitioners right as mortgagee, because the same was
annotated subsequent to the mortgage, yet the said notice affects its right as purchaser
because notice of lis pendens simply means that a certain property is involved in a
litigation and serves as a notice to the whole world that one who buys the same does so at
his own risk.26
The subject of the lis pendens on the title of HSLBs vendor, Delgado, is the "Reformation
case" filed against Delgado by the herein respondents. The case was decided with finality
by the CA in favor of herein respondents. The contract of sale in favor of Delgado was
ordered reformed into a contract of mortgage. By final decision of the CA, HSLBs vendor,
Delgado, is not the property owner but only a mortgagee. As it turned out, Delgado could
not have constituted a valid mortgage on the property. That the mortgagor be the absolute
owner of the thing mortgaged is an essential requisite of a contract of mortgage. Article
2085 (2) of the Civil Code specifically says so:
Art. 2085. The following requisites are essential to the contracts of pledge and mortgage:
xxxx
(2) That the pledgor or mortagagor be the absolute owner of the thing pledged or
mortgaged.
Succinctly, for a valid mortgage to exist, ownership of the property is an essential
requisite.27
Reyes v. De Leon28 cited the case of Philippine National Bank v. Rocha29 where it was
pronounced that "a mortgage of real property executed by one who is not an owner thereof
at the time of the execution of the mortgage is without legal existence." Such that,
according to DBP v. Prudential Bank,30 there being no valid mortgage, there could also be
no valid foreclosure or valid auction sale.
We go back to Bank of Commerce v. San Pablo, Jr. 31 where the doctrine of mortgagee in
good faith, upon which petitioner relies, was clarified as "based on the rule that all persons
dealing with property covered by the Torrens Certificate of Title, as buyers or mortgagees,
are not required to go beyond what appears on the face of the title. In turn, the rule is
based on "x x x public interest in upholding the indefeasibility of a certificate of title, as
evidence of lawful ownership of the land or of any encumbrance thereon." 32
Insofar as the HSLB is concerned, there is no longer any public interest in upholding the
indefeasibility of the certificate of title of its mortgagor, Delgado. Such title has been
nullified in a decision that had become final and executory. Its own title, derived from the
foreclosure of Delgado's mortgage in its favor, has likewise been nullified in the very same
decision that restored the certificate of title in respondents' name. There is absolutely no
reason that can support the prayer of HSLB to have its mortgage lien carried over and into
the restored certificate of title of respondents.
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Land Titles and Deeds (Finals) 2017

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals in CA-G.R. the property described herein in accordance with Doc. No. 336; Page No. 69; Book No. 1;
CV No. 87540 is AFFIRMED. SO ORDERED. s. of 1981 of Not. Pub. of Makati, M.M., Romarie G. Villonco, dated August 4, 1981.

Date of inscription - Aug. 5, 1981 - 2:55 p.m.

G.R. No. 168655 July 2, 2010 (Sgd) VICTORIANO S. TORRES, Actg. Reg. of Deeds

J. CASIM CONSTRUCTION SUPPLIES, INC., Petitioner, Entry No. 82-4676/T-49936 - CANCELLATION OF ADVERSE CLAIM inscribed hereon
vs. under Entry No. 81-8334/T-30459 in accordance with Doc. No. 247; Page 50; Book No.
REGISTRAR OF DEEDS OF LAS PIAS, Respondent. CXLI; s. of 1982 of Not. Pub. of Pasay City, M.M., Julian G. Tubig, dated April 21, 1982.
INTESTATE ESTATE OF BRUNEO F. CASIM, (Purported) Intervenor.
Date of inscription - April 21, 1982 - 8:40 a.m.
DECISION
(Sgd) VICTORIANO S. TORRES, Actg. Reg. of Deeds
PERALTA, J.:
Entry No. 82-4678/T-49936 - AFFIDAVIT - In accordance with the affidavit duly executed
This is a petition for review under Rule 45 of the Rules of Court, taken directly on a pure by the herein registered owners, this title is hereby cancelled and in lieu thereof TCT No.
question of law from the April 14, 2005 Resolution 1 and June 24, 2005 Order2 issued by 49936/T-228 has been issued in accordance with Doc. No. 249; Page No. 80; Book No.
the Regional Trial Court (RTC) of Las Pias City, Branch 253 in Civil Case No. LP-04- CXLI; s. of 1982 of Not. Pub. of Pasay City, M.M., Julian G. Tubig, dated April 21, 1982.
00713 one for cancellation of notice of lis pendens. The assailed Resolution dismissed
for lack of jurisdiction the petition filed by J. Casim Construction Supplies Inc. for
Date of inscription - April 21, 1982 - 8:44 a.m.
cancellation of notice of lis pendens annotated on its certificate of title, whereas the
assailed Order denied reconsideration.
(Sgd) VICTORIANO S. TORRES, Actg. Reg. of Deeds
The facts follow.
Entry No. 81-12423/T-30459 - NOTICE OF LIS PENDENS: By virtue of the notice of Lis
Pendens presented and filed by CESAR P. MANALAYSAY, counsel for the plaintiff, notice
Petitioner, represented herein by Rogelio C. Casim, is a duly organized domestic
is hereby given that a petition for review has been commenced and now pending in the
corporation4 in whose name Transfer Certificate of Title (TCT) No. 49936,5 covering a Court of First Instance of Rizal, Branch XXIX, Pasay, M.M, in Civil Case No. LP-9438-P,
10,715-square meter land was registered. Sometime in 1982, petitioner acquired the
BRUNEO F. CASIM, Plaintiff, vs. SPS. JESUS A. CASIM & MARGARITA CHAVEZ and
covered property by virtue of a Deed of Absolute Sale6 and as a result the mother title, Sps. Urbano Nobleza and Cristita J. Nobleza, and Filomena C. Antonio, Defendants,
TCT No. 30459 was cancelled and TCT No. 49936 was issued in its stead. 7 involving the property described herein.

On March 22, 2004, petitioner filed with the RTC of Las Pias City, Branch 253 an original
Date of the instrument - Sept. 17, 1981
petition for the cancellation of the notice of lis pendens, as well as of all the other entries of
involuntary encumbrances annotated on the original copy of TCT No. 49936. Invoking the
inherent power of the trial court to grant relief according to the petition, petitioner prayed Date of the inscription - Sept. 18, 1981 - 3:55 p.m.
that the notice of lis pendens as well as all the other annotations on the said title be
cancelled. Petitioner claimed that its owner's duplicate copy of the TCT was clean at the (Sgd) VICTORIANO S. TORRES, Actg. Reg. of Deeds9
time of its delivery and that it was surprised to learn later on that the original copy of its
TCT, on file with the Register of Deeds, contained several entries which all signified that
the covered property had been subjected to various claims. The subject notice of lis To justify the cancellation, petitioner alleged that the notice of lis pendens, in particular,
pendens is one of such entries.8 The notations appearing on the title's memorandum of was a forgery judging from the inconsistencies in the inscriber's signature as well as from
encumbrances are as follows: the fact that the notice was entered non-chronologically, that is, the date thereof is much
earlier than that of the preceding entry. In this regard, it noted the lack of any transaction
record on file with the Register of Deeds that would support the notice of lis pendens
Entry No. 81-8334/T-30459 - ADVERSE CLAIM - In an affidavit duly subscribed and sworn annotation.10
to, BRUNO F. CASIM claims, among other things, that he has the right and interest over

Petitioner also stated that while Section 59 of Presidential Decree (P.D.) No. 1529 requires
the carry-over of subsisting encumbrances in the new issuances of TCTs, petitioner's
duplicate copy of the title did not contain any such carry-over, which means that it was an
innocent purchaser for value, especially since it was never a party to the civil case referred
to in the notice of lis pendens. Lastly, it alludes to the indefeasibility of its title despite the
fact that the mother title, TCT No. 30459, might have suffered from certain defects and
constraints.11
The Intestate Estate of Bruneo F. Casim, representing Bruneo F. Casim, intervened in the
instant case and filed a Comment/Opposition12 in which it maintained that the RTC of Las
Pias did not have jurisdiction over the present action, because the matter of canceling a
notice of lis pendens lies within the jurisdiction of the court before which the main action
referred to in the notice is pending. In this regard, it emphasized that the case referred to in
the said notice had already attained finality as the Supreme Court had issued an entry of
judgment therein and that the RTC of Makati City had ordered execution in that case. 13 It
cited the lack of legal basis for the petition in that nothing in the allegations hints at any of
the legal grounds for the cancellation of notice of lis pendens. 14 And, as opposed to
petitioner's claim that there was no carry-over of encumbrances made in TCT No. 49936
from the mother title TCT No. 30459, the latter would show that it also had the same
inscriptions as those found in TCT No. 49936 only that they were entered in the original
copy on file with the Register of Deeds. Also, as per Certification 15 issued by the Register
of Deeds, petitioner's claim of lack of transaction record could not stand, because the said
certification stated merely that the corresponding transaction record could no longer be
retrieved and might, therefore, be considered as either lost or destroyed.
On April 14, 2005, the trial court, ruling that it did not have jurisdiction over the action,
resolved to dismiss the petition and declared that the action must have been filed before
the same court and in the same action in relation to which the annotation of the notice of lis
pendens had been sought. Anent the allegation that the entries in the TCT were forged,
the trial court pointed out that not only did petitioner resort to the wrong forum to determine
the existence of forgery, but also that forgery could not be presumed merely from the
alleged non-chronological entries in the TCT but instead must be positively proved. In this
connection, the trial court noted petitioner's failure to name exactly who had committed the
forgery, as well as the lack of evidence on which the allegation could be based.16 The
petition was disposed of as follows:
IN VIEW OF THE FOREGOING, the instant petition is hereby DISMISSED.
SO ORDERED.17
Petitioner moved for reconsideration,18 but it was denied in the trial court's June 24, 2005
Order.19
Now, raising the purely legal question of whether the RTC of Las Pias City, Branch 253
has jurisdiction in an original action to cancel the notice of lis pendens annotated on the
subject title as an incident in a previous case, petitioner, in this present petition, ascribes
error to the trial court in dismissing its petition for cancellation. An action for cancellation of
notice of lis pendens, petitioner believes, is not always ancillary to an existing main action
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Land Titles and Deeds (Finals) 2017
because a trial court has the inherent power to cause such cancellation, especially in this
case that petitioner was never a party to the litigation to which the notice of lis pendens
relates.20 Petitioner further posits that the trial court has committed an error in declining to
rule on the allegation of forgery, especially since there is no transaction record on file with
the Register of Deeds relative to said entries. It likewise points out that granting the notice
of lis pendens has been properly annotated on the title, the fact that its owner's duplicate
title is clean suggests that it was never a party to the civil case referred to in the
notice.21 Finally, petitioner posits that TCT No. 49936 is indefeasible and holds it free from
any liens and encumbrances which its mother title, TCT No. 30459, might have suffered. 22
The Intestate Estate of Bruneo F. Casim (intervenor), in its Comment on the present
petition, reiterates that the court a quo does not have jurisdiction to order the cancellation
of the subject notice of lis pendens because it is only the court exercising jurisdiction over
the property which may order the same that is, the court having jurisdiction over the
main action in relation to which the registration of the notice has been sought. Also, it
notes that even on the assumption that the trial court had such jurisdiction, the petition for
cancellation still has no legal basis as petitioner failed to establish the grounds therefor.
Also, the subject notice of lis pendens was validly carried over to TCT No. 49936 from the
mother title, TCT No. 30459.
In its Reply,23 petitioner, in a semantic slur, dealt primarily with the supposed
inconsistencies in intervenor's arguments. Yet the core of its contention is that the non-
chronological annotation of the notice stands to be the best evidence of forgery. From this,
it advances the notion that forgery of the notice of lis pendens suffices as a ground for the
cancellation thereof which may be availed of in an independent action by the aggrieved
party.
The petition is utterly unmeritorious.
Lis pendens which literally means pending suit refers to the jurisdiction, power or
control which a court acquires over the property involved in a suit, pending the continuance
of the action, and until final judgment.24Founded upon public policy and necessity, lis
pendens is intended to keep the properties in litigation within the power of the court until
the litigation is terminated, and to prevent the defeat of the judgment or decree by
subsequent alienation.25 Its notice is an announcement to the whole world that a particular
property is in litigation and serves as a warning that one who acquires an interest over said
property does so at his own risk, or that he gambles on the result of the litigation over said
property.26
A notice of lis pendens, once duly registered, may be cancelled by the trial court before
which the action involving the property is pending. This power is said to be inherent in the
trial court and is exercised only under express provisions of law. 27 Accordingly, Section 14,
Rule 13 of the 1997 Rules of Civil Procedure authorizes the trial court to cancel a notice of
lis pendens where it is properly shown that the purpose of its annotation is for molesting
the adverse party, or that it is not necessary to protect the rights of the party who caused it
to be annotated. Be that as it may, the power to cancel a notice of lis pendens is exercised
only under exceptional circumstances, such as: where such circumstances are imputable
to the party who caused the annotation; where the litigation was unduly prolonged to the
prejudice of the other party because of several continuances procured by petitioner; where

the case which is the basis for the lis pendens notation was dismissed for non
prosequitur on the part of the plaintiff; or where judgment was rendered against the party
who caused such a notation. In such instances, said notice is deemed ipso
facto cancelled.28
In theorizing that the RTC of Las Pias City, Branch 253 has the inherent power to cancel
the notice of lis pendens that was incidentally registered in relation to Civil Case No. 2137,
a case which had been decided by the RTC of Makati City, Branch 62 and affirmed by the
Supreme Court on appeal, petitioner advocates that the cancellation of such a notice is not
always ancillary to a main action.
The argument fails.
From the available records, it appears that the subject notice of lis pendens had been
recorded at the instance of Bruneo F. Casim (Bruneo) in relation to Civil Case No.
213729 one for annulment of sale and recovery of real property which he filed before
the RTC of Makati City, Branch 62 against the spouses Jesus and Margarita Casim,
predecessors-in-interest and stockholders of petitioner corporation. That case involved the
property subject of the present case, then covered by TCT No. 30459. At the close of the
trial on the merits therein, the RTC of Makati rendered a decision adverse to Bruneo and
dismissed the complaint for lack of merit. 30 Aggrieved, Bruneo lodged an appeal with the
Court of Appeals, docketed as CA-G.R. CV No. 54204, which reversed and set aside the
trial court's decision.31 Expectedly, the spouses Jesus and Margarita Casim elevated the
case to the Supreme Court, docketed as G.R. No. 151957, but their appeal was dismissed
for being filed out of time.32
A necessary incident of registering a notice of lis pendens is that the property covered
thereby is effectively placed, until the litigation attains finality, under the power and control
of the court having jurisdiction over the case to which the notice relates. 33 In this sense,
parties dealing with the given property are charged with the knowledge of the existence of
the action and are deemed to take the property subject to the outcome of the litigation. 34 It
is also in this sense that the power possessed by a trial court to cancel the notice of lis
pendens is said to be inherent as the same is merely ancillary to the main
action.351avvphi1
Thus, in Vda. de Kilayko v. Judge Tengco, 36 Heirs of Maria Marasigan v. Intermediate
Appellate Court37 and Tanchoco v. Aquino,38 it was held that the precautionary notice of lis
pendens may be ordered cancelled at any time by the court having jurisdiction over the
main action inasmuch as the same is merely an incident to the said action. The
pronouncement in Heirs of Eugenio Lopez, Sr. v. Enriquez, citing Magdalena Homeowners
Association, Inc. v. Court of Appeals,39 is equally instructive
The notice of lis pendens x x x is ordinarily recorded without the intervention of the court
where the action is pending. The notice is but an incident in an action, an extrajudicial one,
to be sure. It does not affect the merits thereof. It is intended merely to constructively
advise, or warn, all people who deal with the property that they so deal with it at their own
risk, and whatever rights they may acquire in the property in any voluntary transaction are
subject to the results of the action, and may well be inferior and subordinate to those which
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
may be finally determined and laid down therein. The cancellation of such a precautionary
notice is therefore also a mere incident in the action, and may be ordered by the Court
having jurisdiction of it at any given time. x x x40
Clearly, the action for cancellation of the notice of lis pendens in this case must have been
filed not before the court a quo via an original action but rather, before the RTC of Makati
City, Branch 62 as an incident of the annulment case in relation to which its registration
was sought. Thus, it is the latter court that has jurisdiction over the main case referred to in
the notice and it is that same court which exercises power and control over the real
property subject of the notice.
But even so, the petition could no longer be expected to pursue before the proper forum
inasmuch as the decision rendered in the annulment case has already attained finality
before both the Court of Appeals and the Supreme Court on the appellate level, unless of
course there exists substantial and genuine claims against the parties relative to the main
case subject of the notice of lis pendens. 41 There is none in this case. It is thus well to note
that the precautionary notice that has been registered relative to the annulment case then
pending before the RTC of Makati City, Branch 62 has served its purpose. With the finality
of the decision therein on appeal, the notice has already been rendered functus officio.
The rights of the parties, as well as of their successors-in-interest, petitioner included, in
relation to the subject property, are hence to be decided according the said final decision.
To be sure, petitioner is not altogether precluded from pursuing a specific remedy, only
that the suitable course of action legally available is not judicial but rather administrative.
Section 77 of P.D. No. 1529 provides the appropriate measure to have a notice of lis
pendens cancelled out from the title, that is by presenting to the Register of Deeds, after
finality of the judgment rendered in the main action, a certificate executed by the clerk of
court before which the main action was pending to the effect that the case has already
been finally decided by the court, stating the manner of the disposal thereof. Section 77
materially states:
SEC. 77. Cancellation of lis pendens. - Before final judgment, a notice of lis pendens may
be cancelled upon order of the court, after proper showing that the notice is for the
purpose of molesting the adverse party, or that it is not necessary to protect the rights of
the party who caused it to be registered. It may also be cancelled by the Register of Deeds
upon verified petition of the party who caused the registration thereof.
At any time after final judgment in favor of the defendant, or other disposition of the action
such as to terminate finally all rights of the plaintiff in and to the land and/or buildings
involved, in any case in which a memorandum or notice of lis pendens has been registered
as provided in the preceding section, the notice of lis pendens shall be deemed cancelled
upon the registration of a certificate of the clerk of court in which the action or proceeding
was pending stating the manner of disposal thereof. 42
Lastly, petitioner tends to make an issue out of the fact that while the original TCT on file
with the Register of Deeds does contain the annotations and notice referred to in this
petition, its owner's duplicate copy of the title nevertheless does not reflect the same non-
chronological inscriptions. From this, petitioner submits its puerile argument that the said
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Land Titles and Deeds (Finals) 2017

annotations appearing on the original copy of the TCT are all a forgery, and goes on to ARLYN* PINEDA, G.R. No. 170172
assert the indefeasibility of its Torrens title as well as its supposed status as an innocent Petitioner,
purchaser for value in good faith. Yet we decline to rule on these assumptions principally Present:
because they raise matters that call for factual determination which certainly are beyond
the competence of the Court to dispose of in this petition. YNARES-SANTIAGO, J.,
Chairperson,
All told, we find that the RTC of Las Pias City, Branch 253 has committed no reversible - versus - AUSTRIA-MARTINEZ,
error in issuing the assailed Resolution and Order dismissing for lack of jurisdiction the CHICO-NAZARIO,
petition for cancellation of notice of lis pendens filed by petitioner, and in denying NACHURA, and
reconsideration. REYES, JJ.

JULIE C. ARCALAS,
WHEREFORE, the petition is DENIED. The April 14, 2005 Resolution and the June 24, Respondent. Promulgated:
2005 Order issued by the Regional Trial Court of Las Pias City, Branch 253, in Civil Case
No. LP-04-0071, are hereby AFFIRMED. November 23, 2007
x-------------------------------------------------x
SO ORDERED.
DECISION

CHICO-NAZARIO, J.:

This is a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, assailing

the Resolution[1] dated 25 January 2005, rendered by the Court of Appeals in C.A. G.R. CV

No. 82872, dismissing the appeal filed by petitioner Arlyn Pineda (Pineda) for failure to file

her appellants brief. Under the assailed Resolution, the Order [2] promulgated by Branch 27

of the Regional Trial Court of Santa Cruz, Laguna (Laguna RTC), on 2 February 2004,

granting the petition of respondent Julie Arcalas (Arcalas) for the cancellation of the

Affidavit of Adverse Claim annotated at the back of Transfer Certificate of Title (TCT) No.

T-52319 under Entry No. 324094, became final.

The subject property consists of three parcels of land, which are described as Lot

No. 3762-D with an area of 42,958 square meters, Lot No. 3762-E with an area of 4,436

square meters, and Lot No. 3762-F with an area of 2,606 square meters, the total area of

which consists of 50,000 square meters. These three lots are portions of Lot No. 3762,

registered in the name of Spouses Mauro Lateo and Encarnacion Evangelista


(spouses Lateo) under TCT No. T-52319, with a total area of 74,708 square meters,
located at Barrios Duhat and Labuin, Santa Cruz, Laguna. A certain
Victoria Tolentino bought the said property from the Spouses Lateo. Sometime later, Civil
Case No. Q-96-27884, for Sum of Money, was instituted by Arcalas against
Victoria Tolentino. This case stemmed from an indebtedness evidenced by a promissory
note and four post-dated checks later dishonored, which Victoria Tolentino owed Arcalas.[3]
On 9 September 1997, Branch 93 of the Quezon City RTC, rendered judgment in
favor of Arcalas and against Victoria Tolentino.[4]
On 15 December 1997, Pineda bought the subject property from Victoria
L. Tolentino.[5] Pineda alleged that upon payment of the purchase price, she took
possession of the subject property by allowing a tenant, Rodrigo Bautista to cultivate the
same. However, Pineda failed to register the subject property under her name. [6]
To execute the judgment, the Quezon City RTC levied upon the subject property
and the Notice of Levy on Alias Writ of Execution dated 12 January 1999 was annotated
as Entry No. 315074, in relation to Entry No. 319362, at the back of TCT No. T-52319.[7]
Asserting ownership of the subject property, Pineda filed with the Deputy Sheriff of
the Quezon City RTC an Affidavit of Title and Third Party Claim. Arcalas filed a motion to
set aside Pinedas Affidavit of Title and Third Party Claim, which on 3 November 1999,
the Quezon City RTC granted, to wit:
[Arcalas] showed that her levies on the properties were duly
registered while the alleged Deed of Absolute Sale between the
defendant Victoria L. Tolentino and Analyn G. Pineda was not. The
levies being superior to the sale claimed by Ms. Pineda, the court rules
to quash and set aside her Affidavit of Title and Third Party Claim.
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Land Titles and Deeds (Finals) 2017
ACCORDINGLY, the motion is granted. The Affidavit of Title and Third-
Party Claim is set aside to allow completion of execution proceedings. [8]
On 2 February 2000, after the finality[9] of the Order of the Quezon City RTC
quashing Pinedas third-party claim, Pineda filed with the Office of the Register of Deeds of
Laguna another Affidavit of Third Party Claim and caused the inscription of a notice of
adverse claim at the back of TCT No. T-52319 under Entry No. 324094. [10]
On 3 February 2000, Arcalas and Leonardo Byron P. Perez, Jr. purchased Lot
No. 3762 at an auction sale conducted by the Deputy Sheriff of Quezon City. The sale was
evidenced by a Sheriffs Certificate of Sale issued on the same day and registered as Entry
No. 324225 at the back of TCT No. T-52319.[11]
Arcalas then filed an action for the cancellation of the entry of Pinedas adverse
claim before the Laguna RTC. The Laguna RTC ordered the cancellation of the Notice of
Adverse Claim annotated as Entry No. 324094 at the back of TCT No. 52319 on the
ground of res judicata:
The court order emanating from Branch 91 of the Regional Trial Court
of Quezon City having become final and executory and no
relief therefrom having been filed by [Pineda], the said order granting
the [Arcalass] Motion to Set Aside Affidavit of Title and 3 rd Party Claim
should be given due course and the corresponding annotation at the
back of TCT No. T-52319 as Entry No. 324094 dated February 2,
2000 should be expunged accordingly.[12]
Pineda appealed the Order of the Laguna RTC before the Court of Appeals
under Rule 44 of the Rules of Court. In a Resolution dated 25 January 2005,[13] the
appellate court dismissed the appeal and considered it abandoned when Pineda failed to
file her appellants brief.

Pineda filed a Motion for Reconsideration, wherein it was plainly stated that Pinedas
counsel overlooked the period within which he should file the appellants brief. [14] The said
motion was denied in a Resolution dated 26 May 2005.Pineda filed a Second Motion for
Reconsideration, which was denied on 7 October 2005.[15] No appellants brief was
attached to either motion for reconsideration.
Hence, the present Petition raising the following issues: [16]
I.
WHETHER THE LEVY ON ALIAS WRIT OF EXECUTION ISSUED BY
THE REGIONAL TRIAL COURT OF QUEZON CITY IN CIVIL CASE
NO. Q-96-27884 MAY EXEMPT THE PORTION BOUGHT BY
[PINEDA] FROM VICTORIA TOLENTINO; [and]
II.
WHETHER THE POSSESSION OF [PINEDA] OF THE 5 HECTARES
PORTION OF LOT 3762 IS ALREADY EQUIVALENT TO A TITLE
DESPITE THE ABSENCE OF REGISTRATION.
This petition must be dismissed.
The Court of Appeals properly dismissed the case for Pinedas failure to file an appellants
brief. This is in accordance with Section 7 of Rule 44 of the Rules of Court, which imposes
upon the appellant the duty to file an appellants brief in ordinary appealed cases before the
Court of Appeals, thus:
Section 7. Appellants brief.It shall be the duty of the appellant to file
with the court, within forty-five (45) days from receipt of the notice of the
clerk that all the evidence, oral and documentary, are attached to the
record, seven (7) copies of his legibly typewritten, mimeographed or
printed brief, with proof of service of two (2) copies thereof upon
the appellee.
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Land Titles and Deeds (Finals) 2017
In special cases appealed to the Court of Appeals, such as certiorari,
prohibition, mandamus, quo warranto and habeas corpus cases, a memorandum of
appeal must be filed in place of an appellants brief as provided in Section 10 of Rule
44 of the Rules of Court
Section 10. Time of filing memoranda in special cases.In certiorari,
prohibition, mandamus, quo warranto and habeas corpus cases, the
parties shall file, in lieu of briefs, their respective memoranda within a
non-extendible period of thirty (30) days from receipt of the notice
issued by the clerk that all the evidence, oral and documentary, is
already attached to the record.
The failure of the appellant to file his memorandum within the
period therefor may be a ground for dismissal of the appeal.
Non-filing of an appellants brief or a memorandum of appeal is one of the explicitly
recognized grounds of dismissal of the appeal in Section 1 of Rule 50 of the Rules of
Court:
Section 1. Grounds for dismissal of appeal. - An appeal may be
dismissed by the Court of Appeals, on its own motion or on that of
the appellee, on the following grounds:
xxxx
(e) Failure of the appellant to serve and file the required number of
copies of his brief or memorandum within the time provided by these
Rules;
This Court provided the rationale for requiring an appellants brief in Enriquez v. Court of
Appeals[17]:
[T]he appellants brief is mandatory for the assignment of errors is vital
to the decision of the appeal on the merits. This is because on appeal
only errors specifically assigned and properly argued in the brief or
memorandum will be considered, except those affecting jurisdiction
over the subject matter as well as plain and clerical errors. Otherwise
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stated, an appellate court has no power to resolve an unassigned error,

which does not affect the courts jurisdiction over the subject matter, cause needless delay in the administration of justice. [22] The Court eyes with disfavor the
save for a plain or clerical error.
unjustified delay in the termination of cases; once a judgment has become final, the

winning party must not be deprived of the fruits of the verdict, through a mere
Thus, in Casim v. Flordeliza,[18] this Court affirmed the dismissal of an appeal, even when
subterfuge. The time spent by the judiciary, more so of this Court, in taking cognizance
the filing of an appellants brief was merely attended by delay and fell short of some of the
and resolving cases is not limitless and cannot be wasted on cases devoid of any right
requirements of the Rules of Court. The Court, in Gonzales v. Gonzales,[19] reiterated that
calling for vindication and are merely reprehensible efforts to evade the operation of a
it is obligatory on the part of the appellant to submit or file a memorandum of appeal, and
decision that is final and executory.[23]
that failing such duty, the Rules of Court unmistakably command the dismissal of the

appeal.
In the present case, there is a clear intent on the part of Pineda to delay the

termination of the case, thereby depriving Arcalas of the fruits of a just

In this case, Pineda did not even provide a proper justification for her failure to
verdict. The Quezon City RTC already quashed Pinedas third party claim over the subject
file her appellants brief. It was merely alleged in her Motion for Reconsideration that her
property, yet she filed another adverse claim before the Office of the Register of Deeds of
counsel overlooked the period within which to file the appellants brief. Although Pineda
Laguna based on the same allegations and arguments previously settled by
filed no less than two motions for reconsideration, Pineda had not, at any time, made any
the Quezon City RTC. Arcalas, thus, had to file another case to cause the cancellation of
attempt to file her appellants brief. Nor did she supply any convincing argument to
Pinedas notice of adverse claim on TCT No. T-52319 before the Laguna RTC. After the
establish her right to the subject property for which she seeks vindication.
Laguna RTC gave due course to Arcalass petition, Pineda filed a dilatory appeal before

the Court of Appeals, where she merely let the period for the filing of the appellants brief
Thus, this Court cannot reverse or fault the appellate court for duly acting in
lapse without exerting any effort to file one. The two motions for reconsideration and even
faithful compliance with the rules of procedure and established jurisprudence that it has
the petition before this Court fail to present new issues. They raised the very same issues
been mandated to observe, nor turn a blind eye and tolerate the transgressions of these
which had been consistently resolved by both the Quezon City RTC and the Laguna RTC
rules and doctrines.[20] An appealing party must strictly comply with the requisites laid down
in favor of Arcalas, upholding the superiority of her lien over that of Pinedas unregistered
in the Rules of Court since the right to appeal is a purely statutory right. [21]
sale. Considering all these circumstances, there is no basis for the lenient application of

procedural rules in this case; otherwise, it would result in a manifest injustice and the
Even when this Court recognized the importance of deciding cases on the merits
abuse of court processes.
to better serve the ends of justice, it has stressed that the liberality in the application of

rules of procedure may not be invoked if it will result in the wanton disregard of the rules or
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Land Titles and Deeds (Finals) 2017

it relates lies, be constructive notice to all persons from the time of

As a rule, the negligence or mistake of counsel binds the client. [24] The only such registering, filing or entering. (Emphasis provided.)

exception to this rule is when the counsels negligence is so gross that a party is deprived

of due process and, thus, loses life, honor or property on mere technicalities. [25] The
It is clear from these provisions that before a purchaser of land causes the
exception cannot apply to the present case, where Pineda is merely repeating arguments
registration of the transfer of the subject property in her favor, third persons, such
that were already heard and decided upon by courts of proper jurisdiction, and the
as Arcalas, cannot be bound thereby. Insofar as third persons are concerned, what validly
absolute lack of merit of the petition is at once obvious.
transfers or conveys a persons interest in real property is the registration of the deed. As

the deed of sale was unrecorded, it operates merely as a contract between the parties,
Pineda avers that she is not a party to Civil Case No. Q-96-27884, heard before
namely Victoria Tolentino as seller and Pineda as buyer, which may be enforceable
the Quezon City RTC, and that the levy on the alias writ of execution issued in Civil Case
against Victoria Tolentino through a separate and independent action. On the other
No. Q-96-27884 cannot affect her purchase of subject property. Such position runs
hand, Arcalass lien was registered and annotated at the back of the title of the subject
contrary to law and jurisprudence.
property and accordingly amounted to a constructive notice thereof to all persons, whether

or not party to the original case filed before the Quezon City RTC.
Sections 51 and 52 of Presidential Decree No. 1529, otherwise known as the

Property Registration Decree, provide that:

The doctrine is well settled that a levy on execution duly registered takes

Section 51. Conveyance and other dealings by registered preference over a prior unregistered sale.[26] A registered lien is entitled to preferential
owner.An owner of registered land may convey, mortgage, lease,
charge or otherwise deal with the same in accordance with existing consideration.[27] In Valdevieso v. Damalerio,[28] the Court held that a registered writ of
laws. He may use such forms of deeds, mortgages, leases or other
voluntary instruments as are sufficient in law. But no deed, mortgage, attachment was a superior lien over that on an unregistered deed of sale and explained
lease, or other voluntary instrument, except a will purporting to
the reason therefor:
convey or affect registered land shall take effect as a conveyance
or bind the land, but shall operate only as a contract between the
parties and as evidence of authority to the Register of Deeds to
This is so because an attachment is a proceeding in rem. It is against
make registration.
the particular property, enforceable against the whole world. The
attaching creditor acquires a specific lien on the attached property
The act of registration shall be the operative act to convey or
which nothing can subsequently destroy except the very dissolution of
affect the land insofar as third persons are concerned, and in all
the attachment or levy itself. Such a proceeding, in effect, means that
cases under this Decree, the registration shall be made in the office of
the property attached is an indebted thing and a virtual condemnation
the Register of Deeds for the province or the city where the land lies.
of it to pay the owners debt. The lien continues until the debt is paid, or
(Emphasis provided.)
sale is had under execution issued on the judgment, or until the
judgment is satisfied, or the attachment discharged or vacated in some
Section 52. Constructive notice upon registration.Every conveyance,
manner provided by law.
mortgage, lease, lien, attachment, order, judgment, instrument or entry
affecting registered land shall, if registered, filed or entered in the office
Thus, in the registry, the attachment in favor of respondent
of the Register of Deeds for the province or city where the land to which
appeared in the nature of a real lien when petitioner had his purchase
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recorded. The effect of the notation of said lien was to subject and
subordinate the right of petitioner, as purchaser, to the lien. Petitioner Laguna, directing the Register of Deeds of Laguna to cancel the Notice of Adverse Claim
acquired ownership of the land only from the date of the recording of
his title in the register, and the right of ownership which he inscribed inscribed at the back of TCT No. T-52319 as Entry No. 324094 is SUSTAINED. No costs.
was not absolute but a limited right, subject to a prior registered lien of
respondent, a right which is preferred and superior to that of petitioner.
SO ORDERED.

Pineda also contends that her possession of the subject property cures the

defect caused by her failure to register the subject property in her name. This contention is

inaccurate as well as inapplicable.

True, that notwithstanding the preference given to a registered lien, this Court

has made an exception in a case where a party has actual knowledge of the claimants

actual, open, and notorious possession of the disputed propertyat the time the levy or

attachment was registered. In such situations, the actual notice and knowledge of a prior

unregistered interest, not the mere possession of the disputed property, was held to be

equivalent to registration.[29]

Lamentably, in this case, Pineda did not even allege, much less prove,

that Arcalas had actual knowledge of her claim of ownership and possession of the

property at the time the levy was registered. The records fail to show that Arcalas knew of

Pinedas claim of ownership and possession prior to Pinedas filing of her third party claim

before the Quezon City RTC. Hence, the mere possession of the subject property by

Pineda, absent any proof that Arcalas had knowledge of her possession and adverse claim

of ownership of the subject property, cannot be considered as equivalent to registration.

IN VIEW OF THE FOREGOING, the instant Petition is DISMISSED and the assailed

Decision of the Court of Appeals in C.A. G.R. CV No. 82872, promulgated on 25 January

2005, is AFFIRMED. The Order of Branch 27 of the Regional Trial Court of Sta. Cruz,

[G.R. No. 133303. February 17, 2005]
BERNARDO VALDEVIESO, petitioner, vs. CANDELARIO DAMALERIO AND AUREA
C. DAMALERIO, respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review under Rule 45 of the Rules of Court,
seeking to set aside the 25 September 1997 Decision and the 10 February 1998
Resolution of the Court of Appeals in CA-G.R. SP No. 43082 entitled, Candelario
Damalerio and Aurea Damalerio v. Honorable Antonio S. Alano, et al.[1]
There is no dispute as to the following facts:
On 05 December 1995, Bernardo Valdevieso (petitioner) bought from spouses
Lorenzo and Elenita Uy a parcel of land consisting of 10,000 square meters, more or less,
located at Bo. Tambler, General Santos City, and covered by Transfer Certificate of Title
(TCT) No. T-30586.[2]
The deed of sale was not registered, nor was the title of the land transferred to
petitioner.[3]
On 07 December 1995, the said property was immediately declared by petitioner for
taxation purposes as Tax Declaration No. l6205 with the City Assessors Office. [4]
It came to pass that on 19 April 1996, spouses Candelario and Aurea Damalerio
(respondents) filed with the Regional Trial Court (RTC) of General Santos City, a complaint
for a sum of money against spouses Lorenzo and Elenita Uy docketed as Civil Case No.
5748 with application for the issuance of a Writ of Preliminary Attachment.[5]
On 23 April 1996, the trial court issued a Writ of Preliminary Attachment by virtue of
which the property, then still in the name of Lorenzo Uy but which had already been sold to
petitioner, was levied. The levy was duly recorded in the Register of Deeds of General
Santos City and annotated upon TCT No. T-30586.[6]
On 06 June 1996, TCT No. T-30586 in the name of Lorenzo Uy was cancelled and,
in lieu thereof, TCT No. T-74439 was issued in the name of petitioner. [7] This new TCT
carried with it the attachment in favor of respondents.
On 14 August 1996, petitioner filed a third-party claim in Civil Case No. 5748 to
discharge or annul the attachment levied on the property covered by TCT No. T-74439 on
the ground that the said property belongs to him and no longer to Lorenzo and Elenita
Uy.[8]
In a resolution dated 21 October 1996, the trial court ruled for the
petitioner.[9] Citing Manliguez v. Court of Appeals[10] and Santos v. Bayhon,[11] it held that
the levy of the property by virtue of attachment is lawful only when the levied property
indubitably belongs to the defendant. Applying the rulings in the cited cases, it opined that
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Land Titles and Deeds (Finals) 2017
although defendant Lorenzo Uy remained the registered owner of the property attached,
yet the fact was that he was no longer the owner thereof as it was already sold earlier to
petitioner, hence, the writ of attachment was unlawful.
Respondents sought reconsideration thereof which was denied by the trial court in a
resolution dated 03 January 1997.[12]
From the unfavorable resolution of the trial court in the third-party claim, respondents
appealed to the Court of Appeals. The appellate court reversed the resolution and by
judgment promulgated on 25 September 1997, it declared that an attachment or levy of
execution, though posterior to the sale, but if registered before the sale is registered, takes
precedence over the sale.[13] The writ of attachment in favor of the respondents, being
recorded ahead of the sale to petitioner, will therefore take precedence.
Petitioner moved for reconsideration but this was denied by the Court of Appeals in
its Resolution of 10 February 1998.[14]
Hence, this Petition for Review on Certiorari.
The sole issue in this case is whether or not a registered writ of attachment on the
land is a superior lien over that of an earlier unregistered deed of sale.
Petitioner maintains that he has a superior right over the questioned property
because when the same was attached on 23 April 1996, this property was no longer
owned by spouses Uy against whom attachment was issued as it was already sold to
petitioner on 05 December 1995. The ownership thereof was already transferred to
petitioner pursuant to Article 1477[15] in relation to Article 1498[16] of the Civil Code.
Dismissing the allegation that he slept on his rights by not immediately registering at
least an adverse claim based on his deed of sale, petitioner avers that he promptly worked
out for the transfer of registration in his name. The slight delay in the registration, he claims
was not due to his fault but attributable to the process involved in the registration of
property such as the issuance of the Department of Agrarian Reform clearance which was
effected only after compliance with several requirements.
Considering the peculiar facts and circumstances obtaining in this case, petitioner
submits it would be in accord with justice and equity to declare him as having a superior
right to the disputed property than the respondents.
Respondents maintain the contrary view. They aver that registration of a deed of sale
is the operative act which binds the land and creates a lien thereon. Before the registration
of the deed, the property is not bound insofar as third persons are concerned. Since the
writ of attachment in favor of respondents was registered earlier than the deed of sale to
petitioner, respondents were of the belief that their registered writ of attachment on the
subject property enjoys preference and priority over petitioners earlier unregistered deed of
sale over the same property. They also contend that Articles 1477 and 1498 of the Civil
Code as cited by petitioner are not applicable to the case because said provisions apply
only as between the parties to the deed of sale. These provisions do not apply to, nor bind,
third parties, like respondents, because what affects or binds third parties is the
registration of the instrument in the Register of Deeds. Furthermore, respondents argue
that petitioner cannot invoke equity in his favor unless the following conditions are met: (a)
the absence of specific provision of a law on the matter; and (b) if the person who invokes
it is not guilty of delay. Both conditions have not been met, however, since there is a law
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on the subject matter, i.e., Section 51 of Presidential Decree No. 1529, and that petitioner
allegedly slept on his rights by not immediately registering an adverse claim based on his
deed of sale.
We agree with the respondents.
The law applicable to the facts of this case is Section 51 of P.D. No. 1529. Said
Section provides:
Sec. 51. Conveyance and other dealings by registered owner. - An owner of registered
land may convey, mortgage, lease, charge, or otherwise deal with the same in accordance
with existing laws. He may use such forms of deeds, mortgages, leases or other voluntary
instruments as are sufficient in law. But no deed, mortgage, lease, or other voluntary
instrument, except a will purporting to convey or affect registered land, shall take effect as
a conveyance or bind the land, but shall operate only as a contract between the parties
and as evidence of authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land insofar as third
persons are concerned, and in all cases under this Decree, the registration shall be made
in the office of the Register of Deeds for the province or city where the land lies.
judgment is satisfied, or the attachment discharged or vacated in some manner provided
by law.
Thus, in the registry, the attachment in favor of respondents appeared in the nature
of a real lien when petitioner had his purchase recorded. The effect of the notation of said
lien was to subject and subordinate the right of petitioner, as purchaser, to the lien.
Petitioner acquired ownership of the land only from the date of the recording of his title in
the register, and the right of ownership which he inscribed was not absolute but a limited
right, subject to a prior registered lien of respondents, a right which is preferred and
superior to that of petitioner.[22]
Anent petitioners reliance on the rulings laid down in Manliguez v. Court of
Appeals and Santos v. Bayhon, we find the same to be misplaced. These cases did not
deal at all with the dilemma at hand, i.e. the question of whether or not a registered writ of
attachment on land is superior to that of an earlier unregistered deed of sale. In Santos,
what was involved were machinery and pieces of equipment which were executed upon
pursuant to the favorable ruling of the National Labor Relations Commission. A third party
claimed that the machinery were already sold to her, but it does not appear in the facts of
the case if such sale was ever registered. Manliguez is similar to Santos, except that the
former involved buildings and improvements on a piece of land. To stress, in both cited
cases, the registration of the sale, if any, of the subject properties was never in issue.

As to petitioners invocation of equity, we cannot, at this instance, yield to such

It is to be noted that though the subject land was deeded to petitioner as early as 05
principle in the presence of a law clearly applicable to the case. We reiterate that this
December 1995, it was not until 06 June 1996 that the conveyance was registered, and, Court, while aware of its equity jurisdiction, is first and foremost, a court of law. [23] While
during that interregnum, the land was subjected to a levy on attachment. It should also be
equity might tilt on the side of one party, the same cannot be enforced so as to overrule
observed that, at the time of the attachment of the property on 23 April 1996, the spouses positive provisions of law in favor of the other. [24] Equity cannot supplant or contravene the
Uy were still the registered owners of said property. Under the cited law, the execution of
law.[25] The rule must stand no matter how harsh it may seem. Dura lex sed lex.
the deed of sale in favor of petitioner was not enough as a succeeding step had to be
taken, which was the registration of the sale from the spouses Uy to him. Insofar as third WHEREFORE, the appealed Decision of the Court of Appeals in CA-G.R. SP No.
persons are concerned, what validly transfers or conveys a persons interest in real 43082 dated 25 September 1997, and its Resolution dated 10 February 1998, are hereby
property is the registration of the deed. Thus, when petitioner bought the property on 05 AFFIRMED. No costs.
December 1995, it was, at that point, no more than a private transaction between him and
the spouses Uy. It needed to be registered before it could bind third parties, including SO ORDERED.
respondents. When the registration finally took place on 06 June 1996, it was already too
late because, by then, the levy in favor of respondents, pursuant to the preliminary
attachment ordered by the General Santos City RTC, had already been annotated on the
title.
The settled rule is that levy on attachment, duly registered, takes preference over a
prior unregistered sale.[17] This result is a necessary consequence of the fact that the
property involved was duly covered by the Torrens system which works under the
fundamental principle that registration is the operative act which gives validity to the
transfer or creates a lien upon the land.[18]
The preference created by the levy on attachment is not diminished even by the
subsequent registration of the prior sale. This is so because an attachment is a
proceeding in rem.[19] It is against the particular property, enforceable against the whole
world. The attaching creditor acquires a specific lien on the attached property which
nothing can subsequently destroy except the very dissolution of the attachment or levy
itself.[20] Such a proceeding, in effect, means that the property attached is an indebted
thing and a virtual condemnation of it to pay the owners debt. [21] The lien continues until
the debt is paid, or sale is had under execution issued on the judgment, or until the

[G.R. No. 127941. January 28, 1999]
BIBLIA TOLEDO-BANAGA and JOVITA TAN, petitioners,
vs. COURT OF APPEALS and CANDELARIO DAMALERIO respondents.
DECISION
MARTINEZ, J.:
The Court of Appeals (CA), in a decision penned by then Justice Ricardo J.
Francisco,[1] categorically declared private respondent as the absolute owner of the land
subject of this case. That decision was affirmed by this Court, became final and executory
and was remanded to the lower court for execution. But the Register of Deeds frustrated
private respondents judicially determined right as it refused to issue Certificates of Title in
his name on the ground that the matter should be referred en consulta to the Register of
Deeds before petitioners title can be cancelled and a new one issued in the name of the
winning party herein private respondent. So, for the third time, this simple redemption case
which commenced in the 1980s is again before this Court.
Here is a summary of the facts, over which there is no dispute:
In an action for redemption filed by petitioner Banaga, the trial court declared that
she had lost her right to redeem her property earlier foreclosed and which was
subsequently sold at public auction to private respondent. [2] Certificates of Title covering
the said property were issued to private respondent over which petitioner Banaga
annotated on March 3, 1983 a notice of lis pendens.[3] On appeal by petitioner Banaga, the
CA reversed the decision of the trial court and allowed the former to redeem the property
within a certain period.[4]Private respondents petition to this Court was dismissed [5] and the
decision became final.
On June 11, 1992, petitioner Banaga tried to redeem the property by depositing with
the trial court the amount of redemption which was financed by her co-petitioner
Tan. Private respondent opposed the redemption arguing that it was made beyond the
time given to her by the court in the earlier case. However, the lower court issued an order
on August 7, 1992 upholding the redemption and ordered the Register of Deeds to cancel
private respondents Certificates of Title and issue new titles in the name of petitioner
Banaga.[6] When his motion for reconsideration was denied by the trial court in an order
dated January 4, 1993, private respondent filed a petition for certiorari with the CA which
was docketed as CA-G.R. No. 29869. On January 11, 1993, private respondent caused
the annotation of said petition as another notice of lis pendens on the Certificates of
Title. Three days later, the CA issued a temporary restraining order to enjoin the execution
of the August 7, 1992 and January 4, 1993 orders.
Meanwhile, on January 7, 1993, petitioner Banaga sold the subject property to
petitioner Tan with the deed of absolute sale mentioning private respondents certificate of
title which was not yet cancelled. Notwithstanding the notice of lis pendens, petitioner Tan
subdivided the property in question under a subdivision plan, which she made not in her
name but in the name of private respondent. There being no preliminary injunction issued
and with the expiration of the TRO, petitioner Tan asked the Register of Deeds to issue
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Land Titles and Deeds (Finals) 2017
new titles in her name. On March 24, 1993, such titles were issued in petitioner Tans name
but it still carried the annotations of the two notices of lis pendens. Upon learning of the
new title of petitioner Tan, private respondent impleaded the former in his petition in CA-
G.R. No. 29869.
On October 28, 1993, the CA set aside the August 7, 1992 and January 4, 1993
orders of the trial court and declared private respondent absolute owner of the subject
property. The CA disposed of the petition as follows:
WHERFORE, in view of the foregoing considerations, the instant petition is hereby
GRANTED. The orders issued by public respondent judge dated August 7, 1992 and
January 4, 1993 are hereby ordered SET ASIDE and a new one is hereby entered
declaring petitioner as the absolute owner of the parcels of land subject of redemption for
failure of private respondent to exercise the right of redemption within the thirty (30) day
period previously granted her by this court.[7]
That decision became final and executory after petitioner Banagas petition for review
was dismissed by this Court for lack of merit. [8] Upon motion of private respondent, the trial
court issued a writ of execution on December 27, 1994 ordering the Register of Deeds to
reinstate the Certificates of Title in the name of the movant herein private respondent. In its
order which petitioners did not contest, the court a quo said that:
Although there is no specific pronouncement in the decision of the Court of Appeals that
reverts the titles to the land subjects of redemption to the defendant, the fact that it
declared the petitioner (Damalerio) as the absolute owner of the lands entitles him to writ
of execution issuing from this court directing the Register of Deeds to reinstate his titles to
his name. As it is implied from the decision declaring him the absolute owner of the lands
that the titles to the land be reverted to him (See Uy v. Capulong, 221 SCRA 87).
Let therefore a writ of execution issue in this case to enforce the decision of the Court of
Appeals. In this connection, the Register of Deeds of the Registry of Deeds for General
Santos City is hereby ordered to reinstate the titles of Candelario B. Damalerio - Transfer
Certificates of Title No. T- 19570 and T-19571, both of the Registry of Deeds from General
Santos City.[9]
But the Register of Deeds refused to comply with the writ of execution alleging that
the Certificates of Title issued to petitioner Tan must first be surrendered. Accordingly,
private respondent moved to cite the Register of Deeds in contempt of court which was
denied, as the trial court ruled on January 11, 1995 that the formers remedy is
by consulta to the Commissioner of Land Registration. [10] In another order (dated March
29, 1996), the trial court likewise denied private respondents motion for the issuance of a
writ of possession ruling that the latters remedy is a separate action to declare petitioner
Tans Certificates of Title void. Aggrieved, private respondent again elevated the case to
the CA via a petition for certiorari and mandamus[11] assailing the above-mentioned two
orders of the court a quonaming as respondents the trial court judge, the Register of
Deeds and the petitioners. On November 7, 1996, the CA rendered a decision granting the
petition and, among others, set aside the assailed orders of the trial court. The dispositive
portion of the CA decision reads:

WHEREFORE, in view of all the foregoing considerations, the petition is GRANTED.
Judgment is hereby rendered:
1) setting aside the orders of the respondent judge dated January11, 1995 and
March 29, 1996;
2) declaring the title issued to Biblia Toledo-Banaga, Jovita Tan and to those
other subsequent transferee or transferees, if any, as null and void;
3) ordering the Register of Deeds of General Santos City to issue new
certificates of title to Candelario Damalerio over the parcels of land in
question;
4) ordering the respondent court to issue writ of execution for the enforcement
of this decision and of the decision in CA-G.R. SP No. 29868 (sic), as
well as a writ of possession for the delivery to petitioner Damalerio of
the Physical possession of the parcels of land subject matter of this
case.
SO ORDERED.[12]
Upon denial by the CA of their motion for reconsideration, petitioners filed the instant
petition for certiorari and mandamus. The Court, however, is puzzled why petitioners, in
their petition, would seek to set aside the two orders (January 4, 1995 and March 29,
1996) of respondent judge who was not named in their petition. [13] Assuming this to be a
mere lapsus since they also confusingly refer to Banaga and Tan as private respondent
and to Damalerio as petitioner,[14] the petition is still utterly without merit. It is petitioners
stand (1) that petitioner Tan is a buyer in god faith and (2) that the remedy of private
respondent to secure the titles in his name is by consulta to the Land Registration
Commissioner and not through contempt.
The Court is not convinced of the arguments proffered by petitioners.
By arguing that petitioner Tan was a buyer in good faith, petitioners in effect raise
once more the issue of ownership of the subject property. But such issue had already been
clearly and categorically ruled upon by the CA and affirmed by this Court, wherein private
respondent was adjudged the rightful and absolute owner thereof. The decision in that
case bars a further repeated consideration of the very same issue that has already been
settled with finality. To once again re-open that issue through a different avenue would
defeat the existence of our courts as final arbiters of legal controversies. Having attained
finality, the decision is beyond review or modification even by this Court.[15]
Under the principle of res judicata, the Court and the parties, are bound by such final
decision, otherwise, there will be no end to litigation. It is to the interest of the public that
there should be an end to litigation by the parties over a subject fully and fairly adjudicated,
and an individual should not be vexed twice for the same cause. [16] All the elements of res
judicata are present in this case, which are:
(a) the former judgment must be final;
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Land Titles and Deeds (Finals) 2017
(b) the court which rendered judgment had jurisdiction over the parties and the
subject matter;
(c) it must be a judgment on the merits;
(d) and there must be between the first and second actions identity of parties,
subject matter, and cause of action.[17]
The judgment in the redemption suit had long become final and executory; there is
no question that the court had jurisdiction over the parties and the subject matter; it
involves an adjudication on the merits of the case as the court discussed and passed upon
petitioner Banagas right of redemption which she did not timely exercise and as a
consequence, lost her claim of ownership of the lot. Both petitioners and private
respondent are parties to the earlier cases, disputing the same parcel of land with both
opposing parties claiming ownership thereof. Certainly, res judicata had set in. Besides,
once a judgment had become final and executory, it can no longer be disturbed no matter
how erroneous it may be. In any case, no such error was attributed to in this case.
Contrary to petitioners argument, private respondents remedy is not a direct or
independent civil action for cancellation of petitioner Tans titles. The facts, circumstances,
evidence and arguments invoked in this derailed final and executory decision are the very
same matters that will be established assuming such independent suit is legally
warranted. It does not matter whether the former case was a redemption suit and the new
one will be for cancellation of title because the test of identity of causes of action is not in
its form but whether the same evidence would support and establish the former and
present causes of action.[18]
Petitioners other contention that the execution of the final and executory decision -
which is to issue titles in the name of private respondent - cannot be compelled
by mandamus because of the formality that the registered owner first surrenders her
duplicate Certificates of Title for cancellation per Section 80 of Presidential Decree
1529[19] cited by the Register of Deeds,[20] bears no merit. In effect, they argue that the
winning party must wait execution until the losing party has complied with the formality of
surrender of the duplicate title.Such preposterous contention borders on the absurd and
has no place in our legal system. Precisely, the Supreme Court had already affirmed the
CAs judgment that Certificates of Title be issued in private respondents name. To file
another action just to compel the registered owner, herein petitioner Tan, to surrender her
titles constitute violation of, if not disrespect to, the orders of the highest tribunal.
Otherwise, if execution cannot be had just because the losing party will not surrender her
titles, the entire proceeding in the courts, not to say the efforts, expenses and time of the
parties, would be rendered nugatory. It is revolting to conscience to allow petitioners to
further avert the satisfaction of their obligation because of sheer literal adherence to
technicality,[21] or formality of surrender of the duplicate titles. The surrender of the
duplicate is implied from the executory decision since petitioners themselves were parties
thereto. Besides, as part of the execution process, it is a ministerial function of the Register
of Deeds to comply with the decision of the court to issue a title and register a property in
the name of a certain person, especially when the decision had attained finality, as in this
case.
In addition, the enforcement of a final and executory judgment is likewise a
ministerial function of the courts[22] and does not call for the exercise of discretion. Being a
ministerial duty, a writ of mandamus lies to compel its performance.[23] Moreover, it is

axiomatic that where a decision on the merits is rendered and the same has become final
and executory, as in this case, the action on procedural matters or issues becomes moot
and academic.[24] Thus, the so-called consulta to the Commissioner of Land Registration,
which is not applicable herein, was only a naive and belated effort resorted to by
petitioners in order to delay execution. If petitioners desire to stop the enforcement of a
final and executory decision, they should have secured the issuance of a writ of
preliminary injunction,[25] but which they did not avail knowing that there exists no legal or
even equitable justifications to support it.
At any rate, at the time petitioner Banaga sold the property to petitioner Tan, the
latter was well aware of the interest of private respondent over the lot. Petitioner Tan
furnished the amount used by petitioner Banaga for the attempted redemption. One who
redeems in vain a property of another acquires notice that there could be a controversy. It
is for the same reason that petitioner Tan was included as party to the case filed in
court. Worse, at the time of the sale, petitioner Tan was buying a property not registered in
the sellers name.This clear from the deed of absolute sale which even mentioned that the
Certificates of Title is still in the name of private respondent. It is settled that a party
dealing with a registered land need not go beyond the Certificate of Title to determine the
true owner thereof so as to guard or protect her interest. She has only to look and rely on
the entries in the Certificate of Title. By looking at the title, however, petitioner Tan cannot
feigned ignorance that the property is registered in private respondents name and not in
the name of the person selling to her. Such fact alone should have at least prompted, if not
impelled her to investigate deeper into the title of her seller - petitioner Banaga, more so
when such effort would not have entailed additional hardship, and would have been quite
easy, as the titles still carried the two notices of lis pendens.
By virtue of such notices, petitioner Tan is bound by the outcome of the litigation
subject of the lis pendens. As a transferee pendente lite, she stands exactly in the shoes of
the transferor and must respect any judgment or decree which may be rendered for or
against the transferor. Her interest is subject to the incidents or results of the pending suit,
and her Certificates of Title will, in that respect, afford her no special protection. [26]
To repeat, at the time of the sale, the person from whom petitioner Tan bought the
property is neither the registered owner nor was the former authorized by the latter to sell
the same. She knew she was not dealing with the registered owner or a representative of
the latter. One who buys property with full knowledge of the flaws and defects in the title of
his vendor is enough proof of his bad faith[27] and cannot claim that he acquired title in
good faith as against the owner or of an interest therein.[28] When she nonetheless
proceeded to buy the lot, petitioner Tan gambled on the result of litigation. [29] She is bound
by the outcome of her indifference with no one to blame except herself if she looses her
claim as against one who has a superior right or interest over the property. These are the
undeniable and uncontroverted facts found by the CA, which petitioners even quote and
cite in their petition. As aptly concluded by the CA that petitioner Tan is indeed a buyer in
bad faith on which the Court agrees:
Notwithstanding her constructive and actual knowledge that Damalerio was claiming the
land, that the land was in his name, and it was involved in pending litigation, Jovita Tan
bought it from Banaga on January 7, 1993. The deed of sale recites that the parcels of
land sold were covered by Transfer Certificates of Title No. __ (formerly [T-12488] T-530)
and TCT No. __ (formerly [T-12488] T-530) (sic) and TCT No. __ (formerly P-1294).
(Annex F, Petition). Apart from the fact that Banaga was without any TCT, as above
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
stated, TCT No. T-12488 was petitioners title (Annex C, Petition). Herein private
respondent Tan was buying a land not registered in her sellers (Banagas) name, but in
that of petitioner Damalerio who had been claiming it as his own. She admitted this fact
when she had the land subdivided on February 2, 1993 not in her name but in the name of
Candelario Damalerio (Annex Q, Reply). Evidently, she was a purchaser in bad faith
because she had full knowledge of the flaws and defects of title of her seller, Banaga. X x
x.
The notice of lis pendens registered on March 3, 1993 involving the land in question and
private respondent Tans actual knowledge of the then pending Civil Case No. 2556, where
the question as to whether the redemption of the land which she financed was raised,
rendered her a purchaser in bad faith and made the decision therein binding upon her. [30]
Being a buyer in bad faith, petitioner Tan cannot acquire a better rights than her
predecessor in interest,[31] for she merely stepped into the shoes of the latter. Such finding
of bad faith is final and may not be re-opened for the law cannot allow the parties to trifle
with the courts.[32]
With respect to the issue of possession, such right is a necessary incident of
ownership.[33] The adjudication of ownership to private respondent includes the delivery of
possession since the defeated parties in this case has not shown by what right to retain
possession of the land independently of their claim of ownership which was
rejected.[34] Otherwise, it would be unjust if petitioners who has no valid right over the
property will retain the same.[35] Thus, the CA correctly disagreed with the trial courts order
denying private respondents motion for writ of possession for the following reasons cited in
its decision:
1. The order violates the doctrine laid down in Javier vs. Court of Appeals, 224
SCRA 704, which ruled that the issuance of title in favor of a purchaser in bad
faith does not exempt the latter from complying with the decision adverse to his
predecessor in interest, nor preclude him from being reached by writ of
execution;
2. Private respondent Tan was a party respondent in CA-G.R. SP No. 29869,
she having been impleaded in a supplemental petition, which this Court gave
due course and required the respondents to file their answer. The fact that she
did not file any pleading, nor intervene therein did not excuse her from being
bound by the decision, otherwise all that a party respondent was to fold his arm
to prevent him from being bound by a decision in a case. Her securing titles
over the land during the pendency of said case did not protect her from the
effects of said decision. The validity of tile of a purchaser of registered land
depends on whether he had knowledge, actual or constructive, of defects in
the title of his vendor. If he has such knowledge, he is a purchaser in bad faith
and acquires the land subject to such defects (X x x indicates that citations of
authorities omitted) The title secured by a purchaser in bad faith is a nullity and
gave the latter no right whatsoever, as against the owner (x x x).
3. Private respondent Tans titles and those of her predecessor, Banaga, arose
from the void orders of August 7, 1992 and January 4, 1993. Since a void order
could not give rise to valid rights, said titles were also necessarily null and void
(x x x).
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

4. Private respondents and respondent Judge executed the questioned orders SPOUSES LETICIA & JOSE ERVIN ABAD, SPS.
of August 7, 1993 and January 4, 1993, pending review of said orders in CA- ROSARIO AND ERWIN COLLANTES, SPS. RICARDO
G.R. SP No. 29869. The nullification of said orders by this out imposed upon AND FELITA ANN, SPS. ELSIE AND ROGER LAS PIAS, G.R. No. 189239
the private respondents the obligation to return the property to Damalerio and LINDA LAYDA, RESTITUTO MARIANO, SPS. ARNOLD
upon respondent Judge, upon motion for execution, to order the cancellation of AND MIRIAM MERCINES, SPS. LUCITA AND Present:
private respondents titles and the issuance of new titles to him. WENCESLAO A. RAPACON, SPS. ROMEO AND EMILYN
HULLEZA, LUZ MIPANTAO, SPS. HELEN AND CARPIO MORALES, Chairperson
5. This Court in its decision in CA-G.R. SP No. 29869 declared petitioner ANTHONY TEVES, MARLENE TUAZON, SPS. ZALDO BRION,
Damalerio absolute owner of the property in question. Private respondents AND MIA SALES, SPS. JOSEFINA AND JOEL YBERA, BERSAMIN
were parties litigants in said case, who did not claim possession of the land SPS. LINDA AND JESSIE CABATUAN, SPS. WILMA AND VILLARAMA, JR., and
separately from their claim of ownership thereof. Such being the case, the MARIO ANDRADA, SPS. RAYMUNDO AND ARSENIA SERENO, JJ.
delivery of possession is considered included in this Courts decision declaring LELIS, FREDY AND SUSANA PILONEO,
Damalerio absolute owner of the property (x x x), which can be enforced by Petitioners,
writ of possession (x x x). In denying petitioners motion for writ of possession,
the trial court violated said doctrines, and
- versus -
6. Lastly, the effect of respondent Judges order of March 29, 1996 is to re-open
the decision in CA-G.R. SP No. 29689 for re-litigation and alteration in a
separate action. For while this Court already declared that Banagas
redemption of the land financed by private respondent Tan was invalid, and as
FIL-HOMES REALTY and DEVELOPMENT
a consequence declared Damalerio absolute owner of the property, which was
CORPORATION and MAGDIWANG REALTY Promulgated:
binding against private respondent Tan, as she was a respondent therein and
CORPORATION,
a purchaser pendente lite and in bad faith, the order of the respondent Court
Respondents.
holding that another civil action be filed to annul private respondent Tans titles
November 24, 2010
would be to re-litigate such issues and modify or alter this Courts final decision.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - x
The respondent Court has no authority to do so. [36]

WHEREFORE, premises considered, the petition is hereby DENIED and the assailed
decision of the Court of Appeals is AFFIRMED in toto with costs against petitioners. No
further proceeding will be entertained in this case.
DECISION
SO ORDERED.
CARPIO MORALES, J.:

Fil-Homes Realty and Development Corporation and Magdiwang Realty Corporation

(respondents), co-owners of two lots situated in Sucat, Paraaque City and covered by

Transfer Certificates of Title Nos. 21712 and 21713, filed a complaint for unlawful detainer

on May 7, 2003 against above-named petitioners before the Paraaque Metropolitan Trial

Court (MeTC).

Respondents alleged that petitioners, through tolerance, had occupied the subject lots

since 1980 but ignored their repeated demands to vacate them.


Petitioners countered that there is no possession by tolerance for they have been in
adverse, continuous and uninterrupted possession of the lots for more than 30 years; and
that respondents predecessor-in-interest, Pilipinas Development Corporation, had no title
to the lots. In any event, they contend that the question of ownership must first be settled
before the issue of possession may be resolved.
During the pendency of the case or on June 30, 2004, the City of Paraaque filed
expropriation proceedings covering the lots before the Regional Trial Court of Paraaque
with the intention of establishing a socialized housing project therein for distribution to the
occupants including petitioners. A writ of possession was consequently issued and a
Certificate of Turn-over given to the City.
Branch 77 of the MeTC, by Decision of March 3, 2008, rendered judgment in the
unlawful detainer case against petitioners, disposing as follows:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendants Leticia and Ervin Abad et. als.
ordering the latter and all persons claiming rights under them
to VACATE and SURRENDER possession of the premises (Lots
covered by TCT NOS. (71065) 21712 and (71066) 21713 otherwise
known as Purok I Silverio Compound, Barangay San Isidro, Paraaque
City to plaintiff and to PAY the said plaintiff as follows:
1. The reasonable compensation in the amount
of P20,000.00 a month commencing November 20, 2002
and every month thereafter until the defendants shall
have finally vacated the premises and surrender peaceful
possession thereof to the plaintiff;
2. P20,000.00 as and for attorneys fees, and finally
3. Costs of suit.
SO ORDERED.[1] (emphasis in the original)
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
The MeTC held that as no payment had been made to respondents for the lots, they still
maintain ownership thereon. It added that petitioners cannot claim a better right by virtue
of the issuance of a Writ of Possession for the project beneficiaries have yet to be named.
On appeal, the Regional Trial Court (RTC), by Decision of September 4,
2008,[2] reversed the MeTC decision and dismissed respondents complaint in this wise:
x x x The court a quo ruled that the case filed by plaintiffs (respondents
herein) is unlawful detainer as shown by the allegations of the
Complaint. The ruling of the court a quo is not accurate. It is not the
allegations of the Complaint that finally determine whether a case
is unlawful detainer, rather it is the evidence in the case.
Unlawful detainer requires the significant element of
tolerance. Tolerance of the occupation of the property must be present
right from the start of the defendants possession. The phrase from the
start of defendants possession is significant. When there is no
tolerance right from the start of the possession sought to be
recovered, the case of unlawful detainer will not
prosper.[3] (emphasis in the original; underscoring supplied)
The RTC went on to rule that the issuance of a writ of possession in favor of the City bars
the continuation of the unlawful detainer proceedings, and since the judgment had already
been rendered in the expropriation proceedings which effectively turned over the lots to the
City, the MeTC has no jurisdiction to disregard the . . . final judgment and writ of
possession due to non-payment of just compensation:
The Writ of Possession shows that possession over the
properties subject of this case had already been given to the City
of Paraaque since January 19, 2006 after they were expropriated. It is
serious error for the court a quo to rule in the unlawful detainer
case that Magdiwang Realty Corporation and Fil-Homes Realty
and Development Corporation could still be given possession of
the properties which were already expropriated in favor of the City
of Paraaque.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

There is also another serious lapse in the ruling of the court a Respecting the issuance of a writ of possession in the expropriation proceedings, the
quo that the case for expropriation in the Regional Trial Court would not
bar, suspend or abate the ejectment proceedings. The court a quo had appellate court, citing Republic v. Gingoyon,[8] held the same does not signify the
failed to consider the fact that the case for expropriation was already
decided by the Regional Trial Court, Branch 196 way back in the year completion of the expropriation proceedings. Thus it disposed:
2006 or 2 years before the court a quo rendered its judgment in the
unlawful detainer case in the year 2008. In fact, there was already a
Writ of Possession way back in the year 1996 (sic) issued in the WHEREFORE, premises considered, the instant Petition is
expropriation case by the Regional Trial Court, Branch 196. The court GRANTED. The assailed Decision of the Court a quo is REVOKED and
a quo has no valid reason to disregard the said final judgment and SET ASIDE. The Decision of the Metropolitan Trial Court dated March
the writ of possession already issued by the Regional Trial Court 3, 2008 is hereby REINSTATED with MODIFICATION [by] deleting the
in favor of the City of Paraaque and against Magdiwang Realty award for attorneys fees.
Corporation and Fil-Homes Realty Development Corporation and
make another judgment concerning possession of the subject SO ORDERED. (underscoring supplied)
properties contrary to the final judgment of the Regional Trial
Court, Branch 196.[4] (emphasis in the original)
Petitioners motion for reconsideration was denied by Resolution dated August 26, 2009,

hence, the filing of the present petition for review.

