Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

L-28790 April 29, 1968

ANTONIO H. NOBLEJAS, as Commissioner of Land Registration, petitioner, vs. CLAUDIO TEEHANKEE, as Secretary of Justice, and RAFAEL M. SALAS, as Executive Secretary,respondents. Leandro Sevilla, Ramon C. Aquino and Lino M. Patajo for petitioner. Claudio Teehankee for and in his own behalf as respondent. REYES, J.B.L., Actg. C.J.: Petition for a writ of prohibition with preliminary injunction to restrain the Secretary of Justice from investigating the official actuations of the Commissioner of Land Registration, and to declare inoperative his suspension by the Executive Secretary pending investigation. The facts are not in dispute. Petitioner Antonio H. Noblejas is the duly appointed, confirmed and qualified Commissioner of Land Registration, a position created by Republic Act No. 1151. By the terms of section 2 of said Act, the said Commissioner is declared "entitled to the same compensation, emoluments and privileges as those of a Judge of the Court of First Instance." The appropriation laws (Rep. Acts 4642, 4856 and 5170) in the item setting forth the salary of said officer, use the following expression: 1. One Land Registration Commissioner with the rank and privileges of district judge P19,000.00. On March 7, 1968, respondent Secretary of Justice coursed to the petitioner a letter requiring him to explain in writing not later than March 9, 1968 why no disciplinary action should be taken against petitioner for "approving or recommending approval of subdivision, consolidation and consolidatedsubdivision plans covering areas greatly in excess of the areas covered by the original titles." Noblejas answered and apprised the Secretary of Justice that, as he enjoyed the rank, privileges, emoluments and compensation of a Judge of the Court of First Instance, he could only be suspended and investigated in the same manner as a Judge of the Courts of First Instance, and, therefore, the papers relative to his case should be submitted to the Supreme Court, for action thereon conformably to section 67 of the Judiciary Act (R. A. No. 296) and Revised Rule 140 of the Rules of Court. On March 17, 1968, petitioner Noblejas received a communication signed by the Executive Secretary, "by authority of the President", whereby, based on "finding that a prima facie case exists against you for gross negligence and conduct prejudicial to the public interest", petitioner was "hereby suspended, upon receipt hereof, pending investigation of the above charges." On March 18, 1968, petitioner applied to this Court, reiterating the contentions advanced in his letter to the Secretary of Justice, claiming lack of jurisdiction and abuse of discretion, and praying for restraining writs. In their answer respondents admit the facts but denied that petitioner, as Land

Registration Commissioner, exercises judicial functions, or that the petitioner may be considered a Judge of First Instance within the purview of the Judiciary Act and Revised Rules of Court 140; that the function of investigating charges against public officers is administrative or executive in nature; that the Legislature may not charge the judiciary with non-judicial functions or duties except when reasonably incidental to the fulfillment of judicial duties, as it would be in violation of the principle of the separation of powers. Thus, the stark issue before this Court is whether the Commissioner of Land Registration may only be investigated by the Supreme Court, in view of the conferment upon him by the Statutes heretofore mentioned (Rep. Act 1151 and Appropriation Laws) of the rank and privileges of a Judge of the Court of First Instance. First to militate against petitioner's stand is the fact that section 67 of the Judiciary Act providing for investigation, suspension or removal of Judges, specifically recites that "No District Judge shall be separated or removed from office by the President of the Philippines unless sufficient cause shall exist in the judgment of the Supreme Court . . ." and it is nowhere claimed, much less shown, that the Commissioner of Land Registration is a District Judge, or in fact a member of the Judiciary at all. In the second place, petitioner's theory that the grant of "privileges of a Judge of First Instance" includes by implication the right to be investigated only by the Supreme Court and to be suspended or removed upon its recommendation, would necessarily result in the same right being possessed by a variety of executive officials upon whom the Legislature had indiscriminately conferred the same privileges. These favoured officers include (a) the Judicial Superintendent of the Department of Justice (Judiciary Act, sec. 42); (b) the Assistant Solicitors General, seven in number (Rep. Act No. 4360); (c) the City Fiscal of Quezon City (R.A. No. 4495); (d) the City Fiscal of Manila (R. A. No. 4631) and (e) the Securities and Exchange Commissioner (R. A. No. 5050, s. 2). To adopt petitioner's theory, therefore, would mean placing upon the Supreme Court the duty of investigating and disciplining all these officials, whose functions are plainly executive, and the consequent curtailment by mere implication from the Legislative grant, of the President's power to discipline and remove administrative officials who are presidential appointees, and which the Constitution expressly placed under the President's supervision and control (Constitution, Art. VII, sec. 10[i]). Incidentally, petitioner's stand would also lead to the conclusion that the Solicitor General, another appointee of the President, could not be removed by the latter, since the Appropriation Acts confer upon the Solicitor General the rank and privileges of a Justice of the Court of Appeals, and these Justices are only removable by the Legislature, through the process of impeachment (Judiciary Act, sec. 24, par. 2). In our opinion, such unusual corollaries could not have been intended by the Legislature when it granted these executive officials the rank and privileges of Judges of First Instance. This conclusion gains strength when account is taken of the fact that in the case of the Judges of the Court of Agrarian Relations and those of the Court of Tax Appeals, the organic statutes of said bodies (Republic Act 1267, as amended by Act 1409; Rep. Act No. 1125) expressly provide that they are to be removed from office for the same causes and in the same manner provided by law for Judges of First Instance", or "members of the judiciary of appellate rank". The same is true of Judges of the Court of Agrarian Relations (Comm. Act No. 103) and of the Commissioner of Public Service (Public Service Act, Sec. 3). It is thereby shown that where the legislative design is to make the suspension or removal procedure prescribed for Judges of First Instance applicable to other officers, provision to that effect is made in plain and unequivocal language. But the more fundamental objection to the stand of petitioner Noblejas is that, if the Legislature had really intended to include in the general grant of "privileges" or "rank and privileges of Judges of the

