G.R. No. 114299 March 9, 2000 TRADERS ROYAL BANK, petitioner, vs. HON.

COURT OF APPEALS, PARIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA JOY, all surnamed CAPAY and RAMON A. GONZALES, respondents. x-----------------------x G.R. No. 118862 PATRIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA JOY, all surnamed CAPAY, and RAMON A. GONZALES, petitioners, vs. SPS. HONORATO D. SANTOS and MARIA CRISTINA S. SANTOS, SPS. CECILIO L. PE and JOSEFINA L. PE, FLORA LARON WESCOMBE, SPS. TELESFORO P. ALFELOR II and LIZA R. ALFELOR, SPS. DEAN RODERICK FERNANDO and LAARNI MAGDAMO FERNANDO, REMEDIOS OCA, DEVELOPMENT BANK OF THE PHILIPPINES and TRADERS ROYAL BANK, respondents. R E SO L U T I O N KAPUNAN, J.: In our Decision dated September 29, 1999, we disposed of the consolidated cases as follows: WHEREFORE, the Decision of the Court of Appeals dated February 24, 1994, in CAG.R. C.V. No. 33920, as modified by its Resolution dated August 10, 1994 is hereby AFFIRMED. In addition, Traders Royal Bank is ordered to pay the Capays the fair market value of the property at the time it was sold to Emelita Santiago. This Decision is without prejudice to whatever criminal, civil or administrative action against the Register of Deeds and/or his assistants that may be take by the party or parties prejudiced by the failure of the former to carry over the notice of lis pendens to the certificate of title in the name of TRB. 1 SO ORDERED. On October 21, 1999, the Capays and Ramon Gonzales, private respondents in G.R. No. 114299 and petitioners in G.R. No. 118862, filed a Motion for Partial Reconsideration of the above Decision. They pray for the inclusion in the dispositive portion of said Decision of an award to each of them the amount of P100,000.00 as moral damages, P40,000.00 as exemplary damages, and P40,000.00 as attorneys fees, all with legal interest at the time of the filing of the complaint. They also ask that Traders Royal Bank (TRB) be ordered to pay them the amount of P47,730.00, the price stipulated in the Deed of Absolute Sale between said bank and its transferee, Emelita Santiago, plus interest at 12% per annum from the date of said contract, instead of the fair market value of the disputed property at the time of said sale. I We clarify that we did not delete the award of moral and exemplary damages, attorneys fees, and interest in favor of the movants. It may be recalled that the trial court, in ruling for the Capays and Atty. Gonzales, ordered the Register of Deeds to cancel the certificate of titles issued in the names of the transferees and to issue new ones in favor of the movants. In addition, the trial court ordered TRB to pay movants P100,000.00 as moral damages, P40,000.00 as exemplary damages, and P40,000.00 2 as attorneys fees, with legal interest from the filing of the complaint.

The Court of Appeals initially affirmed the decision of the trial court in toto. TRB appealed to this Court while the subsequent transferees filed a motion for reconsideration in the appellate court. The Court of Appeals, in a Resolution dated August 10, 1994, granted the transferees motion thus: ACCORDINGLY, in view of the foregoing disquisitions and finding merit in the motion for reconsideration, the same is hereby GRANTED. Consequently, the decision of this Court, promulgated on February 24, 1994, is hereby RECONSIDERED. The complaint filed against defendants-appellants with the court a quo is hereby ordered DISMISSED, and the certificate of titles originally issued to them in their individual names are hereby restored and duly respected. We make no pronouncements as to costs. 3 SO ORDERED. As stated in the above Resolution, the appellate court merely dismissed the complaint as against the subsequent transferees, not as against TRB. In effect, the Court of Appeals reversed the decision of the trial court ordering the cancellation of the certificates of title in the name of the subsequent transferees but sustained the award of damages in favor of the movants herein. The decision of the Court of appeals affirming the award of damages remained unaffected by the subsequent resolution. TRB did not specifically question the award of damages when it appealed to this Court; hence, such issue was beyond our review. Inasmuch as we affirmed the decision of the Court of Appeals, as modified by its resolution, the award of damages in favor of movants need not be stated in detail. The omission should not be read as a deletion of the award for damages. Accordingly, we deny the prayer for the inclusion of such award in the dispositive portion of our decision. II Movants ask that TRB be ordered to pay them the amount the former received from its immediate transferee, Emelita Santiago, and interest thereon, instead of the fair market value of the property at the time of said transfer. The basis for the award of the amount constituting the value of the property, which we decreed in our decision, is found in Article 1400 of the Civil Code: Art. 1400. Whenever the person obliged by the decree of annulment to return the thing can not do so because it has been lost through his fault, he shall return the fruits received and the value of the thing at the time of the loss, with interest from the said date. In accordance with the above provision, movants would ordinarily be entitled to, aside from the value of the property, interest thereon from the date of the loss, in this case, from the sale of the property by TRB to Emelita Santiago, with interest from said date. Pursuant also to the above provision, movants would be entitled to the fruits received from said property, if evidence of such receipt of fruits is presented. Movants, however, insist upon the price of the property at the time of the sale to Emelita Santiago, which was in the amount of P47,730.00 as appearing in the Deed of Absolute Sale. To this, TRB poses no objection and we take the price stated in the deed of sale as a stipulation between the parties on the value of the property. Accordingly, we grant movants prayer for said amount, with 12% per annum from 4 said sale, the value of the property being equivalent to a forbearance of credit.

IN VIEW OF THE FOREGOING, the Court Resolved to GRANT IN PART the Partial Motion for Reconsideration and Motion for Reconsideration. The dispositive portion of this Courts Decision in G.R. Nos. 114299 and 118862 dated September 24, 1999 is hereby AMENDED as follows: WHEREFORE, the Decision of the Court of Appeals dated February 24, 1994 in CA-G.R. C.V. No. 33920, as modified by its Resolution dated August 10, 1994 is hereby AFFIRMED. In addition, Traders Royal Bank is ordered to pay the Capays the amount of P47,730.00, with 12% interest from the date of said sale until the same is paid. This Decision is without prejudice to whatever criminal, civil or administrative action against the Register of Deeds and/or his assistants that may be take by the party or parties prejudiced by the failure of the former to carry over the notice of lis pendens to the certificate of title in the name of TRB.1wphi1.nt SO ORDERED. SO ORDERED. Davide, Jr., C.J., Puno and Ynares-Santiago, JJ., concur. Pardo, J., on official business abroad.