Before the Court of Appeals where respondents filed a petition for review, they
The petition fails.
maintained that respondents act of allowing several years to pass without requiring [them]

to vacate nor filing an ejectment case against them amounts to acquiescence or tolerance
In the exercise of the power of eminent domain, the State expropriates private
of their possession.[5]
property for public use upon payment of just compensation. A socialized housing project

falls within the ambit of public use as it is in furtherance of the constitutional provisions on
By Decision of May 27, 2009,[6] the appellate court, noting that petitioners did not present
social justice.[9]
evidence to rebut respondents allegation of possession by tolerance, and considering

petitioners admission that they commenced occupation of the property without the
As a general rule, ejectment proceedings, due to its summary nature, are not suspended
permission of the previous owner Pilipinas Development Corporation as indicium of
or their resolution held in abeyance despite the pendency of a civil action regarding
tolerance by respondents predecessor-in-interest, ruled in favor of respondents. Held the
ownership.
appellate court:
Where the defendants entry upon the land was with plaintiffs
tolerance from the date and fact of entry, unlawful detainer proceedings
may be instituted within one year from the demand on him to vacate Section 1 of Commonwealth Act No. 538[10] enlightens, however:
upon demand. The status of such defendant is analogous to that of a
tenant or lessee, the term of whose lease, has expired but whose
Section 1. When the Government seeks to acquire, through
occupancy is continued by the tolerance of the lessor. The same rule
purchase or expropriation proceedings, lands belonging to any estate
applies where the defendant purchased the house of the former lessee,
or chaplaincy (cappellania), any action for ejectment against the
who was already in arrears in the payment of rentals, and thereafter
tenants occupying said lands shall be automatically suspended, for
occupied the premises without a new lease contract with the
such time as may be required by the expropriation proceedings or the
landowner.[7]

necessary negotiations for the purchase of the lands, in which latter
case, the period of suspension shall not exceed one year.
To avail himself of the benefits of the suspension, the tenants
shall pay to the landowner the current rents as they become due
or deposit the same with the court where the action for ejectment has
been instituted. (emphasis and underscoring supplied)
Petitioners did not comply with any of the acts mentioned in the law to avail of the benefits
of the suspension. They nevertheless posit that since the lots are the subject of
expropriation proceedings, respondents can no longer assert a better right of possession;
and that the City Ordinance authorizing the initiation of expropriation proceedings
designated them as beneficiaries of the lots, hence, they are entitled to continue staying
there.
Petitioners position does not lie.
The exercise of expropriation by a local government unit is covered by Section
19 of the Local Government Code (LGC):
SEC. 19. Eminent Domain. A local government unit may,
through its chief executive and acting pursuant to an ordinance,
exercise the power of eminent domain for public use, or purpose, or
welfare for the benefit of the poor and the landless, upon payment of
just compensation, pursuant to the provisions of the Constitution and
pertinent laws: Provided, however, That the power of eminent domain
may not be exercised unless a valid and definite offer has been
previously made to the owner, and such offer was not accepted:
Provided, further, That the local government unit may immediately take
possession of the property upon the filing of the expropriation
proceedings and upon making a deposit with the proper court of at least
fifteen percent (15%) of the fair market value of the property based on
the current tax declaration of the property to be expropriated: Provided,
finally, That the amount to be paid for the expropriated property shall be
determined by the proper court, based on the fair market value of the
property.
Lintag v. National Power Corporation[11] clearly outlines the stages of
expropriation, viz:
Expropriation of lands consists of two stages:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
The first is concerned with the determination of the authority of the
plaintiff to exercise the power of eminent domain and the propriety of its
exercise in the context of the facts involved in the suit. It ends with an
order, if not of dismissal of the action, "of condemnation declaring that
the plaintiff has a lawful right to take the property sought to be
condemned, for the public use or purpose described in the complaint,
upon the payment of just compensation to be determined as of the date
of the filing of the complaint x x x.
The second phase of the eminent domain action is concerned with the
determination by the court of "the just compensation for the property
sought to be taken." This is done by the court with the assistance of not
more than three (3) commissioners x x x .
It is only upon the completion of these two stages that expropriation is
said to have been completed. The process is not complete until
payment of just compensation. Accordingly, the issuance of the writ of
possession in this case does not write finis to the expropriation
proceedings. To effectuate the transfer of ownership, it is necessary for
the NPC to pay the property owners the final just
compensation.[12] (emphasis and underscoring supplied)
In the present case, the mere issuance of a writ of possession in the expropriation
proceedings did not transfer ownership of the lots in favor of the City. Such issuance was
only the first stage in expropriation. There is even no evidence that judicial deposit had
been made in favor of respondents prior to the Citys possession of the lots, contrary to
Section 19 of the LGC.
Respecting petitioners claim that they have been named beneficiaries of the lots,
the city ordinance authorizing the initiation of expropriation proceedings does not state
so.[13] Petitioners cannot thus claim any right over the lots on the basis of the ordinance.
Even if the lots are eventually transferred to the City, it is non sequitur for
petitioners to claim that they are automatically entitled to be beneficiaries
thereof. For certain requirements must be met and complied with before they can be
considered to be beneficiaries.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

G.R. No. L-21362 November 29, 1968

In another vein, petitioners posit that respondents failed to prove that their
DEVELOPMENT BANK OF THE PHILIPPINES, plaintiff-appellant,
possession is by mere tolerance. This too fails. Apropos is the ruling in Calubayan v.
vs.
Pascual:[14] LOURDES GASPAR BAUTISTA, THE DIRECTOR OF THE LANDS and THE
NATIONAL TREASURER OF THE PHILIPPINES, defendants-appellees.

In allowing several years to pass without requiring the occupant Jesus A. Avancea for plaintiff-appellant.
to vacate the premises nor filing an action to eject Lourdes Gaspar Bautista in her own behalf as defendant-appellee.
him, plaintiffs have acquiesced to defendants possession Assistant Solicitor General Antonio Torres, Solicitor Francisco J. Bautista and Special
and use of the premises. It has been held that a person Attorney Daniel G. Florida for defendants-appelles Director of Lands, et al.
who occupies the land of another at the latters tolerance or
permission, without any contract between them,
FERNANDO, J.:
is necessarily bound by an implied promise that he will
vacate upon demand, failing which a summary action for
ejectment is the proper remedy against them. The status of the The question this appeal from a judgment of a lower court presents is one that possesses
defendant is analogous to that of a lessee or tenant whose term both novelty and significance. It is this: What is the right, if any, of a creditor which
of lease has expired but whose occupancy continued by previously satisfied its claim by foreclosing extrajudicially on a mortgage executed by the
tolerance of the owner. In such a case, the unlawful deprivation debtor, whose title was thereafter nullified in a judicial proceeding where she was not
or withholding of possession is to be counted from the date of brought in as a party?
the demand to vacate. (emphasis and underscoring supplied)
As creditor, the Development Bank of the Philippines now appellant, filed a complaint
against one of its debtors, Lourdes Gaspar Bautista, now appellee, for the recovery of a
sum of money representing the unpaid mortgage indebtedness, which previously had been
Respondents bought the lots from Pilipinas Development Corporation in 1983. They
wiped out with the creditor bank acquiring the title of the mortgaged property in an
extrajudicial sale. Thereafter, the title was nullified in a judicial proceeding, the land in
stepped into the shoes of the seller with respect to its relationship with petitioners. Even if
question being adjudged as belonging to another claimant, without, however, such debtor,
early on respondents made no demand or filed no action against petitioners to eject them as above noted, having been cited to appear in such court action.

from the lots, they thereby merely maintained the status quo allowed petitioners The Development Bank was unsuccessful, the lower court being of the view that with the
due process requirement thus flagrantly disregarded, since she was not a party in such
possession by tolerance. action where her title was set aside, such a judgment could in no wise be binding on her
and be the source of a claim by the appellant bank. The complaint was thus dismissed by
the lower court, then presided by Judge, now Justice, Magno Gatmaitan of the Court of
Appeals. Hence, this appeal by appellant bank.
WHEREFORE, the petition for review is DENIED.
Such dismissal is in accordance with law. There is no occasion for us to repudiate the
lower court.

From the very statement of facts in the brief for appellant bank, the following appears: "On
or before May 31, 1949, the defendant-appellee, Lourdes Gaspar Bautista, who shall
hereafter be referred to as Bautista, applied to the Government for the sale favor of a
parcel of land with an area of 12 has., 44 ares, and 22 centares, located at Bo. Barbara,
San Jose, Nueva Ecija. After proper investigation, Sales Patent no. V-132 covering said
property was issued in her favor on June 1, 1949 (Exh. A-1) by the Director of Lands.
Sales Patent No. V-132 was registered in the office of the Register of Deeds of Nueva
Ecija pursuant to Section 122 of Act 496 on June 3, 1949 (Exh. A), as a result of which
Original Certificate of Title No. P-389 was issued in her favor."1

How the loan was contracted by now appellee Bautista was therein set forth. Thus: "On
July 16, 1949, Bautista applied for a loan with the Rehabilitation Finance Corporation
(RFC), predecessor in interest of the plaintiff-appellee Development Bank of the
Philippines (DBP), offering as security the parcel of land covered by O.C.T. No. P-389.
Aside from her certificate of title, Bautista also submitted to the RFC other documents to
show her ownership and possession of the land in question, namely, Tax Declaration No.
5153 (Exh. A-4) in her name and the blueprint plan of the land. On the basis of the
documents mentioned and the appraisal of the property by its appraiser, the RFC
approved a loan of P4,000.00 in favor of Bautista. On July 16, 1949, Bautista executed the
mortgage contract over the property covered by O.C.T. No. P-389 and the promissory note
for P4,000.00 in favor of RFC (Exhs. C and C-1), after which the proceeds of the loan were
released."2
The satisfaction of the mortgage debt with the acquisition of the title to such property by
appellant Bank, by virtue of an extrajudicial foreclosure sale, and such title losing its
validity in view of a court proceeding, where however, appellee Bautista, was not made a
party, was next taken up in the brief of plaintiff-appellant. Thus: "Bautista failed to pay the
amortization on the loan so that the RFC took steps to foreclose the mortgage extra-
judicially under Act 3135, as amended. In the ensuing auction sale conducted by the
sheriff of Nueva Ecija on June 27, 1951, the RFC acquired the mortgaged property as the
highest bidder (Exh. D). On the date of the sale, the total obligation of Bautista with the
RFC was P4,858.48 (Exh. I). On July 21, 1952, upon failure of Bautista to redeem the
property within the one (1) year period as provided bylaw, plaintiff-appellant RFC
consolidated its ownership thereon (Exhs. E and E-I). On July 26, 1952, the Register of
Deeds of Nueva Ecija cancelled O.C.T. No. P-389 and replaced it with T.C.T. No. NT-
12108 in the name of the RFC (Exhs. F and F-1). On or about this time, however, an
action (Civil Case No. 870) was filed by Rufino Ramos and Juan Ramos in the Court of
First Instance of Nueva Ecija against the Government of the Republic of the Philippines
and the RFC (as successor in interest of Bautista) claiming ownership of the land in
question and seeking the annulment of T.C.T. No. 2336 in the name of the Government,
O.C.T. No. P-389 in the name of Bautista and T.C.TG. No. NT-12108 in the name of the
RFC. A decision thereon was rendered on June 27, 1955 (Exhs. G, G-1, and G-3) whereby
the aformentioned certificates of title were declared null and void." 3
Why the complaint had to be dismissed was explained thus in the decision now on appeal:
"The Court after examining the proofs, is constrained to sustain her on that; it will really
appear that she had never been placed within the jurisdiction of the Nueva Ecija Court; as
the action there was one to annual the title, it was an action strictly in personam, if that was
the case as it was, the judgment there could not in any way bind Lourdes who had not
acquired in said decision in any way for what only happened is that as to the mortgage, the
Bank foreclosed, and then sold unto Conrada and when the title had been annulled, the
Bank reimbursed Conrada; stated otherwise, the annulment of Lourdes' title was a
proceeding ex parte as far as she was concerned and could not bind her at all; and her
mortgage was foreclosed an the Bank realized on it, when the Bank afterwards acquiesced
in the annulment of the title and took it upon itself to reimburse Conrada, the Bank was
acting on its own peril because it could not have by that, bound Lourdes at all." 4
As stated at the outset, the decision must be affirmed. The fundamental due process
requirement having been disregarded, appellee Bautista could not in any wise be made to
suffer, whether directly or indirectly, from the effects of such decision. After appellant bank
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
had acquired her title by such extrajudicial foreclosure sale and thus, through its own act,
seen to it that her obligation had been satisfied, it could not thereafter, seek to revive the
same on the allegation that the title in question was subsequently annulled, considering
that she was not made a party on the occasion of such nullification.
If it were otherwise, then the cardinal requirement that no party should be made to suffer in
person or property without being given a hearing would be brushed aside. The doctrine
consistently adhered to by this Court whenever such a question arises in a series of
decisions is that a denial of due process suffices to cast on the official act taken by
whatever branch of the government the impress of nullity. 5
A recent decision, Macabingkil v. Yatco,6 possesses relevance. "A 1957
decision, Cruzcosa v. Concepcion, is even more illuminating in so far as the availability of
the remedy sought is concerned. In the language of this Court, speaking through Justice
J.B.L. Reyes: 'The petition is clearly meritorious. Petitioners were conclusively found by the
Court of Appeals to be co-owners of the building in question. Having an interest therein,
they should have been made parties to the ejectment proceedings to give them a chance
to protect their rights: and not having been made parties thereto, they are not bound and
can not be affected by the judgment rendered therein against their co-owner Catalino
Cruzcosa. Jr. ....' Two due process cases deal specifically with a writ of execution that
could not validly be enforced against a party who was not given his day in court, Sicat v.
Reyes, and Hamoy v. Batingoplo. According to the former: 'The above agreement, which
served as basis for the ejectment of Alipio Sicat, cannot be binding and conclusive upon
the latter, who is not a party to the case. Indeed, that order, as well as the writ of
execution, cannot legally be enforced against Alipio Sicat for the simple reason that he
was not given his day in court.' From the latter: 'The issue raised in the motion of Rangar is
not involved in the appeal for it concerns a right which he claims over the property which
has not so far been litigated for the reason that he was not made a party to the case either
as plaintiff for a defendant. He only came to know of the litigation when he was forced out
of the property by the sheriff, and so he filed the present motion to be heard and prove his
title to the property. This he has the right to do as the most expeditious manner to protect
his interest instead of filing a separate action which generally is long, tedious and
protracted.'"
Reinforcement to the above conclusion comes from a codal provision. According to the
Civil Code:7 "The vendor shall not be obliged to make good the proper warranty, unless he
is summoned in the suit for eviction at the instance of the vendee. "While not directly in
point, the principle on which the above requirement is based sustains the decision of the
lower court. In effect, appellant bank would hold appellee Bautista liable for the warranty
on her title, its annullment having the same effect as that of an eviction. In such a case, it
is wisely provided by the Civil Code that appellee Bautista, as vendor, should have been
summoned and given the opportunity to defend herself. In view of her being denied her
day in court, it would to be respected, that she is not "obliged to made good the proper
warranty."
In the suit before the lower court, the Director of Lands and the National Treasurer of the
Philippines were likewise made defendants by appellant bank because of its belief that if
no right existed as against appellee Bautista, recovery could be had from the Assurance
Fund. Such a belief finds no support in the applicable, law, which allows recovery only

upon a showing that there be no negligence on the part of the party sustaining any loss or
damage or being deprived of any land or interest therein by the operation of the Land
Registration Act.8This certainly is not the case here, plaintiff-appellant being solely
responsible for the light in which it now finds itself. Accordingly, the Director of Lands and
the National Treasurer of the Philippines are likewise exempt from any liability.
WHEREFORE, the judgment appealed from is affirmed, with costs against the
Development Bank of the Philippines.
G.R. No. L-63046 June 21, 1990
MARIANO TORRES Y CHAVARRIA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, FRANCISCO E. FERNANDEZ and FE
FERNANDEZ, ROSARIO MOTA CUE, ERNESTO MEDINA CUE and the NATIONAL
TREASURER, as Custodian of the Assurance Fund, respondents.
Bengzon, Zarraga, Narciso, Cudala, Pecson, Azcuna & Bengzon for petitioner.
Albon, Serrano & Associates for private respondents.
T.J. Sumawang & Associates for respondent Fernandezes.
MEDIALDEA, J.:
This is a petition for review of the decision of the Court of Appeals in CA-G.R. No. 62248-R
entitled "Mariano Torres Y Chavarria v. Francisco E. Fernandez, et al., etc.," which
reversed the decision of the then Court of First Instance of Manila, Branch 7, by holding
that it is the respondent Rosario Mota who is legally entitled to the disputed realties, being
an innocent mortgagee and later the highest bidder when the properties were supposedly
foreclosed, and not the petitioner Mariano Torres, the defrauded owner thereof; and of the
resolution of that Court denying Torres' motion for reconsideration.
The parcel of land located at the comer of Quezon Boulevard and Raon Street (now
Gonzalo Street), and the building erected thereon known as "M. Torres Building" is owned
by Mariano Torres, the herein petitioner, as evidenced by Transfer Certificate of Title No.
53628-Manila issued in his name. As far as the records show, Torres was and still is in
possession of the realties, holding safely to his owner's duplicate certificate of title, and, at
least until 1971, paying the real estate taxes due thereon, and collecting rentals from his
tenants occupying the building.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Sometime in 1966, Francisco Fernandez, Torres' brother-in-law, filed a petition with the
Court of First Instance of Manila, docketed as LRC GLRO Cad. Rec. No. 133, where he,
misrepresenting to be the attorney-in-fact of Torres and falsely alleging that the a duplicate
copy of TCT No. 53628 was lost, succeeded in obtaining a court order for the issuance of
another copy of the certificate.
Once in possession thereof, Fernandez forged a simulated deed of sale of the realties in
his favor. Whereupon TCT No. 53628 in the name of Torres was canceled and TCT No.
86018 was issued in Fernandez' name.
On various dates from December, 1966 to November, 1967 Fernandez mortgaged the
realties to Rosario Mota, wife of Ernesto Cue, and also to Angela Fermin, who later
assigned her credit to the spouses Cue. The mortgages were annotated at the back of
TCT No. 86018 and so was the deed of assignment.
Torres, who up to this time still had possession of his owner's duplicate certificate of title
and who was still collecting rentals from the occupants of the subject building, upon
Teaming of the fraud committed by Fernandez, caused, on March 18, 1968, the annotation
on the latter's TCT a notice of adverse claim.
On March 30, 1968, Torres filed Civil Case No. 72494 against Fernandez to annul TCT
No. 86018 as well as the proceedings in LRC GLRO Cad. Rec. No. 133. On April 2, 1968,
a notice of lis pendens was annotated at the back of Fernandez' TCT.
In the meantime, Fernandez failed to pay his various loans which prompted the Cues to
institute an extrajudicial foreclosure of the mortgage.
On February 11, 1969, Fernandez filed Civil Case No. 75643 against the spouses Cue for
the annulment of the mortgage with preliminary injunction.
After the foreclosure was enjoined, the parties entered into an amicable settlement,
approved by the court whereby it was stipulated that Fernandez acknowledged and
promised to pay his debt to the Cues for Five Hundred Sixty-Two Thousand Nine Hundred
Fifty-Five and 28/100 (P562,955.28) Pesos on or before, March 30, 1970, while the
spouses bound themselves to execute and deliver, within ten (10) days from receipt of the
sum mentioned such documents as are necessary to release the mortgages in favor of
defendants on plaintiffs' property.
Before Fernandez could pay his obligation under the settlement agreement, a decision
was rendered in Civil Case No. 72494 where it was declared that the proceedings held in
LRC GLRO Cad. Rec, No. 133 was void and that TCT No. 86018, issued in the name of
Fernandez, is without force and effect as TCT No. 53628 in the name of Torres is the true
and legal evidence of ownership of the subject immovables. Fernandez appealed from this
decision to the Court of Appeals where it was docketed as CA-G.R. No. 46386-R. The
Court of Appeals, on April 20, 1979, affirmed the decision of the trial court. There being
nothing on the records that would indicate that the judgment of the appellate court was
elevated here, it would appear that it had become final and executory.

But meanwhile, prior to the Court of Appeals' decision mentioned above, Fernandez failed
to comply with his obligation under the amicable settlement and whereupon the Cues
applied for and were granted a writ of execution. The subject realties were then levied
upon and sold at public auction where Rosario Mota was the highest bidder.
On August 31, 1971, the redemption period for the subject immovables having lapsed
without Fernandez nor Torres redeeming the properties, Rosario Mota was issued the
Sheriffs Deed of Sale. Thereafter, TCT No. 86018 was canceled and TCT No. 105953 was
issued in her name.
On December 7, 1971 Mota, through her lawyer, notified the tenants occupying "M. Torres
Building" that she is the new owner thereof and henceforth, payment of their rentals should
be made to her.
On December 17, 1971 Torres filed a complaint, which later gave rise to this petition, with
the Court of First Instance of Manila, docketed as Civil Case No. 85753, against
Fernandez and his spouse and the Cues to restrain the latter from collecting rentals and
for the declaration as void TCT No. 105953. The Cues in turn filed a cross-claim against
Fernandez spouses and a third party complaint against the National Treasurer as the
custodian of the Assurance Fund.
During the proceeding, Mariano Torres, having died sometime in 1974, was substituted by
his widow. On June 3, 1977, the trial court rendered its decision declaring TCT No. 105953
in the name of Rosario Mota nun and void as it upheld the validity of TCT No. 53628 in the
name of Torres as the true evidence of title to the disputed realties, and at the same time
dismissing the Cue's third party complaint and cross claim.
The decision was reviewed by the respondent court at the instance of the Cues which, as
aforementioned, reversed the trial court in its decision dated July 30, 1982 and the
Resolution of January 14, 1983. Hence, this petition.
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 55
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. Fable, 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 owner's duplicate certificate of title,
converts it in his name, and subsequently sells or otherwise encumbers it to an innocent
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
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 Bank, No. L Legarda
v. Saleeby, 31 Phil. 590, Roman Catholic Bishop v. Philippine Railway, 49 Phil. 546, Reyes
v. Borbon, 50 Phil. 791. in C.N. Hodges v. Dy Buncio & Co., Inc., No. L-16096, October 30,
1962, 6 SCRA 287, 292, We laid down the doctrine that:
The claim of indefeasibility of the petitioner's title under the Torrens
land title system would be correct if previous valid title to the same
parcel of land did not exist. The respondent had a valid title ... It never
parted with it; it never handed or delivered to anyone its owner's
duplicate of the transfer certificate of title, it could not be charged with
negligence in the keeping of its duplicate certificate of title or with any
act which could have brought about the issuance of another certificate
upon which a purchaser in good faith and for value could rely. If the
petitioner's contention as to indefeasibility of his title should be upheld,
then registered owners without the least fault on their part could be
divested of their title and deprived of their property. Such disastrous
results which would shake and destroy the stability of land titles had not
been foreseen by those who had endowed with indefeasibility land titles
issued under the Torrens system. Veronica Bareza perpetrated the
fraud by making false representations in her petition and the title issued
to her being the product of fraud could not vest in her valid and legal
title to the parcel of land in litigation. As she had no title to the parcel of
land, in the same way that a thief does not own or have title to the
stolen goods, she could not transmit title which she did not have nor
possess.
We have applied this doctrine in the case of the Register of Deeds v. P.N.B., supra, where
We noted that said ruling is "a mere affirmation of the recognized principle that a certificate
is not conclusive evidence of title if it is shown that the same land had already been
registered and an earlier certificate for the same land is in existence." Again in the case
of Baltazar v. Court of Appeals, G.R. No. 78728, December 8, 1988, 168 SCRA 354, We
held that as between two persons both of whom are in good faith and both innocent of any
negligence, the law must protect and prefer the lawful holder of registered title over the
transfer of a vendor bereft of any transmissible rights.
In view of the foregoing, to hold, for the purpose of enforcing the mortgage, that Mota was
an innocent mortgagee would be futile because, as above shown, no certificate of title
covering the subject realties in derogation of Torres' certificate of title may validly be
issued.
Then it becomes evident that the remaining possible remedies of the Cues are to go
against Fernandez or the Assurance Fund, as they in fact had done in the lower court by
filing a cross claim and third party complaint. The lower court dismissed the Cues' cross-
claim against Fernandez reasoning out that their remedy is to cause the final judgment
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

(compromise agreement) in Civil Case No. 75643 executed. This, of course, is correct ACCORDINGLY, the decision and resolution under review are REVERSED and the
since the rights and obligations of both parties had been determined in that case. decision of the then Court of First Instance, Branch 7, Manila in Civil Case No. 85753 is
REINSTATED. SO ORDERED.
The trial court also dismissed the Cues' third party complaint against the Treasurer of the
Philippines as custodian of the Assurance Fund after finding them negligent in protecting
their interest. The trial court recognized the principle that a person dealing with registered
lands need not go beyond the certificate of title but nevertheless pointed out that there are
circumstances in this case which should have put the Cues on guard and prompted them G.R. No. 199810
to investigate the property being mortgaged to them, thus:

BEVERLY ANNE C. YAP Petitioner

The property in question is a very valuable property, in fact accepted by
defendants Mota and Medina Cue as collateral for more than half a
million pesos in loans granted by them to Fernandez. Its value lies versus
principally in its income potential, in the form of substantial monthly
rentals. Certainly, the registered title does not yield any information as
to the amount of rentals due from the building, much less on who is REPUBLIC OF THE PHILIPPINES, represented by THE REGIONAL EXECUTIVE
collecting them, or who is recognized by the tenants as their landlord.
Any prospective buyer or mortgagee of such a property, if prudent and DIRECTOR, DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR)
in good faith, is normally expected to inquire into all these and related
facts and circumstances. Respondent

Besides, by the course of visible dimensions of the M. Torres Building, PRESENT: VELASCO, JR, J, CHAIRPERSON, PERALTA,* BERSAMIN, REYES AND
it should be readily obvious to any one that the area of the two lots ...
covered by TCT No. 86018 cannot accommodate the building, as in TIJAM, JJ
fact it also rests upon a lot covered by TCT No. 56387, and partly upon
a lot leased by (Torres) from the City of Manila. Had (the Cues) known
of this fact would they have accepted the mortgage alone over TCT No. Promulgated: March 15, 2017
86018? The answer is obvious. And yet, to all indications, they never
bothered to look into this fact about the M. Torres Building.

xxx xxx xxx

DECISION
Another thing that defendants Mota and Medina Cue must have
investigated, as any prudent buyer or mortgagee should before
consummating any transaction on real property, in the matter of REYES, J:
payment of taxes on the property. After all, the big value of the property
in question necessarily means that even real estate taxes on it alone This is a petition for review on certiorari1 seeking to annul and set aside the
would involve big amounts of money, and if there are tax arrearages,
any buyer or subsequent owner of the property wig have to come face Decision2 dated June 30, 2011 and Resolution3 dated November 14, 2011 of the Court of
to face with the tax hen attaching to the property wherever its owner
may be. ... (P. 257, Record on Appeal) Appeals (CA) in CA-G.R. CV No. 01753-MIN which reversed and set aside the

Decision4 dated October 24, 2008 of the Regional Trial Court (RTC) of Davao City, Branch
We likewise take note of the manifestation of the Office of the Solicitor General that the
Cues failed to contest the ruling of the trial court negating the liability of the Assurance 16, in Civil Case No. 29,705-03, dismissing the complaint for reversion of a parcel of land.
Fund. For these reasons, We hold that the Cues' remedy merely is to go against Francisco
Fernandez or rather his estate since record shows that he died sometime in 1983.
Antecedent Facts
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Consuelo Vda. de dela Cruz applied for free patent over a parcel of land constituting about The administrative protest of the protestants reached the Office of the Secretary of the

1,292 square meters, designated as Lot No. 9087, Cad. 102, located in Daliao, Toril, DENR. On May 15, 1995, Secretary Angel C. Alcala rendered a Decision 14 against

Davao City. As she could not wait for the approval of her application, she executed a Deed Pagarigan, the salient portion and the fallo of which read as follows:
5 6
of Waiver/ Quitclaim on November 25, 1981 in favor of Rollie Pagarigan (Pagarigan).
From the Investigation Reports submitted by both the Departments Regional Office
7
Pagarigan filed his own Free Patent Application (FPA) and subsequently, Free Patent No. involved and this Office as well as from the other pieces of evidence available, both

(XI-I)5133 was issued to him over said lot. Original Certificate of Title (OCT) No. P- documentary and testimonial, it is obvious that actual fraud and bad faith have been
8 9
11182 was thereby issued in his name on November 25, 1982. committed by [Pagarigan] in his subject public land application which led to the issuance of

the title. The following facts and circumstances are uncontroverted, to wit; that the
On September 5, 1989, Pagarigan mortgaged the lot to Banco Davao-Davao City
[protestants] have been in actual occupation of the land in dispute since 1945 and have
Development Bank (the Bank). For failure to pay his loan, the property was foreclosed, and
introduced improvements thereon; that [Pagarigan] never occupied the same nor his
was eventually sold to the Bank at public auction on October 26, 1990. These proceedings
predecessor-in-interest, Consuelo dela Cruz, that [Pagarigan] misrepresented in his
were duly annotated in the title.10
application that he was the actual occupant and that there were no others who occupied

However, the land covered by OCT No. P-11182 was allegedly occupied by Teodoro the lot in dispute; that the title was issued sans an actual ground survey; and that

Valparaiso and Pedro Malalis (protestants). On October 24, 1990, the protestants filed a [Pagarigan] did not post a copy of his Notice for [FPA] on both the Bulletin Boards of

formal protest with the Bureau of Lands (Bureau). They prayed for the recall of the free Daliao and Lizardo as required by law.

patent issued to Pagarigan, and for the institution of a corresponding action for reversion
xxx
considering that they have been in adverse, exclusive, and continuous occupation of the

subject property since 1945, cultivating it, and planting various crops, nipa palms and WHEREFORE, the instant appeal is hereby given DUE COURSE and the subject Decision

coconut trees on said land.11 appealed from SET ASIDE and REVOKED. Consequently, the Regional Executive

Director (RED), DENR Region XI, Davao City, is hereby ordered to institute an action for
On January 27, 1992, the protestants caused the annotation of a notice of lis pendens in
cancellation of Original Certificate of Title (OCT) No. V-11182 of the Registry of Deeds of
OCT No. P-11182. Assigned as Entry No. 647677, said notice of lis pendens pertained to
Davao City covering Lot No. 9087, Cad-102, and for the reversion of the property covered
Civil Case No. 20-435-912 instituted by the protestants against Pagarigan, Menardo Metran
thereby to the government.
and Rene Galope to enjoin them from demolishing the formers houses pending the

determination of the Department of Environment and Natural Resources (DENR) on the After the cancellation of the subject title and the land already reverted to the government,

propriety of cancelling the title obtained by Pagarigan. 13 Regional Executive Director (RED) concerned shall then order the ground survey of the

land in dispute and give due course to the public land applications of the [protestants].
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

SO ORDERED.15 This case is now considered closed.

Meanwhile, on November 5, 1992, without consolidating title over the land in its name, the SO ORDERED.20

Bank sold the subject property to herein petitioner Beverly Anne C. Yap (Yap) and
Ruling of the RTC
Rosanna F. Villamor (Villamor). Upon the execution of the deed of sale, OCT No. P-11182

was delivered to them and Transfer Certificate of Title No. 36698316 was eventually issued On May 22, 2003, the respondent, through the Office of the Solicitor General (OSG), filed

in the name of Yap and Villamor on December 16, 2003. 17 the Complaint for Cancellation of Patent, Nullification of Title and Reversion with the RTC

of Davao City.21 The case was raffled to Branch 16 thereof.

On February 28, 1997, the Department of Transportation and Communication filed a

complaint for expropriation of a portion of the subject lot before the RTC of Davao City, On October 24, 2008, the RTC Branch 16 rendered a Decision22 dismissing the

Branch 13, docketed as Civil Case No. 25,084-97.18 respondents complaint. The court ruled that since the subject land has already been sold

to third persons, it must be shown that the latter were part of the fraud and/or
On February 19, 2003, the RTC Branch 13 rendered its Decision. 19 Confronted with the
misrepresentation committed by the original grantee, or at least were aware of it. However,
issue of who among the claimants shall be entitled to just compensation, the trial court
since the RTC Branch 13 already declared in its decision in Civil Case No. 25,084-97 that
ruled in this wise:
Yap and Villamor were purchasers in good faith and for value of the land in question, RTC

WHEREFORE, it is the judgment of this court that[:] Branch 16 maintained that, as a court of co-equal jurisdiction, it is bound by the said

finding under the principle of conclusiveness of judgment. Moreover, the fact that it took
1. The plaintiff is entitled to expropriate the land subject of this case for the purpose of road
the respondent 26 years, from the issuance of the free patent before it instituted an action
right of way to the Davao Fish Port, which is for public use;
for reversion, militates against its cause. The fallo of the trial courts decision reads:

2. The just compensation for the land is P278,[000].00;

IN VIEW of the foregoing, judgment is hereby rendered dismissing the instant complaint.

3. [Villam or and Yap] are the ones entitled to the payment of just compensation for the
Defendants [sic] [Bank] and Pagarigan compulsory counterclaim[s] are likewise dismissed
property subject of this case, and plaintiff is directed to pay the said amount to the said
in the absence of proof that there was malice or bad faith on [the respondents] part when
defendants;
it sought the reversion of the property.

4. The Commissioners Fee of P3,850.00 shall be paid by plaintiff to Asian Appraisal

The dismissal of the action necessarily carries with it the dismissal of defendants [sic]
Company, Inc., and may be deducted from the just compensation for the land being
[Bank] cross-claim against [Pagarigan].
expropriated.

SO ORD[E]RED.23
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Ruling of the CA III. Whether or not the decision of the CA runs counter to the rule on res judicata.32

The respondent elevated its case to the CA. On June 30, 2011, the CA rendered the Yap asserts that she and Villamor purchased the subject property in good faith and for

assailed Decision24 reversing that of the trial court. In so ruling, the CA adopted the value. She maintains that on its face, nothing appears in OCT No. P-11182 indicating that

findings of the DENR as to the commission of fraud by Pagarigan in his FPA, and held that some other person has a right to, or interest over the property covered thereby. As such,

neither the Bank nor Yap and Villamor were innocent purchasers for value. Further, the CA there was no obligation on their part to look beyond the certificate of title to determine the

maintained that the decision of the RTC Branch 13 did not constitute res judicata insofar legal condition of the concerned property.

as the same has not yet attained finality. The fallo of the CA decision reads:
Granting that a notice of lis pendens was annotated in OCT No. P-11182 filed before the

WHEREFORE, We GRANT the appeal and REVERSE the decision of the [RTC]. We Register of Deeds of Davao City, the same, however, was not offered in evidence and

declare Free Patent No. (XI-I)5133 and [OCT] No. P-11182 issued in the name of should not have been considered. Accordingly, the presumption that Yap and Villamor

[Pagarigan], and [TCT] No. T-366983 in the name of [Yap] and [Villamor], and all were purchasers in good faith and for value was not effectively rebutted.

subsequent [TCTs] derived therefrom, as null and void. We order the reversion of Lot
Moreover, in the case for expropriation heard before the RTC Branch 13, they were
9087, Cad. 102, [l]ocated in Daliao, Toril, Davao City, to the mass of public domain.
already adjudged as innocent purchasers for value. Under the principle of res judicata, it

SO ORDERED.25 was but proper for RTC Branch 16 to uphold said pronouncement. Accordingly, it was an

error on the part of the CA to reverse the same.

The Bank,26 Yap,27 and Villamor28 sought reconsideration of the CA decision, but their

motion was evenly denied in the Resolution29dated November 14, 2011. Invoking the Courts ruling in Saad Agro-Industries,33 Yap asserts that the respondent

failed to discharge the burden of proving the alleged fraud and misrepresentation which
Hence this petition filed solely by Yap.
attended Pagarigans FPA.

Yap propounds the following assignments of errors:

Ruling of the Court

I. Whether or not the decision of the CA is not in accord with the applicable decision
Yaps contentions are untenable.
enunciated by the Court in the case of Spouses Macadangdang v. Spouses Martinez;30

The decision of the CA does not run counter to the rule on conclusiveness of
II. Whether or not the CA departed from the rule declared by the Court in the case of Saad
judgment.
Agro-Industries, Inc. v. Republic of the Philippines, 31 that in reversion proceedings the

same must be proved by clear and convincing evidence, mere preponderance of evidence Yap asserts that the CA erred in setting aside the decision of RTC Branch 16 in violation of

not even being adequate; and the rule on res judicata. It was a finding already made by the RTC Branch 13, a co-equal
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branch that the land is now in the hands of innocent purchasers for value. Thus, the issues in another litigation between the same parties on a different claim or cause of

respondents complaint for reversion must be dismissed on the basis of the principle of action.

conclusiveness of judgment.
The general rule precluding the re-litigation of material facts or questions which were in

The Court does not agree. issue and adjudicated in former action are commonly applied to all matters essentially

connected with the subject matter of the litigation. Thus, it extends to questions necessarily
In a catena of cases, the Court discussed the doctrine of conclusiveness of judgment, as a
implied in the final judgment, although no specific finding may have been made in
concept of res judicata as follows:
reference thereto and although such matters were directly referred to in the pleadings and

The second concept - conclusiveness of judgment - states that a fact or question which were not actually or formally presented. Under this rule, if the record of the former trial

was in issue in a former suit and was there judicially passed upon and determined shows that the judgment could not have been rendered without deciding the particular

by a court of competent jurisdiction, is conclusively settled by the judgment therein matter, it will be considered as having settled that matter as to all future actions between

as far as the parties to that action and persons in privity with them are concerned the parties and if a judgment necessarily presupposes certain premises, they are as

and cannot be again litigated in any future action between such parties or their conclusive as the judgment itself. 34 (Emphasis and underlining ours, and emphasis in the

privies, in the same court or any other court of concurrent jurisdiction on either the original deleted)

same or different cause of action, while the judgment remains unreversed by proper
In Nabus v. CA,35 the Court stressed that when a party seeks relief upon a cause of action
authority. It has been held that in order that a judgment in one action can be conclusive
different from the one asserted by him in a previous one, the judgment in the former suit
as to a particular matter in another action between the same parties or their privies, it is
is conclusive only as to such points or questions as were actually in issue or
essential that the issue be identical. If a particular point or question is in issue in the
adjudicated therein.36 However, in Calalang v. Register of Deeds of Quezon City,37 the
second action, and the judgment will depend on the determination of that particular point or
Court clarified that the bar on re-litigation of a matter or question extends to those
question, a former judgment between the same parties or their privies will be final and
questions necessarily implied in the final judgment, although no specific finding may have
conclusive in the second if that same point or question was in issue and adjudicated in the
been made in reference thereto, and although those matters were directly referred to in the
first suit xxx. Identity of cause of action is not required but merely identity of issue.
pleadings and were not actually or formally presented.38If the record of the former trial

Justice Feliciano, in Smith Bell & Company (Phils.), Inc. v. Court of Appeals x x x, shows that the judgment could not have been rendered without deciding a particular

reiterated Lopez v. Reyes x x x in regard to the distinction between bar by former judgment matter, it will be considered as having settled that matter as to all future actions

which bars the prosecution of a second action upon the same claim, demand, or cause of between the parties.39 Verily, as developed, these principles now embody paragraph (c)

action, and conclusiveness of judgment which bars the relitigation of particular facts or of Section 47, Rule 39 of the Rules of Court, which reads:
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Land Titles and Deeds (Finals) 2017

(c) In any other litigation between the same parties or their successors in interest, that only Defendants Yap and Villamor for their part, dispute the claim of [the protestants]. They

is deemed to have been adjudged in a former judgment or final order which appears upon alleged that they were buyers in good faith of the property, and in fact, the owners copy of

its face to have been so adjudged, or which was actually and necessarily included therein OCT No. P-11182 has been delivered to them by [the Bank], They alleged that the title

or necessary thereto. which was issued to [Pagarigan] cannot be attacked collaterally as in this case. There

should be a case filed in court to annul the title if indeed the same was fraudulently issued.
Guided by the foregoing, the Court finds that RTC Branch 16 falsely appreciated the
For as long as the title is not yet declared null and void, the same remains valid, and
decision of RTC Branch 13. The Court quotes the pertinent portions of the Decision dated
whoever succeeds to the same is the owner of the land, they alleged. Moreover, since they
February 19, 2003 of the RTC Branch 13:
are purchasers in good faith, and for value, they have a right to be protected, defendants

THE COURTS RULING: Yap and Villamor alleged.

CLAIMS OF [THE PROTESTANTS]: THE COURTS RULING:

[The protestants] claim that the decision of the Secretary of the DENR in effect conferred The Decision of the Secretary of the DENR, in the case cited by [the protestants] cannot

ownership of the land to them, so that they should be paid the compensation and not justify the court to declare that the title issued to [Pagarigan] is void, and that [the

defendants Yap and Villamor. In fact, defendant Malalis had declared the property for protestants] are the owners of the property in question.

taxation purposes, and had paid the taxes thereon from the time they had occupied the
As correctly stated by defendants Yap and Villamor in their Memorandum, a Torrens title
land.
cannot be collaterally attacked. The title must be attacked directly in a case filed in court

[The protestants] alleged that the land subject of this case is still in the name of specifically to annul the said title. The alleged fraud in the issuance of OCT No. P-11182

[Pagarigan], and OCT No. P-11182 has not yet been cancelled and transferred in the therefore cannot be raised in this case, and the court will not consider the decision of the

names of defendants Yap and Villamor, who never even set foot on the land, nor declared DENR Secretary to say that the title of [Pagarigan] is void, and that the [protestants] are

the land for taxation purposes. The alleged sale of [the Bank] of the land to Yap and the owners of the land subject of this case.

Villamor did not confer ownership of the land to them, because the land had not been
Moreover, a Torrens title has the presumption of having been validly issued, and the
delivered to them by the owner, and they have not exercised ownership over the same. In
defendants Yap and Villamor are not expected to look beyond the title to determine its
short their claim of ownership is based on a technicality, and no amount of technicality may
validity. They are purchasers in good faith and for value, and are therefore entitled to the
serve as a solid foundation for the enjoyment of the fruits of fraud, [the protestants]
protection of the court.
alleged.

Contrary to the allegation of [the protestants], there was in fact a valid delivery of the land
CLAIMS OF DEFENDANTS YAP AND VILLAMOR:
to defendants Yap and Villamor. The execution of a Deed of Sale in their favor by
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Land Titles and Deeds (Finals) 2017

defendant [Bank], and delivery to them of the owners copy of OCT No. P-11182 is a with law,43 it was clear that the trial court was without jurisdiction in an expropriation

constructive delivery of the property sold to them. proceeding, to rule whether the title issued to Pagarigan is void - notwithstanding the

decision of the DENR Secretary. Thereupon, since the position of the protestants rests
Although defendants Yap and Villamor had not taken actual physical possession of the
mainly on the validity of Pagarigans title which cannot be considered in the action, RTC
property covered by OCT No. P-11182, the same did not divest them of the ownership of
Branch 13, in effect, posited that there was no legal way for it to rule otherwise.
the land covered by the said title. The occupation and possession of [the protestants] of

the land in question did not ripen into ownership because their occupation (even in the Accordingly, and as similarly advanced by the OSG in its Comment, the RTC Branch 13s

concept of an owner) cannot defeat a Torrens title. OCT No. P-11182 is presumed to be pronouncement that Yap and Villamor were buyers in good faith was, at best, a

valid until declared void by the courts.40 mere obiter dictum. Contrary to Yaps claim, there was nothing final or conclusive with the

decision of the RTC Branch 13 which the CA should be bound.

The foregoing shows that the question of whether or not Yap and Villamor are innocent

purchasers was not an actual issue of fact in the case before the RTC Branch 13, and Neither the Bank, nor Yap and Villamor were purchasers in good faith and for value.

which called for said courts adjudication. An issue of fact is a point supported by one Reversion of subject lot is in order.

partys evidence and controverted by anothers. 41 That Yap and Villamor were buyers in
[F]actual findings of administrative or quasi-judicial bodies, which are deemed to have
good faith is merely an allegation which was not proven in court. The RTC Branch 13 did
acquired expertise in matters within their respective jurisdictions, are generally accorded
not actually make any clear pronouncement on the matter.
not only respect but even finality, and bind the Court when supported by substantial

The expropriation proceeding was filed on February 28, 1997. The protestants caused the evidence.44

annotation of a notice of lis pendens on the original copy of OCT No. P-11182 on January
The fact that Pagarigan fraudulently secured his free patent was duly established by the
27, 1992. Accordingly, if indeed the question on whether Yap and Villamor are buyers in
investigation conducted by the DENR through Senior Special Investigator Domingo
good faith was an actual issue of fact before the expropriation proceeding, the protestants
Mendez. The decision of the DENR is very clear in this regard, thus:
could have easily controverted such claim by the mere expedience of presenting a certified

original copy of OCT No. P-11182. Forsooth, the notice at the back of a Torrens title From the Investigation Reports submitted by both the Departments Regional Office

serves as notice to the whole world of the pending controversy over the land so involved and this Office as well as from the other pieces of evidence available, both
42
registered. documentary and testimonial, it is obvious that actual fraud and bad faith have been

committed by [Pagarigan] in his subject public land application which led to the issuance of
The RTC Branch 13 basically anchored its judgment on the indefeasibility of a Torrens
the title. The following facts and circumstances are uncontroverted, to wit; that the
title. Pursuant to the well-settled rule that a certificate of title cannot be subject to collateral
[protestants] have been in actual occupation of the land in dispute since 1945 and have
attack and can only be altered, modified, or cancelled in a direct proceeding in accordance
introduced improvements thereon; that [Pagarigan] never occupied the same nor his
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predecessor-in-interest, Consuelo dela Cruz; that [Pagarigan] misrepresented in his dealings with registered lands. Accordingly, given inter alia the suspicion-provoking

application that he was the actual occupant and that there were no others who occupied presence of occupants other than the owner on the land to be mortgaged, it behooved

the lot in dispute; that the title was issued sans an actual ground survey; and that them to conduct a more exhaustive investigation on the history of the mortgagors title.

[Pagarigan] did not post a copy of his Notice for [FPA] on both the Bulletin Boards of That appellee Bank accepted in mortgage the property in question notwithstanding the

Daliao and Lizardo as required by law. 45 existence of structures on the property and which were in actual, visible, and public

(Emphasis ours) possession of persons other than the mortgagor, constitutes gross negligence amounting

to bad faith.46 (Citation omitted)

Thus, the DENR ordered for the institution of the present action seeking the cancellation of

the certificate of title issued in the name of Pagarigan, and for the reversion of the land Yap and Villamor are not innocent purchasers for value.

covered thereby to the government.

As pointed out by the CA, the respondent argued that at the time Yap and Villamor

However, as adverted to above, Section 32 of Presidential Decree No. 1529 mandates that purchased the said lot from the Bank, a notice of lis pendens was already annotated on

for a reversion case to prosper, it is not enough to prove that the original grantee of a OCT No. P-11182; hence, they cannot be considered as innocent purchasers for value.

patent has obtained the same through fraud; it must also be proven that the subject Yap and Villamor, on the other hand, contended that the owners duplicate copy they

property has not yet been acquired by an innocent purchaser for value, because fraudulent received from the Bank did not contain any annotations of encumbrance or liens; hence,

acquisition cannot affect the titles of the latter. they cannot be bound by such annotation.47

Henceforth, the ultimate resolution of this case boils down to the determination on whether In the present petition, Yap maintains that the presumption that she and Villamor are

the subsequent conveyances of the subject lot from Pagarigan were made to innocent buyers in good faith and for value has not been rebutted. She adds that even if it is

purchasers for value. Specifically, based on the records, can we regard the Bank, and assumed, for the sake of argument, that their predecessor-in-interest committed fraud and

thereafter, Yap and Villamor as innocent purchasers for value? misrepresentation, their title as innocent purchasers and for value will not in any way be

affected.48
The Court answers in the negative.

This Court cannot sanction Yaps assertion. Time and again, the Court has ruled that the
Verily, the Court is in full accord with the following disquisitions of the CA on the matter,
burden of proof to establish the status of a purchaser and registrant in good faith lies upon
thus:
the one who asserts it. This onus probandi cannot be discharged by mere invocation of the

It cannot be overemphasized that [the Bank], being in the business of extending loans legal presumption of good faith.49

secured by real estate mortgage, is familiar with rules on land registration. As such, it was,
It must be emphasized that aside from the fact that a notice of lis pendens was already
as here, expected to exercise more care and prudence than private individuals in its
annotated on OCT No. P-11182 even before Yap and Villamor purchased the subject
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property, it was also established that when they did so, the said property was still exercise such degree of precaution makes him a buyer in bad faith. 52 (Emphasis and italics

registered in the name of Pagarigan since the Bank did not consolidate its title in the original)

thereto.50 Stated simply, Yap and Villamor purchased the subject property not from
Verily, as the Court held in a catena of cases:
the registered owner.

[T]he law protects to a greater degree a purchaser who buys from the registered owner
In Trifonia D. Gabutan, et al. v. Dante D. Nacalaban, et al., 51 the Court held that:
himself. Corollarily, it requires a higher degree of prudence from one who buys from

A buyer for value in good Faith is one who buys property of another, without notice that a person who is not the registered owner, although the land object of the

some other person has a right to, or interest in, such property and pays full and fair price transaction is registered. While one who buys from the registered owner does not need

for the same, at the time of such purchase, or before he has notice of the claim or interest to look behind the certificate of title, one who buys from one who is not the registered

of some other persons in the property. He buys the property with the well-founded belief owner is expected to examine not only the certificate of title but all factual

that the person from whom he receives the thing had title to the property and capacity to circumstances necessary for him to determine if there are any flaws in the title of

convey it. the transferor, or in his capacity to transfer the land.

To prove good faith, a buyer of registered and titled land need only show that he relied on This Court has consistently applied the stricter rule when it comes to deciding the issue of

the face of the title to the property. He need not prove that he made further inquiry for he is good faith of one who buys from one who is not the registered owner, but who exhibits a

not obliged to explore beyond the four corners of the title. Such degree of proof of good certificate of title.53 (Emphasis in the original)

faith, however, is sufficient only when the following conditions concur: firsts the
Neither estoppel nor laches lies against the respondent in the present case
seller is the registered owner of the land; second, the latter is in possession thereof;

and third, at the time of the sale, the buyer was not aware of any claim or interest of Citing the cases of Saad Agro-Industries54 and Republic of the Philippines v. CA,55 the

some other person in the property, or of any defect or restriction in the title of the RTC Branch 16 opined that in an action for reversion, the defenses of

seller or in his capacity to convey title to the property. equitable estoppel, laches and Torrens System in land titles are available - without,

however, stating that the foregoing also applies in this case, and how.
Absent one or two of the foregoing conditions, then the law itself puts the buyer on notice

and obliges the latter to exercise a higher degree of diligence by scrutinizing the certificate In any event, neither of said cases is on all fours with the present case. Said cases did not

of title and examining all factual circumstances in order to determine the sellers title and dwell on whether an FPA was granted through the employment of fraud and/or

capacity to transfer any interest in the property. Under such circumstance, it is no longer misrepresentation, nor the question of whether the concerned properties were conveyed to

sufficient for said buyer to merely show that he relied on the face of the title; he must now innocent purchasers.

also show that he exercised reasonable precaution by inquiring beyond the title. Failure to
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In Saad Agro-Industries, free patent was alleged to have been mistakenly issued over a was instituted only in 2003, the circumstances leading to the institution of the case hardly

property that was claimed by therein respondent as inalienable for being part of a track of spells inaction or neglect on the part of the respondent as to be considered guilty of

land classified as forest land. However, it was established that government has not yet laches.

classified the lot in question as forest reserve prior to the issuance of the concerned free
Forsooth, there was no prolonged inaction on the part of the respondent in this case. This
patent. Moreover, it was also established that therein subject property was already
can be gleaned in the decision57 of the DENR Secretary. Shortly after the protestants filed
conveyed to an innocent purchaser for value, Saad Agro-Industries, Inc. before the action
a formal protest with the Bureau on October 24, 1990, 58 the Officer-in-Charge, Regional
for reversion was instituted.
Executive Director (RED) of the DENR Region XI, Davao City immediately ordered an

In Republic of the Philippines v. CA,56 therein petitioner instituted an action to annul the investigation on November 15, 1990,58 and the same commenced on November 19, 1990.

certificates of title that were issued on the basis of a null and void subdivision plan. While On February 14, 1994, the RED issued a decision dismissing the protestants

therein petitioner sufficiently proved that the actual area of the disputed property was protest.59Undaunted, the protestants elevated their case to the Office of the DENR

unduly enlarged in the said subdivision plan, it, however, presented no proof that therein Secretary. On May 15, 1995, the DENR Secretary set-aside the REDs decision and

respondent committed fraud when it submitted the subdivision plan to the Land ordered the institution of appropriate action for the cancellation of OCT No. P-11182, and

Registration Commission for approval. Since the plan was presumed to have been for the reversion of the property covered thereby to the government.

subjected to investigation, study and verification by said commission, there was no one to
The instant action does not undermine the indefeasibility of Torrens title
be blamed except therein petitioner, acting through said body, itself. Thus, for having

allowed and approved the subdivision plan, the government was held to be in estoppel to In the case of Lorzano v. Tabayag, Jr.,60 the Court reiterated that a Torrens title emanating

question the same, and seek the annulment of titles issued pursuant thereto. Moreover, from a free patent which was secured through fraud does not become indefeasible

when the action was instituted, the subdivided properties were already sold to innocent because the patent from whence the title sprung is itself void and of no effect whatsoever.

purchasers for value. Additionally, although therein petitioner asserted that the action was Thus:

instituted to protect the integrity of the Torrens System, it was, however, unjustifiable that it
Once a patent is registered and the corresponding certificate of title is issued, the land
took nearly 20 years before therein petitioner acted on the matter. Verily, therein
covered thereby ceases to be part of public domain and becomes private property, and the
petitioners prolonged inaction was held as tantamount to laches.
Torrens Title issued pursuant to the patent becomes indefeasible upon the expiration of

In the instant case, it was established that Pagarigans FPA was secured on the basis of one year from the date of such issuance. However, a title emanating from a free patent

his fraudulent representations. The respondent cannot be faulted for having been misled which was secured through fraud does not become indefeasible, precisely because the

into believing that an applicant is legally qualified to be granted free patent as to render it patent from whence the title sprung is itself void and of no effect whatsoever. 61

estopped from asserting its right to recover its own property. While the action for reversion
On this point, the Courts ruling in Republic v. Heirs of Felipe Alejaga, Sr. 62 is instructive:
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Land Titles and Deeds (Finals) 2017

True, once a patent is registered and the corresponding certificate of title [is] issued, the WHEREFORE, the petition is hereby DENIED. The Decision dated June 30, 2011 and

land covered by them ceases to be part of the public domain and becomes private Resolution dated November 14, 2011 of the Court of Appeals in CA-G.R. CV No. 01753-

property. Further, the Torrens Title issued pursuant to the patent becomes indefeasible a MIN are AFFIRMED. SO ORDERED.

year after the issuance of the latter. However, this indefeasibility of a title does not attach

to titles secured by fraud and misrepresentation. Well-settled is the doctrine that the

registration of a patent under the Torrens System does not by itself vest title; it merely
FRANCISCO ALONSO, substituted by MERCEDES V. G.R. No. 188471
confirms the registrants already existing one. Verily, registration under the Torrens System ALONSO, TOMAS V. ALONSO and ASUNCION V.
ALONSO,
is not a mode of acquiring ownership.63 (Citations omitted) Petitioners, Present:

A fraudulently acquired free patent may only be assailed by the government in an

- versus - PUNO, C.J.,
action for reversion CARPIO MORALES,
LEONARDO-DE CASTRO,
CEBU COUNTRY CLUB, INC., BERSAMIN, and
Nonetheless, a free patent that was fraudulently acquired, and the certificate of title issued Respondent, VILLARAMA, JR., JJ.

pursuant to the same, may only be assailed by the government in an action for reversion, REPUBLIC OF THE PHILIPPINES, represented by the Promulgated:
OFFICE OF THE SOLICITOR GENERAL,
pursuant to Section 101 of the Public Land Act. In Sherwill Development Corporation v. Public Respondent. April 20, 2010

Sitio Sto. Nino Residents Association, Inc.,64 the Court pointed out that:

It is also to the public interest that one who succeeds in fraudulently acquiring title to a

public land should not be allowed to benefit therefrom, and the State should, therefore,

have an even existing authority, thru its duly-authorized officers, to inquire into the

circumstances surrounding the issuance of any such title, to the end that the Republic, thru

the Solicitor General or any other officer who may be authorized by law, may file the

corresponding action for the reversion of the land involved to the public domain, subject

thereafter to disposal to other qualified persons in accordance with law. In other words, the
x-----------------------------------------------------------------------------------------x
indefeasibility of a title over land previously public is not a bar to an investigation by the
DECISION
Director of Lands as to how such title has been acquired, if the purpose of such

investigation is to determine whether or not fraud had been committed in securing such BERSAMIN, J.:
65
title in order that the appropriate action for reversion may be filed by the Government.
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By petition for review on certiorari, the petitioners appeal the order dated December 28, Francisco subsequently found that the certificate of title covering Lot No. 727-D-2

2007 of the Regional Trial Court (RTC), Branch 20, in Cebu City, denying the motion for of the Banilad Friar Lands Estate had been administratively reconstituted from the owners

issuance of writ of execution of the Office of the Solicitor General (OSG) in behalf of the duplicate of Transfer Certificate of Title (TCT) No.RT-1310 in the name of United Service

Government, and the order dated April 24, 2009, denying their motion for Country Club, Inc., the predecessor of respondent Cebu Country Club, Inc (Cebu Country

reconsideration filed against the first order. Club); and that upon the order of the court that had heard the petition for reconstitution of

the TCT, the name of the registered owner in TCT No. RT-1310 had been changed to that

Antecedents of Cebu Country Club; and that the TCT stated that the reconstituted title was a transfer

from TCT No. 1021.[4]

The antecedent facts are those established in Alonso v. Cebu Country

Club,[1] which follow. It is relevant to mention at this point that the current TCT covering Lot 727-D-2 in

the name of Cebu Country Club is TCT No. 94905, which was entered in the land records

Petitioner Francisco M. Alonso (Francisco) was the only son and sole heir of the of Cebu City on August 8, 1985.[5]

late spouses Tomas N. Alonso and Asuncion Medalle. Francisco died during the pendency

of this case, and was substituted by his legal heirs, namely: his surviving spouse, With his discoveries, Francisco formally demanded upon Cebu Country Club to

Mercedes V. Alonso, his son Tomas V. Alonso (Tomas) and his daughter Asuncion V. restore the ownership and possession of Lot 727-D-2 to him. However, Cebu Country Club

Alonso.[2] denied Franciscos demand and claim of ownership, and refused to deliver the possession

to him.[6]

In 1992, Francisco discovered documents showing that his father Tomas N.

Alonso had acquired Lot No. 727 of the Banilad Friar Lands Estate from the Government in On September 25, 1992, Francisco commenced against Cebu Country Club in

or about the year 1911; that the original vendee of Lot No.727 had assigned his sales the RTC in Cebu City an action for the declaration of nullity and non-existence of deed/title,

certificate to Tomas N. Alonso, who had been consequently issued Patent No. 14353; and the cancellation of certificates of title, and the recovery of property. On November 5, 1992,

that on March 27, 1926, the Director of Lands had executed a final deed of sale in favor of Cebu Country Club filed its answer with counterclaim.[7]

Tomas N. Alonso, but the final deed of sale had not been registered with the Register of
On May 7, 1993, the RTC decided in favor of Cebu Country Club.
Deeds because of lack of requirements, like the approval of the final deed of sale by the

Secretary of Agriculture and Natural Resources, as required by law. [3]


Both parties appealed to the Court of Appeals (CA), which ultimately affirmed the
RTC on March 31, 1997. Thus, Francisco filed a motion for reconsideration, which was
denied on October 2, 1997.[8]
Nothing daunted, Francisco appealed to this Court (G.R. No. 130876).
On January 31, 2002, this Court decided G.R. No. 130876, decreeing:
WHEREFORE, we DENY the petition for review. However, we
SET ASIDE the decision of the Court of Appeals and that of the
Regional Trial Court, Cebu City, Branch 08.
IN LIEU THEREOF, we DISMISS the complaint and
counterclaim of the parties in Civil Cases No. CEB 12926 of the trial
court. We declare that Lot No. 727 D-2 of the Banilad Friar Lands
Estate covered by Original Certificate of Title Nos. 251, 232, and 253
legally belongs to the Government of the Philippines. [9]
The petitioners sought a reconsideration. On December 5, 2003, however, the
Court denied their motion for reconsideration.[10] Hence, the decision in G.R. No.
130876 became final and executory.
In late 2004, the Government, through the OSG, filed in the RTC a motion for the
issuance of a writ of execution.[11] Cebu Country Club opposed the motion for the issuance
of a writ of execution in due course.
Later on, the proceedings on the OSGs motion for the issuance of a writ of
execution at the instance of Cebu Country Club in deference to the on-going hearings
being conducted by the Committee on Natural Resources of the House of Representatives
on a proposed bill to confirm the TCTs and reconstituted titles covering the Banilad Friar
Lands Estate in Cebu City.[12] The Congress ultimately enacted a law to validate the TCTs
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Land Titles and Deeds (Finals) 2017
and reconstituted titles covering the Banilad Friar Lands Estate in Cebu City. This was
Republic Act No. 9443,[13] effective on July 27, 2007.
Thereafter, both Cebu Country Club and the OSG brought the passage of R.A.
No. 9443 to the attention of the RTC for its consideration in resolving the OSGs motion for
the issuance of a writ of execution.[14] On December 28, 2007, therefore, the RTC denied
the OSGs motion for the issuance of a writ of execution through the first appealed order.[15]
The petitioners filed a motion for reconsideration dated February 1, 2008,
questioning the denial of the OSGs motion for the issuance of a writ of execution.[16]
Upon being directed by the RTC to comment on the petitioners motion for
reconsideration, the OSG manifested in writing that the Government was no longer
seeking the execution of the decision in G.R. No. 130876, subject to its reservation to
contest any other titles within the Banilad Friar Lands Estate should clear evidence show
such titles as having been obtained through fraud. [17]
After the filing of the OSGs comment, the RTC issued the second appealed
order, denying the petitioners motion for reconsideration, giving the following reasons:
1. The party who had a direct interest in the execution of the decision
and the reconsideration of the denial of the motion for execution
was the Government, represented only by the OSG; hence, the
petitioners had no legal standing to file the motion for
reconsideration, especially that they were not authorized by the
OSG for that purpose;
2. R.A. No. 9443 confirms and declares as valid all existing TCTs
and reconstituted titles; thereby, the State in effect waived and
divested itself of whatever title or ownership over the Banilad Friar
Lands Estate in favor of the registered owners thereof, including
Lot 727 D-2; and
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3. The situation of the parties had materially changed, rendering the Memorandum No. 16, both of which in fact made their predecessor
enforcement of the final and executory judgment Tomas N. Alonsos sales certificate and patent valid. [19]
unjust, inequitable, and impossible, because Cebu Country Club
was now recognized by the State itself
as the absolute owner of Lot 727 D-2.[18]

Hence, the petitioners appeal by petition for review on certiorari. Issues

The Court confronts and resolves the following issues, to wit:

Contentions of the Petitioners 1. Whether or not the petitioners were the real parties-in-interest to
question the denial by the RTC of the OSGs motion for the
issuance of a writ of execution;

The petitioners challenge the orders dated December 28, 2007 and April 29, 2. Whether or not R.A. No. 9443 gave the petitioners a legal interest
to assail the RTCs orders; and
2009, because:
3. Whether or not the petitioners can appeal by petition for review
on certiorari in behalf of the OSG.
1. R.A. No. 9443 did not improve Cebu Country Clubs plight,
inasmuch as R.A. No. 9443 presupposed first a sales certificate
that lacked the required signature, but Cebu Country Club did not
have such sales certificate. Moreover, the titleholders were in fact Ruling
the owners of the lands covered by their respective titles, which
was not true with Cebu Country Club due to its being already
adjudged with finality to be not the owner of Lot727-D-2. Lastly,
Cebu Country Clubs title was hopelessly defective, as found by The petition for review is denied due course.
the Supreme Court itself;

2. The doctrine of law of the case barred the application of R.A. No.
A.
9443 to Cebu Country Club;
Preliminary Considerations:
Petitioners contravene the hierarchy of courts,
3. The RTCs declaration that R.A. No. 9443 confirmed Cebu Country
and the petition is fatally defective
Club as the absolute owner of Lot 727-D-2 despite the prior and
final judgment of the Supreme Court that Cebu Country Club was
not the owner was unconstitutional, because it virtually allowed the
legislative review of the Supreme Courts decision rendered against
Cebu Country Club; Before delving on the stated issues, the Court notes that the petitioners are guilty
4. The use of R.A. No. 9443 as a waiver on the part of the of two violations that warrant the immediate dismissal of the petition for review
Government vis--vis Cebu Country Club was not only misplaced
but downrightly repugnant to Act 1120, the law governing the legal on certiorari.
disposition and alienation of Friar Lands; and

5. The petitioners had the requisite standing to question the patent The first refers to the petitioners breach of the hierarchy of courts by coming
errors of the RTC, especially in the face of the unholy conspiracy
between the OSG and Cebu Country Club, on the one hand, and, directly to the Court to appeal the assailed issuances of the RTC via petition for review
on the other hand, the passage of R.A. No. 9443 and DENR

on certiorari. They should not have done so, bypassing a review by the Court of Appeals
(CA), because the hierarchy of courts is essential to the efficient functioning of the courts
and to the orderly administration of justice. Their non-observance of the hierarchy of courts
has forthwith enlarged the docket of the Court by one more case, which, though it may not
seem burdensome to the layman, is one case too much to the Court, which has to devote
time and effort in poring over the papers submitted herein, only to discover in the end that
a review should have first been made by the CA. The time and effort could have been
dedicated to other cases of importance and impact on the lives and rights of others.
The hierarchy of courts is not to be lightly regarded by litigants. The CA stands
between the RTC and the Court, and its establishment has been precisely to take over
much of the work that used to be done by the Court.Historically, the CA has been of the
greatest help to the Court in synthesizing the facts, issues, and rulings in an orderly and
intelligible manner and in identifying errors that ordinarily might escape detection. The
Court has thus been freed to better discharge its constitutional duties and perform its most
important work, which, in the words of Dean Vicente G. Sinco, [20] is less concerned with the
decision of cases that begin and end with the transient rights and obligations of particular
individuals but is more intertwined with the direction of national policies, momentous
economic and social problems, the delimitation of governmental authority and its impact
upon fundamental rights.[21]
The need to elevate the matter first to the CA is also underscored by the reality
that determining whether the petitioners were real parties in interest entitled to bring this
appeal against the denial by the RTC of the OSGs motion for the issuance of a writ of
execution was a mixed question of fact and law. As such, the CA was in the better position
to review and to determine. In that regard, the petitioners violate Section 1, Rule 45 of the
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
1997 Rules of Civil Procedure, which demands that an appeal by petition for review
on certiorari be limited to questions of law.[22]
The second violation concerns the omission of a sworn certification against forum
shopping from the petition for review on certiorari. Section 4, Rule 45 of the 1997 Rules of
Civil Procedure requires that the petition for review should contain, among others, the
sworn certification on the undertakings provided in the last paragraph of Section 2, Rule 42
of the 1997 Rules of Civil Procedure, viz:
Section 2. xxx
The petitioner shall also submit together with the petition a
certification under oath that he has not theretofore commenced any
other action involving the same issues in the Supreme Court, the Court
of Appeals or different divisions thereof, or any other tribunal or agency;
if there is such other action or proceeding, he must state the status of
the same; and if he should thereafter learn that a similar action or
proceeding has been filed or is pending before the Supreme Court, the
Court of Appeals, or different divisions thereof, or any other tribunal or
agency, he undertakes to promptly inform the aforesaid courts and
other tribunal or agency thereof within five (5) days therefrom. (n)
Only petitioner Tomas V. Alonso has executed and signed the sworn certification against
forum shopping attached to the petition. Although neither of his co-petitioners Mercedes V.
Alonso and Asuncion V. Alonso has joined the certification, Tomas did not present any
written express authorization in his favor authorizing him to sign the certification in their
behalf. The signing of the certification by only one of the petitioners could not be presumed
to reflect the personal knowledge by his co-petitioners of the filing or non-filing of any
similar action or claim.[23] Hence, the failure of Mercedes and Asuncion to sign and execute
the certification along with Tomas warranted the dismissal of their petition. [24]
B.
Petitioners are not proper parties

to appeal and assail the order of the RTC
The petitioners are relentless in insisting that their claim to Lot No. 727-D-2 of the
Banilad Friar Lands Estate should be preferred to that of Cebu Country Club, despite the
final judgment in G.R. No. 130876 being adverse to their claim. Their insistence raises the
need to resolve once and for all whether or not the petitioners retained any legal right to
assert over Lot No. 727-D-2 following the Governments manifest desistance from the
execution of the judgment in G.R. No. 130876 against Cebu Country Club.
The above-noted defects of the petition for review notwithstanding, therefore, the
Court has now to address and resolve the stated issues on the sole basis of the results the
Court earlier reached in G.R. No. 130876. In this regard, whether or not the petitioners are
the proper parties to bring this appeal is decisive.
After careful consideration, the Court finds that the cause of the petitioners
instantly fails.
In G.R. No. 130876, the Court found that the petitioners did not validly acquire
ownership of Lot No. 727-D-2, and declared that Lot No. 727 D-2 legally belonged to the
Government, thus:
The second issue is whether the Court of Appeals erred in ruling
that the Cebu Country Club, Inc. is owner of Lot No. 727.
Admittedly, neither petitioners nor their predecessor had any
title to the land in question. The most that petitioners could claim was
that the Director of Lands issued a sales patent in the name of Tomas
N. Alonso. The sales patent, however, and even the corresponding
deed of sale were not registered with the Register of Deeds and no
title was ever issued in the name of the latter. This is because there
were basic requirements not complied with, the most important of which
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
was that the deed of sale executed by the Director of Lands was
not approved by the Secretary of Agriculture and Natural
Resources. Hence, the deed of sale was void. Approval by the
Secretary of Agriculture and Commerce is indispensable for the validity
of the sale. Moreover, Cebu Country Club, Inc. was in possession of
the land since 1931, and had been paying the real estate taxes thereon
based on tax declarations in its name with the title number indicated
thereon. Tax receipts and declarations of ownership for taxation
purposes are strong evidence of ownership. This Court has ruled that
although tax declarations or realty tax payments are not conclusive
evidence of ownership, nevertheless, they are good indicia of
possession in the concept of owner for no one in his right mind will be
paying taxes for a property that is not in his actual or constructive
possession.
Notwithstanding this fatal defect, the Court of Appeals ruled that
there was substantial compliance with the requirement of Act No. 1120
to validly convey title to said lot to Tomas N. Alonso.
On this point, the Court of Appeals erred.
Under Act No. 1120, which governs the administration and
disposition of friar lands, the purchase by an actual and bona fide
settler or occupant of any portion of friar land shall be agreed upon
between the purchaser and the Director of Lands, subject to the
approval of the Secretary of Agriculture and Natural Resources (mutatis
mutandis).
In his Memorandum filed on May 25, 2001, the Solicitor General
submitted to this Court certified copies of Sale Certificate No. 734, in
favor of Leoncio Alburo, and Assignment of Sale Certificate No. 734, in
favor of Tomas N. Alonso. Conspicuously, both instruments do not bear
the signature of the Director of Lands and the Secretary of the Interior.
They also do not bear the approval of the Secretary of Agriculture and
Natural Resources.
Only recently, in Jesus P. Liao v. Court of Appeals, the Court
has ruled categorically that approval by the Secretary of Agriculture
and Commerce of the sale of friar lands is indispensable for its
validity, hence, the absence of such approval made the sale null and
void ab-initio. Necessarily, there can be no valid titles issued on the
basis of such sale or assignment. Consequently, petitioner
Franciscos father did not have any registerable title to the land in
question. Having none, he could not transmit anything to his sole
heir, petitioner Francisco Alonso or the latters heirs.
In a vain attempt at showing that he had succeeded to the
estate of his father, on May 4, 1991, petitioner Francisco Alonso
executed an affidavit adjudicating the entire estate to himself (Exh.
Q), duly published in a newspaper of general circulation in the province
and city of Cebu (Exh. Q-1). Such affidavit of self-adjudication is
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

inoperative, if not void, not only because there was nothing to

adjudicate, but equally important because petitioner Francisco did not suit on appeal. If he does not, the appeal, as to him, is an exercise in futility. So it is with
show proof of payment of the estate tax and submit a certificate of
clearance from the Commissioner of Internal Revenue. Obviously, the petitioners!
petitioner Francisco has not paid the estate taxes.