Court of First Instance" the right to be investigated by the Supreme Court, and to be suspended or removed only upon recommendation of that Court, then such grant of privileges would be unconstitutional, since it would violate the fundamental doctrine of separation of powers, by charging this court with the administrative function of supervisory control over executive officials, and simultaneously reducing pro tanto the control of the Chief Executive over such officials. Justice Cardozo ruled in In re Richardson et al., Connolly vs. Scudder (247 N. Y. 401, 160 N. E. 655), saying: There is no inherent power in the Executive or Legislature to charge the judiciary with administrative functions except when reasonably incidental to the fulfillment of judicial duties. The United States Supreme Court said in Federal Radio Commission vs. General Electric Co., et al., 281 U.S. 469, 74 Law. Ed., 972, But this court cannot be invested with jurisdiction of that character, whether for purposes of review or otherwise. It was brought into being by the judiciary article of the Constitution, is invested with judicial power only and can have no jurisdiction other than of cases and controversies falling within the classes enumerated in that article. It cannot give decisions which are merely advisory; nor can it exercise or participate in the exercise of functions which are essentially legislative or administrative. Keller v. Potomac Electric Power Co., supra (261 U.S. 444, 67 L. ed. 736, 43 Sup. Ct. Rep. 445) and cases cited; Postum Cereal Co. vs. California Fig Nut Co. supra (272 U.S. 700, 701, 71 L. ed. 481, 47 Sup. Ct. Rep. 284); Liberty Warehouse Co. v. Grannis, 273 U.S. 70, 74, 71 L. ed. 541, 544, 47 Sup. Ct. Rep. 282; Willing v. Chicago Auditorium Asso. 277 U.S. 274, 289, 72 L. ed. 880, 884, 48 Sup. Ct. Rep. 507; Ex parte Bakelite Corp. 279 U.S. 438, 449, 73 L. ed. 789, 793, 49 Sup. Ct. Rep. 411. (Federal Radio Commission v. General Electric Company, 281 U.S. 469, 74 L. ed. 972.) (Emphasis supplied.) In this spirit, it has been held that the Supreme Court of the Philippines and its members should not and cannot be required to exercise any power or to perform any trust or to assume any duty not pertaining to or connected with the administration of judicial functions; and a law requiring the Supreme Court to arbitrate disputes between public utilities was pronounced void in Manila Electric Co. vs. Pasay Transportation Co. (57 Phil. 600).
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Petitioner Noblejas seeks to differentiate his case from that of other executive officials by claiming that under Section 4 of Republic Act No. 1151, he is endowed with judicial functions. The section invoked runs as follows: Sec. 4. Reference of doubtful matters to Commissioner of Land Registration. When the Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be made in pursuance of any deed, mortgage, or other instrument presented to him for registration, or where any party in interest does not agree with the Register of Deeds with reference to any such matter, the question shall be submitted to the Commissioner of Land Registration either upon the certification of the Register of Deeds, stating the question upon which he is in doubt, or upon the suggestion in writing by the party in interest; and thereupon the Commissioner, after consideration of the matter shown by the records certified to him, and in case of registered lands, after notice to the parties and hearing, shall enter an order prescribing the step to be taken or memorandum to be made. His decision in such cases shall be conclusive and binding upon all Registers of Deeds: Provided, further, That, when a party in interest disagrees with the ruling or resolution of the Commissioner and the issue