[G.R. No. 108926. July 12, 1996] REPUBLIC OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS and HEIRS OF DEMOCRITO O. PLAZA, respondents. DECISION TORRES, JR., J.: [1] Petitioner implores this Court to review and set aside the decision of February 8, 1993 of the Court of Appeals in CA-G.R. CV No. 34950 which affirmed the decision of June 14, 1991 of the Regional Trial Court of Makati in LRC Case No. M-99 confirming respondent Democrito O. Plazas title over Rel. Plan 1059, which is the relocation plan of Psu-97886. After the filing of private respondents Comment, this Court, in its resolution of May 24, 1993, gave due course to the petition and required the parties to submit their respective Memoranda. The petitioner filed its Memorandum on June 29, 1993 while private respondent filed his Memorandum on July 6, 1993. [2] The factual background is summarized in the Decision of the Court of Appeals as follows: According to petitioner-appellee, the subject property situated at Liwanag, Talon (formerly Pamplona), Las Pinas, Rizal, now Metro Manila, having an area of 45,295 sq. m., was first owned by Santos de la Cruz who declared the same in his name under Tax Declaration Nos. 3932, for the year 1913; 3933 for 1917; and 6905, for 1921 (Exhs. 2-B, 2-C and 2-D, Exh. K for petitioner-appellee, pp. 514-516, Record). Subsequently, the subject property was successively bought or acquired by Pedro Cristobal, Regino Gervacio, Diego Calugdan and Gil Alhambra. To evidence their respective acquisition of the property in question, Tax Declaration Nos. 7937, for the year 1923; 8463, for 1927; 9467, for 1934; and 2708 (year not available) were [3] presented. After Gil Alhambra died, his heirs extrajudicially partitioned the subject

property and declared it in their names under Tax Declaration Nos. 5595 and 5596 for [4] the year 1960. On 5 July 1966, they executed a Deed of Sale With Mortgage deeding the subject property to petitioner-appellee for P231,340.00 payable in three (3) installments, the payment of which was secured by a mortgage on the property. Upon receipt of the full payment, they executed a Release of Mortgage [5] on 1 August 1968. After the sale, petitioner-appellee took possession of the subject property and paid the taxes due thereon for the years 1966 up to 1986, and in 1985 declared it in his name under Tax Declaration Nos. B-013-01392 and B-013[6] 01391. He appointed Mauricio Plaza and Jesus Magcanlas as the administrator and caretaker thereof, respectively. Due to losses, the property in question was cultivated only for a while. Five (5) years according to Mauricio Plaza, and from 1966 [7] up to 1978 according to Jesus Magcanlas. On 14 November 1986, petitioner-appellee filed a petition, which was amended on 17 July 1987, for the registration and confirmation of his title over the subject property alleging, among others, that: 1. by virtue of the deed of sale, he is the owner thereof; 2. he and his predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of the property prior to, and since 12 June 1945; 3. other than himself, there is no other person occupying, or having any interest over the property; and, [8] 4. there are no tenants or agricultural lessees thereon. On 24 February 1988, oppositor-appellant, the Republic of the Philippines (Republic, for brevity), filed its opposition maintaining, among others, that: (1) petitionerappellee and his predecessors-in-interest have not been in open, continuous, exclusive and notorious possession and occupation of the land in question since 12 June 1945 or prior thereto; (2) the muniment of title and tax declarations as well as tax payments relied upon do not constitute sufficient evidence of a bona fide acquisition of the land by petitioner-appellee and of his open, continuous possession and occupation thereof in the concept of owner since 12 June 1945, or prior thereto, and (3) the subject property pertains to the public domain and is not [9] subject to private appropriation. On 9 March 1988, after the compliance of the jurisdiction requirements was proved [10] and, on motion, the lower court issued its order of general default. Aside from the Republic, there were others who opposed the petition and filed their opposition thereto prior to, or were allowed to submit their opposition despite, and after, the issuance of the order of general default. They are: [11] (a) Arsenio Medina who withdrew his opposition on 29 May 1989; (b) Emilio, Leopoldo and Abraham, all surnamed Borbon; Heirs of Andres Reyes; Maximo Lopez; and, Marilou Castanares who prayed that the lower court direct petitioner-appellee to see to it that their respective property, which adjoins the land [12] in question, are not included in the petition; (c) the Heirs of Santos de la Cruz and the Kadakilaan Estate. Upon their respective motion, the order of default was set aside as to them and they were allowed to file their opposition.

The Heirs of Santos de la Cruz argue that: (1) their predecessor-in-interest, Santos de la Cruz, is the primitive owner of the subject lot; and, (2) he, his heirs, and upon their tolerance, some other persons have been in open, peaceful, notorious and continuous possession of the land in question since time immemorial until the present. The Kadakilaan Estate contends that: (1) by reason of its Titulo de Propiedad de Terrenos of 1891 Royal Decree 01-4, with approved plans registered under the Torrens System in compliance with, and as a consequence of, P.D. 872, it is the owner of the subject property; and, (2) petitioner-appellee or his predecessors-in-interest have not been in open, continuous, exclusive and notorious possession and [13] occupation of the land in question since 12 June 1945 or earlier. (d) the Heirs of Hermogenes Rodriguez. They allege, among others, that by reason of a Titulo de Propiedad de Terrenos of 1891; Royal Decree No. 01-4, Protocol of 1891; Decree No. 659, approved Plan of the Bureau of Lands No. 12298 dated 10 September 1963, their predecessor-in-interest is the owner of the subject property. Despite (sic) that their motion to lift order of default as to them and admit their opposition, which motion was opposed by petitioner-appellee, does not appear to have been acted upon by the lower court, they were able to present one (1) [14] witness; and, (e) Phase II Laong Plaza Settlers Association, Inc. It filed a motion to intervene in the case but the motion does not appear to have been acted upon by the lower [15] court. On 13 March 1990, the Community Environment and Natural Resources Office, West Sector (CENRO-WEST) of the Department of Environment and Natural Resources requested the lower court to furnish it photocopies of the records of the petition as the property in question was the subject of a request for a Presidential Proclamation reserving the land in question for Slum Improvement and Resettlement Site (SIR) of [16] the National Housing Authority. On 22 June 1990, upon order of the lower court, a n ocular inspection was conducted on the subject property by the court-appointed commissioner who submitted his [17] report on 2 July 1990. On 3 January 1991 Proclamation No. 679 was issued by the President of the Republic of the Philippines withdrawing the subject property from sale or settlement and reserve (the same) for slum improvement and sites and services program under the administration and disposition of the National Housing Authority in coordination with the National Capital Region, Department of Environment and Natural Resources subject to actual survey and private rights if any there be, ... The National Housing Authority was authorized to develop, administer and dispose of the area in [18] accordance with LOI 555, as amended (by LOI Nos. 686 and 1283), and LOI 557. [19] On 31 May 1991 petitioner-appellee filed his memorandum. The oppositors did not. Nevertheless, among them, only the Republic and the Heirs of Santos de la Cruz [20] formally offered their evidence. On 14 June 1991 the lower court rendered the judgment referred to earlier. On 8 July 1991, from among the oppositors, only the Republic filed a notice of [21] appeal which was approved on 10 July 1991. By reason of the approval thereof, the

