CALALANG VS RD
names of different owners.
The subject of controversy in these two consolidated petitions is a
parcel of land Lot 671-A of the Piedad Estate located in Barrio
Culiat, Diliman.
The petitioners are individual lot owners who claim to have
bought their respective portions from Amando Clemente in the
1950's.
Amando Clemente is alleged to be the registered owner of said
land evidenced by Transfer of Certificate Title No. 16212 covering
about 81,160 square meters who converted it into a subdivision
known as Clemville Subdivision.
Lot 671-A is actually part of a bigger parcel known as Lot 671
which is claimed by respondent Iglesia ni Kristo (INK), which
bought said property from Lucia dela Cruz in 1975. Dela Cruz was
adjudged the rightful owner of Lot 671 in the case of dela Cruz
v. dela Cruz (130 SCRA 666 [1984]). INK began fencing the whole
area and placed the following sign "NO TRESPASSING IGLESIA
NI KRISTO PROPERTY SUPREME COURT CASE NO. 61969, July 25,
1984."
Briefly, the dela Cruz v. dela Cruz case is an action for
reconveyance founded on breach of trust filed by Augustina dela
Cruz, et al. against Lucia dela Cruz and INK. Augustina and her co-
plaintiffs charged that the parcel of land purchased by the INK
from Lucia dela Cruz was actually a part of their inheritance share
in the estate of their late grandfather, Policarpio dela Cruz but
which, in breach of trust known to the INK, Lucia sold to the
latter.
Augustina's suit was originally decided in her favor by the trial
court. On appeal to the Court of Appeals, the judgment was
reversed and the questioned sale by Lucia dela Cruz to the INK
was upheld. Consequently, Augustina went to the Supreme Court
on a petition for review on certiorari, docketed as G. R. No. 61969.
On July 25, 1984, the Court rendered a decision in affirming the
decision of the Court of Appeals. The validity of the sale of Lucia
to the INK was thereby upheld and the title of INK to the subject
realty (Lot 671) was validated as well.
This Supreme Court decision spawned the two (2) petitions now
before us assailing the validity of Lucia dela Cruz's title over Lot
671 which in turn was sold to INK.
In G.R. No. 76265, petitioner Virginia Calalang alleged that she is
the registered owner of a portion of Lot 671-A (subdivision plan
PSD 32221) as evidenced by TCT Nos. 17556, 17564 and 17562.
She allegedly came to know of INK'S claim only when a
prospective buyer inspected the land on August 1986 and saw the
"no trespassing" sign.
Petitioner Calalang lost no time in inquiring into the status of the
land and learned about the pending consulta case (LRC 1978) filed
before the Administrator of the National Land Titles and Deeds
Registration Administration (NLTDRA). This consulta came about
when the Register of Deeds doubted the registrability of the
documents presented before it in the light of his findings that the
land affected was covered by two (2) sets of titles issued in the
On September 9, 1986, the petitioner filed a Motion to Intervene
requesting the Administrator to conduct an investigation of the
supposed anomaly committed in connection with the
reconstitution of TCT No. RT-58 in the name of Lucia dela Cruz.
This was denied by the Administrator invoking our ruling in dela
Cruz v. dela Cruz to the effect that TCT RT-58 in the name of
respondent Lucia dela Cruz is the valid title. (Rollo, pp. 44-47)
Consequently, a Motion for Reconsideration was filed by herein
petitioner but this was likewise denied by the Administrator on
October 20, 1986 on the ground that the issues raised therein
have already been passed upon and that the issues being litigious
in nature cannot be decided in a consulta case "where the only
question to be determined is the registrability of the document
presented for registration."
Hence, on October 27, 1986, the petitioner file the instant Special
Civil Action for Certiorari and Prohibition in G.R. No. 76265 against
the Administrator of the NLTDRA, the Register of Deeds of
Quezon City and private respondents Lucia dela Cruz, Constancio
Simangan and Iglesia ni Kristo. Lucia dela Cruz and Constancio
Simangan were impleaded as they were predecessors-in-interest
of INK.
INK and the Administrator filed their comments on January 5,
1987 and June 29, 1987 respectively. For failure to locate
Constancio Simangan's whereabouts despite diligent efforts and
considering further that INK is the indispensable party and the
one interested in upholding the validity of the reconstituted title
of respondent Lucia dela Cruz, the petitioner moved to drop him
as respondent. This was granted by the Court in a resolution
dated April 13, 1988. (Rollo, p. 189)
Taking the cue from the Administrator that present certificates of
title must be cancelled to avoid duplication, the Register of Deeds,
instead of filing its comment initiated cancellation proceedings of
more than 100 titles, against 81 defendants which included herein
petitioner on the basis of this Court's declaration in the case
of dela Cruz that the reconstituted title of respondent Lucia dela
Cruz is the valid title. This petition was filed by the Office of the
Solicitor-General (OSG) on January 5, 1987 with the Regional Trial
Court of Quezon City docketed as Civil Case No. Q-49900.
Consequently, the petitioner moved to dismiss on the ground that
the complaint was premature and maliciously filed with
knowledge of the instant petition with this Court. INK, on the
other hand, filed a Motion to Intervene in said case. Claiming
ownership over Lot 671, it prayed for damages against some of
the defendants namely Augusto de Leon, Jose M. Panlilio and
Felicidad Vda. de Pineda who filed an injunction suit against it
(Civil Case No. Q-45767) with the Regional Trial Court (RTC) of
Quezon City on September 12, 1985.
Despite opposition of the petitioner to respondent INK's Motion
to Intervene, presiding Judge Benigno T. Dayaw granted the
motion of INK and denied petitioner's Motion to Dismiss on the
ground that the issues raised in the instant petition (G. R. No.
76265) will not substantially affect said civil case. The subsequent
motion for reconsideration filed by the petitioner was likewise
denied considering that no restraining order has been issued
(Rollo, pp. 198-216).
However, instead of filing an answer to the complaint in Civil Case
No. Q-49900, the petitioners filed on July 15, 1988 a supplemental
petition before this Court to include as additional respondent, the
Honorable Judge Benigno T. Dayaw and petitioner's children who
were named as defendants in said Civil Case, as additional
petitioners. At the same time the petitioner prayed for a
restraining order (Rollo, p.197).
To this supplemental petition, the OSG in behalf of the Republic
filed its comment pursuant to the Court's resolution granting the
petitioner's motion for leave to include additional parties and to
admit supplemental petition (Rollo, p. 228).
In the meantime, fire gutted the records of the Register of Deeds
in Quezon City, so respondent Judge required the parties to agree
to a stipulation of facts instead of trial.
In G.R. No. 83280, the petitioners alleged that they and/or their
predecessors in interest were issued their corresponding titles to
the lots purchased from Amando Clemente in the 1950's yet.
They alleged that they took physical possession of their lots in
Clemville Subdivision by actually occupying the same, declaring
them in their names for tax purposes, fencing or marking them off
and entrusting their care to "katiwalas". From the time they
acquired their Torrens Title they and they alone to the exclusion
of INK exercised all acts of undisturbed, peaceful and
uninterrupted ownership and possession including the payment
of their realty taxes.
On or about the second week of August, 1985, INK started to
enclose the entire Clemville Subdivision with "sawali" fences with
billboards randomly posted which read:
On September 19, by agreement of the parties and in open court,
the Judge issued an order, granting the parties' motion to enter
into a stipulation of facts instead of going on with the hearing and
to maintain the status quo.
In the course of the exchange of pleadings between the parties,
the trial judge issued an Order on December 6, 1985 denying the
petitioners' prayer for the issuance of a writ of preliminary
injunction on the grounds that:
From the exchange of written arguments
and the authorities cited, it appears that the
petitioners' titles which were issued some
ten years earlier than that of respondent's
emanated from a reconstituted TCT No. RT-
52, which covered portion of Lot 671 of the
Piedad Estate of Quezon City. Petitioner's
parcels of land are within that estate. This
reconstituted TCT No. RT-52 was the
subject of a case, "De la Cruz v. De la Cruz",
130 SCRA 66 [1984], wherein the Honorable
Supreme Court declared the said
reconstituted title null and void.
The principal argument of petitioners that
they were not parties thereto can not be
given serious extended discussion as they
could acquire no more rights than the
source of their titles. For brevity, at this
initial stage, suffice it to say that under the
foregoing discussed circumstances, the
petitioners have not shown a clear and
positive right to a temporary relief.
(Emphasis supplied) (Rollo, p. 35)

NO TRESPASSING Assailing this order, the petitioners by way of certiorari elevated

I.N.C. PROPERTY the matter to the Court of Appeals in CA-G.R. SP No. 08146.
SC DECISION
2ND DIVISION
On April 9, 1986, the Court of Appeals promulgated a Decision
G. R. NO. L 61969
with the following dispositive portion:
JULY 25, 1984

WHEREFORE, the petition is given due

INK also destroyed the concrete/hollow block fence surrounding
course and is hereby RESOLVED by setting
the lot of petitioner de Castro and started the construction of
aside the Order dated December 6, 1985 in
housing structures therein. At the same time, it commenced the
Civil Case No. Q-45767 and directing that
delivery of construction materials to the former premises of
the application for preliminary injunctive
petitioner Panlilio to erect a permanent structures of strong
relief therein be properly heard and
materials on it.
evidence for or against the same be
adduced in due course. (Rollo, p. 39)
Thus, on August 22, 1985, the petitioners filed with the RTC-
Branch 101 a petition for injunction with damages. This case was
On February 12, 1987, respondent INK filed with the lower court a
docketed an Civil Case No. 45767. Later, this petition was
motion to dismiss the petitioners' complaint for injunction on the
amended to include Elena Ostrea and Feliza C. Cristobal-Generoso
ground that it does not state a cause of action.
as additional petitioners.

On August 7, 1987, the lower court issued an Order with the

August 25, 1985, presiding Judge Santiago issued a restraining
following dispositive portion:
order and set the case for hearing the writ for preliminary
injunction on September 5, 1985.
WHEREFORE, premises considered, finding
respondent's Motion to Dismiss justified,
The September 5 hearing was however, reset to September 19,
the instant petition is hereby DISMISSED,
1985 with respondent Erao Manalo volunteering to maintain
with costs against petitioners. (Rollo, p. 48)
the status quo until then or until the matter had been resolved by
the trial court.
Seeking relief from the dismissal, the petitioners filed the two
pleadings, to wit:
1) "Motion for Reconsideration Ad
Cautelam" dated September 18, 1987 filed
with the RTC, NCR, Branch 101 Quezon City;
and
2) "Omnibus Motion Incident to Execution
of the Decision dated April 9, 1986" dated
September 29, 1987 filed with the Court of
Appeals.
On December 10, 1987, the Court of Appeals denied petitioners'
Omnibus Motion. The petitioners' motion for reconsideration was
likewise denied in a resolution by the RTC dated May 4, 1988.
Hence, the instant petition with the following assignment of
errors.
THE HONORABLE COURT OF APPEALS, IN
ITS DECEMBER 10, 1987 RESOLUTION,
ERRED IN HOLDING THAT THE ORDERS OF
DECEMBER 12, 1986 AND AUGUST 7, 1986
RELATE TO INCIDENTS IN CIVIL CASE NO.
45767 TOTALLY ALIEN TO THE SUBJECT
MATTER OF CA-G.R. SP NO. 08146.
THE HONORABLE COURT OF APPEALS
ERRED IN VALIDATING THE ORDER OF
AUGUST 7, 1986. (Rollo, p. 16)
In a resolution dated August 30, 1989, G.R. No. 83280 was
consolidated with G.R. No. 76265.
Although other minor issues are involved in these consolidated
cases, the principal and crucial issue that alone needs to be
resolved is the applicability of this Court's decision in the dela
Cruz case to these cases now before us.
The petitioners argue that the dela Cruz case could not be applied
to them since they were not parties in that case nor were they
ever notified of such case pending between the parties. The
petitioners explained that the de la Cruz case was a case among
the heirs of Policarpio de la Cruz. Since they acquired their
properties from an entirely different person, Amando Clemente
and not from any of the heirs of Policarpio de la Cruz, they could
not be considered privies to any of them.
In denying applicability, however, the petitioners assail the
Court's ruling that "the reconstituted title of Lucia dela Cruz over
Lot 671 (TCT No. RT 58) was valid. As the registered and rightful
owner, Lucia dela Cruz had the perfect and legal right to sell,
assign, and convert the property to respondent INK who as
purchaser for value in good faith holds the same free from all
encumbrances except those noted in said certificate."
With this Court's ruling promulgated in 1984, it is our considered
view that the petitioner can not raise anew the question of
ownership of Lucia dela Cruz over Lot 671 which had been
determined by the Court of Appeals and affirmed by the Supreme
Court in the dela Cruz case. Well-settled is the rule enunciated
in Church Assistance Program, Inc. v. Sibulo, 171 SCRA 408 [1989]
that:
When a right or fact has been judicially tried
and determined by a court of competent
jurisdiction, so long as it remains
unreversed, it should be conclusive upon
the parties and those in privity with them in
law or estate.
The Court's ruling has long been final and the issue on ownership
of Lot 671 finally disposed of several years ago. This declaration
must be respected and followed in the instant case applying the
principle of res judicata or, otherwise, the rule on conclusiveness
of judgment. The less familiar concept or less terminological
usage of res judicata as a rule on conclusiveness of judgment
refers to the situation where the judgment in the prior action
operates as an estoppel only as to the matters actually
determined therein or which were necessarily included therein
(De la Cruz v. Court of Appeals, 187 SCRA 165 [1990]).
Inevitably, the dela Cruz ruling should be applied to the present
petitions since the facts on which such decision was predicated
continue to be the facts of the case before us now (See Rivas v.
SEC, 190 SCRA 295 [1990]). Even the petitioners substantially
adopt the same findings of facts in their pleadings. The factual
inquiry with regards to the history of Lot 671 has already been laid
to rest and may no longer be disturbed. We quote:
The undisputed facts indicate that the
parcel of land in question is Lot 671 of the
Piedad Estate, GLRO Rec. No. 5975, with an
area of 184, 268 square meters, more or
less, situated in Barrio Culiat, Quezon
City; that the totality of the Piedad Estate
consists of a vast tract of land, registered on
March 12, 1912, in the name of the
Philippine Government, under Original
Certificate of Title (OCT) No. 614 of the
Register of Deeds of the Province of Rizal;
that when the Piedad Estate was subdivided
(with Lot No. 671 as one of the resulting
parcels) whoever was in possession of a
particular lot was given priority and/or
preference in the acquisition thereof
provided that the price and the cost of
titling would be paid; that upon such
payment, the government would issue the
corresponding certificate of title; that
Policarpio dela Cruz and his wife Luciana
Rafael were originally in possession of the
land; that they had three children, namely
(1) Maximo de la Cruz (married to Feliza
Yabut);
(2) Filomeno de la Cruz (married to Narcisa
Santiago); and
(3) defendant-appellant Lucia de la Cruz (a
widow);
that the plaintiffs-appellees herein are the
descendants of the two sons (Maximo and
Filomeno) of Policarpio; that on April 25,
1940, Lot No. 671 was segregated from the
totality of the Piedad Estate, covered by
OCT No. 614 and a separate title was issued
in the name of
"Eugenia de la Paz, soltera" and "Dorotea
de la Cruz, viuda"
(this was Transfer Certificate of Title (TCT)
No. 40355 of the Register of Deeds for the
Province of Rizal); that on November 29,
1941, a deed of sale over Lot No. 671 was
executed by Eugenia de la Paz and Dorotea
de la Cruz (the registered owners) in favor of
defendant-appellant Lucia de la Cruz; that
said deed of sale was registered with the
office of the Register of Deeds on July 17,
1943 and the corresponding certificate of
title was issued to Lucia de la Cruz; that in
1971, Lucia de la Cruz obtained from the
land registration court a reconstituted
title (TCT No. RT-59 over Lot No. 671), the
transfer certificate of title previously issued
to her in 1943 having been lost; that
subsequently, Lot No. 671 (this time,
already covered by TCT No. RT-58) was
subdivided into three (3) lots, each of which
was issued a separate title, as follows:
(a) Lot No. 671-A containing an area of
30,000 square meters and covered by TCT
No. 168320;
(b) Lot No. 671-B, containing an area of
4,268 square meters and covered by TCT
No. 168321; and
(c) Lot No. 671-C, containing an area of
150,000 square meters and covered by TCT
No. 168322;
that meanwhile TCT No. 40355 (already
previously issued to and in the names of
Eugenia de la Paz and Dorotea de la Cruz)
continued to exist; that when the title was
transferred from the Rizal Registry to the
Quezon City Registry, from the latter
Registry assigned to this TCT a new number,
RT-52; that this same Lot (No. 671) was
later subdivided into two lots, each with a
title:
(a) Lot No. 671-A (TCT No. 16212)
(b) Lot No. 671-B (TCT No. 16213)
both in the names of Eugenia de la Paz and
Dorotea de la Cruz; that the second lot (lot
No. 671-B, with an area of 103,108 square
meters) was sold on December 17, 1952 to
one Narcisa Vda. de Leon (to whom TCT No.
2009 was later issued); that on May 6,
1964, Narcisa Vda. de Leon transferred the
same Lot 671-B to Nieves Paz Eraa (who
was later issued in her own name TCT No.
79971).
The undisputed facts further show that in
1971, Nieves Paz Eraa filed before the
Court of First instance of Quezon City Civil
Case No. 16125 for 'quieting of title' against
Lucia de la Cruz, et al., praying that TCT
No. RT-58, (the reconstituted title of Lucia
de la Cruz), as well as all titles derived
therefrom, be declared null and void; that
the case ended with the parties submitting
a compromise agreement with Lucia de la
Cruz, among other things, paying plaintiff
Eraa the amount of P250,000.00 to cover
the acquisitive cost of the 103,108 square
meters of land included in the certificate of
title of defendant Lucia de la Cruz; that on
July 17, 1975, Lucia de la Cruz sold a portion
of Lot No. 671-C (one of the three portions
to which the lot included in RT-58 had been
subdivided, and which portion was covered
by TCT No. 168322), consisting of 103,108
square meters to defendant-appellant
Iglesia Ni Cristo, for the amount of
P2,108,850.00; that this sale was later
registered in the Registry of Deeds of
Quezon City, with a new title, TCT No.
209554 being issued in the name of the
Iglesia Ni Cristo; that another deed of
absolute sale was executed for the
remaining 84,356 square meters in favor
also of the Iglesia and said sale was
annotated on TCT No. 168322. In view of
said sales and the fact that registration of
the involved parcels is now in the name
(separately) of Lucia de la Cruz and the
Iglesia Ni Cristo, the present action for
reconveyance with damages was instituted.
(Emphasis supplied)
Apparently, there is no mention of Amando Clemente in the
above recital of facts. A closer perusal of the records in G. R.
76265 would, however, reveal that TCT No. 16212 was issued for
Lot 671-A in the name of Amando Clemente on August 9, 1951
per report of the Acting Administrator of the NLTDRA (Rollo, p.
92). Amando Clemente's TCT No. 16212 emanated from TCT No.
40355 in the name of Eugenia de la Paz and Dorotea dela Cruz.
Thus, Amando Clemente's predecessors-in-interest are Eugenia
dela Paz and Dorotea dela Cruz whom the Court found to have
lost their rights over Lot 671 by virtue of the sale made to Lucia
dela Cruz.
The Register of Deeds correctly observed that this is a clear case
where there is a duplication or overlapping of titles issued to
different names over the same land which thereby compelled him
to file the consulta case with the NLTDRA:
(1) Lucia dela Cruz's reconstituted title (RT-58) which was divided
into 3 Lots, Lot 671-A, Lot 671-B and Lot 671-C and was
subsequently sold to INK;
(2) Eugenia dela Paz and Dorotea dela Cruz's reconstituted title
(RT-52) which was divided into 2 lots, Lot 671-A and Lot 671-B.
Notwithstanding, it is undisputed that Lot 671 was sold to Lucia
dela Cruz by Eugenia dela Paz and Dorotea dela Cruz as evidenced
by Entry No. 258, page 7, Vol. 7, Primary Entry Book of the
Registry of Deeds of Manila. (de la Cruz v. de la Cruz, supra, pp.
697-698) This is a finding which can not be disturbed.
Title is generally a conclusive evidence of the ownership of the
land referred to therein. (Ching v. Court of Appeals, 181 SCRA 9
[1990]) It is, therefore, too late in the day for the petitioners to
reopen or question the legality of INK's title over Lot 671 at this
time.
The petitioners also contend that what INK purchased from Lucia
dela Cruz in 1975 was Lot 671-C-4 LRC 322534 which corresponds
roughly to Lot 671-B (Psd-32221) and did not affect Lot 671-A of
Amando Clemente at all. This is, however, belied by the fact that
the sale made by Dorotea dela Cruz to Lucia dela Cruz (as
indicated in Entry No. 258) was Lot 671 which was later on
conveyed to INK.