involves a question of law, said decision may be appealed to the Supreme Court within thirty days from and after receipt of the notice thereof. Serious doubt may well be entertained as to whether the resolution of a consulta by a Register of Deeds is a judicial function, as contrasted with administrative process. It will be noted that by specific provision of the section, the decision of the Land Registration Commissioner "shall be conclusive and binding upon all Registers of Deeds" alone, and not upon other parties. This limitation1 in effect identifies the resolutions of the Land Registration Commissioner with those of any other bureau director, whose resolutions or orders bind his subordinates alone. That the Commissioner's resolutions are appealable does not prove that they are not administrative; any bureau director's ruling is likewise appealable to the corresponding department head. But even granting that the resolution of consultas by the Register of Deeds should constitute a judicial (or more properly quasi judicial) function, analysis of the powers and duties of the Land Registration Commissioner under Republic Act No. 1151, sections 3 and 4, will show that the resolution of consultas are but a minimal portion of his administrative or executive functions and merely incidental to the latter. Conformably to the well-known principle of statutory construction that statutes should be given, whenever possible, a meaning that will not bring them in conflict with the Constitution,2 We are constrained to rule that the grant by Republic Act 1151 to the Commissioner of Land Registration of the "same privileges as those of a Judge of the Court of First Instance" did not include, and was not intended to include, the right to demand investigation by the Supreme Court, and to be suspended or removed only upon that Court's recommendation; for otherwise, the said grant of privileges would be violative of the Constitution and be null and void. Consequently, the investigation and suspension of the aforenamed Commissioner pursuant to sections 32 and 34 of the Civil Service Law (R. A. 2260) are neither abuses of discretion nor acts in excess of jurisdiction. WHEREFORE, the writs of prohibition and injunction applied for are denied, and the petition is ordered dismissed. No costs. Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur. Concepcion, C.J., is on leave.
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FIRST DIVISION

[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 theTorrens 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 andREVERSING 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; Declaring Gloria Villafania [liable] to pay the following to [Respondent] Romana de Vera and to [Petitioner-]Spouses [Noel and Julie] Abrigo, to wit:

2.

As to [Respondent] Romana de Vera:

1.

5.

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 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; 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 TignoSalazar 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.

4.

On October 16, 1997, Rosenda Tigno-Salazar and Rosita Cave-Go, sold the house and lot to the herein [Petitioner-Spouses Noel and Julie Abrigo]. On October 23, 1997, Gloria Villafania sold the same house and lot to Romana de Vera x x x. Romana de Vera registered the sale and as a consequence, TCT No. 22515 was issued in her name. 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, Pangasinan docketed as Civil Case No. 1452. On February 25, 1998, the parties therein 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] 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 Villafania]. After the trial on the merits, the lower court rendered the assailed Decision dated January 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. Not contented with the assailed Decision, both parties [appealed to the CA].[6] 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 CaveGo, 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] Hence, this Petition.[9] Issues Petitioners raise for our consideration the issues below: 1. Whether or not the deed of sale executed by Gloria Villafania in favor of [R]espondent Romana de Vera is valid. 2. Whether or not the [R]espondent Romana de Vera is a purchaser for value in good faith. 3. Who between the petitioners and respondent has a better title over the property in question.[10] In the main, the issues boil down to who between petitioner-spouses and respondent has a better right to the property. The Courts Ruling The Petition is bereft of merit. Main Issue: Better Right over the Property 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 (TignoSalazar 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. P30522.[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 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 st eps 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. Santiago affirmed 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). xxx xxx xxx

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 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 theTorrens 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 The Court of Appeals examined the facts to determine whether respondent was an innocent purchaser for value.[47] After its factual findings revealed that Respondent De Vera was in good faith, it explained thus: x x x. Gloria Villafania, [Respondent] De Veras vendor, appears to be the registered owner. The subject land was, and still is, registered in the name of Gloria Villafania. There is nothing in her certificate of title and in the circumstances of the transaction or sale which warrant [Respondent] De Vera in supposing that she need[ed] to look beyond the title. She had no notice of the earlier sale of the land to [petitioners]. She ascertained and verified that her vendor was the sole owner and in possession of the subject property by examining her vendors title in the Registry of Deeds and actually going to the premises. There is no evidence in the record showing that when she bought the land on October 23, 1997, she 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 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 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 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] We find no reason to disturb these findings, which petitioners have not rebutted. Spouses Abrigo base their position only on the general averment that respondent 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]

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 first sale when she conducted an ocular inspection. Thus, good faith on respondents part stands. WHEREFORE, the Petition is DENIED and Decision AFFIRMED. Costs against petitioners. SO ORDERED. the assailed

THIRD DIVISION SPS. LITA DE LEON and FELIX RIO TARROSA, Petitioners, - versus G.R. No. 185063 Present: YNARES-SANTIAGO, Chairperson, CHICO-NAZARIO, VELASCO, JR., NACHURA, and PERALTA, JJ. Promulgated:

ANITA B. DE LEON, DANILO B. DE LEON, and VILMA B. DELEON, Respondents.