Consequently, we rule that neither Tomas N. Alonso nor his

son Francisco M. Alonso or the latters heirs are the lawful owners In contrast, the Government, being the legal owner of Lot No. 727-D-2, is the
of Lot No. 727 in dispute. xxx.[25]
only party adversely affected by the denial, and is the proper party entitled to assail the

denial.[30] However, its manifest desistance from the execution of the decision effectively

The pronouncement in G.R. No. 130876 renders beyond dispute that the non- barred any challenge against the denial, for its non-appeal rendered the denial final and

execution of the judgment would not adversely affect the petitioners, who now hold no right immutable.

whatsoever in Lot No. 727-D-2. Otherwise put, they are not the proper parties to assail the
C.
questioned orders of the RTC, because they stand to derive nothing from the execution of R.A. No. 9443 gives petitioners no legal interest
to assail the denial of the motion for execution
the judgment against Cebu Country Club.

Section 1 of R.A. No. 9443 provides:

Every action must be prosecuted or defended in the name of the real party in
Section 1. All existing Transfer Certificates of Title and
interest, unless otherwise authorized by law or the rules. [26] A real party in interest is one Reconstituted Certificates of Title duly issued by the Register of
Deeds of Cebu Province and/or Cebu City covering any portion of
who stands to be benefited or injured by the judgment in the suit, or the party entitled to the Banilad Friar Lands Estate, notwithstanding the lack of signatures
and/or approval of the then Secretary of Interior (later Secretary of
the avails of the suit.[27] Interest within the meaning of the rule means material interest, an
Agriculture and Natural Resources) and/or the then Chief of the Bureau
of Public Lands (later Director of Public Lands) in the copies of the duly
interest in issue and to be affected by the decree, as distinguished from mere interest in
executed Sale Certificates and Assignments of Sale Certificates, as the
case may be, now on file with the Community Environment and Natural
the question involved, or a mere incidental interest. The rule refers to
Resources Office (CENRO), Cebu City, are hereby declared as valid
a real or present substantial interest, as distinguished from a mere expectancy; or from a titles and the registered owners recognized as absolute owners
thereof.
future, contingent, subordinate, or consequential interest. [28] One having no right or interest

to protect cannot invoke the jurisdiction of the court as a party-plaintiff in an action.[29]

The law expressly declares as valid (a)ll existing Transfer Certificates of Title and

Reconstituted Certificates of Title duly issued by the Register of Deeds of Cebu Province

Thus, an appeal, like this one, is an action to be prosecuted by a party in interest and/or Cebu City covering any portion of the Banilad Friar Lands Estate, and

before a higher court. In order for the appeal to prosper, the litigant must of necessity recognizes the registered owners as absolute owners. To benefit from R.A. No. 9443,

continue to hold a real or present substantial interest that entitles him to the avails of the

therefore, a person must hold as a condition precedent a duly issued Transfer Certificate
of Title or a Reconstituted Certificate of Title.
Although Lot 727-D-2 was earlier declared to be owned by the Government in
G.R. No. 130876, R.A. No. 9443 later validated Cebu Country Clubs registered ownership
due to its holding of TCT No. RT-1310 (T-11351) in its own name. As the OSG explained
in its manifestation in lieu of comment[31] (filed in the RTC vis--vis the petitioners motion for
reconsideration against the RTCs denial of the OSGs motion for issuance of a writ of
execution), the enactment of R.A. No. 9443 had mooted the final and executory Decision
of the Supreme Court in Alonso v. Cebu Country Club, Inc., docketed as G.R. No. 130876,
which declared the Government as the owner of Lot 727-D-2 based on the absence of
signature and approval of the then Secretary of Interior; and that the decision in G.R. No.
130876 had ceased to have any practical effect as the result of the enactment of R.A. No.
9443, and had thereby become academic.[32]
On the other hand, the petitioners could not benefit from R.A. No. 9443 because
of their non-compliance with the express condition of holding any Transfer Certificate of
Title or Reconstituted Certificate of Title respecting Lot727-D-2 or any portion thereof.
The appropriate recourse for the petitioners, if they persist in the belief that the
TCT of Cebu Country Club should be nullified, is to compel the OSG through the special
civil action for mandamus to commence the action to annul on the ground that Cebu
Country Club had obtained its title to Lot 7217-D-2 through fraud. Yet, that recourse is no
longer availing, for the decision in G.R. No. 130876 explicitly found and declared that
the reconstituted title of Cebu Country Club had not been obtained through fraud. Said the
Court:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
On the question that TCT No. RT-1310 (T-11351) bears the
same number as another title to another land, we agree with the Court
of Appeals that there is nothing fraudulent with the fact that Cebu
Country Club, Inc.s reconstituted title bears the same number as
the title of another parcel of land. This came about because under
General Land Registration Office (GLRO) Circular No. 17, dated
February 19, 1947, and Republic Act No. 26 and Circular No. 6, RD 3,
dated August 5, 1946, which were in force at the time the title was
reconstituted on July 26, 1948, the titles issued before the inauguration
of the Philippine Republic were numbered consecutively and the titles
issued after the inauguration were numbered also consecutively
starting with No. 1, so that eventually, the titles issued before the
inauguration were duplicated by titles issued after the inauguration of
the Philippine Republic. xxx.
xxx
Petitioners next argue that the reconstituted title of Cebu
Country Club, Inc. had no lawful source to speak of; it was
reconstituted through extrinsic and intrinsic fraud in the absence
of a deed of conveyance in its favor. In truth,
however, reconstitution was based on the owners duplicate of the
title, hence, there was no need for the covering deed of sale or
other modes of conveyance. Cebu Country Club, Inc. was
admittedly in possession of the land since long before the Second
World War, or since 1931. In fact, the original title (TCT No. 11351)
was issued to the United Service Country Club, Inc. on November
19, 1931 as a transfer from Transfer Certificate of Title No. 1021.
More importantly, Cebu Country Club, Inc. paid the realty taxes on
the land even before the war, and tax declarations covering the
property showed the number of the TCT of the land. Cebu Country
Club, Inc. produced receipts showing real estate tax payments
since 1949. On the other hand, petitioner failed to produce a single
receipt of real estate tax payment ever made by his father since the
sales patent was issued to his father on March 24, 1926. Worse,
admittedly petitioner could not show any [T]orrens title ever issued to
Tomas N. Alonso, because, as said, the deed of sale executed
on March 27, 1926 by the Director of Lands was not approved by the
Secretary of Agriculture and Natural Resources and could not be
registered. Under the law, it is the act of registration of the deed of
conveyance that serves as the operative act to convey the land
registered under the Torrens system. The act of registration creates
constructive notice to the whole world of the fact of such conveyance.
On this point, petitioner alleges that Cebu Country Club, Inc.
obtained its title by fraud in connivance with personnel of the
Register of Deeds in 1941 or in 1948, when the title was
administratively reconstituted. Imputations of fraud must be
proved by clear and convincing evidence. Petitioner failed to
adduce evidence of fraud. In an action for re-conveyance based on
fraud, he who charges fraud must prove such fraud in obtaining a
title. In this jurisdiction, fraud is never presumed. The strongest

suspicion cannot sway judgment or overcome the presumption of
regularity. The sea of suspicion has no shore, and the court that
embarks upon it is without rudder or compass. Worse, the imputation
of fraud was so tardily brought, some forty-four (44) years or sixty-
one (61) years after its supposed occurrence, that is, from the
administrative reconstitution of title on July 26, 1948, or from the
issuance of the original title on November 19, 1931, that verification is
rendered extremely difficult, if not impossible, especially due to
the supervening event of the second world war during which
practically all public records were lost or destroyed, or no longer
available.[33]
IN VIEW OF THE FOREGOING, the petition for review on certiorari is denied for
lack of merit.
The Court declares that Cebu Country Club, Inc. is the exclusive owner of Lot
No.727-D-2 of the Banilad Friar Lands Estate, as confirmed by Republic Act No. 9443.
Costs of suit to be paid by the petitioners.
SO ORDERED.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
G.R. No. L-79787 June 29, 1989
APOLONIO EGAO AND BEATRIZ EGAO, petitioners,
vs.
THE HONORABLE COURT OF APPEALS (NINTH DIVISION), SEVERO DIGNOS AND
SEVERO BONTILAO, respondents.
Eliud J. Pailagao for petitioners.
Guerrero A. Adaza for private respondents.
PADILLA, J.:
This is a land dispute which culminated in the filing by private respondents Severo Dignos
and Severo Bontilao of a verified complaint for Quieting of Title and/or Recovery of
Possession and Ownership before the RTC of Manolo Fortich, Bukidnon, * against
petitioners Apolonio and Beatriz Egao.
Private respondents' complaint alleged that they are the legitimate owners and possessors
of two (2) parcels of land situated at Lonocan, Manolo Fortich, Bukidnon, per deed of
absolute sale dated 21 December 1979 which, among others, recited thus:
WHEREAS, the abovementioned Parcels of land Lot No. 662 is
covered by Original Certificate of Title No. P-3559 Free Patent No.
298112 registered in the name of APOLONIO EGAO married to Beatriz
Menosa and Lot No. 661 is covered by Original Certificate of Title No.
P-3558 Free Patent No. 303249 registered in the name of RAULITA
CONEJOS married to Pedro Conejos, all transcribed in the Registration
Book in the Register of Deeds for the Province of Bukidnon;
WHEREAS, Lot No. 662 has been transferred in ownership from
BEATRIZ MENOSA EGAO, married to Apolonio Egao in favor of
ROBERTO N. MARFORI per Deed of Absolute Sale executed before
Tommy C. Pacana, Notary Public of Cagayan de Oro City entered in
his Notarial Registry under Doc. No. 75; Page No. 15; Book V Series of
1965; and Lot No. 661 likewise has been transferred in ownership from
RAULITA R. CONEJOS in favor of ROBERTO N. MARFORI per Deed
of Absolute Sale executed before Tommy C. Pacana, Notary Public of
Cagayan de Oro City, dated June 3, 1965, entered in his Notarial
Registry under Doc. No. 20; Page 4; Book V; Series of 1965.
WHEREAS, the VENDEES herein is [sic] aware of the fact that the
Certificate of Title over the abovementioned parcels of land have not
yet been transferred in favor of ROBERTO N. MARFORI except for the
tax declarations but that the VENDOR herein is in actual, physical,

continuous, uninterrupted, and adverse possession of the above
described parcels of land free from all liens and encumbrances
whatsoever; 1
Allegedly, upon purchase of Lot No. 662 from Roberto Marfori, improvements were
introduced and taxes paid by private respondents. Sometime in June 1983, herein
petitioners allegedly occupied illegally portions of the land. 2
Petitioners' answer to the complaint asserted that Apolonio Egao is the registered owner of
the parcel of land known as Lot No. 662, Pls 854 with an area of 3,451 sq. meters
evidenced by OCT No. P-3559 issued by the Register of Deeds of Bukidnon pursuant to
Free Patent No. 298112 dated 12 August 1965; that he (Apolonio Egao) and his family
have been in actual, physical, adverse, open and continuous possession thereof even
before the issuance to him of the free patent; that the land has never been sold by reason
of the prohibition against alienation under Commonwealth Act No. 141 (Public Land Law);
and that the instant case was the fourth in a series filed against the Egaos and is part of
respondents' scheme to grab said parcel of land from the petitioners.
Judge Felicidario M. Batoy ruled in favor of the Egaos, herein petitioners (defendants in
the court a quo), ordering respondent Severo Bontilao (plaintiff in the court a quo) to
immediately deliver to the Egaos the owner's duplicate copy of Original Certificate of Title
No. P-3559. Said trial judge held:
In the instant case, granting arguendo, that defendants executed the 2
documents in favor of Marfori (Exhs. A & B) after the filing of the
application for free patent but before the issuance of the latter, without
the approval of the Director of Lands, upon issuance of Free Patent No.
29811 2 on August 12, 1965, the said deeds of sale (Exhs. A & B)
were ipso facto cancelled or superseded by said free patent. Moreover,
it appears from the evidence that defendants never vacated or
abandoned their possession of Lot No. 662 as they have continuously
lived on said lot since 1950, a fact admitted by the plaintiffs themselves.
And as long as Original Certificate of Title No. P-3559 remains in the
name of defendant Apolonio Egao, married to Beatriz Menoza Egao,
this is the ultimate and best evidence of title granted by the government
which must be honored and respected by the courts. In a nutshell, the
plaintiffs miserably failed to present or show any title to Lot No. 662,
PLS-854 which should be quieted or freed from any cloud of doubt as
prayed for in their complaint and they further failed to show that they
are entitled to the ownership and possession to Lot No. 662, PLS-854. 3
Private respondents went to the Court of Appeals in CA-G.R. No. 09539. Setting aside the
RTC decision, the appellate court ** held, in part, thus-
That the land is titled in the name of defendant Apolonio Egao is not in
question. The main point in issue is whether defendants could validly
sell the land to Marfori who in turn transferred ownership thereof to the
plaintiff. 4
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Marfori and Egao were both held by the Court of Appeals in pari delicto for violating the
five (5) year restriction under Sec. 118, Commonwealth Act No. 141 as amended by Act
No. 496 against encumbrance or alienation of lands acquired under a free patent or
homestead; hence, they cannot, according to the appellate court, seek affirmative relief,
but respondents on the other hand were declared innocent purchasers for value who
obtained the owner's duplicate copy of the OCT (still in the name of the Egaos) from
Marfori who transferred to them (respondents) physical possession of the property. Finally,
the Court of Appeals held:
WHEREFORE, the decision appealed from is hereby SET ASIDE and a
new one is rendered:
1. Declaring the plaintiffs as the absolute owners of
the land known as Lot No. 662, Pls-854 of the Land
Registry of Bukidnon;
2. Ordering the Register of Deeds of Bukidnon to
effect the cancellation of Original Certificate of Title
No. P-3559 in the name of Apolonio Egao and in lieu
thereof, another one be issued in the names of
plaintiffs, after payment of the proper fees;
3. Ordering the defendants to surrender peaceful
possession of the land to plaintiffs and to desist from
further disturbing the possession over the land of
plaintiffs;
4. Ordering the defendants to pay the costs.
SO ORDERED. 5
Petitioners turn to this Court for relief, assailing the appellate court for allegedly committing
grave abuse of discretion amounting to lack of jurisdiction in holding that:
a. Petitioners sold Lot 662 to Roberto Marfori;
b. It was only in 1983 when Petitioners wrested
possession over the land from private respondents;
c. Petitioners never denied the sales made in favor
of Marfori, in their answer;
d. Private Respondents are "innocent purchasers for
value. 6

and/or for allegedly deciding questions of substance not in accordance with law and/or
applicable decisions of this Court.
Without giving due course to the petition, the Court required respondents to
comment. 7 After comment, the Court resolved to require petitioners to file a reply, which
they did. Respondents filed a rejoinder. Considering the allegations, issues and arguments
adduced, the Court resolved to give due course to the petition. Upon submission by the
parties of their respective memorandum, the petition was submitted for decision. 8
Validity of the Deeds of Sale executed between Marfori (as purchaser) and the petitioners
(as sellers) is the main issue to be resolved, in determining respondents' right over the
disputed land, the respondents being the transferees of Marfori.
It is undisputed that Free Patent No. 298112 was issued to petitioner Apolonio Egao over
Lot No. 662 on 12 August, 1965. Sec. 118 of Commonwealth Act No. 141, as amended,
prohibits the alienation or encumbrance, within a period of five (5) years from the date of
issuance of the patent, of lands acquired under free patent or homestead.
Assuming, arguendo, the authenticity of the Deeds of Sale executed by the Egaos in favor
of Marfori over portions of Lot No. 662 (the land in question), dated 7 May 1964, 14
January and 6 October 1965, it clearly appears that all deeds were executed within the
prohibited period of five (5) years. As correctly found by the appellate court-
Section 124 of the Public Land Act provided [sic] that any acquisition,
conveyance, abenation, transfer or other contract made or executed
inviolation of any of the provisions of Sections 118,121,120,122 and
123 of this Act shall be unlawful, null and void from its execution and
shall produce the effect of annulling and cancelling the grant, title,
patent or permit originally issued, recognized or confirmed, actually or
prescriptively, and cause the reversion of the property and its
improvements to the state. 9
Petitioners deny the authenticity and due execution of the notarized deeds of sale in favor
of Marfori, asserting continued ownership over the land by virtue of a Torrens Certificate of
Title issued in their name. While the Court is not satisfied with respondents' explanation of
their failure to present the notaries public (who were residents of a neighboring province)
to affirm their participation in the preparation of the Deeds, the Court also finds as
insufficient the mere denials by petitioners as to due execution and authenticity of said
Deeds of Sale. A notarial document is evidence of the facts in clear unequivocal mariner
therein expressed. It has in its favor the presumption of regularity To contradict all these
there must be evidence that is clear, convincing and more than merely
preponderant. 10 The question of authenticity being one of fact, the Court will not disturb
the conclusions of the Court of Appeals on the matter.
Original Certificate of Title No. P-3559 over the land in dispute was issued on 1 March
1966, a few months after the execution by the Egaos of the last Deed of Sale in favor of
Marfori. 11 The OCT is registered in the name of the Egaos, herein petitioners.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
A Torrens title, once registered, cannot be defeated, even by adverse open and notorious
possession. A registered title under the Torrens system cannot be defeated by
prescription. The title, once registered, is notice to the world. All persons must take notice.
No one can plead ignorance of the registration. 12
Contrary to the appellate court's conclusion, respondents are not innocent purchasers for
value. 13 An "innocent purchaser for value" is deemed, under the Torrens system, to
include an innocent lessee, mortgagee or other encumbrancer for value. 14 Where a
purchaser neglects to make the necessary inquiries and closes his eyes to facts which
should put a reasonable man on his guard as to the possibility of the existence of a defect
in his vendor's title, and relying on the belief that there was no defect in the title of the
vendor, purchases the property without making any further investigation, he cannot claim
that he is a purchaser in good faith for value. 15
Furthermore, a private individual may not bring an action for reversion or any action which
would have the effect of cancelling a free patent and the corresponding certificate of title
issued on the basis thereof, with the result that the land covered thereby will again form
part of the public domain, as only the Solicitor General or the officer acting in his stead
may do so. 16
The rule of pari delicto non oritur actio (where two persons are equally at fault neither party
may be entitled to relief under the law), admits of exceptions and does not apply to an
inexistent contract, such as, a sale void ab initio under the Public Land Act, when its
enforcement or application runs counter to the public policy of preserving the grantee's
right to the land under the homestead law. 17
Sec. 51, par. 2 of the Property Registration Decree (PD 1529), formerly Sec. 50 of the
Land Registration Act (Act No. 496) expressly provides that the registration of the Deed is
the operative act that binds or affects the land insofar as third persons are concerned. The
law requires a higher degree of prudence from one who buys from a person who is not the
registered owner, when the land object of the transaction is registered land. While one who
buys from the registered owner need not look behind the certificate of title, one who buys
from another who is not the registered owner is expected to examine not only the
certificate of title but all factual circumstances necessary for him to determine if there are
any flaws in the title of the transferor, or in his capacity to transfer the land. Failing to
exercise caution of any kind whatsoever is tantamount to bad faith. 18
Deeds of sale of patented lands, perfected within the prohibited five (5) year period are null
and void (Sec. 124, Public Land Act). No title passed from the Egaos to Marfori which
could be validly transferred to herein respondents Bontilao and Dignos. Nemo dat quod
non habet (nobody can dispose of that which does not belong to him). 19
While the government has not taken steps to assert its title, by reversion, to a homestead
sold in violation of the Public Land Act, the vendor or his heirs is better entitled to the
possession of the said, the vendee being in no better situation than any intruder. 20
Accordingly, respondents who are not innocent purchasers for value have no standing to
question petitioners' right to the land and to file an action for quieting of title.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

WHEREFORE, the appealed decision of the Court of Appeals in CA G.R. CV No. 09539 is G.R. No. 107751 June 1, 1995
REVERSED and SET ASIDE. Meanwhile, petitioners as registered owners are entitled to
remain in physical possession of the disputed property. Respondents are ordered to LETICIA P. LIGON, petitioner,
deliver the owner's duplicate copy of the OCT (No. P-3559) to petitioners, without prejudice
vs.
to an action for reversion of the land, which may be instituted by the Solicitor General for COURT OF APPEALS, JUDGE CELIA LIPANA-REYES, Presiding Judge, Branch 81,
the State. Regional Trial Court of Quezon City, Iglesia ni Kristo and the Register of Deeds of
Quezon City, respondent.
Let a copy of this decision be furnished the Solicitor General.

SO ORDERED.
BELLOSILLO, J.:

This is a petition for review of the decision of the Court of Appeals which affirmed the order
of the Regional Trial Court of Quezon City, Br. 82, granting the motion of respondent of
Iglesia ni Kristo to direct petitioner to surrender the owner's duplicate of the certificates of
title in her possession.

On 19 October 1990 respondent Iglesia ni Kristo (INK) filed with the Regional Trial Court of
Quezon City a complaint 1 for specific performance with damages against the Islamic
Directorate of the Philippines (IDP) docketed as Civil Case No. Q90-6937. Respondent
INK alleged in its complaint that by virtue of an Absolute Deed of Sale dated 20 April 1989
IDP sold to it two (2) parcels of land located at Tandang Sora, Barrio Culiat, Quezon City,
both of which IDP is the registered owner. The parties stipulated in the deed of sale that
the IDP shall undertake to evict all squatters and illegal occupants in the property within
forty-five (45) days from the execution of the contract.

IDP failed to fulfill this obligation. Hence INK prayed that the trial court order IDP to comply
with its obligation of clearing the subject lots of illegal occupants and to pay damages to
INK.

IDP alleged in its answer that it was INK which violated the contract by delaying the
payment of the purchase price and prayed that the contract of sale be rescinded and
revoked.

On 15 June 1991 INK filed a motion for partial summary judgment on the ground that there
was actually no genuine issue as to any material fact.

On 12 September 1991 the trial court rendered partial judgment, and on 7 October 1991
an amended partial judgment granting the reliefs prayed for by INK except the prayer for
damages which was to be resolved later.

On 22 January 1992 INK filed a motion in the same case praying that petitioner Leticia
Ligon, who was in possession of the certificates of title over the properties as mortgagee of
IDP, be directed to surrender the certificates to the Register of Deeds of Quezon City for
the registration of the Absolute Deed of Sale in its name. INK alleged that the document
could not be registered because of the refusal and/or failure of petitioner to deliver the
certificates of title despite repeated requests.

On 31 January 1992 petitioner Ligon filed an opposition to the motion on the ground that
the IDP was not served copy of the motion, and the ownership of the INK over the property
was still in issue since rescission was sought by the IDP as a counterclaim. She prayed
that the motion be denied, but should it be granted, the Register of Deeds be directed after
registration to deliver the owner's duplicate copies of the new certificates of title to her.
On 15 February 1992 petitioner filed a Supplemental Opposition questioning the
jurisdiction of the trial court because the motion involved the registrability of the document
of sale, and she was not made a party to the main case.
On 2 March 1992 the trial court granted the motion of INK and ordered petitioner to
surrender to INK the owner's copy of RT-26521 (170567) and RT-26520 (176616) in open
court for the registration of the Absolute Deed of Sale in the latter's name and the
annotation of the mortgage executed in favor of petitioner on the new transfer certificates
of title to be issued to INK.2
On 6 April 1992, on motion of petitioner Ligon, the trial court reconsidered its order by
directing her to deliver the certificates of title to the Register of Deeds of Quezon City. 3
Petitioner filed a petition for certiorari with the Court of Appeals seeking the annulment of
the two (2) orders. However, on 28 October 1992 the Court of Appeals dismissed the
petition and affirmed the orders of the trial court.
Petitioner now comes to us alleging that the trial court erred: (a) in ruling that it had
jurisdiction over petitioner; (b) in upholding the orders of the trial court even as they
violated the rule prohibiting splitting of a single cause of action and forum-shopping; (c) in
holding that INK is the owner of the property and entitled to registration of its ownership;
and, (d) in holding that INK has a superior right to the possession of the owner's copies of
the certificates of title.
Upon prior leave, the IDP intervened alleging that prior to the issuance by the trial court of
the order of 2 March 1992, its legal Board of Trustees filed a motion for intervention
informing said court that the sale of the properties was not executed by it but was made
possible by a fake Board of Trustees, hence, the sale is void. The trial court denied the
motion since jurisdiction over the incident properly belonged to the Securities and
Exchange Commission (SEC). Conformably therewith, IDP brought the matter before the
SEC which later declared that the sale of the properties was void. Thus, IDP banks on this
favorable decision in similarly seeking the nullification of the questioned orders of the trial
court.
Under our land registration law, no voluntary instrument shall be registered by the Register
of Deeds unless the owner's duplicate certificate is presented together with such
instrument, except in some cases or upon order of the court for cause shown. In case the
person in possession of the duplicate certificates refuses or fails to surrender the same to
the Register of Deeds so that a voluntary document may be registered and a new
certificate issued, Sec. 107, Chapter 10, of P.D. No. 1529 clearly states:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Sec. 107. Surrender of withheld duplicate certificates. Where it is
necessary to issue a new certificate of title pursuant to any involuntary
instrument which divests the title of the registered owner against his
consent or where a voluntary instrument cannot be registered by
reason of the refusal or failure of the holder to surrender the owner's
duplicate certificate of title, the party in interest may file a petition in
court to compel surrender of the same to the Register of Deeds. The
court, after hearing, may order the registered owner or any person
withholding the duplicate certificate to surrender the same and direct
the entry of a new certificate or memorandum upon such surrender. If
the person withholding the duplicate certificate is not amenable to the
process of the court, or if for any reason the outstanding owner's
duplicate certificate cannot be delivered, the court may order the
annulment of the same as well as the issuance of a new certificate of
title in lieu thereof. Such new, certificate and all duplicates thereof shall
contain a memorandum of the annulment of the outstanding duplicate.
Before the enactment of P.D. No. 1529 otherwise known as the Property Registration
Decree, the former law, Act No. 496 otherwise known as the Land Registration Act, and all
jurisprudence interpreting the former law had established that summary reliefs such as an
action to compel the surrender of owner's duplicate certificate of title to the Register of
Deeds could only be filed with and granted by the Regional Trial Court sitting as a land
registration court if there was unanimity among the parties or there was no adverse claim
or serious objection on the part of any party in interest, otherwise, if the case became
contentious and controversial it should be threshed out in an ordinary action or in the case
where the incident properly belonged.4
Under Sec. 2 of P.D. No. 1529, it is now provided that "Courts of First Instance (now
Regional Trial Courts) shall have exclusive jurisdiction over all applications for original
registration of titles to lands, including improvements and interest therein and over all
petitions filed after original registration of title, with power to hear and determine all
questions arising upon such applications or petitions." The above provision has eliminated
the distinction between the general jurisdiction vested in the regional trial court and the
limited jurisdiction conferred upon it by the former law when acting merely as a cadastral
court. Aimed at avoiding multiplicity of suits the change has simplified registration
proceedings by conferring upon the regional trial courts the authority to act not only on
applications for original registration but also over all petitions filed after original registration
of title, with power to hear and determine all questions arising upon such applications or
petitions.5
The principal action filed by INK in Civil Case No. Q-90-6937 before the trial court was for
specific performance with damages based on a document of sale. Such action was well
within the exclusive jurisdictions of the Regional Trial Court. 6 When IDP, the defendant in
the trial court, did not question the genuineness and validity of said deed of sale and its
obligations thereunder, the summary judgment issued by the court granting the reliefs
sought by INK was also an exercise of its general jurisdiction.
Hence, when INK filed a motion for the issuance of an order from the same court to
compel the holder of the duplicate certificates of title to surrender the same to the Register

of Deeds for the registration of the deed of sale subject of the principal action, the motion
was a necessary incident to the main case. When the sale of the property was upheld by
the court in its judgment and the defendant was directed to comply with its terms and
conditions, the right of INK to have the same registered with the Register of Deeds could
not be disregarded. To assert and enjoy its right, INK should be allowed to seek the aid of
the court to direct the surrender of the certificates of title. Since Regional Trial Courts are
courts of general jurisdiction, they may therefore take cognizance of this case pursuant to
such jurisdiction. 7 Even while Sec. 107 of P.D. 1529 speaks of a petition which can be
filed by one who wants to compel another to surrender the certificates of title to the
Register of Deeds, this does not preclude a party to a pending case to include as incident
therein the relief stated under Sec. 107, especially if the subject certificates of title to be
surrendered are intimately connected with the subject matter of the principal action. 8 This
principle is based on expediency and in accordance with the policy against multiplicity of
suits.
The records of the case show that the subsisting mortgage lien of petitioner appears in the
certificates of title Nos. 26520 and 26521. Hence, the order of the trial court directing the
surrender of the certificates to the Register of Deeds in order that the deed of sale in favor
of INK can be registered, cannot in any way prejudice her rights and interests as a
mortgagee of the lots. Any lien annotated on the previous certificates of title which subsists
should be incorporated in or carried over to the new transfer certificates of title. This is true
even in the case of a real estate mortgage because pursuant to Art. 2126 of the Civil Code
it directly and immediately subjects the property upon which it is imposed, whoever the
possessor may be, to the fulfillment of the obligation for whose security it was constituted.
It is inseparable from the property mortgaged as it is a right in rem a lien on the property
whoever its owner may be. It subsists notwithstanding a change in ownership; in short, the
personality of the owner is disregarded. Thus, all subsequent purchasers must respect the
mortgage whether the transfer to them be with or without the consent of the mortgagee, for
such mortgage until discharged follows the property. 9 It is clear therefore that the surrender
by petitioner of the certificates of title to the Register of Deeds as ordered by the trial court
will not create any substantial injustice to her. To grant the petition and compel INK to file a
new action in order to obtain the same reliefs it asked in the motion before the trial court is
to encourage litigations where no substantial rights are prejudiced. This end should be
avoided. Courts should not be so strict about procedural lapses that do not really impair
the proper administration of justice. The rules are intended to insure the orderly conduct of
litigations because of the higher objective they seek, which is, to protect the parties'
substantive rights. 10
WHEREFORE, the appealed decision of the Court of Appeals dated 28 October 1992 is
AFFIRMED.
SO ORDERED.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
[G.R. No. 127941. January 28, 1999]
BIBLIA TOLEDO-BANAGA and JOVITA TAN, petitioners,
vs. COURT OF APPEALS and CANDELARIO DAMALERIO respondents.
DECISION
MARTINEZ, J.:
The Court of Appeals (CA), in a decision penned by then Justice Ricardo J.
Francisco,[1] categorically declared private respondent as the absolute owner of the land
subject of this case. That decision was affirmed by this Court, became final and executory
and was remanded to the lower court for execution. But the Register of Deeds frustrated
private respondents judicially determined right as it refused to issue Certificates of Title in
his name on the ground that the matter should be referred en consulta to the Register of
Deeds before petitioners title can be cancelled and a new one issued in the name of the
winning party herein private respondent. So, for the third time, this simple redemption case
which commenced in the 1980s is again before this Court.
Here is a summary of the facts, over which there is no dispute:
In an action for redemption filed by petitioner Banaga, the trial court declared that
she had lost her right to redeem her property earlier foreclosed and which was
subsequently sold at public auction to private respondent. [2] Certificates of Title covering
the said property were issued to private respondent over which petitioner Banaga
annotated on March 3, 1983 a notice of lis pendens.[3] On appeal by petitioner Banaga, the
CA reversed the decision of the trial court and allowed the former to redeem the property
within a certain period.[4]Private respondents petition to this Court was dismissed [5] and the
decision became final.
On June 11, 1992, petitioner Banaga tried to redeem the property by depositing with
the trial court the amount of redemption which was financed by her co-petitioner
Tan. Private respondent opposed the redemption arguing that it was made beyond the
time given to her by the court in the earlier case. However, the lower court issued an order
on August 7, 1992 upholding the redemption and ordered the Register of Deeds to cancel
private respondents Certificates of Title and issue new titles in the name of petitioner
Banaga.[6] When his motion for reconsideration was denied by the trial court in an order
dated January 4, 1993, private respondent filed a petition for certiorari with the CA which
was docketed as CA-G.R. No. 29869. On January 11, 1993, private respondent caused
the annotation of said petition as another notice of lis pendens on the Certificates of
Title. Three days later, the CA issued a temporary restraining order to enjoin the execution
of the August 7, 1992 and January 4, 1993 orders.
Meanwhile, on January 7, 1993, petitioner Banaga sold the subject property to
petitioner Tan with the deed of absolute sale mentioning private respondents certificate of
title which was not yet cancelled. Notwithstanding the notice of lis pendens, petitioner Tan
subdivided the property in question under a subdivision plan, which she made not in her
name but in the name of private respondent. There being no preliminary injunction issued
and with the expiration of the TRO, petitioner Tan asked the Register of Deeds to issue

new titles in her name. On March 24, 1993, such titles were issued in petitioner Tans name
but it still carried the annotations of the two notices of lis pendens. Upon learning of the
new title of petitioner Tan, private respondent impleaded the former in his petition in CA-
G.R. No. 29869.
On October 28, 1993, the CA set aside the August 7, 1992 and January 4, 1993
orders of the trial court and declared private respondent absolute owner of the subject
property. The CA disposed of the petition as follows:
WHERFORE, in view of the foregoing considerations, the instant petition is hereby
GRANTED. The orders issued by public respondent judge dated August 7, 1992 and
January 4, 1993 are hereby ordered SET ASIDE and a new one is hereby entered
declaring petitioner as the absolute owner of the parcels of land subject of redemption for
failure of private respondent to exercise the right of redemption within the thirty (30) day
period previously granted her by this court.[7]
That decision became final and executory after petitioner Banagas petition for review
was dismissed by this Court for lack of merit. [8] Upon motion of private respondent, the trial
court issued a writ of execution on December 27, 1994 ordering the Register of Deeds to
reinstate the Certificates of Title in the name of the movant herein private respondent. In its
order which petitioners did not contest, the court a quo said that:
Although there is no specific pronouncement in the decision of the Court of Appeals that
reverts the titles to the land subjects of redemption to the defendant, the fact that it
declared the petitioner (Damalerio) as the absolute owner of the lands entitles him to writ
of execution issuing from this court directing the Register of Deeds to reinstate his titles to
his name. As it is implied from the decision declaring him the absolute owner of the lands
that the titles to the land be reverted to him (See Uy v. Capulong, 221 SCRA 87).
Let therefore a writ of execution issue in this case to enforce the decision of the Court of
Appeals. In this connection, the Register of Deeds of the Registry of Deeds for General
Santos City is hereby ordered to reinstate the titles of Candelario B. Damalerio - Transfer
Certificates of Title No. T- 19570 and T-19571, both of the Registry of Deeds from General
Santos City.[9]
But the Register of Deeds refused to comply with the writ of execution alleging that
the Certificates of Title issued to petitioner Tan must first be surrendered. Accordingly,
private respondent moved to cite the Register of Deeds in contempt of court which was
denied, as the trial court ruled on January 11, 1995 that the formers remedy is
by consulta to the Commissioner of Land Registration. [10] In another order (dated March
29, 1996), the trial court likewise denied private respondents motion for the issuance of a
writ of possession ruling that the latters remedy is a separate action to declare petitioner
Tans Certificates of Title void. Aggrieved, private respondent again elevated the case to
the CA via a petition for certiorari and mandamus[11] assailing the above-mentioned two
orders of the court a quonaming as respondents the trial court judge, the Register of
Deeds and the petitioners. On November 7, 1996, the CA rendered a decision granting the
petition and, among others, set aside the assailed orders of the trial court. The dispositive
portion of the CA decision reads:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
WHEREFORE, in view of all the foregoing considerations, the petition is GRANTED.
Judgment is hereby rendered:
1) setting aside the orders of the respondent judge dated January11, 1995 and
March 29, 1996;
2) declaring the title issued to Biblia Toledo-Banaga, Jovita Tan and to those
other subsequent transferee or transferees, if any, as null and void;
3) ordering the Register of Deeds of General Santos City to issue new
certificates of title to Candelario Damalerio over the parcels of land in
question;
4) ordering the respondent court to issue writ of execution for the enforcement
of this decision and of the decision in CA-G.R. SP No. 29868 (sic), as
well as a writ of possession for the delivery to petitioner Damalerio of
the Physical possession of the parcels of land subject matter of this
case.
SO ORDERED.[12]
Upon denial by the CA of their motion for reconsideration, petitioners filed the instant
petition for certiorari and mandamus. The Court, however, is puzzled why petitioners, in
their petition, would seek to set aside the two orders (January 4, 1995 and March 29,
1996) of respondent judge who was not named in their petition. [13] Assuming this to be a
mere lapsus since they also confusingly refer to Banaga and Tan as private respondent
and to Damalerio as petitioner,[14] the petition is still utterly without merit. It is petitioners
stand (1) that petitioner Tan is a buyer in god faith and (2) that the remedy of private
respondent to secure the titles in his name is by consulta to the Land Registration
Commissioner and not through contempt.
The Court is not convinced of the arguments proffered by petitioners.
By arguing that petitioner Tan was a buyer in good faith, petitioners in effect raise
once more the issue of ownership of the subject property. But such issue had already been
clearly and categorically ruled upon by the CA and affirmed by this Court, wherein private
respondent was adjudged the rightful and absolute owner thereof. The decision in that
case bars a further repeated consideration of the very same issue that has already been
settled with finality. To once again re-open that issue through a different avenue would
defeat the existence of our courts as final arbiters of legal controversies. Having attained
finality, the decision is beyond review or modification even by this Court. [15]
Under the principle of res judicata, the Court and the parties, are bound by such final
decision, otherwise, there will be no end to litigation. It is to the interest of the public that
there should be an end to litigation by the parties over a subject fully and fairly adjudicated,
and an individual should not be vexed twice for the same cause. [16] All the elements of res
judicata are present in this case, which are:
(a) the former judgment must be final;

(b) the court which rendered judgment had jurisdiction over the parties and the
subject matter;
(c) it must be a judgment on the merits;
(d) and there must be between the first and second actions identity of parties,
subject matter, and cause of action.[17]
The judgment in the redemption suit had long become final and executory; there is
no question that the court had jurisdiction over the parties and the subject matter; it
involves an adjudication on the merits of the case as the court discussed and passed upon
petitioner Banagas right of redemption which she did not timely exercise and as a
consequence, lost her claim of ownership of the lot. Both petitioners and private
respondent are parties to the earlier cases, disputing the same parcel of land with both
opposing parties claiming ownership thereof. Certainly, res judicata had set in. Besides,
once a judgment had become final and executory, it can no longer be disturbed no matter
how erroneous it may be. In any case, no such error was attributed to in this case.
Contrary to petitioners argument, private respondents remedy is not a direct or
independent civil action for cancellation of petitioner Tans titles. The facts, circumstances,
evidence and arguments invoked in this derailed final and executory decision are the very
same matters that will be established assuming such independent suit is legally
warranted. It does not matter whether the former case was a redemption suit and the new
one will be for cancellation of title because the test of identity of causes of action is not in
its form but whether the same evidence would support and establish the former and
present causes of action.[18]
Petitioners other contention that the execution of the final and executory decision -
which is to issue titles in the name of private respondent - cannot be compelled
by mandamus because of the formality that the registered owner first surrenders her
duplicate Certificates of Title for cancellation per Section 80 of Presidential Decree
1529[19] cited by the Register of Deeds,[20] bears no merit. In effect, they argue that the
winning party must wait execution until the losing party has complied with the formality of
surrender of the duplicate title.Such preposterous contention borders on the absurd and
has no place in our legal system. Precisely, the Supreme Court had already affirmed the
CAs judgment that Certificates of Title be issued in private respondents name. To file
another action just to compel the registered owner, herein petitioner Tan, to surrender her
titles constitute violation of, if not disrespect to, the orders of the highest tribunal.
Otherwise, if execution cannot be had just because the losing party will not surrender her
titles, the entire proceeding in the courts, not to say the efforts, expenses and time of the
parties, would be rendered nugatory. It is revolting to conscience to allow petitioners to
further avert the satisfaction of their obligation because of sheer literal adherence to
technicality,[21] or formality of surrender of the duplicate titles. The surrender of the
duplicate is implied from the executory decision since petitioners themselves were parties
thereto. Besides, as part of the execution process, it is a ministerial function of the Register
of Deeds to comply with the decision of the court to issue a title and register a property in
the name of a certain person, especially when the decision had attained finality, as in this
case.
In addition, the enforcement of a final and executory judgment is likewise a
ministerial function of the courts[22] and does not call for the exercise of discretion. Being a
ministerial duty, a writ of mandamus lies to compel its performance.[23] Moreover, it is
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
axiomatic that where a decision on the merits is rendered and the same has become final
and executory, as in this case, the action on procedural matters or issues becomes moot
and academic.[24] Thus, the so-called consulta to the Commissioner of Land Registration,
which is not applicable herein, was only a naive and belated effort resorted to by
petitioners in order to delay execution. If petitioners desire to stop the enforcement of a
final and executory decision, they should have secured the issuance of a writ of
preliminary injunction,[25] but which they did not avail knowing that there exists no legal or
even equitable justifications to support it.
At any rate, at the time petitioner Banaga sold the property to petitioner Tan, the
latter was well aware of the interest of private respondent over the lot. Petitioner Tan
furnished the amount used by petitioner Banaga for the attempted redemption. One who
redeems in vain a property of another acquires notice that there could be a controversy. It
is for the same reason that petitioner Tan was included as party to the case filed in
court. Worse, at the time of the sale, petitioner Tan was buying a property not registered in
the sellers name.This clear from the deed of absolute sale which even mentioned that the
Certificates of Title is still in the name of private respondent. It is settled that a party
dealing with a registered land need not go beyond the Certificate of Title to determine the
true owner thereof so as to guard or protect her interest. She has only to look and rely on
the entries in the Certificate of Title. By looking at the title, however, petitioner Tan cannot
feigned ignorance that the property is registered in private respondents name and not in
the name of the person selling to her. Such fact alone should have at least prompted, if not
impelled her to investigate deeper into the title of her seller - petitioner Banaga, more so
when such effort would not have entailed additional hardship, and would have been quite
easy, as the titles still carried the two notices of lis pendens.
By virtue of such notices, petitioner Tan is bound by the outcome of the litigation
subject of the lis pendens. As a transferee pendente lite, she stands exactly in the shoes of
the transferor and must respect any judgment or decree which may be rendered for or
against the transferor. Her interest is subject to the incidents or results of the pending suit,
and her Certificates of Title will, in that respect, afford her no special protection. [26]
To repeat, at the time of the sale, the person from whom petitioner Tan bought the
property is neither the registered owner nor was the former authorized by the latter to sell
the same. She knew she was not dealing with the registered owner or a representative of
the latter. One who buys property with full knowledge of the flaws and defects in the title of
his vendor is enough proof of his bad faith[27] and cannot claim that he acquired title in
good faith as against the owner or of an interest therein. [28] When she nonetheless
proceeded to buy the lot, petitioner Tan gambled on the result of litigation. [29] She is bound
by the outcome of her indifference with no one to blame except herself if she looses her
claim as against one who has a superior right or interest over the property. These are the
undeniable and uncontroverted facts found by the CA, which petitioners even quote and
cite in their petition. As aptly concluded by the CA that petitioner Tan is indeed a buyer in
bad faith on which the Court agrees:
Notwithstanding her constructive and actual knowledge that Damalerio was claiming the
land, that the land was in his name, and it was involved in pending litigation, Jovita Tan
bought it from Banaga on January 7, 1993. The deed of sale recites that the parcels of
land sold were covered by Transfer Certificates of Title No. __ (formerly [T-12488] T-530)
and TCT No. __ (formerly [T-12488] T-530) (sic) and TCT No. __ (formerly P-1294).
(Annex F, Petition). Apart from the fact that Banaga was without any TCT, as above
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

stated, TCT No. T-12488 was petitioners title (Annex C, Petition). Herein private
respondent Tan was buying a land not registered in her sellers (Banagas) name, but in
that of petitioner Damalerio who had been claiming it as his own. She admitted this fact
when she had the land subdivided on February 2, 1993 not in her name but in the name of
Candelario Damalerio (Annex Q, Reply). Evidently, she was a purchaser in bad faith
because she had full knowledge of the flaws and defects of title of her seller, Banaga. X x
x.
The notice of lis pendens registered on March 3, 1993 involving the land in question and
private respondent Tans actual knowledge of the then pending Civil Case No. 2556, where
the question as to whether the redemption of the land which she financed was raised,
rendered her a purchaser in bad faith and made the decision therein binding upon her.[30]
Being a buyer in bad faith, petitioner Tan cannot acquire a better rights than her
predecessor in interest,[31] for she merely stepped into the shoes of the latter. Such finding
of bad faith is final and may not be re-opened for the law cannot allow the parties to trifle
with the courts.[32]
With respect to the issue of possession, such right is a necessary incident of
ownership.[33] The adjudication of ownership to private respondent includes the delivery of
possession since the defeated parties in this case has not shown by what right to retain
possession of the land independently of their claim of ownership which was
rejected.[34] Otherwise, it would be unjust if petitioners who has no valid right over the
property will retain the same.[35] Thus, the CA correctly disagreed with the trial courts order
denying private respondents motion for writ of possession for the following reasons cited in
its decision:
4. Private respondents and respondent Judge executed the questioned orders
of August 7, 1993 and January 4, 1993, pending review of said orders in CA-
G.R. SP No. 29869. The nullification of said orders by this out imposed upon
the private respondents the obligation to return the property to Damalerio and
upon respondent Judge, upon motion for execution, to order the cancellation of
private respondents titles and the issuance of new titles to him.
5. This Court in its decision in CA-G.R. SP No. 29869 declared petitioner
Damalerio absolute owner of the property in question. Private respondents
were parties litigants in said case, who did not claim possession of the land
separately from their claim of ownership thereof. Such being the case, the
delivery of possession is considered included in this Courts decision declaring
Damalerio absolute owner of the property (x x x), which can be enforced by
writ of possession (x x x). In denying petitioners motion for writ of possession,
the trial court violated said doctrines, and
6. Lastly, the effect of respondent Judges order of March 29, 1996 is to re-open
the decision in CA-G.R. SP No. 29689 for re-litigation and alteration in a
separate action. For while this Court already declared that Banagas
redemption of the land financed by private respondent Tan was invalid, and as
a consequence declared Damalerio absolute owner of the property, which was
binding against private respondent Tan, as she was a respondent therein and
a purchaser pendente lite and in bad faith, the order of the respondent Court
holding that another civil action be filed to annul private respondent Tans titles
would be to re-litigate such issues and modify or alter this Courts final decision.
The respondent Court has no authority to do so. [36]

1. The order violates the doctrine laid down in Javier vs. Court of Appeals, 224
SCRA 704, which ruled that the issuance of title in favor of a purchaser in bad
faith does not exempt the latter from complying with the decision adverse to his
predecessor in interest, nor preclude him from being reached by writ of
execution;
WHEREFORE, premises considered, the petition is hereby DENIED and the assailed
decision of the Court of Appeals is AFFIRMED in toto with costs against petitioners. No
further proceeding will be entertained in this case.
SO ORDERED.

2. Private respondent Tan was a party respondent in CA-G.R. SP No. 29869,

she having been impleaded in a supplemental petition, which this Court gave
due course and required the respondents to file their answer. The fact that she
did not file any pleading, nor intervene therein did not excuse her from being
bound by the decision, otherwise all that a party respondent was to fold his arm
to prevent him from being bound by a decision in a case. Her securing titles
over the land during the pendency of said case did not protect her from the
effects of said decision. The validity of tile of a purchaser of registered land
depends on whether he had knowledge, actual or constructive, of defects in
the title of his vendor. If he has such knowledge, he is a purchaser in bad faith
and acquires the land subject to such defects (X x x indicates that citations of
authorities omitted) The title secured by a purchaser in bad faith is a nullity and
gave the latter no right whatsoever, as against the owner (x x x).

3. Private respondent Tans titles and those of her predecessor, Banaga, arose
from the void orders of August 7, 1992 and January 4, 1993. Since a void order
could not give rise to valid rights, said titles were also necessarily null and void
(x x x).

G.R. No. 163118 April 27, 2007
DORIS CHIONGBIAN-OLIVA, Petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, THE DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES AND THE REGISTER OF DEEDS OF CEBU
CITY, Respondents.
DECISION
QUISUMBING, J.:
This petition for certiorari assails (1) the Decision 1 dated August 7, 2003 of the Court of
Appeals in CA-G.R. CV. No. 74409, reversing the Decision2 dated December 13, 2001 of
the Regional Trial Court of Cebu City, Branch 12 in SP. Proc. No. 10746-CEB, and (2) the
Resolution3 dated March 17, 2004, denying the motion for reconsideration.
The following facts are undisputed.
Petitioner Doris Chiongbian-Oliva is the registered owner of a parcel of land in Talamban,
Cebu City, as evidenced by Transfer Certificate of Title (TCT) No. 5455. 4 This title
originated from Original Certificate of Title (OCT) No. 1066 from a free patent granted on
September 11, 1969 under Commonwealth Act No. 141, 5 as amended. The free patent,
OCT No. 1066, and TCT No. 5455 contained the condition that a forty-meter legal
easement from the bank of any river or stream shall be preserved as permanent
timberland.6
On October 1, 2001, petitioner filed a petition for reduction of legal easement docketed as
SP. Proc. No. 10746-CEB before the Regional Trial Court of Cebu City, Branch 12.
Petitioner alleged that the property is residential as shown by the tax declaration 7 and the
Certification8 of the Office of the City Assessor. Thus, the applicable legal easement is only
three meters pursuant to Department of Environment and Natural Resources (DENR)
Administrative Order No. 99-21,9 and not forty meters, which applies to timberlands and
forest lands. Petitioner also alleged that enforcing the forty-meter legal easement would
virtually deprive her of the use and enjoyment of the property since it consists only of 1,000
square meters.
The DENR countered that the property is inalienable. It also claimed that the applicant
agreed on the forty-meter legal easement when the free patent was applied for.
The trial court ruled in favor of petitioner. It said that there is no longer any reason for the
forty-meter legal easement because the property had been transformed into residential
land and the area where it is located has been reclassified as urban. Applying DENR A.O.
No. 99-21, the applicable legal easement is only three meters. The decisions decretal
portion states:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
WHEREFORE, premises considered, it is hereby ordered that the legal encumbrance of
forty (40) meters for river bank protection annotated on Petitioners Transfer Certificate of
Title No. 5455 be reduced to the applicable legal easement of three (3) meters in
accordance with law.
Accordingly, the Register of Deeds of Cebu City is hereby directed to cancel the above
legal encumbrance of forty (40) meters annotated on Petitioners Transfer Certificate of
Title No. 5455 and in lieu thereof, annotate the applicable legal encumbrance of three (3)
meters for river bank protection.
SO ORDERED.10
On appeal, the Court of Appeals reversed the trial courts decision. It upheld the DENRs
claim that the property was inalienable. Accordingly, a positive act of the government was
necessary to declassify it from forest land to alienable land. Declaration of the property as
residential in the tax declaration and reclassification of the area where it is located as
urban were insufficient bases to reclassify the property. The fallo of the appellate courts
decision reads:
WHEREFORE, premises considered, the Decision dated December 13, 2001, of the
Regional Trial Court, 7th Judicial Region, Branch 12, Cebu City, in SP. PROC. NO. 10746-
CEB, is hereby REVERSED and SET ASIDE. No pronouncement as to costs.
SO ORDERED.11
The appellate court later denied petitioners motion for reconsideration.
Petitioner now raises the following issues:
I.
WHETHER OR NOT PETITIONERS LOT COVERED BY THE LEGAL ENCUMBRANCE
IS A PUBLIC LAND/LAND OF THE PUBLIC DOMAIN (AND THUS, CANNOT BE
RECLASSIFIED EXCEPT BY THE EXECUTIVE DEPARTMENT) OF THE
GOVERNMENT, OR A PRIVATE LAND.
II.
WHETHER OR NOT THE TRIAL COURT IS CORRECT IN TAKING JUDICIAL NOTICE
OF THE FACT THAT PETITIONERS LOT COVERED BY TCT NO. 5455 IS SITUATED IN
AN URBAN AREA AND NOT IN A FOREST AREA, AND IN THUS CONCLUDING THAT
THE LEGAL EASEMENT APPLICABLE FOR RIVER BANK PROTECTION IS THREE (3)
METERS AND NOT FORTY (40) METERS.
III.

WHETHER OR NOT SECTION 90(i) OF C.A. NO. 141 WHICH PROVIDES FOR A
UNIFORM EASEMENT OF FORTY (40) METERS FROM THE BANK ON EACH SIDE OF
ANY RIVER, AND WHICH PRESERVES THE SAID 40-METER PORTION AS
PERMANENT TIMBERLAND REGARDLESS OF WHETHER IT IS SITUATED IN A
FOREST AREA OR AN URBAN AREA, IS STILL APPLICABLE TO LOTS SITUATED IN
AN URBAN AREA IN THE LIGHT OF THE PROVISIONS OF SUBSEQUENT
LEGISLATION, SPECIFICALLY SECTION 51 OF P.D. NO. 1067.12
Simply stated, the issues are: (1) Is the property public or private land? and (2) Is the
applicable legal easement forty or three meters?
On the first issue, C.A. No. 141, as amended, provides that lands of the public domain may
be classified by the President, upon the recommendation of the Secretary of Environment
and Natural Resources, into: (1) alienable or disposable; (2) timber; and (3) mineral
lands.13 However, only alienable or disposable lands may be disposed of through any of
the forms of concession enumerated in the law. 14 A free patent is one of such
concessions15and once it is registered and the corresponding certificate of title issued, the
land covered by them ceases to be part of the public domain and becomes private
property.16
Verily, by the issuance of a free patent on September 11, 1969, and the subsequent
issuance of OCT No. 1066 and TCT No. 5455, the property in this case had become
private land. It is inconsistent for an alienable land of the public domain to be covered by a
free patent and at the same time retain its character as public land.
On the second issue, Section 90(i) of C.A. No. 141 requires that a forty-meter legal
easement from the bank of any river or stream shall be preserved as permanent
timberland. More specifically, it provides:
(i) That the applicant agrees that a strip forty meters wide starting from the bank on each
side of any river or stream that may be found on the land applied for, shall be demarcated
and preserved as permanent timberland to be planted exclusively to trees of known
economic value, and that he shall not make any clearing thereon or utilize the same for
ordinary farming purposes even after patent shall have been issued to him or a contract of
lease shall have been executed in his favor. (Emphasis supplied.)
To implement this, the DENR promulgated A.O. No. 99-21 which provides the guidelines in
the processing, verification, and approval of isolated and cadastral surveys. Pertinent to
this case are the following provisions:
2.1 Original Surveys:
2.1.a Public Lands:
All alienable and disposable (A and D) lands of the public domain shall be surveyed
pursuant to Section 1 Par. (1) of R.A. 1273 [C.A. No. 141, Section 90(i)] whereby a strip of
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
forty (40) meters wide starting from the banks on each side of any river or stream that may
be found on the land shall be demarcated and preserved as permanent timberland.
Likewise, to be demarcated are public lands along the banks of rivers and streams and the
shores of the seas and lakes throughout their entire length and within a zone of three (3)
meters in urban areas, twenty (20) meters in agricultural areas and forty (40) meters in
forest area, along their margins which are subject to the easement for public use in the
interest of recreation, navigation, floatage, fishing and salvage.
xxxx
2.3 Survey of Titled Lands:
2.3.1 Administratively Titled Lands:
The provisions of item 2.1.a and 2.1.b shall be observed as the above. However, when
these lands are to be subdivided, consolidated or consolidated-subdivided, the strip of
three (3) meters which falls within urban areas shall be demarcated and marked on the
plan for easement and bank protection.
The purpose of these strips of land shall be noted in the technical description and
annotated in the title.
xxxx
Running in parallel vein is the Water Code of the Philippines 17 which provides:
Art. 51. The banks of rivers and streams and the shores of the seas and lakes throughout
their entire length and within a zone of three (3) meters in urban areas, twenty (20) meters
in agricultural areas and forty (40) meters in forest areas, along their margins, are subject
to the easement of public use in the interest of recreation, navigation, floatage, fishing and
salvage. No person shall be allowed to stay in this zone longer than what is necessary for
recreation, navigation, floatage, fishing or salvage or to build structures of any kind.
Since the property in this case was originally alienable land of the public domain, the
application for free patent contained the condition that a forty-meter legal easement from
the banks on each side of any river or stream found on the land shall be demarcated and
preserved as permanent timberland. However, after the property was administratively
titled, it underwent several surveys for purposes of subdivision, consolidation, or
consolidation-subdivision as evidenced by TCT No. 5455. This title provides that it is a
transfer from TCT Nos. 3975 and 436018and describes the property as Lot 2 of the
consolidation-subdivision plan Pcs-07-002121, being a portion of Lot 6 and 7 Pcs-07-
000974.19 Thus, presently only three meters is required to be demarcated and preserved
as permanent timberland.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

In this case, the trial court properly took judicial notice that Talamban, Cebu City is an G.R. No. 215009, January 23, 2017
urban area. Judicial notice is the cognizance of certain facts which judges may properly
take and act on without proof because they already know them.20 A municipal jurisdiction, REPUBLIC OF THE PHILIPPINES, Petitioner, v. CARMEN SANTORIO
whether designated as chartered city or provincial capital, is considered as urban in its
GALENO, Respondent.
entirety if it has a population density of at least 1,000 persons per square kilometer. 21 The
City of Cebu was created on October 20, 1934 under Commonwealth Act No. 58. 22 It is a
highly urbanized city classified as entirely urban. 23 Thus, all its barangays, including DECISION
Talamban, are considered urban.
PERLAS-BERNABE, J.:
Conformably with the foregoing considerations, the reduction of the legal easement of forty
meters on petitioners property covered by TCT No. 5455 to three meters now is in order. Assailed in this petition for review on certiorari1 are the Decision2 dated June 27, 2013 and
the Resolution3 dated September 17, 2014 rendered by the Court of Appeals (CA) in CA-
WHEREFORE, the instant petition is GRANTED. The assailed Decision dated August 7, G.R. CV No. 02085, affirming the Orders dated October 13, 2006 4 and January 22,
2003 and Resolution dated March 17, 2004 of the Court of Appeals in CA-G.R. CV. No. 20075 of the Regional Trial Court of Dumangas, Iloilo, Branch 68 (RTC), which allowed the
74409 are REVERSED, and the Decision dated December 13, 2001 of the Regional Trial correction of the area of Lot No. 2285 in Original Certificate of Title (OCT) No. 46417 from
Court of Cebu City, Branch 12 in SP. Proc. No. 10746-CEB is REINSTATED. 20,948 square meters to 21,298 square meters.

SO ORDERED. The Facts

On September 2, 2003, respondent Carmen Santorio Galeno (respondent) filed a

petition6 for correction of the area of Lot No. 2285 covered by OCT No. 46417, Dingle
Cadastre (subject property) before the RTC. She alleged therein that she is one of the co-
owners of the subject property by virtue of a Deed of Sale7 dated July 6, 1962. The survey
and subdivision of the subject property was duly approved by the Department of
Environment and Natural Resources (DENR) per its Approved Subdivision Plan of Lot No.
2285.8

Respondent further alleged that when she and her co-owners had the subject property
resurveyed for the purpose of partition, they discovered a discrepancy in the land area of
the subject property as appearing in OCT No. 46417, 9 in that the title reflects an area
of 20,948 square meters, while the Certification10 issued by the DENR Office of the
Regional Technical Director, Lands Management Services, shows an area
of 21,298 square meters. Hence, she sought to correct the area of the subject property in
order to avoid further confusion, and claimed to have notified the adjoining owners. 11

There being no opposition to the petition, the RTC allowed the presentation of
respondent's evidence ex parte before the Branch Clerk as well as for the satisfaction of
the jurisdictional requirements.12

The RTC Ruling

In an Order13 dated October 13, 2006, the RTC granted the petition upon a finding that
respondent was able to substantiate the allegations in her petition to warrant a correction
of the area of the subject property. Hence, it directed the Register of Deeds of the Province
of Iloilo to correct such area in OCT No. 46417 from 20,948 to 21,298 square meters. 14

Herein petitioner Republic of the Philippines (petitioner), through the Office of the Solicitor
General (OSG), filed a motion for reconsideration claiming that the adjoining owners had
not been notified, stressing that such notice is a jurisdictional requirement. 15 In the
Order16 dated January 22, 2007, the RTC denied the motion, finding that a Notice of
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Hearing17 was sent to the adjoining owners. As such, respondent was able to prove Unfortunately, the foregoing documentary evidence are not sufficient to warrant the
compliance with the said jurisdictional requirement. 18 correction prayed for. The Court cannot accord probative weight upon them in view of the
fact that the public officers who issued the same did not testify in court to prove the facts
Aggrieved, petitioner appealed to the CA.19 stated therein.

The CA Ruling
In a Decision20 dated June 27, 2013, the CA affirmed the RTC Order. It found that
respondent, by a preponderance of evidence, was able to prove, based on the records of
the proper government authority, i.e., the Office of the Technical Director, Land
Management Services of the DENR, that the true and correct area of the subject property
was 21,298 square meters as shown in the approved plan. Moreover, petitioner failed to
rebut with contrary evidence respondent's claim that she and her co-owners followed the
boundaries in the technical description of OCT No. 46417 when they caused its resurvey.
In fact, no proof had been adduced to show that the boundaries had been altered. Also,
the CA pointed out that none of the adjoining owners, who were properly notified of the
proceedings and who stand to be adversely affected by the change in the land area of the
subject property, objected to respondent's petition. 21
Petitioner's motion for reconsideration22 was denied in a Resolution23 dated September 17,
2014; hence, this petition.
The Issue Before the Court
The issue advanced for the Court's resolution is whether or not the CA erred in upholding
the correction of the area of the subject property in OCT No. 46417.
The Court's Ruling
The petition is meritorious.
A scrutiny of the evidence marked and formally offered by respondent before the court a
quo shows that the former failed to prove that there was sufficient basis to allow the
correction of the area of the subject property in OCT No. 46417 from 20,948 square
meters to 21,248 square meters.
Records reveal that respondent offered in evidence the following documents: (a) the
Certification24issued by a certain Althea C. Acevedo (Acevedo), Engineer IV, Chief of the
Technical Services Section of the Office of the Regional Technical Director, Land
Management Services of the DENR in Iloilo City, which states that "the true and correct
area of [L]ot 2285, Cad. 246 Dingle Cadastre is 21,928 square meters;" (b) the technical
description25 of Lot No. 2285, a copy of which was certified by Ameto Caballero
(Caballero), Chief of the Surveys Division, while another copy was certified correct by
Acevedo; and (c) the approved subdivision plan of Lot No. 2258, 26 certified by Rogelio M.
Santome (Santome), Geodetic Engineer; Alfredo Muyarsas (Muyarsas), Chief of the
Regional Surveys Division, and Edgardo R. Gerobin (Gerobin), OIC, Regional Technical
Director of the Land Management Services, DENR. On the strength of these pieces of
evidence, respondent sought a reconciliation of the area of the subject property with the
records of the DENR.
In Republic v. Medida,27 the Court held that certifications of the Regional Technical
Director, DENR cannot be considered prima facie evidence of the facts stated therein,
holding that:ChanRoblesVirtualawlibrary
Public documents are defined under Section 19, Rule 132 of the Revised Rules on
Evidence as follows:chanRoblesvirtualLawlibrary
(a) The written official acts, or records of the official acts of the sovereign authority, official
bodies and tribunals, and public officers, whether of the Philippines, or of a foreign
country;chanrobleslaw
(b) Documents acknowledged before a notary public except last wills and testaments; and
(c) Public records, kept in the Philippines, of private documents required by law to be
entered therein.
Applying Section 24 of Rule 132, the record of public documents referred to in Section
19(a), when admissible for any purpose, may be evidenced by an official publication
thereof or by a copy attested by the officer having legal custody of the record, or by his
deputy x x x.
Section 23, Rule 132 of the Revised Rules on Evidence
provides:ChanRoblesVirtualawlibrary
"Sec. 23. Public documents as evidence. - Documents consisting of entries in public
records made in the performance of a duty by a public officer are prima facie evidence of
the facts stated therein. All other public documents are evidence, even against a third
person, of the fact which gave rise to their execution and of the date of the latter."
The CENRO and Regional Technical Director, FMS-DENR, certifications [do] not fall
within the class of public documents contemplated in the first sentence of Section
23 of Rule 132. The certifications do not reflect "entries in public records made in the
performance of a duty by a public officer," such as entries made by the Civil Registrar in
the books of registries, or by a ship captain in the ship's logbook. The certifications are
not the certified copies or authenticated reproductions of original official records in
the legal custody of a government office. The certifications are not even records of
public documents. x x x28 (Emphases supplied)
As such, sans the testimonies of Acevedo, Caballero, and the other public officers who
issued respondent's documentary evidence to confirm the veracity of its contents, the
same are bereft of probative value and cannot, by their mere issuance, prove the facts
stated therein.29 At best, they may be considered only as prima facie evidence of their due
execution and date of issuance but do not constitute prima facie evidence of the facts
stated therein.30
In fact, the contents of the certifications are hearsay because respondent's sole witness
and attorney-in-fact, Lea Galeno Barraca, was incompetent to testify on the veracity of
their contents,31 as she did not prepare any of the certifications nor was she a public officer
of the concerned government agencies. Notably, while it is true that the public prosecutor
who represented petitioner interposed no objection to the admission of the foregoing
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

evidence in the proceedings in the court below, 32 it should be borne in mind that "hearsay LUCIANO P. PAZ, G.R. No. 157367
evidence, whether objected to or not, has no probative value unless the proponent can Petitioner,
show that the evidence falls within the exceptions to the hearsay evidence rule," 33which do
not, however, obtain in this case. Verily, while respondent's documentary evidence may Present:
have been admitted due to the opposing party's lack of objection, it does not, however, -versus-
mean that they should be accorded any probative weight. The Court has explained CORONA, C.J., Chairperson,
that:ChanRoblesVirtualawlibrary LEONARDO-DE CASTRO,
The general rule is that hearsay evidence is not admissible. However, the lack of objection REPUBLIC OF THE PHILIPPINES, ACTING BERSAMIN,
to hearsay testimony may result in its being admitted as evidence. But one should not be THROUGH THE DEPARTMENT OF ENVIRONMENT DEL CASTILLO, and
misled into thinking that such declarations are thereby impressed with probative value. AND NATURAL RESOURCES, PUBLIC ESTATES VILLARAMA, JR., JJ.
Admissibility of evidence should not be equated with weight of evidence. Hearsay AUTHORITY, FILINVEST DEVELOPMENT
evidence whether objected to or not cannot be given credence for it has no probative CORPORATION, and FILINVEST ALABANG, INC.,
value.34chanroblesvirtuallawlibrary Respondents. Promulgated:
Besides, case law states that the "absence of opposition from government agencies is of
no controlling significance because the State cannot be estopped by the omission, mistake
or error of its officials or agents. Neither is the Republic barred from assailing the decision November 23, 2011
granting the petition for reconstitution [or correction of title, as in this case] if, on the basis
of the law and the evidence on record, such petition has no merit." 35 Moreover, "in civil
cases, the party having the burden of proof must produce a preponderance of evidence x-----------------------------------------------------------------------------------------x
thereon, with plaintiff having to rely on the strength of his own evidence and not upon the
DECISION
weakness of the defendant's."36

In fine, the Court holds that respondent did not present any competent evidence to prove
that the true and correct area of the subject property is 21,298 square meters instead of BERSAMIN, J.:
20,948 square meters to warrant a correction thereof in OCT No. 46417. Accordingly,
respondent's petition for the correction of the said Certificate of Title must be denied, and
the present petition be granted.
The petitioner assails the decision promulgated on August 1, 2002, [1] whereby the Court of
WHEREFORE, the petition is GRANTED. The assailed Decision dated June 27, 2013 and
Appeals (CA) affirmed the dismissal by the Regional Trial Court (RTC), Branch 276, in
the Resolution dated September 17, 2014 rendered by the Court of Appeals in CA-G.R.
CV No. 02085 are hereby REVERSED and SET ASIDE. Carmen Santorio Galeno's Muntinlupa City of his petition for the cancellation of a certificate of title brought under
petition for correction of area of Lot No. 2285 on Original Certificate of Title No. 46417
is DISMISSED. Section 108 of Presidential Decree (P.D.) No. 1529 (Property Registration Decree).
SO ORDERED.

Antecedents

On November 29, 2000, the petitioner brought a petition for the cancellation of Original

Certificate of Title (OCT) No. 684 docketed as LRC Case No. 00-059. The petition,

ostensibly made under Section 108 of P.D. No. 1529, impleaded the Republic of the

Philippines (Republic), Filinvest Development Corporation (FDC), and Filinvest Alabang,

Inc. (FAI) as respondents.