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motion filed on 23 July 1991 by the Heirs of Hermogenes Rodriguez for the [22] reconsideration of the judgment was denied on 1 August 1991. On February 8, 1993, the Court of Appeals rendered a decision affirming the trial courts judgment. Hence, this petition filed by the Republic of the Philippines alleging that: THE DECISION OF THE COURT OF APPEALS AFFIRMING THE DECISION OF THE REGIONAL TRIAL COURT GRANTING PRIVATE RESPONDENTS APPLICATION FOR REGISTRATION, IS NOT SUPPORTED BY AND IS CONTRARY TO LAW, THE EVIDENCE AND EXISTING JURISPRUDENCE. Petitioner argues that the burden rests on the applicant to show by convincing evidence that he has a registrable title over the property sought to be titled, which the latter failed to do. According to petitioner, aside from mere tax declarations all of which are of recent vintage, private respondent has not established actual possession of the property in question in the manner required by law (Section 14, P.D. 1529) and settled jurisprudence on the matter. Thus, no evidence was adduced that private respondent cultivated much less, fenced the subject property if only to prove actual possession. The actual fencing of the property was done only starting 1988 when the actual occupants were forcibly ejected and driven out from their respective abodes and that its witnesses namely: Elascio Domitita, Manuel Dolom, Bernadette Aguinaldo and Virginia Franco, who were all actual residents of the questioned area, categorically testified on this score, summarized as follows: In their long stay in the area, the longest staying occupant being Domitita who had been in the premises for more than thirty (30) years nobody ever claimed ownership over the subject property; It was only in 1988 that they learned that private respondent had filed a petition to have the property titled in his name; Private respondent had not introduced any improvement nor was there a caretaker assigned by him to look after the property; and, Aside from them, there were about 200 more families residing in the area but through force, intimidation and illegal demolitions, were driven out by private respondent from the premises. We are not persuaded. On this point, the respondent Court correctly found that: Proof that petitioner-appellee and his predecessors-in-interest have acquired and have been in open, continuous, exclusive and notorious possession of the subject property for a period of 30 years under a bona fide claim of ownership are the tax declarations of petitioner-appellees predecessors-in-interest, the deed of sale, tax payment receipts and petitioner-appellees tax declarations. The evidence on record reveals that: (1) the predecessors-in-interest of petitioner-appellee have been declaring the property in question in their names in the years 1923, 1927, 1934 and 1960; and, (2) in 1966, petitioner-appellee purchased the same from the Heirs of Gil Alhambra and since then paid the taxes due thereon and declared the property in his name in 1985. xxx xxx xxx

x x x Considering the dates of the tax declarations and the realty tax payments, they can hardly be said to be of recent vintage indicating petitioner-appellees pretended possession of the property. On the contrary, they are strong evidence of possession in the concept of owner by petitioner-appellee and his predecessors-ininterest. Moreover, the realty tax payment receipts show that petitioner-appellee has been very religious in paying the taxes due on the property. This is indicative of his honest belief that he is the owner of the subject property. We are, therefore, of the opinion that petitioner-appellee has proved that he and his predecessors-ininterest have been in open, continuous, exclusive and notorious possession of the subject property in the concept of owner for a period of 30 years since 12 June 1945 and earlier. By operation of law, the property in question has become private [23] property. Contrary to the representations of the Republic, petitioner -appellee had introduced some improvements on the subject property from the time he purchased it. His witnesses testified that petitioner-appellee developed the subject property into a ricefield and planted it with rice, but only for about five years because the return on investment was not enough to sustain the continued operation of the riceland. Though not in the category of permanent structures, the preparation of the land into a ricefield and planting it with rice are considered improvements [24] thereon. Although tax declarations or realty tax payments of property 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 would be paying taxes for a property [25] that is not in his actual or at least constructive possession. They constitute at least proof that the holder has a claim of title over the property. The voluntary declaration of a piece of property for taxation purposes manifests not only ones sincere and honest desire to obtain title to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed revenues to the Government. Such an act strengthens ones bona fide claim of [26] acquisition of ownership. Neither do we find merit in the assertions of petitioners witnesses Elascio Domitita, Manuel Dolom, Bernadette Aguinaldo and Virginia Franco. As properly stated by the public respondent, xxx Their alleged possession is not based on any right. Neither do they claim to have any title or interest over the subject property. As a matter of fact, they did not bother to oppose the petition. The most that can be said of their alleged possession is that it was only with the tolerance of rightful owners of the property - plaintiffappellee and his predecessors-in-interest, hence, is no bar to the granting of the petition. We do not see why we should accept the bare assertions of the alleged occupants at their face value as against the claim of ownership of plaintiff-appellee [27] backed up by legal documents, tax declarations, and tax receipts. Well-settled and oft-repeated is the rule that findings of facts of the Court of Appeals are final and conclusive on the Supreme Court except: 1.) when the conclusion is a finding grounded entirely on speculation, surmises and conjectures; 2.) when the inference made is manifestly mistaken, absurd or impossible; 3.) when there is a grave abuse of discretion; 4.) when the judgment is based on a