July 23, 2009 x-----------------------------------------------------------------------------------------x DECISION VELASCO, JR., J.: The Case Before us is a Petition for Review on Certiorari under Rule 45 assailing and seeking to set aside the Decision[1] and Resolution[2] dated August 27, 2008 and October 20, 2008, respectively, of the Court of Appeals (CA) in CA-G.R. CV No. 88571. The CA affirmed with modification the October 4, 2006 Decision[3] in Civil Case No. Q04-51595 of the Regional Trial Court (RTC), Branch 22 in Quezon City. The Facts On July 20, 1965, Bonifacio O. De Leon, then single, and the Peoples Homesite and Housing Corporation (PHHC) entered into a Conditional Contract to Sell for the purchase on installment of a 191.30 square-meter lot situated in Fairview, Quezon City. Subsequently, on April 24, 1968, Bonifacio married Anita de Leon in a civil rite officiated by the Municipal Mayor of Zaragosa, Nueva Ecija. To this union were born Danilo and Vilma.

Following the full payment of the cost price for the lot thus purchased, PHHC executed, on June 22, 1970, a Final Deed of Sale in favor of Bonifacio. Accordingly, Transfer Certificate of Title (TCT) No. 173677 was issued on February 24, 1972 in the name of Bonifacio, single. Subsequently, Bonifacio, for PhP 19,000, sold the subject lot to her sister, Lita, and husband Felix Rio Tarrosa (Tarrosas), petitioners herein. The conveying Deed of Sale dated January 12, 1974 (Deed of Sale) did not bear the written consent and signature of Anita. Thereafter, or on May 23, 1977, Bonifacio and Anita renewed their vows in a church wedding at St. John the Baptist Parish in San Juan, Manila. On February 29, 1996, Bonifacio died. Three months later, the Tarrosas registered the Deed of Sale and had TCT No. 173677 canceled. They secured the issuance in their names of TCT No. N173911 from the Quezon City Register of Deeds. Getting wind of the cancellation of their fathers title and the issuance of TCT No. N-173911, Danilo and Vilma filed on May 19, 2003 a Notice of Adverse Claim before the Register of Deeds of Quezon City to protect their rights over the subject property. Very much later, Anita, Danilo, and Vilma filed a reconveyance suit before the RTC in Quezon City. In their complaint, Anita and her children alleged, among other things, that fraud attended the execution of the Deed of Sale and that subsequent acts of Bonifacio would show that he was still the owner of the parcel of land. In support of their case, they presented, inter alia, the following documents:
a. A Real Estate Mortgage execution by Bonifacio in favor of spouses Cesar Diankinay and Filomena Almero on July 22, 1977. b. A Civil Complaint filed by Bonifacio against spouses Cesar Diankinay and Filomena Almero on November 27, 1979 for nullification of the Real Estate Mortgage. c. The Decision issued by the Court of First Instance of Rizal, Quezon City, promulgated on July 30, 1982, nullifying the Real Estate Mortgage.[4]

The Tarrosas, in their Answer with Compulsory Counterclaim, averred that the lot Bonifacio sold to them was his exclusive property inasmuch as he was still single when he acquired it from PHHC. As further alleged, they were not aware of the supposed marriage between Bonifacio and Anita at the time of the execution of the Deed of Sale. After several scheduled hearings, both parties, assisted by their respective counsels, submitted a Joint Stipulation of Facts with Motion, to wit:
1. The parties have agreed to admit the following facts: a. Bonifacio O. De Leon, while still single x x x, purchased from the [PHHC] through a Conditional Contract to Sell on July 20, 1965 a parcel of land with an area of 191.30 square meters situated in Fairview, Quezon City for P841.72; b. On April 24, 1968, Bonifacio O. De Leon married plaintiff Anita B. De Leon before the Municipal Mayor of Zaragosa, Nueva Ecija. Both parties stipulate that said marriage is valid and binding under the laws of the Philippines; c. On June 22, 1970, Bonifacio O. De Leon paid [PHHC] the total amount of P1,023.74 x x x. The right of ownership over the subject parcel of land was transferred to the late Bonifacio O. De Leon on June 22, 1970, upon the full payment of the total [price] of P1,023.74 and upon execution of the Final Deed of Sale; d. After full payment, Bonifacio O. De Leon was issued [TCT] No. 173677 on February 24, 1972; e. On January 12, 1974, Bonifacio O. De Leon executed a Deed of Sale in favor of defendants-spouses Felix Rio Tarrosa and Lita O. De Leon disposing the parcel of land under TCT No. 173677 for valuable consideration amount of P19,000.00 and subscribed before Atty. Salvador R. Aguinaldo who was commissioned to [notarize] documents on said date. The parties stipulate that the Deed of Sale is valid and genuine. However, plaintiff Anita De Leon was not a signatory to the Deed of Sale executed on January 12, 1974; f. That plaintiff Anita B. De Leon and the late Bonifacio O. De Leon were married in church rites on May 23, 1977 x x x; g. The late Bonifacio O. De Leon died on February 29, 1996 at the UST Hospital, Espaa, Manila; h. The said Deed of Sale executed on January 12, 1974 was registered on May 8, 1996 before the Office of the Register of Deeds of Quezon

City and [TCT] No. N-173911 was issued to Lita O. De Leon and Felix Rio Tarrosa.[5]