We need not emphasize the fact that the

In challenging the validity of the reconstitution of Lucia dela Cruz's
Supreme Court by tradition and in our
title, the petitioners are not alleging fraud, collusion and illegality
system of judicial administration, has the
in the procurement of the certificate of title of Lucia dela Cruz. It
last word on what the law is. It is the final
must be recalled that G.R. No. 76265 stemmed merely from
arbiter of any justiciable controversy. There
a consulta case with the National Land Titles and Deeds
is only one Supreme Court from whose
Administration. Undeniably, the arguments and issues raised by
decisions all other courts should take their
the petitioner require adjudication of facts which, under the
bearings. Consequently, we cannot and
circumstances of this case, we are not prepared to do as this
should not review a case already passed
Court is not a trier of facts. Moreover, the present petition is not
upon by the Highest Tribunal. It is only
the proper remedy in challenging the validity of certificates of
proper to allow the case to take its rest.
titles since the judicial action required is a direct and not a
(Church assistance Program, Inc. v.
collateral attack. (Natalia Realty Corp. v. Vallez, 173 SCRA 534
Sibulo, supra.).
[1989]).

The sale of the land to Lucia dela Cruz and the subsequent
The Court had this to say:
registration thereof in the Primary Book of the Registry of Deeds,
Manila constitutes constructive notice to the whole world. (Heirs
of Maria Marasigan v. Intermediate Appellate Court, 152 SCRA We note with approval the lower court's
253 [1987]; People v. Reyes, 175 SCRA 597 [1988]) patient explanation that, inter alia the
certificate of title issued in the name of the
plaintiff in accordance with the Land
Since it is the act of registration which transfers ownership of the
Registration Act (Act No. 496) is
land sold (Government Service Insurance System v. Court of
indefeasible after the expiration of one year
Appeals, 169 SCRA 244 [1989]). Lot 671 was already owned by
from the entry of the decree of registration.
Lucia dela Cruz as early as 1943. Amando Clemente's alleged title
Under Section 38 thereof, a petition for
meanwhile which was issued on August 9, 1951 was very much
review of the decree must be presented
later. Thus, the petitioners, who merely stepped into the shoes of
within one year after its entry as described
Amando Clemente cannot claim a better right over said land.
and defined in Section 40 of the same. After
"Prior est temporae, prior est in jura" (he who is first in time is
the lapse of one year, the decree of
preferred in right) (Garcia v. Court of Appeals, 95 SCRA 380
registration becomes incontrovertible and is
[1980]). The fact that Amando Clemente possessed a certificate of
binding upon and conclusive against all
title does not necessarily make him the true owner. And not being
persons whether or not they were notified
the owner, he cannot transmit any right to nor transfer any title
of or participated in the registration
or interest over the land conveyed (Beaterio del Santisimo Rosario
proceedings. . . .
de Molo v. Court of Appeals, 137 SCRA 459 [1985]; Treasurer of
the Phil. v. Court of Appeals, 153 SCRA 359 [1987]).
Even assuming arguendo that said titles
may still be challenged, the present case
Moreover, the petition for reconstitution of title by Lucia dela
does not provide the vehicle for that
Cruz which the court held to be valid was a proceeding in rem. It is
remedy since the judicial action required is
well established that in rem proceedings such as land registration
a direct, and not a collateral attack. In fact,
constitute constructive notice to the whole world. The petitioners
under the existing law, Section 48 of the
cannot now claim that they were not notified of the
Property Registration Decree expressly
reconstitution proceedings over said lot. Under the facts of the
provides that a certificate of title cannot be
case, the title in the name of Lucia dela Cruz (TCT No. RT 58) has
subject to collateral attack and can be
become indefeasible and incontrovertible.
altered, modified or cancelled only in a
direct proceeding in accordance with law.
Likewise, the INK was also issued a Torrens Title over Lot 671 as a (at p. 542)
result of the sale made to it by the rightful owner, Lucia dela Cruz
in 1975. Under the Torrens System of registration, the Torrens
In our capacity as the court of last resort, the petitioners try to
Title became indefeasible and incontrovertible one year from its
convince us to look or inquire into the validity of the
final decree (Tirado v. Sevilla, 188 SCRA 321 [1990]). A Torrens
reconstitution proceedings initiated by Lucia dela Cruz,
contending that the implementation of de la Cruz ruling would
deprive them of their properties without due process of law. We
have looked long and hard into the records of the case but the
facts and circumstances plus law and jurisprudence on the matter
do not warrant such action from the Court. INK's title over Lot 671
which necessarily included Lot 671-A had already become
incontrovertible and indefeasible. To reopen or to question the
legality of INK's title would defeat the purpose of our Torrens
system which seeks to insure stability by quieting titled lands and
putting to a stop forever any question of the legality of the
registration in the certificate or questions which may arise
therefrom. (de la Cruz v. de la Cruz, supra.) In fairness to INK, as
registered owner it is entitled to rest secure in its land title.
In view of all the foregoing, it would be for the public interest and
the maintenance of the integrity and stability of the Torrens
system of land registration that all transfer certificates of title
derived from the reconstituted title of Eugenia dela Paz and
Dorotea dela Cruz be annulled in order to prevent the
proliferation of derivative titles which are null and void. The
legality or validity of INK's title over Lot 671 has been settled. The
Court has spoken and it has done so with finality, logically and
rightly so as to assure stability in legal relations and avoid
confusion. (see Ver v. Quetulio, 163 SCRA 80 [1988])
WHEREFORE, the petitions in G. R. Nos. 76265 and 83280 are
hereby DISMISSED for lack of merit.
SO ORDERED.
MATEO H. REYES and JUAN H. REYES, petitioners and appellants,
vs.
MATEO RAVAL REYES, respondent and appellee.
Harold M. Hernando for petitioners and appellants.
Rafael Ruiz for respondent and appellee.
REYES, J.B.L., J.:
Direct appeal on pure question of law from an order of the Court
of First Instance of Ilocos Norte, in its Cadastral Cases Nos. 31, L.
R. C. Rec. No. 1188, and 42, L. R. C. Rec. No. 1994, denying
petitioners' motion to compel respondent to surrender their
owners' duplicates of Original Certificates of Title Nos. 22161 and
8066, as well as from a subsequent order of the same court,
refusing, upon petitioners' motion, to reconsider the first order of
denial.
The undisputed facts are: three brothers, Mateo H., Juan H., and
Francisco H., all surnamed Reyes, are the registered owners of
several parcels of land, to wit; Lots Nos. 15891, 15896, 15902 and
15912, of the Laoag (Ilocos Norte) Cadastre, embraced in and
covered by Original Certificate of Title No. 22161, and also Lots
Nos. 20481 and 20484, of the same cadastral survey, embraced in
and covered by Original Certificate of Title No. 8066, both of the
Registry of Deeds of Ilocos Norte. These titles were issued
pursuant to a decree of registration, dated 31 May 1940.
On 17 July 1962, petitioners Mateo H. Reyes and Juan H. Reyes
filed, in the above stated cadastral cases, a motion for issuance of
writs of possession over all the lots covered by both Certificates of
Title above referred to.
Respondent Mateo Raval Reyes opposed the motion, admitting
that he is only in possession of the lots covered by Original
Certificate of Title No. 22161, but denying that he possesses the
lots covered by Original Certificate of Title No. 8066; however, he
claimed that he has been in, and is entitled to, the possession
thereof (i.e., Lots Nos. 20481 and 20484), having acquired by way
of absolute sale (not recorded) from petitioners' brother,
Francisco H. Reyes, the latter's undivided one-third (1/3) share,
interest and participation to these disputed lots.
After due hearing of this appellant, the court a quo issued, on 20
December 1962, the writ of possession with respect to Lot Nos.
15891 and 15896, which writ was, upon petitioners' motion for
reconsideration, amended, on 7 January 1963, to include all the
other lots covered by both titles.
Respondent did not appeal from this order amending the writ of
possession.
Subsequently, petitioners in the above cadastral cases, as
plaintiffs, commenced, on 15 January 1963, before the same court
of first instance, an ordinary civil action seeking to recover the
products of the disputed lots, or their value, and moral damages
against respondent Mateo Raval Reyes, as defendant. This case
was docketed as its Civil Case No. 3659.
Defendant therein (now respondent M. Raval Reyes) answered
the complaint and pleaded a counterclaim for partition of all the
disputed lots, alleging the same ground he had heretofore raised
in his answer and/or opposition to the motion for issuance of writ
of possession, i.e., he is their (plaintiffs') co-owner, he having
bought from plaintiffs' brother, Francisco H. Reyes, the latter's
undivided one-third (1/3) share, interest and participation to
these disputed lots.
Pending trial on this ordinary civil case (No. 3659), petitioners
presented, on 25 February 1963, in the cadastral cases
aforementioned, a motion to compel respondent Mateo Raval
Reyes to surrender and deliver to them the owners' duplicates of
Original Certificates of Title Nos. 22161 and 8066. Respondent
opposed this motion.
The court a quo denied petitioners' motion, on the ground that
the parcels of land covered by both titles are subjects of litigation
in Civil Case No. 3659 and the same has not yet been decided on
the merits by it. Petitioners subjected the foregoing order to a
motion for reconsideration, but without success; hence, the
present appeal.
Petitioners-appellants dispute the above ruling of the trial court
contending that, since the subject matter of Civil Case No. 3659
are not the lots covered by the titles in question but their
products or value, and moral damages, these lots are not in
litigation in this ordinary civil case; and that since respondent had
already raised the issue of ownership and possession of these lots
in his opposition to the (petitioners') motion for issuance of writ
of possession and, despite this opposition, the court a
quo granted the writ, without any appeal being taken, respondent
is barred and estopped from raising the same issue in the ordinary pretension no es meritoria Segun el articulo 41 de la
civil case, under the principle of res judicata.1wph1.t Ley No. 496, conforme ha sido enmendado, el
duplicado para el dueno debe expedirse por el
Registrador a nombre de la persona a cuyo favor se ha
On the other hand, respondent-appellee maintains that, having
decretado el terreno y dispone, ademas, que dicho
pleaded a counterclaim for partition of the lots in question in said
duplicado debe entregarsele al dueo inscrito. Si la
Civil Case No. 3659, the trial court correctly held that these lots
apelante cree que tiene derecho a participar en el lote
are subjects of litigation in this ordinary civil case. He also
No. 778, como coheredera, debe ejercitar una accion
maintains that petitioners not having impleaded their brother,
independiente, encaminada a obtener su participacion.
Francisco H. Reyes, or his heirs, as parties in their motion for
(El Director de Terrenos contra Abacahin 72 Phil. 326).
issuance of writ of execution, and because these heirs have not
intervened in this particular incident, the writ of possession issued
by the trial court is, at most, valid only with respect to their It being undisputed that respondent had already availed of an
(petitioners) undivided two-thirds (2/3) share and participation in independent civil action to recover his alleged co-owner's share in
these disputed lots; hence, he concludes that he is not barred and the disputed lots by filing a counterclaim for partition in said Civil
estopped from raising the issue of ownership and possession of Case No. 3659, his rights appear to be amply protected; and
the undivided one-third (1/3) share and participation of considering that he may also avail of, to better protect his rights
petitioners' brother, Francisco H. Reyes, which share respondent thereto, the provision on notice of lis pendens under Section 24,
allegedly bought from the latter. Rule 14, of the Revised Rules of Court, for the purpose of
recording the fact that the lots covered by the titles in question
are litigated in said Civil Case No. 3659, we again see no justifiable
In their reply brief, petitioners-appellants refute the latter
reason for respondent to retain the custody of the owners'
argument of respondent-appellee by showing that they had
duplicates of certificates of titles.
previously obtained special authority from the heirs of their
deceased brother to represent them in the proceedings had in the
court below. In view of the above considerations, we deem it unnecessary to
pass on the merits of the second contention of petitioners-
appellants.
The sole issue to be resolved in the instant appeal is: who
between petitioners-appellants or respondent-appellee has a
better right to the possession or custody of the disputed owners' Wherefore, the orders appealed from should be, as they are
duplicates of certificates of title. hereby, reversed; and, in accordance with this opinion,
respondent Mateo Raval Reyes is hereby ordered to deliver to
petitioners the owners' duplicates of Original Certificates of Title
While we agree with the court a quo that the disputed lots are
No. 22161 and 8066. With costs against respondent-appellee,
subjects of litigation in Civil Case No. 3659, it appearing that
Mateo Raval Reyes.
respondent, as defendant therein, had presented a counterclaim
for partition of the lots covered by the titles, we see no valid and
plausible reason to justify, on this ground, the withholding from
the registered owners, such as the petitioners-appellants herein,
the custody and possession of the owners' duplicates of [G.R. No. 154409. June 21, 2004]
certificates of title. In a decided case, this Court has already held
that the owner of the land in whose favor and in whose name said
land is registered and inscribed in the certificate of title has a
more preferential right to the possession of the owners' duplicate
than one whose name does not appear in the certificate and has Spouses NOEL and JULIE
yet to establish his right to the possession thereto. Thus, this ABRIGO, petitioners, vs. ROMANA DE VERA, respondent.
Court said:

Como acertadamente dijo el Juzgado, lo unico que se

suscita es si Ana Umbao de Carpio tiene derecho a la DECISION
possession del duplicado para el dueno del Certificado
de Titulo Original No. 698, con preferencia a la PANGANIBAN, J.:
opositora-apelante. A nuestro juicio, la solucion es
clara e ineludible. Hallandose admitido que el decreto Between two buyers of the same immovable property
final que se dicto en el expediente catastral en 28 de registered under the Torrens system, the law gives ownership
mayo de 1936, en relacion con el lote No. 778, fue a priority to (1) the first registrant in good faith; (2) then, the first
favor de Ana Umbao y que el duplicado para el dueo possessor in good faith; and (3) finally, the buyer who in good
del Certificado de Titulo Original No. 698 se expidio por faith presents the oldest title. This provision, however, does not
el Registrador de Titulos a favor de la misma es apply if the property is not registered under the Torrens system.
obvious que quien tiene derecho a poseer el
certificado de titulo es ella y no la apelante (art. 41 de
la Ley No. 496, tal como ha sido reformado).
The Case
Alega la apelante que ella tiene tanto derecho como la
apelada a poseer el titulo porque el terreno a que se
refiere es de la propiedad de las tres hermanas. La
 Before us is a Petition for Review[1] under Rule 45 of the
Rules of Court, seeking to set aside the March 21, 2002 Amended
Decision[2] and the July 22, 2002 Resolution[3] of the Court of
Appeals (CA) in CA-GR CV No. 62391. The Amended Decision
disposed as follows:
WHEREFORE, the dispositive part of the original DECISION of this
case, promulgated on November 19, 2001, is SET ASIDE and
another one is entered AFFIRMING in part and REVERSING in part
the judgment appealed from, as follows:
1. Declaring [Respondent] Romana de Vera the
rightful owner and with better right to
possess the property in question, being an
innocent purchaser for value therefor;
2. Declaring Gloria Villafania [liable] to pay the
following to [Respondent] Romana de Vera
and to [Petitioner-]Spouses [Noel and Julie]
Abrigo, to wit:
As to [Respondent] Romana de Vera:
1. P300,000.00 plus 6% per annum as actual damages;
2. P50,000.00 as moral damages;
3. P50,000.00 as exemplary damages;
4. P30,000.00 as attorneys fees; and
5. Cost of suit.
As to [Petitioner-]Spouses [Noel and Julie] Abrigo:
1. P50,000.00 as moral damages;
2. P50,000.00 as exemplary damages;
3. P30,000.00 as attorneys fees;
4. Cost of suit.[4]
The assailed Resolution denied reconsideration.
The Facts
Quoting the trial court, the CA narrated the facts as follows:
As culled from the records, the following are the pertinent
antecedents amply summarized by the trial court:
On May 27, 1993, Gloria Villafania sold a house and lot located at
Banaoang, Mangaldan, Pangasinan and covered by Tax
Declaration No. 1406 to Rosenda Tigno-Salazar and Rosita Cave-
Go. The said sale became a subject of a suit for annulment of
documents between the vendor and the vendees.
On December 7, 1993, the Regional Trial Court, Branch 40 of
Dagupan City rendered judgment approving the Compromise
Agreement submitted by the parties. In the said Decision, Gloria
Villafania was given one year from the date of the Compromise
Agreement to buy back the house and lot, and failure to do so
would mean that the previous sale in favor of Rosenda Tigno-
Salazar and Rosita Cave-Go shall remain valid and binding and the
plaintiff shall voluntarily vacate the premises without need of any
demand. Gloria Villafania failed to buy back the house and lot, so
the [vendees] declared the lot in their name.
Unknown, however to Rosenda Tigno-Salazar and Rosita Cave-Go,
Gloria Villafania obtained a free patent over the parcel of land
involved [on March 15, 1988 as evidenced by OCT No. P-
30522]. The said free patent was later on cancelled by TCT No.
212598 on April 11, 1996.
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 Cave-Go, the subsequent sale
to De Vera was deemed void.
The CA also dismissed the appeal of Petitioner-Spouses
Abrigo and found no sufficient basis to award them moral and
exemplary damages and attorneys fees.
On reconsideration, the CA issued its March 21,
2002 Amended Decision, finding Respondent De Vera to be a
purchaser in good faith and for value. The appellate court ruled
that she had relied in good faith on the Torrens title of her vendor
and must thus be protected.[8]
 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 (Tigno-Salazar and Cave-Go) knew that the
property was covered by the Torrens system, they registered their
respective sales under Act 3344.[17] For her part, respondent
registered the transaction under the Torrens system[18] because,
during the sale, Villafania had presented the transfer certificate of
title (TCT) covering the property.[19]
Respondent De Vera contends that her registration under
the Torrens system should prevail over that of petitioners who
recorded theirs under Act 3344. De Vera relies on the following
insight of Justice Edgardo L. Paras:
x x x If the land is registered under the Land Registration Act (and
has therefore a Torrens Title), and it is sold but the subsequent
sale is registered not under the Land Registration Act but under
Act 3344, as amended, such sale is not considered REGISTERED, as
the term is used under Art. 1544 x x x.[20]
We agree with respondent. It is undisputed that Villafania
had been issued a free patent registered as Original Certificate of
Title (OCT) No. P-30522.[21] The OCT was later cancelled by
Transfer Certificate of Title (TCT) No. 212598, also in Villafanias
name.[22] As a consequence of the sale, TCT No. 212598 was
subsequently cancelled and TCT No. 22515 thereafter issued to
respondent.
Soriano v. Heirs of Magali[23] held that registration must be
done in the proper registry in order to bind the land. Since the
property in dispute in the present case was already registered
under the Torrens system, petitioners registration of the sale
under Act 3344 was not effective for purposes of Article 1544 of
the Civil Code.
More recently, in Naawan Community Rural Bank v. Court
of Appeals,[24] the Court upheld the right of a party who had
registered the sale of land under the Property Registration
Decree, as opposed to another who had registered a deed of final
conveyance under Act 3344. In that case, the priority in time
principle was not applied, because the land was already covered
by the Torrens system at the time the conveyance was registered
under Act 3344. For the same reason, inasmuch as the
registration of the sale to Respondent De Vera under
the Torrens system was done in good faith, this sale must be
upheld over the sale registered under Act 3344 to Petitioner-
Spouses Abrigo.
Radiowealth Finance Co. v. Palileo[25] explained the
difference in the rules of registration under Act 3344 and those
under the Torrens system in this wise:
Under Act No. 3344, registration of instruments affecting
unregistered lands is without prejudice to a third party with a
better right. The aforequoted phrase has been held by this Court
to mean that the mere registration of a sale in ones favor does
not give him any right over the land if the vendor was not
anymore the owner of the land having previously sold the same to
somebody else even if the earlier sale was unrecorded.
The case of Carumba vs. Court of Appeals[26] is a case in point. It
was held therein that Article 1544 of the Civil Code has no
application to land not registered under Act No. 496. Like in the
case at bar, Carumba dealt with a double sale of the same
unregistered land. The first sale was made by the original owners
and was unrecorded while the second was an execution sale that
resulted from a complaint for a sum of money filed against the
said original owners. Applying [Section 33], Rule 39 of the Revised
Rules of Court,[27] this Court held that Article 1544 of the Civil
Code cannot be invoked to benefit the purchaser at the execution
sale though the latter was a buyer in good faith and even if this
second sale was registered.It was explained that this is because
the purchaser of unregistered land at a sheriffs execution sale
only steps into the shoes of the judgment debtor, and merely
acquires the latters interest in the property sold as of the time the
property was levied upon.
Applying this principle, x x x the execution sale of unregistered
land in favor of petitioner is of no effect because the land no
longer belonged to the judgment debtor as of the time of the said
execution sale.[28]
Petitioners cannot validly argue that they were fraudulently
misled into believing that the property was
unregistered. A Torrens title, once registered, serves as a notice to
the whole world.[29] All persons must take notice, and no one can
plead ignorance of the registration.[30]
Good-Faith Requirement
We have consistently held that Article 1544 requires the
second buyer to acquire the immovable in good faith and to
register it in good faith.[31] Mere registration of title is not enough;
good faith must concur with the registration.[32] We explained the
rationale in Uraca v. Court of Appeals,[33] which we quote:
Under the foregoing, the prior registration of the disputed
property by the second buyer does not by itself confer ownership
or a better right over the property. Article 1544 requires that such
registration must be coupled with good faith.Jurisprudence
teaches us that (t)he governing principle is primus tempore, potior
jure (first in time, stronger in right). Knowledge gained by the first
buyer of the second sale cannot defeat the first buyers rights
except where the second buyer registers in good faith the second
sale ahead of the first, as provided by the Civil Code. Such
knowledge of the first buyer does not bar her from availing of her
rights under the law, among them, to register first her purchase as
against the second buyer. But in converso, knowledge gained by
the second buyer of the first sale defeats his rights even if he is
first to register the second sale, since such knowledge taints his
prior registration with bad faith. This is the price exacted by
Article 1544 of the Civil Code for the second buyer being able to
displace the first buyer; that before the second buyer can obtain
priority over the first, he must show that he acted in good faith
throughout (i.e. in ignorance of the first sale and of the first buyers
rights) ---- from the time of acquisition until the title is transferred
to him by registration, or failing registration, by delivery of
possession.[34] (Italics supplied)
Equally important, under Section 44 of PD 1529, every
registered owner receiving a certificate of title pursuant to a
decree of registration, and every subsequent purchaser of
registered land taking such certificate for value and in good
faith shall hold the same free from all encumbrances, except
those noted and enumerated in the certificate.[35] Thus, a person
dealing with registered land is not required to go behind the
registry to determine the condition of the property, since such
condition is noted on the face of the register or certificate of
title.[36] Following this principle, this Court has consistently held as
regards registered land that a purchaser in good faith acquires a
good title as against all the transferees thereof whose rights are
not recorded in the Registry of Deeds at the time of the sale.[37]
Citing Santiago v. Court of Appeals,[38] petitioners contend
that their prior registration under Act 3344 is constructive notice
to respondent and negates her good faith at the time she
registered the sale. Santiagoaffirmed the following commentary
of Justice Jose C. Vitug:
The governing principle is prius tempore, potior jure (first in time,
stronger in right). Knowledge by the first buyer of the second sale
cannot defeat the first buyer's rights except when the second
buyer first registers in good faith the second sale (Olivares vs.
Gonzales, 159 SCRA 33). Conversely, knowledge gained by the
second buyer of the first sale defeats his rights even if he is first to
register, since such knowledge taints his registration with bad
faith (see also Astorga vs. Court of Appeals, G.R. No 58530, 26
December 1984) In Cruz vs. Cabana (G.R. No. 56232, 22 June
1984; 129 SCRA 656), it was held that it is essential, to merit the
protection of Art. 1544, second paragraph, that the second realty
buyer must act in good faith in registering his deed of sale
(citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs.
CA, G.R. 95843, 02 September 1992).
xxxxxxxxx
Registration of the second buyer under Act 3344, providing for
the registration of all instruments on land neither covered by the
Spanish Mortgage Law nor the Torrens System (Act 496), cannot
improve his standing since Act 3344 itself expresses that
registration thereunder would not prejudice prior rights in good
faith (see Carumba vs. Court of Appeals, 31 SCRA
558). Registration, however, by the first buyer under Act 3344
can have the effect of constructive notice to the second buyer
that can defeat his right as such buyer in good faith (see Arts.
708-709, Civil Code; see also Revilla vs. Galindez, 107 Phil.
480; Taguba vs. Peralta, 132 SCRA 700). Art. 1544 has been held
to be inapplicable to execution sales of unregistered land, since
the purchaser merely steps into the shoes of the debtor and
acquires the latter's interest as of the time the property is sold
(Carumba vs. Court of Appeals, 31 SCRA 558; see also Fabian vs.
Smith, Bell & Co., 8 Phil. 496) or when there is only one sale
(Remalante vs. Tibe, 158 SCRA 138).[39] (Emphasis supplied)
Santiago was subsequently applied in Bayoca v.
Nogales,[40] which held:
Verily, there is absence of prior registration in good faith by
petitioners of the second sale in their favor. As stated in
the Santiago case, registration by the first buyer under Act No.
3344 can have the effect of constructive notice to the second
buyer that can defeat his right as such buyer. On account of the
undisputed fact of registration under Act No. 3344 by [the first
buyers], necessarily, there is absent good faith in the registration
of the sale by the [second buyers] for which they had been issued
certificates of title in their names. x x x.[41]
Santiago and Bayoca are not in point. In Santiago, the first
buyers registered the sale under the Torrens system, as can be
inferred from the issuance of the TCT in their names.[42] There was
no registration under Act 3344. In Bayoca, when the first buyer
registered the sale under Act 3344, the property was still
unregistered land.[43] Such registration was therefore considered
effectual.
Furthermore, Revilla and Taguba, which are cited
in Santiago, are not on all fours with the present case. In Revilla,
the first buyer did not register the sale.[44] In Taguba, registration
was not an issue.[45]
As can be gathered from the foregoing, constructive notice
to the second buyer through registration under Act 3344 does not
apply if the property is registered under the Torrens system, as in
this case.
We quote below the additional commentary of Justice
Vitug, which was omitted in Santiago. This omission was evidently
the reason why petitioner misunderstood the context of the
citation therein:
"The registration contemplated under Art. 1544 has been held to
refer to registration under Act 496 Land Registration Act (now PD
1529) which considers the act of registration as the operative act
that binds the land (see Mediante vs. Rosabal, 1 O.G. [12]
900, Garcia vs. Rosabal, 73 Phil 694). On lands covered by the
Torrens System, the purchaser acquires such rights and interest as
they appear in the certificate of title, unaffected by any prior lien
or encumbrance not noted therein. The purchaser is not required
to explore farther than what the Torrens title, upon its face,
indicates. The only exception is where the purchaser has actual
knowledge of a flaw or defect in the title of the seller or of such
liens or encumbrances which, as to him, is equivalent to
registration (see Sec. 39, Act 496; Bernales vs. IAC, G.R. 75336, 18
October 1988; Hernandez vs. Sales, 69 Phil 744; Tajonera vs. Court
of Appeals, L-26677, 27 March 1981),"[46]
Respondent
in Good Faith
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 the assailed
Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
REPUBLIC OF THE PHILIPPINES, G.R. No. 185091
REPRESENTED BY THE
DEPARTMENT OF EDUCATION
DIVISION OF LIPA CITY (FOR
PANINSINGIN PRIMARY SCHOOL),
Petitioner, Present:
CARPIO, J., Chairperson, The Facts and the Case
- versus - ABAD,
V
I
L Paninsingin Primary School (PPS) is a public school
L
A operated by petitioner Republic of the Philippines (the Republic)
R
through the Department of Education. PPS has been using 1,149
A
M square meters of land in Lipa City, Batangas since 1957 for its
A
, school. But the property, a portion of Lots 1923 and 1925, were