The petition averred that the petitioner was the owner of Parcel 1, Plan 11-69,
with an area of 71,692,754 square meters, situated in Paraaque City, Pasay City, Taguig
City and San Pedro, Laguna, and Parcel 2 Plan 11-69, with a total area of 71,409,413
square meters, situated in Alabang, Muntinlupa, Paraaque City and Las Pias City; that the
total landholding of the petitioner consisted of 143,102,167 square meters, or
approximately 14,310 hectares; that OCT No. 684 was registered in the name of the
Republic, and included Lot 392 of the Muntinlupa Estate with an area of approximately 244
hectares; that Lot 392 was segregated from OCT No. 684, resulting in the issuance of
Transfer Certificate of Title (TCT) No. 185552,[2] also in the name of the Republic; that
FDC and FAI developed Lot 392 into a subdivision based on their joint venture agreement
with the Government; that pursuant to the joint venture agreement, Lot 392 was further
subdivided, causing the cancellation of TCT No. 185552, and the issuance of TCTs for the
resulting individual subdivision lots in the names of the Republic and FAI; and that the
subdivision lots were then sold to third parties.
The petition for cancellation prayed as follows: [3]
xxxx
WHEREFORE, it is most respectfully prayed that OCT No. 684
in the name of the Republic of the Philippine Islands and TCT No.
185552 in the name of the Republic of the Philippines, Book 26, Page
152, Register of Deeds, Muntinlupa City, and all subsequent titles
derived from said TCT No. 185552 as stated in paragraphs 23, 24, 25
and 28 above-quoted, Proclamation No. 1240 dated June 23, 1998,
Resolution No. 01-311 of the City of Muntinlupa dated February 7, 2001
be cancelled and in lieu thereof, and said Register of Deeds be ordered
to issue a new certificate of title in the name of Luciano P. Paz, married
to Elvira Joson, both of legal ages, Filipinos and residents of Lot 5,
Block 31, Modesta Village, San Mateo, Rizal, free from all liens and
encumbrances, and defendants be ordered to vacate the property
covered by said title; ordering respondents jointly and severally to pay
petitioner compensatory damages in the amount of not less than P10
Million, moral damages in the amount of P1 Million, exemplary
damages in the amount of P1 Million and P2 Million for attorneys fees.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Petitioner prays for other reliefs just and equitable to the
premises.
xxxx
On January 19, 2001, FDC and FAI moved to dismiss the petition for cancellation on the
following grounds,[4] to wit:
(1) The serious and controversial dispute spawned by the Petition for
cancellation of title is litigable in an ordinary action outside the
special and limited jurisdiction of land registration courts. The
Petition is thus removed from the ambit of Sec. 108 of the Property
Registration Decree which requires, as an indispensable element
for availment of the relief thereunder, either unanimity of the
parties or absence of serious controversy or adverse claim. It
authorizes only amendment and alteration of certificates of title,
not cancellation thereof;
(2) Lack of jurisdiction of the Court over the persons of the
respondents who were not validly served with summons but only a
copy of the Petition;
(3) Docket fees for the Petition have not been paid.
(4) The Petition does not contain the requisite certificate of non-forum
shopping.
The petitioner countered that his petition for cancellation was not an initiatory pleading that
must comply with the regular rules of civil procedure but a mere incident of a past
registration proceeding; that unlike in an ordinary action, land registration was not
commenced by complaint or petition, and did not require summons to bring the persons of
the respondents within the jurisdiction of the trial court; and that a service of the petition
sufficed to bring the respondents within the jurisdiction of the trial court.
On May 21, 2001, the RTC granted FDC and FAIs motion to dismiss, [5] viz:
xxxx
The petition at bench therefore bears all the elements of an action for
recovery: (A) it was commenced long after the decree of registration in
favor of the Respondent Republic of the Philippines had become final
and incontrovertible, following the expiration of the reglementary period;

for a review of the decree of registration issued to the government of
the Philippine Islands.; (B) there is an imputation of a wrongful or
fraudulent titling in the issuance of Original Certificate of Title No. 684
allegedly irregular due to the absence of survey plan, decree of
registration and court records; (C) the Petition finally seeks as its main
relief the issuance of a new title to him, Luciano Paz, after Original
Certificate of Title No. 684 is invalidated, or the reconveyance of the
property to him. This action although entitled a Petition for cancellation
of a title, which is a complaint by itself, is complete with the name of the
parties, the subject matter, the cause of action, and the reliefs prayed
for, which are all components of a regular complaint. It is in fact an
initiatory pleading, and is not a mere motion.
It is futile to deny that the petition is a fresh lawsuit, involving title to a
land or an interest thereon arising after the original proceeding, which
should be filed and entitled under the original land registration case
under the instructions of Sec. 2 of PD 1529.Indeed, this Section states
further post registration cause of an aggrieved party who complains of
being deprived of a land wrongfully or fraudulently titled in the name of
another. As such it is fair and logical to assume that this is covered by
the current rules on an initiatory pleading and becomes vulnerable to
dismissal under any grounds invoked by the respondent which are
mandatory and jurisdictional requirements under the present rules,
including the payment of docket fees and the certification of non forum
shopping.
xxxx
Thence, the petitioner assailed the dismissal in the CA via petition for certiorari, ascribing
grave abuse of discretion on the part of the RTC in granting FDC and FAIs motion to
dismiss.
On August 1, 2002, the CA dismissed the petition for certiorari,[6] stating:
xxxx
Petition denied.
In a special civil action for certiorari, the burden is on Petitioner to prove
not merely reversible error, but grave abuse of discretion amounting to
lack or excess of jurisdiction for the part of Public Respondent. Mere
abuse of discretion is not enough (Don Orestes Romualdez Electric
Corporation, Inc. vs. NLRC, 319 SCRA 255). The mere fact that Public
Respondent does not subscribe to nor accepts Petitioners arguments
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
or viewpoint does not make the former guilty of committing grave abuse
of discretion.
Not only that. As long as a court acts within its jurisdiction, any alleged
errors committed in the exercise thereof will amount to nothing more
than errors of judgment which are reversible by timely appeal and not
by a special civil action of certiorari (Tomas Claudio Memorial College,
Inc. vs. CA, 316 SCRA 502). A Petition for Certiorari must be based on
jurisdictional grounds because, as long as the respondent acted with
jurisdiction, any error committed by him or it in the exercise thereof will
amount to nothing more than an error of judgment which may be
reviewed or corrected only by appeal (Jalandoni vs. Drilon, 327 SCRA
107).
Applying the aforecited jurisprudence to the case at bench, the Petition
must fail. It is all too obvious that Petitioner would have Us determine
whether or not Public Respondent correctly rendered judgment in
ordering the dismissal of his Petition. Sadly, as the aforecited rulings
have shown, a special civil action for certiorari is a remedy designed for
correction of errors of jurisdiction and not errors of judgment (Diaz vs.
Diaz, 331 SCRA 302). Certiorari will not be issued to xxx correct
erroneous conclusion of law or fact (Tensorex Industrial Corp. vs. CA,
316 SCRA 471).
To reiterate, Petitioner has failed to overcome the burden of proving
how Public Respondent may be faulted with having acted with grave
abuse of discretion in rendering judgment ordering the dismissal of his
Petition. That the court a quo cannot share Petitioners interpretation of
certain alleged laws and jurisprudence hardly constitute the abuse of
discretion contemplated under Rule 65 of the 1997 Rules of Civil
Procedure and as applied by the Highest Tribunal in numerous
cases. Ours is not, through this Petition, to determine whether or not
Public Respondent erred in its judgment but to determine whether or
not Public Respondent court acted with grave abuse of discretion
amounting to lack or excess of jurisdiction.
WHEREFORE, foregoing premises considered, the Petition is hereby
DENIED DUE COURSE and ordered DISMISSED. Resultantly, the
assailed Resolution/s are hereby AFFIRMED, with costs to Petitioner.
SO ORDERED.
On February 24, 2003, the CA denied the petitioners motion for partial reconsideration. [7]
Hence, the petitioner has come to the Court for review, asserting the applicability of
Section 108 of P.D. 1529, and insisting that his petition filed under Section 108 of P.D.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

certificate for value and in good faith, or his heirs and assigns without
1529 should not be dismissed because it was exempt from the requirements of paying his or their written consent. Where the owners duplicate certificate is
not presented, a similar petition may be filed as provided in the
docket fees, of service of summons, and of the certification against forum shopping due to preceding section.

its not being an initiatory pleading. All petitions or motions filed under this section as well as any other
provision of this decree after original registration shall be filed and
entitled in the original case in which the decree of registration was
entered.
Ruling

Based on the provision, the proceeding for the amendment and alteration of a certificate of
The petition for review is devoid of merit. The dismissal of the petition for certiorari by the
title under Section 108 of P.D. No. 1529 is applicable in seven instances or situations,
CA was proper and correct because the RTC did not abuse its discretion, least of all
namely: (a) when registered interests of any description, whether vested, contingent,
gravely.
expectant, or inchoate, have terminated and ceased; (b) when new interests have arisen

or been created which do not appear upon the certificate; (c) when any error, omission or
Section 108 of P.D. No. 1529 reads as follows:
mistake was made in entering a certificate or any memorandum thereon or on any
Section 108. Amendment and alteration of certificates. No erasure, duplicate certificate; (d) when the name of any person on the certificate has been changed;
alteration, or amendment shall be made upon the registration book after
the entry of a certificate of title or of a memorandum thereon and the (e) when the registered owner has been married, or, registered as married, the marriage
attestation of the same by the Register of Deeds, except by order of the
proper Court of First Instance. A registered owner or other person has been terminated and no right or interest of heirs or creditors will thereby be affected;
having interest in the registered property, or, in proper cases, the
Register of Deeds with the approval of the Commissioner of Land (f) when a corporation, which owned registered land and has been dissolved, has not
Registration, may apply by petition to the court upon the ground that the
registered interest of any description, whether vested, contingent, conveyed the same within three years after its dissolution; and (g) when there is
expectant or inchoate appearing on the certificate, have terminated and
ceased; or that new interest not appearing upon the certificate have reasonable ground for the amendment or alteration of title.[8]
arisen or been created; or that an omission or an error was made in
entering a certificate or any memorandum thereon, or on any duplicate
certificate: or that the same or any person in the certificate has been
changed or that the registered owner has married, or, if registered as We agree with both the CA and the RTC that the petitioner was in reality seeking
married, that the marriage has been terminated and no right or interest
of heirs or creditors will thereby be affected; or that a corporation which the reconveyance of the property covered by OCT No. 684, not the cancellation of a
owned registered land and has been dissolved has not yet convened
the same within three years after its dissolution; or upon any other certificate of title as contemplated by Section 108 of P.D. No. 1529. Thus, his petition did
reasonable ground; and the court may hear and determine the petition
after notice to all parties in interest, and may order the entry or not fall under any of the situations covered by Section 108, and was for that reason rightly
cancellation of a new certificate, the entry or cancellation of a
memorandum upon a certificate, or grant any other relief upon such dismissed.
terms and conditions, requiring security and bond if necessary, as it
Moreover, the filing of the petition would have the effect of reopening the decree
may consider proper; Provided, however, That this section shall not be
construed to give the court authority to reopen the judgment or decree
of registration, and could thereby impair the rights of innocent purchasers in good faith and
of registration, and that nothing shall be done or ordered by the court
which shall impair the title or other interest of a purchaser holding a
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

G.R. No. 200180, June 06, 2016

for value. To reopen the decree of registration was no longer permissible, considering that
BENJAMIN H. CABAEZ, Petitioner, v. MARIE JOSEPHINE CORDERO SOLANO
the one-year period to do so had long ago lapsed, and the properties covered by OCT No.
A.K.A. MA. JOSEPHINE S. CABAEZ, Respondent.
684 had already been subdivided into smaller lots whose ownership had passed to third
DECISION
persons. Thusly, the petition tended to violate the proviso in Section 108 of P.D. No. 1529,

to wit: PERALTA, J.:

Before the Court is a petition for review on certiorari seeking to reverse and set aside the
xxx Provided, however, That this section shall not be construed to give Amended Decision1 and Resolution2 of the Court of Appeals (CA), dated August 29, 2011
the court authority to reopen the judgment or decree of registration, and and January 10, 2012, respectively, in CA-G.R. SP No. 101406.
that nothing shall be done or ordered by the court which shall impair the
title or other interest of a purchaser holding a certificate for value in Subject of the present controversy are two (2) parcels of land located in Alabang Hills,
good faith, or his heirs and assigns without his or their written consent. Muntinlupa, with land areas measuring 739 and 421 square meters, and are covered by
Where the owners duplicate certificate is not presented, a similar Transfer Certificates of Title Nos. 154626 and 154627, respectively. Appearing on the face
petition may be filed as provided in the preceding section. of these titles as the registered owner is herein respondent, "Maria Josephine S. Cabaez,
of legal age, married to [herein petitioner] Benjamin H. Cabaez x x x."

On February 12, 2007, respondent filed with the Regional Trial Court (RTC) of Muntinlupa
Nor is it subject to dispute that the petition was not a mere continuation of a City a "Petition for Correction of the Name and Marital Status of the Registered Owner of
Transfer Certificates of Title (TCT) No[s.] 154626 and 154627 of the Registry of Deeds for
previous registration proceeding. Shorn of the thin disguise the petitioner gave to it, the Muntinlupa City."3The petition was docketed as LRC Case No. 07-007 and raffled to
Branch 203. In the said petition, respondent alleged as follows:
petition was exposed as a distinct and independent action to seek the reconveyance of chanRoblesvirtualLawlibrary
realty and to recover damages. Accordingly, he should perform jurisdictional acts, like
x x x x
paying the correct amount of docket fees for the filing of an initiatory pleading, causing the
1. Petitioner is of legal age, single and a resident of #21 Dona Ines St., Alabang Hills
service of summons on the adverse parties in order to vest personal jurisdiction over them Village, Muntinlupa City;

in the trial court, and attaching a certification against forum shopping (as required for all 2. Petitioner is the owner of two parcels of land situated in Alabang, Muntinlupa City
covered by Transfer Certificates of Title No. 154626 and 154627 issued by the Registry of
initiatory pleadings). He ought to know that his taking such required acts for granted was Deed for Muntinlupa, though the same were issued under the name Ma Josephine S.
Cabaez, married to Benjamin H. Cabaez. x x x
immediately fatal to his petition, warranting the granting of the respondents motion to
3. Without knowing the legal implication, Petitioner erroneously made it appear that she is
dismiss. married to Mr. Benjamin when in truth and in fact they are not married but merely living a
common-law relationship
WHEREFORE, the PETITION FOR REVIEW ON CERTIORARI is DENIED, and the
4. Mr. Benjamin H. Cabaez is actually married to a certain Leandra D. Cabaez who had
decision of the Court of Appeals is AFFIRMED. previously filed a case against Petitioner, questioning the ownership of the said properties
which case however was terminated by virtue of a compromise approved by the court in an
Order dated November 23, 2000. xxx
The petitioner shall pay the costs of suit. 5. Mr. Benjamin H. Cabaez has also declared that he is not actually married to the
Petitioner and that he has no interest or share whatsoever in the aforesaid properties as
SO ORDERED. evidenced by the hereto attached copy of the Affidavit of Declaration Against Interest
dated January 22, 2007. x x x
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

6. No interests or rights will be affected by the correction of the name and status of Respondent then filed a Motion for Reconsideration8 contending, among others, that the
Petitioner as registered owner of the said properties. provisions of PD 1529, and not Rule 108 of the Rules of Court, should be applied in the
present case; posting of the notice of hearing of respondent's petition is deemed
PRAYER constructive notice to the whole world, including petitioner; the petition filed by respondent
is an action in rem where jurisdiction over the person of the defendant is not a prerequisite
WHEREFORE, it is respectfully prayed of this Honorable Court that Petitioner's name and to confer jurisdiction on the court, provided that the court acquires jurisdiction over the res.
marital status appearing in Transfer Certificates of Title No. 154626 and 154627 be
corrected to (sic) from "MA. JOSEPHINE S. CABAEZ, married to BENJAMIN H. After petitioner filed its Comment,9 the CA rendered its presently assailed Amended
CABAEZ" to ["]MARIE JOSEPHINE C. SOLANO, single" as it is the true and actual Decision and disposed, thus:
status of petitioner. chanRoblesvirtualLawlibrary
WHEREFORE, the Motion for Reconsideration is hereby GRANTED. The Decision dated
x x x x4ChanRoblesVirtualawlibrary 28 June 2007 of the Regional Trial Court or Muntinlupa City, Branch 203, in LRC Case No.
07-007, is REINSTATED. Perforce, the Petition for Annulment of Judgment is DENIED.
The RTC then conducted hearings where respondent presented her evidence ex parte.
SO ORDERED.10ChanRoblesVirtualawlibrary
On June 28, 2007, the RTC of Muntinlupa, Branch 203, rendered its Decision, the This time, the CA agreed with respondent and ruled that PD 1529 is the governing law and
dispositive portion of which reads as follows: that there is nothing under the pertinent provisions of the said law which states that
chanRoblesvirtualLawlibrary publication is a requirement for the RTC to acquire jurisdiction over respondent's petition.
WHEREFORE, finding the petition to be well-founded and meritorious, the same is The CA also ruled that petitioner failed to prove the existence of extrinsic fraud as a
hereby GRANTED. ground for annulment of the assailed judgment of the RTC.

Accordingly, the Register of Deeds of Muntinlupa City is directed to cause the correction of Aggrieved, petitioner filed a Motion for Reconsideration.11
the name and civil status of the registered owner of Transfer Certificate of Title Nos.
154626 and 154627 from MA. JOSEPHINE S. CABAEZ, married to BENJAMIN H. However, in its Resolution of January 10, 2012, the CA denied petitioner's Motion for
CABAEZ, to MARIE JOSEPHINE C. SOLANO, single. Reconsideration.

SO ORDERED.5ChanRoblesVirtualawlibrary Hence, the present petition for review on certiorari based on the following grounds:
The RTC held that from the evidence presented by herein respondent, it has been chanRoblesvirtualLawlibrary
satisfactorily established that the subject properties should indeed be in respondent's A.
name and that her status should be "single".
WHETHER OR NOT THE HONORABLE COURT OF APPEALS PATENTLY ERRED IN
On November 23, 2007, herein petitioner filed with the CA a Petition for Annulment of AMENDING ITS ORIGINAL DECISION DATED JANUARY 27, 2011 CONSIDERING
Judgment6assailing the above Decision of the RTC on the ground that the said trial court THAT THE REQUIREMENTS OF PUBLICATION AND SUMMONS WERE NOT
did not acquire jurisdiction over the subject matter of the case because respondent's COMPLIED WITH.
petition was not published in a newspaper of general circulation and that petitioner and
other persons who may have interest in the subject properties were not served summons.
B.
On January 27, 2011, the CA rendered a Decision, disposing as follows:
WHETHER OR NOT THE PROCEEDING PROVIDED FOR UNDER SECTION 108 OF
chanRoblesvirtualLawlibrary
PRESIDENTIAL DECREE NO. 1529 IS SUMMARY IN NATURE ALBEIT THE EVIDENT
WHEREFORE, the instant Petition for Annulment of Judgment is hereby GRANTED.
PRESENCE. OF OTHER INTERESTED PARTIES THAT MAY BE AFFECTED BY THE
The Decision dated 28 June 2007 of the Regional Trial Court of Muntinlupa City, Branch
JUDGMENT AS A RESULT OF EX-PARTE PROCEEDINGS.
203, in LRC Case No. 07-007, is ANNULLED and SET ASIDE.

SO ORDERED.7ChanRoblesVirtualawlibrary C.
The CA ruled, among others, that respondent's petition for correction of her name and
marital status as appearing in the subject TCTs should have been published in accordance WHETHER OR NOT THE RULING OF THE HONORABLE SUPREME COURT IN THE
with Rule 108 of the Rules of Court and that respondent failed to present sufficient CASE OF CHAN V. COURT OF APPEALS (298 SCRA 713, 733) APPLIES IN THE
evidence to prove compliance with such requirement. The appellate court also held that INSTANT CASE WHERE IT WAS RULED THAT MERE NOTICE TO THE REGISTER OF
respondent also failed to serve summons upon petitioner, which is in violation of the latter's DEEDS WAS A SUBSTANTIAL COMPLIANCE.
right to due process and of the principle of fair play.

D.
WHETHER OR NOT AMENDMENT AND ALTERATION OF CERTIFICATES OF TITLE
PROVIDED FOR UNDER SECTION 108 OF PD 1529 IS AN IN REM PROCEEDINGS
THAT REQUIRES STRICT COMPLIANCE WITH THE PUBLICATION REQUIREMENT.
E.
WHETHER OR NOT SECTIONS 3 AND 4 OF RULE 108 OF THE RULES OF COURT
SUPPLETORILY APPLY TO THE PROCEEDINGS PROVIDED FOR UNDER SECTION
108 OF PD 1529 WHEREIN THE REQUIREMENT OF PUBLICATION IS MANDATORY.
F.
WHETHER OR NOT THE PHRASE "THE COURT MAY HEAR AND DETERMINE THE
PETITION AFTER NOTICE TO ALL PARTIES IN INTEREST" IN SECTION 108 OF PD
1529 INCLUDES PUBLICATION AND SERVICE OF SUMMONS.
G.
WHETHER OR NOT THE COURT A QUO ACQUIRED JURISDICTION OVER THE
SUBJECT MATTER OF THE PETITION IN THE ABSENCE OF SUMMONS AND
PUBLICATION.
H.
WHETHER OR NOT PETITIONER IS AN INDISPENSABLE PARTY IN THE PETITION
FOR CORRECTION OF NAME AND MARITAL STATUS IN THE TRANSFER
CERTIFICATE OF TITLE NO. 154627 AND 154628.
I.
WHETHER OR NOT LEANDRA D. CABAEZ IS ENTITLED TO NOTICE AND SERVICE
OF SUMMONS BY VIRTUE OF THE DECISION OF THE REGIONAL TRIAL COURT OF
MAKATIY CITY-BRANCH 137 TO THE EFFECT THAT THE PARCELS OF LAND
LEGALLY BELONGED TO THEIR CONJUGAL PROPERTY.
J.
WHETHER OR NOT AN AFFIDAVIT THE CONTENTS OF WHICH WAS NOT TESTIFIED
TO HAS PROBATIVE VALUE.
K.
WHETHER OR NOT THE SECURITY OR BOND MENTIONED IN SECTION 108 OF PD
1529 BEFORE ENTRY OF CORRECTION OR ALTERATION MAY BE MADE IS
MANDATORY TO PROTECT THE INTEREST OF THIRD PERSON.
L.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
WHETHER OR NOT THE HONORABLE COURT OF APPEALS [IS] PROCEDURALLY
CORRECT IN ADMITTING THE SUPPLEMENTAL MEMORANDUM OF THE
RESPONDENT DESPITE THE FACT THAT THE PETITION WAS ALREADY LONG
SUBMITTED FOR DECISION.12ChanRoblesVirtualawlibrary
The Court finds merit in the petition, but for reasons which are not identical as those
espoused by petitioner.
At the outset, it bears to reiterate that the CA ruled on the basis of the provisions of
Presidential Decree No. 1529 (PD 1529), otherwise known as the Property Registration
Decree. Specifically, the CA cited Sections 2 and 108 of the said law, which provide as
follows:
chanRoblesvirtualLawlibrary
Section 2. Nature of registration proceedings; jurisdiction of courts. Judicial proceedings
for the registration of lands throughout the Philippines shall be in rem and shall be based
on the generally accepted principles underlying the Torrens system.
Courts of First Instance shall have exclusive jurisdiction over all applications for original
registration of title to lands, including improvements and interests therein, and over all
petitions filed after original registration of title, with power to hear and determine all
questions arising upon such applications or petitions. The court through its clerk of court
shall furnish the Land Registration Commission with two certified copies of all pleadings,
exhibits, orders, and decisions filed or issued in applications or petitions for land
registration, with the exception of stenographic notes, within five days from the filing or
issuance thereof. (emphasis supplied)
Section 108. Amendment, and alteration of certificates. No erasure, alteration, or
amendment shall be made upon the registration book after the entry of a certificate of title
or of a memorandum thereon and the attestation of the same be Register of Deeds, except
by order of the proper Court of First Instance. A registered owner of other person having
an interest in registered property, or, in proper cases, the Register of Deeds with the
approval of the Commissioner of Land Registration, may apply by petition to the court
upon the ground that the registered interests of any description, whether vested,
contingent, expectant or inchoate appearing on the certificate, have terminated and
ceased; or that new interest not appearing upon the certificate have arisen or been
created; or that an omission or error was made in entering a certificate or any
memorandum thereon, or, on any duplicate certificate; or that the same or any person on
the certificate has been changed; or that the registered owner has married, or, if registered
as married, that the marriage has been terminated and no right or interests of heirs or
creditors will thereby be affected; or that a corporation which owned registered land and
has been dissolved has not convened the same within three years after its dissolution; or
upon any other reasonable ground; and the court may hear and determine the petition
after notice to all parties in interest, and may order the entry or cancellation of a new
certificate, the entry or cancellation of a memorandum upon a certificate, or grant any other
relief upon such terms and conditions, requiring security or bond if necessary, as it may
consider proper; Provided, however, That this section shall not be construed to give the
court authority to reopen the judgment or decree of registration, and that nothing shall be
done or ordered by the court which shall impair the title or other interest of a purchaser
holding a certificate for value and in good faith, or his heirs and assigns, without his or their
written consent. Where the owner's duplicate certificate is not presented, a similar petition
may be filed as provided in the preceding section. (emphasis supplied)

All petitions or motions filed under this Section as well as under any other provision of this
Decree after original registration shall be filed and entitled in the original case in which the
decree or registration was entered.
The Court notes that the petition was clearly one which was filed after original registration
oi title, as provided under the abovequoted Section 2 of PD 1529. Moreover, respondent's
petition was filed with the RTC for the purpose of correcting supposed errors which were
committed when entries were made in the subject TCTs, as contemplated under Section
108 of the same law.
However, under settled jurisprudence, the enumerated instances for amendment or
alteration of a certificate of title under Section 108 of PD 1529 are non-controversial in
nature.13 They are limited to issues so patently insubstantial as not to be genuine issues.
The proceedings thereunder are summary in nature, contemplating insertions of mistakes
which are only clerical, but certainly not controversial issues.
As early as the case of Tangunan v. Republic of the Philippines 14, which was later cited
in Angeles v. Razon, et al.15, this Court, sitting en banc, ruled that:
chanRoblesvirtualLawlibrary
x x x the lower court did not err in finding that it lacks jurisdiction to entertain the present
petition for the simple reason that it involves a controversial issue which takes this case
out of the scope of Section 112 of Act No. 496 [now Section 108 of PD 1529]. While this
section, among other things, authorized a person in interest to ask the court for any
erasure, alteration, or amendment of a certificate of title "upon the ground that registered
interests of any description, whether vested, contingent expectant, or inchoate, have
terminated and ceased", and apparently the petition comes under its scope, such relief can
only be granted if there is unanimity among the parties, or there is no adverse claim or
serious objection on the part of any party in interest; otherwise the case becomes
controversial and should be threshed out in an ordinary case or in the case where the
incident properly belongs. Thus, it was held that "It is not proper to cancel an original
certificate of Torrens title issued exclusively in the name of a deceased person, and to
issue a new certificate in the name of his heirs, under the provisions of Section 112 of Act
No. 496, when the surviving spouse claims right of ownership over the land covered by
said certificate." And, in another case, where there was a serious controversy between the
parties as to the right of ownership over the properties involved, this court held, "that
following the principle laid down in the decision above cited, the issues herein should be
ventilated in a regular action x x x."16(citations omitted)
In the present case, the Court notes that in a separate action for annulment of title and
recovery of ownership filed by petitioner's wife against respondent, the RTC of Makati City,
Branch 137, in its decision in Civil Case No. 91-2648, dated July 5, 1993, made a
categorical finding that petitioner and his wife are the lawful owners of the subject
properties and ordering respondent to surrender possession thereof to the said
spouses.17 This RTC judgment was later affirmed by the CA in its Decision 18 in CA-G.R.
CV No. 49446, dated April 29, 1997. Respondent, on the other hand, claims that she
together with petitioner and his wife subsequently executed an amicable settlement dated
June 22, 2000, which was approved by the RTC, wherein petitioner's wife waived her
rights and interests over the said properties. She also alleged that petitioner executed an
Affidavit of Declaration Against Interest, dated January 22, 2007, indicating that he has no
right or interest over the subject properties. Petitioner, nonetheless, claims that he
executed a subsequent Affidavit of Non-Waiver of Interest, dated January 14, 2008,
claiming that he was deceived by respondent into signing the said Affidavit of Declaration
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Against Interest and that he was seriously ill at the time that he affixed his signature.
From the foregoing, there is no question that there is a serious objection and an adverse
claim on the part of an interested party as shown by petitioner's subsequent execution of
his Affidavit of Non-Waiver of Interest. The absence of unanimity among the parties is also
evidenced by petitioner's petition seeking the annulment of the RTC Decision which
granted respondent's petition for correction of entries in the subject TCTs. These
objections and claims necessarily entail litigious and controversial matters making it
imperative to conduct an exhaustive examination of the factual and legal bases of the
parties' respective positions. Certainly, such objective cannot be accomplished by the court
through the abbreviated action under Section 108 of PD 1529. A complete determination of
the issues in the present case can only be achieved if petitioner and his wife are
impleaded in an adversarial proceeding.
In addition, the Court finds apropos to the instant case the ruling in the similar case
of Martinez v. Evangelista19 where the petitioner in the said case, being the registered
owner of certain real properties, sought to strike out the words "married to x x x" appearing
in the Transfer Certificates of Title covering the said properties on the ground that the
same was so entered by reason of clerical error or oversight and in lieu thereof the word
"single" be substituted, which according to the petitioner in the said case is his true and
correct civil status. This Court held that:
chanRoblesvirtualLawlibrary
x x x x changes in the citizenship of a person or in his status from legitimate to illegitimate
or from married lo not married are substantial as well as controversial, which can only be
established in an appropriate adversary proceeding as a remedy for the adjudication of
real and justifiable controversies involving actual conflict of rights the final determination of
which depends upon the resolution of issues of nationality, paternity, filiation or legitimacy
of the marital status for which existing substantive and procedural laws as well as other
rules of court amply provide.20ChanRoblesVirtualawlibrary
In the present case, it is now apparent that before the trial court can alter the description of
the civil status of respondent in the transfer certificates of title in question, it will have to
receive evidence of and determine respondent's civil status. This requires a full dress trial
rendering the summary proceedings envisaged in Section 108 of PD 1529 inadequate.
Finally, it is settled that a land registration case is a proceeding in rem, and jurisdiction in
rem cannot be acquired unless there be constructive seizure of the land through
publication and service of notice.21 However, as found by the CA, respondent failed to
comply with the said requirements. In all cases where the authority of the courts to
proceed is conferred by a statute, and when the manner of obtaining jurisdiction is
mandatory, it must be strictly complied with, or the proceedings will be utterly void. 22 It is
wrong for the CA to rule in its Amended Decision that publication is not a jurisdictional
requirement for the RTC to take cognizance of respondent's petition. The appellate court's
reliance on the case of Chan v. Court of Appeals23 is misplaced. In the said case, this
Court considered the notice to the Register of Deeds as substantial compliance with the
notice and publication requirements of the law simply because in the petition for correction
filed by the petitioner therein, only the said petitioner and the Register of Deeds had an
interest in the correction of titles sought for. This Court ruled that there is therefore no
necessity to notify other parties who had no interest to protect in the said petition. This is
not true, however, in the present case. As discussed above, on the bases of petitioner's
serious objection and adverse claim, it is apparent that he has an interest to protect. Thus,
the ruling in Chan finds no application in the instant case.chanrobleslaw
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

WHEREFORE, the instant petition is GRANTED. The Amended Decision and Resolution GR No. 192353
of the Court of Appeals, dated August 29, 2011 and January 10, 2012, respectively, in CA-
G.R. SP No. 101406, are REVERSED and SET ASIDE. The Decision of the Court of
Appeals, dated January 27, 2011, which annulled the June 28, 2007 Decision of the MERCEDITA C. COOMBS Petitioner
Regional Trial Court of Muntinlupa City, Branch 203, is REINSTATED.
versus
SO ORDERED

VICTORIA C. CASTANEDA, VIRGILIO VELOSO SANTOS, SPS. PANCHO & EDITH

LEVISTE, BPI FAMILY SAVINGS BANK and the REGISTER OF DEEDS OF

MUNTINLUPA CITY Respondents

PRESENT: SERENO, CJ, CHAIRPERSON, LEONARDO-DE CASTRO, DEL CASTILLO,

PERLAS-BERNABE, AND CAGUIOA, JJ

Promulgated: MAR 15, 2017

DECISION

LEONARDO-DE CASTRO, J:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court,

as amended, seeking to reverse and set aside the Resolutions dated April 30, 2009 1 and

May 25, 20102 of the Court of Appeals in CA-G.R. SP No. 107949.

This case stemmed from a petition for annulment of judgment to declare the

Decision3 dated August 26, 2004 of the Regional Trial Court (RTC), Branch 206,

Muntinlupa City in LRC Case No. 04-035 as null and void, filed by herein petitioner

Mercedita C. Coombs (Coombs) before the Court of Appeals. The dispositive portion of the

RTC Decision reads:

WHEREFORE, judgment is hereby rendered declaring the lost owners duplicate copy of

Transfer Certificate of Title [No.] 6715 of the Registry of Deeds of Muntinlupa City as null
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

and void. Accordingly, the Register of Deeds of Muntinlupa City is ordered to issue a new In its Resolution dated April 30, 2009, relying on Section 1, Rule 47 of the Revised Rules

owners duplicate copy of the said TCT No. 6715 under the same terms and conditions as of Court, the Court of Appeals dismissed the petition for annulment of judgment. According

the original thereof and to include thereon all annotations which have not been lawfully to the appellate court -
4
ordered cancelled by the Court upon payment of all fees prescribed by law.
A careful reading of the petition reveals that there is no allegation in the petition that the

Petitioner Coombs narrated in the said petition that she is the owner of the real property petitioner has failed to avail of any of the aforementioned remedies in Section 1 through no

covered by Transfer Certificate of Title (TCT) No. 6715 situated on Apitong Street, Ayala fault of his before instituting the herein petition. This is an important condition for the

Alabang, Muntinlupa City; that sometime in March 2005, when she tried to pay the real availment of this remedy. The petition is also not sufficient in substance. Under Section 2[,]

property tax due relative to the real property covered by TCT No. 6715, she was told that Rule 47 of the Rules of Civil Procedure, the grounds for Annulment of Judgment are: (a)

said real property was no longer listed under her lame; that upon further verification, she lack of jurisdiction of the lower court; and (b) extrinsic fraud. Obviously, the ground relied

came to know that TCT No. 6715 had already been cancelled and had been replaced by upon in the present action is extrinsic fraud. However, the petitioner failed to state the facts

TCT No. 14115 issued in the name of herein respondent Virgilio Veloso Santos (Santos); constituting extrinsic fraud as a ground. Since the petitioner failed to avail [of] any of

that TCT No. 6715 was ordered cancelled by the RTC in a Decision dated August 26, 2004 aforementioned remedies in Section 1 without justification and that the ground relied upon

in LRC Case No. 04-035, entitled In Re: Petition for the Issuance of Second Owners was not substantiated, this petition has no prima facie merit. 7

Duplicate Copy of Transfer Certificate of Title No. 6715, [by] Mercedita C. Coombs,
Petitioner Coombs moved for the reconsideration of the above-quoted Resolution. She
represented by her Atty.-in-Fact Victoria C. Castaneda; that she neither authorized
insisted that her petition was grounded on lack of jurisdiction, not extrinsic fraud. In fact,
Victoria C. Castaneda (Castaneda) to file petition for issuance of a second owners
she explicitly spelled out in her petition that the RTC did not have jurisdiction over the
duplicate copy of TCT No. 6715 sometime in 2004, nor asked her to sell the subject
subject matter in LRC Case No. 04-035 because the owners duplicate copy of TCT No.
property to herein respondent Santos; that Santos, in turn, sold the same to herein
6715 was never lost.
respondents Pancho and Edith Leviste (spouses Leviste); that the spouses Leviste

executed a real estate mortgage over the subject property in favor of herein respondent In its assailed Resolution dated May 25, 2010, the Court of Appeals denied the said motion
5
Bank of the Philippine Islands Family Savings Bank (BPI Family). and explained that the RTC has jurisdiction over all proceedings involving title to real

property and land registration cases. Thus, it had jurisdiction over the subject matter of
Petitioner Coombs anchored her prayer for the annulment of the RTC Decision on the
LRC Case No. 04-035. It further held that petitioner Coombs failed to append affidavits of
ground that, since the owners duplicate copy of TCT No. 6715 had never been lost as it
witnesses or documents supporting her cause of action as required by Section 4, Rule 47
had always been in her custody,6 the RTC did not acquire jurisdiction over the subject
of the Rules of Court. It cited Veneracion v. Mancilla,8 where it was held that failure to
matter of LRC Case No. 04-035.
append the necessary documents may prompt the appellate court to dismiss the petition

The Assailed Court of Appeals Resolutions outright or deny the same due course. The dispositive portion of the Resolution reads:
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

WHEREFORE, premises considered, the instant motion is DENIED. Accordingly, the 2. [T]hat the Honorable Court of Appeals be directed to give due course to the petitioners
9
instant petition is DISMISSED WITH FINALITY. petition for annulment of judgment, declaration of nullity of sales and titles, and damages,

and to conduct further proceedings thereon. 17

Hence, the present petition raising the following arguments:

On the other hand, the spouses Leviste maintains (a) that petitioner Coombs petition was
First, petitioner Coombs asserts that she was never notified about the proceedings in LRC
grounded on extrinsic fraud and she failed to properly allege the facts constituting this
Case No. 04-035. Being a stranger to the case, she could not have availed of any of the
ground; (b) that the petition is infirm because petitioner Coombs did not comply with the
remedies mentioned in Section 1, Rule 47 of the Rules of Court to question the RTC
requirements of alleging her failure to resort to ordinary remedies, as enumerated in
Decision. She claims that she only found out about the RTCs decision sometime in March
Section 1, Rule 47 of the Rules of Court and appending the appropriate documents in
2005 in the course of paying for real estate taxes due on the subject property. By that time,
support of her cause of action; and (c) that petitioner Coombs admitted that a new owners
the RTC decision had already become final and executory. Thus, the failure to allege these
duplicate copy of TCT No. 6715 was issued by virtue of the RTC Decision. And, for their
circumstances is not fatal to her petition. 10
last point, they argue that the Petition for Annulment of Judgment is actually a collateral

Second, citing the Courts rulings in Strait Times, Inc. v. Court of Appeals,11 Serra Serra v. attack on their title that is not permitted pursuant to Section 48 of Presidential Decree No.

Court of Appeals,12 Alabang Development Corporation v. Valenzuela, 13 and Demetriou v. 1529, which states that a certificate of title cannot be altered, modified, or cancelled,

Court of Appeals,14 petitioner Coombs maintains that the RTC did not have jurisdiction over except in a direct proceeding in accordance with the law. 18

the subject matter in LRC Case No. 04-035 because the owners duplicate copy of the
For their part, respondent BPI Family contends that it should not have been impleaded in
TCT sought to be annulled was never lost and had always been in her possession. 15
the present petition. It maintains that it is simply a mortgagee in good faith and for value in

Third, petitioner Coombs insists that she appended all the relevant documents to support relation to the subject lot covered by TCT No. 6715. And the present petition seeks to

her Petition for Annulment of Judgment. But she did not append any witnesses affidavits nullify the RTC Decision to which the respondent bank was never a party of. Thus, BPI

because she does not have any witness other than herself. Besides, all the facts that may Family claims that the Court has no jurisdiction over it. 19

be set out in a separate affidavit are already averred in the present petition. Thus, lack
The Issue
thereof should not result in the petitions outright dismissal. 16

We are now left to resolve the lone issue of whether or not the Court of Appeals erred
Ultimately, Coombs prays for the following reliefs:
when it dismissed outright petitioner Coombs petition for annulment of judgment.

1. [T]hat this petition be given due course and that the assailed Resolutions of the Court of
The Ruling of the Court
Appeals be reversed and set aside;

The petition is meritorious.

 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

The Court of Appeals erred when it dismissed outright the petition for annulment of To Our mind, the above-stated allegations made out a prima facie case of annulment of

judgment. judgment to warrant the Court of Appeals favorable consideration.

The grounds for annulment of judgment are set forth in Section 2, Rule 47 of the Rules of In Manila v. Manzo,21 the Court held that in a petition for annulment of judgment grounded

Court, viz.: on lack of jurisdiction, it is not enough that there is an abuse of jurisdictional discretion. It

must be shown that the court should not have taken cognizance of the case because the
Section 2. Grounds for annulment. - The annulment may be based only on the grounds of
law does not confer it with jurisdiction over the subject matter.
extrinsic fraud and lack of jurisdiction.

It is doctrinal that jurisdiction over the nature of the action or subject matter is conferred by
Extrinsic fraud shall not be a valid ground if it was availed of, or could have been availed
law. Section 10 of Republic Act No. 2622vests the RTC with jurisdiction over the judicial
of, in a motion for new trial or petition for relief.
reconstitution of a lost or destroyed owners duplicate of the certificate of title. However,

Contrary to the findings of the Court of Appeals, the Petition for Annulment of Judgment the Court of Appeals erred when it ruled that the subject matter of LRC Case No. 04-035

filed by petitioner Coombs was clearly grounded on lack of jurisdiction of the RTC over the was within the RTCs jurisdiction, being a court of general jurisdiction.

subject matter of the case, and not extrinsic fraud.

In a long line of cases,23 the Court has held that the RTC has no jurisdiction when the

In her petition, petitioner Coombs averred as follows: certificate sought to be reconstituted was never lost or destroyed but is in fact in the

possession of another person. In other words, the fact of loss of the duplicate certificate is
13. Since the owners duplicate copy of TCT No. 6715 is not lost or destroyed, but is in fact
jurisdictional.
in the possession of the petitioner, there is no necessity for the petition filed in the trial

court. The Regional Trial Court Branch 206 in Muntinlupa City never acquired jurisdiction Thus, petitioner Coombs mere allegation that the owners duplicate copy of TCT No. 7615

to entertain the petition and order the issuance of a new owners duplicate certificate. was never lost and has in fact always been with her gave rise to a prima facie case of the

Hence, the newly issued duplicate of TCT No. 6715 is null and void. 20 RTCs lack of jurisdiction over the proceedings in LRC Case No. 04-035. This is exactly

the situation a petition for annulment of judgment aims to remedy.

Simply stated, petitioner Coombs sought to annul the RTC Decision for being rendered

without jurisdiction. According to her, the RTC did not acquire jurisdiction over the subject Moreover, the Court of Appeals dismissal based on technical grounds (i.e., failure to

matter of LRC Case No. 04-035-one for the reconstitution of a lost certificate of title- allege that she did not avail of a motion for new trial, appeal, petition for relief, or other

because the owners duplicate copy of TCT No. 6715 was never lost in the first place, appropriate remedies and failure to append the affidavits of witnesses or documents

which argument has been upheld by the Court in a catena of cases that she cited to supporting the cause of action of her petition) was also erroneous.

support her assertion.

 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

First, when a petition for annulment of judgment is grounded on lack of jurisdiction, the WHEREFORE, the petition is hereby GRANTED. The Resolutions dated April 30, 2009

petitioner need not allege that the ordinary remedy of new trial or reconsideration of the and May 25, 2010 of the Court of Appeals in CA-G.R. SP No. 107949 are SET ASIDE.

judgment sought to be annulled are no longer available through no fault of her own. This is The Court of Appeals is directed to REINSTATE the Petition for Annulment of Judgment in

because a judgment rendered without jurisdiction is fundamentally void. Thus, it may be CA-G.R. SP No. 107949 and to proceed hearing the same with dispatch.

questioned any time unless laches has already set in. 24

SO ORDERED.

Second, petitioner Coombs in fact was able to attach to her petition documents supporting

her cause of action.

Verily, our ruling in Veneracion25 required the petitioners to: (a) allege with particularity in

their petition the facts and the law relied upon for annulment as well as those supporting

their cause of action, and (b) attach to the original copy of their petition the affidavits of

their witnesses and documents supporting their cause of action.

In the present case, petitioner Coombs Petition for Annulment of Judgment was grounded

on lack of jurisdiction. Based on our review of the records, she annexed to her petition the

owners duplicate copy of TCT No. 6715 and the RTC Decision - which sufficiently support

the petitions cause of action. A copy of the TCT alleged (in LRC Case No. 04-035) to have

been missing supports the claim that the same was never lost. In the same vein, a copy of

the RTC Decision, in conjunction with supporting jurisprudence, supports petitioner

Coombs averment that said decision was rendered without jurisdiction. Her allegations

coupled with the appropriate supporting documents give rise to a prima facie case that the

RTC did not have jurisdiction over the subject matter in LRC Case No. 04-035.

As we ruled in Tan Po Chu v. Court of Appeals,26 if allegations of this nature turned out

to be true, the RTC Decision would be void and the Court of Appeals would have

been duty-bound to strike it down. Thus, the appellate court erred when it brushed

aside this duty and dismissed the case outright based on a strict interpretation of technical

rules.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

G.R. No. 184348, April 04, 2016 responsible officer of FiberTech; (2) that Felix was aware of this fact; (3) that Felix
committed perjury when he executed the Affidavit of Loss; (4) that Felix and Rosita had not
TAN PO CHU, Petitioner, v. COURT OF APPEALS, FELIX T. CHINGKOE, ROSITA L. acquired 100% ownership of FiberTech; (5) that Rosita and Rodrigo Garcia were not even
stockholders of record in Fibertech; and (6) that the respondents had no authority to file
CHINGKOE, AND RODRIGO GARCIA, Respondents.
the petition for reissuance of the owner's duplicate copy on behalf of FiberTech. 9

DECISION Citing New Durawood Co. v. Court of Appeals10 and Serra Serra v. Court of Appeals,11 Tan
further argued that if an owner's duplicate TCT has not been lost, but is in fact possessed
BRION, J.: by another person, then the reconstituted title is void and the court that rendered the
decision never acquired jurisdiction.
This is a petition for certiorari filed by Tan Po Chu from the January 16, 2008 and July 16, However, the CA dismissed Tan's petition outright on January 16, 2008 on the grounds
2008 resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 101727.1 The CA that the petition suffered from procedural infirmities and lacked substantial merit. 12
dismissed outright Tan's petition for annulment of the Regional Trial Court's (RTC) decision
in LRC CASE No. 2005-771-MK2 on the grounds that the petition suffered from procedural The CA observed that: (1) the verification and certification of non-forum shopping were
infirmities and lacked substantial merit. executed alone by Tan Po Chu without showing that she had the authority to sign for and
on behalf of the corporation; (2) Tan's actual address was not indicated in the petition as
Antecedents required by Rule 46, Section 3; and (3) the attached copy of the owner's duplicate TCT No.
157923 was not a certified true copy.
Fiber Technology Corporation (FiberTech) was a Philippine corporation with Securities and
Exchange Commission (SEC) Registration No. 0000142818. It was also the registered The CA also brushed aside Tan's substantive argument. It held that the RTC acquired
owner of a parcel of land in Marikina (subject lot) covered by Transfer Certificate of Title jurisdiction over the case after complying with the notice and hearing requirements under
(TCT) No. 157923 entered on November 28, 1988. The SEC allegedly revoked Section 109 of Presidential Decree (P.D.) No. 1529 or the Property Registration Decree. 13
FiberTech's registration on September 29, 2003.3
Tan moved for reconsideration. However, on July 16, 2008, the CA denied the motion,
On April 4, 2005, respondent Felix Chingkoe executed an affidavit of loss of TCT No. insisting that Tan's assertion that the RTC lacked jurisdiction was without merit. 14
157923 allegedly on behalf of FiberTech. 4
On September 19, 2008, Tan filed the present petition for certiorari.
On June 2, 2005, FiberTech - supposedly represented by respondent Rodrigo Garcia
pursant to a December 2, 2004 Board Resolution5 - filed a petition for the The Petition
reissuance/replacement of its owner's duplicate of TCT No. 157923. The petition was
based on the affidavit of loss that Felix executed. The petition alleged: (1) that Felix and Tan argues that the CA committed grave abuse of discretion in ruling that her allegation of
his wife Rosita acquired 3 00% ownership of FiberTech in 2004 pursuant to an award by the RTC's lack of jurisdiction was not meritorious. She maintains that the respondents
the National Labor Relations Commission (NLRC); (2) that Felix was elected Corporate misled the RTC because: (1) Felix and Rosita never became 100% owners of FiberTech;
Secretary soon after; (3) that Felix asked the former directors and officers of FiberTech to and (2) they knew that the "missing" owner's duplicate was in her possession. Pursuant to
turn over the owner's duplicate of TCT No. 157923, but the latter denied knowledge or the cases of New Durawood, Serra Serra, Strait Times v. CA,15 and Demetriou v. CA,16 the
possession thereof; and (4) that after conducting an exhaustive search, the subject title RTC never acquired jurisdiction to reconstitute the owner's duplicate TCT.
was nowhere,to be found.6
The respondents counter that the CA did not commit grave abuse of discretion in
The petition was raffled to the RTC, Marikina City, Branch 193 and docketed as LRC Case dismissing the petition. Further, assuming the CA decided in a manner contrary to
No. 2005-771-MK. prevailing jurisprudence, then it only committed an error of law and not an error of
jurisdiction. They conclude that Tan's resort to a special civil action of certiorari was
On July 23, 2006, the RTC granted the petition. It declared the owner's duplicate copy of unwarranted because the correct remedy would have been to appeal the dismissal of her
TCT No. 157923 as lost and ordered its reissuance. 7 petition.
On December 21, 2007, Tan Po Chu - mother of Fibertech's incorporators Faustino and
Our Ruling
respondent Felix Chingkoe - filed a petition before the CA for annulment of judgment
against the RTC's decision.8The petition was docketed as CA-G.R. SP No. 101727 with
At the outset, we observe that Tan resorted to the wrong remedy by filing a petition
Tan Po Chu and FiberTech as petitioners.
for certiorari under Rule 65. The. Rules of Court explicitly authorizes the CA to dismiss
outright a petition for annulment of judgment if the court finds no substantial merit in the
Tan alleged: (1) that the missing owner's duplicate of TCT was in her custody as the
petition.

Section 5. Action by the court. - Should the court find no substantial merit in the
petition, the same may be dismissed outright with specific reasons for such
dismissal.
Should prima facie merit be found in the petition, the same shall be given due course and
summons shall be served on the respondent.17ChanRoblesVirtualawlibrary
Accordingly, outright dismissal of Tan's petition is within the jurisdiction of the CA and its
correctness may be reviewed through an appeal by certiorari under Rule 45.
Certiorari is an extraordinary remedy of last resort for when another remedy is
present, certiorari is not available.18 It is a limited form of review confined to errors of
jurisdiction. An error of jurisdiction is one where the officer or tribunal acted without or in
excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction.19 On the other hand, an error of judgment is one which the court may commit
in the exercise of its jurisdiction.20 They only involve errors in the court or tribunal's
appreciation of the facts and of the law. 21 Errors of jurisdiction are reviewable on certiorari;
errors of judgment, only by appeal.22
Ordinarily, this Court would have dismissed the petition outright for being an improper
remedy. As a general rule, certiorari will not lie as a substitute for an appeal. However, an
exception to this rule is where public welfare and the advancement of public policy so
dictates.23
This Court cannot ignore the implications if the petitioner's allegations - that she has the
original owner's duplicate TCT of the subject lot and that the SEC revoked FiberTech's
registration in 2003 - are true. There will currently exist two owner's duplicate TCTs over
the same property possessed by two contending factions in an intra-corporate dispute of a
defunct corporation. This anomalous situation can potentially bring considerable hann to
the general public and to the integrity of our Torrens system. This Court, therefore, cannot
simply leave the parties as they were.
The CA committed a grave error when it brushed aside Tan's argument that the RTC
rendered its decision without jurisdiction. It ruled that the replacement of a lost duplicate
certificate is a proceeding in rem, directed against the whole world; therefore, the RTC
acquired jurisdiction when it complied with the notice and hearing requirements under
Section 109ofP.D. 1529.
The CA completely missed the point because Tan did not assail the RTC's jurisdiction by
alleging noncompliance with the requirements of notice and hearing; she questioned the
RTC's jurisdiction over the res by claiming that the allegedly lost owner's duplicate was, in
fact, not lost but was in her custody. Therefore, the RTC's compliance with Section 109 of
P.D. 1529 was irrelevant.
We have consistently held that when the owner's 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 failed to acquire jurisdiction over the subject matter - the allegedly
lost owner's duplicate.24 The correct remedy for the registered owner against an
uncooperative possessor is to compel the surrender of the owner's duplicate title through
an action for replevin.
A judgment void for want of jurisdiction is no judgment at all. 25 It has been held to be a
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Land Titles and Deeds (Finals) 2017
lawless thing, which can be treated as an outlaw and . slain at sight, or ignored wherever
and whenever it exhibits its ugly head. 26 It may be attacked at any time.
If Tan's allegation were true, then the RTC's judgment would be void and the CA would
have been duty-bound to strike it down. The CA could have nipped this anomalous
situation in the bud before it could cause any harm to innocent third persons. However, the
CA opted to turn its back on this duty and dismiss the case outright based on rigid
technicalities and on irrelevant considerations regardless of the implications to the general
public.
Moreover, the CA's dismissal based on technical grounds was erroneous. The CA raised
the following procedural infirmities:
chanRoblesvirtualLawlibrary
...(1) the verification and certification of non-forum shopping was executed alone by affiant
Tan Po Chu without any showing that [s]he had the authority to sign for and in behalf of
petitioner corporation pursuant to Sec. 5(1), Rule 7 and Sec. 4(3), Rule 47 of the 1997
Revised Rules of Civil Procedure considering that [s]he is one of the incorporators and
stockholders of her co-petitioner corporation; (2) The actual address of petitioner Tan Po
Chu is not indicated in the petition as required by Sec. 3 (1), Rule 46 of the same Rule; (3)
The copy of the owner's duplicate of TCT No. 157923 is not certified as a true copy of the
original owner's duplicate by the proper government agency as alleged by the
petitioners.27ChanRoblesVirtualawlibrary
First, we note that Tan alleged that FiberTech's corporate existence had already ceased
when the SEC revoked its corporate registration on September 29, 2003, and that she was
a trustee of the corporation for the purpose of its dissolution. 28 We note further that the
petition for annulment was filed in the names of both FiberTech and Tan Po Chu.
While FiberTech may no longer have judicial personality to initiate the suit or authorize Tan
Po Chu to file the case, Tan Po Chu remained a real party-in-interest as the lawful
possessor of the allegedly lost owner's duplicate TCT. The respondents could not legally
oust her of this possession by reconstituting the owner's duplicate instead of filing an
action for replevin. Therefore, the verification and certification of non-forum shopping
remained valid with respect to Tan Po Chu even though it might have been defective with
respect to FiberTech.
Second, we also note that Tan Po Chu submitted her address in her motion for
reconsideration to cure the defect in the petition. 29 Her motion for reconsideration
substantially complies with Rule 46, Section 3 of the Rules of Court.
Finally, a petition for annulment of judgment only requires the inclusion of a clearly legible
duplicate original or certified true copy of the judgment, order, resolution, or ruling subject
thereof.30 It does not require the petitioner to annex certified true copies or duplicate
originals of his evidence to the petition because these may be presented during the
evidentiary hearings of the case. To our mind, none of the procedural infirmities warranted
the CA's outright dismissal of the case.
Grave abuse of discretion is the capricious and whimsical exercise of judgment equivalent
to an evasion of positive duty, or a virtual refusal to act

G.R. No. L-15183 October 30, 1962
IN RE: ORIGINAL CERTIFICATE OF TITLE NO. O-1385, SP. NO. 695, BOOK NO. 1-5,
PATENTEE PAULINO P. GOCHECO, CESARIO GOCHECO, petitioner-appellant,
vs.
FRANCISCO T. ESTACIO, ET AL., oppositors-appellees.
Climaco and Azcarraga for petitioner-appellant.
Antonio M. Ceniza for oppositors-appellees.
PAREDES, J.:
Cesario Gocheco is a legitimate son of Paulino P. Gocheco registered owner of a parcel of
land, with improve comments, in Margosatubig, Zamboanga del Sur, as evidenced by
Original Certificate of Title No. O-1385 of the Register of Deeds for the said province. The
owner's duplicate copy of the said original certificate of title was lost, and notwithstanding
diligent search to ascertain its whereabouts, the said owner's duplicate copy has not been
found. However, in the records of the Register of Deeds of Zamboanga del Sur, the
original of the above number certificate No. O-1385 of title is found intact and complete in
Sp. No. 695, Book No. 1-5 patentee Paulino P. Gocheco.
On January 18, 1957, Cesario Gocheco, in his capacity as heir of the registered owner,
filed a petition before the trial court to require the Register of Deeds of Zamboanga del Sur
to issue another owner's duplicate copy of the O.C.T. No. O-1385, in lieu of the owners
copy which was lost, copy of which petition was served to the Register of Deeds, thru the
Provincial Fiscal, on April 30, 1957. Francisco T. Estacio and others opposed the petition,
claiming that they have been in continuous, peaceful, lawful, public and adverse
possession of the property covered by O.C.T. No. O-1385. On June 1, 1957, petitioner
replied, stating that the oppositors can not intervene in the petition for want of personality
Industrial that to allow them to claim ownership and/or possession of the subject property
would defeat and destroy the indefeasibility of title guaranteed and protected by Act No.
496.
On June 29, 1957 petitioner appeared in Court and submitted his oral and documentary
evidence. Notwithstanding notice of hearing served upon them, the oppositors or their
counsel failed to appear. On the same day, however, the trial court entered an order
suspending hearing of the petition and required the petitioner to publish within 30 days his
petition or to file a testate or intestate proceeding, and to secure the appointment of a legal
representative to the estate of registered owner and the ultimate declaration of heirs. For
failure of petitioners to comply with the order, on August 23, 1957, the oppositors filed
an ex-parte motion to dismiss the petition. The Court, instead, on August 24, 1957 gave
the petitioner 10 days within which to show cause why the petition should not be
dismissed. On September 3, 1957, petitioner filed his "constancia" manifesting that he was
submitting his case, on the evidences adduced in the hearing. On September 9, 1957, the
trial court dismissed the petition against which petitioner interposed the present appeal.
Petitioner-appellant alleges that the trial court erred (1) in requiring him to publish the
petition for the issuance of a new owner's duplicate copy of O.C.T. No. O-1385; (2) in
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Land Titles and Deeds (Finals) 2017
requiring him to secure the appointment of a legal representative to the estate of the
original registered owner, Paulino P. Gocheco and to obtain a judicial declaration of his
lawful heirs before giving due course to his petition and (3) in dismissing the petition.
The petition is only for the issuance of an owner's duplicate copy of O.C.T. No. O-1385, in
lieu of the one that was lost. Section 109 of Act No. 496, as amended, provides:
SEC. 109. If a duplicate certificate is lost or destroyed or cannot be produced by
a guarantee, heir, devisee, assignee, or other person applying for the entry of a
new certificate to him or for the registration of any instrument, a suggestion of the
fact of such loss or destruction may be filed by the registered owner or other
person in interest and registered. The court may thereupon, upon the petition of
the registered owner or other persons in interest, after notice and hearing direct
the issue of a new duplicate certificate, which shall contain a memorandum of the
fact that it is issued in place of the lost duplicate certificate, but shall in all
respects be entitled to like faith and credit as the original duplicate for all the
purposes of this act.
In view of the existence of the complete record in the Register of Deeds of Zamboanga del
Sur, of the original of the certificate of title in question, which appears in Book No. 1-5 of
the said Register of Deeds' Office (Exh. A) and of the fact that the present petition is not
one for reconstitution as provided by Republic Act No. 26, there is no necessity for
publishing notice of the hearing thereof. And the petition, coming as it does, under the
provisions of Section 109, aforequoted, there is likewise no need to first secure the
appointment of a legal representative of the estate and the declaration of the lawful heirs of
the deceased Paulino P. Gocheco. The petition does not at all seek the distribution of the
decedents estate. The owner's duplicate copy to be issued will be only an owner's
duplicate copy of the O.C.T. No. O-1385 and the petitioner is a person in interest is he is a
legal heir, according to his uncontroverted verified petition.
The oppositors-appellees, who had not chosen to file their brief, have no personality to
intervene and their grounds of intervention, namely, that they have been in public,
continuous, peaceful, adverse and lawful possession of the property is immaterial,
impertinent and of no consequence, in the present proceeding. Their claim of ownership or
possession of the property can be properly instituted in a separate, independent and
ordinary civil action.
IN VIEW HEREOF, the order of June 29, 1957 of the Trial Court, appealed from, is set
aside, and another entered, directing the Register of Deeds of Zamboanga del Sur, to
issue to the petitioner a new owner's duplicate copy which was lost. With costs on the
oppositors-appellees.

G.R. No. 176508, January 12, 2015
SAINT MARY CRUSADE TO ALLEVIATE POVERTY OF BRETHREN FOUNDATION,
INC., Petitioner, v. HON. TEODORO T. RIEL, ACTING PRESIDING JUDGE, REGIONAL
TRIAL COURT, NATIONAL CAPITAL JUDICIAL REGION, BRANCH 85, QUEZON
CITY, Respondent.
UNIVERSITY OF THE PHILIPPINES, Intervenor.
DECISION
BERSAMIN, J.:
A petition for the judicial reconstitution of a Torrens title must strictly comply with the
requirements prescribed in Republic Act No. 26; 1 otherwise, the petition should be
dismissed.
This case is a direct resort to the Court by petition for certiorari and mandamus. The
petitioner applied for the judicial reconstitution of Original Certificate of Title (OCT) No.
1609 of the Register of Deeds of Quezon City, and for the issuance of a new OCT in place
thereof, docketed as L.R.C. Case No. Q-18987 (04), but respondent Acting Presiding
Judge of Branch 85 of the Regional Trial Court (RTC) in Quezon City dismissed the
petition for reconstitution through the assailed order dated September 12, 2006. The
petitioner alleges that the respondent Judge thereby committed grave abuse of discretion
and unlawful neglect of performance of an act specifically enjoined upon him. Equally
assailed is the ensuing denial of its motion for reconsideration through the order dated
February 5, 2007.
The antecedents follow.
On October 28, 2004, the petitioner claimed in its petition for reconstitution that the original
copy of OCT No. 1609 had been burnt and lost in the fire that gutted the Quezon City
Register of Deeds in the late 80s. Initially, respondent Judge gave due course to the
petition, but after the preliminary hearing, he dismissed the petition for reconstitution
through the first assailed order of September 12, 2006, 2 to wit:chanroblesvirtuallawlibrary
With the receipt of Report dated July 14, 2006 from Land Registration Authority (LRA)
recommending that the petition be dismissed, and considering the Opposition filed by the
Republic of the Philippines and University of the Philippines, the above-entitled petition is
hereby ordered DISMISSED.
On October 11, 2006, the petitioner moved for reconsideration of the dismissal, 3 attaching
the following documents to support its petition for reconstitution, namely: (1) the copy of
the original application for registration dated January 27, 1955; (2) the notice of initial
hearing dated June 23, 1955; (3) the letter of transmittal to the Court of First Instance in
Quezon City; (4) the copy of the Spanish Testimonial Title No. 3261054 dated March 25,
1977 in the name of Eladio Tiburcio; (5) the copy of Tax Assessment No. 14238; and (6)
the approved Plan SWD-37457.
On February 5, 2007, the RTC denied the motion for reconsideration for lack of any cogent
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
or justifiable ground to reconsider. 4chanRoblesvirtualLawlibrary
Hence, on February 22, 2007, the petitioner came directly to the Court alleging that
respondent Judge had unfairly abused his discretion and unlawfully neglected the
performance of an act which is specifically enjoined upon him as a duly [sic] under Rule 7,
Section 8, of the Revised Rules of Court; 5that in finally dismissing the herein subject
Petition for Reconsideration, respondent Honorable Acting Presiding Judge has acted
without and in excess of his authority and with grave abuse of discretion to the further
damage and prejudice of the herein petitioner; 6 and that it had no other remedy in the
course of law except through the present petition for certiorari and mandamus.cralawred
Issues
The Court directed respondent Judge and the Office of the Solicitor General (OSG) to
comment on the petition for certiorari and mandamus. Respondent Judge submitted his
comment on May 23, 2007,7and the OSG its comment on July 19, 2007. 8 On November
13, 2007, the University of the Philippines (UP) sought leave to intervene, attaching to its
motion the intended comment/opposition-in-intervention.9 The motion for the UPs
intervention was granted on November 28, 2007. 10 In turn, the petitioner presented its
consolidated reply on February 8, 2008.11 The parties, except respondent Judge, then filed
their memoranda in compliance with the Courts directive.
Respondent Judge justified the dismissal of the petition for reconstitution by citing the
opposition by the OSG and the UP, as well as the recommendation of the Land
Registration Authority (LRA). He pointed out that the petitioner did not present its
purported Torrens title to be reconstituted; that the petitioners claim was doubtful given the
magnitude of 4,304,623 square meters as the land area involved;12 and that the UPs
ownership of the portion of land covered by petitioners claim had long been settled by the
Court in a long line of cases.13chanRoblesvirtualLawlibrary
The OSG and the UP argued that by directly coming to the Court by petition
for certiorari and mandamus, the petitioner had availed itself of the wrong remedies to
substitute for its lost appeal; that the correct recourse for the petitioner was an appeal
considering that the two assailed orders already finally disposed of the case; that the
petitioner intended its petition for certiorari and mandamus to reverse the final
orders;14 that the petitioner further failed to observe the doctrine of hierarchy of courts,
despite the Court of Appeals (CA) having concurrent jurisdiction with the Court over
special civil actions under Rule 65;15 that the RTC would have gravely erred had it
proceeded on the petition for reconstitution despite the petitioner not having notified the
adjoining owners of the land or other parties with interest over the land;16 that the petitioner
had no factual and legal bases for reconstitution due to its failure to prove the existence
and validity of the certificate of title sought to be reconstituted, in addition to the ownership
of the land covered by the petition for reconstitution being already settled in a long line of
cases; that the petitioners claim over the land was derived from the Deed of Assignment
executed by one Marcelino Tiburcio the same person whose claim had long been settled
and disposed of in Tiburcio v. Peoples Homesite and Housing Corporation and University
of the Philippines (106 Phil. 477), which vested title in the UP, and in Caero v. University
of the Philippines (437 SCRA 630); and that the Deed of Transfer and Conveyance dated
November 26, 1925 executed by Tiburcio in favor of St. Mary Village Association, Inc. was
not a basis for the judicial reconstitution of title accepted under Section 2 of Republic Act
No. 26.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

In its memorandum, the petitioner indicates that the RTC gravely abused its discretion (b) The co-owner's, mortgagee's, or lessee's duplicate of the certificate of title;
amounting to lack or excess of its jurisdiction in dismissing its petition for reconstitution on
the basis of the recommendation of the LRA and the opposition of the Republic and the UP (c) A certified copy of the certificate of title, previously issued by the register of deeds or by
despite having initially given due course to the petition for reconstitution. It urges that the a legal custodian thereof;
dismissal should be overturned because it was not given a chance to comment on the
recommendation of the LRA, or to controvert the oppositions filed. 17 It contends that the (d) An authenticated copy of the decree of registration or patent, as the case may be,
LRA report did not substantiate the allegation of dismissal of the application for registration pursuant to which the original certificate of title was issued;
of Marcelino Tiburcio on October 17, 1955, in addition to the veracity of the report being
questionable by virtue of its not having been under oath. 18chanRoblesvirtualLawlibrary (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
Ruling copy of said document showing that its original had been registered; and

The petition for certiorari and mandamus, being devoid of procedural and substantive (f) Any other document which, in the judgment of the court, is sufficient and proper basis
merit, is dismissed. for reconstituting the lost or destroyed certificate of title.