The Ruling of the Trial Court On October 4, 2006, the RTC, on the finding that the lot in question was the conjugal property of Bonifacio and Anita, rendered judgment in favor of Anita and her children. The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiffs and against defendants in the following manner: (1) Declaring the Deed of Sale dated January 12, 1974 executed by the late Bonifacio O. De Leon in favor of defendants-spouses Lita De Leon and Felix Rio Tarrosa void ab initio; (2) Directing the Register of Deed of Quezon City to cancel Transfer Certificate of Title No. N-173911 in the name of Lita O. De Leon, married to Felix Rio Tarrosa and restore Transfer Certificate of Title No. 173667 in the name of Bonifacio O. De Leon; (3) sums: (a) (b) (c) (d) P25,000.00 as moral damages; P20,000.00 as exemplary damages; P50,000.00 as attorneys fees plus appearance fee of P2,500.00 per court appearance; Costs of this suit. Ordering the defendants-spouses to pay plaintiffs the following

SO ORDERED.

Aggrieved, the Tarrosas appealed to the CA. As they would submit, the RTC erred:
(1) (2) (3) (4) (5) in finding for the plaintiffs-appellees by declaring that the land subject matter of the case is conjugal property; in not declaring the land as the exclusive property of Bonifacio O. De Leon when sold to defendant-appellants; in ruling that defendant-appellants did not adduce any proof that the property was acquired solely by the efforts of Bonifacio O. De Leon; in declaring that one-half of the conjugal assets does not vest to Bonifacio O. De Leon because of the absence of liquidation; in cancelling TCT No. N-173911 and restored TCT No. [173677] in the name of Bonifacio O. De Leon;

(6)

in awarding moral and exemplary damages and attorneys fees to the plaintiffs-appellees.[6]

The Ruling of the Appellate Court On August 27, 2008, the CA rendered a decision affirmatory of that of the RTC, save for the award of damages, attorneys fees, and costs of suit which the appellate court ordered deleted. The fallo of the CA decision reads:
WHEREFORE, in view of the foregoing, the assailed decision dated October 4, 2006, of the Regional Trial Court, Branch 22, Quezon City in Civil Case No. Q-04-51595 is hereby AFFIRMED with MODIFICATION, in that the award of moral and exemplary damages as well as attorneys fees, appearance fee and costs of suit are hereby DELETED. SO ORDERED.

Just like the RTC, the CA held that the Tarrosas failed to overthrow the legal presumption that the parcel of land in dispute was conjugal. The appellate court held further that the cases they cited were inapplicable. As to the deletion of the grant of moral and exemplary damages, the CA, in gist, held that no evidence was adduced to justify the award. Based on the same reason, it also deleted the award of attorneys fees and costs of suit. The Tarrosas moved but was denied reconsideration by the CA in its equally assailed resolution of October 20, 2008. Hence, they filed this petition. The Issues
I Whether the [CA] gravely erred in concluding that the land purchased on installment by Bonifacio O. De Leon before marriage although some installments were paid during the marriage is conjugal and not his exclusive property. II

Whether the [CA] gravely erred in ruling that the Lorenzo, et al. vs. Nicolas, et al., and Alvarez vs. Espiritu cases do not apply in the case at bar because in the latter the land involved is not a friar land unlike in the former. III Whether the [CA] gravely erred in affirming the decision of the trial court a quo which ruled that petitioners did not adduce any proof that the land was acquired solely by the efforts of Bonifacio O. De Leon. IV Whether the court of appeals gravely erred in affirming the decision of the trial court which ruled that one-half (1/2) of the conjugal assets do not vest to Bonifacio O. De Leon because of the absence of liquidation.

Our Ruling The petition lacks merit.

The Subject Property is the Conjugal Property of Bonifacio and Anita The first three issues thus raised can be summed up to the question of whether or not the subject property is conjugal. Petitioners assert that, since Bonifacio purchased the lot from PHHC on installment before he married Anita, the land was Bonifacios exclusive property and not conjugal, even though some installments were paid and the title was issued to Bonifacio during the marriage. In support of their position, petitioners citeLorenzo v. Nicolas[7] and Alvarez v. Espiritu.[8] We disagree. Article 160 of the 1950 Civil Code, the governing provision in effect at the time Bonifacio and Anita contracted marriage, provides that all property of the