J registered in the name of respondents Primo and Maria Mendoza

R
. (the Mendozas) under Transfer Certificate of Title (TCT) T-11410.[1]
,
*

P On March 27, 1962 the Mendozas caused Lots 1923

E
and 1925 to be consolidated and subdivided into four lots, as
R
E follows:
Z
,
*
Lot 1 292 square meters in favor of Claudia Dimayuga
*
Lot 2 292 square meters in favor of the Mendozas
Lot 3 543 square meters in favor of Gervacio Ronquillo;
a and
n Lot 4 1,149 square meters in favor of the City
d Government of Lipa[2]
M
E
N
D As a result of subdivision, the Register of Deeds
O
Z partially cancelled TCT T-11410 and issued new titles for Lots 1
A
and 3 in favor of Dimayuga and Ronquillo, respectively. Lot 2
,
remained in the name of the Mendozas but no new title was
J
J issued in the name of the City Government of Lipa
.
PRIMO MENDOZA and for Lot 4.[3] Meantime, PPS remained in possession of the
MARIA LUCERO, Promulgated:
Respondents. property.
August 8, 2010
The Republic claimed that, while no title was issued in
x --------------------------------------------------------------------------------------
the name of the City Government of Lipa, the Mendozas had
-x
relinquished to it their right over the school lot as evidenced by
DECISION
the consolidation and subdivision plan. Further, the property had

long been tax-declared in the name of the City Government and

ABAD, J.:
PPS built significant, permanent improvements on the same.
This case is about the propriety of filing an ejectment
These improvements had also been tax-declared.[4]
suit against the Government for its failure to acquire ownership of

a privately owned property that it had long used as a school site

and to pay just compensation for it.

The Mendozas claim, on the other hand, that although PPS sought

permission from them to use the property as a school site, they The Republic, through the Office of the Solicitor

never relinquished their right to it. They allowed PPS to occupy General (OSG), appealed the RTC decision to the Court of Appeals

the property since they had no need for it at that time. Thus, it (CA) in CA-G.R. SP 96604 on the grounds that: (1) the Mendozas

has remained registered in their name under the original title, TCT were barred by laches from recovering possession of the school

T-11410, which had only been partially cancelled. lot; (2) sufficient evidence showed that the Mendozas

relinquished ownership of the subject lot to the City Government

On November 6, 1998 the Mendozas wrote PPS, of Lipa City for use as school; and (3) Lot 4, Pcs-5019 has long

demanding that it vacate the disputed property.[5] When PPS been declared in the name of the City Government since 1957 for

declined to do so, on January 12, 1999 the Mendozas filed a taxation purposes.[14]

complaint with the Municipal Trial Court in Cities (MTCC) of Lipa

City in Civil Case 0002-99 against PPS for unlawful detainer with In a decision dated February 26, 2008, the CA affirmed

application for temporary restraining order and writ of the RTC decision.[15] Upholding the Torrens system, it emphasized

preliminary injunction.[6] the indefeasibility of the Mendozas registered title and the

imprescriptible nature of their right to eject any person occupying

On July 13, 1999 the MTCC rendered a decision, the property. The CA held that, this being the case, the Republics

dismissing the complaint on ground of the Republics immunity possession of the property through PPS should be deemed merely

from suit.[7] The Mendozas appealed to the Regional Trial Court a tolerated one that could not ripen into ownership.

(RTC) of Lipa Citywhich ruled that the Republics consent was not The CA also rejected the Republics claim of ownership

necessary since the action before the MTCC was not against it.[8] since it presented no documentary evidence to prove the transfer

In light of the RTCs decision, the Mendozas filed with of the property in favor of the government. Moreover, even

the MTCC a motion to render judgment in the case before assuming that the Mendozas relinquished their right to the

it.[9] The MTCC denied the motion, however, saying that property in 1957 in the governments favor, the latter never took

jurisdiction over the case had passed to the RTC upon steps to have the title to the property issued in its name or have

appeal.[10] Later, the RTC remanded the case back to the its right as owner annotated on the Mendozas title. The CA held

MTCC,[11] which then dismissed the case for insufficiency of that, by its omissions, the Republic may be held in estoppel to

evidence.[12] Consequently, the Mendozas once again appealed to claim that the Mendozas were barred by laches from bringing its

the RTC in Civil Case 2001-0236. action.

With the denial of its motion for reconsideration, the

On June 27, 2006 the RTC found in favor of Republic has taken recourse to this Court via petition for review

the Mendozas and ordered PPS to vacate the property. It held on certiorari under Rule 45.

that the Mendozas had the better right of possession since they

were its registered owners. PPS, on the other hand, could not The Issue Presented

produce any document to prove the transfer of ownership of the The issue in this case is whether or not the CA erred in

land in its favor.[13] PPS moved for reconsideration, but the RTC holding that the Mendozas were entitled to evict the Republic

denied it. from the subject property that it had used for a public school.
The Courts Ruling be assumed that the Mendozas agreed to transfer ownership of

A decree of registration is conclusive upon all persons, the land to the government, whether to the City Government of

including the Government of the Republic and all its branches, Lipa or to the Republic, way back but never got around to do so

whether or not mentioned by name in the application for and the Republic itself altogether forgot about it. Consequently,

registration or its notice.[16] Indeed, title to the land, once the Republic should be deemed entitled to possession pending

registered, is imprescriptible.[17] No one may acquire it from the the Mendozas formal transfer of ownership to it upon payment of

registered owner by adverse, open, and notorious just compensation.

possession.[18] Thus, to a registered owner under The Court holds that, where the owner agrees

the Torrens system, the right to recover possession of the voluntarily to the taking of his property by the government for

registered property is equally imprescriptible since possession is a public use, he thereby waives his right to the institution of a

mere consequence of ownership. formal expropriation proceeding covering such property. Further,

as the Court also held in Eusebio v. Luis,[22] the failure for a long

Here, the existence and genuineness of time of the owner to question the lack of expropriation

the Mendozas title over the property has not been proceedings covering a property that the government had taken

disputed. While the consolidation and subdivision plan of Lots constitutes a waiver of his right to gain back

1923 and 1925 shows that a 1,149 square meter lot had been possession. The Mendozas remedy is an action for the payment of

designated to the City Government, the Republic itself admits that just compensation, not ejectment.

no new title was issued to it or to any of its subdivisions for the

portion that PPS had been occupying since 1957.[19] In Republic of the Philippines v. Court of Appeals,[23] the

Court affirmed the RTCs power to award just compensation even

That the City Government of Lipa tax-declared the in the absence of a proper expropriation proceeding. It held that

property and its improvements in its name cannot defeat the RTC can determine just compensation based on the evidence

the Mendozas title. This Court has allowed tax declarations to presented before it in an ordinary civil action for recovery of

stand as proof of ownership only in the absence of a certificate of possession of property or its value and damages. As to the time

title.[20] Otherwise, they have little evidentiary weight as proof of when just compensation should be fixed, it is settled that where

ownership.[21] property was taken without the benefit of expropriation

proceedings and its owner filed an action for recovery of

The CA erred, however, in ordering the eviction of PPS possession before the commencement of expropriation

from the property that it had held as government school site for proceedings, it is the value of the property at the time of taking

more than 50 years. The evidence on record shows that that is controlling.[24]

the Mendozas intended to cede the property to the City

Government of Lipa permanently. In fact, they allowed the city to Since the MTCC did not have jurisdiction either to evict

declare the property in its name for tax purposes. And when they the Republic from the land it had taken for public use or to hear

sought in 1962 to have the bigger lot subdivided into four, and adjudicate the Mendozas right to just compensation for it,

the Mendozas earmarked Lot 4, containing 1,149 square meters, the CA should have ordered the complaint for unlawful detainer