misapprehension of facts; 5.) when the findings of facts are conflicting; 6.) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; 7.) when the findings of the Court of Appeals are contrary to those of the trial court; and 8.) when the findings of fact are conclusions without citation of specific evidence on which [28] they are based. Concededly, none of the above exceptions obtains in the case at bar. Petitioner also alleges that the land in question had been withdrawn from the alienable portion of the public domain pursuant to Presidential Proclamation No. 679 entitled Reserving for Slum Improvement and Resettlement (SIR) Sites and Services of the National Housing Authority, A Certain Parcel of Land of the Public Domain Situated in the Municipality of Las Pinas, Metro Manila, which was issued on January 7, 1991 or almost 6 months prior to the issuance of the trial courts decision. The Court of Appeals opined that the issuance of the proclamation did not have any effect on the subject property as the proclamation only withdrew it from sale or settlement and reserved the same for slum improvement and sites and services program, but subject to actual survey and existing private rights. The proclamation did not prohibit the registration of title of one who claims, and proves, to be the owner thereof. We agree. At any rate, registration does not vest title. It is [29] merely evidence of such title. Our land registration laws do not give the holder any better title than what he actually has. When the conditions set by law are complied with, the possessor of the land, by operation of law, acquires a right to a grant, a government grant, without the necessity of a certificate of title being issued. The Torrens system was not established as a means for the acquisition of title to private [30] land, as it merely confirms, but does not confer ownership. Of particular relevance is the finding of the respondent Court of Appeals to the effect that We have found that petitioner-appellee has proven his claim of ownership over the subject property. As provided in the proclamation itself, his ownership of the subject property must be respected and he cannot be barred from having the land titled in his name. This does not contravene or negate the intention of the proclamation. Besides, its implementing Letters of Instruction recognize that there may be lands declared included in the Slum Improvement Resettlement (SIR) program that are privately owned. Paragraph 10 of LOI No. 555 provides that if the land declared to be included in the SIR program is privately owned, the concerned local government, upon the approval by the National Housing Authority of its project plan, shall acquire the property through expropriation. In LOI No. 686 paragraph 3, it is mandated that the NHA, upon request of the local government, expropriate or otherwise acquire land for the SIR program. Proclamation No. 679 is, therefore, not a valid justification to deny the petition. x x x At the time the Proclamation was issued, the controversy over the subject property was sub-judice. The conflicting rights over it had been presented to the court for resolution. That jurisdiction could not be removed from it by subsequent legislation. The President must have been aware of this. Hence, the inclusion of the [31] cautionary clause subject to existing private rights.

Over time, Courts have recognized with almost pedantic adherence that what is inconvenient or contrary to reason is not allowed in law - Quod est inconveniens, aut contra rationem non permissum est in lege. Undoubtedly, reason and law find respondent entitled to rights of ownership over the disputed property. ACCORDINGLY, the assailed decision dated February 8, 1993 is hereby AFFIRMED and the instant petition is hereby DISMISSED. SO ORDERED. Regalado (Chairman), Romero, Puno, and Mendoza, JJ., concur.

G.R. No. 147072 May 7, 2002 FRANCISCO H. LU, petitioner, vs. Spouses ORLANDO and ROSITA MANIPON, respondents. PANGANIBAN, J.: The registration of a sale of real estate will not protect a buyer in bad faith, for the law cannot be used as a shield for fraud. On the other hand, the preferential right of a first registrant in a double sale is always qualified by good faith. The Case Before us is a Petition for Review on Certiorari challenging the October 25, 2000 1 Decision and the February 9, 2001 Resolution of the Court of Appeals (CA) in CA-GR CV No. 55149. The assailed Decision disposed as follows: "WHEREFORE, premises considered, the appealed Decision is hereby AFFIRMED with MODIFICATION in the sense that [petitioner] is directed to convey Lot 5582-B-7-D covered by TCT No. 171497 to [respondent] Rosita C. 2 Manipon without being entitled to any payment from the latter." 3 The assailed Resolution denied the Motion for Reconsideration. The Facts The facts of the case are summarized in the assailed Decision as follows: "On May 9, 1981, Juan Peralta executed a [D]eed of [S]ale by installment in favor of spouses Orlando and Rosita Manipon [herein respondents]. Therein, Juan Peralta agreed to sell by installment to the said spouses 350 square meters of the 2,078 square-meter lot he owned, covered by Transfer Certificate of Title (TCT) No. 137911 and located at Barrio Dilan, Urdaneta, Pangasinan. The said [D]eed was not registered with the Registry of Deeds. "On June 10, 1981, Juan Peralta mortgaged the aforesaid lot to Thrift Savings and Loan Association, Inc. (TSLAI). He however failed to pay the loan he obtained for which the mortgage was constituted and so the same was judicially foreclosed and sold to TSLAI for P62,789.18 which was the highest bidder. The latter in turn sold the same on July 15, 1988 in the amount of P80,000.00 to the [petitioner]. Thereafter, on August 30, 1989, [petitioner] caused the subdivision of the said lot into five (5) lots, one of which is Lot