marriage is presumed to belong to the conjugal partnership unless it is proved that it pertains exclusively to the husband or the wife. For the presumption to arise, it is not, as Tan v. Court of Appeals[9] teaches, even necessary to prove that the property was acquired with funds of the partnership. Only proof of acquisition during the marriage is needed to raise the presumption that the property is conjugal. In fact, even when the manner in which the properties were acquired does not appear, the presumption will still apply, and the properties will still be considered conjugal.[10] In the case at bar, ownership over what was once a PHHC lot and covered by the PHHC-Bonifacio Conditional Contract to Sell was only transferred during the marriage of Bonifacio and Anita. It is well settled that a conditional sale is akin, if not equivalent, to a contract to sell. In both types of contract, the efficacy or obligatory force of the vendors obligation to transfer title is subordinated to the happening of a future and uncertain event, usually the full payment of the purchase price, so that if the suspensive condition does not take place, the parties would stand as if the conditional obligation had never existed.[11] In other words, in a contract to sell ownership is retained by the seller and is not passed to the buyer until full payment of the price, unlike in a contract of sale where title passes upon delivery of the thing sold.[12] Such is the situation obtaining in the instant case. The conditional contract to sell executed by and between Bonifacio and PHHC on July 20, 1965 provided that ownership over and title to the property will vest on Bonifacio only upon execution of the final deed of sale which, in turn, will be effected upon payment of the full purchase price, to wit:
14. Titles to the property subject of this contract remains with the CORPORATION and shall pass to, and be transferred in the name of the APPLICANT only upon the execution of the final Deed of Sale provided for in the next succeeding paragraph. 15. Upon the full payment by the APPLICANT of the price of the lot above referred to together with all the interest due thereon, taxes and other charges, and upon his faithful compliance with all the conditions of this contract the CORPORATION agrees to execute in favor of the APPLICANT a final deed of sale of the aforesaid land, and the APPLICANT agrees to accept said deed, as full performance by the CORPORATION of its covenants and undertakings hereunder.[13] x x x

Evidently, title to the property in question only passed to Bonifacio after he had fully paid the purchase price on June 22, 1970. This full payment, to stress, was made more than two (2) years after his marriage to Anita on April 24, 1968. In net effect, the property was acquired during the existence of the marriage; as such, ownership to the property is, by law, presumed to belong to the conjugal partnership. Such presumption is rebuttable only with strong, clear, categorical, and convincing evidence.[14] There must be clear evidence of the exclusive ownership of one of the spouses,[15] and the burden of proof rests upon the party asserting it.[16] Petitioners argument that the disputed lot was Bonifacios exclusive property, since it was registered solely in his name, is untenable. The mere registration of a property in the name of one spouse does not destroy its conjugal nature.[17] What is material is the time when the property was acquired. Thus, the question of whether petitioners were able to adduce proof to overthrow the presumption is a factual issue best addressed by the trial court. As a matter of long and sound practice, factual determinations of the trial courts,[18] especially when confirmed by the appellate court, are accorded great weight by the Court and, as rule, will not be disturbed on appeal, except for the most compelling reasons.[19] Petitioners have not, as they really cannot, rebut the presumptive conjugal nature of the lot in question. In this regard, the Court notes and quotes with approval the following excerpts from the trial courts disposition:
The defendants, however, did not adduce any proof that the property in question was acquired solely by the efforts of [Bonifacio]. The established jurisprudence on the matter leads this Court to the conclusion that the property involved in this dispute is indeed the conjugal property of the deceased [Bonifacio] De Leon. In fact, defendant even admitted that [Bonifacio] brought into his marriage with plaintiff Anita the said land, albeit in the concept of a possessor only as it was not yet registered in his name. The property was registered only in 1972 during the existence of the marriage. However, the absence of evidence on the source of funding has called for the application of the presumption under Article 160 in favor of the plaintiffs.[20]

The cases petitioners cited are without governing applicability to this case simply because they involved a law specifically enacted to govern the disposition

of and ownership of friar lands. In Lorenzo, the Court held that the pervading legislative intent of Act No. 1120 is to sell the friar lands acquired by the Government to actual settlers and occupants of the same.[21] The Court went on further to say in Alvarez that under the Friar Lands Act of 1120, the equitable and beneficial title to the land passes to the purchaser the moment the first installment is paid and a certificate of sale is issued.[22] Plainly, the said cases are not applicable here considering that the disputed property is not friar land. There can be no quibbling that Anitas conformity to the sale of the disputed lot to petitioners was never obtained or at least not formally expressed in the conveying deed. The parties admitted as much in their Joint Stipulation of Facts with Motion earlier reproduced. Not lost on the Court of course is the fact that petitioners went to the process of registering the deed after Bonifacios death in 1996, some 22 years after its execution. In the interim, petitioners could have had workbut did nottowards securing Anitas marital consent to the sale. It cannot be over-emphasized that the 1950 Civil Code is very explicit on the consequence of the husband alienating or encumbering any real property of the conjugal partnership without the wifes consent.[23] To a specific point, the sale of a conjugal piece of land by the husband, as administrator, must, as a rule, be with the wifes consent. Else, the sale is not valid. So it is that in several cases we ruled that the sale by the husband of property belonging to the conjugal partnership without the consent of the wife is void ab initio, absent any showing that the latter is incapacitated, under civil interdiction, or like causes. The nullity, as we have explained, proceeds from the fact that sale is in contravention of the mandatory requirements of Art. 166 of the Code.[24] Since Art. 166 of the Code requires the consent of the wife before the husband may alienate or encumber any real property of the conjugal partnership, it follows that the acts or transactions executed against this mandatory provision are void except when the law itself authorized their validity.[25] Accordingly, the Deed of Sale executed on January 12, 1974 between Bonifacio and the Tarrosas covering the PHHC lot is void. Interest in the Conjugal Partnership Is Merely Inchoate until Liquidation As a final consideration, the Court agrees with the CA that the sale of onehalf of the conjugal property without liquidation of the partnership is void. Prior to the liquidation of the conjugal partnership, the interest of each spouse in the