for the City Government of Lipa. Under the circumstances, it may


dismissed without prejudice to their filing a proper action for
recovery of such compensation.
WHEREFORE, the Court partially GRANTS the
petition, REVERSES the February 26, 2008 decision and the
October 20, 2008 resolution of the Court of Appeals in CA-G.R.
96604, and ORDERSthe dismissal of respondents Primo and Maria
Mendozas action for eviction before the Municipal Trial Court in
Cities of Lipa City in Civil Case 0002-99 without prejudice to their
filing an action for payment of just compensation against the
Republic of the Philippines or, when appropriate, against the City
of Lipa.
SO ORDERED.
[G.R. No. L-7644. November 27, 1956.]
HENRY LITAM, ETC., ET AL., Plaintiffs-Appellants, vs. REMEDIOS
R. ESPIRITU, as guardian of the incompetent MARCOSA RIVERA,
and ARMINIO RIVERA, Defendants-Appellees.
[G.R. No. L-7645. November 27, 1956]
IN THE MATTER OF THE INTESTATE OF THE DECEASED RAFAEL
LITAM. GREGORIO DY TAM, Petitioner-Appellant, vs. REMEDIOS
R. ESPIRITU, in her capacity as judicial guardian of the
incompetent MARCOSA RIVERA, counter-Petitioner, ARMINIO
RIVERA, administrator-Appellee.
DECISION
CONCEPCION, J.:
This is an appeal from a decision of the Court of First Instance of
Rizal in the above entitled case, which were jointly tried.
On May 21, 1952, Gregorio Dy Tam instituted Special Proceeding
No. 1537 of said court, entitled In the matter of the Intestate
Estate of the Deceased Rafael Litam. The petition therein filed,
dated April 24, 1952, states that Petitioner is the son of Rafael
Litam, who died in Manila on January 10, 1951; chan
roblesvirtualawlibrarythat the deceased was survived
by:chanroblesvirtuallawlibrary
Li Hong Hap 40 years
Li Ho 37 years
Gregorio Dy Tam 33 years
Henry Litam alias Dy Bun Pho 29 years
Beatriz Lee Tam alias Lee Giak Ian 27 years
Elisa Lee Tam alias Lee Giok Bee 25 years
William Litam alias Li Bun Hua 23 years
Luis Litam alias Li Bun Lin 22 years
that the foregoing children of the decedent by a marriage
celebrated in China in 1911 with Sia Khin, now deceased; chan
roblesvirtualawlibrarythat after the death of Rafael
Litam, Petitioner and his co-heirs came to know that the
decedent had, during the subsistence of said marriage with Sia
Khin, contracted in 1922 in the Philippines cralaw another
marriage with Marcosa Rivera, Filipino citizen; chan
roblesvirtualawlibrarythat the decedent left as his property
among others, his one-half (1/2) share valued at P65,000 in the
purported conjugal properties between him and Marcosa Rivera,
which cralaw partnership consisted of the following real property
acquired during the marriage between him and Marcosa Rivera,
to wit:chanroblesvirtuallawlibrary
(1) Three (3) parcels of land covered by Transfer Certificate of
Title No. 1228 of the Registry of Deeds of the province of
Pampanga:chanroblesvirtuallawlibrary
(2) One (1) parcel of land covered by Transfer Certificate of Title
No. 26011 of the Registry of Deeds of the province of Bulacan.
and that the decedent had left neither a will nor
debt. Petitioner prayed, therefore, that, after appropriate
proceedings, letters of administration be issued to Marcosa
Rivera, the surviving spouse of the decedent. Soon thereafter,
Marcosa Rivera filed a counter-
petition:chanroblesvirtuallawlibrary (1) substantially denying the
alleged marriage of the decedent to Sia Khin, as well as the
alleged filiation of the persons named in the petition; chan
roblesvirtualawlibrary(2) asserting that the properties described
herein are her paraphernal properties, and that the decedent had
left unpaid debts, and certain properties in Bulan and Casiguran,
Sorsogon, and in Virac, Catanduanes, apart from shares of stock in
a private corporation known by the name of Litam Co., Inc.; chan
roblesvirtualawlibraryand (3) praying that her nephew, Arminio
Rivera, be appointed administrator of the intestate estate of the
deceased.
In due course, the court granted this petition and letters of
administration were issued to Arminio Rivera, who assumed his
duties as such, and, later, submitted an inventory of the alleged
estate of Rafael Litam. Inasmuch as said inventory did not include
the properties mentioned in the petition, dated April 24, 1952, of
Gregorio Dy Tam, the latter filed, on November 29, 1952, a
motion for the removal of Rivera as administrator of the
aforementioned estate. This led to a number of incidents hinging
on the question whether said properties belong in common to the
decedent and Marcosa Rivera or to the latter exclusively.
Meanwhile, Remedios R. Espiritu was appointed, in Special
Proceeding No. 1709 of the Court of First Instance of Rizal,
guardian of Marcosa Rivera, who had been declared incompetent.
Thereafter, or on April 20, 1953, Gregorio Dy Tam and his alleged
brothers and sisters aforementioned, filed the complaint in Civil
Case No. 2071 of the same court, against Remedios R. Espiritu, as
guardian of Marcosa Rivera, and Arminio Rivera. In said
complaint, Plaintiffs therein reproduced substantially the
allegations made in the aforementioned petition of Gregorio Dy
Tam dated April 24. 1952, except that the properties acquired
during the existence of marriage between Rafael Litam and
Marcosa Rivera and/or with their joint efforts during the time
that they lived as husband and wife were said to be more than
those specified in said petition,
namely:chanroblesvirtuallawlibrary
(1) 3 parcels of land situated in the Municipality of Macabebe,
Province of Pampanga, covered by Transfer Certificate of Title No.
1228 of the Registry of Deeds for the Province of Pampanga,
issued on July 29, 1947;
(2) 2 Parcels of land, together with all buildings and
improvements thereon except those expressly noted in the title as
belonging to other persons, situated in the Municipality of
Navotas, Province of Rizal, covered by Transfer Certificate of Title
No. 35836 of the Registry of Deeds for the Province of Rizal,
issued on October 4, 1938;
(3) 1 parcel of land situated in the Municipality of Malabon,
Province of Rizal, covered by Transfer Certificate of Title No.
23248 of the Registry of Deeds for the Province of Rizal, issued on
June 12, 1933;
(4) 1 parcel of land situated in Barrio of Kay-Badia, Municipality
of Obando, Province of Bulacan, covered by Transfer Certificate of
Title No. 21809 of the Registry of Deeds for the Province of
Bulacan, issued on May 25, 1939;
(5) 1 parcel of land (plan psu-93067, swo-16049) situated in
Barrio of Quibadia, Municipality of Obando, Province of Bulacan,
covered by Transfer Certificate of Title No. 26011 of the Registry
of Deeds for the Province of Bulacan, issued on April 9, 1943;
Other properties are located in Bataan province.
All properties total an assessed value of approximately
P150,000.00.
In said complaint, Plaintiffs prayed that the judgment be
rendered:chanroblesvirtuallawlibrary
(1) declaring the aforesaid properties as belonging to the
conjugal partnership or tenancy in common which existed
between the deceased Rafael Litam and the incompetent
Marcosa Rivera;
(2) ordering the Defendants to deliver the aforesaid properties
to the administration of the estate of the deceased Rafael Litam
(Rule 75, section 2, Rules of Court);
(3) ordering the said Defendants further to render an accounting
of the fruits they collected from the aforesaid properties and to
deliver the same to the administration of the estate of the
deceased Rafael Litam;
(4) ordering the said Defendants to pay the administration of the
estate of the deceased Rafael Litam damages in double the value
of the fruits mentioned in the preceding paragraph which they
embezzled; chan roblesvirtualawlibraryand
(5) ordering the Defendants to pay the costs.
The Plaintiffs further pray for such other remedy as the Court
may deem just and equitable in the premises.
In her answer to the complaint, Marcosa Rivera reiterated, in
effect, the allegations in her counter-petition, dated July 12, 1952,
in Special Proceeding No. 1537, and set up some affirmative and
special defenses, as well as a counter-claim for attorneys fees and
damages in the aggregate sum of P110,000.00.
Owning to the identity of the issue raised in said Civil Case No.
2071 and in the aforementioned incidents in Special Proceeding
No. 1537, both were jointly heard. Later on, the court rendered a
decision.
(1) Dismissing Civil Case No. 2071, with costs against
the Plaintiffs;
(2) Sentencing the Plaintiff in Civil Case No. 2071, under
the Defendants counterclaim, to pay jointly and severally each of
the Defendants the sum of P5,000.00 as actual damages and
P25,000.00 as moral damages;
(3) Declaring that the properties in question,
namely:chanroblesvirtuallawlibrary the fishponds, consisting of
three parcels, situated in Macabebe, Pampanga, with Transfer
certificate of Title No. 1228 of the land records of Pampanga, one-
half undivided portion of the fishponds, consisting of two parcels,
situated in Navotas, Rizal, covered by Transfer Certificate of Title
No. 35836, the parcel of land with the improvements thereon
situated in Malabon, Rizal, covered by Transfer Certificate of Title
No. 23248, both of the land records of Rizal, and the fishponds,
consisting of two parcels, situated in Obando, Bulacan, covered by
Transfer Certificates of Title Nos. 21809 and 26011, both of the
land records of Bulacan, are the exclusive, separate and
paraphernal properties of Marcosa Rivera; chan
roblesvirtualawlibraryand
(4) Declaring that the Plaintiffs in Civil Case No. 2071 (who are
the same persons alleged to be children of Rafael Litam in the
petition, dated April 24, 1952, filed by the Petitioner in Sp. Proc.
No. 1537) are not the children of the deceased Rafael Litam, and
that his only heir is his surviving wife, Marcosa Rivera.
The two (2) Cases are now before us on appeal taken by
the Petitioner in Special Proceeding No. 1537 and the Plaintiffs in
Civil Case No. 2071. The issues for determination
are:chanroblesvirtuallawlibrary (1) Are Appellants the legitimate
children of Rafael Litam? (2) Is Marcosa Rivera the exclusive
owner of the properties in question, or do the same constitute a
common property of her and the decedent?
The first issue hinges on whether Rafael Litam and Sia Khin were
married in 1911, and whether Rafael Litam is the father
of Appellants herein. In this connection, the lower court had the
following to say:chanroblesvirtuallawlibrary
cralaw the evidence weikhs very heavily in favor of the theory of
the Defendants in Civil Case No. 2071 to the effect that the said
deceased Rafael Litam was not married to Sia Khin and
that Plaintiffs, are not the children of the said decedent.
The Plaintiffs in Civil Case No. 2071 and the Petitioner in Sp. Proc.
No. 1537 have utterly failed to prove their alleged status as
children of Rafael Litam by a marriage with Sia Khin.
It appears from the evidence presented by the Defendants in civil
Case No. 2071 and the administrator and the counter-Petitioner in
Sp. Proc. No. 1537 that there was no such marriage between the
deceased Rafael Litam and Sia Khin and that the Plaintiffs named
in Civil Case No. 2071 are not children of said deceased. The
various official and public documents executed by Rafael Litam
himself convincingly show that he had not contracted any
marriage with any person other than Marcosa Rivera, and that he
had no child. In the marriage certificate, (Exhibit 55) it was clearly
stated that he was single when he married Marcosa Rivera on
June 10, 1922. In the sworn application for alien certificate of
registration dated July 7, 1950 (Exhibit 1), Rafael Litam
unequivocably declared under oath that he had no child. In the
several other documents executed by him and presented in
evidence, (Exhibits 19, 21, 22, 23, 46 and 46-A) Rafael Litam had
consistently referred to Marcosa Rivera alone as his wife; chan
roblesvirtualawlibraryhe had never mentioned of Sia Khin as his
wife, or of his alleged children.
The witnesses presented by the Defendants in Civil Case No. 2071
and the administrator and counter Petitioner in Sp. Proc. No. 1537
positively testified to the effect that they know that Rafael Litam
did not have any child, nor was he married with Sia Khin. An
impartial and disinterested witness, Felipe Cruz, likewise testified
that he has known Rafael Litam even before his marriage with
Marcosa Rivera and that said Rafael Litam did not have any child.
On the other hand, the Plaintiffs in Civil Case No. 2071 and
the Petitioner in Sp. Proc. No. 1537 presented in support of their
theory the testimony of their lone witness, Luis Litam, and certain
documentary evidence. It is noteworthy that the
said Plaintiffs and said Petitioner did not present in evidence the
marriage certificate of Rafael Litam and Sia Khin, which in the
opinion of the Court, is the competent and best evidence of the
alleged marriage between them. No explanation has been given
for the non-presentation of said marriage certificate, nor has
there been any showing of its loss. Neither have said Plaintiffs and
said Petitioner presented any competent secondary evidence of
the supposed marriage.
The testimony of the lone witness, Luis Litam, cannot be given
any credence and value at all. His testimony is mostly hearsay, as
according to him, he was merely informed by Rafael Litam of the
latters supposed marriage with Sia Khin. His testimony is
uncorroborated. The court noticed that the said witness was only
22 years old when he testified, and it appears in the petition filed
by the Petitioner in Sp. Proc. No. 1537 that said witness is the
youngest of all the alleged eight children of Rafael Litam. The
Court is at a loss to understand why one or some of the older
alleged children of Rafael Litam were not presented as witnesses
in view of the unreliable testimony of Luis Litam, and considering
that older persons are better qualified to testify on the matters
sought to be proved which allegedly happened a long time ago.
The birth certificate presented by the Plaintiff in Civil Case No.
2071 and Petitioner in Sp. Proc. No. 1537 cannot be given even
little consideration, because the name of the father of the
children appearing therein is not Rafael Litam, but different
persons. It is very significant to note that the names of the father
of the persons appearing in said birth certificates are Dy Tham, Li
Tam, Lee Tham, Rafael Dy Tam, and that said persons were born
in different places, some in Amoy, China, another Fukien, China,
and the other in Limtao, China. It also appears in said birth
certificates that the childrens mothers named therein are
different, some being Sia Khim, others Sia Quien, the other Sia
Khun, and still another Sia Kian. These documents do not establish
the identity of the deceased Rafael Litam and the persons named
therein as father. Besides, it does not appear in the said
certificates of birth that Rafael Litam had in any manner
intervened in the preparation and filing thereof.
The other documentary evidence presented by the
said Plaintiffs and Petitioner are entirely immaterial and highly
insufficient to prove the alleged marriage between the deceased
Rafael Litam and Sia Khin and the alleged statue of
the Plaintiffs as children of said decedent.
It is, therefore, the finding of this Court that the Plaintiffs named
in Civil Case No. 2071 are not heirs of the said decedent, his only
heir being his surviving wife, Marcosa Rivera. (Emphasis ours.)
The findings of fact thus made in the decision appealed from are
borne out by the records and the conclusion drawn from said
facts is, to our mind, substantially correct.
Appellants evidence on this point consists of the testimony
of Appellant Li Bun Lin, who said that he is, also known as Luis
Litam; chan roblesvirtualawlibrarythat his co-Appellants are his
brothers and sisters; chan roblesvirtualawlibrarythat their parents
are the decedent and Sia Khin, who were married in China in
1911; chan roblesvirtualawlibraryand that Sia Khin died in Manila
during the Japanese occupation. He likewise, identified several
pictures, marked Exhibits I to S, which were claimed to be family
portraits, but the lower court rejected their admission in
evidence. Although we agree with herein Appellants that this was
an error, it is clear to us that said pictures and the testimony of
Luis Litam, as well as the other evidence adverted to in the above-
quoted portion of the decision appealed from, are far from
sufficient to outweigh, or even offset, the evidence in favor of
the Appellees.
It should be noted that the decedent had admittedly married
Marcosa Rivera in 1922. In the very petition of Appellant Gregorio
Dy Tam, in Special Proceeding No. 1537, dated April 24, 1952, he
alleged that Marcosa Rivera is the surviving spouse of the
decedent. In their complaint in Civil Case No.
2071, Appellants specifically admitted and averred the existence
of the marriage between said Rafael Litam and Marcosa Rivera
which would have been void ab initio, and, hence, inexistent
legally, if Appellants pretense were true or they believed it to be
so and that they had lived as husband and wife. Again,
although Gregorio Dy Tam, asserted, in his aforementioned
petition, that he and his co-heirs came to know about the
marriage of the decedent and Marcosa Rivera after the death of
Rafael Litam, the very testimony of Li Bun Lin, as witness for
the Appellants, show, beyond doubt, that said Appellants knew,
during the lifetime of Rafael Litam that he and Marcosa Rivera
were living in Malabon, Rizal, openly and publicly, as husband and
wife, and regarded her as his lawful wife. Indeed, in the course of
his testimony, said Li Bun Lin alluded to her as his mother. In
other words, aside from the circumstance that the wedding and
marital life of Marcosa Rivera and Rafael Litam is undisputed, it is,
also, an established fact that they had the general reputation of
being legally married and were so regarded by the community
and by Appellants herein, during the lifetime of Rafael Litam.
Upon the other hand, Appellants maintain, in effect, that Rafael
Litam was guilty of the crime of bigamy; chan
roblesvirtualawlibrarythat he had, likewise, willfully and
maliciously falsified public and official documents; chan
roblesvirtualawlibraryand that, although Appellants and Sia Khin
were living in Manila and Marcosa Rivera
whom Appellants knew resided only a few kilometers away, in
Malabon, Rizal where Rafael Litam returned daily, after attending
to his business in Manila, the decedent had succeeded, for about
thirty (30) years, in keeping each party in complete ignorance of
the nature of his alleged relations with the other. Apart from the
highly improbable nature of the last part of Appellants pretense,
it is obvious that the same cannot be sustained unless the
evidence in support thereof is of the strongest possible kind, not
only because it entails the commission by Rafael Litam of grave
criminal offenses which are derogatory to his honor, but, also,
because death has sealed his lips, thus depriving him of the most
effective means of defense. The proof for Appellants herein does
not satisfy such requirement.
As regards the title to the properties in dispute, the evidence
thereon was analyzed by the lower court in the following
language:chanroblesvirtuallawlibrary
It has been established by the evidence that the properties in
question were bought by Marcosa Rivera with her separate and
exclusive money. The fishponds situated in Obando, Bulacan,
covered by Transfer Certificate of Title Nos. 21809 and 26011, the
one-half (1/2) undivided portion of the fishponds situated in
Navotas, Rizal with Transfer Certificate of Title No. 35836, and the
property situated in Hulong-Duhat, Malabon, Rizal, with Transfer
Certificate of Title No. 23248 were all purchased by Marcosa
Rivera with the money she earned and accumulated while she
was still single; chan roblesvirtualawlibrarywhile the fishponds
situated in Macabebe, Pampanga with Transfer Certificate of Title
No. 1228 were purchased by her with the money she inherited
from her late sister, Rafaela Rivera and with the money she
received from the proceeds of the sale of the pieces of jewelry
she inherited from her father Eduardo Rivera and her sister
Rafaela Rivera. The properties in question, having been bought by
Marcosa Rivera, although during her marriage with Rafael Litam,
with her exclusive and separate money, said properties are
undeniably her paraphernal properties. (Art. 1396, Spanish Civil
Code, which is the same as Art. 148 of the Civil Code of the Phil.)
Great importance should be given to the documentary evidence,
vis:chanroblesvirtuallawlibrary Exhibits 21, 22, 23, 19, 46 and 46-
A, presented by the Defendants, in Civil Case No. 2071 and the
administrator and counter- Petitioner in Sp. Proc. No. 1537, which
prove beyond peradventure of any doubt that the properties in
question are the paraphernal properties of Marcosa Rivera. In
Exhibit 21, Rafael Litam unequivocably declared under his oath
that the money paid by Marcosa Rivera for the fishponds in
Obando, Bulacan was her exclusive and separate money which
was earned by her while she was still single. In Exhibits 22 and 23,
both dated June 16, 1947, same Rafael Litam, also under oath,
acknowledge the fact that the sums of P13,000.00 and P10,000.00
loaned by Marcosa Rivera to the spouses Catalino Pascual and
Juliana Pascual, and to Juliana Pascual, respectively, are the
separate and exclusive money of Marcosa Rivera, in which money
Rafael Litam had no interest whatsoever. In Exhibit 19, same
Rafael Litam acknowledged the fact that he had obtained, before
the outbreak of the second world war, from Marcosa Rivera the
sum of P135,000.00 which belongs exclusively to the latter, and
that after the liberation, or more specifically, on January 4, 1946,
he stole from Marcosa Rivera the further sum of P62,000.00, also
belonging exclusively to the latter, which amounts, totalling
P197,000.00, exclusive of interests, have not, according to the
evidence, been paid to her up to the present. In Exhibits 46 and
46-A, it was acknowledged by Rafael Litam that he had not given
any money to his wife, Marcosa Rivera, and that they have
actually adopted a system of separation of property, each of them
not having any interest or participation whatsoever in the
property of the other. These declarations and admission of fact
made by Rafael Litam against his interest are binding upon him,
his heirs and successors in interests and third persons as well.
(Secs. 7 & 29, Rule 123, Rules of Court).
The finding of this Court that the properties in question are
paraphernal properties of Marcosa Rivera, having been bought by
her with her separate and exclusive money, is further
strengthened by the fact that, as it is clearly disclosed by the
evidence when Marcosa Rivera married Rafael Litam in 1922, she
was already rich, she having already earned and saved money as
consignataria while she was still single. It also appears that she
was born of a rich family, her father, Eduardo Rivera, being the
owner of fishponds, commercial and residential lands and
buildings, (Exhibits 5 to 18, inclusive), with an assessed value of
around P150,000.00 (Exhibits 25 and 42, inclusive), now worth
approximately a million pesos, and most of which properties as
may be seen from the certificates of title were acquired by him
way back in the years 1916 and 1919. When Eduardo Rivera died
on February 5, 1942, his cash and jewelry were inherited by his
eldest daughter, Rafaela Rivera, and when the latter died single
on July 2, 1943, Marcosa Rivera inherited her cash amounting to
P150,000.00, Philippine currency, and and her pieces of jewelry. It
is with this amount and with the proceeds of the sale of some of
said pieces of jewelry that Marcosa Rivera purchased the
fishponds in question, situated in Macabebe, Pampanga.
On the other hand, it appears from the evidence that when
Rafael Litam was on June 10, 1922, married to Marcosa Rivera, he
was poor. He had to borrow from Marcosa Rivera, the sum of
P135,000.00 belonging exclusively to her before the outbreak of
the war, and to steal from her further sum of P62,000.00 after the
liberation (Exhibit 10). The said amounts totalling P197,000.00,
exclusive of the stipulated interests, according to the evidence,
have not been paid to Marcosa Rivera up to the present. Rafael
Litam did not contribute any amount of money or labor to the
properties in question, as he and Marcosa Rivera maintained an
absolute separation of property (Exhibits 46 and 46-A). Besides,
during his lifetime he used to go his office in Manila everyday.
Another circumstance which clearly proves that the properties in
question belong exclusively to Marcosa Rivera is the established
fact that before she became incompetent sometime in the early
part of the year, 1953, she had been administering said
properties, to the exclusion of Rafael Litam. In fact, as may be
seen from the very documentary evidence (Exhibit EE, same as
Nxh. 50) presented by the Plaintiffs in Civil Case No. 2071
themselves and Petitioner in Sp. Proc. No. 1537, she alone leased
the properties in question, situated in Macabebe, Pampanga, and
the corresponding lease contract, dated July 13, 1948 was signed
by her as lessor and by Rafael Suarez, Jr. as lessees. Furthermore,
the properties in question have been declared in the name of
Marcosa Rivera alone, and she alone pays the real estate taxes
due thereon. (Exhibits 43, 44 & 45.)
Further strong proofs that the properties in question are the
paraphernal properties of Marcosa Rivera, are the very Torrens
Titles covering said properties. All the said properties are
registered in the name of Marcosa Rivera, married to Rafael
Litam. This circumstance indicates that the properties in question
belong to the registered owner, Marcosa Rivera, as her
paraphernal properties, for if they were conjugal, the titles
covering the same should have been issued in the names of Rafael
Litam and Marcosa Rivera. The words married to Rafael Litam
written after the name of Marcosa Rivera, in each of the above
mentioned titles are merely descriptive of the civil status of
Marcosa Rivera, the registered owner of the properties covered
by said titles.
On the other hand, the evidence presented by the Plaintiffs in
Civil Case No. 2071 and Petitioner in Sp. Proc. No. 1537 in support
of their contention that the properties in question are conjugal is,
in the mind of the Court, very weak, unreliable, and mostly
incompetent, and cannot overcome the clear, convincing and
almost conclusive proofs presented by the opposite party. Scant
or no consideration at all could be given by the Court to the
immaterial, incompetent and unbelievable testimonies of the
witnesses presented by the said Plaintiffs and Petitioners. The
disputable presumption of law that the properties acquired during
the marriage are conjugal properties, upon which legal
presumption said Plaintiffs and Petitioner mainly rely has been
decisively overcome by the overwhelming preponderance of
evidence adduced in these cases that the properties in question
are the paraphernal properties of Marcosa Rivera. (Emphasis
ours.)
Appellants counsel assail the decision appealed from upon the
ground that the lower court had been partial to the Appellees and
had not accorded to the Appellants a fair and just hearing.
As above pointed out, His Honor the trial Judge could have been,
and should have been, more liberal in the reception of
evidence. Appellants witnesses (Li Bun Lin, Dominador Gadi,
Benigno Musni and Rafael B. Suarez) should have been allowed to
testify on the alleged title of Rafael Litam to certain properties
and on his alleged reasons for the language used in the public and
official documents relied upon by the Appellees. However, it is
apparent to us that said evidence cannot affect the decision in
these cases.
The evidenciary value of the testimony of said witnesses would
have depended mainly upon their individual appraisal of certain
facts, upon their respective inferences therefrom and their biases
or view points, and upon a number of other factors affecting their
credibility. At best, said testimony could not possibly prevail over
the repeated admissions made by the decedent against his own
interest in Exhibits 19, 21, 22, 23, 46 and 46-A (adverted to in the
abovequoted portion of the decision appealed from), which
admissions are corroborated by the fact that the deceased father
of Marcosa Rivera was well to do; chan roblesvirtualawlibrarythat
aside from her share in his estate, she had, likewise, inherited
from a sister who died single and without issue; chan
roblesvirtualawlibrarythat the lands in dispute were registered,
and some were, also, leased, in her name, instead of hers and that G.R. No. 184148 June 9, 2014
of the decedent; chan roblesvirtualawlibraryand that the latter
lived in her house in Malabon, Rizal.
NORA B. CALALANG-PARULAN and ELVIRA B.
Appellants contend that the transactions covered by said Exhibits CALALANG, Petitioners,
19, 21 to 23 and 46 and 46-A, as well as by the other deeds vs.
referred to in the decision appealed from, were caused to be ROSARIO CALALANG-GARCIA, LEONORA CALALANG-SABILE, and
made in the name of Marcosa Rivera, to the exclusion of her CARLITO S. CALALANG, Respondents.
husband, in order to evade the constitutional provision
disqualifying foreigners from the acquisition of private agricultural
lands, except by succession. Apart from being based, solely, upon DECISION
a surmise, without any evidentiary support, this pretense is
refuted by the fact that said residential property in Hulong-Duhat, VILLARAMA, JR., J.:
Malabon, Rizal, was acquired on April 12, 1933, or prior to the
adoption of our Constitution (see Exhibits Z and AA). Her
Before us is a petition for review on certiorari assailing the
transactions subsequently thereto, merely followed, therefore,
Decision1 dated December 21, 2007 and Resolution2dated July 25,
the pattern of her activities before the drafting of said
2008 of the Thirteenth Division of the Court of Appeals (CA) in CA-
fundamental law.
G.R. CV No. 72531. The CA modified the Decision3 dated July 10,
This notwithstanding, we do not believe that Appellants should be 2001 of the Regional Trial Court (RTC), Branch 21, of Malolos,
sentenced to pay damages. The petition of Gregorio Dy Tam in Bulacan, in Civil Case No. 370-M-91.
Special Proceeding No. 1537 and the complaint in Civil Case No.
2071 contain nothing derogatory to the good name or reputation The facts, as culled from the records, follow:
of the herein Appellees. On the contrary, it may be surmised from
said pleadings that Marcosa Rivera had no knowledge of the
alleged previous marriage of the decedent to Sia Khin. Moreover, In a Complaint4 for Annulment of Sale and Reconveyance of
the records do not show that Appellants have acted in bad faith. Property filed with the RTC of Malolos, Bulacan on June 10, 1991,
the respondents Rosario Calalang-Garcia, Leonora Calalang-Sabile,
Likewise, we are of the opinion that the lower court should not and Carlito S. Calalang asserted their ownership over a certain
have declared, in the decision appealed from, that Marcosa Rivera parcel of land against the petitioners Nora B. Calalang-Parulan
is the only heir of the decedent, for such declaration is improper and Elvira B. Calalang. The said lot with an area of 1,266 square
in Civil Case No. 2071, it being within the exclusive competence of meters and specifically identified as Lot 1132, Cad. 333, Bigaa
the court in Special Proceeding No. 1537, in which it is not as yet, Cadastre situated in Brgy. Burol 2nd, Municipality of Balagtas,
in issue, and, will not be, ordinarily, in issue until the presentation Province of Bulacan, was allegedly acquired by the respondents
of the project of partition. from their mother Encarnacion Silverio, through succession as the
latters compulsory heirs.
Wherefore, with the elimination of the award for damages in
favor of the herein Appellees, and of said declaration of heirship,
the decision appealed from is hereby affirmed in all other According to the respondents, their father, Pedro Calalang
respects, with costs against the Appellants. It is SO ORDERED. contracted two marriages during his lifetime. The first marriage
was with their mother Encarnacion Silverio. During the
subsistence of this marriage, their parents acquired the above-
mentioned parcel of land from their maternal grandmother
Francisca Silverio. Despite enjoying continuous possession of the
land, however, their parents failed to register the same. On June
7, 1942, the first marriage was dissolved with the death of
Encarnacion Silverio.
On November 6, 1967, Pedro Calalang entered into a second
marriage with Elvira B. Calalang who then gave birth to Nora B.
Calalang-Parulan and Rolando Calalang. According to the
respondents, it was only during this time that Pedro Calalang filed
an application for free patent over the parcel of land with the
Bureau of Lands. Pedro Calalang committed fraud in such
application by claiming sole and exclusive ownership over the land
since 1935 and concealing the fact that he had three children with
his first spouse. As a result, on September 22, 1974, the Register
of Deeds of Bulacan issued Original Certificate of Title (OCT) No. P-
28715 in favor of Pedro Calalang only.
On February 17, 1984, Pedro Calalang sold the said parcel of land
to Nora B. Calalang-Parulan as evidenced by a Deed of
Sale6 executed by both Pedro Calalang and Elvira B. Calalang.
Accordingly, the Register of Deeds of Bulacan cancelled OCT No.
P-2871 and issued Transfer Certificate of Title (TCT) No. 283321 in
the name of Nora B. Calalang-Parulan. On December 27,
1989,7 Pedro Calalang died.
The respondents assailed the validity of TCT No. 283321 on two
grounds. First, the respondents argued that the sale of the land
was void because Pedro Calalang failed to obtain the consent of
the respondents who were co-owners of the same. As compulsory
heirs upon the death of Encarnacion Silverio, the respondents
claimed that they acquired successional rights over the land. Thus,
in alienating the land without their consent, Pedro Calalang
allegedly deprived them of their pro indiviso share in the
property. Second, the respondents claimed that the sale was
absolutely simulated as Nora B. Calalang-Parulan did not have the
capacity to pay for the consideration stated in the Deed of Sale.
In their Answer,8 the petitioners argued that the parcel of land
was acquired during the second marriage of Pedro Calalang with
Elvira B. Calalang. They stressed that OCT No. P-2871 itself stated
that it was issued in the name of "Pedro Calalang, married to
Elvira Berba [Calalang]." Thus, the property belonged to the
conjugal partnership of the spouses Pedro Calalang and Elvira B.
Calalang. The petitioners likewise denied the allegation that the
sale of the land was absolutely simulated as Nora B. Calalang-
Parulan was gainfully employed in Spain at the time of the sale.
Moreover, they alleged that the respondents did not have a valid
cause of action against them and that their cause of action, if any,
was already barred by laches, estoppel and prescription. By way
of counterclaim, the petitioners also sought the payment to them
of moral and exemplary damages plus costs of suit for the filing of
the clearly unfounded suit.
On July 10, 2001, the trial court rendered decision in favor of the
respondents. The dispositive portion of the RTC decision reads as
follows:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiffs and against the defendants in the following manner:
1. Ordering the defendants to reconvey in favor of the
plaintiffs, their rightful share to three-fourth (3/4) of
one-half (1/2) or a total of 474.75 square meters at
158.25 square meters for each of the three plaintiffs,
namely: Rosario, Leonora, and Juanito all surname[d]
Calalang, of the real property covered by TCT No.
283321 of the Registry of Deeds of Bulacan
corresponding to their shares in the conjugal estate of
the late Encarnacion S. Calalang [sic];
2. Ordering defendants to pay plaintiffs the amount of
50,000.00 for moral damages; 50,000.00 for
attorneys fees and another 50,000.00 for litigation
expenses.
3. Dismissing the defendants counterclaims.
With costs against the defendants.
SO ORDERED.9
The trial court declared that the parcel of land was jointly
acquired by the spouses Pedro Calalang and Encarnacion Silverio
from the parents of the latter. Thus, it was part of the conjugal
property of the first marriage of Pedro Calalang. When this
marriage was dissolved upon the death of Encarnacion Silverio on
June 7, 1942,the corresponding shares to the disputed property
were acquired by the heirs of the decedent according to the laws
of succession. In particular, the trial court allocated half of the
disputed property to Pedro Calalang as his share in the conjugal
partnership and allocated the other half to the three respondents
and Pedro Calalang to be divided equally among them. The trial
court then ordered all of Pedros share to be given to Nora B.
Calalang-Parulan on account of the sale. The trial court also ruled
that because the application for free patent filed by Pedro
Calalang was attended by fraud and misrepresentation, Pedro
Calalang should be considered as a trustee of an implied trust.
Aggrieved by the adverse ruling, the petitioners appealed the case
to the CA which rendered the assailed Decision on December 21,
2007. The dispositive portion of the CA decision reads,
WHEREFORE, in light of the foregoing premises, the Decision
dated July 10, 2001of the Regional Trial Court of Malolos, Bulacan
is hereby MODIFIED to read as follows:
"WHEREFORE, judgment is hereby rendered in favor of the
plaintiffs, and against the defendants in the following manner:
1. Ordering the defendants to reconvey in favor of the
plaintiffs, their rightful share to the property owned by
their common father Pedro Calalang, equivalent to one
half(1/2) portion of the whole area or 633 square
meters to be divided equally by the three plaintiffs,
namely:
Rosario, Leonora and Carlito, all surnamed
Calalang, each getting an area of 211 square
meters of the property covered by TCT No.
2883321 of the Registry of Deeds of Bulacan
corresponding to their shares in the
property of their late father Pedro Calalang;
 2. Ordering defendants to pay plaintiffs the amount of
50,000.00 for moral damages; 50,000.00 for
attorneys fees and another 50,000.00 for litigation
expenses.
3. Dismissing the defendants counterclaims.
With costs against the defendants.
SO ORDERED.
SO ORDERED.10
The CA reversed the factual findings of the trial court and held
that Pedro Calalang was the sole and exclusive owner of the
subject parcel of land. Firstly, it held that there was insufficient
evidence to prove that the disputed property was indeed jointly
acquired from the parents of Encarnacion Silverio during the first
marriage. Secondly, the CA upheld the indefeasibility of OCT No.
P-2871. It held that although the free patent was issued in the
name of "Pedro Calalang, married to Elvira Berba [Calalang]" this
phrase was merely descriptive of the civil status of Pedro Calalang
at the time of the registration of the disputed property. Thus,
contrary to the ruling of the trial court, upon the death of
Encarnacion Silverio on June 7, 1942, the respondents did not
acquire any successional rights to the parcel of land which was
exclusively owned by Pedro Calalang. However, applying the rules
of succession, Pedros heirs namely, Rosario Calalang-Garcia,
Leonora Calalang-Sabile, Carlito Calalang, Nora B. Calalang-
Parulan, Elvira B. Calalang, and Rolando Calalang, succeeded
Pedro to the land in equal shares upon his death. Thus, the CA
ordered the petitioners to reconvey in favor of the respondents
their rightful shares to the land. The CA ruled that the sale by
Pedro Calalang to Nora B. Calalang-Parulan was fraudulent and
fictitious as the vendee was in bad faith and the respondents
were unlawfully deprived of their pro indiviso shares over the
disputed property. As regards the issue of prescription, the CA
ruled that the prescriptive period for reconveyance of
fraudulently registered real property is ten years. Since the
property was registered in the name of Nora in1984 and the
action for reconveyance was filed in 1991, the action has not yet
prescribed.
On January 23, 2008, petitioners filed their Motion for
Reconsideration. The CA, however, denied their motion in its
Resolution dated July 25, 2008.
Hence, this petition raising the sole issue:
Whether or not the court a quo gravely erred in rendering its
December 21, 2007 Decision modifying the July 10, 2001 Decision
of the trial court, and in issuing its July 25, 2008 Resolution
denying petitioners Motion for Reconsideration dated January
23, 2008.11
Essentially, the only issue in this case is whether Pedro Calalang
was the exclusive owner of the disputed property prior to its
transfer to his daughter Nora B. Calalang-Parulan.
The petitioners argue that the disputed property belonged to the
conjugal partnership of the second marriage of Pedro Calalang
with Elvira B. Calalang as evidenced by OCT No. P-2871 which was
issued to Pedro Calalang during the subsistence of his marriage to
Elvira B. Calalang. On the other hand, the respondents claim that
the disputed property was transferred by their maternal
grandmother, Francisca Silverio, to their parents, Pedro Calalang
and Encarnacion Silverio, during the latters marriage. Thus, the
respondents argue that it belonged to the conjugal partnership of
the first marriage of Pedro Calalang with Encarnacion Silverio.
The petition is meritorious.
Preliminarily, we note that the resolution of the issue in this case
requires a reevaluation of the probative value of the evidence
presented by the parties in order to trace the title of the disputed
property. What is involved is indeed a question of fact which is
generally beyond the jurisdiction of this Court to resolve in a
petition for review on certiorari.12 However, a recognized
exception to the rule is when the RTC and CA have conflicting
findings of fact as in this case.13 Here, while the trial court ruled
that the disputed property belonged to the conjugal partnership
of the first marriage of Pedro Calalang with Encarnacion Silverio,
the court a quo declared that the evidence proved the sole and
exclusive ownership of the disputed property of Pedro Calalang.
We have carefully reviewed the records of this case and sustain
the finding of the CA that Pedro Calalang is the sole and exclusive
owner of the disputed property.
The trial court ruled that the respondents were able to establish
that Lot 1132, Cad. 333 originated from the parents of
Encarnacion, and therefore said property "either became
property of Encarnacion in her own right or jointly with her
husband Pedro Calalang in 1936." In so ruling, the trial court
relied on the testimony of Rosario Calalang-Garcia that her
parents built a nipa house on the subject lot and lived there
before and after World War II. The trial court further noted that
Rosarios testimony was corroborated by her cousin and adjacent
neighbor Manolo Calalang.14
However, as correctly pointed out by the CA, a close perusal of
the records of this case would show that the records are bereft of
any concrete proof to show that the subject property indeed
belonged to respondents maternal grandparents. The evidence
respondents adduced merely consisted of testimonial evidence
such as the declaration of Rosario Calalang-Garcia that they have
been staying on the property as far as she can remember and that
the property was acquired by her parents through purchase from
her maternal grandparents. However, she was unable to produce
any document to evidence the said sale, nor was she able to
present any documentary evidence such as the tax declaration
issued in the name of either of her parents. Moreover, we note
that the free patent was issued solely in the name of Pedro
Calalang and that it was issued more than 30 years after the death
of Encarnacion and the dissolution of the conjugal partnership of
gains of the first marriage. Thus, we cannot subscribe to
respondents submission that the subject property originally
belonged to the parents of Encarnacion and was acquired by
Pedro Calalang and Encarnacion.
We likewise cannot sustain the argument of the petitioners that
the disputed property belongs to the conjugal partnership of the
second marriage of Pedro Calalang with Elvira B. Calalang on the
ground that the title was issued in the name of "Pedro Calalang,
married to Elvira Berba [Calalang]."
The contents of a certificate of title are enumerated by Section 45
of Presidential Decree No. 1529, otherwise known as the Property
Registration Decree:
SEC. 45. Statement of personal circumstances in the certificate.
Every certificate of title shall set forth the full names of all persons
whose interests make up the full ownership in the whole land,
including their civil status, and the names of their respective
spouses, if married, as well as their citizenship, residence and
postal address. If the property covered belongs to the conjugal
partnership, it shall be issued in the names of both
spouses.1wphi1
A plain reading of the above provision would clearly reveal that
the phrase "Pedro Calalang, married to Elvira Berba [Calalang]"
merely describes the civil status and identifies the spouse of the
registered owner Pedro Calalang. Evidently, this does not mean
that the property is conjugal. In Litam v. Rivera,15 we declared:
Further strong proofs that the properties in question are the
paraphernal properties of Marcosa Rivera, are the very Torrens
Titles covering said properties. All the said properties are
registered in the name of "Marcosa Rivera, married to Rafael
Litam." This circumstance indicates that the properties in question
belong to the registered owner, Marcosa Rivera, as her
paraphernal properties, for if they were conjugal, the titles
covering the same should have been issued in the names of Rafael
Litam and Marcosa Rivera. The words "married to Rafael Litam"
written after the name of Marcosa Rivera, in each of the above
mentioned titles are merely descriptive of the civil status of
Marcosa Rivera, the registered owner of the properties covered
by said titles.
the decedent died (Art. 1034); the legitime is to be computed as
of the same moment (Art. 908), and so is the in officiousness of
the donation inter vivas (Art. 771). Similarly, the legacies of credit
and remission are valid only in the amount due and outstanding at
the death of the testator (Art. 935), and the fruits accruing after
that instant are deemed to pertain to the legatee (Art. 948).
Thus, it is only upon the death of Pedro Calalang on December 27,
1989 that his heirs acquired their respective inheritances, entitling
them to their pro indiviso shares to his whole estate. At the time
of the sale of the disputed property, the rights to the succession
were not yet bestowed upon the heirs of Pedro Calalang. And
absent clear and convincing evidence that the sale was fraudulent
or not duly supported by valuable consideration (in effect an in
officious donation inter vivas), the respondents have no right to
question the sale of the disputed property on the ground that
their father deprived them of their respective shares. Well to
remember, fraud must be established by clear and convincing
evidence. Mere preponderance of evidence is not even adequate
to prove fraud.20 The Complaint for Annulment of Sale and
Reconveyance of Property must therefore be dismissed.
WHEREFORE, the petition for review on certiorari is GRANTED.
The Decision dated December 21, 2007 and Resolution dated July
25, 2008 of the Thirteenth Division of the Court of Appeals in CA-
G.R. CV No. 72531 are REVERSED and SET ASIDE. Civil Case No.
370-M-91, or the Complaint for Annulment of Sale and
Reconveyance of Property filed by the respondents with the
Regional Trial Court, Branch 21 of Malolos, Bulacan, on June 10,
1991, is hereby DISMISSED for lack of merit.
No pronouncement as to costs.