5582-B-7-D, with an area of 339 square meters covering the lot which was earlier sold by installment to [respondents]. The said lot is now covered by TCT No. 171497. In the interim, or on July 30, 1983, Juan Peralta executed a [D]eed of [S]ale in favor of [respondents] after the couple paid a total amount of P8,000.00 for the subject lot. The aforesaid [D]eed was however also not registered.1wphi1.nt "On January 22, 1990, [petitioner] through counsel wrote the [respondents] regarding the presence of the latter's house, which was also being occupied by them, on the lot in question. Efforts were apparently made by both parties to settle the brewing dispute but to [no] avail. Hence, on February 26, 1990, [petitioner] filed the present action alleging therein that he is the owner of the lot in question including that which was being occupied by [respondents. Petitioner] further claims that his ownership was confirmed by the Regional Trial Court of Urdaneta, Pangasinan, Branch 49, in Civil Case No. U-4399. He also averred that for reasons unknown to him, [respondents] were claiming ownership of Lot 5582-B-7-D and have constructed a house thereon on January 22, 1990. "In the Answer filed by [respondents], they claim that [petitioner] is a buyer in bad faith because even before he bought the 2,078 square-meter lot, he knew for a fact that they already bought Lot 5582-B-7-D from the original owner of the said lot and have been residing therein since 1981. [Respondents] also asserted that [petitioner] had knowledge of their claim over the said property because when the whole lot was foreclosed they shared the same problem as [petitioner] also bought a lot with the 2,078 square-meter lot of Juan Peralta. "Trial ensued and thereafter, the trial court rendered the questioned 4 judgment. x x x." (Citations omitted) Ruling of the Trial Court The trial court ruled that petitioner was not a buyer in good faith despite the fact that he was able to register his ownership of the disputed lot. He admitted knowing that respondents had constructed a house on the disputed lot in 1984, even before he purchased the property from the loan association in 1990. Indeed, he waited more than ten (10) years before contesting respondents' occupation and possession of the land. The RTC disposed as follows: "WHEREFORE, IN THE LIGHT OF THE FOREGOING, the Court renders judgment as follows: "1). The [petitioner] is hereby ordered to convey to the herein [respondent] Rosita Manipon, (defendant Orlando Manipon is already dead) the lot consisting of 339 square meters denominated as Lot 5582-B-7-D and covered by Transfer Certificate of Title No. 171497 after paying the sum of P13,051.50 plus legal interest to the herein [petitioner] anytime after the finality of this decision. "2). The third-party defendant, Juan Peralta, is ordered to refund to the defendants Manipons the amount of P18,000.00 paid by the latter to him; "3). x x x no pronouncement as to damages in favor [of] or against either of 5 the parties."

Ruling of the Court of Appeals The CA affirmed the Decision of the trial court with the modification that respondents would no longer be required to pay petitioner the value of the disputed portion in a "forced sale." The appellate court said that petitioner knew that Lot 5582-B-7-D had already been sold by Juan Peralta to respondents before the mother lot was mortgaged, foreclosed and eventually purchased. He bought the entire property from the foreclosing bank, because he feared that he might lose what he had earlier bought in 1981 a 350 square meter lot which also formed part of the mother lot. 6 Hence, this Petition. The Issues 7 In his Memorandum, petitioner raises the following issues: "1. Who between petitioner and respondents have a better right of ownership over the lot in question, Lot 5582-B-7-D, with an area of 339 square meters? "2. Whether respondents' claim over the lot can rise [above that of] their predecessor in interest Juan Peralta[.] "3. Whether respondents are under estoppel to question petitioner's ownership over the lot in question[.] "4. Whether petitioner was in bad faith in the acquisition of the lot in question[.] "5. And even assuming without admitting that petitioner is under obligation to convey the lot in question in favor of respondents, whether the consideration of the lot be paid by respondent is P2,000.00 per square 8 meter[.]" These issues can be summed up into three questions: (1) who has a better right to the disputed property? (2) was petitioner a purchaser in bad faith? and (3) what should be the purchase price of the disputed lot? This Court's Ruling The Petition is partly meritorious. First Issue: Better Right to the Disputed Lot Petitioner claims to have a better right to the disputed portion of the real property. First, although respondents had bought it first, he was the first to register his purchase of the mother lot. Second, respondents' ownership follows that of their vendor who mortgaged to the bank his title to the mother lot and failed to redeem it. Petitioner avers that, although respondents purchased the disputed lot by installment on May 9, 1981 and fully paid for it on May 30, 1983, they failed to register their sale with the Registry of Deeds. In the meantime, on June 18, 1981, Juan Peralta mortgaged the mother lot including the disputed portion to the Thrift Savings and Loan Association, Inc. (TSLAI). The mortgage was foreclosed and the property sold on July 10, 1988. Petitioner, on the other hand, bought the whole lot from the bank for P80,000 on July 15, 1988 and registered it in his name on September 23, 1988. Third, petitioner claims that from the time respondents fully paid for the lot until they received a Notice to Vacate, they did not do anything to perfect their title thereto; hence, they are now estopped from questioning his ownership of it.

We are not convinced. In estoppel, a person who by deed or conduct induces another to act in a particular manner is barred from adopting an inconsistent position, 9 attitude or course of conduct that thereby causes loss or injury to another. This equitable principle will not apply to respondents, because they exercised dominion over the property by occupying and building their house on it. On the other hand, it was petitioner who, despite having knowledge of the existence of respondents' house on the disputed portion, bought the whole lot. Before acquiring the mother lot from the bank, he knew of respondents' claim of ownership and occupation. He cannot now pretend to be an innocent buyer in good faith. 10 Registration is not the equivalent of title. Under the Torrens system, registration 11 only gives validity to the transfer or creates a lien upon the land. It was not established as a means of acquiring title to private land because it merely confirms, 12 but does not confer, ownership. Moreover, the RTC and the CA have correctly ruled that the preferential right of the first registrant of a real property in a case of double 13 14 sale is always qualified bygood faith under Article 1544 of the Civil Code. A holder in bad faith of a certificate of title is not entitled to the protection of the law, for the 15 law cannot be used as a shield for fraud. "When the registration of a sale is not made in good faith, a party cannot base his preference of title thereon, because the law will not protect anything done in bad faith. Bad faith renders the registration futile. Thus, if a vendee registers the sale in his favor after he has acquired knowledge that there was a previous sale of the same property to a third party, or that another person claims said property under a previous sale, or that the property is in the possession of one who is not a vendor, or that there were flaws and defects in the vendor's title, or that this was in dispute, the registration will constitute x x x bad faith, and will not confer upon him any preferential right. The situation will be the same as if there had been no registration, and the vendee who first took possession of the real property in 16 good faith shall be preferred." Equally important, under Section 44 of the Property Registration Decree (Presidential Decree No. 1529), every registered owner receiving a certificate of title in pursuance of 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 on the certificate and enumerated therein. Petitioner is evidently not a subsequent purchaser in good faith. Therefore, between the parties, respondents have a better right to the property based on the concurring factual findings of both the trial and the appellate courts. We quote with approval the following ruling of the CA: "x x x We are persuaded that [petitioner] knew of the fact that Lot 5582-B-7D was sold by Juan Peralta to [respondents] before Lot 5582-B-7, the mother lot of Lot 5582-B-7-D, was mortgaged, foreclosed, sold and [its ownership] transferred x x x to him. In fact, [w]e are convinced that the main reason why [petitioner] bought the entire lot from the TSLAI was hi fear of losing the 350 square meter-lot he bought sometime in 1981 which also forms part of Lot 5582-B-7. Having been aware of the 'defects' in the title of TSLAI as far as Lot 5582-B-7-D is concerned, he cannot now claim to be a purchaser in