conjugal assets is inchoate, a mere expectancy, which constitutes neither a legal nor an equitable estate, and does not ripen into a title until it appears that there are assets in the community as a result of the liquidation and settlement.[26] The interest of each spouse is limited to the net remainder or remanente liquido (haber ganancial) resulting from the liquidation of the affairs of the partnership after its dissolution.[27] Thus, the right of the husband or wife to one-half of the conjugal assets does not vest until the dissolution and liquidation of the conjugal partnership, or after dissolution of the marriage, when it is finally determined that, after settlement of conjugal obligations, there are net assets left which can be divided between the spouses or their respective heirs.[28] Therefore, even on the supposition that Bonifacio only sold his portion of the conjugal partnership, the sale is still theoretically void, for, as previously stated, the right of the husband or the wife to one-half of the conjugal assets does not vest until the liquidation of the conjugal partnership. Nevertheless, this Court is mindful of the fact that the Tarrosas paid a valuable consideration in the amount of PhP 19,000 for the property in question. Thus, as a matter of fairness and equity, the share of Bonifacio after the liquidation of the partnership should be liable to reimburse the amount paid by the Tarrosas. It is a well-settled principle that no person should unjustly enrich himself at the expense of another.[29] WHEREFORE, the petition is DENIED. The CA Decision in CA-G.R. CV No. 88571 is AFFIRMED. Costs against petitioners. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-17956 September 30, 1963

ELISA D. GABRIEL, petitioner-appellee, vs. REGISTER OF DEEDS OF RIZAL, respondent, JUANITA R. DOMINGO, oppositor-appellant. Romualdo D. Celestra for petitioner-appellee. Balcos, Salazar & Associates for oppositor-appellant.

PAREDES, J.: On January 4, 1960, petitioner herein Elisa D. Gabriel, filed with the Register of Deeds of Manila, an Adverse claim, against the properties registered in the name of oppositor-appellant, Juanita R. Domingo, her sister. As grounds for the adverse claim, petitioner allege Notwithstanding the registration of the foregoing properties in the name of Juanita R. Domingo, the same properties have been included in the amended inventory of the estate of the late Antonia Reyes Vda. de Domingo, filed by Elisa Domingo de Gabriel1 as they are in fact properties acquired by the deceased during her lifetime. The registration of the titles of these properties,; should have been made in the name of said Antonia Reyes Vda. de Dominga, but due to commission of fraud and deceit, by said Juanita R. Domingo, who was then living in the same house with the deceased, all the titles of the above stated properties were registered instead in her name, thus depriving herein adverse claimant who is likewise an heir of Antonia Reyes Vda. de Domingo of her lawful rights, interests and participations over said properties. On the same date, a similar notice of adverse claim was presented by petitioner with the Register of Deeds of Rizal, on the properties registered in the name of Juanita R. Domingo, located in Rizal Province, the ground for which was stated as follows The foregoing properties an included in the amended inventory of the estate of their late mother Antonia Reyes Vda, de Domingo, who is the true owner of said properties, and considering that the registrations in the name of Juanita R. Domingo were only made fraudulently, thus depriving herein adverse claimant of her lawful rights, interest and participations over said properties. For the adverse claim on the Manila properties, Domingo presented an opposition, claiming that the Adverse claim was instituted for (1) Harassment;(2) Had no legal basis; and (3) Had done and will do irreparable loss her. The Register of Deeds of Manila, elevated the matter to the Land Registration Commission en Consulta, where in he stated

Because the undersigned is in doubt as to whether the registration of the claim is proper determination by this Commission. Oppositor Domingo also asked that the adverse claim of Gabriel on her Rizal properties be denied, contending that same was presented only to embarrass her that said properties were acquired by her pursuant to an extrajudicial partition in which the petitioner Gabriel and their mother (Antonia), were signatories. On January 13, 1960, the Register of Deeds of Rizal denied registration of the Notice of Adverse Claim, stating P.E. No. 90080 NOTICE OF ADVERSE CLAIM has have been found to be legally defective or otherwise not sufficient in law and is/are therefore, hereby denied on the following ground: Where there are other provisions of remedies under this Act, the affidavit of adverse claim is not applicable. Under date of January 21, 1960, Elisa D. Gabriel appealed the above denial to the Land Registration Commission.
1awphl.nt