It must likewise be noted that in his application for free SO ORDERED.

patent,16 applicant Pedro Calalang averred that the land was first
occupied and cultivated by him since 1935 and that he had
planted mango trees, coconut plants, caimito trees, banana plants
and seasonal crops and built his house on the subject lot. But he
applied for free patent only in 1974 and was issued a free patent
while already married to Elvira B. Calalang. Thus, having
possessed the subject land in the manner and for the period
required by law after the dissolution of the first marriage and
before the second marriage, the subject property ipso jure
became private property and formed part of Pedro Calalangs
exclusive property.17 It was therefore excluded from the conjugal
partnership of gains of the second marriage.18

As the sole and exclusive owner, Pedro Calalang had the right to
convey his property in favor of Nora B. Calalang-Parulan by
executing a Deed of Sale on February 17, 1984. The CA therefore
erred in ruling that Pedro Calalang deprived his heirs of their
respective shares over the disputed property when he alienated
the same.

It is hornbook doctrine that successional rights are vested only at

the time of death. Article 777 of the New Civil Code provides that
"[t]he rights to the succession are transmitted from the moment
of the death of the decedent." In Butte v. Manuel Uy and Sons,
Inc.,19 we proclaimed the fundamental tenets of succession:

The principle of transmission as of the time of the predecessor's

death is basic in our Civil Code, and is supported by other related
articles. Thus, the capacity of the heir is determined as of the time