good faith and for value even if he traces his ownership [to] TSLAI which [w]e believe was a purchaser in good faith the latter not being aware of the sale that transpired between the [respondents] and Juan Peralta before Lot 5582-B-7 was sold to it in a public auction. "One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or an interest therein. Thus, even assuming arguendo that [petitioner] was not aware of the sale between Juan Peralta and the [respondents], still he cannot be considered as a purchaser in good faith because he had personal knowledge of [respondents'] occupation of the lot in question. This fact alone should have put him on guard before buying the land. But as he admitted during the trial, he was not interested in the [respondents'] reason for occupying the said lot[;] all that he was interested in was to buy the entire lot. This 'devil-may-care' attitude of [petitioner] has placed him where he is now. Consequently, he cannot be entitled to the relief he is seeking before this [c]ourt. "True, the purchaser of a registered land is not required to go behind the title to determine the condition of the property. However, a purchaser cannot close his eyes to facts which should put a reasonable man upon his guard and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. His mere refusal to believe that such defect exists, or his willful closing of his eyes to the possibility of the existence of a defect in his vendor's title, will not make him an innocent purchaser for value, if it afterwards develops that the title was in fact defective, and it appears that he had such notice of the defect as would have led to its discovery had he acted with that measure of precaution which may 17 reasonably be required of a prudent man in a like situation." All told, the right of a buyer to rely upon the face of the title certificate and to dispense with the need of inquiring further is upheld only when the party concerned had no actual knowledge of facts and circumstances that should impel a reasonably 18 cautious man to conduct further inquiry. Second Issue: Bad Faith Petitioner denies being a purchaser in bad faith. He alleges that the only reason he spoke to the respondents before he bought the foreclosed land was to invite them to share in the purchase price, but they turned him down. This, he argues, was not an indication of bad faith. Petitioner's contention is untenable. He might have had good intentions at heart, but it is not the intention that makes one an innocent buyer. A purchaser in good faith or an innocent purchaser for value is one who buys property and pays a full and fair price for it, at the time of the purchase or before any notice of some other person's 19 claim on or interest in it. One cannot close one's eyes to facts that should put a reasonable person on guard and still claim to have acted in good faith. As aptly explained by 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 ). InCruz vs. Cabaa (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).1wphi1.nt "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 20 Appeals, L-26677, 27 March 1981)." By his own allegations, petitioner admits he was not a purchaser in good faith. A buyer of real property which is in the possession of another must be wary and investigate the rights of the latter. Otherwise, without such inquiry, the buyer cannot 21 be said to be in good faith. Basic is the rule that the factual findings of the appellate court are given great weight, 22 even finality, when they affirm those of the trial court, unless they fall under the 23 exceptions enumerated in Fuentes v. Court of Appeals. Petitioner has not shown that this case falls under any of those exceptions; hence, we find no cogent reason to depart from this general rule. Third Issue: Proper Purchase Price Petitioner protests respondents' exception from paying him P13,051.50 with legal interest for the conveyance of the disputed portion. Instead, he pleads that this Court modify the price to P2,000 per square meter. We are not persuaded. While neither party appealed the issue of the purchase price, petitioner did question the conveyance of Lot 5582-B-7-D to respondents upon payment of the said price. Hence, the payment was also effectively put in issue. It is well-settled that appellate courts have ample authority to rule on matters not specifically assigned as errors in an appeal, if these are indispensable or necessary to 24 the just resolution of the pleaded issues. However, the CA modification exempting respondents from paying petitioner is flawed, because the RTC had ordered Juan Peralta to refund the P18,000 paid to him by petitioner as the purchase price of the disputed lot. Thus, the trial court correctly

ordered (1) respondents to pay petitioner 13,051.50 plus legal interest for Lot 5582B-7-D and (2) the third-party defendant Peralta to refund to respondents the P18,000 they had paid for the lot. The CA ruling would unjustly enrich respondents, who would receive double compensation. In short, the RTC ruling should have been affirmed in its entirety.1wphi1.nt WHEREFORE, the Petition is PARTLY GRANTED. The assailed Decision and Resolution are AFFIRMED without the MODIFICATION ordered by the CA. No pronouncement as to costs. SO ORDERED.

25

G.R. No. 130768 March 21, 2002 CRISANTO L. FRANCISCO, petitioners, vs. THE COURT OF APPEALS and REGINO B. RELOVA, JR., respondents. YNARES-SANTIAGO, J.: 1 Before us is a petition for review of the decision dated June 11, 1997 of the Court of 2 Appeals in CA-G.R. CV No. 50104, affirming the decision dated January 25, 1995 of the Regional Trial Court of Antipolo, Rizal, Branch 73, in Land Registration Case No. 91-1016, LRA Record No. N-62367. 3 On October 2, 1991, respondent Regino G. Relova filed a petition with the trial court for the registration of two parcels of land described as Lots Nos. 1834 and 1832, Cad688-D of the Cainta-Taytay Cadastre, situated in Barangay San Juan, Taytay, Rizal. He alleged that he has been in open, continuous, exclusive and notorious possession of the said parcels of land since 1958 and, therefore, has acquired the same by prescription. The Republic of the Philippines, through the Office of the Solicitor General, registered 4 its written opposition to the petition. At the initial hearing of the petition on February 28, 1992, nobody appeared to oppose the petition. After respondent Relova presented evidence to establish the jurisdictional facts, the trial court ordered that a general default be entered against the whole world except the Republic of the Philippines. The trial court designated a 5 hearing commissioner to receive evidence ex-parte in support of the petition. During the course of the proceedings, the Land Registration Authority (LRA) 6 submitted its report stating that discrepancies were found after plotting the plans pertaining to the land applied for. Thus, the LRA recommended that the appropriate government agencies be ordered to submit their reports to determine whether the land or any portion thereof are covered by land patents are within the forest zone. After the reception of evidence before the trial commissioner, and based on its 7 report, the trial court rendered its decision, the dispositive portion of which reads: WHEREFORE, premises considered, the Court hereby confirms the title of herein petitioner Regino B. Relova, Jr. to the parcels Lot No. 1834 Cad-688-D