Firstly, certiorari, being an extraordinary remedy, is granted only under the conditions
defined by the Rules of Court. The conditions are that: (1) the respondent tribunal, board
or officer exercising judicial or quasi-judicial functions has acted without or in excess of its
or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (2) there is no appeal, or any plain, speedy, and adequate remedy in the
ordinary course of law.19Without jurisdiction means that the court acted with absolute lack
of authority; there is excess of jurisdiction when the court transcends its power or acts
without any statutory authority; grave abuse of discretion implies such capricious and
whimsical exercise of judgment as to be equivalent to lack or excess of jurisdiction; in
other words, power is exercised in an arbitrary or despotic manner by reason of passion,
prejudice, or personal hostility; and such exercise is so patent or so gross as to amount to
an evasion of a positive duty or to a virtual refusal either to perform the duty enjoined or to
act at all in contemplation of law. 20chanRoblesvirtualLawlibrary
The petition for certiorari and mandamus did not show how respondent Judge could have
been guilty of lacking or exceeding his jurisdiction, or could have gravely abused his
discretion amounting to lack or excess of jurisdiction. Under Section 12 21 of Republic Act
No. 26, the law on the judicial reconstitution of a Torrens title, the Regional Trial Court (as
the successor of the Court of First Instance) had the original and exclusive jurisdiction to
act on the petition for judicial reconstitution of title. Hence, the RTC neither lacked nor
exceeded its authority in acting on and dismissing the petition. Nor did respondent Judge
gravely abuse his discretion amounting to lack or excess of jurisdiction considering that the
petition for reconstitution involved land already registered in the name of the UP, as
confirmed by the LRA. Instead, it would have been contrary to law had respondent Judge
dealt with and granted the petition for judicial reconstitution of title of the petitioner.
Secondly, the petitioner did not present the duplicate or certified copy of OCT No. 1609.
Thereby, it disobeyed Section 2 and Section 3 of Republic Act No. 26, the provisions that
expressly listed the acceptable bases for judicial reconstitution of an existing Torrens title,
to wit:chanroblesvirtuallawlibrary
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 owner's duplicate of the certificate of title;
Sec. 3. Transfer certificates of title shall be reconstituted from such of the sources
hereunder enumerated as may be available, in the following order:
(a) The owner's duplicate of the certificate of title;
(b) The co-owner's, mortgagee's, or lessee's 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) The deed of transfer or other document, on file in the registry of deeds, containing the
description of the property, or an authenticated copy thereof, showing that its original had
been registered, and pursuant to which the lost or destroyed transfer 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.
Thirdly, with the questioned orders of the RTC having finally disposed of the application for
judicial reconstitution, nothing more was left for the RTC to do in the case. As of then,
therefore, the correct recourse for the petitioner was to appeal to the Court of Appeals by
notice of appeal within 15 days from notice of the denial of its motion for reconsideration.
By allowing the period of appeal to elapse without taking action, it squandered its right to
appeal. Its present resort to certiorari is impermissible, for an extraordinary remedy like
certiorari cannot be a substitute for a lost appeal. That the extraordinary remedy
of certiorari is not an alternative to an available remedy in the ordinary course of law is
clear from Section 1 of Rule 65, which requires that there must be no appeal, or any plain,
speedy, and adequate remedy in the ordinary course of law. Indeed, no error of judgment
by a court will be corrected by certiorari, which corrects only jurisdictional
errors.22chanRoblesvirtualLawlibrary

Fourthly, the filing of the instant special civil action directly in this Court is in disregard of
the doctrine of hierarchy of courts. Although the Court has concurrent jurisdiction with the
Court of Appeals in issuing the writ of certiorari, direct resort is allowed only when there
are special, extra-ordinary or compelling reasons that justify the same. The Court enforces
the observance of the hierarchy of courts in order to free itself from unnecessary, frivolous
and impertinent cases and thus afford time for it to deal with the more fundamental and
more essential tasks that the Constitution has assigned to it. 23 There being no special,
important or compelling reason, the petitioner thereby violated the observance of the
hierarchy of courts, warranting the dismissal of the petition for certiorari.
Finally, the land covered by the petition for judicial reconstitution related to the same area
that formed the UP campus. The UPs registered ownership of the land comprising its
campus has long been settled under the law. Accordingly, the dismissal of the petition for
judicial reconstitution by respondent Judge only safeguarded the UPs registered
ownership. In so doing, respondent Judge actually heeded the clear warnings to the lower
courts and the Law Profession in general against mounting or abetting any attack against
such ownership. One such warning was that in Caero v. University of the Philippines,24as
follows:chanroblesvirtuallawlibrary
We strongly admonish courts and unscrupulous lawyers to stop entertaining spurious
cases seeking further to assail respondent UPs title. These cases open the dissolute
avenues of graft to unscrupulous land-grabbers who prey like vultures upon the campus of
respondent UP. By such actions, they wittingly or unwittingly aid the hucksters who want
to earn a quick buck by misleading the gullible to buy the Philippine counterpart of the
proverbial London Bridge. It is well past time for courts and lawyers to cease wasting their
time and resources on these worthless causes and take judicial notice of the fact that
respondent UPs title had already been validated countless times by this Court. Any ruling
deviating from such doctrine is to be viewed as a deliberate intent to sabotage the rule of
law and will no longer be countenanced.25
WHEREFORE, the Court DISMISSES the petition for certiorari and mandamus for lack of
merit; and ORDERS the petitioner to pay the costs of suit.
SO ORDERED.cralawlawlibrary
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
G.R. No. 146081 July 17, 2006
REPUBLIC OF THE PHILIPPINES, Represented by the Land Registration
Authority, petitioner,
vs.
SPOUSES ROBERTO and MARINA SANCHEZ, respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review1 of the Decision2 dated 31 August 2000 and Resolution dated
17 November 2000 of the Court of Appeals. The 31 August 2000 Decision granted the
petition of respondent spouses Roberto and Marina Sanchez ("respondents") to set aside
the ruling of the Regional Trial Court, Quezon City, Branch 225 ("trial court") in a suit for
reconstitution of title. The 17 November 2000 Resolution denied the motion for
reconsideration of petitioner Land Registration Authority ("petitioner").
The Facts
On 28 May 1996, respondents filed a petition ("LRC Case No. Q-96-8296") in the trial court
to reconstitute the original of Transfer Certificate of Title No. 252708 ("TCT No. 252708"),
covering a parcel of land measuring 2,991 square meters ("Lot 1"). 3 Respondents claimed
that TCT No. 252708 was issued in the name of respondent Marina Sanchez ("Marina") by
the Register of Deeds, Quezon City. Respondents alleged that the original of TCT No.
252708 was among the documents destroyed by the fire which razed the Office of the
Register of Deeds, Quezon City in June 1988. Respondents sought reconstitution under
Section 3(a)4 of Republic Act No. 265 ("RA 26") based on Marina's duplicate title.
The trial court scheduled the case for hearing on 15 August 1996. The notice of hearing
dated 30 May 1996 was published in the 8 and 15 July 1996 issues of the Official Gazette
and posted at the main entrance of the City Hall and the Hall of Justice, Quezon City on 1
July 1996. Petitioner, the Office of the Solicitor General, the Land Management Section,
Surveys Division of the Department of Environment and Natural Resources, the Office of
the Quezon City Prosecutor, and the Register of Deeds, Quezon City were furnished
copies of the notice of hearing.
The Solicitor General filed his Comment to the petition, noting that since the petition is
based on Section 3(a) of RA 26, the trial court should defer acting on the petition until the
Land Registration Authority (LRA) has submitted its Report on the petition as required
under Land Registration Commission (now LRA) Circular No. 35 ("Circular No. 35").6
In response to the Solicitor General's Comment, respondents submitted a Report, dated 5
September 1996 ("First Report"), signed by Benjamin Bustos ("Bustos"), Chief,

Reconstitution Division, LRA. The First Report, which was endorsed 7 to the trial court in a
letter signed by Salvador L. Oriel ("Oriel"), Chief, Docket Division, LRA, reads in full:
REPORT
COMES NOW the Land Registration Authority and to the Honorable Court
respectfully reports that:
(1) The present petition seeks the reconstitution of Transfer Certificate of Title
No. 252708, allegedly lost or destroyed and supposedly covering Lots 12, 13, 14,
15, & 16 all of Blocks 5, of (LRC) Psd-4786, respectively, on the basis of the
owner's duplicate thereof, reproductions of which, not certified by the clerk of
Court, as required under LRC circular 35, Series of 1983, were submitted to this
Authority.
(2) The technical description of the consolidation of Lots, 12, 13, 14, 15 & 16 all
of Block 5, Psd-4786, appearing in the reproduction of Transfer Certificate of Title
No. 252708, respectively, have been examined and verified against the technical
description on file in the Volume 2753 in the Vault Section Docket Division, this
Authority. Said technical description when plotted in the Municipal Index Sheet
No. 3669-C do [sic] not appear to overlap previously plotted/decreed properties
in the area.
The technical description of Lot 1, Pcn-04-000007 of the cosolidation [sic] of Lots
12, 13, 14, 15 & 16 of Block 5, appearing in the reproductions of Transfer
Certificate of Title No. 252708, respectively have been examined and verified
against the Lot Description on file in the vault section, Docket Division, this
Authority. Said technical descriptions when plotted in the Municipal Index Sheet
No. 3669-C do not appear to overlap previously plotted/decreed properties in the
area.
WHEREFORE, the foregoing information anent the lots in question is respectfully
submitted for consideration in the resolution of the instant petition, and if the
Honorable Court, after notice and hearing, finds justification pursuant to Section
15 of the Republic Act No. 26 to grant the same, the owners [sic] duplicate of
Transfer Certificate of Title No. 252708 may be used as sources [sic] of the
desired reconstitution pursuant to Section 3 (a) of said Act. Provided, however,
that in case the petition is granted, the reconstituted title should be made subject
to such encumbrances as maybe subsisting, and provided, further, that no
certificate of title covering the same parcels of land exists in the office of the
Register of Deeds Concerned [sic].
Quezon City, Philippines, September 5, 1996.
REYNALDO Y. MAULIT
Administrator
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
By:
[Sgd.]
BENJAMIN M. BUSTOS
Reconstituting Officer & Chief,
Reconstitution Division8
As no opposition was filed against the petition, the trial court allowed respondents to
present evidence ex parte.Apart from the First Report, respondents also presented a
Certification, dated 14 December 1994, of the Quezon City Register of Deeds, that the
original of TCT No. 252708 was among those destroyed in the 1988 fire. Respondents
further presented a Certification, dated 14 May 1996, of the Office of the City Treasurer,
Quezon City, confirming that respondents last paid the real estate taxes on Lot No. 1 in
January 1996.
The Ruling of the Trial Court
In its Order dated 28 October 1996 ("28 October 1996 Order"), the trial court granted
reconstitution and ordered TCT No. 252708 reconstituted. The 28 October 1996 Order
became final on 6 January 1997. The Register of Deeds, Quezon City issued to
respondents reconstituted Transfer Certificate of Title No. RT-115027 (252708) ("TCT No.
RT-115027").
In a letter dated 4 November 1997, Oriel submitted to the trial court another Report, dated
24 October 1997 ("Second Report"), also signed by Bustos. Oriel informed the trial court
that the First Report was fake. The Second Report, which recommended that the trial court
set aside the 28 October 1996 Order, reads:
REPORT
COMES NOW the Land Registration Authority, and to the Honorable Court
respectfully reports that:
(1) The above-entitled case appears to seek the reconstitution of Transfer
Certificate of Title No. 252708 allegedly lost or destroyed and supposedly
covering Lot 1, Pcn-04-000007, situated at Quezon City, as indicated in the copy
of the Notice of Hearing dated May 30, 1996, submitted to this Authority.
Attached also to our records of this case is a xerox copy of the purported
Transfer Certificate of Title No. 252708 covering Lot 1, Pcn-04-000007 in the
name of Marina Sanchez, not certified by the Clerk of Court, as required under
LRC Circular 35, Series of 1983.
(2) In the 1st Indorsement dated October 21, 1997 of Engr. Alberto H. Lingayo,
Acting Chief, Ordinary and Cadastral Decree Division, this Authority, xerox copy

attached as Annex "A", the following information are stated relative to the above-
entitled petition and its enclosures[] to wit:
1. On or about October 1, 1997, a certain Marvin Bautista came to this office to
inquire about the above petition, showing a copy of the reconstituted title No. RT-
115027 (252708) and a copy of a report purportedly issued by this Authority,
xerox copies attached as Annexes "B" & "C";
2. We checked our records and found out that on August 6, 1996, we sent a
letter to the Clerk of Court requiring petitioner to submit to this Authority, certain
documents, however, petitioner has not yet complied as of this date, hence,
we could not have rendered a report, xerox copy attached as Annex "D";
3. On October 2, 1997, we secured from the RTC Branch 225, Quezon City,
certified copies of pertinent documents relative to the above-petition and
found out that there is indeed a copy of a fake LRA Report, copies attached
hereto;
4. Initial verification of the purported TCT No. 252708 reveals that the same
is a questionable title, because, among other reasons, the Serial No.
3002163 appearing on the face of the certificate pertains to x x x judicial
forms issued to the Registry of Deeds of Manila on January 13, 1976, as per
records on file at the Property Section, this Authority; and it overlaps
properties covered by TCT Nos. 187042 and 187040 when plotted on our
Municipal Index Map.
5. It is suggested that this case be referred to proper authorities for investigation
and prosecution of the perpetrators, and that the order of reconstitution rendered
by the court be recommended vacated or set aside because it was obtained
through fraud and forgery.
WHEREFORE, the foregoing observation anent the lot in question is respectfully
submitted for the information and guidance of the Honorable Court, with the
recommendation that the order of reconstitution rendered relative to the
purported Transfer Certificate of Title No. 252708 be ordered vacated or set
aside and the corresponding title that was issued be declared null and void.
That the person[] or persons responsible for the reconstitution of this
questionable title be investigated and if evidence warrants be charged or
prosecuted in Court.
Quezon City, Philippines, October 24, 1997.
REYNALDO Y. MAULIT
Administrator
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
By:
[Sgd.]
BENJAMIN M. BUSTOS
Reconstituting Officer & Chief,
Reconstitution Division9
On 24 March 1998, petitioner filed a Manifestation and Motion to set aside the 28 October
1996 Order. Petitioner contended that considering the Second Report, respondents'
petition should be considered as having been filed under Section 3(f) 10 of RA 26, that is,
based on "any other document." Petitioner pointed out that under Section 13 11 in relation to
Section 1212 of RA 26, the notice of a petition for reconstitution of lost or destroyed titles
based on Section 3(f) should not only be published and posted but also served on, among
others, the owners of the adjoining properties. For non-compliance with this requirement,
the trial court did not acquire jurisdiction over LRC Case No. Q-96-8296.
Respondents opposed petitioner's motion, primarily on the ground that the 28 October
1996 Order had become final.
The heirs of Mario Uy ("Heirs"), whose predecessor-in-interest allegedly owned Lot No. 12
covered by Transfer Certificate of Title No. 187042, filed an "amicus curiae" brief disclosing
that they have caused the filing of criminal complaints against respondents for Falsification
of TCT No. 252708 (Criminal Case No. 77668) and Use of Falsified Public Document
(Criminal Case No. 90649).13 Mario Uy and Maria Corazon Uy-Zalamea ("Zalamea), the
latter being the alleged owner of Lot No. 13 covered by TCT No. 187042, had earlier sued
respondents in the Regional Trial Court, Quezon City, Branch 227 ("Civil Case No. Q-96-
29545") for quieting of title, nullity of [TCT No. 252708], recovery of possession and
damages.14
In its Order of 17 July 1998 ("17 July 1998 Resolution"), the trial court set aside the 28
October 1996 Order and dismissed LRC Case No. Q-96-8296. The trial court held:
Records reveal, x x x, that TCT No. 25[2]708, the title to be reconstituted,
overlaps TCT Nos. 187040 and 187042. Petitioners' design of having their title
reconstituted, notwithstanding the fact that the same is covered in two other
titles, eludes the comprehension of this Court.
xxxx
The unscrupulous manner by which the petitioners misled the Court is glaring in
two (2) instances, to wit: 1) the petition unceremoniously omitted the names of
the registered owners of TCT Nos. 187040 and 187042; and 2) the spurious LRA
Report submitted by the petitioners.

This Court is of the view that the failure to notify the registered owners of TCT
Nos. 187040 and 187042 of the Reconstitution proceeding proved to be a
mistake.
Section 13, Republic Act No. 26 x x x provides that "x x x x 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 the 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 name[s] of the occupants or
persons in possession of the property, the owner[s] 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 o[r] objection 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."
Petitioners' failure to comply with this provision is a fatal defect for the same is
mandatory and jurisdictional (Ortigas and Company Limited Partnership vs.
Velasco, 234 SCRA 435).
When this Court issued the questioned order dated October 28, 1996, it was
under the impression that there was no legal impediment for the reconstitution of
TCT No. 252708. Had it been apprised at that time that the LRA report submitted
by the petitioner was spurious then it would not have issued the
same.15(Italicization in the original)
Respondents sought reconsideration but the trial court denied their motion on 4 January
1999.
Respondents filed a petition for certiorari in the Court of Appeals. The appellate court
initially dismissed the petition for respondents' failure to submit a certified true copy or
duplicate original of the trial court's 17 July 1998 and 4 January 1999 Resolutions.
However, on respondents' motion, the Court of Appeals, without giving due course to the
petition, required petitioner and respondents to file Comment and Reply, respectively.
The Ruling of the Court of Appeals
In its Decision of 31 August 2000, the Court of Appeals granted respondents' petition, set
aside the trial court's 17 July 1998 and 4 January 1999 Resolutions, and reinstated the 28
October 1996 Order. The appellate court held:
The motion to set aside the [28 October 1996 Order] contemplates a petition for
relief from a final order entered against a party in any court through fraud,
accident, mistake, or excusable negligence under Rule 38 of the 1997 Rules of
Civil Procedure, which must be filed within sixty (60) days after the petitioner
learns of the final order, and not more than six (6) months after such final order
was entered, and must be accompanied with affidavits showing the fraud,
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
accident, mistake, or excusable negligence relied upon, and the facts constituting
the petitioner's good and substantial cause of action or defense, as the case may
be.
xxxx
As mentioned previously, the LRA, represented by the OSG, contends that notice
of the petition should have been served on adjoining landowners as one of the
jurisdictional requirements, since the Authentic LRA Report of 24 October 1997
found petitioners' title to be a fake title. However, a mere LRA Report cannot
declare a certificate of title spurious without the proper court declaring its nullity
and cancellation. A certificate of title cannot be subject to collateral attack and
can be altered, modified or cancelled only in a direct proceeding in accordance
with law. Incidentally, private respondents filed an action for quieting of title,
nullity of title (viz., TCT No. 252708), recovery of possession and damages
against petitioners, which is still pending before Branch 227, Regional Trial Court
of Quezon City. Until the trial court declares TCT No. 252708 to be void and
orders its cancellation, [w]e cannot but recognize the validity of the same.
Granting that a suspicion or cloud of doubt was cast on the genuineness and
authenticity of petitioners' certificate of title, the same was brought to the fore
belatedly. A Certificate of Finality had already been issued on 06 January 1997.
Presumably, the proper parties received a copy of the Order dated 28 October
1996 on or before 21 December 1996. Entry of Judgment having been made on
06 January 1997, a petition for relief from judgment should have been filed on or
before 05 July 1997. The Manifestation and Motion was only filed on 24 March
1998, long after the order of reconstitution had become final and a reconstituted
title actually issued petitioners. There having been no sufficient evidence to
discredit petitioners' duplicate of the certificate of title within the time to appeal,
move for new trial or file a petition for relief, there is no need to serve notice of
the petition on the adjoining landowners under Section 13 of RA No. 26. Said
section applies only when the source of reconstitution is other than the owner's
duplicate of the certificate of title. x x x xThus, at the time the Order of 28 October
1996 was rendered, respondent court was properly clothed with jurisdiction. After
said order became final, and the petition for relief having been foreclosed against
aggrieved parties, respondent judge was without jurisdiction to entertain the
attack against the order of reconstitution. x x x x
Moreover, it must be remembered that the fallo of the Decision dated 28 October
1996 contains a caveat, i.e., "provided, however, that no certificate of title
covering the same parcel of land exists in the office of the Register of Deeds."
The reconstituted title issued petitioners militates against any doubt or suspicion
cast on their title. The Registrar of Deeds concerned would not have issued a
reconstituted title had the land covered by TCT No. 252708 already been
covered by another certificate of title. Thus, [w]e reiterate, until Branch 227,
Regional Trial Court of Quezon City declares TCT No. 252708 to be void and
orders its cancellation, [w]e cannot but recognize the validity of the same.
The allegation of fraud requires a higher burden of persuasion, but this Court
maintains that the reconstitution proceeding, which has now become final, is not

the proper forum to thresh out the same. It is a fundamental rule that when a final
judgment becomes executory, it thereby becomes immutable and unalterable
and any amendment or alteration which substantially affects a final and
executory judgment is null and void for lack of jurisdiction, including the entire
proceedings held for that purpose. Thus, it is as if no Manifestation and Motion
was filed and no suspicion or cloud of doubt was cast on the genuineness and
authenticity of petitioners' certificate of title by the presentation of the LRA Report
of 24 October 1997.16
Petitioner sought reconsideration but the appellate court denied its motion in the
Resolution of 17 November 2000.
Hence, this petition. Petitioner reiterates its claim that the trial court did not acquire
jurisdiction over LRC Case No. Q-96-8296 for lack of actual notice to all interested parties
as required under Section 13 in relation to Section 12 of RA 26.
In their Comment, respondents countered that the actual notice requirement in Section 13
does not apply to LRC Case No. Q-96-8296 because that case was based on Marina's
duplicate copy of TCT No. 252708. At any rate, respondents contended that it is the
posting and publication of the notice of hearing, not its actual service, which vests
jurisdiction to the trial court, citing our ruling in Calalang v. Register of Deeds of Quezon
City.17 Lastly, respondents maintained that the 28 October 1996 Order is already final and
can no longer be set aside.
The Issue
The question is whether the trial court acquired jurisdiction over LRC Case No. Q-96-8296.
The Ruling of the Court
We hold in the negative and accordingly grant the petition.
The Actual Notice Requirement under Section 13 in Relation
to Section 12 of RA 26 Applies Here
Respondents are correct in saying that the service of notice of the petition for
reconstitution filed under RA 26 to the occupants of the property, owners of the adjoining
properties, and all persons who may have any interest in the property is not required if the
petition is based on the owner's duplicate certificate of title or on that of the co-owner's,
mortgagee's, or lessee's. This was our ruling in Puzon v. Sta Lucia Realty and
Development, Inc.,18involving a petition filed with the Regional Trial Court of Quezon City,
Branch 80, ("Branch 80") for reconstitution of the original of two Torrens certificates of title
based on Puzon's duplicate certificates of title. We held in that case:
[T]he first sentence of Section 13 provides that the requirements therein pertain
only to petitions for reconstitution filed under "the preceding section," Section 12,
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Land Titles and Deeds (Finals) 2017
which in turn governs those petitions based on specified sources. We quote
Section 12 below:
"SEC. 12. Petition for reconstitution from sources enumerated in
Section 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: x x x
(e) the name 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 interest in the property; x x x x All the
documents, or authenticated copies thereof, to be introduced in
evidence in support to 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 Commissioner of Land Registration, or with a certified copy of the
description taken from a prior certificate of title covering the same
property."
In other words, the requirements under Sections 12 and 13 do not apply to all
petitions for judicial reconstitution, but only to those based on any of the sources
specified in Section 12, that is, "sources enumerated in Section 2(c), 2(d), 2(e),
2(f), 3(c), 3(d), 3(e), and/or 3(f) of this Act."
Sections 2 and 3 of RA 26 provide as follows:
"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 owner's duplicate of the certificate of title;
(b) The co-owner's, mortgagee's, or lessee's 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.
"SEC. 3. Transfer certificates of title shall be reconstituted from such of
the sources hereunder enumerated as may be available, in the
following order:
(a) The owner's duplicate of the certificate of title;
(b) The co-owner's, mortgagee's or lessee's 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) The deed of transfer or other document on file in the
registry of deeds, containing the description of the property, or
an authenticated copy thereof, showing that its original had
been registered, and pursuant to which the lost or destroyed
transfer 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 documents,
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." x x x
In the present case, the source of the Petition for the reconstitution of title was
petitioner's duplicate copies of the two TCTs mentioned in Section 3(a). Clearly,
the Petition is governed, not by Sections 12 and 13, but by Section 10 of RA 26.
We quote said Section 10 in full:
"SEC. 10. Nothing hereinabove provided shall prevent any registered
owner or person in interest from filing the petition mentioned in Section
Five of this Act directly with the proper Court of First Instance, based on
sources enumerated in Section 2(a), 2(b), 3(a), 3(b), and/or 4(a) of this
Act: Provided, however, That the Court shall cause a notice of the
petition, before hearing and granting the same, to be published in the
manner stated in Section Nine hereof: And provided, further, That
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Land Titles and Deeds (Finals) 2017
certificates of title reconstituted pursuant to this section shall not be
subject to the encumbrance referred to in Section Seven of this Act."
Nothing in this provision requires that notices be sent to owners of adjoining lots.
Verily, that requirement is found in Section 13, which does not apply to petitions
based on an existing owner's duplicate TCT.
Put differently, Sections 9 and 10 of RA 26 require that 30 days before the date
of hearing, (1) a notice be published in two successive issues of the Official
Gazette at the expense of the petitioner, and (2) such notice be posted at the
main entrances of the provincial building and of the municipal hall where the
property is located. The notice shall state the following: (1) the number of the
certificate of title, (2) the name of the registered owner, (3) the names of the
interested parties appearing in the reconstituted certificate of title, (4) the location
of the property, and (5) the date on which all persons having an interest in the
property, must appear and file such claims as they may have.
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: that the notice be
mailed to occupants, owners of adjoining lots, and all other persons who may
have an interest in the property. To repeat, mailing the notice is not required for a
petition based on Sections 2(a), 2(b), 3(a), 3(b) and 4(a), as in the present case.
xxxx
[T]here is no question that in [petitions for] reconstitution involving
Sections 12 and 13 of RA 26], notices to adjoining owners and to the actual
occupants of the land are mandatory and jurisdictional. But in petitions for
reconstitution falling under Sections 9 and 10 of RA 26 where, as in the present
case, the source is the owner's duplicate copy, notices to adjoining owners and
to actual occupants of the land are not required. When the law is clear, the
mandate of the courts is simply to apply it, not to interpret or to speculate on it.
In sum, RA 26 separates petitions for reconstitution of lost or destroyed
certificates of title into two main groups with two different requirements and
procedures. Sources enumerated in Sections 2(a), 2(b), 3(a), 3(b), and 4(a) of
RA 26 are lumped under one group (Group A); and sources enumerated in
Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and 3(f) are placed together under
another group (Group B). For Group A, the requirements for judicial
reconstitution are set forth in Section 10 in relation to Section 9 of RA 26; while
for Group B, the requirements are in Sections 12 and 13 of the same
law.19 (Italicization in the original; boldfacing supplied)
However, contrary to respondents' claim, Puzon finds no application here. No report from
a pertinent government agency challenging the authenticity of Puzon's duplicate
certificates of title was presented in Puzon. Thus, when Branch 80 granted reconstitution,
Puzon's duplicate transfer certificates of title remained unchallenged. 20

In contrast, the trial court in the present case was misled into treating LRC Case No. Q-96-
8296 as having been filed under Section 3(a) based on Marina's purported duplicate title.
Thus, the trial court followed Section 1021 in connection with Section 922 of RA 26 to
publicize LRC Case No. Q-96-8296. Relying on the First Report's finding that TCT No.
252708 "do[es] not appear to overlap previously plotted/decreed properties in the area,"
the trial court granted reconstitution. However, petitioner later informed the trial court of the
First Report's spuriousness, the serious doubts on TCT No. 252708's authenticity, and the
existence of two other titles that overlapped Lot No. 1. After hearing the parties, the trial
court dismissed LRC Case No. Q-96-8296 for lack of jurisdiction as all interested parties
were not actually notified of the petition as required under Section 13 in relation to Section
12 of RA 26.
We hold that the trial court did not commit grave abuse of discretion.
We were faced with substantially the same situation in Director of Lands v. Court
of Appeals.23 In that case, the petition for reconstitution, as in the present case, was filed
under Section 3(a) of RA 26 based on an alleged owner's duplicate certificate of title.
However, the Director of Lands, in an adverse Report, challenged the authenticity of the
purported duplicate certificate of title. The trial court denied reconstitution but the Court of
Appeals reversed the trial court's ruling. Upon further review, we reversed the Court of
Appeals and dismissed the reconstitution petition. We held that with the Director of Lands'
Report, the petition for reconstitution "falls squarely" under Section 3(f) of RA 26, thus:
In the instant case, the change in the number of the certificate of title sought to
be reconstituted from T-12/79 to TCT No. 42449 rendered at once the
authenticity or genuineness of respondent's certificate of title under suspicion or
cloud of doubt. And since respondent alleges that the technical descriptions
under both certificates of title are identical and the same, x x x, We hold that the
instant petition for judicial reconstitution falls squarely under Section 3(f),
Republic Act No. 26, because the Director of Lands claims that the
respondent's duplicate of the Certificate of Title No. T-12/79 or TCT No.
42449 are [sic] both fake and fictitious.24 (Emphasis supplied)
Consequently, we applied Sections 12 and 13 of RA 26 and held that for non-compliance
with these provisions, the trial court did not acquire jurisdiction over the petition for
reconstitution.
Contrary to the Court of Appeals' finding, the Second Report is not a "collateral attack" on
TCT No. 252708. Circular No. 35 requires the submission of an LRA Report in all
proceedings to judicially reconstitute lost or destroyed Torrens certificates of title. 25 Indeed,
to "x x x prevent duplication of titles, x x x and [the] irregular reconstitution of lost or
destroyed land certificates of title based on unauthorized sources," this Court issued
Administrative Circular No. 7-96 ("Circular 7-96") on 15 July 1996 reminding trial court
judges and clerks of courts "under pain of disciplinary sanctions, x x x to comply strictly"
with, among others, Circular No. 35. Trial courts hearing reconstitution petitions under RA
26 are thus duty-bound to take into account the LRA's Report. When the trial court
considered the authentic Second Report in issuing the 17 July 1998 Resolution, it merely
complied with Circular 7-96.
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Land Titles and Deeds (Finals) 2017
True, petitioner submitted the Second Report after the period to appeal, or seek relief
against, the 28 October 1996 Order had lapsed. However, this is no bar for the trial court
to consider the Second Report. Petitioner was not at fault when it did not submit its Report
before the trial court resolved LRC Case No. Q-96-8296. Petitioner explained that
respondents failed to submit the documents petitioner had requested in its letter of 6
August 1996. But more than this, courts have inherent power to
correct fatal infirmities in its proceedings, 26 especially if, as here, the flaw was intentionally
brought about by a party who employed deceit in misleading the trial court. To hold
otherwise would render courts helpless in maintaining the integrity of its proceedings and
correspondingly embolden parties to make a mockery of judicial rules. The trial court
merely exercised such inherent power in the higher interest of justice. 27
The issuance by the Register of Deeds of Quezon City of TCT No. RT-115027 does not
erase the doubts the Second Report raises on the authenticity of TCT No. 252708. Nor
does it negate the existence of TCT Nos. 187040 and 187042. Paragraph 12 of Circular
No. 35 requires that the Register of Deeds shall submit "written findings" on the status of
the title sought to be reconstituted.28 No such "written findings" exist in the records of this
case. What respondents submitted was a Certification dated 14 December 1994 that the
original of TCT No. 252708 was among those destroyed in the 1988 fire. This falls short of
what paragraph 12 of Circular 35 requires.
Consequently, it is Section 13 in relation to Section 12 of RA 26 which applies to LRC
Case No. Q-96-8296. Hence, in addition to its posting and publication, the notice of
hearing of LRC Case No. Q-96-8296 should also have been served through mail on the
owners of the adjoining properties and all persons who may have any interest in the
property.29 The records show that neither Lot No. 1's adjoining owners 30 nor the other
interested parties, namely, Mario Uy and Maria Corazon Uy-Zalamea ("Uy
and Zalamea"), in whose names TCT Nos. 187042 and 187040 were issued, were notified
of respondents' petition in LRC Case No. Q-96-8296.31
The Actual Notice Requirement in Section 13 in
Relation to Section 12, RA 26 is Jurisdictional
That the requirement of actual notice in Section 13 in relation to Section 12 of RA 26 is
jurisdictional was settled in Director of Lands v. Court of Appeals where we held:
To ascertain whether a court has jurisdiction or not, the provisions of the law
should be inquired into (Auyong vs. Hon. Court of Tax Appeals, L-25181, Jan.
11, 1967, 19 SCRA 10). In all cases where the authority of the courts to proceed
is conferred by a statute and when the manner of obtaining jurisdiction is
mandatory and must strictly be complied with, or the proceedings will be utterly
void (Caltex, et al. vs. CIR, et al., L-28472, April 30, 1968, 23 SCRA 492). So that
where there is defect of publication of petition, such defect deprives the court of
jurisdiction (Po vs. Republic, L-27443, July 19, 1971, 40 SCRA 37). And when
the court a quo lacks jurisdiction to take cognizance of a case, the same lacks
authority over the whole case and all its aspects (Development Bank of the Phils.

Employees Union vs. Juan Perez, L-22584 and L-23083, May 30, 1972, 45
SCRA 179, 187). Further, absent jurisdiction the court cannot pass upon the
merits of the petition (Pinza vs. Aldovino, 25 SCRA 220, 224).
In the case at bar, the jurisdiction or authority of the Court of First Instance is
conferred upon it by Republic Act 26 entitled "An Act providing a special
procedure for the reconstitution of Torrens Certificates of Title lost or destroyed,"
approved on September 25, 1946. The Act specifically provides the special
requirements and mode of procedure that must be followed before the court can
act on the petition and grant to the petitioner the remedy sought for. These
requirements and procedure are mandatory. The petition for reconstitution
must allege the jurisdictional facts; the notice of hearing must also be
published and posted in particular places and the same sent to specified
persons. Specifically, the requirements and procedure are set forth in detail
under Sections 12 and 13 of the Act [.] x x x x32(Emphasis supplied)
On the particular requirement of service of notice to all interested parties, we held in the
earlier case of Manila Railroad Company v. Moya:
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. 33 (Emphasis supplied)
We have since reiterated this ruling in Ortigas & Company Limited Partnership v.
Velasco34 and Puzon.
Respondents erroneously invoke Calalang as authority for their claim that it is only the
publication and posting of the notice of hearing which are mandatory. The question of
whether the actual notice requirement in Section 13 in relation to Section 12 of RA 26 is
mandatory and jurisdictional was not the main issue in that case it was whether the
petitioners were bound by our ruling in De la Cruz v. De la Cruz,35 affirming the validity of
a Torrens certificate of title issued to one who had obtained the property covered by the
title through a conveyance duly recorded in the Register of Deeds of Quezon City and who
had the title subsequently reconstituted. We answered in the affirmative and dismissed the
petitions principally on the ground of res judicata.36 Notably, we found in Calalang that
the predecessor-in-interest of the petitioners did not own the disputed property, thus the
latter could not claim any better right than the former.
For non-compliance with the actual notice requirement in Section 13 in relation to Section
12 of RA 26, the trial court did not acquire jurisdiction over LRC Case No. Q-96-8296. The
proceedings in that case were thus a nullity and the 28 October 1996 Order was void.
Void Rulings Subject to Challenge at any Time
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Land Titles and Deeds (Finals) 2017
In MWSS v. Sison, also involving a motion to set aside a "final" reconstitution order for
non-compliance with Section 13 of RA 26, we laid down the attributes of a void judgment
or ruling:
x x x a void judgment is not entitled to the respect accorded to a valid judgment,
but may be entirely disregarded or declared inoperative by any tribunal in which
effect is sought to be given to it. It is attended by none of the consequences of a
valid adjudication. It has no legal or binding effect or efficacy for any purpose or
at any place. It cannot affect, impair or create rights. It is not entitled to
enforcement and is, ordinarily, no protection to those who seek to enforce. All
proceedings founded on the void judgment are themselves regarded as invalid.
In other words, a void judgment is regarded as a nullity, and the situation is the
same as it would be if there were no judgment. It, accordingly, leaves the parties
litigants in the same position they were in before the trial. 37
Guided by this rule, we had set aside so-called "final" reconstitution Orders for being void
for non-compliance with Section 13 of RA 26 where the Orders were challenged either
through a motion filed in the trial court issuing the reconstitution order 38 or through a
petition under Rule 47 of the Rules of Court filed with the Court of Appeals. 39Here,
petitioner availed of the former remedy.40
However, a modification in the disposition of LRC Case No. Q-96-8296 is in order. In its 17
July 1998 Resolution, the trial court set aside the 28 October 1996 and dismissed LRC
Case No. Q-96-8296. At that time, however, the Register of Deeds, Quezon City had
already issued reconstituted TCT No. RT-115027. That title must similarly be set aside,
emanating as it did from a void ruling.
A Final Word
Reconstitution proceedings under RA 26 has for their purpose the restoration in the
original form and condition of a lost or destroyed instrument attesting the title of a person
to a piece of land.41 Thus, reconstitution must be granted only upon clear proof that the title
sought to be restored was indeed issued to the petitioner. Strict observance of this rule is
vital to prevent parties from exploiting reconstitution proceedings as a quick but illegal way
to obtain Torrens certificates of titles over parcels of land which turn out to be already
covered by existing titles.42 The social and economic costs of such modus operandi cannot
be underestimated.43 Asweobserved in Director of Lands v. Court of Appeals:
The efficacy and integrity of the Torrens System must be protected and
preserved to ensure the stability and security of land titles for otherwise land
ownership in the country would be rendered erratic and restless and can certainly
be a potent and veritable cause of social unrest and agrarian agitation. x x x x
The real purpose of the Torrens System which is to quiet title to the land must be
upheld and defended, and 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. 44
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WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated 31 August HEIRS OF GREGORIO AND MARY G.R. No. 149122
2000 and the Resolution dated 17 November 2000 of the Court of Appeals. We ENTER a VENTURANZA, Present:
new judgment declaring the reconstitution proceedings in LRC Case No. Q-96-
8296 VOID for lack of jurisdiction. Accordingly, we declare VOID the Order dated 28 Petitioners,
October 1996 of the Regional Trial Court of Quezon City, Branch 225 and the reconstituted
Transfer Certificate of Title No. RT-115027 (252708). We direct the Register of Deeds of
PUNO, C.J., Chairperson,
Quezon City to CANCEL Transfer Certificate of Title No. RT-115027 (252708).
SANDOVAL-GUTIERREZ,
Let a copy of this ruling be served on the Register of Deeds, Quezon City.
CORONA,
SO ORDERED.
AZCUNA, and

- versus - GARCIA, JJ.

Promulgated:

REPUBLIC OF THE PHILIPPINES,

Respondent. July 27, 2007

x------------------------------------------------------------------------------------x

DECISION

GARCIA, J.:

By this petition for review under Rule 45 of the Rules of Court, petitioners seek the reversal

of the decision[1] dated January 31, 2001 of the Court of Appeals (CA) in CA-G.R. CV No.

38630, as reiterated in its resolution of March 22, 2001, denying the petitioners motion for

reconsideration. The assailed CA decision affirmed [and dismissed the appeal taken by the
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Land Titles and Deeds (Finals) 2017

petitioners from] an earlier decision of the Regional Trial Court (RTC) of Iriga City, Branch Meanwhile, it appears that in the course of the parties negotiation for the sale of the

37, which ordered the cancellation of petitioners Transfer Certificate of Title (TCT) No. property covered by the title in question, the governments negotiation committee assigned

2574 and the reversion of the land covered thereby to the mass of the public domain, in a a deputy clerk of the Land Registration Commission (LRC) to verify the true copies of TCT

suit thereat commenced for the purpose by respondent Republic of the Philippines, No. 2574 in the name of Gregorio Venturanza.

originally against the spouses Gregorio Venturanza and Mary Edwards-Venturanza,

Per verification, it was found out that Venturanzas TCT No. 2574, was derived from TCT
predecessors-in-interest of the herein petitioners.
No. RT-40 (140) in the name of one Florencio Mora (Mora) which covers Lots 1, 2 and 3 of

The petition traces its beginning from a complaint filed by the Republic of the Philippines, Plan RS-383-D containing a combined area of 23,944,635 square meters or 2,394

through the Office of the Solicitor General (OSG), in the RTC of Iriga City, thereat hectares, situated in the municipality of Buhi, Camarines Sur.

docketed as Civil Case No. IR-122 and raffled to Branch 37 thereof, against the
In turn, TCT No. RT-40 (140) appears to have been reconstituted from TCT No. 140 which
Venturanza couple for the cancellation of their TCT No. 2574, covering a vast track of land
was issued to one Sebastian Moll on June 7, 1928.
with a combined area of 23,944, 635 square meters located at Buhi, Camarines Sur.

TCT No. 140, on the other hand, appears to be a transfer from Land Registration Case
Reviewed, the records unfold the following facts and antecedents:
(LRC) No. 3480 issued to one Casimiro Natividad.

The title in question TCT No. 2574 of the Registry of Deeds of Camarines Sur was issued
Upon further investigation, it was discovered that the land subject of LRC No. 3480,
sometime in 1959 in the name of Gregorio Venturanza, married to Mary Edwards-
originally registered on July 28, 1911, covered a parcel of land consisting of only 451
Venturanza. The memorandum of registration shows that TCT No. 2574 was derived from
square meters and situated in Tigaon, Camarines Sur.
TCT No. RT-40 (140), which is a reconstituted title issued to one Florencio Mora who

sold the property therein described to Gregorio Venturanza in 1956 for P107,730.00. The In the report submitted by the LRC deputy clerk, the latter made a finding that the

same memorandum of registration, however, does not show when the land covered by Venturanzas TCT No. 2574, a direct transfer from TCT No. RT-40 (140) which was, in turn,

TCT No. 2574 was originally registered and the other data were merely noted as (NA). derived from TCT No. 140, covers only a parcel of land with an area of 451 square meters

and not 23,944,635 square meters or 2,394 hectares which practically comprise the
In 1964, GregorioVenturanza and the then Abaca Development Board entered into an
entire Municipality of Buhi.
agreement for purchase and sale of the property covered by TCT No. 2574, whereby the

former agreed to convey the property to the latter, subject to the approval of the document

of sale by the concerned government office. The final sale, however, did not materialize.

Such was the state of things when, sometime in 1965, in the then Court of First Instance
(now RTC) of Camarines Sur, the Republic of the Philippines, through the OSG, filed a
complaint for the Cancellation of Transfer Certificate of Title No. 2574 and the Reversion of
the Land Described Therein to the Republic of the Philippines. Thereat originally docketed
as Civil Case No. 5973, the complaint eventually became Civil Case No. IR-122 which was
raffled to Branch 37 of the court.
On April 8, 1992, the trial court came out with its decision[2] ordering the annulment and
cancellation of the Venturanzas TCT No. 2574 and the reversion of the land covered
thereby to the mass of the public domain. Dispositively, the decision reads:
WHEREFORE, premises considered, judgment is rendered in
favor of the Republic of the Philippines and against the defendants
ordering the annulment of TCT No. 2574 in the name of Gregorio
Venturanza, ordering the Register of Deeds of Camarines Sur to cancel
said title, and reverting the land covered by the questioned title, except
that which may have already been alienated by the proper authorities
and lawfully passed to private ownership, to the public domain of the
Republic of the Philippines, with costs against the defendants.
SO ORDERED.
In resolving the suit in favor of the Republic, the trial court principally anchored its
judgment on the ground that the reconstituted title issued in the name of Florencio Mora
could have been fraudulently secured, hence, does not legally exist. The court further ruled
that since the reconstituted title issued to Florencio Mora is a nullity, then the order for its
reconstitution did not attain finality and therefore may be attacked anytime.
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Land Titles and Deeds (Finals) 2017
Therefrom, the Venturanzas went on appeal to the CA in CA-G.R. CV No. 38630, arguing
that Moras reconstituted title from where their TCT No. 2574 was derived is already
indefeasible on the ground that upon the lapse of one (1) year, the decision granting
reconstitution of Moras title becomes final. The Venturanzas also claimed that they are
protected by law as buyers in good faith. Lastly, they argued that the Republics action for
the cancellation of TCT No. 2574 and the reversion of the land described therein to the
mass of public domain was already barred by the decision of the CA in CA-G.R. No.
20681-R, entitled, Florencio Mora v. Venancio Infante, et al., which granted the petition for
reconstitution of Moras TCT No. RT-40 (140).
In the herein assailed decision dated January 31, 2001, the CA affirmed that of the trial
court. With their motion for reconsideration having been denied by the CA in its
resolution[3] of May 22, 2001, petitioners as successors-in-interest of the spouses
Venturanza are now with this Court via the present recourse raising the same issues
already passed upon by the appellate court.
We DENY.
Petitioners maintain that under Section 112 of Act No. 496 (Land Registration Act), Moras
reconstituted TCT No. RT-40 (140) is already indefeasible the same having attained finality
one (1) year after the CA granted its reconstitution in CA-G.R. No. 20681-R. Citing the
second paragraph of Section 31 of P.D. No. 1529[4] which reads:
The decree of registration shall bind the land and quiet title thereto,
subject only to such exceptions or liens as may be provided by law. It
shall be conclusive upon and against all persons, including the National
Government and all branches thereof, whether mentioned by name in
the application or notice, the same being included in the general
description to all whom it may concern,

petitioners contend that the two courts below were without authority to annul TCT No. 2574
issued in the name of Gregorio Venturanza.
Petitioners are wrong. Clearly, the provisions relied upon refer to original decrees of
registration and not to orders of reconstitution. As it is, petitioners cannot even seek refuge
in the Land Registration Act because the land covered by TCT No. 2574 had never been
brought within the operation of said law. As correctly pointed out by the CA to which we
are in full accord:
xxx the Land Registration Act is not applicable considering that the land
covered by TCT No. 2574 had never been within the operation of the
Land Registration Act because of the irregularities attending the
issuance of the reconstituted title. As found by the trial court:
TCT No. RT-40 (140) supposedly reconstituted from
TCT no. 140 in the name of Florencio Mora consists
of 2,394 hectares supposedly situated in Buhi,
Camarines Sur. It appears from the survey plan that
the land was surveyed only in 11 days, which
according to Engr. Antonio Rodriguez was quite
impossible considering the rugged terrain and the
mountainous features of the area. Moreover, it
covers timberland.
Significantly, from the exhibits presented by the
plaintiff it can be seen that the resurvey plan (Exh.
A) shows that the survey of Lot Nos. 1, 2 and 3 was
based on TCT No. 140 and it covered an area of
23,944,635 square meters and appeared to have
been surveyed on January 20, to January 31, 1953
or a period of 11 days. Exh. B shows that the area
supposedly covered by TCT 2574 is within the
timberland, Project 12, Block B, L.C. 646 and
Project 19, Block ALC 761, Exh. C, the official map
of Legaspi City shows that the land covered by TCT
140, which was issued on the basis of the resurvey
(Exh. A) is a land situated in Tigaon, Camarines Sur,
while the land covered by TCT No. 40 (140) is a vast
tract of land in Buhi, Camarines Sur; that it further
appears that the lots covered by TCT No. 40 (140)
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
were supposedly registered in GRLO Sp.
Proceedings No. 112 with an area of 23,944,635
square meters but records of the LRC revealed that
GRLO records No. 112 refers to a land registration
case in Iloilo, and not in Camarines Sur. Exh D also
shows that Mr. Florencio Mora had never applied for
original registration of title covering a land in the
municipality of Buhi, Camarines Sur, and that plan
RS-383-D (without the suffix capital letter D)
involving Lots 1 and 2 situated in the Municipality of
Calawag, Quezon, was the subject of Land
Registration Case No. 322, GRLO Record No.
13804 with Maximina Zepeda as applicant.
The stench of anomaly became at once pervading
when we consider the evidence submitted by the
plaintiff. The land practically covers
the Municipality of Buhi and are being claimed and
possessed by claimants, who appeared as
intervenors in this case. The Venturanzas never
materially and physically occupied the property
because there are actual occupants and
possessors. The Venturanzas only asserted
ownership over the property in papers but not in
physical possession.[5]
As a necessary consequence, no court could have ever acquired jurisdiction to order the
reconstitution of Moras TCT No. RT-40 (140) over the land which has never been originally
registered. As aptly pointed out by the trial court:
The evidence shows that TCT No. 2574,
the title in question, derived its existence from RT-40
(140) in the name of Florencio Mora which was a
reconstituted title based on TCT No. 140 allegedly
obtained by Florencio Mora during the Japanese
occupation. The records of the Register of Deeds of
Camarines Sur, however, do not show how the land
covered by TCT No. 140 supposedly in the name of
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Florencio Mora was registered. Neither is there a

decree number, when said decree was entered, the Again, this assertion is without basis considering that Moras reconstituted TCT No. RT-40
OCT number or LRC Record Number. [6]
(140), from where petitionersTCT No. 2574 was derived, is void. The only way by which

Mora could have acquired ownership over the subject parcels of land and validly transfer
Corollarily, petitioners argument that the Republics action for the cancellation of TCT No.
that ownership to the petitioners was for Mora to apply for their registration in his own
2574 and the reversion of the land covered thereby to the State is barred by the decision
name.
of the CA in CA-G.R. No. 20681-R has no leg to stand on.

What makes petitioners cause doubly undeserving of merit is the finding of the two courts
Aside from the fact that no court could have ever acquired jurisdiction to order the
below that the land subject matter of this case is part timberland, [7] a finding not even once
reconstitution of Moras title over the property which has never been originally registered,
disputed by petitioners. It is, thus, safe to conclude that the land subject of TCT No. 2574
the judgment in CA-G.R. No. 20681-R did not operate as res judicata which would bar the
could not have been registered in the name of petitioners or their predecessors-in-interest
Republics action because there was no identity of cause of action between CA-G.R. No.
for the simple reason that under the Constitution, timberlands, which are part of the public
20681-R and the instant case.
domain, cannot be alienated.[8] A certificate of title covering inalienable lands of the public
The issue in CA-G.R. No. 20681-R was whether or not Moras domain is void and can be cancelled in whosever hand said title may be found. [9] Thus, we
evidence in Special Proceedings No. 674 and the procedures adopted by have ruled that a certificate of title is void when it covers property of the public domain
him for the reconstitution of certificate of title alleged to have been lost or destroyed were classified as forest or timber and mineral lands. And any title issued on non-disposable
in conformity with the provisions of Republic Act No. 26. The questions of ownership and lands even if in the hands of alleged innocent purchaser for value, shall be cancelled. [10]
whether or not the property or portion thereof was registrable, being a timberland, were
All told, the Court finds no reversible error in the assailed decision of the CA, affirming that
never put at issue in CA-G.R. No. 20681-R. Neither the non-
of the trial court.
existence of the original title from which Moras TCT No. RT-40 (140) and petitioners TCT
WHEREFORE, the instant petition is DENIED and the assailed decision of the CA
No. 2574 were derived, nor the non-registrability of the timberland included in the area in
is AFFIRMED.
question which constitute Republics cause of action against the herein petitioners, were

ever raised, much less, decided by the CA in CA-G.R. No. 20681-R. No pronouncement as to costs.

Petitioners also claim that they are protected by law considering that they were buyers in SO ORDERED.

good faith.

G.R. No. 172338 December 10, 2012
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
CONCEPCION LORENZO, ORLANDO FONTANILLA, SAMUEL FONTANILLA, JULIET
FONTANILLA, ELIZABETH FONTANILLA, ROSELA FONTANILLA, RENATO
FONTANILLA AND EVELYN FONTANILLA, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
Before the Court is a petition for review under Rule 45 of the 1997 Rules of Civil Procedure
assailing the Decision 1 dated April 17, 2006 of the Court of Appeals in CA-G.R. CV No.
80132, entitled "Concepcion Lorenzo, Orlando Fontanilla, Samuel Fontanilla, Juliet
Fontanilla, Elizabeth Fontanilla. RosPln Fontanilla, Renato Fontanilla and Evelyn
Fontanilla v. Republic of the Philippines." Said Court of Appeals Decision affirmed the
Decision2 dated August 26, 2003 in LRC Case No. 24-2692 of Branch 24, Regional Trial
Court (RTC), Echague, Isabela.
The genesis of the present case can be traced back to the filing before the trial court on
February 11, 2002 of a Petition3 for the reconstitution of Original Certificate of Title (OCT)
No. 3980 covering a parcel of land measuring 811 square meters, situated in Echague,
Isabela.
In seeking the reconstitution of OCT No. 3980, respondents averred before the trial court:
3. That during the lifetime of Pedro Fontanilla and herein petitioner Concepcion
Lorenzo, husband and wife, respectively, they acquired a parcel of residential
land, x x x;
4. That subject parcel of land is identical to Lot 18 of Echague Cadastre 210,
covered by and embraced under ORIGINAL CERTIFICATE OF TITLE NO. 3980
of the Land Records of Isabela, in the name of Antonia Pascua as her
paraphernal property and being the mother of Pedro Fontanilla;
5. That because of the death of Pedro Fontanilla the lot as covered by the
aforesaid title was settled and adjudicated among the herein petitioners, x x x;
6. That the OWNERS DUPLICATE COPY OF OCT NO. 3980 was handed and
delivered unto the spouses Pedro Fontanilla and Concepcion Lorenzo which they
have been keeping only to find out thereafter that it was eaten by white ants
(Anay);
7. That the original and office file copy of said OCT NO. 3980 kept and to be on
file in the Registry of Deeds of Isabela is not now available, utmost same was
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
included burned and lost beyond recovery when the office was razed by fire
sometime in 1976, a certification to this effect as issued by the office is hereto
marked as ANNEX "D";
8. That for taxation purposes, the lot as covered by OCT NO. 3980, still in the
name of Antonia Pascua for Lot 18, Cad. 210, with an assessed value of
P16,920.00, x x x;
9. That no mortgagees and/or lessees co-owners copy to the subject OCT NO.
3980 was ever issued, and likewise no related documents affecting the land
covered thereby is presented and pending for registration in favor of any person
whomsoever, and henceforth, it is free from lien and encumbrance;
xxxx
11. That in support for the reconstitution of [OCT] No. 3980, the following
documents which may constitute as source or basis for the purpose are herewith
submitted:
(a) S[E]PIA PLAN with Blue Prints x x x;
(b) Certified technical description of Lot 18, Cad. 210 x x x;
(c) Certification by LRA as to the non-availability of a copy of DECREE
NO. 650254 x x x[.]4
During the trial, the testimony of co-respondent Evelyn Fontanilla- Gozum was offered in
order to prove the above-mentioned allegations in the petition. In her testimony, she
declared that she is the daughter of the late Pedro Fontanilla and co-respondent
Concepcion Lorenzo who, during their marriage, acquired a parcel of land covered and
embraced by OCT No. 3890 from her grandmother Antonia Pascua as evidenced by a
Deed of Sale. She also averred that the owners duplicate of the said Torrens certificate of
title was later discovered to have been eaten by termites and that the original copy of the
said Torrens certificate of title on file with the Register of Deeds of Isabela was certified to
be burned and lost beyond recovery when the office was razed by fire of unknown origin
on December 4, 1976 as certified to by the Register of Deeds. Since both the original copy
on file and the owners duplicate copy are non-existent, she and her co-heirs, who are also
co-respondents in this case, instituted the petition for reconstitution of lost or destroyed
Torrens certificate of title.5
In its Decision dated August 26, 2003, the trial court granted respondents petition and
directed the Register of Deeds of Isabela to reconstitute OCT No. 3980 in the name of
Antonia Pascua on the basis of the deed of sale, the technical description and the sketch
plans, and to issue another owners duplicate copy of the said Torrens certificate of title.
The dispositive portion of the said ruling states:

WHEREFORE, premises considered, judgment is hereby rendered ordering the Register
of Deeds of Isabela to reconstitute the original copy of OCT No. 3980 in the name of
Antonia Pascua, on the basis of the deed of sale, the technical description and the sketch
plans, and to issue another Owners Duplicate of the said title after payment of the
necessary legal fees.
Furnish copy of this Order to the Land Registration Authority, The Register of Deeds of
Isabela and the Office of the Solicitor General.6
Petitioner Republic of the Philippines, through the Office of the Solicitor General, appealed
the ruling to the Court of Appeals arguing that the trial court erred in granting respondents
petition for reconstitution of Torrens title since they failed to present substantial proof that
the purported original certificate of title was valid and existing at the time of its alleged loss
or destruction, and that they failed to present sufficient basis or source for reconstitution.
The Court of Appeals dismissed petitioners appeal in the assailed Decision dated April 17,
2006, the dispositive portion of which states:
WHEREFORE, premises considered, the appeal is hereby DISMISSED for lack of merit.7
Hence, the petitioner sought relief before this Court and relied on the following grounds to
support its petition:
I
THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS
ORDER GRANTING RECONSTITUTION OF ORIGINAL CERTIFICATE OF
TITLE NO. 3980.
II
THE COURT OF APPEALS ERRED IN ITS APPLICATION OF PARAGRAPH F,
SECTION 2 OF REPUBLIC ACT NO. 26.8
On the other hand, respondents put forward the following issues for consideration:
(a) HAS THERE BEEN SUFFICIENT COMPLIANCE OF ACT 26,
REQUIREMENTS RECONSTITUTING OCT NO. 3890 AND ISSUANCE OF
ANOTHER OWNERS DUPLICATE COPY?
(b) DID THE HONORABLE COURT OF APPEALS CORRECTLY SUSTAIN THE
RENDERED DECISION OF THE COURT OF ORIGIN?9
Petitioner argues that the alleged loss or destruction of the owners duplicate copy of OCT
No. 3980 has no evidentiary basis and that there is no sufficient basis for the reconstitution
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
of OCT No. 3980. Petitioner likewise maintains that the findings of fact of the Court of
Appeals are not supported by the evidence on record. Lastly, petitioner insists that,
contrary to respondents assertion, the government of the Republic of the Philippines is not
estopped by the mistakes, negligence or omission of its agents.
For their part, respondents maintain that they have complied with Section 2 of Republic Act
No. 26 considering that there was no opposition from the Office of the Solicitor General
(OSG); that the OSG is guilty of estoppel; that there was a valid basis for reconstitution of
OCT No. 3980; that there was compliance with jurisdictional requirements; that both the
original file copy and the owners copy of the subject OCT for reconstitution were lost or
destroyed beyond discovery; and that questions of fact are not subject to review by this
Court.
In essence, the focal issue of the present case is whether or not the reconstitution of OCT
No. 3980 was in accordance with the pertinent law and jurisprudence on the matter.
The petition is impressed with merit.
The relevant law that governs the reconstitution of a lost or destroyed Torrens certificate of
title is Republic Act No. 26. Section 2 of said statute enumerates the following as valid
sources for judicial reconstitution of title:
SECTION 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.
As borne out by the records of this case, respondents were unable to present any of the
documents mentioned in paragraphs (a) to (e) above. Thus, the only documentary
evidence the respondents were able to present as possible sources for the reconstitution

of OCT No. 3980 are those that they believed to fall under the class of "any other
document" described in paragraph (f).
In the assailed April 17, 2006 Decision of the Court of Appeals, the appellate court affirmed
the trial courts ruling by granting respondents petition for reconstitution of OCT No. 3980
merely on the bases of a purported deed of sale,10 sketch plan,11 and technical
description.12 The relevant portion of said Decision reads:
The appeal is bereft of merit.
In granting the petition, the trial court ratiocinated:
"As basis for the reconstitution of the lost title, the deed of sale, Exh "M", evidencing
transaction over the property, in addition to the sketch plan, Exh. "E" and the technical
description, Exh. "D", duly approved under (LRA) PR-02-00022-R pursuant to the
provisions (of) Section 12 of Republic Act No. 26, as embodied in the report filed by the
Land Registration Authoriy, Exh. "J", would be sufficient basis for the reconstitution of the
lost title." (p. 3, Rollo, p. 38)
Appellees presented the approved sketch plan with its blue print, the certified technical
description of the subject lot, the Deed of Sale executed by Antonia Pascua, the Tax
Declaration, and Tax Payment Receipts. To the mind of this Court, there was sufficient and
preponderant evidence thus presented to warrant the reconstitution of the original of OCT
No. 3980 and the issuance of another Owners Duplicate Copy thereof. The enumeration
of the preferential documents to be produced, as provided under Section 2 of Republic Act
26 had been substantially complied with. Certifications of loss of documents were attested
to by the custodian thereof, the Land Registration Authority of Ilagan, Isabela and Quezon
City (Exh. "F", Supra & Annex "H", Record, p. 13, respectively). It is on this premise that
paragraph (f) of Section 2, RA 26 comes to the fore, viz: "Any other document which, in the
judgment of the court, is sufficient and proper basis for reconstituting the lost or destroyed
certificate of title."13
As correctly pointed out by petitioner, we had emphasized in Republic v. Holazo14 that the
term "any other document" in paragraph (f) refers to reliable documents of the kind
described in the preceding enumerations and that the documents referred to in Section 2(f)
may be resorted to only in the absence of the preceding documents in the list. Therefore,
the party praying for the reconstitution of a title must show that he had, in fact, sought to
secure such documents and failed to find them before presentation of "other documents"
as evidence in substitution is allowed. Thus, we stated in Holazo that:
When Rep. Act No. 26, Section 2(f), or 3(f) for that matter, speaks of "any other
document," it must refer to similar documents previously enumerated therein or
documents ejusdem generis as the documents earlier referred to. The documents alluded
to in Section 3(f) must be resorted to in the absence of those preceding in order. If the
petitioner for reconstitution fails to show that he had, in fact, sought to secure such prior
documents (except with respect to the owners duplicate copy of the title which it claims
had been, likewise, destroyed) and failed to find them, the presentation of the succeeding
documents as substitutionary evidence is proscribed. 15 (Citation omitted.)
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Furthermore, in a more recent case, this Court enumerated what should be shown before
an order for reconstitution can validly issue, namely: (a) that the certificate of title had been
lost or destroyed; (b) that the documents presented by petitioner are sufficient and proper
to warrant 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 or destroyed; and (e) that the description, area and
boundaries of the property are substantially the same and those contained in the lost or
destroyed certificate of title.16
In the case at bar, the respondents were unable to discharge the burden of proof
prescribed by law and jurisprudence for the reconstitution of lost or destroyed Torrens
certificate of title. First, respondents failed to prove that the owners duplicate copy of OCT
No. 3980 was indeed eaten by termites while in the custody of respondent Concepcion
Lorenzo and her late husband Pedro Fontanilla who, inexplicably, did not execute an
affidavit of loss as required by Section 10917 of Presidential Decree No. 1529. Second, The
Certification18 dated April 23, 2001 issued by the Register of Deeds of Ilagan, Isabela did
not categorically state that the original copy of OCT No. 3980, which respondents alleged
to be on file with said office, was among those destroyed by the fire that gutted the
premises of said office on December 4, 1976. The document only stated that said office
"could not
give any information/data involving the existence of Original/Transfer Certificate of Title
No. Lot No. 18, area 770 sq. m., located at Taggapan, Echague, Isabela." Third, a
comparison between the aforementioned certification and the technical description and
sketch plan will reveal that there was a discrepancy in the land area of the lot allegedly
covered by OCT No. 3980. What was reflected on the former was a land area of 770 sq.
m. while the latter two documents pertained to a land area of 811 sq. m. Furthermore,
respondents were not able to show adequate proof that a Torrens certificate of title was
issued covering the subject parcel of land or that the same piece of land is what is covered
by the allegedly lost or destroyed OCT No. 3980. The Certification19 dated December 3,
2001 issued by the Land Registration Authority (LRA) which indicates that Decree No.
650254 issued on September 1, 1937 is not among the salvaged decrees on file in the
LRA and is presumed to have been lost or destroyed as a consequence of World War II
does not support respondents assertion that OCT No. 3980 did exist prior to its loss or
destruction because said document failed to show a connection between Decree No.
650254 and OCT No. 3980. From the foregoing, it is apparent that the conclusion of the
Court of Appeals that "(t)he enumeration of the preferential documents to be produced as
provided under Section 2 of Republic Act 26 had been substantially complied with" had no
foundation based on the evidence on record.
Likewise, the deed of sale purportedly between Antonia Pascua, as seller, and Pedro
Fontanilla, as buyer, which involves OCT No. 3980 cannot be relied upon as basis for
reconstitution of Torrens certificate of title. An examination of the deed of sale would reveal
that the number of the OCT allegedly covering the subject parcel of land is clearly
indicated, however, the date when said OCT was issued does not appear in the document.
This circumstance is fatal to respondents cause as we have reiterated in Republic v. El
Gobierno de las Islas Filipinas20 that the absence of any document, private or official,
mentioning the number of the certificate of title and the date when the certificate of title
was issued, does not warrant the granting of a petition for reconstitution. We held that:
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

We also find insufficient the index of decree showing that Decree No. 365835 was issued BARSTOWE PHILIPPINES G.R. No. 133110
for Lot No. 1499, as a basis for reconstitution. We noticed that the name of the applicant CORPORATION,
as well as the date of the issuance of such decree was illegible. While Decree No. 365835 Petitioner,
existed in the Record Book of Cadastral Lots in the Land Registration Authority as stated
in the Report submitted by it, however, the same report did not state the number of the Present:
original certificate of title, which is not sufficient evidence in support of the petition for
reconstitution. The deed of extrajudicial declaration of heirs with sale executed by
Aguinaldo and Restituto Tumulak Perez and respondent on February 12, 1979 did not also
YNARES-SANTIAGO,*J.
mention the number of the original certificate of title but only Tax Declaration No. 00393.
Chairperson,
As we held in Tahanan Development Corp. v. Court of Appeals, the absence of any
AUSTRIA-MARTINEZ,
document, private or official, mentioning the number of the certificate of title and the
date when the certificate of title was issued, does not warrant the granting of such
petition.21 (Citation omitted, emphasis supplied.) CALLEJO, SR.,**
- versus-
CHICO-NAZARIO, and
Lastly, on the peripheral issue of whether or not the OSG should be faulted for not filing an
opposition to respondents petition for reconstitution before the trial court, we rule that such
an apparent oversight has no bearing on the validity of the appeal which the OSG filed NACHURA, JJ.
before the Court of Appeals. This Court has reiterated time and again that the absence of
opposition from government agencies is of no controlling significance because the State
cannot be estopped by the omission, mistake or error of its officials or agents. 22 Neither is
the Republic barred from assailing the decision granting the petition for reconstitution if, on
the basis of the law and the evidence on record, such petition has no merit. 23
Promulgated:
WHEREFORE, premises considered, the petition is GRANTED. The Decision dated April REPUBLIC OF THE PHILIPPINES,
17, 2006 of the Court of Appeals in CA-G.R. CV No. 80132 and the August 26, 2003
Decision of the Regional Trial Court, Branch 24 of Echague, Isabela are Respondent.
hereby REVERSED and SET ASIDE. The petition for reconstitution is DENIED. March 28, 2007

SO ORDERED. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the

Rules of Court seeking the reversal and setting aside the Decision, [2] dated 8 August 1997,

and Resolution,[3] dated 18 March 1998, of the Court of Appeals in CA-G.R. CV No. 47522,
[4]
which in turn, reversed and set aside the Decision, dated 22 December 1992, of
the Quezon City Regional Trial Court (RTC), Branch 80 in Civil Case No. Q-92-11806.
Antecedent Facts
This case involves the conflicting titles to the same parcels of land (subject lots)
of petitioner Barstowe Philippines Corporation (BPC) and the respondent Republic of
the Philippines (Republic). The subject lots have a total area of 111,447 square meters,
and are situated along the northeastern perimeter boundary of the National Government
Center in Payatas, Quezon City.
BPC traces its titles to the subject lots back to Servando Accibal (Servando) who
was supposedly issued on 24 July 1974, at 3:20 p.m., Transfer Certificates of Title (TCTs)
No. 200629 and 200630 over the subject lots. TCTsNo. 200629 and 200630 were
purportedly signed by Nestor N. Pena, Deputy Register of Deeds of Quezon City. On 10
June 1988, Servando executed a Deed of Absolute Sale of the subject lots to his son
Antonio Accibal (Antonio), with the concurrence of his other heirs. Despite his prior sale of
the subject lots to Antonio, Servando, by virtue of a Deed of Conveyance, dated 8
February 1989, transferred/conveyed the subject lots to BPC in exchange for subscription
of 51% of the capital stock of BPC, such subscription supposedly amounting
to P6,000,000.00.[5] About a year after the death of Servando on 3 October 1989,
particularly on 10 October 1990, Antonio executed another Deed of Conveyance of the
subject lots in favor of BPC in exchange for subscription of 2,450 shares of its capital
stock, with an alleged total value of P49,000,000.00.[6] Due to the fire that gutted the Office
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
of the Quezon City Register of Deeds on 11 June 1988 and destroyed many certificates of
title kept therein, Antonio sought the administrative reconstitution of the original copies and
owners duplicate copies of TCTs No. 200629 and 200630 with the Land Registration
Authority (LRA). On 12 December 1990, the LRA issued TCTs No. RT-23687 and RT-
23688 (reconstituting TCTs No. 200629 and 200630, respectively), which were transmitted
to the Quezon City Register of Deeds and signed by Deputy Register of
Deeds Edgardo Castro on 19 February 1991. Also on 19 February 1991, TCTs No. RT-
23687 and RT-23688 were cancelled and in lieu thereof, TCTs No. 30829, 30830, 30831,
and 30832 in the name of BPC were issued. BPC then acquired from the Housing and
Land Use Regulatory Board (HLURB) a permit to develop the subject lots into a residential
subdivision. Subsequently, BPC entered into Joint Venture Agreements with other
corporations for the development of the subject lots into a subdivision called Parthenon
Hills.
Meanwhile, according to the Republic, prior to 14 November 1979, the subject lots were
owned by First Philippine Holdings Corporation (FPHC). As evidence of its title to the
subject lots, FPHC was issued TCT No. 257672, on an undetermined date, and TCT
No. 275201, on 20 January 1981. Pursuant to a Deed of Sale, dated 14 November 1979,
FPHC sold one of the subject lots, covered by TCT No. 257672, to the Republic
for P2,757,360.00. Thus, on 22 January 1981, TCT No. 257672 was cancelled and TCT
No. 275443 was issued in place thereof in the name of the Republic. FPHC executed
another Deed of Sale on 25 March 1982 in which it sold the remainder of the subject lots,
covered by TCT No. 275201, to the Republic for P9,575,920.00. On 31 May 1982, TCT
No. 275201 was cancelled and was replaced by TCT No. 288417 issued in the name of
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Land Titles and Deeds (Finals) 2017

allowed to continue with the improvement and development of

the Republic. Because of the 11 June 1988 fire which razed the Quezon City Office of the the controverted property into a residential subdivision. [10]
Register of Deeds and destroyed the original copies of TCTs No. 275443 and 288417, the

Republic applied for administrative reconstitution of the same with the LRA. It was then

that the Republic came to know that another party had applied for reconstitution

of TCTs No. 200629 and 200630 which also covered the subject lots. This prompted the On 12 October 1992, the Republic filed with the Quezon City Register of Deeds a Notice

Republic to file before the RTC on 26 March 1992 a petition for cancellation of title against of Lis Pendens requesting the recording of the pendency of Civil Case No. Q-92-11806

Antonio, Servando, and BPC, docketed as Civil Case No. Q-92-11806. on TCTs No. 30830, 30831, and 30832, all in the name of BPC.