G.R. No. 159310 February 24, 2009
CAMILO F. BORROMEO, Petitioner,
vs.
ANTONIETTA O. DESCALLAR, Respondent.
DECISION
PUNO, C.J.:
What are the rights of an alien (and his successor-in-interest) who
acquired real properties in the country as against his former
Filipina girlfriend in whose sole name the properties were
registered under the Torrens system?
The facts are as follows:
Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983
after he was assigned by his employer, Simmering-Graz Panker
A.G., an Austrian company, to work at a project in Mindoro. In
1984, he transferred to Cebu and worked at the Naga II Project of
the National Power Corporation. There, he met respondent
Antonietta Opalla-Descallar, a separated mother of two boys who
was working as a waitress at St. Moritz Hotel. Jambrich befriended
respondent and asked her to tutor him in English. In dire need of
additional income to support her children, respondent agreed.
The tutorials were held in Antoniettas residence at a squatters
area in Gorordo Avenue.
Jambrich and respondent fell in love and decided to live together
in a rented house in Hernan Cortes, Mandaue City. Later, they
transferred to their own house and lots at Agro-Macro
Subdivision, Cabancalan, Mandaue City. In the Contracts to Sell
dated November 18, 19851 and March 10, 19862 covering the
properties, Jambrich and respondent were referred to as the
buyers. A Deed of Absolute Sale dated November 16, 19873 was
likewise issued in their favor. However, when the Deed of
Absolute Sale was presented for registration before the Register
of Deeds, registration was refused on the ground that Jambrich
was an alien and could not acquire alienable lands of the public
domain. Consequently, Jambrichs name was erased from the
document. But it could be noted that his signature remained on
the left hand margin of page 1, beside respondents signature as
buyer on page 3, and at the bottom of page 4 which is the last
page. Transfer Certificate of Title (TCT) Nos. 24790, 24791 and
24792 over the properties were issued in respondents name
alone.
Jambrich also formally adopted respondents two sons in Sp. Proc.
No. 39-MAN,4 and per Decision of the Regional Trial Court of
Mandaue City dated May 5, 1988.5
However, the idyll lasted only until April 1991. By then,
respondent found a new boyfriend while Jambrich began to live
with another woman in Danao City. Jambrich supported
respondents sons for only two months after the break up.
Jambrich met petitioner Camilo F. Borromeo sometime in 1986.
Petitioner was engaged in the real estate business. He also built
and repaired speedboats as a hobby. In 1989, Jambrich purchased
an engine and some accessories for his boat from petitioner, for
which he became indebted to the latter for about 150,000.00. To
pay for his debt, he sold his rights and interests in the Agro-Macro
properties to petitioner for 250,000, as evidenced by a "Deed of
Absolute Sale/Assignment."6 On July 26, 1991, when petitioner
sought to register the deed of assignment, he discovered that
titles to the three lots have been transferred in the name of
respondent, and that the subject property has already been
mortgaged.
On August 2, 1991, petitioner filed a complaint against
respondent for recovery of real property before the Regional Trial
Court of Mandaue City. Petitioner alleged that the Contracts to
Sell dated November 18, 1985 and March 10, 1986 and the Deed
of Absolute Sale dated November 16, 1987 over the properties
which identified both Jambrich and respondent as buyers do not
reflect the true agreement of the parties since respondent did not
pay a single centavo of the purchase price and was not in fact a
buyer; that it was Jambrich alone who paid for the properties
using his exclusive funds; that Jambrich was the real and absolute
owner of the properties; and, that petitioner acquired absolute
ownership by virtue of the Deed of Absolute Sale/Assignment
dated July 11, 1991 which Jambrich executed in his favor.
In her Answer, respondent belied the allegation that she did not
pay a single centavo of the purchase price. On the contrary, she
claimed that she "solely and exclusively used her own personal
funds to defray and pay for the purchase price of the subject lots
in question," and that Jambrich, being an alien, was prohibited to
acquire or own real property in the Philippines.
At the trial, respondent presented evidence showing her alleged
financial capacity to buy the disputed property with money from a
supposed copra business. Petitioner, in turn, presented Jambrich
as his witness and documentary evidence showing the substantial
salaries which Jambrich received while still employed by the
Austrian company, Simmering-Graz Panker A.G.
In its decision, the court a quo found
Evidence on hand clearly show that at the time of the purchase
and acquisition of [the] properties under litigation that Wilhelm
Jambrich was still working and earning much. This fact of Jambrich
earning much is not only supported by documentary evidence but
also by the admission made by the defendant Antoniet[t]a Opalla.
So that, Jambrichs financial capacity to acquire and purchase the
properties . . . is not disputed.7
xxx
On the other hand, evidence . . . clearly show that before
defendant met Jambrich sometime in the latter part of 1984, she
was only working as a waitress at the St. Moritz Hotel with an
income of 1,000.00 a month and was . . . renting and living only
in . . . [a] room at . . . [a] squatter area at Gorordo Ave., Cebu City;
that Jambrich took pity of her and the situation of her children
that he offered her a better life which she readily accepted. In
fact, this miserable financial situation of hers and her two children
. . . are all stated and reflected in the Child Study Report dated
April 20, 1983 (Exhs. "G" and "G-1") which facts she supplied to
the Social Worker who prepared the same when she was
personally interviewed by her in connection with the adoption of
her two children by Wilhelm Jambrich. So that, if such facts were
not true because these are now denied by her . . . and if it was
also true that during this time she was already earning as much as
8,000.00 to 9,000.00 as profit per month from her copra
business, it would be highly unbelievable and impossible for her
to be living only in such a miserable condition since it is the
observation of this Court that she is not only an extravagant but
also an expensive person and not thrifty as she wanted to impress
this Court in order to have a big saving as clearly shown by her
actuation when she was already cohabiting and living with
Jambrich that according to her . . . the allowance given . . . by him
in the amount of $500.00 a month is not enough to maintain the
education and maintenance of her children.8
This being the case, it is highly improbable and impossible that
she could acquire the properties under litigation or could
contribute any amount for their acquisition which according to
her is worth more than 700,000.00 when while she was working
as [a] waitress at St. Moritz Hotel earning 1,000.00 a month as
salary and tips of more or less 2,000.00 she could not even
provide [for] the daily needs of her family so much so that it is
safe to conclude that she was really in financial distress when she
met and accepted the offer of Jambrich to come and live with him
because that was a big financial opportunity for her and her
children who were already abandoned by her husband.9
xxx
The only probable and possible reason why her name appeared
and was included in [the contracts to sell dated November 18,
1985 and March 10, 1986 and finally, the deed of absolute sale
dated November 16, 1987] as buyer is because as observed by the
Court, she being a scheming and exploitive woman, she has taken
advantage of the goodness of Jambrich who at that time was still
bewitched by her beauty, sweetness, and good attitude shown by
her to him since he could still very well provide for everything she
needs, he being earning (sic) much yet at that time. In fact, as
observed by this Court, the acquisition of these properties under
litigation was at the time when their relationship was still going
smoothly and harmoniously.10 [Emphasis supplied.]
The dispositive portion of the Decision states:
WHEREFORE, . . . Decision is hereby rendered in favor of the
plaintiff and against the defendant Antoniet[t]a Opalla by:
1) Declaring plaintiff as the owner in fee simple over
the residential house of strong materials and three
parcels of land designated as Lot Nos. 1, 3 and 5 which
are covered by TCT Nos. 24790, 24791 and 24792
issued by the Register of Deeds of Mandaue City;
2) Declaring as null and void TCT Nos. 24790, 24791
and 24792 issued in the name of defendant
Antoniet[t]a Descallar by the Register of Deeds of
Mandaue City;
3) Ordering the Register of Deeds of Mandaue City to
cancel TCT Nos. 24790, 24791 and 24792 in the name
of defendant Antoniet[t]a Descallar and to issue new
ones in the name of plaintiff Camilo F. Borromeo;
4) Declaring the contracts now marked as Exhibits "I,"
"K" and "L" as avoided insofar as they appear to
convey rights and interests over the properties in
question to the defendant Antoniet[t]a Descallar;
5) Ordering the defendant to pay plaintiff attorneys
fees in the amount of 25,000.00 and litigation
expenses in the amount of 10,000.00; and,
6) To pay the costs.11
Respondent appealed to the Court of Appeals. In a Decision dated
April 10, 2002,12 the appellate court reversed the decision of the
trial court. In ruling for the respondent, the Court of Appeals held:
We disagree with the lower courts conclusion. The circumstances
involved in the case cited by the lower court and similar cases
decided on by the Supreme Court which upheld the validity of the
title of the subsequent Filipino purchasers are absent in the case
at bar. It should be noted that in said cases, the title to the subject
property has been issued in the name of the alien transferee
(Godinez et al., vs. Fong Pak Luen et al., 120 SCRA 223 citing
Krivenko vs. Register of Deeds of Manila, 79 Phils. 461; United
Church Board for World Ministries vs. Sebastian, 159 SCRA 446,
citing the case of Sarsosa Vda. De Barsobia vs. Cuenco, 113 SCRA
547; Tejido vs. Zamacoma, 138 SCRA 78). In the case at bar, the
title of the subject property is not in the name of Jambrich but in
the name of defendant-appellant. Thus, Jambrich could not have
transferred a property he has no title thereto.13
Petitioners motion for reconsideration was denied.
Hence, this petition for review.
Petitioner assigns the following errors:
I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
DISREGARDING RESPONDENTS JUDICIAL ADMISSION AND OTHER
OVERWHELMING EVIDENCE ESTABLISHING JAMBRICHS
PARTICIPATION, INTEREST AND OWNERSHIP OF THE PROPERTIES
IN QUESTION AS FOUND BY THE HONORABLE TRIAL COURT.
II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
HOLDING THAT JAMBRICH HAS NO TITLE TO THE PROPERTIES IN
QUESTION AND MAY NOT THEREFORE TRANSFER AND ASSIGN
ANY RIGHTS AND INTERESTS IN FAVOR OF PETITIONER.
III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
REVERSING THE WELL-REASONED DECISION OF THE TRIAL COURT
AND IN IMPOSING DOUBLE COSTS AGAINST HEREIN PETITIONER
(THEN, PLAINTIFF-APPELLEE).14
First, who purchased the subject properties?
The evidence clearly shows, as pointed out by the trial court, who
between respondent and Jambrich possesses the financial
capacity to acquire the properties in dispute. At the time of the
acquisition of the properties in 1985 to 1986, Jambrich was
gainfully employed at Simmering-Graz Panker A.G., an Austrian
company. He was earning an estimated monthly salary of
50,000.00. Then, Jambrich was assigned to Syria for almost one
year where his monthly salary was approximately 90,000.00.
On the other hand, respondent was employed as a waitress from
1984 to 1985 with a monthly salary of not more than 1,000.00.
In 1986, when the parcels of land were acquired, she was
unemployed, as admitted by her during the pre-trial conference.
Her allegations of income from a copra business were
unsubstantiated. The supposed copra business was actually the
business of her mother and their family, with ten siblings. She has
no license to sell copra, and had not filed any income tax return.
All the motorized bancas of her mother were lost to fire, and the
last one left standing was already scrap. Further, the Child Study
Report15 submitted by the Department of Social Welfare and
Development (DSWD) in the adoption proceedings of
respondents two sons by Jambrich disclosed that:
Antonietta tried all types of job to support the children until she
was accepted as a waitress at St. Moritz Restaurant in 1984. At
first she had no problem with money because most of the
customers of St. Moritz are (sic) foreigners and they gave good
tips but towards the end of 1984 there were no more foreigners
coming because of the situation in the Philippines at that time.
Her financial problem started then. She was even renting a small
room in a squatters area in Gorordo Ave., Cebu City. It was during
her time of great financial distress that she met Wilhelm Jambrich
who later offered her a decent place for herself and her
children.16
The DSWD Home Study Report17 further disclosed that:
[Jambrich] was then at the Restaurant of St. Moritz when he saw
Antonietta Descallar, one of the waitresses of the said
Restaurants. He made friends with the girl and asked her to tutor
him in [the] English language. Antonietta accepted the offer
because she was in need of additional income to support [her] 2
young children who were abandoned by their father. Their session
was agreed to be scheduled every afternoon at the residence of
Antonietta in the squatters area in Gorordo Avenue, Cebu City.
The Austrian was observing the situation of the family particularly
the children who were malnourished. After a few months
sessions, Mr. Jambrich offered to transfer the family into a decent
place. He told Antonietta that the place is not good for the
children. Antonietta who was miserable and financially distressed
at that time accepted the offer for the sake of the children.18
Further, the following additional pieces of evidence point to
Jambrich as the source of fund used to purchase the three parcels
of land, and to construct the house thereon:
(1) Respondent Descallar herself affirmed under oath,
during her re-direct examination and during the
proceedings for the adoption of her minor children,
that Jambrich was the owner of the properties in
question, but that his name was deleted in the Deed of
Absolute Sale because of legal constraints.
Nonetheless, his signature remained in the deed of
sale, where he signed as buyer.
(2) The money used to pay the subject parcels of land
in installments was in postdated checks issued by
Jambrich. Respondent has never opened any account
with any bank. Receipts of the installment payments
were also in the name of Jambrich and respondent.
(3) In 1986-1987, respondent lived in Syria with
Jambrich and her two children for ten months, where
she was completely under the support of Jambrich.
(4) Jambrich executed a Last Will and Testament,
where he, as owner, bequeathed the subject
properties to respondent.
Thus, Jambrich has all authority to transfer all his rights, interests
and participation over the subject properties to petitioner by
virtue of the Deed of Assignment he executed on July 11, 1991.
Well-settled is the rule that this Court is not a trier of facts. The
findings of fact of the trial court are accorded great weight and
respect, if not finality by this Court, subject to a number of
exceptions. In the instant case, we find no reason to disturb the
factual findings of the trial court. Even the appellate court did not
controvert the factual findings of the trial court. They differed
only in their conclusions of law.
Further, the fact that the disputed properties were acquired
during the couples cohabitation also does not help respondent.
The rule that co-ownership applies to a man and a woman living
exclusively with each other as husband and wife without the
benefit of marriage, but are otherwise capacitated to marry each
other, does not apply.19 In the instant case, respondent was still
legally married to another when she and Jambrich lived together.
In such an adulterous relationship, no co-ownership exists
between the parties. It is necessary for each of the partners to
prove his or her actual contribution to the acquisition of property
in order to be able to lay claim to any portion of it. Presumptions
of co-ownership and equal contribution do not apply.20
Second, we dispose of the issue of registration of the properties in
the name of respondent alone. Having found that the true buyer
of the disputed house and lots was the Austrian Wilhelm
Jambrich, what now is the effect of registration of the properties
in the name of respondent?
It is settled that registration is not a mode of acquiring
ownership.21 It is only a means of confirming the fact of its
existence with notice to the world at large.22 Certificates of title
are not a source of right. The mere possession of a title does not
make one the true owner of the property. Thus, the mere fact
that respondent has the titles of the disputed properties in her
name does not necessarily, conclusively and absolutely make her
the owner. The rule on indefeasibility of title likewise does not
apply to respondent. A certificate of title implies that the title is
quiet,23and that it is perfect, absolute and
indefeasible.24 However, there are well-defined exceptions to this
rule, as when the transferee is not a holder in good faith and did
not acquire the subject properties for a valuable
consideration.25 This is the situation in the instant case.
Respondent did not contribute a single centavo in the acquisition
of the properties. She had no income of her own at that time, nor
did she have any savings. She and her two sons were then fully
supported by Jambrich.
Respondent argued that aliens are prohibited from acquiring SO ORDERED.
private land. This is embodied in Section 7, Article XII of the 1987
Constitution,26 which is basically a reproduction of Section 5,
Article XIII of the 1935 Constitution, 27 and Section 14, Article XIV
of the 1973 Constitution.28 The capacity to acquire private land is
dependent on the capacity "to acquire or hold lands of the public
domain." Private land may be transferred only to individuals or
entities "qualified to acquire or hold lands of the public domain."
Only Filipino citizens or corporations at least 60% of the capital of
which is owned by Filipinos are qualified to acquire or hold lands
of the public domain. Thus, as the rule now stands, the
fundamental law explicitly prohibits non-Filipinos from acquiring
or holding title to private lands, except only by way of legal
succession or if the acquisition was made by a former natural-
born citizen.29

Therefore, in the instant case, the transfer of land from Agro-

Macro Development Corporation to Jambrich, who is an Austrian,
would have been declared invalid if challenged, had not Jambrich
conveyed the properties to petitioner who is a Filipino citizen. In
United Church Board for World Ministries v. Sebastian,30 the Court
reiterated the consistent ruling in a number of cases31 that if land
is invalidly transferred to an alien who subsequently becomes a
Filipino citizen or transfers it to a Filipino, the flaw in the original
transaction is considered cured and the title of the transferee is
rendered valid. Applying United Church Board for World
Ministries, the trial court ruled in favor of petitioner, viz.:

[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich

of the properties under litigation [were] void ab initio since [they
were] contrary to the Constitution of the Philippines, he being a
foreigner, yet, the acquisition of these properties by plaintiff who
is a Filipino citizen from him, has cured the flaw in the original
transaction and the title of the transferee is valid.

The trial court upheld the sale by Jambrich in favor of petitioner

and ordered the cancellation of the TCTs in the name of
respondent. It declared petitioner as owner in fee simple of the
residential house of strong materials and three parcels of land
designated as Lot Nos. 1, 3 and 5, and ordered the Register of
Deeds of Mandaue City to issue new certificates of title in his
name. The trial court likewise ordered respondent to pay G.R. No. 202932 October 23, 2013
petitioner 25,000 as attorneys fees and 10,000 as litigation
expenses, as well as the costs of suit.
EDILBERTO U. VENTURA JR., Petitioner,
vs.
We affirm the Regional Trial Court. SPOUSES PAULINO and EVANGELINE ABUDA, Respondents.