covered by Plan Ap-04-006273 and Lot No. 1832 Cad-688-D covered by Plan Ap-006183 situated in Barangay San Juan, Municipality of Taytay, Province of Rizal containing an area of three hundred thirty nine (339) square meters and seventeen thousand four hundred nine (17,409) square meters respectively and orders their registration in the name of herein applicant Regino B. Relova, Jr. who is married to Lourdes S. Guino with all the rights and privileges appertaining thereto. Let an order for issuance of a Decree be issued upon finality of this decision and payment of taxes and fees due on the subject parcels of land. 8 SO ORDERED. Subsequently, the LRA filed with the trial court a Supplementary Report, submitting the corrected technical boundaries of the technical descriptions for Lots 1832 and 1834. The report further states: WHEREFORE, the foregoing report is respectfully submitted to the Honorable Court for its information and guidance with the recommendation that (a) the corrected technical description of lot 1832, Cad 688-D, CaintaTaytay Cadastre (Annex J) be approved and (b) the applicant be ordered to publish in the Official Gazette the corrected technical description of Lot 1834, Cad 688-D, Cainta-Taytay Cadastre (Annex K), and thereafter, an order be issued approving the said technical description to be utilized in the issuance of the corresponding decree of registration pursuant to the decision dated January 25, 1993 and Order for the issuance of the Decree 9 dated April 1, 1993. On October 28, 1993, the trial court issued the following Order: Considering the Report of the Land Registration Authority (LRA) dated September 20, 1993 as well as the "Urgent Ex-Parte Motion" of the applicant through counsel, the court hereby approves the corrected technical description of Lot 1832, Cad-688-D, Cainta Taytay Cadastre. Moreover, the recommendation that the corrected technical description of lot 1834, Cad688-D Cainta-Taytay Cadastre be published in the Official Gazette is hereby DENIED for the reason that the correction (amendment) does not appear to be substantial inasmuch as the boundaries affected are both owned by the applicant in the above-entitled case.1wphi1.nt 10 SO ORDERED. Upon motion of respondent Relova, the trial court ordered the issuance of a writ of 11 possession on December 7, 1993. On January 14, 1994, petitioner Crisanto L. Francisco entered his appearance as 12 oppositor and filed a Motion to Quash Writ of Possession. He alleged that he has been in actual possession of Lot 1832; that no notice of the motion for writ of possession was furnished to him; and that the land registration court has no authority to issue a writ of possession. 13 Subsequently, petitioner filed a Petition for Reopening and Review of the decree of registration pursuant to Article 32 of P.D. 1529 and a Supplemental Petition and 14 Reply. He reiterated the grounds alleged in his motion to quash the writ of possession and further alleged that respondent failed to republish the notice of initial hearing containing the corrections in the technical description of Lot 1832 made by

the Bureau of Land Management; that respondent falsely and fraudulently testified that the disputed lot was part of the land purchased by his predecessor, Francisco Santana, from Maximo Cruz; that it is not true that resp ondents possession was undisturbed; that respondent declared the land for taxation purposes only in March 1991; that petitioners claim of ownership over the disputed land was annotated on the said tax declaration; and that even respondents predecessor -in-interest and other adjacent lot owners recognized petitioner as the owner of the dispute land. In its order dated February 27, 1995, the trial court ruled as follows: It appears that the Decree of Registration in the above-entitled case with No. N-205474 was issued on February 28, 1994 while oppositors "Petition for Reopening and Review" and "Supplemental Petition" were filed on March 2, 1994 and on August 9, 1994, respectively. It appears also, that the applicant has not yet transferred the subject land to an innocent purchaser for value, hence the court is of the considered view that the oppositor may avail himself of the remedy provided under article 32 of PD 1529 otherwise known as the Property Registration Decree which grants to "any person, including the government and the branches thereof, deprived of land or of any estate or interest therein by such adjudication or confirmation of title obtained by actual fraud, to file in the proper Regional Trial Court a petition for reopening and review of the decree of registration not later than one year from and after the date of entry of such decree of registration, but in no case shall such petition be entertained by the court where an innocent purchaser for value has acquired the land or an interest thereon, whose rights may be prejudiced" The allegations of the oppositor as to the actual fraud allegedly committed by the applicant in the latters application for registration of title of lot 1832 necessarily requires proof which can only be adduced in a proper hearing or trial. Corollary, thereto, is the requirement of the law for the oppositor, to prove his real or dominical right over the lot in question. In view thereof, the Motion for Leave to File and Admission of Supplemental Petition is hereby GRANTED. The above-entitled case is therefore, re-opened insofar as Lot 1832 is concerned. In the meantime, the execution of the writ of possession issued in the above-entitled case is hereby held in abeyance insofar as lot 1832 is concerned, pending resolution of the petition for review of herein oppositor. Let this case be set for reception of evidence for oppositor Crisanto Francisco on April 6, 1995 at 9:00 A.M. 15 SO ORDERED. 16 Upon a motion for reconsideration of respondent, the trial court reversed its previous order, to wit: Wherefore, premises considered, the court therefore reconsiders its order of February 27, 1995 and hereby reiterates its decision in this case for the registration of lots applied for by the applicants. The court also approves the motion for issuance of the writ of possession as prayed for by the applicants and hereby orders the issuance of said writ.