Civil Case No. Q-92-11806

While Civil Case No. Q-92-11806 was still pending before the RTC, there were
Counsel for Antonio and the late Servando filed two successive Motions for extension of
two intervenors.
time to file the proper pleading, dated 17 June 1992 and 1 July 1992, but despite the grant

thereof by the RTC,[7] no such responsive pleading on behalf of Antonio and the Gloria Accibal Rettoriano (Gloria) filed with the RTC a Motion for Intervention,

late Servando was ever filed. Hence, on 31 July 1992, the RTC issued an with a Complaint in Intervention, both dated 1 September 1992. Gloria alleged that she
[8]
Order declaring Antonio and the late Servando in default.
was the only child of Basilia Accibal, Servandos sister; the subject lots were inherited

In another Order,[9] also dated 31 July 1992, the RTC, upon the motion of BPC, allowed by Basilia, Servando, and their other siblings from their parents Martin

the latter to continue with the development of the subject lots. It concluded that and Mauricia Accibal; upon her mothers death, Gloria inherited and came into possession

of a portion of the subject lots with an area of about 2.5 hectares; Gloria had been

Considering the plight of [BPC] and the possible irreparable possessing, cultivating and improving her portion of the subject lots for the last 30
damage that may be caused against the residents in the surrounding
developed subdivision, even as said corporation is possessed of a years; Servando, through fraudulent means, was able to secure TCTs over all the subject
good title, the court in the exercise of its discretion grants the
motion. More importantly, consideration of equity demands that the lots, including Glorias portion therein; the inclusion of Glorias portion in
titled owner [BPC] herein must be able to exercise all its dominical
right bloosoming [sic] forth from its ownership of the land in suit. the TCTs of Servando and, later, in those of BPC, was done through fraud and gross bad

faith; and unless the TCTs of Servando and BPC are declared null and void, Gloria will be

WHEREFORE, under cool reflection and prescinding from the deprived of her property without due process and just compensation. BPC opposed
foregoing, the motion is hereby granted. [BPC] is hereby permitted and
Glorias intervention in Civil Case No. Q-92-11806 considering that she had already
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Land Titles and Deeds (Finals) 2017

Accordingly, the Court finds the opposition of [BPC] to be

instituted Civil Case No. Q-91-10933 before the RTC, Quezon City, Branch 76, seeking the
annulment of TCTs No. 30830, 30831, and 30832 of BPC based on the very same
grounds she raised in her present Complaint in Intervention; on 11 February 1992, Gloria
impressed with merit and the motion for intervention does not inspire
confidence.
WHEREFORE, the subject motion for intervention is denied
and the complaint in intervention attached thereto must be rejected. [12]

entered into a Compromise Agreement with BPC in which she waived and renounced any
Another intervenor in Civil Case No. Q-92-11806 was EL-VI Realty and
and all claims whatsoever which she may have over the titles of BPC in consideration of Development Corporation (ERDC) which filed with the RTC a Motion for Leave to

the payment by the latter of P2,000,000.00; the RTC, Branch 76, after finding that the said Intervene, dated 1 September 1992. Subsequently, it filed an Answer in Intervention, dated

Compromise Agreement was not contrary to law, morals, good customs, public order or 15 September 1992, in which, it alleged that it acquired interest in the subject lots after

having entered into a Joint Venture Agreement dated 16 January 1992, with BPC, for the
public policy, approved the same, thus putting an end to Civil Case No. Q-91-
development of the subject lots into a residential subdivision; the action initiated by the
10933;[11] Glorias cause of action to intervene in Civil Case No. Q-92-11806 was already
Republic for the cancellation of the TCTs of BPC was already barred
barred by prior judgment in Civil Case No. Q-91-10933 and Glorias Complaint in
by laches and estoppel because of the recognition accorded upon the said TCTs by the
Intervention is tantamount to a collateral attack against a TCT. In rejecting Glorias instrumentalities of the Republic, particularly the Register of Deeds and the HLURB, on

intervention in Civil Case No. Q-92-11806, the RTC found as follows which the ERDC relied in all good faith when it entered into the Joint Venture Agreement

with BPC; the Republic is liable to ERDC for moral damages and attorneys fees; should
The motion for intervention must be denied and the complaint
in intervention therein attached must be rejected. the RTC find the TCTs of BPC infirm, rendering the Joint Venture Agreement between
For one thing, herein movant Gloria Accibal Rettoriano, was
the plaintiff in the first case (RTC Br. 76 No. Q-91-10933) and with eyes ERDC and BPC of no force and effect, then BPC should be held liable to ERDC, being an
wide open she entered into a compromise agreement with [BPC], which
was the basis of the 26 February 1992 decision rendered therein and it innocent third party, for reimbursement of all expenses incurred by the latter in the
being based on a compromise agreement, said decision became
immediately final and executory. development of the subject lots; and should the RTC find that the TCTs of BPC are

Whether or not the decision rendered in the first case was spurious, then it should be declared in bad faith when it entered into the Joint Venture
satisfied is of no moment in the present case, as
herein movant intervenor has all the remedies to protect her rights Agreement with ERDC, for which it should be liable for exemplary damages and attorneys
therein.
fees. In an Order,[13] dated 27 October 1992, the RTC granted ERDCs Motion to Intervene
For another, movant intervenor Gloria Accibal Rettoriano,
from her complaint in intervention would ask for the cancellation of the and admitted its Answer in Intervention.
titles issued to their [sic] relative Servando Accibal and those titles duly
issued and registered in the name of [BPC]. Certainly, this can not be
done, as it constitutes a collateral attack on the questioned titles which
the law and settled jurisprudence do not allow. Perforce, a separate
action against the questioned titles is the remedy available
for intervenor Gloria A. Retoriano [sic].

After all the parties had submitted their respective Pre-Trial Briefs,[14] and upon motion by
the BPC,[15] the RTC decided the case on 22 December 1992 on summary
judgment.[16] Although it found both the Republic and the BPC as buyers in good faith, it
held that the titles of BPC should prevail. It ratiocinated thus
3. To the third issue, we rule that the title of [BPC] must
prevail over that of the [Republic].
There is no dispute that the titles of the First Philippine
Holdings Corporation, predecessor-in-interest of [Republic] were either
issued in the year 1979 and 1981 (Exh. A and B). On the other hand,
there is likewise no dispute that the titles of defaulted
defendant Servando Accibal, and predecessor-in-interest of [BPC],
were both issued and registered much earlier on July 24, 1974 (Exhs. F
and G, pp. 210-213, record) and/or a difference of 5 or 6 years in point
of time.
MORE, Servando Accibal, the predecessor-in-interest of
[BPC] has been in the actual and peaceful physical possession of the
lots in suit before he sold them to [BPC] on February 08, 1991. Upon
registration of the same on February 19, 1991, [BPC], after having
subdivided the land into four (4) smaller lots was issued on 19 February
TCT Nos. 30829, 30830, 30831, and 30832 (Exhs. 1, 2, 3 and 4).
It is true [Republic] acquired the land in suit on November 14,
1979 and for which TCT Nos. 275443 and 288417 were issued in the
years 1979 and 1981, but [Republic] never took assertive steps to take
actual possession of the land sold to it by the First Philippine Holdings
Corporation. It is even of grave doubt that the latter took actual
possession of the land before the land in suit was sold to the
[Republic]. So much so, that the area had been occupied by several
squatters, one of them is Servando Accibal who by the way, was able
to have the land in suit titled in his name as early as July 24, 1974,
under TCT Nos. 200629 and 200630 of the land records
of Quezon City. Further, [Republic] and its predecessor-in-interest were
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Land Titles and Deeds (Finals) 2017
not able to discover the overlapping of their titles by the titles
of Servando Accibal for a period of eighteen (18) long years starting
from July 24, 1974 to about June 10, 1992 when the LRA during a
reconstitution of the titles of [Republic] was initiated, as evidenced by a
report of reconstituting officer Benjamin A. Flestado of that office (Exh.
H, pp. 214-258, record).
Simply stated, [Republic] may be guilty of LACHES.
xxxx
Perforce, the claim of [Republic] which was probably
originally VALID became a STALE claim as the years went by. Verily,
the titles of [Republic] must be cancelled and the titles of [BPC] must be
upheld and declared as good and valid titles and [BPC] is entitled to all
the rights bloosoming [sic] fourth from its dominical right of ownership.
More importantly, the predecessor-in-interest of [BPC] had
been long in the actual and physical possession of the lands in suit,
while that of the predecessor-in-interest of [Republic] was not in the
actual possession of the land before the sale to [Republic]. On the other
hand, [BPC] immediately after the sale in its favor took actual, physical
and peaceful possession of the land in suit to the exclusion of all
others. It has no knowledge, actual or constructive that said parcels of
land were sold to the [Republic]. When it registered the sale, there was
no inscription in the Land Registry that the same parcels of land were
earlier sold to the [Republic]. Hence, there was and is a continuing
good faith on the part of [BPC]. (Article 1544, NCC; Cruz vs Cabana,
129 SCRA 656).

In the same Decision, the RTC found certain irregularities in TCTs No. 200629 and 200630
in the name of Servando and that the said TCTs should be cancelled, without prejudice to
the rights and interests of BPC. The RTC discussed the matter in this wise
We shall now dwell on the validity of the titles TCT Nos.
200629 and 200630, issued in the name of Servando Accibal on July
24, 1974 by the Register of Deeds of Quezon City. The LRA report
dated 10 June 1992 (Exh. H, pp. 214-258, record) is competent proof
that indeed said titles must be cancelled. In short, the LRA found after
due investigation that the said titles of Servando Accibal were issued
with certain irregularities. It recommended the cancellation therefore, of
TCT Nos. 200629 and 200630, to which the court concurs, as said
report must be accorded due respect and in the absence of fraud or
irregularities that attended the investigation, which the Court finds none,
the same must be persuasive, if not conclusive. Moreover, herein
defendant Servando Accibal because of his failure to answer, despite
extension of time given him, failed to file his answer. Upon motion of
[Republics] counsel, he was declared as in default and since then, he
never asked the court to lift and set aside the default order. There is no
way, his title must be cancelled. For one thing, he was not able to
present evidence to controvert the recommendation of LRA to cancel
his titles. For another, Servando Accibal is deemed to have impliedly
admitted the irregularities that attended the issuance of
his aforestated titles.
However, the cancellation of the titles of Servando Accibal,
would not affect the rights and interests of [BPC] as the latter is
declared to be a purchaser in good faith and for value. MORE, under
the circumstances of the case, and even when the titles
of Servando Accibal are cancelled, the titles of [BPC] are still good and
indefeasible titles, as it is settled rule that good titles may be sustained
even when the seller has spurious titles.
As for the intervention of ERDC, the RTC addressed the same as follows
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Land Titles and Deeds (Finals) 2017
Finally, we shall next discuss the claim of intervenor EL-VI
Realty and Development Corporation. A close reading from the Joint
Venture Agreement dated January 16, 1992, shows that in case of
litigation, intervenor Realty Corporation shall have the right to suspend
all development activities and the development period of 5 years shall
automatically be suspended until such time as the said case is finally
settled/decided (Exh. 5 and Annex A answer in intervention pp. 109-
114). Upon the signing of the said agreement the amount
of P1,500,000.00 was received by [BPC] as advance payment of the
50-50 sharing basis in the sales proceeds. During the pre-trial
conference, herein intervenor tried to enforce a supplemental
agreement dated October 15, 1992, by filing a motion for a writ of
preliminary injunction with prayer for the issuance of a restraining
order. Resolution of the same was held in abeyance to await the
decision to be rendered, after [BPC] assured intervenor herein that it
will abide by and strictly comply with its commitments arising from the
aforesaid agreement, after proper accounting is made
therefore. Herein intervenor admits that another financier-developer has
entered the area due to the delay of the project caused by the filing of
the present case.
MORE, due to the filing of the present case,
herein intervenor was reluctant to further finance the project because of
its big exposure already made. Hence, intervenors works and other
activities in the area was suspended in accordance with their Joint
Venture Agreement.
Perforce, there is compelling necessity for a proper
accounting, more particularly its substantial exposure to the project, on
a quantum meruit basis, in fairness to all concerned and involved
parties in the project, including but not limited to the present contractor-
developer of the area.
Finally, the RTC concluded that
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and 30832 of the land records of Quezon City,

all issued on February 19, 1991 and the said
titles are further more declared valid, existing
A FORTIORARI, the environmental setting and factual
and indefeasible titles of [BPC] and as such is
scenario of the case, in relation to its legal ambience will show that the
entitled to all the dominical
great preponderance of evidence lies in favor of [BPC]. (Section 01,
rights bloosoming [sic] forth from its ownership
Rule 133, Revised Rules of Court), and the motion for summary
over the lots in suit.
judgment is granted. The hearing as to damages, including attorneys
fees shall be scheduled soonest possible.

4. Ordering [BPC] to abide by and strictly comply

with the terms and conditions of the
WHEREFORE, under cool reflection and prescinding from the
supplemental Agreement entered into by it with
foregoing, judgment is rendered as follows:
herein intervenor EL-VI Realty and
Development Corporation dated October 15,
1992, after proper accounting is made;
1. Ordering the Register of Deeds of Quezon City
to cancel Transfer Certificates of Title No.
275443 and 288417 issued in the name of the
5. Perforce, the Register of Deeds
[Republic] covering the lots in suit. However,
of Quezon City is likewise ordered to cancel
[Republic] being a purchaser in good faith, and
any and all encumbrances annotated on said
based on considerations of equity and
titles of defendant corporation including, but not
justice Barstowe Philippine[s] Corporation is
limited to the lis pendens notice filed by the
ordered to re-imburse and pay [Republic], the
[Republic], if any;
sum of P12,333,280.00 representing the
purchase price from the vendor, First Philippine
Holdings Corporation soonest possible;
6. The hearing as to damages, including the
claim for attorneys fees shall be scheduled
soonest.
2. Ordering the Register of Deeds of Quezon City
to officially and finally cancel from his records,
Transfer Certificates of Title Nos. 200629 and
200630 issued in the name 7. Considering the admissions and agreements
of Servando Accibal, on July 24, 1974, covering of the parties during the pre-trial conference,
the same lots in suit (Exh. F and G, pp. 210- which are considered judicial admissions, this
213, record). decision acquires the nature of one based on a
compromise agreement. Perforce, the Court
declares this decision to be immediately final
and executory.
3. Declaring herein
defendant Barstowe Philippines Corporation as
the absolute owner in fee simple title over the
lots in suit, as evidenced by Transfer 8. No pronouncement as to costs.
Certificates of Title Nos. 30829, 30830, 30831
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Land Titles and Deeds (Finals) 2017

bad faith, already sold 36 of the 40 subdivision lots it earlier offered to ERDC by

accepting downpayments thereon of only 30% of the selling price. Upon further

investigation, it discovered that of the four remaining lots, two were vacant while the other
Despite the promulgation of the foregoing Decision by the RTC on 22 December
two were reserved. ERDC subsequently filed two other motions: (1) A Motion, [21] dated 29
1992, the proceedings in Q-92-11806 were still far from over; significant developments still
April 1993, to set for trial the claim of ERDC for damages. Said motion was granted, and
took place thereafter.
the RTC set the hearing on 16 September 1993, at 8:30 a.m., [22] but upon the motion of the

counsel for BPC, the hearing was reset to 7 October 1993;[23] and (2) A Motion,[24] dated 6

September 1993, for the issuance of a partial writ of execution for the undisputed amount
ERDC sought the execution of paragraph 4 of the dispositive portion of the RTC
of P18,543,000.00, representing 65% of the total claims of ERDC. Unfortunately, the
Decision dated 22 December 1992. In an Order,[17] dated 13 January 1993, the RTC
records no longer show the succeeding incidents concerning these motions.
issued a writ of execution in favor of ERDC, and a notice of levy on execution was

accordingly made on the subject lots. In a dialogue held between the counsels for BPC

and ERDC in the chamber of the RTC Judge on 26 February 1993, an amicable settlement
In a Motion for Leave to Intervene[25] dated 8 March 1993, and the attached
was reached whereby BPC agreed to settle the claim of ERDC in the form of developed
Complaint in Intervention,[26] dated 10 March 1993, Kadakilaan Estate expressed its intent
subdivision lots in Parthenon Hills, subject to proper accounting. [18] BPC offered to ERDC
to intervene in Civil Case No. Q-92-11806. It anchored its claims on the contention that the
40 developed subdivision lots in Parthenon Hills, valued at P18,543,000.00, representing
subject lots were already registered as private property under the Spanish Mortgage Law
65% of the total claims (prior to proper accounting) of ERDC, which amounted
since 18 May 1891, and under the Torrens System of Registration since 31 August 1907,
to P28,787,306.32. However, ERDC refused the offer of BPC and demanded that it be
by the predecessors-in-interest of Kadakilaan Estate. The subject lots were supposedly
paid the total amount of its claims. It also brought to the attention of the RTC that, in
included in a vast track of land covered by Titulo de la Propiedad de Terrenos No. 01-4 in
violation of their Joint Venture Agreement, BPC contracted another realty developer for the
the name of Doa Petra Rodriguez, who transferred the same to her son, Don
development of Parthenon Hills. Thus, ERDC opposed the lifting of the notice of levy on
Gonzalo Yanesa y Rodriguez. Kadakilaan Estate came into ownership and possession of
execution on the subject lots for the protection of its interests. In an Order,[19] dated 17
the vast track of land, including the subject lots, by virtue of its successive sales from Don
March 1993, the RTC found that BPC already substantially complied with the terms of its
Gonzalo Yanesa y Rodriguez to DoaLourdez Rodriguez Yanesa, and from the latter
agreement with ERDC and that the rights and interests of the latter were well-protected
to Kadakilaan Estate. Kadakilaan Estate further alleged that the Original Certificate of Title
and safeguarded. In the same Order, the RTC lifted and set aside the notice of levy on
(OCT) No. 333, from which the TCTs of both BPC and the Republic were ultimately
execution on the subject lots. However, on 20 April 1993, ERDC filed a Motion for
derived, was null and void ab initio, and that the TCTs of BPC and the Republic were
Contempt[20] against BPC and informed the RTC that BPC, fraudulently, maliciously, and in

spurious and likewise null and void ab initio, and without any probative
value. Kadakilaan Estate prayed for judgment declaring it the owner of the subject lots;
directing the other parties to respect its ownership, possession, rights and interests over
the subject lots; and ordering the other parties to pay just compensation, damages, and
attorneys fees. The RTC, in an Order[27] dated 27 April 1993, denied the Motion for Leave
to Intervene and rejected the Complaint in Intervention of Kadakilaan Estate for the
following reasons
New intervenor Kadakilaan Estate alleges that the titles of the
[Republic] and [Antonio, Servando, and BPC] are all falsified, spurious
in origin and null and void ab initio, as the property in question were
already registered as private properties of [Kadakilaan Estates]
predecessors-in-interest, under Spanish Mortgage law since May 18,
1891, and under the Torrens System, Act No. 496, as amended,
in Titulo dela propriedad de Terrenos No. 01-4.
If this is clearly so, then [Kadakilaan Estate] is attacking the
validity of the titles of [Republic] and [Antonio, Servando, and BPC] in
this case. It is settled rule that titles registered under the Torrens
System cannot be the subject of a collateral attack. Perforce, the
remedy of [Kadakilaan Estate] is to file a separate action. For, if the
intervention is allowed at this late stage of the proceedings, then it will
cause unnecessary delay in the soonest termination of this case.
MORE, the law and the rules as well as jurisprudence on the
matter, will only allow in the courts discretion, intervention, before or
during the trial. Certainly NOT after the trial and with more reason
intervention may no longer be allowed after the decision has been
rendered as in the present case.
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Land Titles and Deeds (Finals) 2017
In the meantime, on 4 January 1993, the Republic filed a Notice of Appeal[28] of
the RTC Decision, dated 22 December 1992. The RTC, in an Order,[29] dated 16 February
1993, denied the same. It reasoned that
Considering these judicial dimensions and acquiescence of
the [Republic] in open court during the hearings held and during the
pre-trial conference, the court in its dispositive portion of the questioned
decision, declared it to be a judgment based on a compromise
agreement which by operation of law becomes immediately executory.
It is unfortunate that despite the above declarations of the
court [Republic] failed to ask for a clarification of the said declarations,
by way of a motion for reconsideration of the decision based on fraud,
mistake or duress mandated by the rules.
The notice of appeal must be denied due course.
xxxx
WHEREFORE, prescinding from the foregoing, the notice of
appeal filed by plaintiff is rejected and denied due course.
From the foregoing RTC Order, the Republic filed with the Court of Appeals a Petition
for Certiorari and Mandamus (with Urgent Prayer for Temporary Restraining Order and/or
Writ of Preliminary Injunction), docketed as CA-G.R. SP No. 30647. The Republic primarily
questioned the denial of its Notice of Appeal by the RTC in its Order, dated 16 February
1993, on the basis that the RTC Decision of 22 December 1992 constitutes a compromise
agreement, and is immediately final and executory. The Court of Appeals issued a writ of
preliminary injunction[30] enjoining the RTC from implementing and enforcing its Order,
dated 16 February 1993, during the pendency of CA-G.R. SP No. 30647 or until otherwise

directed by the appellate court. Apparently, from the denial by the RTC of its Motion for
Leave to Intervene and the rejection of its Complaint in Intervention in Civil Case No. Q-92-
11806, the KadakilaanEstate again filed a Motion for Leave to Intervene in CA-G.R. SP
No. 30647, which in a Resolution,[31] dated 13 September 1993, the Court of Appeals also
denied on the following grounds
We find the stance of [Republic] and [BPC] well-
grounded. Not only is [Kadakilaan Estate] precluded by estoppel from
filing the present motion, after failing to challenge before this Court or
the Supreme Court the trial courts denial of subject motion for
intervention, on April 27, 1993; it is too late for [Kadakilaan Estate] to
come in at this stage of the present litigation. Furthermore, as aptly put
by the [Republic] the alleged rights [Kadakilaan Estate] seeks to protect
here can be amply protected in an appropriate action
[Kadakilaan Estate] may later bring.
In a Decision,[32] dated 29 June 1994, the Court of Appeals granted the Republics Petition
for Certiorari and Mandamus, ruling in this wise
We rule for [Republic]. Respondent Courts conclusion lost
sight of the nature of a compromise agreement, and the circumstances
under which a judgment based on a compromise may be rendered.
xxxx
Guided by the aforecited law and jurisprudence in point, it can
be safely concluded that neither mere silence or acquiescence by the
[Republic] in open court during the hearing nor [Republics] stipulation of
facts, marking of exhibits, alleged admission of Exhibit 6 which contains
[BPCs] offer of compromise during the pre-trial, be properly considered
as a compromise agreement. Had the parties really intended to enter
into a compromise to end their case, they could have executed and
submitted a compromise agreement for the approval of the trial
court. But no such step was taken.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
xxxx
Records readily show that due to lack of an amicable
settlement or any compromise agreement, the respondent judge
directed the parties to present their documentary exhibits so as to
facilitate the trial; no longer for the purpose of settling the
case. Evidently, there was no explicit agreement nor any reciprocal
concession between the parties with an end in view of terminating the
litigation. Absence of these essential elements of a compromise
inevitably results in the absence of a valid compromise agreement.
(Merced vs. Roman Catholic Archbishop, L-24614, August 17, 1967, 20
SCRA 1077). Consequently, the opinion of respondent Judge that his
December 22, 1992 Decision had the nature of a judgment based on
compromise, cannot be upheld.
So also, the doctrine relied on by respondents that a
compromise agreement constitutes the law between the parties and a
judgment based thereon is immediately final, executory and
not appealable, is inapplicable under the premises.
xxxx
WHEREFORE, the petition is GRANTED; the questioned
order dated 16 February 1993 is SET ASIDE; and respondent court is
hereby ordered to give due course to [Republics] Notice of Appeal in
Civil Case No. Q-92-11806.Costs against [BPC].
This Court, in its Resolution, dated 6 February 1995, issued in G.R. No. 117969, in effect,
sustained the afore-mentioned Decision of the Court of Appeals.
CA-G.R. CV No. 47522
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Land Titles and Deeds (Finals) 2017

(e) remanding the case to the court of origin for further

Finally, the Republic was allowed to appeal the RTC Decision, dated 22 December 1992, proceedings for determination of the crossclaim of intervenor EL-VI
Realty and Development Corporation against defendant-
in Civil Case No. Q-92-11806, to the Court of Appeals, where it was docketed as CA-G.R.
appellee Barstowe Philippines Corporation.
CV No. 47522. In a Decision,[33] dated 8 August 1997, the Court of Appeals found in favor

of the Republic, and disposed thus

There is no pronouncement as to costs.
WHEREFORE, premises considered, plaintiff-appellant
Republic of the Philippines appeal is GRANTED. Except for paragraph
2 of the dispositive portion of the decision appealed from declaring TCT The Motion for Reconsideration filed by BPC was denied by the Court of Appeals in a
Nos. 200629 and 200630 in the name of Servando Accibal null and
Resolution,[34] dated 18 March 1998.
void and ordering the Register of Deeds of Quezon City to cancel said
TCT Nos. 200629 and 200630, the appealed decision is REVERSED
and SET ASIDE and a new one entered: G.R. No. 133110

Aggrieved, BPC came before this Court via a Petition for Review on Certiorari[35] under
(a) declaring and affirming the validity of TCT Nos. 288417
Rule 45 of the Rules of Court, dated 28 April 1998, raising the sole issue of who between
and 275443 of the Registry of Deeds of Quezon City in the name of
appellant Republic of the Philippines and that appellant Republic has BPC and the Republic has a better title over the subject lots. BPC prays that this Court rule
indefeasible title to the property covered thereby;
in its favor, and reverse and set aside the Court of Appeals Decision, dated 8 August 1997,

in CA-G.R. CV No. 47522, based on the following grounds

(b) declaring TCT Nos. 30829, 30830, 30831 and 30832 also
of the Registry of Deeds of Quezon City in the name
of Barstowe Philippines Corporation null and void and ordering the
Register of Deeds of Quezon City to cancel said titles; THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
ERROR IN NOT CONSIDERING THE GOOD FAITH OF [BPC]
THOUGH IT WAS ADMITTED BY [REPUBLIC] DURING THE PRE-
TRIAL CONFERENCE.
(c) ordering Barstowe Philippines Corporation to surrender to
the Register of Deeds of Quezon City the owners duplicate certificates
of title of TCT Nos. 30829, 30830, 30831 and 30832 for cancellation;
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
ERROR IN UPHOLDING THE VALIDITY OF THE TITLE OF
[REPUBLIC] OVER THAT OF [BPC.]
(d) enjoining defendant-appellee Barstowe Philippines
Corporation and intervenor EL-VI Realty Development Corporation from
exercising any act of ownership or possession of the land in question;
and THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
ERROR IN ORDERING [BPC] TO SURRENDER ITS TITLE TO THE
REGISTER OF DEEDS FOR CANCELLATION[.]
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

THE HONORABLE COURT OF APPEALS ERRED IN ENJOINING

[BPC] FROM EXERCISING ACTS OF OWNERSHIP OVER THE 30831, and 30832 in the name of BPC. Nicolas-Agbulos had already partially paid BPC for
SUBJECT PARCEL OF LAND[.]
Lots No. 27 and 28 in the amount of P1,500,000.00, and the balance of P800,000.00 was

THE HONORABLE COURT OF APPEALES [sic] ERRED IN
APPLYING THE CALALANG CASE (231 SCRA 88) AS IT IS NOT
APPLICABLE TO THE CASE AT BAR[.]
already deposited in a trust account in the name of BPC with the Far East Bank and Trust
Company (FEBTC). She bought Lots No. 27 and 28 after relying on the face of
the TCTs of BPC which were intact and subsisting in the records of the Quezon City

Register of Deeds, and on the authority granted to BPC by several government agencies,
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT
FINDING [REPUBLIC] GUILTY OF ESTOPPEL BY LACHES[.] such as the HLURB, LRA, and the Register of Deeds, for the subdivision, development,

and sale of the subject lots to private individuals. She only came to know, through her

sister and attorney-in-fact, Nicolas-Agbulos, that the TCTs of BPC covering the subject
After the Republic filed its Comment, dated 29 October 1998, several parties
lots, which comprised the Parthenon Hills, were being assailed in Civil Case No. Q-92-
again sought to intervene in the case.
11806 pending before the RTC. Nicolas inquiry on the matter was answered by BPC with

an assurance that despite the bad publicity, Parthenon Hills was an on-going project and
Winnie U. Nicolas (Nicolas), through her sister and attorney-in-
that she should continue paying her installments. Acting cautiously, Nicolas-
fact, Ditas Felicitas Nicolas-Agbulos (Nicolas-Agbulos),
Agbulos decided that instead of paying the balance of the purchase price for Lots No. 27
and Edgardo Q. Abesamis (Abesamis), filed their respective Petitions for Intervention,
and 28 directly to BPC, she would open a trust account with FEBTC in the name of BPC
dated 22 October 1998 and 9 December 1998, respectively.
where she would deposit Nicolas-Agbulos succeeding installment payments. Nicolas-

Agbulos was compelled to intervene in the instant case because BPC made no mention of
Nicolas-Agbulos invokes the provisions of the Rules of Court on the joinder of
the fact that it had already sold numerous subdivision lots in Parthenon Hills to innocent
indispensable parties and necessary parties for the complete determination of all possible
purchasers for value, either through absolute or installment sales. She thus sought a ruling
issues, not only between the parties themselves but also as regards to other persons who
upholding the title of BPC, and recognizing and protecting the rights of Nicolas as an
may be affected by the judgment. Nicolas-Agbulos contends that she was a buyer in good
innocent purchaser for value of Lots No. 27 and 28. [36]
faith of Lots No. 27 and 28, Block 13, of Parthenon Hills, covered by TCTs No. 76497 and

76498, respectively, of the Quezon City Register of Deeds, derived from TCTs No. 30830,
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Abesamis seeks to intervene in the present case as an indispensable party since favor 15 Deeds of Assignment for 15 subdivision lots in Parthenon Hills. The TCTs for the

no complete and conclusive determination can be had therein, which shall be legally 15 subdivision lots were transferred in the name of the spouses Santiago free from any

binding and effective on Abesamis, unless he be allowed to intervene. Abesamis claims to lien or encumbrance. The spouses Santiago mortgaged 13 of the subdivision lots with the

have acquired by purchase Lot No. 16, Block 4, of Parthenon Hills, for the purchase price Planters Development Bank and sold the remaining two to different buyers. Thereafter,

of P720,000.00, and evidenced by a Deed of Absolute Sale dated 9 June 1993. BPC BPC again executed in favor of the spouses Santigao 71 Deeds of Assignment over 71

processed and secured TCT No. 92270 covering Lot No. 16 in Abesamis name. He only subdivision lots in Parthenon Hills. When the spouses Santiago attempted to transfer

learned that the subject lots comprising the Parthenon Hills, including his Lot No. 16, was the TCTs covering the 71 subdivision lots to their names, they discovered that the TCTs of

mired in controversy, when he attended an emergency meeting of the Homeowners BPC already bore the annotation of the notice of lis pendens. The Quezon City Register of

Association of Parthenon Hills. He asserts that, being a bona fide purchaser and holder of Deeds cancelled the TCTs of BPC covering the 71 subdivision lots and issued new ones in

a legitimate and indefeasible title to Lot No. 16, he had valid and enforceable rights against the names of the spouses Santiago, still bearing the annotation of the notice

both BPC and the Republic.[37] of lis pendens. The spouses Santiago claim that they were unable to intervene earlier in

this case because of the pendency of the case filed by BPC against them, docketed as

A third Petition in Intervention, dated 8 February 1999, was filed by spouses Civil Case No. 93-18231, with the Quezon City RTC, Branch 84, for the annulment of the

Jacinto H. Santiago, Jr. and Arlene C. Santiago (spouses Santiago). The last 71 Deeds of Assignment. This case had since been dismissed. The

spouses Santiago aver that, doing business as ACS Trading, they entered into a supply spouses Santiago invoke that they have sufficient interest in the present case which would

agreement with Proven International Development Corporation (PIDC), which had a necessarily be affected by the resolution/decision thereof, and they must necessarily

construction contract with BPC, for the development of Parthenon Hills. The intervene herein to protect their interest. The spouses Santiago pray for this Court to

spouses Santiago agreed to accept lots in Parthenon Hills as payment for the construction declare the assignment to them by BPC of the subdivision lots as valid, and to direct both

materials they supplied BPC since the latter showed them clean TCTs to the subject lots, BPC and the Republic to recognize and respect their rights and interest. [38]

and HLURB licenses and permits to develop Parthenon Hills. In payment for the

construction materials delivered, and financial assistance and various other professional
BPC supports the intervention in the case by Nicolas-Agbulos and Abesamis. It
services rendered by the spouses Santiago to BPC, the latter initially executed in their
explains that its failure to mention that it has already practically sold all the subdivision lots
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

in Parthenon Hills was not by design, but by mere oversight. [39] However, BPC opposes the This Court, in a Resolution, dated 22 March 1999, granted the motion of the

Republic for the issuance of a temporary restraining order enjoining BPC from selling the
intervention of the spouses Santiago claiming that the latter are not indispensable parties
remaining unsold portions of the subject lots and from allowing buyers to enter and occupy
to the case; they acquired their TCTs through fraudulent means; and Civil Case No. 93-
portions thereof.[42]
18231 which it instituted against the spouses Santiago was dismissed by the Quezon City
Thereafter, BPC,[43] the Republic,[44] spouses Santiago,[45] Abesamis,[46] and Nicolas-
RTC, Branch 84, without prejudice. According to BPC, the supply agreement for
Agbulos,[47] filed their respective Memoranda.
construction materials was between the spouses Santiago and PIDC, so that it could not

be enforced against BPC. This issue, as well as the validity of the 71 Deeds of Assignment However, even before the case could be submitted for decision, Servandos heirs,

namely Virgilio V. Accibal (Virgilio), Virginia A. Macabudbod (Virginia), and Antonio, filed
over 71 subdivision lots supposedly executed by BPC in favor of the spouses Santiago,
an Urgent Ex Parte Motion to Defer Resolution of the same. Soon after, they filed a
requires the holding of a trial, not a mere intervention. [40]
Petition for New Trial, dated 23 May 2001.[48] Although Servandos heirs concede that the

period allowed for the filing of a motion to set aside the judgment and grant a new trial
The Republic opposed all efforts of other parties to intervene in the case. The
under Rule 37, Section 1 of the Rules of Court, had already lapsed, on grounds of justice

legal interests of Nicolas-Agbulos, Abesamis, and the spouses Santiago are totally and equity, they still move that this Court grant their Petition. Servandos heirs were

dependent on the alleged right of ownership of BPC, and the issues they raised are similar allegedly prevented from participating in Civil Case No. Q-92-11806 before the RTC by the

fraudulent misrepresentations of Rev. Father Antonio O. Ipo (Ipo), BPC President, together
to those raised by BPC. The fact that Nicolas-Agbulos and Abesamis are purchasers in
with the BPC counsel, who convinced the nave Antonio that there was no need to worry
good faith will not render their titles valid and indefeasible. The titles of Servando from
about the case filed by the Republic against them and to hire another counsel as the BPC
whom BPC acquired its titles and from whom, in turn, Nicolas-Agbulos and Abesamis,
counsel shall represent all of them. Unknown to Servandos heirs, the BPC counsel neither
derived their titles, were found to be spurious; and the spring cannot rise higher than its
represented them nor included them in the Answer he filed on behalf of BPC,

source.[41] thus, Servandos heirs were declared in default by the RTC. Because of the extrinsic fraud

In the interim, BPC filed its Reply dated 22 January 1999, to the Comment of the perpetrated upon them and their excusable negligence, Servandos heirs should be

granted a new trial, otherwise, they would be deprived of their constitutional right to due
Republic.
process of law. According to Servandos heirs, neither BPC nor the Republic was a

purchaser in good faith who acquired clean titles to the subject lots. The BPC

President Ipo, hoodwinked Antonio into agreeing to convey the subject lots to BPC in
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

exchange for 51% of its capital stock. However, despite acquiring titles to the subject lots, It is alleged by BPC and Servandos heirs that Servando was issued TCTs No. 200629 and

BPC failed to transfer the promised 51% of its capital stock. On the other hand, 200630 on 24 July 1974. However, there is an absolute dearth of information and proof as

the TCTs of FPHC, the Republics predecessor-in-interest, were of doubtful origin; and the to how Servando acquired ownership and came into possession of the subject lots.

Republics acquisition of the subject lots from FPHC was anomalous in the sense that it
An investigation conducted by the LRA revealed even more irregularities which raised
purchased the said property through ordinary sale when it could have easily expropriated

the same. serious doubts as to the validity and authenticity of TCTs No. 200629 and 200630. The

LRA Report, dated 10 June 1992, submitted by Investigator Benjamin

Without formally intervening in the case at bar, Sariling Sikap Pabahay (SSP), through its
A. Flestado (Flestado), found the said certificates of titles spurious after a very detailed
President, Elias V. Esraita, submitted to this Court a letter,[49] dated 26 August 2002,

together with other documents to disprove the validity of the titles of Servando and his and exhaustive analysis of the evidence available.

heirs to the subject lots. SSP is a cooperative formed by the urban poor to help secure for First, it should be noted that despite letters sent by Investigator Flestado to BPC

its members award from the government of titles to the portions of the subject lots which President Ipo, Servando, and Antonio, requesting copies of documents to support the

they are presently occupying. It presented the affidavit of a certain Edith issuance of TCTs No. 200629 and 200630, they failed to file a reply and furnish him with

C. Mantaring,[50] who attests that the Accibals are still misrepresenting themselves as the documents requested. A certain Atty. Justino Z. Benito (Atty. Benito) appeared before

owners of the subject lots and fraudulently selling portions thereof to unsuspecting buyers. Investigator Flestado claiming to be the counsel for BPC and promising to

contact Servandos heirs. Yet, even by the time the LRA Report was finalized on 10 June
This Courts Ruling
1992, Atty. Benito still failed to submit the documents requested. Instead, he wrote letters

insisting that TCTs No. 200629 and 200630 be returned to the Quezon City Register of
Ultimately, this Court is called upon to determine which party now has superior title to the
Deeds since these certificates were detached and transferred to [your LRA central] office
subject lots: the Republic, BPC, the intervenors Abesamis, Nicolas-Agbulos, and
for no cogent reason or purpose; and his client, BPC, is a transferee in good faith and for
spouses Santiago, or Servandos heirs?
value, and its titles unchallenged.

BPC, the intervenors Abesamis, Nicolas-Agbulos, spouses Santiago, and Servandos heirs

derived their title to the subject lots from Servandos TCTs No. 200629 and 200630. This Second, although the 109-D forms on which TCTs No. 200629 and 200630 were printed

appeared to be genuine, and determined to have been issued to the Quezon City Register
Court then is compelled to look into the validity, authenticity, and existence of these
of Deeds on 5 July 1974, the signature therein of the Quezon City Register of Deeds Atty.
two TCTs.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Nestor N. Pea (Atty. Pea) was forged. No less than Atty. Pea himself refuted that the and designation of Atty. Pea appearing on the questionable TCTs No. 200629 and 200630

signatures on TCTs No. 200629 and 200630 were his. In his sworn statement, he noted compared to those on five other admittedly authentic TCTs.[51].

A. At a glance, I am definitely sure that the signatures appearing here

are not mine. My attention is invited on the loop, on the
starting point of the signature. The loop should be sharp on Fourth, the National Bureau of Investigation (NBI), upon request of
the last portion of my signature. The portion going-up starts
from a point and is also sharp because that Investigator Flestado, conducted an examination and issued Questioned Documents
represents hypen [sic] on letter n. I notice in these titles my
surname is typed as PENA and not PEA. If ever there is no in Report No. 636-991, dated 31 March 1992, wherein it noted significant differences in the
the typewriter, I used to add hypen [sic] over the letter
n. Besides, my position here is indicated as Deputy Register handwriting characteristics between the standard/sample signatures of Atty. Pea and those
of Deeds. I never signed titles as Deputy Register of Deeds,
during my time; and if ever a title was presented indicating my appearing on TCTs No. 200629 and 200630, i.e., in the manner of execution,
position as Deputy Register of Deeds, I would erase the word
Deputy. Moreso, the pen used here was a sign-pen. I never direction/movement of strokes, and other identifying details. The NBI concluded that [t]he
used a signpen, as shown in the other 5 titles I identified
questioned and the standard/sample signatures of [N]estor N. Pea were NOT WRITTEN
earlier.

by one and the same person.

His employment records revealed that Atty. Pea was appointed as the Quezon City

Register of Deeds on 27 May 1968, and served as such until his retirement in August of
Finally, Investigator Flestado made inquiries with the Land Management Bureau
1980, so that at the time when he supposedly signed TCTsNo. 200629 and 200630 on 24

July 1974, he was the Quezon City Register of Deeds, not the Deputy Register of Deeds. (LMB) regarding the consolidation-subdivision plan Pcs-2480 and plan Psu-32606 of Lots

34 and 40 (the subject lots) as described in TCTs No. 200629 and 200630. LMB Geodetic

Surveys Division Chief Privadi J.G. Dalire, in a letter, dated 29 November 1991, informed
Third, even the then incumbent Quezon City Register of Deeds
Investigator Flestado that LMB had no records of Pcs-2480, while the original copy of Psu-
Samuel Cleofe (RD Cleofe) and Deputy Register of Deeds Edgardo Castro (DRD Castro)
32606 is no longer available as it had been badly damaged. Thus, there was no record in
believed that TCTs No. 200629 and 200630 were spurious. According to RD Cleofe, the
the LMB that Lots 34 and 40, Psu-32606, were in fact consolidated and then subdivided
size of the area covered by the TCTs made him highly suspicious of the
into Lots 3, 4, 5, and 6 pursuant to plan Pcs-2480, as mentioned in TCTs No. 200629 and
same. In Quezon City, only a few people own big tracts of land, namely,

the Aranetas, Tuazons, etc. Commonly, ordinary individuals own only 300 to 2,000 square 200630.

meters of land. Both RD Cleofe and DRD Castro identified differences in the signatures
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

To rebut the foregoing findings of LRA Investigator Flestado, BPC presented, in subject of NBI Questioned Documents Report No. 636-991, dated 31 March 1992,

support of the authenticity and validity of TCTs No. 200629 and 200630, the LRA mentioned in the LRA Report) or the accuracy of the entries made therein.

Resolution,[52] dated 4 November 1991, in Consulta No. 1957, and NBI Questioned

Documents Report No. 585-891,[53] dated 2 September 1991. A careful study of the said The LRA Report, dated 10 June 1992, of Investigator Flestado was submitted as

documents does little to support the position of BPC. evidence before the RTC. It must be emphasized that the LRA Report was extensive and

thorough. Its findings are sufficiently supported by independent and reliable proof. The

The LRA Resolution in Consulta No. 1957 merely allowed the registration of the BPC failed to present evidence to refute the same. The LRA Report deserves great weight

rescission of a Joint Venture Agreement on TCTs No. 200629 and 200630 despite the sufficient to overcome the presumption that TCTs No. 200629 and 200630 were genuine,

initial adverse finding that the said certificates were of doubtful authenticity. It did not make authentic, and indefeasible.[54]

any categorical finding as to the authenticity or validity of the TCTs. In fact, the last

paragraph of the said Resolution elucidated that It having been established that TCTs No. 200629 and 200630 were forged and

spurious, their reconstitution was also attended with grave irregularities. Once more, this
This resolution, however, should be understood to be limited
to the issue of registrability of the instrument sought to be registered Court relies on the findings in the LRA Report, dated 10 June 1992, of
and is without prejudice to any action, if warranted, that may be filed
in court assailing the validity or authenticity of the certificate of Investigator Flestado. Quezon City RD Cleofe; the unnamed Chief of the LRA
titles. (Emphasis supplied.)
Micrographics and Computer Division; and Records Officer Viterbo Cahilig of

the Quezon City Register of Deeds, all confirmed that there were no records of any
The NBI Questioned Documents Report No. 585-891 was even in accordance
applications for reconstitution of TCTs No. 200629 and 200630 in the name of Servando. It
with the finding in the LRA Report that the 109-D forms on which TCTs No. 200629 and
would seem that an LRA employee, Cartographer Rovil Ruiz (Ruiz), made it appear that
200630 were printed seemed to be genuine. The NBI concluded that the words 109-D and
there were applications for reconstitution of TCTs No. 200629 and 200630 filed, and which
the serial numbers printed on the forms were not altered. The NBI did a very limited
were included in Folder 1614. When Folder 1614 was inspected, TCTs No. 200629 and
examination of the genuineness of the forms on which TCTs No. 200629 and 200630 were
200630 were not included in its table of contents; and although the said folder did have 44
printed, but it did not look into the authenticity of Atty. Peas signature (which was the
missing pages, the missing pages pertain to the supporting documents of other TCTs, and

there was no showing that TCTs No. 200629 and 200630 and the applications for
reconstitution thereof were among these missing pages. Ruiz undertook by himself the
computation of the tie-lines of the subject lots as described in TCTs No. 200629 and
200630, the plotting, and examination of the titles. The LRA Report thus recommended
that Ruiz be administratively charged for grave misconduct, it appearing that he was the
one who facilitated the administrative reconstitution of TCTs No. 200629 and 200630.
In contrast, the Republic was able to supply Investigator Flestado with the
documents supporting the transfer of the titles to the subject lots from FPHC to the
Republic, among which were the TCTs of FPHC, the Deeds of Sale executed by FPHC to
the Republic, notice to the real property owners within 300-meter radius from the area,
receipts for payment of registration fees, and payment order for the documentary stamp
tax on the sales. TCTs No. 275443 and 288417 in the name of the Republic were included
in LRA Folder No. 1976-B, together with other certificates of title in the name of the
Republic. One of the applications filed by the Republic was docketed as Application for
Reconstitution No. 41869. The Chief of the LRA Micrographics and Computer Division
confirmed that the applications for reconstitution of TCTs No. 275443 and 288417 by the
Republic were recorded in the computerized Administrative Reconstitution System.
BPC was unable to attack the authenticity and validity of the titles of the Republic
to the subject lots, and could only interpose the defense that it was a buyer in good
faith. Only Servandos heirs, in their Petition for New Trial, attempted to raise doubts as to
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Land Titles and Deeds (Finals) 2017
the titles of the Republic to the subject lots by averring that the transfer thereof from FPHC
to the Republic was highly irregular because the latter could have acquired the property by
expropriation.Such an averment is totally baseless. Expropriation as the means by which
the State can acquire private property is always the remedy of last resort. Expropriation
lies only when it is made necessary by the opposition of the owner of the property to the
sale or by the lack of any agreement as to the price.[55] There being, in the present case,
valid and subsisting contracts between the FPHC, the previous owner, and the Republic,
the buyer, for the purchase of the subject lots at an agreed price, there was no reason for
the expropriation.
.
In consideration of all the foregoing findings, it is indubitable that TCTs No.
275443 and 288417 of the Republic covering the subject lots are authentic and valid,
while TCTs No. 200629 and 200630 of Servando covering the same property are not.
However, BPC maintains that it was a purchaser in good faith, for value and
without any inkling about any flaw from Servandos titles. It points out that it purchased the
subject lots from Servando on 8 February 1989 and registered the same on 19 February
1991, way before the titles of Servando were declared null by the RTC on 22 December
1992. BPC relies on this Courts ruling in Tenio-Obsequio v. Court of Appeals,[56] to wit
Under Section 55 of the Land Registration Act, as amended
by Section 53 of Presidential Decree No. 1529, an original owner of
registered land may seek the annulment of a transfer thereof on the
ground of fraud. However, such a remedy is without prejudice to the
rights of any innocent holder for value with a certificate of title.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

the certificate and investigate the title of the vendor appearing on the
A purchaser in good faith and for value is one who buys the face of said certificate.
property of another, without notice that some other person has a right to
or interest in such property, and pays a full and fair price for the same
at the time of such purchase or before he has notice of the claim or
interest of some other person in the property. In consonance with this Now the question is whether BPC qualifies as an innocent purchaser for value which
accepted legal definition, petitioner Consorcia Tenio-Obsequio is a
purchaser in good faith. There is no showing whatsoever nor even an acquired valid titles to the subject lots, despite the fact that the titles of its predecessor-in-
allegation that herein petitioner had any participation, voluntarily or
otherwise, in the alleged forgery. interest were found to be forged and spurious.

xxxx

The main purpose of the Torrens system is to avoid possible This Court finds in the negative.
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 Foremost is the fact that there seem to be two documents by which titles to the subject lots
circumstances that should impel a reasonable cautious man to make
such further inquiry. Where innocent third persons, relying on the were transferred from the Accibals to BPC: (1) A Deed of Conveyance, dated 8 February
correctness of the certificate of title thus issued, acquire rights over the
property, the court cannot disregard such rights and order the total 1989, executed by Servando in favor of BPC, transferring to the latter titles to the subject
cancellation of the certificate. The effect of such an outright cancellation
would be to impair public confidence in the certificate of title, for lots in exchange for 51% of its capital stock; and (2) A Deed of Conveyance, dated 10
everyone dealing with property registered under the Torrens system
would have to inquire in every instance as to whether the title has been October 1990, executed by Antonio in favor of BPC, transferring to the latter the very same
regularly or irregularly issued by the court. Every person dealing with
registered land may safely rely on the correctness of the certificate of property in exchange for 2,450 shares in BPC. It should be noted that even prior to these
title issued therefor and the law will in no way oblige him to go beyond
the certificate to determine the condition of the property. Deeds of Conveyance, Servando already transferred the subject lots by way of a Deed of

xxxx Absolute Sale, dated 10 June 1988, in favor of his son Antonio, with the concurrence of his

It has been consistently ruled that a forged deed can legally other heirs. Thus, by the time Servando executed the Deed of Conveyance over the
be the root of a valid title when an innocent purchaser for value
intervenes. A deed of sale executed by an impostor without the subject lots in favor of BPC on 8 February 1989, he no longer had any right to the said
authority of the owner of the land sold is a nullity, and registration will
not validate what otherwise is an invalid document. However, where the property, having sold the same to Antonio. It was probably to rectify this mistake that a
certificate of title was already transferred from the name of the true
second Deed of Conveyance was executed by Antonio on 10 October 1990. Comparing all
owner to the forger and, while it remained that way, the land was
subsequently sold to an innocent purchaser, the vendee had the right to
these transfer documents, the LRA Report, dated 10 June 1992, prepared by
rely upon what appeared in the certificate and, in the absence of
anything to excite suspicion, was under no obligation to look beyond
Investigator Flestado noted that Servandos Tax Account Number (TAN) in the Deed of

Conveyance, dated 8 February 1989, which he executed over the subject lots in favor of
BPC, was A2140-M1746-A-1; while in the Deed of Sale, dated 10 June 1988, which he
executed over the subject lots in favor of Antonio, his TAN was 4110-241-R. Moreover,
despite being executed a year apart, Servando had the same residence certificate (No.
5901393, issued at QuezonCity, on 6 April 1988) appearing in both documents.
Furthermore, BPC cannot really claim that it was a purchaser in good faith which relied
upon the face of Servandos titles. It should be recalled that the Quezon City Register of
Deeds caught fire on 11 June 1988. Presumably, the original copies of TCTs No. 200629
and 200630 were burnt in the said fire. Servandos heirs sought the administrative
reconstitution of of TCTs No. 200629 and 200630 only in December 1990. The two Deeds
of Conveyance over the subject lots were executed in favor of BPC by Servando and
Antonio on 8 February 1989 and 10 October 1990, respectively, both prior to the
administrative reconstitution of TCTs No. 200629 and 200630. If BPC bought the subject
lots after TCTs No. 200629 and 200630 were destroyed when the Quezon City Register of
Deeds burned down, but before the said certificates were reconstituted, then on the face of
what titles did BPC rely on before deciding to proceed with the purchase of the subject
lots? There was no showing that there were surviving owners duplicate copies of TCTs No.
200629 and 200630, or even if there were, without the original copies of the
said TCTs which were stored in the Quezon City Register of Deeds and purportedly
destroyed in the fire, there would have been no way for BPC to have verified the owners
duplicate copies.
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Land Titles and Deeds (Finals) 2017
In addition, without the original copies and owners duplicate copies of TCTs No.
200629 and 200630, BPC had to rely on the reconstituted certificates, issued on 12
December 1990, bearing the following numbers: TCTs No. RT-23687 (for TCT No.
200629) and RT-23688 (for TCT No. 200630). Under section 7 of Republic Act No.
26,[57] "Reconstituted titles shall have the same validity and legal effect as the originals
thereof" unless the reconstitution was made extrajudicially.[58] In this case, TCTs No.
200629 and 200630 were reconstituted administratively, hence, extrajudicially. In contrast
to the judicial reconstitution of a lost certificate of title which is in rem, the administrative
reconstitution is essentially ex-parte and without notice.[59] The reconstituted certificates of
title do not share the same indefeasible character of the original certificates of title for the
following reason
x x x The nature of a reconstituted Transfer Certificate Of Title of
registered land is similar to that of a second Owner's Duplicate Transfer
Certificate Of Title. Both are issued, after the proper proceedings, on
the representation of the registered owner that the original of the said
TCT or the original of the Owner's Duplicate TCT, respectively, was lost
and could not be located or found despite diligent efforts exerted for
that purpose. Both, therefore, are subsequent copies of the originals
thereof. A cursory examination of these subsequent copies would show
that they are not the originals. Anyone dealing with such copies are put
on notice of such fact and thus warned to be extra-careful. x x x.[60]
The fact that the TCTs were reconstituted should have alerted BPC and its officers to
conduct an inquiry or investigation as might be necessary to acquaint themselves with the
defects in the titles of Servando.[61]
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Land Titles and Deeds (Finals) 2017

What is more, BPC again invokes LRA Resolution, dated 4 November 1991, with a par value of P100.00 each, amount only to P245,000.00. This Court cannot find a

in Consulta No. 1957, and NBI Questioned Documents Report No. 585-891, dated 2 plausible explanation for the discrepancy in the value of 2,450 shares of BPC between

September 1991 as proof that it did inquire or investigate into the validity and authenticity the P245,000.00 it has hereby computed and the P49,000,000.00 claimed by BPC.

of Servandos titles. But again, it should be noted that these documents were

issued after BPC already acquired the subject lots from Servando and Antonio. For the above-stated reasons, this Court cannot declare BPC an innocent

purchaser for value, and it acquired no better titles to the subject lots than its

Lastly, there are serious doubts that BPC acquired the subject lots for value. The Republic predecessors-in-interest, Servando and Antonio.

bought the subject lots from FPHC for the combined price of P12,333,280.00. BPC, on the

other hand, supposedly acquired the subject lots from Servando on 8 February 1989 in At this point, it would seem that the Republic does hold better titles to the subject

exchange for 51% of the capital stock of BPC, with a subscription value lots. Nonetheless, another level of transactions involving the subject lots was brought

of P6,000,000.00. In the LRA Report, dated 10 June 1992, Investigator Flestado pointed by intervenors to the attention of this Court.

out that in the Articles of Incorporation, dated 16 January 1989, of BPC, submitted to the

Securities and Exchange Commission (SEC) on 20 January 1989, BPC had an authorized From the reconstituted TCTs No. RT-23687 (200629) and RT- 23688 (200630) in

capital stock of only P1,000,000.00, which was divided into 10,000 shares, with a par value the name of Servando, BPC derived and was issued by the Quezon City Register of

of P100.00 each; and the amount of capital stock actually subscribed Deeds new certificates, TCTs No. 30829, 30830, 30831 and 30832, in its own name. It

was P250,000.00. Therefore, in 1989, fifty-one percent of the capital stock of BPC would was able to secure the necessary licenses and permits from the appropriate government

be 5,100 shares, with an aggregate value of only P510,000.00. BPC is not saved by the agencies to subdivide, develop, and sell the subject lots as Parthenon Hills. The Parthenon

second Deed of Conveyance, executed more than a year later by Antonio, again Hills project was openly advertised and marketed, and a substantial portion of the subject

transferring to BPC the subject lots in exchange for 2,450 shares in the latter, with the lots was already sold by BPC to the public.

alleged value of P49,000.000.00. Unless BPC is able to present proof that it applied for,

and the SEC approved, a substantial increase in its capital stock, then this Court can only Except for the spouses Santiago, BPC recognizes that the intervenors, Nicolas-

assume that its capital stock remained the same as the year before, 2,450 shares in BPC, Agbulos and Abesamis, together with other legitimate homeowners in Parthenon Hills,
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

acquired from BPC titles to their respective subdivided lots in good faith and for

value. Even the Republic could not refute that the individuals who acquired lots in The forged TCTs No. 200629 and 200630 were later administratively

Parthenon Hills from BPC were purchasers in good faith and for value. It insists, however,
that these buyers could not acquire better titles to the property than its predecessors-in-
interest BPC, Servando, and Antonio since the spring cannot rise higher than its
source. The law must protect and prefer the lawful holder of registered title over the
reconstituted, and although an investigation would show that their reconstitution was also
attended with irregularities, TCTs No. RT-23687 (200629) and RT-23688 (200630) appear,
on either face, to have been duly approved by the LRA and issued by the Quezon City
Register of Deeds. With the cancellation of the reconstituted TCTs and the issuance of
new ones, TCTs No. 30829, 30830, 30831, and 30832, in the name of BPC, any trace of

transferee of a vendor bereft of any transmissible rights.[62] forgery or irregularity as to BPCs titles was eliminated. TCTs No. 30829, 30830, 30831,

and 30832 were clean, at least, until the annotation therein of the notice of lis pendens of

It is true that the general rule is that a forged deed is a nullity and conveys no
title.[63] A forged deed may be defined as an instrument which purports to have been
executed by the person or persons whose signatures appear thereon, but which, in fact,
was not executed, and the signatures thereon had been merely imitated so as to give them
the Republic on 21 October 1992. It is a settled doctrine that one who deals with property
registered under the Torrens system need not go beyond the same, but only has to rely on
the certificates of title. He is charged with notice only of such burdens and claims as are
annotated on the certificates.[66] Herein intervenors, Nicolas-Agbulos and Abesamis, before
purchasing subdivision lots in Parthenon Hills, looked into the TCTs of BPC and found

the deceptive appearance of genuineness. [64] In the case at bar, it was not any of the nothing on the face thereof to raise doubts or suspicions as to their validity and

deeds of transfer or conveyance of the subject lots which was forged, but TCTs No. authenticity. Besides, BPC was the holder of licenses and permits to subdivide, develop,

and sell the subject lots as Parthenon Hills, issued by the appropriate government
200629 and 200630 themselves. The forged TCTs, nevertheless, just as a forged deed,
agencies, primarily HLURB.
can make it appear that one had title, right, or interest to the land, when in truth, he had

none, to the deprivation of the rightful owner. It has been recognized that while a forged

instrument is null and void and of no effect as between the parties, it may nevertheless be
This is definitely a situation which constitutes an exception to the general rule

the root of a good title; so that the title of a registered owner who has taken it bona that estoppel cannot lie against the government. The Republic v. Court of

fide and for value, is not affected by reason of his claiming through someone, that the Appeals,[67] provides an illuminating discourse on when such an exception applies, thus

registration was void because it had been procured by the presentation of a forged

instrument.[65] Is the immunity of the government

from laches and estoppel absolute? May it still recover the ownership of

lots sold in good faith by a private developer to innocent purchasers for
value, notwithstanding its approval of the subdivision plan and its
issuance of separate individual certificates of title thereto?
xxxx
The general rule is that the State cannot be put in estoppel by
the mistakes or errors of its officials or agents. However, like all general
rules, this is also subject to exceptions, viz:
"Estoppels against the public are little
favored. They should not be invoked except in rare
and unusual circumstances, and may not be invoked
where they would operate to defeat the effective
operation of a policy adopted to protect the public.
They must be applied with circumspection and
should be applied only in those special cases where
the interests of justice clearly require it.
Nevertheless, the government must not be allowed
to deal dishonorably or capriciously with its citizens,
and must not play an ignoble part or do a shabby
thing; and subject to limitations x x x the doctrine of
equitable estoppel may be invoked against public
authorities as well as against private individuals."
xxxx
Significantly, the other private respondents Spouses Santos,
Spouses Calaguian, Dela Fuente and Madaya bought such "expanded"
lots in good faith, relying on the clean certificates of St. Jude, which had
no notice of any flaw in them either. It is only fair and reasonable to
apply the equitable principle of estoppel by laches against the
government to avoid an injustice to the innocent purchasers for value.
Likewise time-settled is the doctrine that where innocent third
persons, relying on the correctness of the certificate of title, acquire
rights over the property, courts cannot disregard such rights and order
the cancellation of the certificate. Such cancellation would 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 whether the title has been regularly issued or not. This would
be contrary to the very purpose of the law, which is to stabilize land
titles. Verily, all persons dealing with registered land may safely rely on
the correctness of the certificate of title issued therefor, and the law or
the courts do not oblige, them to go behind the certificate in order to
investigate again the true condition of the property. They are only
charged with notice of the lions and encumbrances on the property that
are noted on the certificate.
When private respondents-purchasers bought their lots from
St. Jude, they did not have to go behind the titles thereto to verify their
contents or search for hidden defects or inchoate rights that could
defeat their rights to said lots. Although they were bound by liens and
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Land Titles and Deeds (Finals) 2017
encumbrances annotated on the titles, private respondents purchasers
could not have had notice of defects that only an inquiry beyond the
face of the titles could have satisfied. The rationale for this presumption
has been stated thus:
"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
had actual knowledge of facts and circumstances
that should impel a reasonably cautious man to
make such further inquiry (Pascua v. Capuyoc, 77
SCRA 78). Thus, where innocent third persons
relying on the correctness of the certificate thus
issued, acquire rights over the property, the court
cannot disregard such rights (Director of Land
v. Abache, et al., 73 Phil. 606)."
In another case, this Court further said:
"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 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.
[Italics supplied.]
Petitioner never presented proof that the private respondents
who had bought their lots from St. Jude were buyers in bad faith.
Consequently, their claim of good faith prevails. A purchaser good faith
and for value is one who buys the property of another without notice
that some other person has a right to or an interest in such property;
and who pays a full and fair price for the same at the time of such
purchase or before he or she has notice of the claims or interest of
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Land Titles and Deeds (Finals) 2017

some other person. Good faith is the honest intention to abstain from
taking any unconscientious advantage of another. further asserted that the spouses Santiago acquired the said subdivision lots by fraudulent

means. The allegations by the spouses Santiago of good faith, on one hand, and by BPC

of fraud, on the other, in the acquisition by the spouses Santiago of the subdivision lots in

question, are factual matters, best proven and established before the RTC, which could
It also bears to emphasize that the subject lots covered by TCTs No. 30829,

30830, 30831, and 30832 were already subdivided, and new TCTs were issued in the receive evidence in support of each partys position during trial. Should the RTC find that

names of the buyers of each subdivision lot. To order the cancellation of all these the spouses Santiago have indeed acquired the subdivision lots in good faith and for

derivative titles and the return of the subdivision lots to the Republic shall irrefragably be value, then their titles thereto shall, likewise, be valid and indefeasible even against that of
unjust to the innocent purchasers for value and shall wreak havoc on the Torrens System.
the Republic. However, in a contrary case, should the RTC find that the

spouses Santiagoacquired the subdivision lots by fraud, then titles thereto return to BPC.

Anyway, the Republic is not without recourse. It can claim damages from BPC,

found herein not to be a buyer of the subject lots in good faith. For its loss of portions of Though estoppel by laches may lie against the Republic when titles to the

the subdivision lots to innocent purchasers from BPC, the Republic may recover from BPC subdivision lots are already in the names of the respective innocent purchasers for value

the purchase price it paid to FPHC corresponding to such subdivision lots, with interest at from BPC, it may not be used by BPC to defeat the titles of the Republic as regards the
6% per annum from 26 March 1992 (the date when the Republic instituted its petition for
subdivision lots which remain unsold and the titles to which are still in the name of BPC. It
the cancellation of the TCTs of Servando, Antonio, and BPC) until finality of this Decision,
must be recalled that BPC is not a purchaser in good faith. Estoppel, being an equitable
and 12% per annum thereafter until fully paid. [68]
principle, may only be invoked by one who comes to court with clean hands. [69]

Although this Court allowed in the case at bar the intervention of Nicolas- Pertinent provisions of the New Civil Code concerning builders in bad faith

Agbulos and Abesamis, and recognized their title to their respective subdivision lots in provide that

Parthenon Hills as purchasers in good faith and for value from BPC, it could not do the ART. 449. He who builds, plants, or sows in bad faith on the
land of another, loses what is built, planted or sown without right to
same for the spouses Santiago, for the reason that BPC contested their claim that they indemnity.

had acquired titles to the subdivision lots in Parthenon Hills in good faith and for value, and ART. 450. The owner of the land on which anything has been
built, planted or sown in bad faith may demand the demolition of the

work, or that the planting or sowing be removed, in order to replace
things in their former condition at the expense of the person who built,
planted or sowed; or he may compel the builder or planter to pay the
price of the land, and the sower the proper rent.
ART. 451. In cases of the two preceding articles, the
landowner is entitled to damages from the builder, planter or sower.
ART. 452. The builder, planter or sower in bad faith is entitled
to reimbursement for the necessary expenses of preservation of the
land.
Hence, as far as the subdivision lots still in the name of BPC are concerned, the Republic
has the option to either (1) recover the said lots and demand that BPC demolish whatever
improvements it has made therein, to return the lots to their former condition, at the
expense of BPC; or (2) compel BPC to pay the price of the land. The choice can only be
made by the Republic, as the rightful owner of the said subject lots. Should the Republic
choose the first option, BPC is under the obligation to return the possession of the
subdivision lots to the Republic and surrender its corresponding TCTs for cancellation and
issuance of new ones in the name of the Republic. Should the Republic select the second
option, then BPC shall pay the Republic the purchase price that the latter had paid to
FPHC corresponding to such subdivision lots, with interest at 6% per annum from 26
March 1992 until finality of this Decision, and 12% per annum thereafter until fully paid. In
either option, the Republic may claim damages from BPC, while BPC cannot seek
indemnity from the Republic for any improvements made on the subdivision lots, except if
these constitute as necessary expenses for the preservation of the land, for which it shall
still be entitled to reimbursement.
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Land Titles and Deeds (Finals) 2017
As for the Petition for New Trial filed by Servandos heirs, this Court dismisses the
same for lack of legal basis. Section 1, Rule 37 of the Rules of Court reads
SECTION 1. Grounds of and period for filing motion for new
trial or reconsideration. Within the period for taking an appeal, the
aggrieved party may move the trial court to set aside the judgment or
final order and grant a new trial for one or more of the following causes
materially affecting the substantial rights of the said party:
(a) Fraud, accident, mistake or excusable negligence which
ordinary prudence could not have guarded against and by reason of
which such aggrieved party has probably been impaired in his rights; or
(b) Newly discovered evidence, which he could not, with
reasonable diligence, have discovered and produced at the trial, and
which if presented would probably alter the result.
Servandos heirs themselves admit that the period allowed for the filing of a
motion to set aside the judgment and grant a new trial under the afore-quoted provision
had already lapsed, but they still pray that this Court give due course to their Petition on
the grounds of justice and equity.
In Malipol v. Lim Tan,[70] this Court ruled that
It is within the sound discretion of the court to set aside an
order of default and to permit a defendant to file his answer and to be
heard on the merits even after the reglementary period for the filing of
the answer has expired, but it is not error, or an abuse of discretion, on
the part of the court to refuse to set aside its order of default and to
refuse to accept the answer where it finds no justifiable reason for the
delay in the filing of the answer. In the motions for reconsideration of an
order of default, the moving parry has the burden of showing such
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Land Titles and Deeds (Finals) 2017

diligence as would justify his being excused from not filing the answer
within the reglementary period as provided by the Rules of Court, consecutive motions for extension of time to file the appropriate pleadings. There was no
otherwise these guidelines for an orderly and expeditious procedure
would be rendered meaningless. Unless it is shown clearly that a party explanation provided as to why, despite the grant of said motions, the counsel still failed to
has justifiable reason for the delay, the court will not ordinarily exercise
its discretion in his favor. file an answer to the Republics petition for cancellation of title. It is also contrary to

common human experience that Servandos heirs, by the mere assurance of the President

and counsel of BPC, adopted a totally hands-off attitude in a case where they supposedly

have substantial interest. There is no showing during the nine years when they were not
In the present case, the late Servando and Antonio were already declared in

default by the RTC on 31 July 1992, after their supposed counsel failed to file an answer to participating in the court proceedings, that they, at least, inquired into or followed-up on the

the Republics petition for cancellation of title. Nothing was heard from Servandos heirs status of the case with BPC. Such blind trust in the President and counsel of BPC is surely

even after the promulgation of the RTC Decision on 22 December 1992, and the Court of difficult to comprehend, especially if this Court takes into account the contention
Appeals Decision, dated 8 August 1997, until they filed their Petition for New Trial,
of Servandos heirs that BPC failed to deliver the shares of stock in exchange for the
dated 23 May 2001, before this Court, or nine years from the date they were declared in
subject lots. What is apparent to this Court is not the alleged fraud committed by BPC but,
default.
rather, the inexcusable negligence of Servandos heirs when it came to protecting their

titles, rights, and interests to the subject lots, if indeed, there were still any.

According to Servandos heirs, due to the extrinsic fraud committed by the

President and counsel of BPC, they were prevented from participating in the proceedings Worth reproducing herein, is the conclusion[71] made by the Court of Appeals

before the trial court. They allegedly relied on the assurance of the President and counsel on Servandos titles

of BPC that the latter shall also represent them and their interests in the subject lots in the
On the strength of the LRA report, Exhibit H (Record, pp. 214-
258), the court a quo found TCT Nos. 200629 and 200630, in the name
case.
of Servando Accibal and from which the titles of defendant-
appellee Barstowe Philippines Corporation were derived, spurious, and
ordered the Register of Deeds of Quezon City to officially and finally
cancel (said titles) from his records (Par. 2, dispositive portion,
This allegation of fraud by Servandos heirs has no leg to stand on. It should be
Decision, p. 16; Rollo, p. 71). As explained by the court a quo:
recalled that the late Servando and Antonio were represented by a counsel at the
We shall now dwell on the validity of the
beginning of the proceedings before the RTC. Their counsel even submitted two titles, TCT Nos. 200629 and 200630, issued in the
name of Servando Accibal on July 24, 2974 by the
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Land Titles and Deeds (Finals) 2017

Register of Deeds of Quezon City. The LRA Report

dated 10 June 1992 (Exh. H, pp. 214-258, record) is
competent proof that indeed said titles must be
cancelled. In short, the LRA found after due (2) BPC did not acquire the subject lots in good faith and for value, and
investigation that the said titles
of Servando Accibal were issued with its certificates of title cannot defeat those of the Republics;
certain irregularties(sic). It recommended the
cancellation therefore, of TCT Nos. 200629 and
200630, to which the court concurs, as said report
must be accorded due respect and in the absence of (3) As between BPC and the Republic, the latter has better titles to the
fraud or irregularties (sic) that attended the
investigation, which the Court finds none, the same subject lots being the purchaser thereof in good faith and for value from FPHC;
must be persuasive, if not conclusive. Moreover,
herein defendant Servando Accibal because of his
failure to answer, despite extension of time given
him, plaintiffs counsel, he was declared as in default (4) However, considering that the subject lots had already been
since then, he never asked the court to lift and set
aside the default order. There is no way, his title subdivided and the certificates of title had been issued for each subdivision lot, which were
may be cancelled. For one thing, he was not able to
present evidence to controvert the recommendation derived from the certificates of title of BPC, it is more practical, convenient, and in
of the LRA to cancel his titles. For
another, Servando Accibal is deemed to have consonance with the stability of the Torrens System that the certificates of title of BPC and
impliedly admitted the irregularties (sic) that
attended the issuance of his aforestated titles. its derivative certificates be maintained, while those of the Republics be cancelled;
(Decision, pp. 14-15; Rollo, pp. 69-70)

This portion of the decision ordering the cancellation of TCT

Nos. 200629 and 200630 in the name of Servando Accibal was not (5) Estoppel lies against the Republic for granting BPC governmental
appealed nor assigned as a counter-assigment of error in the brief
of Barstowe Philippines Corporation; hence, is now final. permits and licenses to subdivide, develop, and sell to the public the subject lots as

Parthenon Hills. Relying on the face of the certificates of title of BPC and the licenses and

permits issued to BPC by government agencies, innocent individuals,

Thus, the findings of this Court as to the rights of the parties involved in the
including intervenors Nicolas-Agbulos and Abesamis, purchased subdivision lots in good
present case are summarized as follows
faith and for value;

(1) The certificates of title acquired by Servando over the subject lots
(6) The claims of the intervenor spouses Santiago that they acquired
were forged and spurious, and such finding made by both the RTC and Court of Appeals is
portions of the subject lots in good faith and for value still need to be proven during trial
already final and binding on Servandos heirs;
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Land Titles and Deeds (Finals) 2017

before the court a quo. Unlike the claims of intervenors Nicolas-Agbulos and Abesamis, No. 47522 is hereby REVERSED and SET ASIDE and a new one is hereby entered, as

which BPC admitted, the claims of the spouses Santiago were opposed by BPC on the follows:

ground of fraud;

(1) In view of the finding that the Transfer Certificates of Title No. 200629 and

(7) Certificates of title over portions of the subject lots, acquired by 200630 in the name of Servando Accibal are forged and spurious, the Quezon City

purchasers in good faith and for value, from BPC, are valid and indefeasible, even as Register of Deeds is ORDERED to officially and finally cancel the same from his records;

against the certificates of title of the Republic. The Republic, however, is entitled to recover

from BPC the purchase price the Republic paid to FPHC for the said portions, plus (2) In view of the finding that the respondent Republic of the Philippines was a

appropriate interests; and purchaser in good faith of the subject lots from Philippine First Holdings Corporation, but

also taking into consideration the functioning and stability of the Torrens System, as well

(8) As portions of the subject lots are still unsold and their corresponding as the superior rights of subsequent purchasers in good faith and for value of portions of

certificates of title remain in the name of BPC, the Republic may exercise two options: (a) the subject lots subdivided, developed, and sold as Parthenon Hills from

It may recover the said portions and demand that BPC demolish whatever improvements it petitioner Barstowe Philippines Corporation

has made therein, so as to return the said portions to their former condition, at the expense

of BPC. In such a case, certificates of title of BPC over the said portions shall be cancelled (a) The Quezon City Register of Deeds is ORDERED to

and new ones issued in the name of the Republic; or (b) It may surrender the said portions cancel Transfer Certificates of Title No. 275443 and 288417 in the

to BPC and just compel BPC to reimburse the Republic for the purchase price the name of respondent Republic of the Philippines;

Republic paid to FPHC for the said portions, plus appropriate interest.