The rationale behind the Courts ruling in United Church Board for
World Ministries, as reiterated in subsequent cases,32 is this
since the ban on aliens is intended to preserve the nations land
for future generations of Filipinos, that aim is achieved by making
lawful the acquisition of real estate by aliens who became Filipino
citizens by naturalization or those transfers made by aliens to
Filipino citizens. As the property in dispute is already in the hands
of a qualified person, a Filipino citizen, there would be no more
public policy to be protected. The objective of the constitutional
provision to keep our lands in Filipino hands has been achieved.
IN VIEW WHEREOF, the petition is GRANTED. The Decision of the
Court of Appeals in C.A. G.R. CV No. 42929 dated April 10, 2002
and its Resolution dated July 8, 2003 are REVERSED and SET
ASIDE. The Decision of the Regional Trial Court of Mandaue City in
Civil Case No. MAN-1148 is REINSTATED.
CARPIO, J.:
The Case
This petition for review on certiorari seeks to annul the
Decision1 dated 9 March 2012 of the Court of Appeals (CA) in CA-
G.R. CV No. 92330 and the Resolution2 dated 3 August 2012
denying the motion for reconsideration. The Decision and
Resolution dismissed the Appeal dated 23 October 2009 and
affirmed with modification the Decision3 dated 24 November
2008 of the Regional Trial Court of Manila, Branch 32 (RTC-
Manila).
The Facts
The RTC-Manila and the CA found the facts to be as follows:
Socorro Torres (Socorro) and Esteban Abletes (Esteban) were
married on 9 June 1980. Although Socorro and Esteban never had
common children, both of them had children from prior
marriages: Esteban had a daughter named Evangeline Abuda
(Evangeline), and Socorro had a son, who was the father of
Edilberto U. Ventura, Jr. (Edilberto), the petitioner in this case.
Evidence shows that Socorro had a prior subsisting marriage to
Crispin Roxas (Crispin) when she married Esteban. Socorro
married Crispin on 18 April 1952. This marriage was not annulled,
and Crispin was alive at the time of Socorros marriage to Esteban.
Estebans prior marriage, on the other hand, was dissolved by
virtue of his wifes death in 1960. According to Edilberto,
sometime in 1968, Esteban purchased a portion of a lot situated
at 2492 State Alley, Bonifacio Street, Vitas, Tondo, Manila (Vitas
property). The remaining portion was thereafter purchased by
Evangeline on her fathers behalf sometime in 1970.4 The Vitas
property was covered by Transfer Certificate of Title No. 141782,
dated 11 December 1980, issued to "Esteban Abletes, of legal age,
Filipino, married to Socorro Torres."5
Edilberto also claimed that starting 1978, Evangeline and Esteban
operated small business establishments located at 903 and 905
Delpan Street, Tondo, Manila (Delpan property).6
On 6 September 1997, Esteban sold the Vitas and Delpan
properties to Evangeline and her husband, Paulino Abuda
(Paulino).7 According to Edilberto:
when Esteban was diagnosed with colon cancer sometime in
1993, he decided to sell the Delpan and Vitas properties to
Evangeline. Evangeline continued paying the amortizations on the
two (2) properties situated in Delpan Street. The amortizations,
together with the amount of Two Hundred Thousand Pesos (Php
200,000.00), which Esteban requested as advance payment, were
considered part of the purchase price of the Delpan properties.
Evangeline likewise gave her father Fifty Thousand Pesos (Php
50,000.00) for the purchase of the Vitas properties and she
shouldered his medical expenses.8
Esteban passed away on 11 September 1997, while Socorro
passed away on 31 July 1999.
Sometime in 2000, Leonora Urquila (Leonora), the mother of
Edilberto, discovered the sale. Thus, Edilberto, represented by
Leonora, filed a Petition for Annulment of Deeds of Sale before
the RTC-Manila. Edilberto alleged that the sale of the properties
was fraudulent because Estebans signature on the deeds of sale
was forged. Respondents, on the other hand, argued that because
of Socorros prior marriage to Crispin, her subsequent marriage to
Esteban was null and void. Thus, neither Socorro nor her heirs can
claim any right or interest over the properties purchased by
Esteban and respondents.9
The Ruling of the RTC-Manila
The RTC-Manila dismissed the petition for lack of merit.
The RTC-Manila ruled that the marriage between Socorro and
Esteban was void from the beginning.10 Article 83 of the Civil
Code, which was the governing law at the time Esteban and
Socorro were married, provides:
Art. 83. Any marriage subsequently contracted by any person
during the lifetime of the first spouse of such person shall be
illegal and void from its performance unless:
1. The first marriage was annulled or dissolved; or
2. The first spouse had been absent for seven
consecutive years at the time of the second marriage
without the spouse present having news of the
absentee being alive, or if the absentee, though he has
been absent for less than seven years, is generally
considered as dead and believed to be so by the
spouse present at the time of contracting such
subsequent marriage, or if the absentee is presumed
dead according to articles 390 and 391. The marriage
so contracted shall be valid in any of the three cases
until declared null and void.
During trial, Edilberto offered the testimony of Socorros
daughter-in-law Conchita Ventura (Conchita). In her first affidavit,
Conchita claimed that Crispin, who was a seaman, had been
missing and unheard from for 35 years. However, Conchita
recanted her earlier testimony and executed an Affidavit of
Retraction.11
The RTC-Manila ruled that the lack of a judicial decree of nullity
does not affect the status of the union. It applied our ruling in
Nial v. Badayog:12
Jurisprudence under the Civil Code states that no judicial decree is
necessary in order to establish the nullity of a marriage. x x x
Under ordinary circumstances, the effect of a void marriage, so far
as concerns the conferring of legal rights upon the parties, is as
though no marriage had ever taken place. And therefore, being
good for no legal purpose, its invalidity can be maintained in any
proceeding in which [the] fact of marriage may be material, either
direct or collateral, in any civil court between any parties at any
time, whether before or after the death of either or both the
husband and the wife, and upon mere proof of the facts rendering
such marriage void, it will be disregarded or treated as non-
existent by the courts.13
According to the RTC-Manila, the Vitas and Delpan properties are
not conjugal, and are governed by Articles 144 and 485 of the Civil
Code, to wit:
Art. 144. When a man and a woman live together as husband and
wife, but they are not married, or their marriage is void from the
beginning, the property acquired by either or both of them
through their work or industry or their wages and salaries shall be
governed by the rules on co-ownership.
Art. 485. The share of the co-owners, in the benefits as well as in
the charges, shall be proportional to their respective interests.
Any stipulation in a contract to the contrary shall be void.
The portions belonging to the co-owners in the co-ownership shall
be presumed equal, unless the contrary is proved.
The RTC-Manila then determined the respective shares of Socorro
and Esteban in the properties. It found that:
with respect to the property located at 2492 State Alley, Bonifacio
St. Vitas, Tondo, Manila covered by TCT No. 141782, formerly
Marcos Road, Magsaysay Village, Tondo, Manila, [Evangeline]
declared that part of it was first acquired by her father Esteban
Abletes sometime in 1968 when he purchased the right of
Ampiano Caballegan. Then, in 1970, she x x x bought the right to
one-half of the remaining property occupied by Ampiano
Caballegan. However, during the survey of the National Housing
Authority, she allowed the whole lot to be registered in her
fathers name. As proof thereof, she presented Exhibits "8" to
"11" x x x. These documents prove that that she has been an
occupant of the said property in Vitas, Tondo even before her
father and Socorro Torres got married in June, 1980.14
Anent the parcels of land and improvements thereon 903 and 905
Del Pan Street, Tondo, Manila, x x x Evangeline professed that in
1978, before her father met Socorro Torres and before the
construction of the BLISS Project thereat, her father [already had]
a bodega of canvas (lona) and a sewing machine to sew the
canvas being sold at 903 Del Pan Street, Tondo Manila. In 1978,
she was also operating Vangies Canvas Store at 905 Del Pan
Street, Tondo, Manila, which was evidenced by Certificate of
Registration of Business Name issued in her favor on 09
November 1998 x x x. When the BLISS project was constructed in
1980, the property became known as Units D-9 and D-10. At first,
her father [paid] for the amortizations for these two (2) parcels of
land but when he got sick with colon cancer in 1993, he asked
respondents to continue paying for the amortizations x x x.
[Evangeline] paid a total of 195,259.52 for Unit D-9 as shown by
the 37 pieces of receipts x x x and the aggregate amount of
188,596.09 for Unit D-10, as evidenced by 36 receipts x x x.15
The RTC-Manila concluded that Socorro did not contribute any
funds for the acquisition of the properties. Hence, she cannot be
considered a co-owner, and her heirs cannot claim any rights over
the Vitas and Delpan properties.16
Aggrieved, Edilberto filed an appeal before the CA.
The Ruling of the CA
In its Decision17 dated 9 March 2012, the CA sustained the
decision of the RTC-Manila. The dispositive portion of the CA
Decision reads:
WHEREFORE, the Appeal is hereby DENIED and the challenged
Decision of the court a quo STANDS. SO ORDERED.18
The CA ruled, however, that the RTC-Manila should have applied
Article 148 of the Family Code, and not Articles 144 and 485 of the
Civil Code. Article 148 of the Family Code states that in unions
between a man and a woman who are incapacitated to marry
each other:
x x x only the properties acquired by both of the parties through
their actual joint contribution of money, property, or industry
shall be owned by them in common in proportion to their
respective contributions. In the absence of proof to the contrary,
their contributions and corresponding shares are presumed to be
equal. The same rule and presumption shall apply to joint
deposits of money and evidences of credit.
If one of the parties is validly married to another, his or her share
in the co-ownership shall accrue to the absolute community or
conjugal partnership existing in such valid marriage. If the party
who acted in bad faith is not validly married to another, his or her
share shall be forfeited in the manner provided in the last
paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise apply even if both
parties are in bad faith.
The CA applied our ruling in Saguid v. Court of Appeals,19 and held
that the foregoing provision applies "even if the cohabitation or
the acquisition of the property occurred before the effectivity of
the Family Code."20 The CA found that Edilberto failed to prove
that Socorro contributed to the purchase of the Vitas and Delpan
properties. Edilberto was unable to provide any documentation
evidencing Socorros alleged contribution.21
On 2 April 2012, Edilberto filed a Motion for
Reconsideration,22 which was denied by the CA in its Resolution
dated 3 August 2012.23
Hence, this petition.
The Ruling of this Court
We deny the petition.
Edilberto admitted that in unions between a man and a woman
who are incapacitated to marry each other, the ownership over
the properties acquired during the subsistence of that
relationship shall be based on the actual contribution of the
parties. He even quoted our ruling in Borromeo v. Descallar24 in
his petition:
It is necessary for each of the partners to prove his or her actual
contribution to the acquisition of property in order to be able to
lay claim to any portion of it. Presumptions of co-ownership and
equal contribution do not apply.25
This is a reiteration of Article 148 of the Family Code, which the
CA applied in the assailed decision:
Art 148. In cases of cohabitation [wherein the parties are
incapacitated to marry each other], only the properties acquired
by both of the parties through their actual joint contribution of
money, property, or industry shall be owned by them in common
in proportion to their respective contributions. In the absence of
proof to the contrary, their contributions and corresponding
shares are presumed to be equal. The same rule and presumption
shall apply to joint deposits of money and evidences of credit.
If one of the parties is validly married to another, his or her share
in the co-ownership shall accrue to the absolute community or
conjugal partnership existing in such valid marriage. If the party
who acted in bad faith is not validly married to another, his or her
share shall be forfeited in the manner provided in the last
paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise apply even if both
parties are in bad faith.
Applying the foregoing provision, the Vitas and Delpan properties
can be considered common property if: (1) these were acquired
during the cohabitation of Esteban and Socorro; and (2) there is
evidence that the properties were acquired through the parties
actual joint contribution of money, property, or industry.
Edilberto argues that the certificate of title covering the Vitas
property shows that the parcel of land is co-owned by Esteban
and Socorro because: (1) the Transfer Certificate of Title was
issued on 11 December 1980, or several months after the parties
were married; and (2) title to the land was issued to "Esteban
Abletes, of legal age, married to Socorro Torres."26
We disagree. The title itself shows that the Vitas property is
owned by Esteban alone.1wphi1 The phrase "married to Socorro
Torres" is merely descriptive of his civil status, and does not show
that Socorro co-owned the property.27The evidence on record
also shows that Esteban acquired ownership over the Vitas
property prior to his marriage to Socorro, even if the certificate of
title was issued after the celebration of the marriage. Registration
under the Torrens title system merely confirms, and does not vest
title. This was admitted by Edilberto on page 9 of his petition
wherein he quotes an excerpt of our ruling in Borromeo:
Registration is not a mode of acquiring ownership. It is only a
means of confirming the fact of its existence with notice to the
world at large. Certificates of title are not a source of right. The
mere possession of a title does not make one the true owner of
the property. Thus, the mere fact that respondent has the titles of
the disputed properties in her name does not necessarily,
conclusively and absolutely make her the owner. The rule on
indefeasibility of title likewise does not apply to respondent. A
certificate of title implies that the title is quiet, and that it is
perfect, absolute and indefeasible. However, there are well-
defined exceptions to this rule, as when the transferee is not a
holder in good faith and did not acquire the subject properties for
a valuable consideration.
Edilberto claims that Esteban s actual contribution to the
purchase of the Delpan property was not sufficiently proven since
Evangeline shouldered some of the amortizations.28 Thus, the law
presumes that Esteban and Socorro jointly contributed to the
acquisition of the Del pan property.
We cannot sustain Edilberto s claim. Both the RTC-Manila and the
CA found that the Delpan property was acquired prior to the
marriage of Esteban and Socorro.29 Furthermore, even if payment
of the purchase price of the Delpan property was made by
Evangeline, such payment was made on behalf of her father.
Article 1238 of the Civil Code provides:
Art. 1238. Payment made by a third person who does not intend
to be reimbursed by the debtor is deemed to be a donation,
which requires the debtor s consent. But the payment is in any
case valid as to the creditor who has accepted it.
Thus, it is clear that Evangeline paid on behalf of her father, and
the parties intended that the Delpan property would be owned by
and registered under the name of Esteban.
During trial, the Abuda spouses presented receipts evidencing
payments of the amortizations for the Delpan
property.1wphi1 On the other hand, Edilberto failed to show any
evidence showing Socorro s alleged monetary contributions. As
correctly pointed out by the CA:
settled is the rule that in civil cases x x x the burden of proof rests
upon the party who, as determined by the pleadings or the nature
of the case, asserts the affirmative of an issue. x x x. Here it is
Appellant who is duty bound to prove the allegations in the
complaint which undoubtedly, he miserably failed to do so.30
WHEREFORE, the petition is DENIED. The Decision dated 9 March
2012 of the Court of Appeals in CA-G.R. CV No. 92330 is
AFFIRMED. SO ORDERED.
G.R. No. 198356, April 20, 2015
ESPERANZA SUPAPO AND THE HEIRS OF ROMEO SUPAPO,
NAMELY: ESPERANZA, REX EDWARD, RONALD TROY, ROMEO,
JR., SHEILA LORENCE, ALL SURNAMED SUPAPO, AND SHERYL
FORTUNE SUPAPO-SANDIGAN, Petitioners, v. SPOUSES ROBERTO
AND SUSAN DE JESUS, MACARIO BERNARDO, AND THOSE
PERSONS CLAIMING RIGHTS UNDER THEM, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1 filed by
petitioners Esperanza Supapo and Romeo Supapo2 (Spouses
Supapo) to assail the February 25, 2011 decision3 and August 25,
2011 resolution4 of the Court of Appeals (CA) in CA-G.R. SP No.
111674.
Factual Antecedents
The Spouses Supapo filed a complaint5 for accion
publiciana against Roberto and Susan de Jesus (Spouses de Jesus),
Macario Bernardo (Macario), and persons claiming rights under
them (collectively, the respondents), with the Metropolitan Trial
Court (MeTC) of Caloocan City.
The complaint sought to compel the respondents to vacate a
piece of land located in Novaliches, Quezon City, described as Lot
40, Block 5 (subject lot). The subject lot is covered by Transfer
Certificate of Title (TCT) No. C-284416 registered and titled under
the Spouses Supapo's names. The land has an assessed value of
thirty-nine thousand nine hundred eighty pesos (39,980.00) as
shown in the Declaration of Real Property Value (tax declaration)
issued by the Office of the City Assessor of Caloocan.7
The Spouses Supapo did not reside on the subject lot. They also
did not employ an overseer but they made sure to visit at least
twice a year.8 During one of their visits in 1992, they saw two (2)
houses built on the subject lot. The houses were built without
their knowledge and permission. They later learned that the
Spouses de Jesus occupied one house while Macario occupied the
other one.9
The Spouses Supapo demanded from the respondents the
immediate surrender of the subject lot by bringing the dispute
before the appropriate Lupong Tagapamayapa. The Lupon issued
a Katibayan Upang Makadulog sa Hukuman (certificate to file
action) for failure of the parties to settle amicably.10
The Spouses Supapo then filed a criminal case11 against the
respondents for violation of Presidential Decree No. 772 or
the Anti-Squatting Law.12 The trial court convicted the
respondents. The dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing, this Court finds accused
ROBERTO DE JESUS, SUSAN DE JESUS and MACARIO BERNARDO,
GUILTY beyond reasonable doubt for Violation of Presidential
Decree No. 772, and each accused is hereby ordered to pay a fine
of ONE THOUSAND PESOS (P1,000.00), and to vacate the subject
premises.
SO ORDERED.13 (Emphasis supplied.)
The respondents appealed their conviction to the CA.14 While the
appeal was pending, Congress enacted Republic Act (RA) No.
8368, otherwise known as "An Act Repealing Presidential Decree
No. 772," which resulted to the dismissal of the criminal case.15
On April 30, 1999, the CA's dismissal of the criminal case became
final.16
Notwithstanding the dismissal, the Spouses Supapo moved for the
execution of the respondents' civil liability, praying that the latter
vacate the subject lot. The Regional Trial Court (RTC) granted the
motion and issued the writ of execution. The respondents moved
for the quashal of the writ but the RTC denied the same. The RTC
also denied the respondents' motion for reconsideration.
The respondents thus filed with the CA a petition for certiorari to
challenge the RTC's orders denying the quashal of the writ and the
respondent's motion for reconsideration.17 The CA granted the
petition and held that with the repeal of the Anti-Squatting Law,
the respondents' criminal and civil liabilities were
extinguished.18 The dispositive portion of the decision reads:
WHEREFORE, premises considered, the petition for certiorari with
prayer for injunction is GRANTED. The orders dated June 5, 2003
and July 24, 2003 of Branch 131 of the Regional Trial Court of
Caloocan City in Criminal Case No. C-45610 are REVERSED and SET
ASIDE. Said court is hereby permanently ENJOINED from further
executing or implementing its decision dated March 18, 1996.
SO ORDERED.
The CA, however, underscored that the repeal of the Anti-
Squatting Law does not mean that people now have unbridled
license to illegally occupy lands they do not own, and that it was
not intended to compromise the property rights of legitimate
landowners.19 In cases of violation of their property rights, the CA
noted that recourse may be had in court by filing the proper
action for recovery of possession.
The Spouses Supapo thus filed the complaint for action
publiciana.20
After filing their Answer,21 the respondents moved to set their
affirmative defenses for preliminary hearing22 and argued that: (1)
there is another action pending between the same parties; (2) the
complaint for accion publiciana is barred by statute of limitations;
and (3) the Spouses Supapo's cause of action is barred by prior
judgment.
The MeTC Ruling23
The MeTC denied the motion to set the affirmative defenses for
preliminary hearing. It ruled that the arguments advanced by the
respondents are evidentiary in nature, which at best can be
utilized in the course of the trial. The MeTC likewise denied the
respondents' motion for reconsideration.
From the MeTC's ruling, the respondents filed a petition
for certiorari with the RTC.24
The RTC Ruling25
The RTC granted the petition for certiorari on two grounds, viz.: (i)
the action has prescribed; and (ii) accion publiciana falls within
the exclusive jurisdiction of the RTC.
It held that in cases where the only issue involved is possession,
the MeTC has jurisdiction if the action for forcible entry or
unlawful detainer is filed within one (1) year from the time to
demand to vacate was made. Otherwise, the complaint for
recovery of possession should be filed before the RTC.
The dispositive portion of the RTC decision reads:
WHEREFORE, premises considered, the instant petition is
hereby GRANTED.
The Orders dated October 24, 2008 and February 23, 2009 are
hereby declared NULL and VOID.
The Public Respondent is hereby directed to DISMISS Civil Case
No. 08-29245 for lack of jurisdiction.
SO ORDERED.26
In their motion for reconsideration,27 the Spouses Supapo
emphasized that the court's jurisdiction over an action involving
title to or possession of land is determined by its assessed value;
that the RTC does not have an exclusive jurisdiction on all
complaints for accion publiciana; and that the assessed value of
the subject lot falls within MeTC's jurisdiction.
The RTC denied the petitioners' motion for reconsideration.
It held that although the MeTC had jurisdiction based on the
assessed value of the subject lot, the Spouses Supapos' cause of
action had already prescribed, the action having been filed
beyond the ten (l0)-year prescriptive period under Article 555 of
the Civil Code.28 As it was not proven when the actual demand to
vacate was made, the RTC ruled that the reckoning period by
which the ejectment suit should have been filed is counted from
the time the certificate to file action was issued. The certificate to
file action was issued on November 25, 1992, while the complaint
for accion publiciana was filed only on March 7, 2008, or more
than ten (10) years thereafter.
Dissatisfied with the RTC ruling, the Spouses Supapo appealed to
the CA.29
The CA Ruling30
The CA dismissed the appeal and held that the complaint
for accion publiciana should have been lodged before the RTC and
that the period to file the action had prescribed.
The dispositive portion of the CA decision reads:
WHEREFORE, the appeal is DENIED. The Decision dated June 30,
2009 and Order dated October 19, 2009 are AFFIRMED.
SO ORDERED
The Spouses Supapo moved31 but failed32 to secure a
reconsideration of the CA decision; hence, they came to us
through the present petition.
recovery of possession of the subject lot but they based their
better right of possession on a claim of ownership.
This Court has held that the objective of the plaintiffs in accion
publiciana is to recover possession only, not ownership. However,
where the parties raise the issue of ownership, the courts may
pass upon the issue to determine who between the parties has
the right to possess the property.35
This adjudication is not a final determination of the issue of
ownership; it is only for the purpose of resolving the issue of
possession, where the issue of ownership is inseparably linked to
the issue of possession. The adjudication of the issue of
ownership, being provisional, is not a bar to an action between
the same parties involving title to the property. The adjudication,
in short, is not conclusive on the issue of ownership.36

Thus, while we will dissect the Spouses Supapo's claim of

The Petition
In seeking reversal of the CA's ruling, the Spouses Supapo
essentially argue that:
(1) the MeTC exercises exclusive original jurisdiction
over accion publiciana where the assessed value of the
property does not exceed P20,000.00, or P50,000.00 if the
property is located in Metro Manila; and that
(2) prescription had not yet set in because their cause of action
is imprescriptible under the Torrens system.
ownership over the subject property, we will only do so to
determine if they or the respondents should have the right of
possession.
Having thus determined that the dispute involves possession over
a real property, we now resolve which court has the jurisdiction to
hear the case.
Under Batas Pambansa Bilang 129,37 the jurisdiction of the RTC
over actions involving title to or possession of real property is
plenary.38

The Respondents' Case33 RA No. 7691,39 however, divested the RTC of a portion of its
jurisdiction and granted the Metropolitan Trial Courts, Municipal
The respondents argue that the complaint for accion Trial Courts and Municipal Circuit Trial Courts the exclusive and
publiciana was (1) filed in the wrong court; (2) barred by original jurisdiction to hear actions where the assessed value of
prescription; and (3) barred by res judicata. the property does not exceed Twenty Thousand Pesos
(P20,000.00), or Fifty Thousand Pesos (P50,000.00), if the
Issues property is located in Metro Manila.

The issues for resolution are: Section 1 of RA No. 7691 states:

I. Whether the MeTC properly acquired jurisdiction; Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise
II. Whether the cause of action has prescribed; and known as the "Judiciary Reorganization Act of 1980," is hereby
III. Whether the complaint for accion publiciana is barred amended to read as follows:
by res judicata. Section. 19. Jurisdiction in civil cases. - Regional Trial Courts shall
exercise exclusive original jurisdiction:

(2) In all civil actions which involve the title to, or possession of,
Our Ruling
real property, or any interest therein, where the assessed value
of the property involved exceeds Twenty thousand pesos
The petition is meritorious.
(P20,000.00) or, for civil actions in Metro Manila, where such
value exceeds Fifty thousand pesos (P50,000.00) x x x. (Emphasis
We hold that: (1) the MeTC properly acquired jurisdiction; (2) the
supplied.)
cause of action has not prescribed; and (3) the complaint is not
barred by res judicata.
Section 3 of the same law provides:
Section. 3. Section 33 of the same law is hereby amended to read
Accion Publiciana and
as follows:
the Jurisdiction of the
Section. 33. Jurisdiction of Metropolitan Trial Courts, Municipal
MeTC
Trial Courts and Municipal Circuit Trial Courts in Civil Cases. -
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Accion publiciana is an ordinary civil proceeding to determine the
Circuit Trial Courts shall exercise:
better right of possession of realty independent of title. It refers
to an ejectment suit filed after the expiration of one year from the
accrual of the cause of action or from the unlawful withholding of xxxx
possession of the realty.34
(3) Exclusive original jurisdiction in all civil actions which involve
In the present case, the Spouses Supapo filed an action for the title to, or possession of, real property, or any interest therein
where the assessed value of the property or interest therein
does not exceed Twenty thousand pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value does not
exceed Fifty thousand pesos (P50,000.00) exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses
and costs x x x. (Emphasis supplied.)
In view of these amendments, jurisdiction over actions involving
title to or possession of real property is now determined by its
assessed value.40 The assessed value of real property is its fair
market value multiplied by the assessment level. It is synonymous
to taxable value.41
In Quinagoran v. Court of Appeals,42 we explained:
[D]oes the RTC have jurisdiction over all cases of recovery of
possession regardless of the value of the property involved?
The answer is no. The doctrine on which the RTC anchored its
denial of petitioner's Motion to Dismiss, as affirmed by the CA
that all cases of recovery of possession or accion publiciana lies
with the regional trial courts regardless of the value of the
property no longer holds true. As tilings now stand, a
distinction must be made between those properties the
assessed value of which is below P20,000.00, if outside Metro
Manila; and P50,000.00, if within.43 (Emphasis supplied.)
In this regard, the complaint must allege the assessed value of the
real property subject of the complaint or the interest thereon to
determine which court has jurisdiction over the action. This is
required because the nature of the action and the court with
original and exclusive jurisdiction over the same is determined by
the material allegations of the complaint, the type of relief prayed
for by the plaintiff, and the law in effect when the action is filed,
irrespective of whether the plaintiffs are entitled to some or all of
the claims asserted therein.44
In the present case, the Spouses Supapo alleged that the assessed
value of the subject lot, located in Metro Manila, is P39,980.00.
This is proven by the tax declaration45 issued by the Office of the
City Assessor of Caloocan. The respondents do not deny the
genuineness and authenticity of this tax declaration.
Given that the Spouses Supapo duly complied with the
jurisdictional requirements, we hold that the MeTC of Caloocan
properly acquired jurisdiction over the complaint for accion
publiciana.
The cause of action
has not prescribed
The respondents argue that the complaint for accion publiciana is
dismissible for being filed out of time.
They invoke Article 555 of the Civil Code, which states: Art. 555. A
possessor may lose his possession:
xxxx
(4) By the possession of another, subject to the provisions of
Article 537, if the new possession has lasted longer than one
year. But the real right of possession is not lost till after the
lapse of ten years. (Emphasis supplied.)
The respondents point out that the Spouses Supapo filed the
complaint for accion publiciana on March 7, 2008 or more than
ten (10) years after the certificate to file action was issued on
November 25, 1992. The respondents contend that the Spouses
Supapo may no longer recover possession of the subject property,
the complaint having been filed beyond the period provided by
law.
Further, while the respondents concede that the Spouses Supapo
hold a TCT over the subject property, and assuming a Torrens title
is imprescriptible and indefeasible, they posit that the latter have
lost their right to recover possession because of laches.
On their part, the Spouses Supapo admit that they filed the
complaint for accion publiciana more than ten (10) years after the
certificate to file action was issued. Nonetheless, they argue that
their cause of action is imprescriptible since the subject property
is registered and titled under the Torrens system.
We rule that the Spouses Supapo's position is legally correct.
At the core of this controversy is a parcel of land registered under
the Torrens system. The Spouses Supapo acquired the TCT on the
subject lot in 1979.46 Interestingly, the respondents do not
challenge the existence, authenticity and genuineness of the
Supapo's TCT.47
In defense, the respondents rest their entire case on the fact that
they have allegedly been in actual, public, peaceful and
uninterrupted possession of the subject property in the concept
of an owner since 1992. The respondents contend that they built
their houses on the subject lot in good faith. Having possessed the
subject lot for more than ten (10) years, they claim that they can
no longer be disturbed in their possession.48
Under the undisputed facts of this case, we find that the
respondents' contentions have no legal basis.
In a long line of cases, we have consistently ruled that lands
covered by a title cannot be acquired by prescription or adverse
possession. We have also held that a claim of acquisitive
prescription is baseless when the land involved is a registered
land because of Article 112649 of the Civil Code in relation to Act
496 [now, Section 47 of Presidential Decree (PD) No. 152950].51
The Spouses Supapo (as holders of the TCT) enjoy a panoply of
benefits under the Torrens system. The most essential insofar as
the present case is concerned is Section 47 of PD No. 1529 which
states:
Section 47. Registered land not subject to prescriptions. No title to
registered land in derogation of the title of the registered owner
shall be acquired by prescription or adverse possession.
In addition to the imprescriptibility, the person who holds a
Torrens Title over a land is also entitled to the possession
thereof.52 The right to possess and occupy the land is an attribute
and a logical consequence of ownership.53 Corollary to this rule is
the right of the holder of the Torrens Title to eject any person
illegally occupying their property. Again, this right is
imprescriptible.54
In Bishop v. CA,55 we held that even if it be supposed that the
holders of the Torrens Title were aware of the other persons'
occupation of the property, regardless of the length of that
possession, the lawful owners have a right to demand the return
of their property at any time as long as the possession was
unauthorized or merely tolerated, if at all.56 by the respondents to challenge the RTC's issuance of the writ
enforcing their civil liability (i.e., to vacate the subject property)
Even if the defendant attacks the Torrens Title because of a arising from their conviction under the Anti-Squatting Law. The CA
purported sale or transfer of the property, we still rule in favor of granted the petition and permanently enjoined the execution of
the holder of the Torrens Title if the defendant cannot adduce, in the respondents' conviction because their criminal liability had
addition to the deed of sale, a duly-registered certificate of title been extinguished by the repeal of the law under which they were
proving the alleged transfer or sale. tried and convicted. It follows that their civil liability arising from
the crime had also been erased.
A case in point is Umpoc v. Mercado57 in which we gave greater
probative weight to the plaintiffs TCT vis-a-vis the contested The respondents' reliance on the principle of res judicata is
unregistered deed of sale of the defendants. Unlike the misplaced.
defendants in Umpoc, however, the respondents did not adduce a
single evidence to refute the Spouses Supapo's TCT. With more Res judicata embraces two concepts: (1) bar by prior judgment as
reason therefore that we uphold the indefeasibility and enunciated in Rule 39, Section 47(b) of the Rules of Civil
imprescriptibility of the Spouses Supapo's title. Procedure; and (2) conclusiveness of judgment in Rule 39, Section
47(c).62
By respecting the imprescriptibility and indefeasibility of the
Spouses Supapo's TCT, this Court merely recognizes the value of "Bar by prior judgment" means that when a right or fact had
the Torrens System in ensuring the stability of real estate already been judicially tried on the merits and determined by a
transactions and integrity of land registration. court of competent jurisdiction, the final judgment or order shall
be conclusive upon the parties and those in privity with them and
We reiterate for the record the policy behind the Torrens constitutes an absolute bar to subsequent actions involving the
System, viz.: same claim, demand or cause of action.63