SO ORDERED. 18 Petitioner filed a motion for reconsideration, arguing that he was denied due process of law when he was deprived the opportunity to prove the allegation of fraud committed by the applicant in securing a decree of registration on the land in dispute. 19 The motion for reconsideration was, however, denied. Petitioner appealed to the Court of Appeals, where the same was docketed as CAG.R. CV No. 50104. On June 11, 1997, the Court of Appeals affirmed the order of the trial court denying the petition for reopening and review of the decree of 20 registration. Petitioners motion for reconsideration was denied on September 16, 21 1997. Hence, this petition raising the following issues: Whether a court can refuse to receive evidence on allegations of fraud, in a petition for review of an application for registration, committed by the applicant in his application and in the proceedings, legally sufficient to nullify and set aside such decision approving registration and the decree and certificate of title subsequently issued, and then reiterate its original decision and decree without trying and resolving if the alleged frauds were committed or not? Whether such refusal to hear and receive evidence on the petition for review is a denial of due process that renders the courts orders, decisions and proceedings void and annullable for lack, excess, or abuse of jurisdiction? Whether an appellate court that affirms such void decision and orders of the trial court and refuse to remand below the appealed case for trial on the merits, equally commits a violation of due process and acts without, in excess or with abuse of jurisdiction? Whether lack of jurisdiction on the part of the trial court for applicants failure to prove jurisdictional requirement of publication in a newspaper of general circulation of the application and date of initial hearing, because the evidence or affidavit of publication presented as proof thereof is a falsified one and, therefore, null and void, can be raised in any stage of the proceedings, and cause the dismissal of the application or the nullification or setting aside of the decision granting registration for lack of jurisdiction? The core issue in this appeal is whether or not petitioner was denied due process when the trial court denied the petition for the reopening and review of the decree of registration, thereby depriving petitioner of the opportunity to substantiate the allegations of fraud. In reversing its earlier order granting the petition to reopen, the trial court ruled: The issue to be resolved in the instant motion for reconsideration is whether or not there was fraud committed by the applicant in this case. To the mind of the court there is no fraud committed. It should be noted that the Report of the LRA that was submitted to the court states that there are some corrections in the technical descriptions of the property but the area of the property has remained the same as applied for. That is why this court in its order dated October 28, 1993 granted the motion of counsel for the applicant to approve the technical corrections for the reason that the

17

correction without need for the republication amendment does not appear to be substantial. It should be noted also that the order of the Land Registration Authority recommended the corrected technical description of Lot 1832 Cad-688-D Cainta-Taytay Cadastre be approved and the applicant be ordered to publish in the Official Gazette the corrected technical description of Lot 1834 Cad-688-D Cainta-Taytay Cadastre. Thereafter, an order be issued approving the said technical description to be utilized in the issuance of the corresponding decree of registration. So it is clear that with respect to Lot 1832, which is the subject matter of the opposition in this case, the LRA merely stated that the corrected technical description of Lot 1832 be approved. This court approved the said corrected technical description of Lot 1832 as recommended by LRA. There is therefore no fraud upon a review by the court of the motion for reconsideration and the opposition thereto as well as taking into account the oral arguments of both counsels for the applicant and the oppositor on the matter of a legal fraud committed in this case. The court merely complied with the recommendation of the LRA for the approval of the corrected technical description of Lot 1832. The court did not order to republish in the Official Gazette the corrected technical description therein as it is not substantial for the area of the land still remains the same. Wherefore, premises considered, the court therefore reconsiders its order of February 27, 1995 and hereby reiterates its decision in this case for the registration of lots applied for by the applicants. The court also approves the motion for issuance of the writ of possession as 22 prayed for by the applicants and hereby orders the issuance of said writ. A careful scrutiny of the assailed order reveals that the trial court did not entirely consider the allegations of fraud or falsity in the petition to reopen and review the decree of registration. The trial court only resolved the issue of republication of the corrected technical description of Lot 1832 and found that the area of the property was the same as that applied for. It summarily dismissed the petition to review the decree of registration. In the petition to reopen and review the decree of registration, petitioner alleged that the first publication of the hearing of respondents application contained an erroneous technical description of Lot 1832, which was later corrected; that application with the corrected technical description was not republished; that respondent falsely represented that Lot 1832 was part of the land which his predecessors-in-interest, Francisco Santana, purchased from Maximo Cruz, but the same was omitted in the original registration proceeding in LRC Case No. N-2710 of the Court of First Instance of Pasig, Rizal, Branch VI; and that it is petitioner, by himself and through his predecessors-in-interest, who has been in actual possession and use of said Lot 1832 as owner, openly, continuously and exclusively, for more than fifty years before the filing of respondents application. Furt hermore, petitioner alleged that respondent is guilty of fraud in making it appear in Tax Declaration No. 04-13781, which was obtained only in March 1991, that he paid the arrears for the past ten years. Petitioner also argues that the notation "Ownership of this property is also claimed by CRISANTO L. FRANCISCO," is inscribed on the tax declaration. Thus,

respondent undeniably had notice of petitioners claim of ownership and possession of said Lot 1832 long before he actually declared it for taxation and applied for registration. Other documents also prove petitioners prior right and possession, namely, the tax receipts for 1936 and 1937 both in the name of Miguel Francisco, petitioners grandfather and predecessor-in-interest, Tax Declaration No. 13296 (1945-1974), Tax Declaration No. 03-2348 (1980-1984), and Tax Declaration No. 033127 (1985 to date), all of which indicate petitioners possession of Lot 1832 as 23 owner thereof. The foregoing are serious allegations which should have necessitated a reopening of the application if only to ensure that the claims of respondent of acquisitive prescription were valid. This was done by the trial court in its order dated February 27, 1995 granting the reopening of the case, wherein it stated that "the allegations of the oppositor as to the actual fraud allegedly committed by the applicant in the latters application for registration of title of lot 1832 necessarily requires proof which 24 can only be adduced in a proper hearing or trial." Subsequently, however, it reversed its order and denied the petition to reopen and review the decree of registration, thereby depriving petitioner the opportunity to substantiate his allegations and protect his claims over the property. In this regard, the trial courts act was reversible error and an unwarranted deviation from both substantive and 25 procedural norms. In the early case of Minlay v. Sandoval, we held: Perhaps the trial judge had reasons to doubt the veracity of the supposed fraudulent acts, attributed to respondents. This doubt, however, should not have been made the basis of dismissal, because if a court doubts the veracity of the allegations in the petition, the best thing it could do would have been to deny the motion to dismiss and proceed with hearing on the merits, of the petition. A person deprived of land or any estate or interest therein by adjudication or confirmation of title obtained by actual fraud may seek the reopening and review of a decree of registration. The Torrens System is intended to guarantee the integrity and conclusiveness of the certificate of registration but it cannot be used for the 26 perpetuation of fraud against the real owner of the registered land. WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals dated June 11, 1997 is REVERSED and SET ASIDE. The Regional Trial Court of Antipolo, Rizal, Branch 73 is ordered to reopen Land Registration Case No. 91-1016 and afford petitioner and respondent full opportunity to substantiate their respective claims.1wphi1.nt SO ORDERED. Davide, Jr., CJ., and Kapunan, J., concur. Puno, J., on official leave.