(b) The respondent Republic of

WHEREFORE, premises considered, the instant Petition is hereby PARTLY the Philippines is ORDERED to respect and recognize the certificates

GRANTED. The Decision, dated 8 August 1997, of the Court of Appeals in CA-G.R. CV of title to the subject portions of land in the name of purchasers of good

faith and for value from petitionerRepublic of the Philippines;

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Land Titles and Deeds (Finals) 2017

petitioner Barstowe Philippines Corporation for any necessary

(c) Petitioner Barstowe Philippines Corporation expenses incurred by the latter for the said portions;

is ORDERED to pay respondent Republic of the Philippines for the

purchase price the latter paid to First Philippine Holdings Corporation (2) In view of the finding that petitioner Barstowe Philippines Corporation

corresponding to the portions of the subject lots which are already is not a purchaser and builder in good faith, and depending on the option chosen by

covered by certificates of title in the name of purchasers in good faith respondent Republic of the Philippines concerning the portions of the subject lots which

and for value from petitioner Barstowe Philippines Corporation, plus remain unsold and covered by certificates of title in the name of

appropriate interest; petitioner Barstowe Philippines Corporation, as enumerated in paragraph 2(d) hereof

(d) The respondent Republic of the Philippines

is ORDERED to choose one of the options available to it as regards the (a) In case the respondent Republic of the Philippines

portions of the subject lots which remain unsold and covered by chooses the option under paragraph 2(d)(i) hereof,

certificates of title in the name of petitioner Barstowe Philippines petitioner Barstowe Philippines Corporation is ORDERED to demolish

Corporation, either (i) To recover the said portions and demand that whatever improvements it has made on the said portions, so as to

petitioner Barstowe Philippines Corporation demolish whatever return the same to their former condition, at its own

improvements it has made therein, so as to return the said portions to expense. The Quezon City Register of Deeds is also ORDERED to

their former condition, at the expense of the latter, or (ii) To surrender cancel the certificates of title of petitioner Barstowe Philippines

the said portions to petitioner Barstowe Philippines Corporation and Corporation over the said portions and to issue in lieu thereof

compel the latter to reimburse the respondent Republic of the certificates of title in the name of respondent Republic of

Philippines for the purchase price it had paid to First Philippine the Philippines;

Holdings Corporation for the said portions, plus appropriate

interest. Regardless of the option chosen by the respondent Republic of (b) In case the respondent Republic of the Philippines

the Philippines, it is ORDERED to reimburse chooses the option under paragraph 2(d)(ii) hereof,
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Land Titles and Deeds (Finals) 2017

petitioner Barstowe Philippines Corporation is ORDERED to reimburse than intervenors Winnie U. Nicolas-Agbulos and Edgardo Q. Abesamis,

whose titles are to be declared valid and indefeasible;

the petitioner Republic of the Philippines for the purchase price it had

paid to First Philippine Holdings Corporation for the said portions, plus (b) The identification of the portions of the subject lots in the

appropriate interest; possession and names of purchasers in good faith and for value and

those which remain with petitioner Barstowe Philippines Corporation;

(c) Petitioner Barstowe Philippines Corporaton is ORDERED to pay

appropriate damages to respondent Republic of the Philippines as may (c) The computation of the amount of the purchase price

be determined by the trial court; which respondent Republic of the Philippines may recover from

petitioner Barstowe Philippines Corporation in consideration of the

(3) In view of the finding that intervenors Winnie U. Nicolas-
preceding paragraphs hereof;
Agbulos and Edgardo Q. Abesamis are purchasers in good faith and for value of portions

of the subject lots subdivided, developed, and sold as Parthenon Hills from (d) The types and computation of the damages recoverable

by the parties; and

petitioner Barstowe Philippines Corporation, it is DECLARED that their certificates of title

are valid and indefeasible as to all parties; (e) The computation and award of the cross-claim of EL-VI

(4) In view of the finding that the Petition for New Trial filed by the heirs Realty and Development Corporation against

of Servando Accibal, namely, Virgilio V. Accibal, Virginia A. Macabudbud, and Antonio petitioner Barstowe Philippines Corporation.

V. Accibal, lacks merit, the said Petition is DISMISSED; and

(5) The case is REMANDED to the court of origin for determination of the SO ORDERED.
following

(a) The validity of the claims, and identification of the

purchasers, in good faith and for value, of portions of the subject lots

from petitioner Barstowe Philippines Corporation, other


[G.R. No. 116111. January 21, 1999]
REPUBLIC OF THE PHILIPPINES, (Represented by the Acting Commissioner of Land
Registration), petitioner, vs. COURT OF APPEALS, Spouses CATALINO
SANTOS and THELMA BARRERO SANTOS, ST. JUDES ENTERPRISES,
INC., Spouses DOMINGO CALAGUIAN and FELICIDAD CALAGUIAN,
VIRGINIA DE LA FUENTE and LUCY MADAYA, respondents.
DECISION
PANGANIBAN, J.:
Is the immunity of the government from laches and estoppel absolute? May it still
recover the ownership of lots sold in good faith by a private developer to innocent
purchasers for value. Notwithstanding its approval of the subdivision plan and its issuance
of separate individual certificates of title thereto?
The Case
These are the main questions raised in the Petition for Review before us, seeking to
set aside the November 29, 1993 Decision[1] of the Court of Appeals[2] in CA-GR CV No.
34647. The assailed Decision affirmed the ruling[3] of the Regional Trial Court of Caloocan
City, Branch 125, in Civil Case No. C-111708, which dismissed petitioners Complaint for
the cancellation of Transfer Certificates of Title (TCTs) to several lots in Caloocan City,
issued in the name of private respondents.
In a Resolution[4] dated July 7, 1994, the Court of Appeals denied the Republics
motion for reconsideration.
The Facts
The facts of the case are not disputed. The trial courts summary, which was adopted
by the Court of Appeals, is reproduced below:
Defendant St. Judes Enterprises, Inc. is the registered owner of a parcel of land known as
Lot 865-B-1 of the subdivision plan (LRC) PSD-52368, being a portion of Lot 865-B located
in Caloocan City containing an area of 40,623 square meters. For Lot 865-B-1 defendant
St. Judes Enterprises, Inc. was issued TCT No. 22660 on July 25, 1966.
Sometime in March 1966 defendant St Judes Enterprises, Inc. subdivided Lot No. 865-B-1
under subdivision plan (LRC) PSD-55643 and as a result thereof the Register of Deeds of
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Caloocan City cancelled TCT No. 22660 and in lieu thereof issued Certificates of Title Nos.
23967 up to 24068 inclusive, all in the name of defendants St. Judes Enterprises, Inc. The
subdivision of lot 865-B-1 [which was] covered [by] TCT No. 22660 was later found to have
expanded and enlarged from its original area of 40,523 square meters to 42,044 square
meters or an increase of 1,421 square meters. This expansion or increase in area was
confirmed by the land Registration Commission [to have been made] on the northern
portion of Lot 865-B-1.
Subsequently, defendant St. Judes Enterprises, Inc. sold the lots covered by TCT Nos.
24013 and 24014 to defendant Sps. Catalino Santos and Thelma Barreto Santos[;] TCT
No. 24019 to defendant Sps. Domingo Calaguian and Felicidad de Jesus[;] TCT No.
24022 to defendant Virginia dela Fuente[;] and TCT No. 2402[3] to defendant Lucy
Madaya. Accordingly, these titles were cancelled and said defendants were issued the
following: TCT No. C-43319 issued in the name of Sps. Santos containing an area of 344
square meters[;] TCT No. 55513 issued in the name of defendants Sps. Calaguian
containing an area of 344 square meters[;] TCT No. 13309 issued in the name of Sps.
Santos[;] TCT No. 24069 issued in the name of Virginia dela Fuente containing an area of
350 square meters[;] and TCT No. C-46648 issued in the name of defendant Lucy
Mandaya with an area of 350 square meters."[5]
"[On January 29, 1985, then Solicitor General Estelito Mendoza filed] an action seeking
xxx the annulment and cancellation of Transfer Certificates of Title (TCT) Nos. 24015,
24017, 24018, 24020, 24021, 24024, 24025 and 24068 issued in the name of defendant
St. Jude's Enterprises, Inc.[;] Transfer Certificates of Title Nos. 13309 and C-43319 both
registered in the name of Sps. Catalino Santos and Thelma B. Santos[;] TCT No. 55513
registered in the name of Sps. Domingo Calaguian and Felicidad de Jesus[;] TCT No.
24069 registered in the name of Virginia dela Fuente[;] and TCT No. C-46648 registered in
the name of Lucy Mandaya, principally on the ground that said Certificates of Title were
issued on the strength of [a] null and void subdivision plan (LRC) PSD-55643 which
expanded the original area of TCT No. 22660 in the name of St. Jude's Enterprises, Inc.
from 40,623 square meters to 42,044 square meters upon its subdivision
"Defendants Virginia dela Fuente and Lucy Mandaya were declared in default for failure to
file their respective answer within the reglementary period.
"Defendants Sps. Catalino Santos and Thelma Barreto Santos, St. Jude's Enterprises, Inc.
and Sps. Domingo Calaguian and Felicidad Calaguian filed separate answers to the
complaint. Defendants Sps. Domingo Calaguian and Sps. Catalino Santos interposed
defenses, among others, that they acquired the lots in question in good faith from their
former owner, defendant St. Jude's Enterprises, Inc. and for value and that the titles issued
to the said defendants were rendered incontrovetible, conclusive and indefeasible after
one year from the date of the issuance of the titles by the Register of Deeds of Caloocan
City.
"On the other hand, defendant St. Jude's Enterprises, Inc. Interposed defenses, among
others, that the cause of action of plaintiff is barred by prior judgment; that the subdivision
plan submitted having been approved by the LRC, the government is now in estoppel to
question the approved subdivision plan; and the plaintiff's allegation that the area of the
subdivision increased by 1,421 square meters is without any basis in fact and in law."[6]
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Ruling of the Trial Court

Undaunted, petitioner seeks a review by this Court. [11]

On April 30, 1991, the trial court dismissed the Complaint. [7] While the plaintiff The Issues
sufficiently proved the enlargement or expansion of the area of the disputed property, it
presented no proof that Respondent St. Jude Enterprises, Inc. (St. Jude) had committed
fraud when it submitted the subdivision plan to the Land Registration Commission (LRC)
for approval. Because the plan was presumed to have been subjected to investigation, In this petition, the Republic raises the following issues for our resolution:[12]
study and verification by the LRC, there was no one to blame for the increase in the area
but the plaintiff[,] for having allowed and approved the subdivision plan. Thus, the court 1. Whether or not the government is estopped from questioning the approved subdivision
concluded, the government was already in estoppel to question the approved subdivision plan which expanded the areas covered by the transfer certificates of title in question;
plan.

The trial court also took into account the absence of complaints from adjoining 2. Whether or not the Court of Appeals erred when it did not consider the Torrens System
owners whose supposed lots [were] encroached upon by the defendants, as well as the as merely a means of registering title to land;
fact that an adjoining owner had categorically stated that there was no such
encroachment. Finding that Spouses Santos, Spouses Calaguian, Dela Fuente and
3. Whether or not the Court of Appeals erred when it failed to consider that petitioners
Madaya had brought their respective lots from St. Jude for value and in good faith, the
complaint before the lower court was filed to preserve the integrity of the Torrens System.
court held that their titles could no longer be questioned, because under the Torrens
system, such titles had become absolute and irrevocable. As regards the Republics
allegation that it had filed the case to protect the integrity of the said system, the court said: We shall discuss the second and third questions together. Hence, the issues shall be
(1) the applicability of estoppel against the State and (2) the Torrens system.
xxx [S]ustaining the position taken by the government would certainly lead to disastrous
consequences. Buyers in good faith would lose their titles. Adjoining owners who were
deprived of a portion of their lot would be forced to accept the portion of the property The Courts Ruling
allegedly encroached upon. Actions for recovery will be filed right and left[;] thus instead of
preserving the integrity of the Torrens System it would certainly cause chaos rather than
stability. Finally, if only to strengthen the Torrens System and in the interest of justice, the
boundaries of the affected properties of the defendants should not be disturbed and the The petition is bereft of merit.
status quo should be maintained.[8]

The solicitor general appealed the trial courts Decision to the Court of Appeals. First Issue: Estoppel Against the Government

Ruling of the Appellate Court The general rule is that the State cannot be put in estoppel by the mistakes or error
of its officials or agents.[13] However, like all general rules, this is also subject to
exceptions, viz.:[14]

Citing several cases[9] upholding the indefeasibility of titles issued under the Torrens
system, the appellate court affirmed the trial court. It berated petitioner for bringing the suit
only after nineteen (19) years had passed since the issuance of St. Judes title and the
approval of the subdivision plan. The pertinent portion of the assailed Decision reads: [10]
xxx Rather than make the Torrens system reliable and stable, [its] act of filing the instant
suit rocks the system, as it gives the impression to Torrens title holders, like appellees, that
their titles to properties can be questioned by the same authority who had approved the
same even after a long period of time. In that case, no Torrens title holder shall be at
peace with the ownership and possession of his land, for the Commission of land
Registration can question his title any time it makes a finding unfavorable to said Torrens
title holder.
Estoppels against the public are little favored. They should not be invoked except in rate
and unusual circumstances, and may not be invoked where they would operate to defeat
the effective operation of a policy adopted to protect the public. They must be applied with
circumspection and should be applied only in those special cases where the interests of
justice clearly require it. Nevertheless, the government must not be allowed to deal
dishonorably or capriciously with its citizens, and must not play an ignoble part or do a
shabby thing; and subject to limitations x x x, the doctrine of equitable estoppel may be
invoked against public authorities as well as against private individuals.

In Republic v. Sandiganbayan,[15] the government, in its effort to recover ill-gotten
wealth, tried to skirt the application of estoppel against it by invoking a specific
constitutional provision.[16] The Court countered:[17]
We agree with the statement that the State is immune from estoppel, but this concept is
understood to refer to acts and mistakes of its officials especially those which are irregular
(Sharp International Marketing vs. Court of Appeals, 201 SCRA 299; 306 [1991]; Republic
v. Aquino, 120 SCRA 186 [1983]), which peculiar circumstances are absent in the case at
bar. Although the States right of action to recover ill-gotten wealth is not vulnerable to
estoppel[;] it is non sequitur to suggest that a contract, freely and in good faith executed
between the parties thereto is susceptible to disturbance ad infinitum. A different
interpretation will lead to the absurd scenario of permitting a party to unilaterally jettison a
compromise agreement which is supposed to have the authority of res judicata (Article
2037, New Civil Code), and like any other contract, has the force of law between parties
thereto (Article 1159, New Civil Code; Hernaez vs. Kao, 17 SCRA 296 [1966]; 6 Padilla,
Civil Code Annotated, 7th ed., 1987, p. 711; 3 Aquino, Civil Code, 1990 ed., p. 463). xxx.
The Court further declared that (t)he real office of the equitable norm of estoppel is
limited to supply[ing] deficiency in the law, but it should not supplant positive law. [18]
In the case at bar, for nearly twenty years (starting from the issuance of St.
Judes titles in 1966 up to the filing of the Complaint in 1985), petitioner failed to correct
and recover the alleged increase in the land area of St. Jude. Its prolonged inaction
strongly militates against its cause, as it is tantamount to laches, which means the failure
or neglect, for an unreasonable and unexplained length of time, to do that which by
exercising due diligence could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert it. [19]
The Court notes private respondents argument that, prior to the subdivision, the
surveyors erred in the original survey of the whole tract of land covered by TCT No.
22660. So that less then the actual land area was indicated on the title. Otherwise, the
adjoining owners would have complained upon the partition of the land in accordance with
the LRC-approved subdivision plan. As it is, Florencio Quintos, the owner of the 9,146
square-meter Quintos Village adjoining the northern portion of St. Judes property (the
portion allegedly expanded), even attested on August 16, 1973 that there [was] no
overlapping of boundaries as per my approved plan (LRC) PSD 147766 dated September
8, 1971.[20] None of the other neighboring owners ever complained against St. Jude or the
purchasers of its property. It is clear, therefore, that there was no actual damage to third
persons caused by the resurvey and the subdivision.
Significantly, the other private respondents -- Spouses Santos, Spouses Calaguian,
Dela Fuente and Madaya -- bought such expanded lots in good faith, relying on the clean
certificates of St. Jude, which had no notice of any flaw in them either. It is only fair and
reasonable to apply the equitable principle of estoppel by laches against the government
to avoid an injustice[21] to the innocent purchasers for value.
Likewise time-settled is the doctrine that where innocent third persons, relying on the
correctness of the certificate of title, acquire rights over the property, courts cannot
disregard such rights and order the cancellation of the certificate. Such cancellation would
impair public confidence in the certificate of title, for everyone dealing with property
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
registered under the Torrens system would have to inquire in every instance whether the
title has been regularly issued or not. This would be contrary to the very purpose of the
law, which is to stabilize land titles. Verily, all persons dealing with registered land may
safely rely on the correctness of the certificate of title issued therefor, and the law or the
courts do not oblige them to go behind the certificate in order to investigate again the true
condition of the property. They are only charged with notice of the liens and encumbrances
on the property that are noted on the certificate. [22]
When private respondents-purchasers bought their lots from St. Jude, they did not
have to go behind the titles thereto to verify their contents or search for hidden defects or
inchoate rights that could defeat their rights to said lots. Although they were bound by liens
and encumbrances annotated on the titles, private respondents-purchasers could not have
had notice of defects that only an inquiry beyond the face of the titles could have
satisfied.[23] The rationale for this presumption has been stated thus: [24]
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 had actual knowledge of facts and circumstances that
should impel a reasonably cautious man to make such further inquiry (Pascua v. Capuyoc,
77 SCRA 78). Thus, where innocent third persons relying on the correctness of the
certificate thus issued, acquire rights over the property, the court cannot disregard such
rights (Director of Land v. Abache, et al., 73 Phil. 606).
In another case,[25] this Court further said:
The Torrens System was adopted in this country because it was believed to be 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 sellers 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 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. [Italics supplied.]
Petitioner never presented proof that the private respondents who had bought their
lots from St. Jude were buyers in bad faith. Consequently, their claim of good faith
prevails. A purchaser in good faith and for value is one who buys the property of another
without notice that some other person has a right to or an interest in such property; and
who pays a full and fair price for the same at the time of such purchase or before he or she
has notice of the claims or interest of some other person. [26] Good faith is the honest
intention to abstain from taking any unconscientious advantage of another.[27]
Furthermore, it should be stressed that the total area of forty thousand six hundred
twenty-three (40,623) square meters indicated on St. Judes original title (TCT No. 22660)
was not an exact area. Such figure was followed by the phrase more or less. This

plainlymeans that the land area indicated was not precise. Atty. Antonio H. Noblejas, who
became the counsel of St. Jude subsequent to his tenure as Land Registration
Commissioner, offers a sensible explanation. In his letter[28] to the LRC dated November 8,
1982, he gave the following information:
a. Records show that our client owned a large tract of land situated in an area cutting the
boundary of Quezon City and Caloocan City, then known as Lot 865-B, Psd-60608, and
described in T.C.T. No. 100412, containing an area of 96,931 sq. meters, more or less.
b. It will be noted that on the northern portion of this Lot 865-B, Psd-60608, is xxx Lot 865-
A, Psd-60608, which means that at a previous point of time, these 2 lots composed one
whole tract of land.
c. On December 23, 1965, Lot 865-B, Psd-60608, was subdivided into 2 lots, denominated
as Lot 865-B-1, with an area of 40,622 sq. meters, more or less, on the Caloocan side,
and Lot 865-B-2, with an area of 56,308 sq. meters, more or less, on the Quezon City side,
under Plan (LRC) Psd-52368.
d. On March 1-10, 1966, Lot 865-B-1, Psd-52368, then covered by T.C.T. No. N-22660,
was subdivided into residential lots under Plan (LRC) Psd-55643, with a total area of
42,044 sq. meters, more or less.
e. It will be noted that Lot 865-B, Psd-60608, covered by T.C.T. No. 100412, contained an
area of 96,931 sq. meters, more or less, but when subdivided under Plan (LRC) Psd-
52368, into 2 lots, its total area shrank by 1 sq. meter, to wit:
Lot 865-B-1, Psd-52368 = 40,622 sq. meters
Lot 865-B-2, Psd-52368 = 56,308
96,930 sq. meters.
f. There is no allegation whatever in the Perez report that there was error in laying out the
metes and bounds of Lot 865-B-1 in Plan (LRC) Psd-55643, as specified in the Technical
Description of the said lot set forth in T.C.T. No. N-22660 covering the same. There is
likewise no allegation, on the contrary there is confirmation from the boundary owner on
the northern side, Mr. Florencio Quintos, that there is no overlapping of boundaries on the
northern side of Lot 865-B-1, Psd-55643.
g. We respectfully submit that the area of 42, 044 sq. meters stated in Plan (LRC) Psd-
55643 as the size of Lot 865-B-a, is the more accurate area, confirmed by the Perez report
as per surveyor[]s findings on the ground, which rectifies previous surveryors error
in computing its area as 40,622 sq. meters in Plan (LRC) Psd-52368, which is about 3.5%
tolerable error (1,422 divided by 40,622 = .035).
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
[h.] It is well settled that in the identification of a parcel of land covered by certificate of title,
what is controlling are the metes and bounds as set forth in its Technical Description and
not the area stated therein, which is merely an approximation as indicated in the more or
less phrase placed after the number of square meters.
i. There is thus no unauthorized expansion of the survey occasioned by the subdivision of
Lot 865-B-1 under Plan (LRC) Psd-55643; consequently, LRC Circular No. 167, Series of
1967, finds no application thereto, as to bar the processing and registration in due course
of transactions involving the subdivision lots of our client, subject hereof. This is apart from
the fact that LRC Circular No. 167 has not been implemented by the Register of Deeds of
Caloocan City or any proper government authority since its issuance in 1967, and that, in
the interest of justice and equity, its restrictive and oppressive effect on transactions over
certificates of titles of subdivisions that allegedly expanded on re-surveys, cannot be
allowed to continue indefinitely. (Italics supplied.)
The discrepancy in the figures could have been caused by the inadvertence or the
negligence of the surveyors. There is no proof, though, that the land area indicated was
intentionally and fraudulently increased. The property originally registered was the same
property that was subdivided. It is well-settled that what defines a piece of titled property is
not the numerical date indicated as the area of the land, but the boundaries or metes and
bounds of the property specified in its technical description as enclosing it and showing its
limits.[29]
Petitioner miserably failed to prove any fraud, either on the part of Private
Respondent St. Jude or on the part of land registration officials who had approved the
subdivision plan and issued the questioned TCTs. Other than its peremptory statement in
the Complaint that the expansion of the area was motivated by bad faith with intent to
defraud, to the damage and prejudice of the government and of public interests, petitioner
did not allege specifically how fraud was perpetrated to cause an increase in the actual
land size indicated. Nor was any evidence proffered to substantiate the allegation. That the
land registration authorities supposedly erred or committed an irregularity was merely a
conclusion drawn from the table survey showing that the aggregate area of the subdivision
lots exceeded the area indicated on the title of the property before its subdivision. Fraud
cannot be presumed, and the failure of petitioner to prove it defeats it own cause.
Second Issue: The Torrens System
True, the Torrens system is not a means of acquiring titles to lands; it is merely a
system of registration of titles to lands.[30] Consequently, land erroneously included in a
Torrens certificate of title is not necessarily acquired by the holder of such certificate. [31]
But in the interest of justice and equity, neither may the titleholder be made to bear
the unfavorable effect of the mistake or negligence of the States agents, in the absence of
proof of his complicity in a fraud or of manifest damage to third persons. First, the real
purpose of the Torrens system is to quite title to land to put a stop forever to any question
as to the legality of the title, except claims that were noted in the certificate at the time of
the registration or that may arise subsequent thereto. [32] Second, as we discussed earlier,
estoppel by laches now bars petitioner from questioning private respondents titles to the

subdivision lots. Third, it was never proven that Private Respondent St. Jude was a party
to the fraud that led to the increase in the area of the property after its
subdivision. Finally,because petitioner even failed to give sufficient proof of any error that
might have been committed by its agent who had surveyed the property, the presumption
of regularity in the performance of their functions must be respected. Otherwise, the
integrity of the Torrens system, which petitioner purportedly aims to protect by filing this
case, shall forever be sullied by the ineptitude and inefficiency of land registration officials,
who are ordinarily presumed to have regularly performed their duties. [33]
We cannot, therefore, adhere to the petitioners submission that, in filing this suit, it
seeks to preserve the integrity of the Torrens system. To the contrary, it is rather evident
from our foregoing discussion that petitioners action derogates the very integrity of the
system.Time and again, we have said that a Torrens certificate is evidence of an
indefeasible title to property in favor of the person whose name appears thereon.
WHEREFORE, the petition is hereby DENIED and the assailed Decision
is AFFIRMED.
SO ORDERED.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
G.R. No. 83432 May 20, 1991
RADIOWEALTH FINANCE COMPANY, petitioner,
vs.
MANUELITO S. PALILEO, respondent.
Rolando A. Calang for petitioner.
Sisenando Villaluz, Sr. for respondent.
GANCAYCO, J.:
If the same piece of land was sold to two different purchasers, to whom shall ownership
belong? Article 1544 of the Civil Code provides that in case of double sale of an
immovable property, ownership shall be transferred: (1) to the person acquiring it who in
good faith first recorded it in the Registry of Property; (2) in default thereof, to the person
who in good faith was first in possession; and (3) in default thereof, to the person who
presents the oldest title, provided there is good faith. There is no ambiguity regarding the
application of the law with respect to lands registered under the Torrens System. Section
51 of Presidential Decree No. 1529 (amending Section 50 of Act No. 496 clearly provides
that the act of registration is the operative act to convey or affect registered lands insofar
as third persons are concerned. Thus, a person dealing with registered land is not required
to go behind the register to determine the condition of the property. He is only charged with
notice of the burdens on the property which are noted on the face of the register or
certificate of title.1 Following this principle, this Court has time and again held that a
purchaser in good faith of registered land (covered by a Torrens Title) acquires a good title
as against all the transferees thereof whose right is not recorded in the registry of deeds at
the time of the sale.2
The question that has to be resolved in the instant petition is whether or not the rule
provided in Article 1544 of the Civil Code as discussed above, is applicable to a parcel of
unregistered land purchased at a judicial sale. To be more specific, this Court is asked to
determine who, as between two buyers of unregistered land, is the rightful ownerthe first
buyer in a prior sale that was unrecorded, or the second buyer who purchased the land in
an execution sale whose transfer was registered in the Register of Deeds.
The facts as found by the Court of Appeals are as follows:
On April 13, 1970, defendant spouses Enrique Castro and Herminia R. Castro
sold to plaintiff-appellee Manuelito Palileo (private respondent herein), a parcel of
unregistered coconut land situated in Candiis, Mansayaw, Mainit, Surigao del
Norte. The sale is evidenced by a notarized Deed of Absolute Sale (Exh. "E").
The deed was not registered in the Registry of Property for unregistered lands in
the province of Surigao del Norte. Since the execution of the deed of sale,
appellee Manuelito Palileo who was then employed at Lianga Surigao del Sur,
exercised acts of ownership over the land through his mother Rafaela Palileo, as

administratrix or overseer. Appellee has continuously paid the real estate taxes
on said land from 1971 until the present (Exhs. "C" to "C-7", inclusive).
On November 29, 1976, a judgment was rendered against defendant Enrique T.
Castro, in Civil Case No. 0103145 by the then Court of First Instance of Manila,
Branch XIX, to pay herein defendant-appellant Radiowealth Finance Company
(petitioner herein), the sum of P22,350.35 with interest thereon at the rate of
16% per annum from November 2, 1975 until fully paid, and the further sum of
P2,235.03 as attorney's fees, and to pay the costs. Upon the finality of the
judgment, a writ of execution was issued. Pursuant to said writ, defendant
provincial Sheriff Marietta E. Eviota, through defendant Deputy Provincial Sheriff
Leopoldo Risma, levied upon and finally sold at public auction the subject land
that defendant Enrique Castro had sold to appellee Manuelito Palileo on April
13,1970. A certificate of sale was executed by the Provincial Sheriff in favor of
defendant- appellant Radiowealth Finance Company, being the only bidder. After
the period of redemption has (sic) expired, a deed of final sale was also executed
by the same Provincial Sheriff. Both the certificate of sale and the deed of final
sale were registered with the Registry of Deeds. 3
Learning of what happened to the land, private respondent Manuelito Palileo filed an
action for quieting of title over the same. After a trial on the merits, the court a
quo rendered a decision in his favor. On appeal, the decision of the trial court was
affirmed. Hence, this petition for review on certiorari.
In its petition, Radiowealth Finance Company presents the following errors:
1. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE DEED OF
ABSOLUTE SALE (EXHIBIT B) ALLEGEDLY EXECUTED BY ENRIQUE
CASTRO IN FAVOR OF APPELLEE MANUELITO PALILEO, WAS SIMULATED
OR FICTITIOUS.
2. THE COURT OF APPEALS ERRED IN NOT FINDING APPELLEE
MANUELITO PALILEO AS ADMINISTRATOR ONLY OF THE DISPUTED
PROPERTY; AND
3. THE COURT OF APPEALS ERRED IN NOT FINDING DEFENDANT-
APPELLANT RADIOWEALTH FINANCE COMPANY OWNER OF THE
DISPUTED PROPERTY BY REASON OF THE CERTIFICATE OF SALE AND
THE DEED OF FINAL SALE WHICH WERE ALL REGISTERED IN THE
REGISTER OF DEEDS, HENCE, SUPERIOR TO THAT OF THE DEED OF
SALE IN POSSESSION OF MANUELITO PALILEO, FOR BEING NOT
REGISTERED.4
As regards the first and second assigned errors, suffice it to state that findings of fact of
the Court of Appeals are conclusive on this Court and will not be disturbed unless there is
grave abuse of discretion. The finding of the Court of Appeals that the property in question
was already sold to private respondent by its previous owner before the execution sale is
evidenced by a deed of sale. Said deed of sale is notarized and is presumed authentic.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
There is no substantive proof to support petitioner's allegation that the document is
fictitious or simulated. With this in mind, We see no reason to reject the conclusion of the
Court of Appeals that private respondent was not a mere administrator of the property.
That he exercised acts of ownership through his mother also remains undisputed.
Going now to the third assigned error which deals with the main issue presented in the
instant petition, We observe that the Court of Appeals resolved the same in favor of private
respondent due to the following reason; what the Provincial Sheriff levied upon and sold to
petitioner is a parcel of land that does not belong to Enrique Castro, the judgment debtor,
hence the execution is contrary to the directive contained in the writ of execution which
commanded that the lands and buildings belonging to Enrique Castro be sold to satisfy the
execution.5
There is no doubt that had the property in question been a registered land, this case would
have been decided in favor of petitioner since it was petitioner that had its claim first
recorded in the Registry of Deeds. For, as already mentioned earlier, it is the act of
registration that operates to convey and affect registered land. Therefore, a bona
fide purchaser of a registered land at an execution sale acquires a good title as against a
prior transferee, if such transfer was unrecorded.
However, it must be stressed that this case deals with a parcel of unregistered land and a
different set of rules applies. We affirm the decision of the Court of Appeals.
Under Act No. 3344, registration of instruments affecting unregistered lands is "without
prejudice to a third party with a better right". The aforequoted phrase has been held by this
Court to mean that the mere registration of a sale in one's favor does not give him any right
over the land if the vendor was not anymore the owner of the land having previously sold
the same to somebody else even if the earlier sale was unrecorded.
The case of Carumba vs. Court of Appeals6 is a case in point. It was held therein that
Article 1544 of the Civil Code has no application to land not registered under Act No. 496.
Like in the case at bar, Carumba dealt with a double sale of the same unregistered land.
The first sale was made by the original owners and was unrecorded while the second was
an execution sale that resulted from a complaint for a sum of money filed against the said
original owners. Applying Section 35, Rule 39 of the Revised Rules of Court, 7 this Court
held that Article 1544 of the Civil Code cannot be invoked to benefit the purchaser at the
execution sale though the latter was a buyer in good faith and even if this second sale was
registered. It was explained that this is because the purchaser of unregistered land at a
sheriffs execution sale only steps into the shoes of the judgment debtor, and merely
acquires the latter's interest in the property sold as of the time the property was levied
upon.
Applying this principle, the Court of Appeals correctly held that the execution sale of the
unregistered land in favor of petitioner is of no effect because the land no longer belonged
to the judgment debtor as of the time of the said execution sale.
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-G.R.
CV No. 10788 is hereby AFFIRMED. No costs. SO ORDERED.

G.R. No. 181359 August 5, 2013
SPOUSES CLEMENCIO C. SABITSANA, JR. and MA. ROSARIO M.
SABITSANA, Petitioners,
vs.
JUANITO F. MUERTEGUI, represented by his Attorney-in-Fact DOMINGO A.
MUERTEGUI, JR., Respondent.
DECISION
DEL CASTILLO, J.:
A lawyer may not, for his own personal interest and benefit, gamble on his client's word,
believing it at one time and disbelieving it the next. He owes his client his undivided loyalty.
Assailed in this Petition for Review on Certiorari 1 are the January 25, 2007 Decision2 of the
Court of Appeals (CA) which denied the appeal in CA-G.R. CV No. 79250, and its January
11, 2008 Resolution3 denying petitioners Motion for Reconsideration.4
Factual Antecedents
On September 2, 1981, Alberto Garcia (Garcia) executed an unnotarized Deed of Sale 5 in
favor of respondent Juanito Muertegui6 (Juanito) over a 7,500-square meter parcel of
unregistered land (the lot) located in Dalutan Island, Talahid, Almeira, Biliran, Leyte del
Norte covered by Tax Declaration (TD) No. 1996 issued in 1985 in Garcias name. 7
Juanitos father Domingo Muertegui, Sr. (Domingo Sr.) and brother Domingo Jr. took
actual possession of the lot and planted thereon coconut and ipil-ipil trees. They also paid
the real property taxes on the lot for the years 1980 up to 1998.
On October 17, 1991, Garcia sold the lot to the Muertegui family lawyer, petitioner Atty.
Clemencio C. Sabitsana, Jr. (Atty. Sabitsana), through a notarized deed of absolute
sale.8 The sale was registered with the Register of Deeds on February 6, 1992. 9 TD No.
1996 was cancelled and a new one, TD No. 5327,10 was issued in Atty. Sabitsanas name.
Although Domingo Jr. and Sr. paid the real estate taxes, Atty. Sabitsana also paid real
property taxes in 1992, 1993, and 1999. In 1996, he introduced concrete improvements on
the property, which shortly thereafter were destroyed by a typhoon.
When Domingo Sr. passed away, his heirs applied for registration and coverage of the lot
under the Public Land Act or Commonwealth Act No. 141. Atty. Sabitsana, in a
letter11 dated August 24, 1998 addressed to the Department of Environment and Natural
Resources CENRO/PENRO office in Naval, Biliran, opposed the application, claiming that
he was the true owner of the lot. He asked that the application for registration be held in
abeyance until the issue of conflicting ownership has been resolved.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
On April 11, 2000, Juanito, through his attorney-in-fact Domingo Jr., filed Civil Case No. B-
109712 for quieting of title and preliminary injunction, against herein petitioners Atty.
Sabitsana and his wife, Rosario, claiming that they bought the lot in bad faith and are
exercising acts of possession and ownership over the same, which acts thus constitute a
cloud over his title. The Complaint13 prayed, among others, that the Sabitsana Deed of
Sale, the August 24, 1998 letter, and TD No. 5327 be declared null and void and of no
effect; that petitioners be ordered to respect and recognize Juanitos title over the lot; and
that moral and exemplary damages, attorneys fees, and litigation expenses be awarded to
him.
In their Answer with Counterclaim,14 petitioners asserted mainly that the sale to Juanito is
null and void absent the marital consent of Garcias wife, Soledad Corto (Soledad); that
they acquired the property in good faith and for value; and that the Complaint is barred by
prescription and laches. They likewise insisted that the Regional Trial Court (RTC) of
Naval, Biliran did not have jurisdiction over the case, which involved title to or interest in a
parcel of land the assessed value of which is merely 1,230.00.
The evidence and testimonies of the respondents witnesses during trial reveal that
petitioner Atty. Sabitsana was the Muertegui familys lawyer at the time Garcia sold the lot
to Juanito, and that as such, he was consulted by the family before the sale was executed;
that after the sale to Juanito, Domingo Sr. entered into actual, public, adverse and
continuous possession of the lot, and planted the same to coconut and ipil-ipil; and that
after Domingo Sr.s death, his wife Caseldita, succeeded him in the possession and
exercise of rights over the lot.
On the other hand, Atty. Sabitsana testified that before purchasing the lot, he was told by a
member of the Muertegui family, Carmen Muertegui Davies (Carmen), that the Muertegui
family had bought the lot, but she could not show the document of sale; that he then
conducted an investigation with the offices of the municipal and provincial assessors; that
he failed to find any document, record, or other proof of the sale by Garcia to Juanito, and
instead discovered that the lot was still in the name of Garcia; that given the foregoing
revelations, he concluded that the Muerteguis were merely bluffing, and that they probably
did not want him to buy the property because they were interested in buying it for
themselves considering that it was adjacent to a lot which they owned; that he then
proceeded to purchase the lot from Garcia; that after purchasing the lot, he wrote
Caseldita in October 1991 to inform her of the sale; that he then took possession of the lot
and gathered ipil-ipil for firewood and harvested coconuts and calamansi from the lot; and
that he constructed a rip-rap on the property sometime in 1996 and 1997.
Ruling of the Regional Trial Court
On October 28, 2002, the trial court issued its Decision 15 which decrees as follows:
WHEREFORE, in view of the foregoing considerations, this Court finds in favor of the
plaintiff and against the defendants, hereby declaring the Deed of Sale dated 2 September
1981 as valid and preferred while the Deed of Absolute Sale dated 17 October 1991 and
Tax Declaration No. 5327 in the name of Atty. Clemencio C. Sabitsana, Jr. are VOID and
of no legal effect.

The Provincial Assessor and the Municipal Assessor of Naval are directed to cancel Tax
Declaration No. 5327 as void and done in bad faith.
Further, Atty. Clemencio C. Sabitsana, Jr. is ordered to pay plaintiff Juanito Muertigui,
represented by his attorney-in-fact Domingo Muertigui, Jr. the amounts of:
a) 30,000.00 as attorneys fees;
b) 10,000.00 as litigation expenses; and
c) Costs.
16
SO ORDERED.
The trial court held that petitioners are not buyers in good faith. Petitioner Atty. Sabitsana
was the Muertegui familys lawyer, and was informed beforehand by Carmen that her
family had purchased the lot; thus, he knew of the sale to Juanito. After conducting an
investigation, he found out that the sale was not registered. With this information in mind,
Atty. Sabitsana went on to purchase the same lot and raced to register the sale ahead of
the Muerteguis, expecting that his purchase and prior registration would prevail over that of
his clients, the Muerteguis. Applying Article 1544 of the Civil Code,17 the trial court
declared that even though petitioners were first to register their sale, the same was not
done in good faith. And because petitioners registration was not in good faith, preference
should be given to the sale in favor of Juanito, as he was the first to take possession of the
lot in good faith, and the sale to petitioners must be declared null and void for it casts a
cloud upon the Muertegui title.
Petitioners filed a Motion for Reconsideration18 but the trial court denied19 the same.
Ruling of the Court of Appeals
Petitioners appealed to the CA20 asserting that the sale to Juanito was null and void for
lack of marital consent; that the sale to them is valid; that the lower court erred in applying
Article 1544 of the Civil Code; that the Complaint should have been barred by prescription,
laches and estoppel; that respondent had no cause of action; that respondent was not
entitled to an award of attorneys fees and litigation expenses; and that they should be the
ones awarded attorneys fees and litigation expenses.
The CA, through its questioned January 25, 2007 Decision, 21 denied the appeal and
affirmed the trial courts Decision in toto. It held that even though the lot admittedly was
conjugal property, the absence of Soledads signature and consent to the deed did not
render the sale to Juanito absolutely null and void, but merely voidable. Since Garcia and
his wife were married prior to the effectivity of the Family Code, Article 173 of the Civil
Code22should apply; and under the said provision, the disposition of conjugal property
without the wifes consent is not void, but merely voidable. In the absence of a decree
annulling the deed of sale in favor of Juanito, the same remains valid.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
The CA added that the fact that the Deed of Sale in favor of Juanito was not notarized
could not affect its validity. As against the notarized deed of sale in favor of petitioners, the
CA held that the sale in favor of Juanito still prevails. Applying Article 1544 of the Civil
Code, the CA said that the determining factor is petitioners good faith, or the lack of it. It
held that even though petitioners were first to register the sale in their favor, they did not
do so in good faith, for they already knew beforehand of Garcias prior sale to Juanito. By
virtue of Atty. Sabitsanas professional and confidential relationship with the Muertegui
family, petitioners came to know about the prior sale to the Muerteguis and the latters
possession of the lot, and yet they pushed through with the second sale. Far from acting in
good faith, petitioner Atty. Sabitsana used his legal knowledge to take advantage of his
clients by registering his purchase ahead of them.
Finally, the CA declared that Juanito, as the rightful owner of the lot, possessed the
requisite cause of action to institute the suit for quieting of title and obtain judgment in his
favor, and is entitled as well to an award for attorneys fees and litigation expenses, which
the trial court correctly held to be just and equitable under the circumstances.
The dispositive portion of the CA Decision reads:
WHEREFORE, premises considered, the instant appeal is DENIED and the Decision
dated October 28, 2002 of the Regional Trial Court, 8th Judicial Region, Branch 16, Naval,
Biliran, is hereby AFFIRMED. Costs against defendants-appellants.
SO ORDERED.23
Issues
Petitioners now raise the following issues for resolution:
I. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
REGIONAL TRIAL COURT DID NOT HAVE JURISDICTION OVER THE CASE
IN VIEW OF THE FACT THAT THE ASSESSED VALUE OF THE SUBJECT
LAND WAS ONLY 1,230.00 (AND STATED MARKET VALUE OF ONLY
3,450.00).
II. THE COURT OF APPEALS ERRED IN APPLYING ART. 1544 OF THE CIVIL
CODE INSTEAD OF THE PROPERTY REGISTRATION DECREE (P.D. NO.
1529) CONSIDERING THAT THE SUBJECT LAND WAS UNREGISTERED.
III. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
COMPLAINT WAS ALREADY BARRED [BY] LACHES AND THE STATUTE OF
LIMITATIONS.
IV. THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF
THE REGIONAL TRIAL COURT ORDERING THE PETITIONERS TO PAY
ATTORNEYS FEES AND LITIGATION EXPENSES TO THE RESPONDENT.24

Petitioners Arguments
Petitioners assert that the RTC of Naval, Biliran did not have jurisdiction over the case.
They argue that since the assessed value of the lot was a mere 1,230.00, jurisdiction
over the case lies with the first level courts, pursuant to Republic Act No. 7691, 25 which
expanded their exclusive original jurisdiction to include "all civil actions which involve title
to, or possession of, real property, or any interest therein where the assessed value of the
property or interest therein does not exceed Twenty thousand pesos (20,000.00) or, in
civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand
pesos (50,000.00) exclusive of interest, damages of whatever kind, attorneys fees,
litigation expenses and costs."26 Petitioners thus conclude that the Decision in Civil Case
No. B-1097 is null and void for lack of jurisdiction.
Petitioners next insist that the lot, being unregistered land, is beyond the coverage of
Article 1544 of the Civil Code, and instead, the provisions of Presidential Decree (PD) No.
1529 should apply. This being the case, the Deed of Sale in favor of Juanito is valid only
as between him and the seller Garcia, pursuant to Section 113 of PD 1529; 27 it cannot
affect petitioners who are not parties thereto.
On the issue of estoppel, laches and prescription, petitioners insist that from the time they
informed the Muerteguis in writing about their purchase of the lot, or in October 1991, the
latter did not notify them of their prior purchase of the lot, nor did respondent interpose any
objection to the sale in their favor. It was only in 1998 that Domingo Jr. showed to
petitioners the unnotarized deed of sale. According to petitioners, this seven-year period of
silence and inaction on the Muerteguis part should be taken against them and construed
as neglect on their part to assert their rights for an unreasonable length of time. As such,
their action to quiet title should be deemed barred by laches and estoppel.
Lastly, petitioners take exception to the award of attorneys fees and litigation expenses,
claiming that since there was no bad faith on their part, such award may not be considered
just and equitable under the circumstances. Still, an award of attorneys fees should
remain the exception rather than the rule; and in awarding the same, there must have
been an express finding of facts and law justifying such award, a requirement that is
absent in this case.
Petitioners thus pray for the reversal of the questioned CA Decision and Resolution; the
dismissal of the Complaint in Civil Case No. B-1097; the deletion of the award of attorneys
fees and litigation expenses in respondents favor; and a declaration that they are the true
and rightful owners of the lot.
Respondents Arguments
Respondent, on the other hand, counters that a suit for quieting of title is one whose
subject matter is incapable of pecuniary estimation, and thus falls within the jurisdiction of
the RTC. He likewise insists that Article 1544 applies to the case because there is a clear
case of double sale of the same property to different buyers, and the bottom line thereof
lies in petitioners lack of good faith in entering into the subsequent sale. On the issue of
laches/estoppel, respondent echoes the CAs view that he was persistent in the exercise of
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
his rights over the lot, having previously filed a complaint for recovery of the lot, which
unfortunately was dismissed based on technicality.
On the issue of attorneys fees and litigation expenses, respondent finds refuge in Article
2208 of the Civil Code,28 citing three instances which fortify the award in his favor
petitioners acts compelled him to litigate and incur expenses to protect his interests; their
gross and evident bad faith in refusing to recognize his ownership and possession over the
lot; and the justness and equitableness of his case.
Our Ruling
The Petition must be denied.
The Regional Trial Court has jurisdiction over the suit for quieting of title.
On the question of jurisdiction, it is clear under the Rules that an action for quieting of title
may be instituted in the RTCs, regardless of the assessed value of the real property in
dispute. Under Rule 63 of the Rules of Court, 29 an action to quiet title to real property or
remove clouds therefrom may be brought in the appropriate RTC.
It must be remembered that the suit for quieting of title was prompted by petitioners
August 24, 1998 letter-opposition to respondents application for registration. Thus, in
order to prevent30 a cloud from being cast upon his application for a title, respondent filed
Civil Case No. B-1097 to obtain a declaration of his rights. In this sense, the action is one
for declaratory relief, which properly falls within the jurisdiction of the RTC pursuant to Rule
63 of the Rules.
Article 1544 of the Civil Code does not apply to sales involving unregistered land.
Both the trial court and the CA are, however, wrong in applying Article 1544 of the Civil
Code. Both courts seem to have forgotten that the provision does not apply to sales
involving unregistered land. Suffice it to state that the issue of the buyers good or bad faith
is relevant only where the subject of the sale is registered land, and the purchaser is
buying the same from the registered owner whose title to the land is clean. In such case,
the purchaser who relies on the clean title of the registered owner is protected if he is a
purchaser in good faith for value.31
Act No. 3344 applies to sale of unregistered lands.
What applies in this case is Act No. 3344, 32 as amended, which provides for the system of
recording of transactions over unregistered real estate. Act No. 3344 expressly declares
that any registration made shall be without prejudice to a third party with a better right. The
question to be resolved therefore is: who between petitioners and respondent has a better
right to the disputed lot?
Respondent has a better right to the lot.

The sale to respondent Juanito was executed on September 2, 1981 via an unnotarized
deed of sale, while the sale to petitioners was made via a notarized document only on
October 17, 1991, or ten years thereafter. Thus, Juanito who was the first buyer has a
better right to the lot, while the subsequent sale to petitioners is null and void, because
when it was made, the seller Garcia was no longer the owner of the lot. Nemo dat quod
non habet.
The fact that the sale to Juanito was not notarized does not alter anything, since the sale
between him and Garcia remains valid nonetheless. Notarization, or the requirement of a
public document under the Civil Code,33 is only for convenience, and not for validity or
enforceability.34 And because it remained valid as between Juanito and Garcia, the latter
no longer had the right to sell the lot to petitioners, for his ownership thereof had ceased.
Nor can petitioners registration of their purchase have any effect on Juanitos rights. The
mere registration of a sale in ones favor does not give him any right over the land if the
vendor was no longer the owner of the land, having previously sold the same to another
even if the earlier sale was unrecorded. 35 Neither could it validate the purchase thereof by
petitioners, which is null and void. Registration does not vest title; it is merely the evidence
of such title. Our land registration laws do not give the holder any better title than what he
actually has.36
Specifically, we held in Radiowealth Finance Co. v. Palileo 37 that:
Under Act No. 3344, registration of instruments affecting unregistered lands is without
prejudice to a third party with a better right. The aforequoted phrase has been held by this
Court to mean that the mere registration of a sale in ones favor does not give him any
right over the land if the vendor was not anymore the owner of the land having previously
sold the same to somebody else even if the earlier sale was unrecorded.
Petitioners defense of prescription, laches and estoppel are unavailing since their claim is
based on a null and void deed of sale. The fact that the Muerteguis failed to interpose any
objection to the sale in petitioners favor does not change anything, nor could it give rise to
a right in their favor; their purchase remains void and ineffective as far as the Muerteguis
are concerned.
The award of attorneys fees and litigation expenses is proper because of petitioners bad
faith.
Petitioners actual and prior knowledge of the first sale to Juanito makes them purchasers
in bad faith. It also appears that petitioner Atty. Sabitsana was remiss in his duties as
counsel to the Muertegui family. Instead of advising the Muerteguis to register their
purchase as soon as possible to forestall any legal complications that accompany
unregistered sales of real property, he did exactly the opposite: taking advantage of the
situation and the information he gathered from his inquiries and investigation, he bought
the very same lot and immediately caused the registration thereof ahead of his clients,
thinking that his purchase and prior registration would prevail. The Court cannot tolerate
this mercenary attitude. Instead of protecting his clients interest, Atty. Sabitsana practically
preyed on him.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Petitioner Atty. Sabitsana took advantage of confidential information disclosed to him by
his client, using the same to defeat him and beat him to the draw, so to speak. He rushed
the sale and registration thereof ahead of his client. He may not be afforded the excuse
that he nonetheless proceeded to buy the lot because he believed or assumed that the
Muerteguis were simply bluffing when Carmen told him that they had already bought the
same; this is too convenient an excuse to be believed. As the Muertegui family lawyer, he
had no right to take a position, using information disclosed to him in confidence by his
client, that would place him in possible conflict with his duty. He may not, for his own
personal interest and benefit, gamble on his clients word, believing it at one time and
disbelieving it the next. He owed the Muerteguis his undivided loyalty. He had the duty to
protect the client, at all hazards and costs even to himself.38
Petitioner Atty. Sabitsana is enjoined to "look at any representation situation from the point
of view that there are possible conflicts, and further to think in terms of impaired loyalty,
that is, to evaluate if his representation in any way will impair his loyalty to a client." 39
Moreover, as the Muertegui familys lawyer, Atty. Sabitsana was under obligation to
safeguard his client's property, and not jeopardize it. Such is his duty as an attorney, and
pursuant to his general agency.40
Even granting that Atty. Sabitsana has ceased to act as the Muertegui family's lawyer, he
still owed them his loyalty.1wphi1 The termination of attorney-client relation provides no
justification for a lawyer to represent an interest adverse to or in conflict with that of the
former client on a matter involving confidential information which the lawyer acquired when
he was counsel. The client's confidence once reposed should not be divested by mere
expiration of professional employment. 41 This is underscored by the fact that Atty.
Sabitsana obtained information from Carmen which he used to his advantage and to the
detriment of his client.
from the foregoing disquisition, it can be seen that petitioners are guilty of bad faith in
pursuing the sale of the lot despite being apprised of the prior sale in respondent's favor.
Moreover, petitioner Atty. Sabitsana has exhibited a lack of loyalty toward his clients, the
Muerteguis, and by his acts, jeopardized their interests instead of protecting them. Over
and above the trial court's and the CA's findings, this provides further justification for the
award of attorney's fees, litigation expenses and costs in favor of the respondent.
Thus said, judgment must be rendered in favor of respondent to prevent the petitioners'
void sale from casting a cloud upon his valid title.
WHEREFORE, premises considered, the Petition is DENIED. The January 25, 2007
Decision and the January 11, 2008 Resolution of the Court of Appeals in CA-G.R. CV No.
79250 are AFFIRMED. Costs against petitioners.
SO ORDERED.

G.R. No. L-24736 January 29, 1926
CONSULTA NO. 441 DE LOS ABOGADOS DE SMITH, BELL AND CO., LTD., BLOCK,
JOHNSTON AND GREENBAUM, appellants,
vs.
THE REGISTER OF DEEDS OF LEYTE, appellee.
Block, Johnston and Greenbaum; Ross, Lawrence and Selph and Antonio T. Carrascoso,
Jr, for appellant Smith, Bell and Co.
Attorney-General Jaranilla for appellee.
STATEMENT
For a purported consideration of P78,000, Teofilo Mejia and Casilda Martinez de Mejia
signed a deed of sale and in favor of Cristina Martinez for four parcels of land in Ormoc,
Leyte, and certain personal property. April 26, 1921, the deed was presented for
registration under Act No. 2837 to the registrar of deeds of the Province of Leyte, and
owing to certain defects in it, registration was refused. June 7, 1921, Teofilo Mejia made
an amendatory affidavit of her husband. On August 12 1921, the property was then
registered as inscription No. 57 in the register of lands not registered under Act No. 496.
Thereafter Smith, Bell and Co. commenced an action, known as civil case No. 4030, in the
Court of First Instance of Cebu against Teofilo Mejia and Casilda Martinez de Mejia,
defendants., and grantors in the deed, to recover the sum of P14,000, in which a writ of
attachment was issued, and on April 18, 1923, it was levied upon the four parcels of land
described in the deed of Cristina Martinez. A record of this certificate of attachment
appears under paragraph 16 of inscription No. 57 of the deed to Cristina Martinez In the
ordinary course of business, judgment was rendered against the defendants, and an order
of sale of the four parcels of land, and execution was issued, and on February 15, 1924,
the fourth parcel of land described in the deed was levied upon by the sheriff to satisfy the
judgment, and that fact was also noted under paragraph 16 of inscription No 57 of the
deed. After the levy was made and the property advertised for sale, Cristina Martinez, the
vendee in the deed, entered a terceria with the sheriff, claiming that the property
advertised for sale was her sole property. The sheriff required Smith, Bell and Co. to give
him an indemnity bond in the sum of P150,000 as a condition precedent to the making of
the sale. The bond was furnished, and the property sold, and in due course, the sheriff
executed and presented a certificate of sale to the registrar for inscription, which was duly
inscribed in the registry under inscription No. 57 as follows:
The fourth parcel described in this inscription, together with all the improvements
thereon, was sold at public auction by the sheriff of Leyte, by order of the Court
of First Instance of Cebu (civil case No. 4030), for the best bidder, this property
being subject to repurchase by the judgment debtor in the said case within the
period of one year from May 21st of this year. All the aforementioned is
contained in the certificate of sale dated May 21, 1924, issued by the sheriff of
Leyte and presented to this registry at 7. 30 a. m. f May 29, 1924. Tacloban,
June 5, 1924.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Observing that this notation was not signed by the registrar, and that the certificate of sale
was not endorse on its margin, the attorneys for the plaintiff in the writ called upon the
registrar of deeds, who then added in parenthesis, following the inscription, the words "no
vale." In May, 1925, the sheriff delivered to the plaintiff his original certificate of sale
endorsed as follows:
The foregoing sheriff's certificate of sale having been presented at 7.30 a.m. on
May 29, 1924, its inscription is denied for the reason that the property, with all the
improvements described in the said certificate, is registered in the name of a
person other than any of the judgment debtors, Teofilo Mejia and Casilda
Martinez de Mejia (see the fourth parcel in the inscription No. 57, pp. 57 to 59, of
book 1, of inscriptions under Act No. 2837). Tacloban, Leyte, May 7, 1925.
A letter setting out the foregoing facts was then addressed to the Chief of the General
Land Registration Office, who in turn submitted it to the Judge of the Fourth Branch of the
Court of First Instance of Manila, who held, first, that after the filing of the affidavits, there
was no error in registering the original deed, and, second, that the registrar had the legal
right to refuse to inscribe the sheriff's certificate of sale for property sold at public auction
which was not registered in the name of the judgment debtor, but in the name of a third
party, and third, refused to order registration of the deed to plaintiff in the writ, which was
executed by the sheriff under sections 429 and 466 of Act No. 190. From this ruling, the
plaintiff appeals, assigning the following errors:
The court erred:
1. In finding that defects in a original conveyance presented for registration under
Act No. 2837, (amending Act No. 2711, sec.. 1940, can be cured by affidavit
alone.
2. In holding that a registrar of deeds may refuse to register a sheriff's deed of
sale, on the ground that the property sold stands inscribed in the registry book for
unregistered real estate in the name of some person other than the judgment
debtor.
3. In failing to order the registrar of deeds of Leyte (1) to annul inscription No. 57
in his register under Act No. 2837; or (if the inscription be held valid) (2) to
require the said registrar to record the sheriff's certificate of sale.
JOHNS, J.:
Upon the facts, we are clearly of the opinion that there is no merit in the first assignment of
error. As the Attorney-General points out, there was no material defect in the conveyance
itself, because the instrument was regular on its face, valid in substance, and had all of the
requirements provided for in section 127 of Act No. 496, as amended. Nothing was

conveyed by the affidavits which were simply furnished for the purpose of conforming to
the requirements of the entries to be made in the registry book.
As to the second assignment of error, it will be noted that, although the deed of sale was
duly registered on August 12, 1921, that on April 18, 1923, the land therein described was
attached as the property of the grantors in the deed. That later judgment was obtained in
the attachment proceedings, execution was issued, and that the fourth parcel of land
described in the deed was advertised for sale when the grantees notified the sheriff that it
was their sole and exclusive property. The sheriff then demanded the indemnity bond from
the plaintiff in the writ, which was furnished, and the fourth parcel of land was then sold by
the sheriff to Smith, Bell and Co. as purchaser for the sum of P20,000. Later, a certificate
of sale was issued and the sale confirmed, and the sheriff's deed was executed.
Section 429 of the Code of Civil Procedure provides:
Real property, standing upon the records in the name of the defendant or not
appearing at all upon the record, shall be attached by filing with the registrar of
titles of land, for the province in which the land is situated, a copy of the order of
attachment, together with a description of the property attached, and a notice that
it is attached, and by leaving a similar copy of the order, description, and notice
with an occupant of the property, if there is one.
Real property or an interest therein, belonging to the defendant and held by any
other person, shall be attached by filing with the registrar of land titles in the
province in which the land is situated, a copy of the order of attachment, together
with a description of the property, and a notice that such real property and any
interest of the defendant therein, held by or standing in the name of such other
person (naming him) are attached; and by leaving with the occupant, if any, and
with such other person, or his agent, if known and within the province, a copy of
the order, description, and notice. The registrar must index statements filed
under the first paragraph of this section, in the names, both the plaintiff and of the
defendant, and must index attachments filed under the second paragraph of this
section, in the names of the plaintiff and of the defendant and of the person by
whom the property is held or in whose name it stands on the records.
It was under the second paragraph of this section that the property was attached as the
property of the grantors in the deed, and attachment indexed by the registrar as therein
provided. That portion of the section deals with real property or an interest therein
belonging to the defendants in the attachment suit, which may be held by any other
person, and section 450 of the Code of Civil Procedure provides:
All goods, chattels, moneys, and other property, both real and personal, or ant
interest therein of the judgment debtor, not exempt by law, and all property and
rights of property seized and held under attachment in the action, shall be liable
to execution. Shares and interests in any corporation or company, and debts,
credits and all other property, both real and personal, or any interest in either real
or personal property, and all other property, not capable of manual delivery, may
be attached on execution, in like manner as upon writs of attachment.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
And section 463 provides:
Upon a sale of real property, the purchaser shall be substituted to, and acquire
all the right, interest, title, and claim of the judgment debtor thereto, subject to the
right of redemption as hereinafter provided. The officer must give to the
purchaser a certificate of sale containing:
1. A particular description of the real property sold;
2. The price paid for each distinct lot or parcel;
3. The whole price by him paid;
4. The date when the right of redemption expires.
When the judgment under which the sale has been made is made payable in a
specified kind of money or currency, the certificate must also show the kind of
money or currency in which such redemption must be made, which must be the
same as that specified in the judgment. A duplicate of such certificate must be
filed by the officer in the office of the registrar of land titles of the province.
Under section 465, if the judgment debtor redeems, he is entitled to a certificate of
redemption, which must be filed with the registrar of deeds, but if the property is not
redeemed, the sheriff's deed of the property sold must also be registered, for, under the
provisions of section 1 of Act No. 2837, if not registered, it would only be valid as between
the parties, and hence in the instant case, it would not be of any value to the purchaser at
the sheriff's sale.
Section 466 of the Code of Civil Procedure provides:
If no redemption be made within twelve months after the sale, the purchaser, or
his assignee, is entitled to a conveyance; or, if so redeemed, whenever sixty
days have elapsed and no other redemption has been made, notice thereof
given, and the time for redemption has expired, the last redemptioner, or his
assignee, is entitled to a deed from the officer. but in all cases the judgment
debtor shall have the entire period of twelve months from the date of the sale to
redeem the property. If the judgment debtor redeem, he must make the same
payments as are required to effect a redemption by a redemptioner. If the debtor
redeem, the effect of the sale is terminated and he is restored to his estate. Upon
a redemption by the debtor, the person to whom the payment is made must
execute and deliver to him a certificate of redemption acknowledged or approved
before an officer authorized to take acknowledgment of conveyances of real
property. Such certificate must be filed and recorded in the office of the registrar
of land titles of the province in which the property is situated, and the registrar
must note the record thereof on the margin of the record of the certificate of sale.
The payment mentioned in this section and the preceding one may be made to
the purchaser or redemptioner, or for him to the officer who made the sale. When
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

the judgment under which the sale has been made is payable in a specified kind [G.R. No. 151821. April 14, 2004]
of money or currency, payments must be made in the same kind of money or
currency.