On February 17, 1960, the Register of Deeds of Rizal in his letter transmitting the case to the LRC, tried justify his denial to annotate the affidavit of Adverse claim, by pointing out that such procedure was not proper contending that petitioner's case does not come under the provisions of Section 110 of Act 496. if at all, he claims petitioner should have availed Section 98 thereof. On March 7, 1960, the LRC heard the two cases, and before any of the parties could file his memorandum, the Register of Deeds of Rizal, presented a Supplemental Memorandum, reiterating his stand. In his reply, Gabriel clarified the issue, stating that the question at bar concerns the fraudulent registration by oppositor, of the properties subject of the Adverse claims, and not their fraudulent acquisition. The Land Registration Commission, on April 29, 1960, issued a resolution, the pertinent portions of which are reproduced hereinbelow The only question to be resolved by this Commission in these related consultas the registration of the two notices of adverse claim filed with the Registries of Manila and Rizal. Whether or not these adverse claims are valid, whether or not they are frivolous and merely intended to harass, and such other litigious matters raised by the protagonists, are for a Court of competent jurisdiction, and not for this Commission to decide. Sec. 110 of Act No. 496 provides that 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 Act for registering the same, make statement in writing setting forth fully 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 claimant's residence, and designate a place at which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim and the court, upon petition of any party in interest, shall grant a specific 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. It is believed that the two notices of adverse claim filed both registries substantially comply with the above legal requirements. And under paragraph 5 of the LRC Circular No. 2, dated July 10. 1954, where the document sought to be registered is sufficient in law and drawn up in accordance with existing requirements, it, becomes incumbent upon the Register of Deeds to perform his ministerial duty without unnecessary delay. The registration of an invalid adverse claim will not do as much harm as the nonregistration of a valid one. The notation of an adverse claim, like that of lis pendens, does not create non-existent right or lien and only means that a person who chases or contracts on the property in dispute does so subject to the result or outcome of the dispute.... xxx xxx xxx

In view of the foregoing facts and considerations, this Commission is of the opinion, and so holds, that the notices of verse claim filed by Elisa D. Gabriel with the Registries of Manila and Rizal are registrable. Registration should not however be confused with validity. The registration of the adverse claim will not by itself alone make them valid. Their validity will ultimately decided in Special Proceeding No. 2658 or, in alternative, in the more expeditious remedy provided for in 110 of Act No. 496, i.e., a speedy hearing upon the question the validity of the adverse claim. Oppositor Domingo moved for a reconsideration of above order, contending, in the main, that a Register Deeds exercises some degree of judicial power to determine upon his own responsibility, the legality of instruments brought before him for registration. In other words, oppositor submits that the duties of the Register of Deeds are not wholly ministerial, for they can refuse, and/or suspend the registration of documents when they think they are not valid or not registrable. In denying the motion for reconsideration, the Land Registration Commissioner said, in part The only question resolved by this Commission was the registrability of the two notices of adverse claims. The allegations and counter-allegations of the contending parties on the validity or invalidity of the adverse claims were not considered. They should be addressed to and decided by a competent court. With the denial of the motion for reconsideration, oppositor brought the matter to this Court on appeal, claiming that the Land Registration Commissionerred (1) holding the adverse claims registrable; and (2) in holding that it is the mandatory duty of the Register of Deeds register the instant notices of adverse claims "whether not they are valid, "whether or not they are frivolous merely intended to harass." In addition to the well-taken disquisitions of the L.R.C., it should be observed that section 110 of Act No. 496, which is the legal provision applicable to the case, is divided into two parts: the first refers to the duty of the party who claims any part or interest in registered land adverse to the

registered owner, subsequent to the date of the original registration; and the requirements to be complied with in order that such statement shall been titled to registration as an adverse claim, thus showing the ministerial function of the Register of Deeds, when no defect is found on the face of such instrument; and the second applies only when, after registration of the adverse claim, a party files an appropriate petition with a competent court which shall grant a speedy hearing upon the question of the validity of such adverse claim, and to enter a decree, as justice and equity require; and in this hearing, the competent court shall resolve whether the adverse claim is frivolous or vexatious, which shall serve as the basis in taxing the costs. In the instant case, the first part was already acted upon by the L.P.C. which resolved in favor of the registrability of the two adverse claims and this part should have been considered as closed. What is left, is the determination of the validity of the adverse claims by competent court, after the filing of the corresponding petition for hearing, which the appellant had not done. Anent the second assignment of error, the Land Registration Commission did not state that it was mandatory for a Register of Deeds to register invalid or frivolous documents, or those intended to harass; it merely said that whether the document is invalid, frivolous or intended to harass, is not the duty of a Register of Deeds to decide, but a court of competent jurisdiction, and that it is his concern to see whether the documents sought to be registered conform with the formal and legal requirements for such documents. WHEREFORE, the Resolution of the Land Registration Commission, holding the registrability of the Adverse Claims under consideration, should be, as it is hereby affirmed, with costs against oppositor-appellant Juanita R. Domingo. Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Dizon, Regala and Makalintal, concur. Reyes, J.B.L., J., took no part.