Of course, if at the time the attachment was levied in the grantors in the deed, the BANK OF THE PHILIPPINE ISLANDS, as Successor-in-Interest of BPI Investment
defendants in the attachment proceedings, did not have any right, title, or interest in the Corporation, petitioner, vs. ALS MANAGEMENT & DEVELOPMENT
property, Smith, Bell and Co. did not acquire any title to the land by the sheriffs deed. But, CORP., respondent.
if it be a fact that at the time the attachment was levied, the grantors in the deed did have
an interest in the property at the time the attachment was levied, it follows that Smith, Bell
and Co. acquired that interest by and through the sheriff's deed. That is to say, that if at the DECISION
time attachment was levied Cristina Martinez was in good faith the real owner of the
PANGANIBAN, J.:
property, Smith, Bell and Co. did not acquire any title, and Cristina Martinez would be and
remain the owner of the property, the same as if had never been sold at the sheriff's sale.
But Smith, Bell and Co., having attached the property as property of the grantors in the Factual findings of the lower courts are entitled to great respect, but may be reviewed
deed at the time the attachment was made, and following the claim of Cristina Martinez, if they do not conform to law and to the evidence on record. In the case at bar, a
having executed a good and sufficient bond to purchased the property at the sale, and meticulous review of the facts compels us to modify the award granted by the Court of
having received the sheriff's deed, is entitled to have the result of such proceedings made Appeals.
a matter of official record, so as to preserve and protect any legal rights it may have
acquired in the land as a result of such proceedings, and under the provisions of section 1
of Act No. 2837, those rights, if any, cannot be protected without the registration of the
sheriff's deed. Such registration would not legally mean that Smith, Bell and Co. was the The Case
owner of the property described in the sheriff's deed, or any interest therein. It would
simply mean that by the sheriff's deed, Smith, Bell, and Co. had acquired any right, title or
interest which the grantors had in the fourth parcel of land described in the deed at the Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to
time the attachment was levied. It might be a cloud on the title of Cristina Martinez, and it set aside the November 24, 2000 Decision[2] and the January 9, 2002 Resolution[3] of the
might be necessary for her to bring a suit to remove the cloud and to quiet her title. Be that Court of Appeals (CA) in CA-GR CV No. 25781. The assailed Decision disposed as
as it may, she would be fully protected from all loss or damage by the sheriff, or after the follows:
deed is registered, Smith, Bell and Co., could then maintain a suit to ascertain what rights,
if any, it had acquired by the sheriff's deed in and to the fourth parcel of land.
WHEREFORE, premises considered, the assailed decision is hereby AFFIRMED in
toto and the instant appeal DISMISSED.[4]
Although in some matters, the registrar may have some quasi-judicial power, yet a suit to
quiet a title to ascertain and determine an interest in real property is a matter exclusively
The assailed Resolution denied reconsideration.
within the jurisdiction of the courts. The title, if any, which Smith, Bell and Co. has in the
fourth parcel of land by the sheriff's deed was acquired by and through a judicial
proceeding, and it has a legal right to have that title settled and determined in the courts,
and under the provisions of its sheriff deed, it would in legal effect be deprived of that right.
The Facts
In the registering the actual sheriff's deed, care should be taken to recite the actual facts,
the source and chain of title, so as to protect the rights of Smith, Bell and Co., and it should
be done so as not to prejudice, injure or impair any rights which Cristina Martinez may
have acquired in the land by her deed, thus leaving the respective rights of each party to The facts of the case are narrated by the appellate court as follows:
be settled and determined upon proper pleadings in a judicial proceeding.
On July 29, 1985, [petitioner] BPI Investment Corporation filed a complaint for a Sum of
The judgment of the lower court is reversed, and following this opinion, the writ of Money against ALS Management and Development Corporation, alleging inter alia that on
mandamus shall issue as prayed for by the petitioner. Neither party to recover costs. So July 22, 1983, [petitioner] and [respondent] executed at Makati, Metro Manila a Deed of
ordered. Sale for one (1) unfurnished condominium unit of the Twin Towers Condominium located
at Ayala Avenue, corner Apartment Ridge Street, Makati, Metro Manila designated as Unit
E-4A comprising of 271 squares [sic] meters more or less, together with parking stalls
identified as G022 and G-63. The Condominium Certificate of Title No. 4800 of the
Registry of Deeds for Makati, Metro Manila was issued after the execution of the said
Deed of Sale. [Petitioner] advanced the amount of P26,300.45 for the expenses in causing

the issuance and registration of the Condominium Certificate of Title. Under the
penultimate paragraph of the Deed of Sale, it is stipulated that the VENDEE [respondent]
shall pay all the expenses for the preparation and registration of this Deed of Sale and
such other documents as may be necessary for the issuance of the corresponding
Condominium Certificate of Title. After the [petitioner] complied with its obligations under
the said Deed of Sale, [respondent], notwithstanding demands made by [petitioner], failed
and refused to pay [petitioner] its legitimate advances for the expenses mentioned above
without any valid, legal or justifiable reason.
In its Answer with Compulsory Counterclaim, [respondent] averred among others that it
has just and valid reasons for refusing to pay [petitioners] legal claims. In clear and direct
contravention of Section 25 of Presidential Decree No. 957 which provides that No fee
except those required for the registration of the deed of sale in the Registry of Deeds shall
be collected for the issuance of such title, the [petitioner] has jacked-up or increased the
amount of its alleged advances for the issuance and registration of the Condominium
Certificate of Title in the name of the [respondent], by including therein charges which
should not be collected from buyers of condominium units. [Petitioner] made and
disseminated brochures and other sales propaganda in and before May 1980, which made
warranties as to the facilities, improvements, infrastructures or other forms of development
of the condominium units (known as The Twin Towers) it was offering for sale to the public,
which included the following:
The Twin Towers is destined to reflect condominium living at its very best.
While the twin tower design and its unusual height will make the project the only one of its
kind in the Philippines, the human scale and proportion [are] carefully maintained.
To be sure, modern conveniences are available as in the installation of an intercom system
and a closed-circuit TV monitor through which residents from their apartments can see
their guests down at the lobby call station.
Some of the features of each typical apartment unit are: x x x A bar x x x Three toilets with
baths x x x.
The penthouse units are privileged with the provision of an all-around balcony. x x x
[Respondent] further averred that [petitioner] represented to the [respondent] that the
condominium unit will be delivered completed and ready for occupancy not later than
December 31, 1981. [Respondent] relied solely upon the descriptions and warranties
contained in the aforementioned brochures and other sales propaganda materials when
[respondent] agreed to buy Unit E-4A of the Twin Tower(s) for the hefty sum
of P2,048,900.00 considering that the Twin Towers was then yet to be built. In
contravention of [petitioners] warranties and of good engineering practices, the
condominium unit purchased by [respondent] suffered from the following defects and/or
deficiencies:
1. The clearance in the walkway at the balcony is not sufficient for passage;
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
2. The anodized aluminum used in the door and windows were damaged;
3. The kitchen counter tops/splashboard suffered from cracks and were mis-cut and
misaligned;
4. The partition between living and masters bedroom was unpainted and it had no access
for maintenance due to aluminum fixed glass cover;
5. The varifold divider, including the bar and counter top cabinet were not installed;
6. The toilets had no tiles;
7. No closed circuit TV was installed;
8. Rainwater leaks inside or into the condominium unit. [5]
Respondents Answer prayed that judgment be rendered ordering [petitioner] to
correct such defects/deficiencies in the condominium unit,[6] and that the following reliefs
be granted:
1. The sum of P40,000.00 plus legal interest thereon from the date of extra-judicial
demand, representing the amount spent by the defendant for the completion works it had
undertaken on the premises.
2. The sum of U.S.$6,678.65 (or its equivalent in the Philippine currency) representing the
unearned rental of the premises which the defendant did not realize by reason of the late
delivery to him of the condominium unit;
3. Twenty-four percent (24%) interest per annum on the agreed one (1) year advance
rental and one (1) month deposit (totaling U.S.$15,785.00) corresponding to the period
January 1, 1982 to June 17, 1982, which [petitioner] would have earned had he deposited
the said amount in a bank;
4. The sum of U.S.$1,214.30 per month, commencing from May 1, 1985, which the
[respondent] no longer earns as rental on the premises because the lessee vacated the
same by reason of defects and/or deficiencies;
5. The sum of P50,000.00 plus appearance fees of P300.00 per court hearing, as
attorneys fees;
6. Litigation expenses and costs of suit.[7]
On February 6, 1990, the trial court issued this judgment:
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

1. Ordering the [respondent] to pay [petitioner] the sum of P26,300.45, with legal interest ii) Falling off water-damaged plywood ceiling in the masters
from the filing of the complaint up to full payment thereof, representing the amount spent bedroom bathroom;
for the registration of the title to the condominium unit in [respondents] name;
iii) Grinders mark damage at the bathtub;
2. Ordering [petitioner] to deliver, replace or correct at [petitioners] exclusive expense/cost
or appoint a licensed qualified contractor to do the same on its behalf, the following
f) BALCONY WALKWAY
defects/deficiencies in the condominium unit owned by the [respondent]:

i) PVC pipes installed two (2) inches above floor level causing
a) KITCHEN water to accumulate;

i) The sides of the kitchen sink covered with sealants as well ii) Cracks on level of wash out flooring;
as miscut marble installed as filler at the right side of
the sink;
iii) 14-inches passageway going to the open terrace not
sufficient as passageway;
ii) Miscut marble installed on both sides of the side wall above
the gas range;
iv) PVC pipe installed on the plant box water drained directly
on the balcony floor;
b) FOYERS

g) BALCONY (OPEN) TERRACE

Water marks at the parquet flooring, near the main water
supply room;
i) Two (2) concrete cement measuring about 6 x 4 inches with
protruding live wires, purportedly lamp posts which
c) MAIDS ROOM
were not installed;

Ceiling cut off about one (1) square foot in size and left h) BOYS BEDROOM
unfinished

i) Water mark on the parquet flooring due to water seepage;

d) DINING ROOM

ii) Asphalt plastered at the exterior wall/floor joints to prevent

i) Water damaged parquet up to about one (1) meter from the water seepage;
wall underneath the open shelves and directly
behind the plant box;
i) ANALOC FINISH of the aluminum frames of doors and windows all
around the condominium were painted with dark gray paint to
ii) Plant box directly behind the dining room; cover dents and scratches;

iii) The water damaged parquet flooring near the door of the
j) LIVING ROOM
dining room to the passage way

Intercom equipment installed without the TV monitor;

e) MASTERS BEDROOM

k) STORAGE FACILITIES at the ground floor

i) Falling off paint layers at the bathroom wall behind the
bathtub/faucet along the passageway of the masters
bedroom; 3. Ordering [petitioner] to pay [respondent] the following:

a) The sum of P40,000.00 representing reimbursement for expenses incurred for the
materials/labor in installing walls/floor titles in 2 bathrooms and bar counter cabinet.
b) The sum of P136,608.75, representing unearned income for the five-month period that
the defendant had to suspend a lease contract over the premises.
c) The sum of P27,321.75 per month for a period of twenty-one (21) months (from May
1985 to January 1987), representing unearned income when defendants lessee had to
vacate the premises and condominium unit remained vacant, all with legal interest from the
filing of the counterclaim until the same are fully paid. [8]
Ruling of the Court of Appeals
[9]
On appeal, after a thorough review and examination of the evidence on record, the
CA found no basis for disbelieving what the trial court found and arrived at. [10]
The appellate court sustained the trial courts finding that while [petitioner] succeeded
in proving its claim against the [respondent] for expenses incurred in the registration of [the
latters] title to the condominium unit purchased, x x x for its part [respondent] in turn
succeeded in establishing an even bigger claim under its counterclaim. [11]
Hence, this Petition.[12]
The Issues
Petitioner raises the following issues for our consideration:
I. Whether or not the Honorable Court of Appeals erred in not holding that the
trial court had no jurisdiction over the respondents counterclaims.
II. Whether or not the decision of the Court of Appeals is based on
misapprehension of facts and/or manifestly mistaken warranting a review
by this Honorable Court of the factual findings therein.
III. Whether or not the award of damages by the Honorable Court of Appeals is
conjectural warranting a review by this Honorable Court of the factual
findings therein.[13]
The Courts Ruling
The Petition is partly meritorious.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
First Issue:
Jurisdiction
Contending that it was the Housing and Land Use Regulatory Board (HLURB) -- not
the RTC -- that had jurisdiction over respondents counterclaim, petitioner seeks to nullify
the award of the trial court.
Promulgated on July 12, 1976, PD No. 957 -- otherwise known as The Subdivision
and Condominium Buyers Protective Decree -- provides that the National Housing
Authority (NHA) shall have exclusive authority to regulate the real estate trade and
business.[14] Promulgated later on April 2, 1978, was PD No. 1344 entitled Empowering the
National Housing Authority to Issue Writs of Execution in the Enforcement of Its Decisions
Under Presidential Decree No. 957. It expanded the jurisdiction of the NHA as follows:
SECTION 1. In the exercise of its function to regulate the real estate trade and business
and in addition to its powers provided for in Presidential Decree No. 957, the National
Housing Authority shall have exclusive jurisdiction to hear and decide cases of the
following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot or condominium
unit buyer against the project owner, developer, dealer, broker or salesman; and
C. Cases involving specific performance of contractual and statutory obligations filed by
buyers of subdivision lot or condominium unit against the owner, developer, broker or
salesman. (Italics ours.)
On February 7, 1981, by virtue of Executive Order No. 648, the regulatory functions
of the NHA were transferred to the Human Settlements Regulatory Commission
(HSRC). Section 8 thereof provides:
SECTION 8. Transfer of Functions. -The regulatory functions of the National Housing
Authority pursuant to Presidential Decree Nos. 957, 1216, 1344 and other related laws are
hereby transferred to the Commission (Human Settlements Regulatory Commission). x x
x.Among these regulatory functions are: 1) Regulation of the real estate trade and
business; x x x 11) Hear and decide cases of unsound real estate business practices;
claims involving refund filed against project owners, developers, dealers, brokers, or
salesmen; and cases of specific performance.
Pursuant to Executive Order No. 90 dated December 17, 1986, the functions of the
HSRC were transferred to the HLURB.
As mandated by PD No. 957, the jurisdiction of the HLURB is encompassing. Hence,
we said in Estate Developers and Investors Corporation v. Sarte:[15]

x x x. While PD 957 was designed to meet the need basically to protect lot buyers from the
fraudulent manipulations of unscrupulous subdivision owners, sellers and operators, the
exclusive jurisdiction vested in the NHA is broad and general -to regulate the real estate
trade and business in accordance with the provisions of said law.
Furthermore, the jurisdiction of the HLURB over cases enumerated in Section 1 of
PD No. 1344 is exclusive. Thus, we have ruled that the board has sole jurisdiction in a
complaint of specific performance for the delivery of a certificate of title to a buyer of a
subdivision lot;[16] for claims of refund regardless of whether the sale is perfected or
not;[17] and for determining whether there is a perfected contract of sale. [18]
In Solid Homes v. Payawal,[19] we declared that the NHA had the competence to
award damages as part of the exclusive power conferred upon it -- the power to hear and
decide claims involving refund and any other claims filed by subdivision lot or
condominium unit buyers against the project owner, developer, dealer, broker or
salesman.[20]
Clearly then, respondents counterclaim -- being one for specific performance
(correction of defects/deficiencies in the condominium unit) and damages -- falls under the
jurisdiction of the HLURB as provided by Section 1 of PD No. 1344.
The Applicability of Estoppel
The general rule is that any decision rendered without jurisdiction is a total nullity and
may be struck down at any time, even on appeal before this Court. [21] Indeed, the question
of jurisdiction may be raised at any time, provided that such action would not result in the
mockery of the tenets of fair play.[22] As an exception to the rule, the issue may not be
raised if the party is barred by estoppel.[23]
In the present case, petitioner proceeded with the trial, and only after a judgment
unfavorable to it did it raise the issue of jurisdiction. Thus, it may no longer deny the trial
courts jurisdiction, for estoppel bars it from doing so. This Court cannot countenance the
inconsistent postures petitioner has adopted by attacking the jurisdiction of the regular
court to which it has voluntarily submitted.[24]
The Court frowns upon the undesirable practice of submitting ones case for decision,
and then accepting the judgment only if favorable, but attacking it for lack of jurisdiction if it
is not.[25]
We also find petitioner guilty of estoppel by laches for failing to raise the question of
jurisdiction earlier. From the time that respondent filed its counterclaim on November 8,
1985, the former could have raised such issue, but failed or neglected to do so. It was only
upon filing its appellants brief [26] with the CA on May 27, 1991, that petitioner raised the
issue of jurisdiction for the first time.
In Tijam v. Sibonghanoy,[27] we declared that the failure to raise the question of
jurisdiction at an earlier stage barred the party from questioning it later. Applying the rule
on estoppel by laches, we explained as follows:
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
A party may be estopped or barred from raising a question in different ways and for
different reasons. Thus, we speak of estoppel in pais, of estoppe[l] by deed or by record,
and of estoppel by laches.
Laches, in general sense, is failure or neglect, for an unreasonable and unexplained length
of time, to do that which, by exercising due diligence, could or should have been done
earlier; it is negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it or declined to assert
it.
The doctrine of laches or of stale demands is based upon grounds of public policy which
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. [28]
Thus, we struck down the defense of lack of jurisdiction, since the appellant therein
failed to raise the question at an earlier stage. It did so only after an adverse decision had
been rendered.
We further declared that if we were to sanction the said appellants conduct, we
would in effect be declaring as useless all the proceedings had in the present case since it
was commenced x x x and compel the judgment creditors to go up their Calvary once
more. The inequity and unfairness of this is not only patent but revolting. [29]
Applicable herein is our ruling in Gonzaga v. Court of Appeals,[30] in which we said:
Public policy dictates that this Court must strongly condemn any double-dealing by parties
who are disposed to trifle with the courts by deliberately taking inconsistent positions, in
utter disregard of the elementary principles of justice and good faith. There is no denying
that, in this case, petitioners never raised the issue of jurisdiction throughout the entire
proceedings in the trial court. Instead, they voluntarily and willingly submitted themselves
to the jurisdiction of said court. It is now too late in the day for them to repudiate the
jurisdiction they were invoking all along. [31]
Second and Third Issues:
Appreciation of Facts
It is readily apparent that petitioner is raising issues of fact that have been ruled upon
by the RTC and sustained by the CA. The factual findings of lower courts are generally
binding upon this Court and will not be disturbed on appeal, especially when both sets of
findings are the same.[32] Nevertheless, this rule has certain exceptions, [33] as when those
findings are not supported by the evidence on record.
We have carefully scrutinized the records of this case and found reason to modify the
award to conform to law and the evidence. We thus address the arguments of
petitioner seriatim.

Warranties and Representations
in the Brochure
The brochure that was disseminated indicated features that would be provided each
condominium unit; and that, under Section 19 of PD No. 957, would form part of the sales
warranties of petitioner.[34] Respondent relied on the brochure in its decision to purchase a
unit.[35] Since the former failed to deliver certain items stated therein, then there was a
clear violation of its warranties and representations.
The brochure says that [t]he particulars stated x x x as well as the details and visuals
shown x x x are intended to give a general idea of the project to be undertaken, and as
such, are not to be relied [upon] as statements or representations of fact. [36] This general
disclaimer should apply only to the general concept of the project that petitioner aptly
characterizes thus:
x x x [D]estined to reflect condominium living at its very best and its design x x x will make
the project the only one of its kind in the Philippines. [37]
This disclaimer, however, should not apply to the features and the amenities that the
brochure promised to provide each condominium unit. Petitioner was thus in breach when
it failed to deliver a closed-circuit TV monitor through which residents from their
apartments can see their guests x x x.[38]
Storage Facilities
The trial court erred, though, in requiring petitioner to provide storage facilities on the
ground floor, as the non-delivery had not been alleged in respondents Answer with
Counterclaim.[39]
It is elementary that a judgment must conform to and be supported by both the
pleadings and the evidence, and that it be in accordance with the theory of the action on
which the pleadings were framed and the case was tried. [40] Indeed, issues in each case
are limited to those presented in the pleadings. [41]
We are aware that issues not alleged in the pleadings may still be decided upon, if
tried with the parties express or implied consent. [42] Trial courts are not precluded from
granting reliefs not specifically claimed in the pleadings -- notwithstanding the absence of
their amendment -- upon the condition that evidence has been presented properly, with full
opportunity on the part of the opposing parties to support their respective contentions and
to refute each others evidence.[43] This exception is not present in the case at bar.
Moreover, a cursory reading of the brochure shows that there is no promise to
provide individual storage facilities on the ground floor for each condominium unit. The
brochure reads: Storage facilities in the apartment units and the ground floor. [44] Apparent
from the letter of petitioner dated June 18, 1982, [45] was its compliance with its promise of
storage facilities on the ground floor. In that letter, respondent was also informed that it
may course a reservation of those facilities through the building superintendent.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Damages for Delay in Delivery
It is undisputed that petitioner sent respondent a Contract to Sell [46] declaring that the
construction would be finished on or before December 31, 1981. [47] The former delivered
the condominium unit only in June 1982;[48] thus, the latter claims that there was a delay in
the delivery.
Because of this delay, the trial court ordered petitioner to pay damages
of P136,608.75 representing unearned income for the period that respondent had to
suspend a lease contract. We find a dearth of evidence to support such award.
To recover actual damages, the amount of loss must not only be capable of proof,
but also be proven with a reasonable degree of certainty. [49] The lone evidence for this
award was the self-serving testimony of respondents witness that a lease contract had
indeed been intended to commence in January 1982, instead of the actual implementation
on June 18, 1982.[50] Without any other evidence, we fail to see how the amount of loss
was proven with a reasonable degree of certainty.
Condominium Defects
The rule is that a partys case must be established through a preponderance of
evidence.[51] By such term of evidence is meant simply evidence that is of greater weight,
or is more convincing than that which is offered in opposition to it. [52]Respondent was able
to establish through its witness testimony that the condominium unit suffered from
defects.[53] This testimony was confirmed by an inspection report [54] noted and signed by
petitioners representative, as well as by a commissioners report [55] prepared after an ocular
inspection by the clerk of court acting as a commissioner. Furthermore, this conclusion is
supported by the circumstances that occurred during the lease period, as evidenced by the
complaint and the update letters[56] of respondents lessee.
Petitioners contention that the claim arising from the alleged defects has already
prescribed must fail for being raised for the first time only on appeal. [57] Well-settled is the
rule that issues not raised below cannot be resolved on review in higher courts. [58]
We agree, however, that the lower courts erred in finding that there was a defect in a
portion of the balcony, which respondent alleges to be a walkway x x x [that] is not
sufficient for passage.[59] Petitioner was able to prove, however, that the specifications
thereof conformed to the building plan.
Respondent contends that this portion should have been 65 to 80 centimeters wide,
so that it would be sufficient as a passageway. [60] The building plan[61] had not specified the
width, however. Architect Leo Ramos of W.V. Coscolluela & Associates, the architectural
firm that prepared the building plan, testified thus:
Q I am directing your attention xxx to a certain portion in this condominium unit
x x x it appears x x x [that] there is no measurement indicated therein, do
you know why the measurement of said portion was not indicated in the
building plan?

A Normally, it is variable.
Q What do you mean by variable?
A It depends on the actual measurement of the building construction.
Q Could you please tell the Court, what x x x the purpose of the said portion of
the condominium unit [is]?
A It is used for watering the plants and the servicing of some area[s].
Q How much measurement is made to affix the portion of watering the plants?
A Approximately .50 [m].[62]
Respondent maintains that this portion should have been .80 meters (or 80
centimeters), similar to another area in the building plan that it offered as Exhibit 2-
A.[63] But an analysis of this plan reveals that the latter area has a different width from that
of the former.
It is readily apparent from the foregoing facts that the portion in controversy was not
intended to be a walkway. Thus, there was no deviation from the building plan. Because it
has not been shown that this section was insufficient to serve the purpose for which it was
intended, the lower courts erred in considering it as defective.
Reimbursement of P40,000
for Completion Work
The lower courts did not err in ordering petitioner to correct the defects in the
condominium unit, but in requiring it to reimburse respondent in the amount of P40,000 for
completion work done.
Petitioner argues that the trial courts Decision encompassed the areas beyond those
alleged in respondents Answer.[64] This contention is not convincing, because the
allegations in the latter were broad enough to cover all the defects in the condominium
unit. In fact, respondent prayed that judgment be rendered ordering [petitioner] to correct
such defects x x x in the condominium unit as may be prove[d] during the trial. [65]
Petitioner further challenges the award of P40,000 as reimbursement for completion
work done by respondent, on the ground that this claim was not proven during the
trial. The latters evidence partook of a witness testimony[66] and of a demand letter[67] sent
to petitioner requesting reimbursement for completion work done. Petitioner argues that
respondent should have presented receipts to support the expenses. [68]
We agree with petitioner. While respondent may have suffered pecuniary losses for
completion work done, it failed to establish with reasonable certainty the actual amount
spent. The award of actual damages cannot be based on the allegation of a witness
without any tangible document, such as receipts or other documentary proofs to support
such claim.[69] In determining actual damages, courts cannot rely on mere assertions,
speculations, conjectures or guesswork, but must depend on competent proof and on the
best obtainable evidence of the actual amount of loss. [70]
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Unearned Lease Income
Respondent entered into a lease contract with Advanced Micro Device on May 18,
1982, for the period June 18, 1982 to June 17, 1983, with option to renew. [71] The lease --
which was for an agreed monthly rental of P17,000 -- was renewed for a period ending
May 1, 1985, when Advanced Micro Device vacated the unit. [72] On the basis of these
facts, the trial court ordered petitioner to pay damages by way of unrealized income for
twenty-one months or from May 1, 1985, until January 1987 -- when respondent decided to
move into the condominium unit, which was unoccupied by then.
Despite the defects of the condominium unit, a lessee stayed there for almost three
years.[73] The damages claimed by respondent is based on the rent that it might have
earned, had Advanced Micro Device chosen to stay and renew the lease.Such claim is
highly speculative, considering that respondent failed to adduce evidence that the unit had
been offered for lease to others, but that there were no takers because of the defects
therein. Speculative damages are too remote to be included in an accurate estimate
thereof.[74] Absent any credible proof of the amount of actual damage sustained, the Court
cannot rely on speculations as to its existence and amount.[75]
We recognize, however, that respondent suffered damages when its lessee vacated
the condominium unit on May 1, 1985, because of the defects therein. Respondents are
thus entitled to temperate damages.[76] Under the circumstances, the amount equivalent to
three monthly rentals of P17,000 -- or a total of P51,000 -- would be reasonable.
WHEREFORE, this Petition is PARTLY GRANTED, and the assailed Decision and
Resolution of the Court of Appeals MODIFIED, as follows:
Hereby DELETED is the requirement on the part of petitioner to (1) deliver storage
facilities on the ground floor; (2) pay P136,608.75 for unearned income for the five-month
period that the lease contract was allegedly suspended; (3) correct the alleged
passageway in the balcony; (4) pay P40,000.00 as reimbursement for completion work
done by respondent; (5) pay P27,321.75 per month for a period of twenty-one months for
the alleged unearned income during the period when the condominium unit remained
vacant. Petitioner, however, is ORDERED to pay P51,000 as temperate damages for the
termination of the lease contract because of the defects in the condominium unit. All other
awards are AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

[G.R. No. 132869. October 18, 2001]
GREGORIO DE VERA, JR., petitioner, vs. COURT OF APPEALS, Q. P. SAN DIEGO
CONSTRUCTION, INC., ASIATRUST DEVELOPMENT BANK, SECOND
LAGUNA DEVELOPMENT BANK, CAPITOL CITY DEVELOPMENT BANK,
EX-OFFICIO SHERIFF OF QUEZON CITY and/or HIS DEPUTY, respondents.
DECISION
BELLOSILLO, J.:
This is a Petition for Review, under Rule 45 of the Revised Rules of Court, of
the Decision of the Court of Appeals in CA-G.R. CV No. 37281, "Gregorio de Vera, Jr. v.
Court of Appeals, QP San Diego Construction, Inc., Asiatrust Development Bank, Second
Laguna Development Bank, Capitol City Development Bank, Ex-Officio Sheriff of Quezon
City and/or his Deputy," and of its Resolution of 18 February 1998 denying
petitioner's Manifestation with Motion for Reconsideration.
Respondent Q. P. San Diego Construction, Inc. (QPSDCI), owned a parcel of land
located at 101 Panay Avenue, Quezon City, on which it built Lourdes I Condominium. On
10 June 1983, to finance its construction and development, QPSDCI entered into
a Syndicate Loan Agreement[1] with respondents Asiatrust Development Bank
(ASIATRUST) as lead bank, and Second Laguna Development Bank (LAGUNA) and
Capitol City Development Bank (CAPITOL) as participating banks (hereafter collectively
known as FUNDERS).QPSDCI mortgaged to the creditor banks as security the herein
mentioned Panay Avenue property and the condominium constructed thereon. The
mortgage deed was registered with the Register of Deeds of Quezon City and annotated
on the individual condominium certificates of title (CCT) of each condominium unit. [2]
On 23 June 1983 petitioner Gregorio de Vera Jr. and QPSDCI, through its authorized
agent Fil-Estate Realty Corporation (FIL-ESTATE), entered into a Condominium
Reservation Agreement[3] where petitioner undertook to buy Unit 211-2C of the
condominium for P325,000.00 under the following agreed terms of payment: (a) an option
money of P5,000.00 payable upon signing of the agreement to form part of the purchase
price; (b) a full downpayment of P175,675.00 broken down into the reservation fee
of P5,000.00 and three (3) equal monthly installments payable beginning the month after
the signing of the contract; and, (c) the remaining balance of P160,000.00 to be secured
through petitioner's Pag-IBIG and Open-Housing Loan. Pending release of the loan,
petitioner was to avail of a bridge financing loan with ASIATRUST or any accredited
originating bank of the Pag-IBIG program.
On 2 June 1983 petitioner paid the reservation fee of P5,000.00, and on 11 July
1983 the balance of the downpayment of P167,000.00, thus completing the downpayment
of P175,675.00 well before the due date. As incentive, petitioner was given a full discount
on cash payment by QPSDCI to bring the total payment to P184,040.00.
Pursuant to their Condominium Reservation Agreement, petitioner submitted through
FIL-ESTATE his application for the Pag-IBIG loan. On 28 December 1983 ASIATRUST as
originating bank notified FIL-ESTATE that petitioner's Pag-IBIG loan application had been
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
approved.[4] In a letter dated 18 January 1984 QPSDCI President Quintin P. San Diego
forwarded the letter to petitioner. However, the amount approved was only P139,100.00
and not P160,000.00. Additional charges further reduced the amount to P117,043.33.
Petitioner De Vera Jr. approached QPSDCI to have the P12,040.00 discount credited
to his additional equity. Since the resultant net loan of P117,043.33 was insufficient to
cover the balance of the purchase price, De Vera Jr. negotiated with QPSDCI to defer
payment of the P23,916.67 deficiency until the project was completed and the unit was
ready for turnover. QPSDCI agreed.[5]
The condominium project was substantially completed in June 1984 and the unit was
turned over to De Vera Jr. the following month. Accordingly, petitioner paid QPSDCI
the P23,916.67 shortfall between the balance and the granted loan.
On 26 June 1984 ASIATRUST through its Vice-President Pedro V. Lucero and
Manager Nicanor T. Villanueva wrote to QPSDCI asking the unit buyers to pay in advance
the costs of the transfer of titles and registration of their Pag-IBIG loan
mortgages.[6] QPSDCI forwarded the letter to De Vera Jr. and requested that he pay the
amount to QPSDCI.[7] As ASIATRUST indicated that the amount be paid directly to it, De
Vera Jr. went to the bank for clarification. On 23 August 1983, after learning that
ASIATRUST was in possession of the certificate of title, De Vera Jr. paid the transfer
expenses directly to ASIATRUST.
On 17 September 1984 ASIATRUST sent another notice of approval [8] to QPSDCI
and De Vera Jr. with the notation, "additional equity of all accounts have (sic) to be paid
directly to the Bank."
On 3 October 1984 ASIATRUST wrote another letter [9] asking QPSDCI to advise the
unit buyers, among others, to pay all additional and remaining equities on 10 October
1984; that their Pag-IBIG loan mortgages would be registered only upon payment of those
equities; and, that loan mortgages registered after 31 October 1984 would be subject to
the increased Pag-IBIG interest rates.
On 12 October 1984 ASIATRUST also wrote a letter to petitioner and signed by its
Assistant Manager Leticia R. de la Cruz informing him that his housing loan would only be
implemented upon the following conditions: (a) Payment of the remaining equity directly to
ASIATRUST Development Bank; and (b) Signing of all Pag-IBIG documents not later than
20 October 1984, so his mortgages could be registered on or before 31 October
1984. Mortgages registered beyond said date shall subject the Pag-IBIG loan to the
increased interest rates of the National Home Mortgage Finance Corp. (per Circular #27
dated June 21, 1984).
According to petitioner, the letter came as a total surprise to him; all the while he
thought that his loan had already been released to QPSDCI and the titles transferred to his
name; he promptly wrote ASIATRUST to seek clarification; ASIATRUST responded by
informing De Vera Jr. that the developmental loan agreement between QPSDCI and the
three (3) banks, under which the individual titles of the condominium units were mortgaged
in favor of the FUNDERS to secure the loan, shall be paid out of the net proceeds of the
Pag-IBIG loans of the buyers; that the total amount of loan from the FUNDERS was
distributed among all condominium units such that each unit had to bear a certain portion
of the total loan, or a "loan value;" that per agreement with QPSDCI, ASIATRUST would
only grant the Pag-IBIG Housing Loan with the release of the mortgage liens, which could

not be released unless the buyers fully paid their respective loan values; and that
petitioner's equity payments to QPSDCI had not been remitted to the bank.
On 30 May 1985 ASIATRUST informed QPSDCI that it could no longer extend the
bridge financing loan to some of the buyers, including petitioner, for various
reasons,[10] among which was that petitioner had already exceeded the age limit, hence, he
was disqualified.[11]
After learning of the disapproval of his loan, petitioner wrote the president of QPSDCI
to make arrangements to settle his balance. Since petitioner had already invested a
substantial amount in remodelling and improving his unit, rescinding the sale was no
longer a viable option. Consequently, he only asked the president of QPSDCI for some
assurance that the title would be turned over to him upon full payment.
In response, QPSDCI suggested that petitioner deal directly with ASIATRUST for
any matter regarding the sale of the unit. [12] President San Diego explained that "as far as
we are concerned we have sold to you our property at a certain price and we have
correspondingly issued to your goodself, thru the Bank, a Deed of Absolute Sale for the
unit we sold to you taking into consideration that the Bank has approved your loan per their
advice dated December 28, 1983 and presumably credited us for the approved amount of
loan."
As petitioner failed to obtain the housing loan, he was not able to pay the balance of
the purchase price. QPSDCI sent him a letter[13] dated 6 August 1987 presenting him with
two options: (a) to pay the remaining balance of the purchase price, with interest, which
had already ballooned to P263,751.63, on or before 15 August 1987; or, (b) to pay rent for
the use of the unit from 28 July 1984 to June 1987.
On 20 May 1988 petitioner, upon discovering that the FUNDERS had already
published a notice[14] of extrajudicial foreclosure of the mortgage, filed a complaint against
respondents for damages and injunction with urgent prayer for issuance of a writ of
preliminary injunction, annulment of mortgage based on fraud, with urgent prayer for the
issuance of a writ of preliminary attachment and specific performance. The complaint was
docketed as Civil Case No. Q-53737 and subsequently raffled to Branch 107 of the
Regional Trial Court of Quezon City.
Meanwhile, QPSDCI failed to pay its obligations to the FUNDERS. On 23 May 1988
ASIATRUST extrajudicially foreclosed the mortgage on twenty-seven (27) condominium
units, including that of petitioner De Vera Jr. The units were sold at public auction, with the
FUNDERS as the highest bidder. The certificate of sale was issued and annotated on the
CCTs.
On 3 March 1992 the trial court rendered judgment "directing the defendants (herein
respondents) to pay to the plaintiff (herein petitioner) jointly and severally the sum
equivalent to the penalties and charges plus whatever amount may be necessary to
redeem Unit 211-2C from any lien and encumbrances so that the title may be released and
delivered to the plaintiff, free from any lien and encumbrances, subject only to the
deduction of his unpaid balance of P139,000.00, which the plaintiff should pay out of his
own funds, plus exemplary damages of P100,000.00 each and to pay plaintiff attorney's
fees jointly and severally x x x P50,000.00 plus the expenses of litigation." The lower court
denied plaintiff's prayer for moral damages and dismissed defendants' counterclaim
against the plaintiff and cross-claims against each other.[15]
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
The Court of Appeals affirmed the decision of the trial court with the modification that
respondents were ordered solidarily to pay petitioner P50,000.00 as nominal damages, but
the award for actual and exemplary damages was deleted.
On 9 July 1997 petitioner filed a "Compliance with Manifestation and Motion for
Extension of Time to File Motion for Reconsideration" alleging that he received the
decision of the Court of Appeals on 4 July 1997 and requesting a thirty (30)-day extension
within which to file a motion for reconsideration. The motion was denied by respondent
appellate court.
On 8 August 1997 petitioner filed a "Manifestation with Motion for Reconsideration,"
and on 6 February 1998 a "Compliance with Motion to Resolve Manifestation with Motion
for Reconsideration," with respondent court. Reckoning the deadline of the period to file a
motion for reconsideration at 19 July 1997, the Court of Appeals denied petitioner's Motion
for Reconsideration for having been filed out of time. Hence, the instant petition for review
on certiorari.
Petitioner assails the 18 February 1998 Resolution denying
his Motion for Reconsideration, asserting that the Court of Appeals should not have denied
his motion on mere technicality. Petitioner claims that his counsel was not notified of the
Court of Appeals' decision.The Notice of Judgment [16] of the decision of the Court of
Appeals shows that the same was served on petitioner Gregorio de Vera himself and not
on his counsel. Petitioner asserts that service to a party is allowed only if the party is not
represented by counsel. But if he is represented by a counsel, then service shall be made
upon his counsel unless service upon the party himself is ordered by the court. Unless so
ordered, service on the party himself who is represented by counsel is not notice in law,
hence, invalid.[17]
Furthermore, justice will be better served by entertaining this petition than by
dismissing it outright. It is always in the power of this Court to suspend its own rules, or to
except a particular case from its operation, whenever the purposes of justice require it. [18]
The trial court found that petitioner's failure to pay the balance of the price of Unit
211-2C was not his fault. It also found that petitioner was a real party in interest to annul
the loan agreement between QPSDCI and the FUNDERS, and that he had priority in right
to the unit over the FUNDERS. The trial court rejected QPSDCI's counterclaim against
petitioner for rentals and sustained petitioner's claim for damages against private
respondents.
The Court of Appeals ruled that the regular courts had no jurisdiction over the subject
matter of the case, the proper venue being the Housing and Land Use Regulatory Board
(HLURB). However, respondents were estopped from questioning jurisdiction because
they filed counterclaims in the lower court.
As to the issue of who had superior right over the Unit 211-2C, the Court of Appeals
ruled in favor of petitioner, holding that the mortgage in favor of ASIATRUST, which was
the basis for its title, did not bind petitioner inasmuch as the same was not registered with
the National Housing Authority (NHA), contrary to the mandate of Sec. 18 of PD 957, or
"The Subdivision and Condominium Buyers' Protective Decree."[19] The appellate court
further found that QPSDCI breached its warranties as seller under Art. 1547, and also
violated its obligation to deliver to petitioner a clean title as required by Sec. 4 of PD 957. It
declared that delivery of the unit to petitioner operated to transfer ownership to him from
QPSDCI.

Respondents did not appeal. Petitioner contests the decision of the Court of Appeals
only insofar as it deleted the award of actual and exemplary damages and attorney's
fees. The only issue to be addressed by this Court therefore is the propriety of the award
of damages in favor of petitioner.
In finding QPSDCI liable for damages, the trial court held -
x x x it (QPSDCI) has not exerted any reasonable diligence or effort to procure the
issuance of the title to the plaintiff. All that it did was to refer the plaintiff to the Funder(s),
alleging that he (plaintiff) should transact business with them as the matter of loan is
between the plaintiff and the Funder(s), and they had nothing to do with it. However, it
collected the additional equity and never forwarded the same to the Funder(s) nor
informed the latter of plaintiff's payment thereof. Thus, to the mind of Asiatrust, plaintiff
never paid the additional equity, although per records of the Seller, he already had.
All these show negligence on the part of the Seller to perform its obligations under the
contract -- to the detriment of the plaintiff, for which it should be liable for damages under
Art. 2201 of the Civil Code, for the natural and probable consequences of the breach of the
obligation which the parties, specially the Seller, should have forseen or could have
reasonably forseen at the time the obligation was contracted.
As to respondent ASIATRUST, the trial court held that its failure to notify petitioner of
the required steps to be taken after the approval of the loan, of the requirement that
additional equity be paid directly to the bank and other important aspects of the bridging
loan, made it liable for damages under the general provisions on torts under Art. 2176 of
the Civil Code, in relation to Art. 2202.
In deleting the award for damages, the respondent Court of Appeals explained -
As earlier found, QPSDCI failed to comply with its warranties as seller. Unfortunately,
plaintiff-appellee posits the propriety of the award of actual damages only in the probable
sense: that such award is to the amount of interests, penalties and other charges as
plaintiff may stand liable for by reason of the non-payment of the purchase price. In other
words, plaintiff-appellee admits not having suffered damages in consequence of non-
compliance of seller's warranties. Since actual damages are predicated on such pecuniary
loss as duly proved, the award of the lower court therefor is plainly not in order x x x
(citations omitted).
We agree with the respondent Court of Appeals on this point. Petitioner did not
present any proof that he suffered any damage as a result of the breach of seller's
warranty. He did not lose possession of his condominium unit, although the same had not
yet been registered in his name. In his Consolidated Reply, petitioner came up with this
feeble argument for claiming actual damages, a rehash of his motion for reconsideration
with the Court of Appeals -
Petitioner reiterates that the compensatory damages awarded is to the amount of interests,
penalties and other charges as (he) may stand liable for by reason of the non-payment of
the balance of the purchase price of Unit #211 in consequence of the respondent's fault or
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
negligence as evidenced by Exhs. S and S-1. The compensation is the same amount as
whatever the liability may be and therefore merely offsets the liability x x x x
The cost of clearing the CCT of liens and encumbrances and transferring it to the name of
the petitioner are also part of the actual or compensatory damages and are its own proof.
Article 2199 of the Civil Code provides that one is entitled to adequate compensation
only for such pecuniary loss suffered by him as is "duly proved."[20] This provision denies
the grant of speculative damages, or such damage not actually proved to have existed and
to have been caused to the party claiming the same.[21] Actual damages, to be
recoverable, must not only be capable of proof, but must actually be proved with
reasonable degree of certainty. Courts cannot simply rely on speculation, conjecture or
guesswork in determining the fact and amount of damages. [22]
This does not mean however that petitioner is liable to private respondents for
penalties, interests and other charges that accrued by reason of non-payment of the
balance of the purchase price. Respondent ASIATRUST had made several
representations to petitioner that his loan had been approved. The tenor of the letters sent
by ASIATRUST would lead a reasonable man to believe that there was nothing left to do
but await the release of the loan. ASIATRUST cannot hide behind the pithy excuse that the
grant of the bridge financing loan was subject to the release of the Pag-IBIG loan. The
essence of bridge financing loans is to obtain funds through an interim loan while the Pag-
IBIG funds are not yet available. To await the release of the Pag-IBIG loan would render
any bridge financing nugatory. Thus, we agree with the trial court when it said that "the
conclusion is inevitable that although the plaintiff was not able to pay, he was a victim of
circumstances and his failure was not due to his own fault."
Furthermore, Sec. 25 of PD 957 provides:
Sec. 25. Issuance of Title. - The owner or developer shall deliver the title of the lot or unit
to the buyer upon full payment of the lot or unit. No fee, except those required for the
registration of the deed of sale in the Registry of Deeds, shall be collected for the issuance
of such title. In the event a mortgage over the lot or unit is outstanding at the time of the
issuance of the title to the buyer, the owner or developer shall redeem the mortgage or the
corresponding portion thereof within six months from such issuance in order that the title
over any fully paid lot or unit may be secured and delivered to the buyer in accordance
herewith.
From the foregoing it is clear that upon full payment, the seller is duty-bound to
deliver the title of the unit to the buyer. Even with a valid mortgage over the lot, the seller is
still bound to redeem said mortgage without any cost to the buyer apart from the balance
of the purchase price and registration fees. It has been established that respondent
QPSDCI had been negligent in failing to remit petitioner's payments to ASIATRUST. If
QPSDCI had not been negligent, then even the possibility of charges, liens or penalties
would not have arisen. Therefore, as between QPSDCI and petitioner, the former should
be held liable for any charge, lien or penalty that may arise. However, it was error for the
trial court to remedy the situation in the form of an award for damages because, as
discussed earlier, the basis for the same does not appear indubitable.
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Part of the confusion lies in the deficiency of the trial court's decision. It had found [G.R. No. 122088. January 26, 2001]
that petitioner had superior right to the unit over the FUNDERS and the mortgage in favor
of the FUNDERS was contrary to Condominium laws. Therefore, the proper remedy was to
annul the mortgage foreclosure sale and the CCT issued in favor of ASIATRUST, and not
merely decree an award for damages. We held in Union Bank of the Philippines v.
HLURB -[23] GOLD LOOP PROPERTIES, INC. and EMMANUEL R. ZAPANTA, petitioners,
vs. THE COURT OF APPEALS, BHAVNA HARILELA SADHWANI and
RAMESH J. SADHWANI, represented by their attorney-in-fact PURSHUTAM
Clearly, FRDC's act of mortgaging the condominium project to Bancom and FEBTC, DIALANI, respondents.
without the knowledge and consent of David as buyer of a unit therein, and without the
approval of the NHA (now HLURB) as required by P.D. No. 957, was not only an unsound
real estate business practice but also highly prejudicial to the buyer David, (who) has a DECISION
cause of action for annulment of the mortgage, the mortgage foreclosure sale, and the
PARDO, J. :
condominium certificate of title that was issued to the UBP and FEBTC as highest bidders
of the sale.
The case before the Court is an appeal via certiorari from the decision[1] of the Court
of Appeals dismissing the petition for certiorari assailing the decision of the Senior Deputy
These remedies were clearly within those sought for in petitioner's complaint. The
Executive Secretary, Office of the President sustaining the ruling of the Housing Land Use
trial court should have also ordered QPSDCI to credit petitioner's payments to his
and Regulatory Board of Commissioners requiring petitioners to furnish private
outstanding balance and deliver to petitioner a clean CCT upon full payment of the
respondents with copy of the contract to sell and to accept the balance of the purchase
purchase price as mandated by Sec. 25 of PD 957.
price of a condominium unit.
We note that petitioner, believing that he won, did not appeal the trial court's
On July 16, 1988, private respondents Bhavna Harilela and Ramesh Sadhwani
decision. Petitioner is partly to blame for the difficult situation he is in, having filed his
(hereinafter referred to as Sadhwanis) submitted through St. Martin Realty Corporation, a
complaint with the regular courts instead of the HLURB. Nevertheless, both trial court and
realtor agent of petitioner Gold Loop Properties, Inc. (hereinafter referred to as GLPI), a
the Court of Appeals found that petitioner had superior rights over the condominium unit,
signed pro forma reservation application addressed to GLPI for the purchase of one (1)
that petitioner was not bound by the mortgage in favor of the FUNDERS and, that QPSDCI
condominium unit at Gold Loop Towers residential complex, located in Ortigas Complex,
violated its contract with petitioner by its failure to remit the latter's payments. Such
Pasig. One of the terms of the reservation was the execution of a contract to sell once the
findings are uncontested before us and provide enough ground to warrant the modification
downpayment was paid in full. Upon submission of the reservation, the Sadhwanis issued
of the ruling, so that full relief may be accorded to petitioner. The general rule that an
a check for P50,000.00 to cover the reservation fees to Josephine Flores Guina, agent of
appellate court may only pass upon errors assigned may be waived, and the appellate
St. Martin Realty who issued a receipt to them.
court may consider matters not assigned when consideration of which is necessary in
arriving at a just decision and complete resolution of the case or serve the interests of On November 18, 1988, the Sadhwanis paid GLPI the amount of
justice or to avoid dispensing piecemeal justice. [24] P819,531.25. Subsequently, Bhavna Harilela signed a Contract To Sell [2] with GLPI,
represented by its President Emmanuel Zapanta. Ms. Guina assured them that they would
WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No.
be furnished with a copy of the contract after its notarization, and that the amount,
37281 is MODIFIED thus -
representing the balance of the purchase price, would be included in a loan application
(a) The mortgage over Unit 211-2C of Lourdes I Condominium covered by CCT No. with a bank. However, the contract to sell was not notarized, as the private respondents
2307 as well as its foreclosure sale is declared NULL and VOID. The Ex-Officio Sheriff of were not able to supply GLPI with a copy of their passports.
Quezon City is ordered to cancel the certificate of sale in favor of ASIATRUST
Under the contract, GLPI agreed to sell to Sadhwanis a 198.75 square meters
Development Bank over the aforesaid Unit 211-2C and the Register of Deeds of Quezon
condominium unit particularly Unit R-84 of Southwest Tower. The contract price was
City to cancel the Annotation of the Real Estate Mortgage (Entry No. 7714) and the
P2,484,375.00, inclusive of a reservation deposit of P50,000.00.
Annotation of the Certificate of Sale (Entry No. 8087); and
The Contract to Sell, Section 3, provides:
(b) Respondents Q. P. San Diego Construction, Inc., and ASIATRUST are ordered to
credit all payments made by petitioner Gregorio de Vera Jr., to his outstanding balance,
and to deliver to petitioner the certificate of title over Unit 211-2C, Lourdes I Condominium, Section 3. PURCHASE PRICE AND TERMS OF PAYMENT.
upon full payment of the purchase price, free from all penalties, liens, charges, except
those accruing after finality of this Decision. (a) The purchase price of the UNIT, exclusive of interest shall be TWO MILLION FOUR
The award of nominal damages in favor of petitioner in the amount of P50,000.00 is HUNDRED EIGHTY FOUR THOUSAND THREE HUNDRED SEVENTY FIVE
AFFIRMED. SO ORDERED. (P2,484,375.00) Pesos, Philippine Currency, payable as follows:
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Amount Due Date January 20, 1989 107,626.25

Downpayment of 35% P869,531.25 TOTAL P1,614,843.80

Less: Reservation 50,000.00 July 16, 1988 By letter[5] dated March 16, 1989, addressed to GLPI, the
Sadhwanis offered to resell their rights to the condominium unit they purchased. The letter
Net Downpayment 819,531.25 Oct. 21, 1988 contained proposals which read:

Balance Payable P1,614,843,80 Per our verbal agreement, this comes to formalize the earnest intention of my clients,
Spouses Ramesh and Anita Sadhwani, to sell their rights over Unit R-84 of the Gold Loop
Towers, under the following terms and conditions:
thru the bank designated by the SELLER and subject to standard banking requisites
and approval.
ACQUISITION:

NOTE: In the event of non-approval of the loan by the bank, the BUYER commits to adopt
198.75 sq. m. @ 12,500 per sq. m. = P2,484,375.00
the Co-Terminus Payment Plan retroactive to the date of scheduled downpayment as
reflected above. This plan requires the payment of non-interest bearing equal monthly Less: 35% downpayment paid 11-15-88 869,531.25
Balance = 1,614,843.75
installments spreads on the full balance of the purchase price commencing 30 days after
the scheduled downpayment up to January 1990.[3]
Monthly amortization payable in = 89,713.54
GLPI informed the Sadhwanis that the bank loan accommodation which was to serve 18 months starting December 1988
until May 1990 @ 3% penalty for
as payment of the balance of the purchase price was disapproved, and thus, per the terms
of the Contract to Sell, the balance would become payable through the Co-terminus delayed amortization = _________3%
Payment Plan schedule of payments, in implementation of which petitioners were informed Penalty per month = P 2,691.41
by letter[4] dated March 15, 1989, which pertinently reads: x 3 months
Total Penalty = P 8,074.22

Despite diligent efforts and ardent representations on our part to have the approval of the
loan in accordance with the Contract, such approval could not be obtained for the reason RE-SALE:
that banks are not willing to extend a loan to be secured by a still ongoing
project. Accordingly, the balance of the purchase price should now be paid in equal 198.75 sq. m. @ P14,500.00
monthly installments until January 1990 pursuant to the aforequoted provision. The per sq. m. = P2,881,875.00
schedule of these payments in implementation of this Co-Terminus Payment Plan should
be as follows: Less: Balance = 1,614,843.75
1,267,031.25
Date of Payment Amount
Less: Interest for delayed
March 20, 1989 (Covering Amortization = 8,074.22
the period from Nov. 21,
1989 to March 21, 1989) P538,281.25 Net cash involved payable
April 20, 1989 107,626.25
in 6 months = P1,258,957.03
May 20, 1989 107,626.25
June 20, 1989 107,626.25
July 20, 1989 107,626.25 Petitioners rejected the offer on the resale of the rights over the condominium unit
August 20, 1989 107,626.25 proposed by private respondents because the offer was unreasonable, unfair and
September 20, 1989 107,626.25 inequitable.
October 20, 1989 107,626.25
November 20, 1989 107,626.25 On March 19 and April 25, 1989, respondent Ramesh J. Sadhwani demanded a copy
December 20, 1989 107,626.25 of the contract to sell, noting that his wife had no official document to show that she bought

a condominium unit from GLPI and there were conditions and/or stipulations in the contract
which she could not be expected to comply with, unless a copy of the same be given to
her. By letter dated May 22, 1989 to GLPI, respondent Sadhwanis counsel made a formal
demand for the delivery to him of a copy of the contract to sell.
Spouses Sadhwanis failed to pay any of the monthly amortizations in the payment
plan.
On August 7, 1989, petitioners sent a letter demanding payment of the balance
amounting to P1,614,814.80, and informed the Sadhwanis that GLPI will rescind the
Contract to Sell and automatically forfeit their down payment should they fail to pay within
five (5) days from receipt of the letter in accordance with section 8 of the contract to sell. [6]
On August 14, 1990, spouses Sadhwanis filed with the Housing and Land Use
Regulatory Board (hereinafter referred to as HLURB), a complaint for specific performance
with an alternative prayer for refund against GLPI. Spouses Sadhwanis prayed that they
be furnished with a copy of the contract to sell and allowed them to remit the balance of
the consideration to GLPI and to deliver to them the title and possession of the
condominium unit, or to be reimbursed of the amount they paid with interest and
damages.[7]
On October 8, 1990, petitioners filed with the HLURB an answer to the complaint and
subsequently, the parties submitted their position papers.
On October 2, 1992, HLURB Arbiter Roberto F. Paras rendered a decision, the
dispositive portion of which provides:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Ordering respondents Gold Loop Properties, Inc. and St. Martin to furnish complainants
with a copy of the subject Contract to Sell and to accept complainants payment of the
agreed purchase price balance of the Condominium unit described in the said Contract to
Sell;
2. Ordering said respondents to deliver possession of and to effect the transfer of title to
the subject condominium unit in favor of the complainants after full payment of the
purchase price;
In the event compliance with the above dispositive portion is no longer possible,
respondents instead are hereby ordered to jointly and severally reimburse complainants
the amount of Eight Hundred Seventy Eight Thousand Three Hundred Sixty Six Pesos and
Thirty Five Centavos (P878,366.35) representing complainants reservation deposit and
downpayment, with legal interest from the time of the filing of this complaint;
3. Ordering respondents jointly and severally to pay complainants (a) moral damages in
the amount of Ten Thousand Pesos (P10,000.00), and (b) attorneys fees in the amount of
Thirty Thousand Pesos (P30,000.00);
4. Dismissing respondents counterclaim for lack of merit.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
IT IS SO ORDERED.[8]
On November 16, 1992, petitioners appealed to the HLURB Board of
Commissioners, Quezon City while private respondents interposed a partial appeal
thereto.
On October 11, 1993, the HLURB Board of Commissioners rendered a decision, the
dispositive portion of which reads:
WHEREFORE, premises considered, respondents appeal is hereby DENIED and
complainants Partial Appeal is hereby given due course and the Decision subject of this
Appeal is hereby MODIFIED by DELETING the second paragraph of order number
two. Accordingly, complainants are directed to pay the balance of the purchase price,
without interest, within 30 days from receipt hereof while respondents are ordered to
accept said payment and turn over to complainants the unit subject of said contract to sell.
All other aspects of the decision is hereby AFFIRMED IN TOTO.
SO ORDERED.[9]
On January 7, 1994, petitioners elevated the case to the Office of the President.
On August 24, 1994, Senior Deputy Executive Secretary Leonardo A.
Quisumbing[10] rendered a decision[11] dismissing petitioners appeal. He also denied
petitioners motion for reconsideration[12] in a Resolution[13] dated December 22, 1994.
On March 22, 1995, petitioners filed with the Supreme Court a special civil action for
certiorari assailing the decision of the Senior Deputy Executive Secretary, Office of the
President. In a resolution dated April 4, 1995, the Court referred the case to the Court of
Appeals for proper disposition.[14]
On June 22, 1995, the Court of Appeals promulgated its decision dismissing the
petition.[15] The court ruled that the failure of petitioners to give respondents a copy of the
contract to sell sued upon, despite repeated demands therefor, and notwithstanding the
payment of P878,366.35, was a valid ground for private respondents to suspend their
payments. And given the fact that the contract to sell was in writing, the Sadhwanis, as
buyers, were entitled to a copy. Their request for a copy sprung from their desire to comply
with what was incumbent upon them to perform thereunder. While buyers do not need a
copy of the contract to know the stipulated purchase price, the schedule of payments and
the outstanding balance, the contract to sell, being an eight paged single-spaced
document, broken down into twelve sections, spelling out the parties respective monetary
and non-monetary rights and obligations, the buyers could not be expected to recall each
and every detail of the stipulations of the contract without a copy of the contract to guide
them.
On July 14, 1995, petitioners filed with the Court of Appeals a motion for
reconsideration.[16] However, the court denied the motion.[17]
Hence, this petition.[18]
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

Petitioners contend that private respondents are not entitled to suspend payment of condominium unit, the contract to sell, or what it represents is concrete proof of the
their monthly amortizations because of the alleged failure of petitioners to furnish them purchase and sale of the condominium unit.
copy of the contract to sell and that private respondents used the alleged failure to give
them copy of the contract as an excuse for defaulting in their contractual obligation to pay WHEREFORE, the Court hereby DENIES the petition for review on certiorari, for lack
the installments. Petitioners insist that private respondents were given copy of the contract of merit. The Court AFFIRMS the decision of the Court of Appeals in CA-G.R. SP No.
to sell. Petitioners pointed out that under the contract, they had the right to rescind the 36977 affirming the order for delivery of a copy of the contract to sell to private
contract in case private respondents breached the contract. respondents and to accept payment of the balance of the purchase
price and deliver title over the condominium unit to the private respondents upon full
In their Comment[19] and Memorandum,[20] private respondents alleged that they have payment of the balance of the purchase price.
not in fact received a copy of the contract to sell. Private respondents likewise averred that
petitioners assertion is premised on its completely wrong proposition that private No costs.
respondents had given petitioners a reason to rescind the contract to sell. What was really
SO ORDERED.
in issue was that it was petitioners that gave them sufficient and well-founded cause to
suspend payment of their monthly amortizations on the condominium unit.
We agree with private respondents.
The core issue actually boils down to the question of whether or not respondents
may suspend payment of their monthly amortizations due to failure of petitioners to furnish
them copy of the contract to sell.
Time and again, the Court had occasion to reiterate the well-established rule that
findings of fact of the Court of Appeals are conclusive on the parties and are not generally
reviewable by this Court.[21] We find no compelling reason to disturb the factual findings of
the Court of Appeals, in the absence of showing that the present case falls within the
exceptions to this rule.[22] When supported by sufficient evidence, the findings of fact of the
Court of Appeals affirming those of the trial court, are not to be disturbed on appeal. The
rationale behind this doctrine is that review of the findings of fact of the Court of Appeals is
not a function that the Supreme Court normally undertakes. In the case at bar, we
subscribe to the findings of fact of the Court of Appeals when it held that:

x x x Private respondents were indeed justified in suspending payment of their monthly

amortizations. The failure of petitioners to give them a copy of the Contract to Sell sued
upon, despite repeated demands therefor, and notwithstanding the private respondents
payment of P878,366.35 for the subject condominium unit was a valid ground for private
respondents to suspend their payments. x x x

xxx

And contrary to petitioners stance, records disclose that they were the ones who did
fraudulent acts against private respondents by entering into a Contract to Sell with the
latter and accepting their downpayment of P878,366.35, withholding a copy thereof for no
valid reason at all, and then threatening them with rescission and forfeiture, when private
respondents only suspended payment of the balance of the purchase price while waiting
for their copy of the Contract to Sell.[23]

The private respondents are entitled to a copy of the contract to sell, otherwise they
would not be informed of their rights and obligations under the contract. When the
Sadhwanis parted with P878,366.35 or more than one third of the purchase price for the

[G.R. No. 118822. July 28, 1997]
G.O.A.L., INC., petitioner, vs. COURT OF APPEALS, OFFICE OF THE RESIDENT
LEGAL AFFAIRS, HOUSING AND LAND USE REGULATORY BOARD,
RIZALINO SIMBILLO, WILLIAM ONG, HERMINIA MESINA, SELFA
MARTINEZ, FILOMENO TENG, RAFAEL JAVIER, FERNANDO DEL MUNDO,
MILDRED PAREJA, REMEDIOS LASQUETE, GEORGE CABIGAN, and
ARCADIO SAMPANG, respondents.
DECISION
BELLOSILLO, J.:
G. O. A. L., INC. (GOAL), in this petition for review on certiorari, seeks to set aside
part of the decision of the Court of Appeals dated 28 September 1994[1] which affirmed the
decision of the Office of the President Legal Affairs (OPLA) that earlier likewise affirmed
the decision of the Housing and Land Use Regulatory Board (HLURB). Petitioner confines
its petition to the construction of the fifth floor of Gemin I Condominium and all works
related thereto, including the issuance of title to private respondent Teng and providing
free parking spaces for the condominium units.[2]
On 23 May 1983 GOAL and the National Housing Authority (NHA) entered into an
agreement whereby NHA extended to GOAL a loan of P4.425 million for the construction
of Gemin I Condominium at 941 Gonzales St., Ermita, Manila.Sometime in 1984 a
Contract Agreement was entered into between GOAL and Matson International
Corporation for the construction of the condominium within one (1) year at the cost of P4.2
million. However, in the later part of 1984, the contractor abandoned the project with only
60% of it finished. In 1985 GOAL offered the condominium units for sale with private
respondents among its buyers. To remedy the situation brought about by the
abandonment of the project by the first contractor, GOAL subsequently pursued the
construction of the fifth floor with NHA granting additional funding on the condition that it
would hold on to the condominium certificates of title of private respondents.
In August 1989 private respondents filed with the Housing and Land Use Regulatory
Board (HLURB), Office of Appeals, Adjudication and Legal Affairs (OAALA), a complaint
against GOAL. Among the issues raised were the illegal construction of the fifth floor of
Gemin I Condominium, the failure to deliver the title of private respondent Filomeno Teng
despite his repeated demands, and the failure to provide adequate parking spaces for the
unit owners.
On 31 March 1989 OAALA rendered its decision ordering GOAL, inter alia, (a) to
stop the construction of the fifth floor, (b) to deliver the title of private respondent Teng, and
(c) to provide adequate parking space for the unit owners. [3]
On appeal to the Office of the President Legal Affairs (OPLA) and subsequently to
the Court of Appeals, the decision rendered by the HLURB-OAALA was affirmed in
toto. Petitioner's motion for reconsideration was denied. Hence this petition.
Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017
Petitioner imputes error to the Court of Appeals in not finding the true facts of the
case that greatly affected its decision, and its decision being contrary to law.
GOAL contends that the Court of Appeals failed to appreciate the fact that the
construction of the fifth floor was with the written approval of public respondent HLURB as
required by Sec. 22 of P.D. 957 which provides -
Sec. 22. Alteration of Plans. - No owner or developer shall change or alter the roads, open
spaces, infrastructures, facilities for public use and/or other form of subdivision
development as contained in the approved subdivision plan and/or represented in its
advertisements, without the permission of the Authority and the written conformity or
consent of the duly organized homeowners association, or in the absence of the latter, by
majority of the lot buyers in the subdivision (underscoring supplied).
The above provision is clear. We do not have to tussle with legal hermeneutics in the
interpretation of Sec. 22 of P.D. 957. The written approval of the National Housing
Authority alone is not sufficient. It must be coupled with the written conformity or consent of
the duly organized homeowners association or the majority of the lot buyers. Failing in this,
the construction of the fifth floor is violative of the decree invoked. The Court of Appeals
simply applied the law, and correctly so.
Petitioner likewise contends that it should not have been faulted for failing to deliver
the title to private respondent Teng as the proximate cause thereof was the abandonment
of the construction project by the first contractor, hence, due to force majeure.[4]
We cannot sustain petitioner. There is no one else to blame but itself. Upon full
payment of the agreed price, petitioner is mandated by law to deliver the title of the lot or
unit to the buyer. Both the Contract to Sell of petitioner and private respondents, and Sec.
25 of P.D. 957 state -
Sec. III (Contract to Sell). - Title and Ownership of Unit. Upon full payment by the vendees
of the full amount of the purchase price stipulated under Sec. III hereof, the assessments
and expenses under Sec. IV and otherwise upon compliance by the VENDEES of all
obligations therein, the VENDOR will convey to the VENDEE all rights and interests of the
former and to the Unit, subject hereof together with the interest in the common area and in
the Condominium Corporation appurtenant to such unit x x x x
Sec. 25, P.D. 957 - Issuance of Title. - The owner or developer shall deliver the title of the
lot or unit to the buyer upon full payment of the lot or unit x x x x In the event a mortgage
over the lot or unit is outstanding at the time of the issuance of the title to the buyer, the
owner or developer shall redeem the mortgage or the corresponding portion thereof within
six months from such issuance in order that the title over any paid lot or unit may be
secured and delivered to the buyer in accordance herewith.
Petitioner also attempts to justify its failure to deliver the certificate of title of private
respondent Teng by claiming that it used the title as part collateral for the additional loan
NHA had extended for the construction of the fifth floor.
The Court observes the frequent allusion of petitioner to its predicament brought
about by the abandonment of the project by the first contractor. But such is irrelevant in
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

light of Sec. 25 of P.D. 957 as well as of the Contract to Sell of the parties.While we
empathize with petitioner in its financial dilemma we cannot make innocent parties suffer
the consequences of the formers lack of business acumen. Upon full payment of a unit,
petitioner loses all its rights and interests to the unit in favor of the buyer. Consequently, it
has no right to use the certificate of title of respondent Teng as collateral for a new
loan. The title of Teng must be released to him as provided by law.
With respect to the second issue, petitioner contends that the decision of the Court of
Appeals is contrary to law considering that under Sec. 12-D, No. 2, Rule V of the
Implementing Rules of P.D. 957, what should be given for free are only off-street parking
spaces and not indoor parking areas.
Petitioner can hardly be excused for its failure to comply with the provisions of P.D.
957 by claiming ignorance of the requirements of the decree and that a mistake upon a
doubtful or difficult question of law may be the basis of good faith. Being engaged in a
business affected by P.D. 957, petitioner should be aware of its provisions and its
mandates which, as can be readily perceived, are clear, simple and unmistakable. [7]
WHEREFORE, finding no error in the Decision sought to be reviewed, the petition is
DENIED. Costs against petitioner.
SO ORDERED

Petitioner is wrong. It has for purposes of its own construed off-street to mean not
including indoor. On the other hand, the law does not exclude indoor parking. What it
specifically excludes is street parking. Therefore, parking may be in the basement or, in
the absence thereof, in the first floor.
Furthermore, at this point, a definition of terms may be necessary. In a condominium,
common areas and facilities are portions of the condominium property not included in the
units, whereas, a unit is a part of the condominium property which is to be subject to
private ownership.[5] Inversely, that which is not considered a unit should fall under
common areas and facilities.

Hence, the parking spaces not being subject to private ownership form part of the
common area over which the condominium unit owners hold undivided interest. As such,
petitioner cannot invoke Sec. I, Art. III, of the Bill of Rights which provides that No person
shall be deprived of life, liberty or property without due process of law. Petitioner alone
does not own the parking area. The parking space is owned in common by the developer
and the unit owners. Private respondents must be allowed to use the parking area.
Finally, petitioner contends that the payment of P10,000.00 as moral damages
and P5,000.00 as exemplary damages plus P5,000.00 as attorney's fees is too much of a
penalty. However, the Court of Appeals upheld these awards holding that -

In the light of the foregoing premises, we sense no error in the award of attorney's fees,
moral and exemplary damages, and administrative fines against petitioner. This is allowed
by the provisions of civil law and under Secs. 38 and 39 of P.D. 957:

Sec. 38. Administrative Fines. - The Authority may prescribe and impose fines not
exceeding ten thousand pesos for violations of the provisions of this Decree or any rule or
regulation thereunder. Fines shall be payable to the Authority and enforceable through
writs of execution in accordance with the provisions of the Rules of Court.

Sec. 39. Penalties - Any person who shall violate any of the provisions of this Decree
and/or any rule or regulation that may be issued pursuant to this Decree shall, upon
conviction, be punished by a fine of not more than twenty thousand (P20,000.00) pesos
and/or imprisonment of not more than ten years: Provided, that in the case of corporations,
partnership, cooperatives, or associations, the President, manager, or Administrator or the
person who has charge of the administration of the business shall be criminally
responsible for any violation of this Decree and/or the rules and regulations promulgated
pursuant thereto.[6]
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

ORTIGAS & COMPANY, G.R. No. 129822

LIMITED PARTNERSHIP, Ordinance 5, Series of 1966 (MO 5) which required it to designate appropriate recreational
Petitioner, Present:
PERALTA, J.,
and playground facilities at its former Capitol VI Subdivision (regarded as a residential
Acting Chairperson,*
- versus - BERSAMIN,**
ABAD, site), now the Pasig City side of the Ortigas Center. Further, the City alleged that despite
VILLARAMA,
JR.,*** and the fact that the plan was only approved by the Municipal Council as to layout, petitioner
PERLAS-
BERNABE, JJ. proceeded to develop the property without securing a final approval.
COURT OF APPEALS, HON. JESUS
G. BERSAMIRA as Judge-RTC of
Pasig City, Branch 166 and the Promulgated:
CITY OF PASIG,
Respondents. June 20, 2012 The City impleaded GPI as the party to whom Ortigas sold a piece of property within the

x --------------------------------------------------------------------------------------- x subdivision.

DECISION

ABAD, J.:
In answer, Ortigas alleged that its development plan for the subject land was for a

commercial subdivision, outside the scope of MO 5 that applied only to residential

This case resolves the question of jurisdiction of the Regional Trial Court over a complaint
subdivisions; that the City cannot assail the validity of that development plan after its
filed against a subdivision owner.
approval 25 years ago. Its development plan had been approved: (1) by the Department of

The Facts and the Case Justice through the Land Registration Commission on June 16, 1969; (2) by the Municipal

Council of Pasig under Resolution 128 dated May 27, 1969; and (3) by the Court of First
Petitioner Ortigas & Company, Limited Partnership (Ortigas), a realty company,
Instance of Rizal, Branch 25 in its Order dated July 11, 1969.
developed the Ortigas Center that straddled the three cities of Mandaluyong, Quezon, and

Pasig. This case concerns the Pasig City side of the commercial district known as the
Ortigas further alleged that only in 1984, 15 years after the approval of its plan, that the
Ortigas Center, known in 1969 as Capitol VI Subdivision.
National Housing Regulatory Commission imposed the open space requirement for

commercial subdivisions through its Rules and Regulations for Commercial Subdivision
In 1994 respondent City of Pasig (the City) filed a complaint against Ortigas and Greenhills
and Commercial Subdivision Development.
Properties, Inc. (GPI) for specific compliance before the Regional Trial Court (RTC) of

Pasig in Civil Case 64427. The City alleged that Ortigas failed to comply with Municipal
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

The case was heard on pre-trial but before it could be terminated, on January 23, 1996 The Issue Presented

Ortigas filed a motion to dismiss the case on the ground that the RTC had no jurisdiction
The sole issue in this case is whether or not the CA erred in affirming the lower courts
over it, such jurisdiction being in the Housing and Land Use Regulatory Board (HLURB) for
ruling that jurisdiction over the Citys action lies with the RTC, not with the HLURB.
unsound real estate business practices.

The Courts Ruling

On April 15, 1996 the RTC denied the motion to dismiss. [1] It held that HLURBs jurisdiction
Ortigas maintains that the HLURB has jurisdiction over the complaint since a land
pertained to disputes arising from transactions between buyers, salesmen, and subdivision
developer's failure to comply with its statutory obligation to provide open spaces
and condominium developers. In this case, the City is a local government unit seeking to
constitutes unsound real estate business practice that Presidential Decree (P.D.) 1344
enforce compliance with a municipal ordinance, an action that is not within the scope of the
prohibits. Executive Order 648 empowers the HLURB to hear and decide claims of
disputes cognizable by the HLURB. With the denial of its motion for reconsideration on
unsound real estate business practices against land developers.
August 7, 1996, Ortigas filed a petition for certiorari before the Court of Appeals (CA) to

challenge the RTCs actions.

Ultimately, whether or not the HLURB has the authority to hear and decide a
On February 18, 1997 the CA rendered judgment, affirming the RTCs denial of the motion
case is determined by the nature of the cause of action, the subject matter or property
[2]
to dismiss. The appellate court ruled that the City sought compliance with a statutory
involved, and the parties.[5] Section 1 of P.D. 1344[6] vests in the HLURB the exclusive
obligation enacted to promote the general welfare (Section 16, Local Government Code)
jurisdiction to hear and decide the following cases:
which invariably includes the preservation of open spaces for recreational
(a) unsound real estate business practices;
[3]
purposes. Since the City was not a buyer or one entitled to refund for the price paid for a (b) claims involving refund and any other claims filed by
subdivision lot or condominium unit buyer against the project owner,
lot, the dispute must fall under the jurisdiction of the RTC pursuant to Section 19 of The developer, dealer, broker, or salesman; and

Judiciary Reorganization Act of 1980.[4] (c) cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lots or condominium
units against the owner, developer, dealer, broker or salesman.

The CA denied Ortigas motion for reconsideration on June 27, 1997, prompting it to file the
Unlike paragraphs (b) and (c) above, paragraph (a) does not state which party
present petition for review.
can file a claim against an unsound real estate business practice. But, in the context of the
 Compiled by: SHEENA RHEA FAELNAR
Land Titles and Deeds (Finals) 2017

evident objective of Section 1, it is implicit that the unsound real estate business practice

would, like the offended party in paragraphs (b) and (c), be the buyers of lands involved in

development. The policy of the law is to curb unscrupulous practices in real estate trade

and business that prejudice buyers.

This position is supported by the Courts statement in Delos Santos v.

Sarmiento[7] that not every case involving buyers and sellers of subdivision lots or

condominium units can be filed with the HLURB. Its jurisdiction is limited to those cases

filed by the buyer or owner of a subdivision lot or condominium unit and based on any of

the causes of action enumerated in Section 1 of P.D. 1344.

Obviously, the City had not bought a lot in the subject area from Ortigas which

would give it a right to seek HLURB intervention in enforcing a local ordinance that

regulates the use of private land within its jurisdiction in the interest of the general

welfare. It has the right to bring such kind of action but only before a court of general

jurisdiction such as the RTC.

WHEREFORE, the Court DISMISSES the petition, AFFIRMS the Court of Appeals

Decision in CA-G.R. SP 42270 dated February 18, 1997, and ORDERS the Regional Trial

Court of Pasig City, Branch 166, to hear and decide the case before it with deliberate

dispatch.

SO ORDERED.