The Government has adopted the Torrens system due to its being The requisites64 for res judicata under the concept of bar by prior
the most effective measure to guarantee the integrity of land judgment are:
titles and to protect their indefeasibility once the claim of
ownership is established and recognized. If a person purchases a (1) The former judgment or order must be final;
piece of land on the assurance that the seller's title thereto is
valid, he should not run the risk of being told later that his (2) It must be a judgment on the merits;
acquisition was ineffectual after all, which will not only be unfair
to him as the purchaser, but will also erode public confidence in (3) It must have been rendered by a court having jurisdiction over
the system and will force land transactions to be attended by the subject matter and the parties; and
complicated and not necessarily conclusive investigations and
proof of ownership. The further consequence will be that land (4) There must be between the first and second actions, identity
conflicts can be even more abrasive, if not even violent.58 of parties, subject matter, and cause of action.

With respect to the respondents' defense59 of laches, suffice it to Res judicata is not present in this case.
say that the same is evidentiary in nature and cannot be
established by mere allegations in the pleadings.60 In other words, While requisites one to three may be present, it is obvious that
the party alleging laches must adduce in court evidence proving the there is no identity of subject matter, parties and causes of
such allegation. This Court not being a trier of facts cannot rule on action between the criminal case prosecuted under the Anti-
this issue; especially so since the lower courts did not pass upon Squatting Law and the civil action for the recovery of the subject
the same. property.

Thus, without solid evidentiary basis, laches cannot be a valid First, there is no identity of parties. The criminal complaint,
ground to deny the Spouses Supapo's petition.61 On the contrary, although initiated by the Spouses Supapo, was prosecuted in the
the facts as culled from the records show the clear intent of the name of the people of the Philippines. The accion publiciana, on
Spouses Supapo to exercise their right over and recover the other hand, was filed by and in the name of the Spouses
possession of the subject lot, viz.: (1) they brought the dispute to Supapo.
the appropriate Lupon; (2) they initiated the criminal complaint
for squatting; and (3) finally, they filed the action publiciana. To Second, there is no identity of subject matter. The criminal case
our mind, these acts negate the allegation of laches. involves the prosecution of a crime under the Anti-Squatting Law
while the accion publiciana is an action to recover possession of
With these as premises, we cannot but rule that the Spouses the subject property.
Supapo's right to recover possession of the subject lot is not
barred by prescription. And third, there is no identity of causes of action. The people of
the Philippines filed the criminal case to protect and preserve
The action is not barred governmental interests by prosecuting persons who violated the
by prior judgment statute. The Spouses Supapo filed the accion publiciana to protect
their proprietary interests over the subject property and recover
As a last-ditch effort to save their case, the respondents its possession.
invoke res judicata. They contend that the decision of the CA in
CA-G.R. SP No. 78649 barred the filing of the action publiciana. Even casting aside the requirement of identity of causes of action,
the defense of res judicata has still no basis.
To recall, CA-G.R. SP No. 78649 is the petition for certiorari filed
The concept of "conclusiveness of judgment" does not require TORRES, JR., J.:
that there is identity of causes of action provided that there is
identity of issue and identity of parties.65
Assailed in this Petition for Review on Certiorari is the
Decision[1] of the respondent Court of Appeals dated January 7,
Under this particular concept of res judicata, any right, fact, or
1993 in CA-G.R. No. 22407-CV, the dispositive portion of which
matter in issue directly adjudicated or necessarily involved in the
reads:
determination of an action before a competent court in which
judgment is rendered on the merits is conclusively settled by the
judgment therein and cannot again be litigated between the WHEREFORE, the decision of the lower court is hereby REVERSED
parties and their privies, whether or not the claim, demand, and judgment is hereby entered ordering defendants Felicidad
purpose, or subject matter of the two actions is the same.66 Vda. de Cabrera and Marykane Cabrera to vacate the portion of
Lot 2238 occupied by them and surrender possession thereof to
As already explained, there is no identity of parties between the plaintiff.
criminal complaint under the Anti-Squatting law and the civil
action for accion publiciana. For this reason alone, "collusiveness SO ORDERED.
of judgment" does not apply.

Even if we assume, for the sake of argument, that there is identity
of parties, "conclusiveness of judgment" still does not apply
because there is no identity of issues. The issue in the criminal
case is whether the respondents (accused therein) committed the
crime alleged in the information, while the only issue in accion
publiciana is whether the Spouses Supapo have a better right than
the respondents to possess and occupy the subject property.
Reversed by the foregoing pronouncements was the
decision[2] of the Regional Trial Court, Branch 7, Baganga, Davao
Oriental in Civil Case No. 379, an action for Quieting of Title to
Real Property, Damages with Preliminary Injunction. The trial
courts disposition reads:
WHEREFORE, the plaintiff is hereby ordered:

For all these reasons, the defense of res judicata is baseless.

(a) to execute a reconveyance within thirty (30) days after this
Final Note decision shall have become final and executory in favor of
defendant Felicidad Vda. De Cabrera corresponding only to that
As a final note, we stress that our ruling in this case is limited only portion of Lot No. 2239 actually and physically possessed and
to the issue of determining who between the parties has a better occupied by the defendant as seen from the sketch plan of Engr.
right to possession. This adjudication is not a final and binding Enecio Magno (Exh. 2) and pinpointed and identified during the
determination of the issue of ownership. As such, this is not a bar ocular investigation as to its extent and boundaries of the said
for the parties or even third persons to file an action for the portion bought by defendants Felicidad Vda. De Cabrera from
determination of the issue of ownership. Felicidad Teokemian;

WHEREFORE, premises considered, we GRANT the petition, and (b) To reimburse defendants for litigation expenses and attorneys
consequently REVERSE and SET ASIDE the February 25, 2011 fees in the amount of P7,000.00; and
decision and August 25, 2011 resolution of the Court of Appeals in
CA-G.R. SP No. 111674.
(c) To pay the cost.
SO ORDERED.
SO ORDERED.

We are restating the facts as determined by the appellate

court, viz:

On January 16, 1950, a Deed of Sale (Exh. B) was executed by

Daniel Teokemian and Albertana Teokemian in favor of Andres
Orais over a parcel of unregistered land situated at Abejod,
Cateel, Davao Oriental with an area described as 7.3720
hectares. The property was owned in common by Daniel and
[G.R. No. 108547. February 3, 1997] Albertana and their sister Felicidad Teokemian, having inherited
the same from their late father, Domingo Teokemian. However,
the Deed of Sale was not signed by Felicidad, although her name
was printed therein as one of the vendors. On January 26, 1950,
the parcel of land was surveyed in the name of Virgilia Orais,
FELICIDAD VDA. DE CABRERA, MARYJANE CABRERA and daughter of the vendee Andres Orais, and denominated as Lot No.
FELICIDAD TEOKEMIAN, plaintiff, vs. COURT OF 2239, PLS-287, Cateel Cadastre. As surveyed, the property had an
APPEALS and VIRGILIA ORAIS DE FELICIO, represented area of 11.1000 hectares.
by her Attorney-in-Fact, ERNESTO M.
ORAIS, defendants.
On June 24, 1957, Virgilia Orais was issued Free Patent No. V-
79089. Original Certificate of Title No. P-10908 was issued in her
DECISION name (Exh. A).
On July 27, 1972, Alberto (sic. Albertana) Teokemian executed a
Deed of Absolute Sale conveying to Elano Cabrera, husband of
Felicidad Cabrera, ONE HALF PORTION OF LOT NO. 2239, Cad-287,
eastern portion, containing an area of FIFTY FIVE THOUSAND FIVE
HUNDRED TEN (55,510) SQUARE METERS, more or less (Exh. 3),
which portion supposedly corresponded to the one-third share in
Lot 2239 of Felicidad Teokemian who was not a party to the Deed
of Sale earlier executed by her brother and sister in favor of
Andres Orais, Virgilia Orais predecessor-in-interest. It was
explained by Felicidad Cabrera that the Deed of Sale was signed
by Albertana Teokemian, not by Felicidad Teokemian, because the
whole of Lot 2239 was adjudicated to Albertana in a decision of a
cadastral court dated June 8, 1965 as evidenced by a Certification
of an officer-in-charge of the Office of the Clerk of Court, RTC, Br.
7, Baganga, Davao Oriental (Exh. 4). Felicidad Cabrera and her
husband immediately took possession of the western portion of
Lot 2239.
In 1974 and 1978, Virgilia Orais brothers, Rodolfo and Jimmy Orais
went to Cateel, Davao Oriental and confronted the Cabreras of
the latters alleged encroachment and illegal occupation of their
sisters land, but no concrete action on the matter was pursued by
Virgilia Orais until February 11, 1988 when she filed Civil Case No.
379 against Felicidad Cabrera, now a widow, and her daughter
Marykane Cabrera for Quieting of Title to Real Property, Damages
with Preliminary Mandatory Injunction.
The complaint, which was amended on June 22, 1988 by including
Felicidad Teokemian as party defendant (pp. 42-47, Records),
alleged that sometime in 1972 and 1973 the late Elano Cabrera
and defendant Felicidad Cabrera, knowing that Lot 2239 was
already registered in the name of the plaintiff, prepared a
document of sale and had Felicidad Teokemian sign it conveying a
portion of said lot to them as described in the Sketch Map (Annex
D of the Complaint), after which they entered and possessed said
portion and enjoyed the fruits thereon. Plaintiff further averred
that by reason of the document of sale and the declaration of the
property involved in the name of defendant Felicidad Vda. De
Cabrera, there created a cloud of doubt on the formers title on
said property.
Plaintiff prayed as follows:
WHEREFORE, premises considered, plaintiff through the
undersigned counsel respectfully prays this Honorable Court that:
a) After due notice and hearing, a Writ of Preliminary Mandatory
Injunction be issued restraining the defendants from further
dispossessing the plaintiff of the land in question;
b) Ordering the defendants to pay jointly the plaintiff the amount
of not less than Sixteen Thousand Two Hundred (P16,200) as total
value of the rice produced from the riceland in question, and the
amount of Twenty One Thousand Six Hundred (P21,600.00) Pesos
as the total proceeds of the nuts of the coconut land in question;
c) The Defendants be ordered to pay the plaintiff the amount of
Twenty Thousand (P20,000.00) Pesos and Ten Thousand
(P10,000.00) Pesos as litigation expenses;
d) The defendants be ordered to pay Six Thousand (P6,000.00)
Pesos for attorneys fees; Four Hundred (P400.00) Pesos as
expenses for every appearance in Court;
e) The document of sale executed by Felicidad Teokemian and the
Tax Declarations issued to the late Elano Cabrera and Felicidad
Vda. De Cabrera and the subsequent Tax Declaration creating a
cloud of doubt on the title, possession, rights and interest be
declared null and void for being fraudulent and without any legal
basis and inexistent; and
f) Such other reliefs and remedies which this Honorable Court
may deem just, proper, and equitable in the premises.
In their answer with counterclaim (pp.10-18, Records),
defendants alleged that they acquired a portion of Lot 2239 in
good faith and for value; that said portion was owned by Felicidad
Teokemian who was not a party to the Deed of Sale executed by
Daniel and Albertana Teokemian on January 16, 1950 in favor of
Andres Orais over Lot 2239; that not having signed the Deed of
Sale, Felicidad Teokemians one-third share in Lot 2239 could not
have been legally conveyed to Andres Orais; that Virgilia Orais
(successor-in-interest of Andres Orais) committed fraud in
including the portion owned by Felicidad Teokemian in her
applying for free patent over Lot 2239 is concerned pursuant to
Art. 1456 of the Civil Code; and that plaintiff is guilty of laches for
not initiating an action against defendants to recover the western
portion of Lot 2239 despite plaintiffs knowledge of defendants
acquisition thereof in 1972, as in fact it was only in 1988 when the
complaint for quieting of title was filed in court.
Defendants prayed, thus:
WHEREFORE, this Honorable Court, after due notice and hearing
on the merits of this case; to issue order or orders;
1. Finding the defendants as the rightful, lawful, and legal owner
of that portion which was sold to them by Felicidad Teokemian
and which was included in the title of plaintiff;
2. To find that the plaintiff did not own the said portion and that
they have personal knowledge of the same when the plaintiff filed
and secured the title under the Administrative Proceeding;
3. Finding that the plaintiff is only holding the title to that portion
only in an implied trust in favor of the real owner;
4. Finding the plaintiff legally obligated to cause the segregation
of the portion at their expense and deliver formally the said
portion to the real owners, the defendants.
5. To order the plaintiff to execute, prepare and or make any
instrument or document to finally vest in the Defendants
absolute, clear and flawless title or ownership over the portion
which the plaintiff holds title in trust in defendants favor.
6. To Order the Plaintiff to pay actual damages in the sum
of P2,000.00 as litigation expense and Attorneys fees in the sum
of P5,000.00 in favor of defendants;
7. To direct the plaintiff to account for the share of the real owner
of the portion of land illegally cultivated and planted by plaintiff
to rice in favor of FELICIDAD TEOKEMIAN to be paid thru the
Defendants who are the owners, which consisted in ONE THIRD
OF THE RICE HARVEST every year since the year 1950 to 1972
when the portion was sold and cultivated by defendant based on
the computation of income by the plaintiff in Paragraph 16, a
paragraph in the Second Cause of Action of the complaint;
and to grant the defendants such other reliefs and remedies
proper and equitable in the premises.[3]
On April 27, 1989, the lower court rendered judgment in
favor of defendants and against the plaintiff, ruling that the latter
can no longer recover the western portion of Lot 2239 conveyed
in 1972 by Felicidad Teokemian in favor of the late Elano Cabrera
and Felicidad Cabrera due to laches. In support of its findings, the
trial court referred to the Courts pronouncements in Lola vs.
Court of Appeals,[4] where it was held that although the defense of
prescription is unavailing to the petitioners, because, admittedly,
the title to the subject lot was still registered in the name of the
respondent, still the petitioners have acquired title to it by virtue
of the equitable principle of laches due to the respondents failure
to assert her claim and ownership for thirty-two years; and in
Republic vs. Court of Appeals[5] that, while it is true that by
themselves tax receipts and declaration of ownership for taxation
purposes are not incontrovertible evidence of ownership, they
become strong evidence of ownership acquired by prescription
when accompanied by proof of actual possession of the property;
and in Miguel vs. Catalino,[6] that even granting appellants
proposition that no prescription lies against their fathers recorded
title, their passivity and inaction for more than thirty four years
justifies the defendant appellee in setting up the equitable
defense of laches in his own behalf.
The respondent Court of Appeals reversed such findings
upon appeal.
Even as the appellate court observed that the registration
made by the plaintiffs was fraudulent insofar as it involved the
one-third interest of Felicidad Teokemian, which was not included
in the sale executed by them and Albertana and Daniel
Teokemian, it nevertheless upheld its effects, on the justification
that the defendants action for reconveyance based on an implied
trust had already been barred by prescription. Furthermore, the
action of the plaintiffs is not barred by laches, as was held by the
lower court. Said the appellate court:
We disagree with the lower courts ruling that plaintiff is barred
from bringing an action for recovery of
ownership. Parenthetically, while the complaint filed by plaintiff is
designated as one for quieting of title, the allegations therein
show that it is actually for recovery of ownership/possession.
First. The Deed of Absolute Sale dated May 27, 1972 (Exh. 3)
executed by Albertana Teokemian in favor of Elcano Cabrera over
the portion of 55,510 square meters of Lot 2238 which allegedly
pertained to the one-third interest of Felicidad Teokemian did not
convey any title to Elcano Cabrera, assuming that Felicidad
Teokemian still owned a one-third portion of Lot 2238 which was
already registered in plaintiffs name, considering that Albertana
did not have any authority from Felicidad Teokemian to effect
such conveyance. Consequently, defendants Felicidad vda. De
Cabrera and Marykane Cabrera had acquired no title upon which
to anchor their claim of ownership over the one-third
portion. Such being the case, plaintiffs cannot be barred by laches
from instituting the action to quiet title against defendants
xxx
Second. There was no allegation, much less proof, that Lot 2239
had been partitioned among the co-owners Daniel, Albertana, and
Felicidad, all surnamed Teokemian, before the land was sold to
Andres Orais in 1950 when the same was still unregistered. This
being the case, and assuming that Felicidad Teokemian had
retained ownership over an undivided one-third portion of Lot
2239 despite its being titled in plaintiffs name in 1958, Felicidad
Teokemian could only dispose her undivided interest, not a
definite portion described in the Deed of Sale executed on July 27,
1972 (Exh. 3) as eastern part. Worse, the supposed vendee,
Elcano Cabrera, and her successors-in-interest, defendants
Felicidad vda. de Cabrera and Marykane Cabrera, occupied the
western portion of Lot 2239, not the eastern portion which was
the subject of the sale. Their occupation of a definite portion of an
undivided property, without any color of title, could not have
ripened into ownership on the principle of laches.
Third. As testified to by Jimmy Orais, plaintiffs brother, it was only
in 1974 when plaintiff came to know that her property was
occupied by Elcano Cabrera. According to Jimmy, he and his elder
brother Dr. Rodolfo Orais went to the house of Elcano Cabrera
three times in 1974 and in 1979 complaining of the latters
occupancy of their sisters property. Jimmy further declared that
after Elcano Cabrera was shown plaintiffs title to the property,
Elcano Cabrera proposed a relocation survey of the area to
determine whether the premises occupied by him were included
in the plaintiffs title (T.S.N. pp. 39-44, January 3, 1989). It appears,
however, that nothing came out of the proposal to conduct a
relocation survey. From the time plaintiff became aware of
Cabreras possession of the western portion of Lot 2239, which
was in 1974, up to the time she instituted the action for quieting
of title in 1988, only fourteen (14) years had elapsed. This case,
therefore, has no congruency with those cases where the
Supreme Court ruled that the registered owner is barred by laches
from recovering his property. Thus, in Lola vs. Court of Appeals
(145 SCRA 439), the petitioners acquired title to the land owned
by respondent by virtue of the equitable principles of laches due,
according to the Supreme Court, to respondents failure to assert
her claims and ownership for thirty-two (32) years. In Miguel vs.
Catalino (26 SCRA 234), the Supreme Court said that appellants
passivity and inaction for more than 34 years (1928-1962) justifies
the defendant-appellee in setting up the equitable defense of
laches in his behalf. In Mejia vs. Gampomana (100 Phil 277), it was
held that the original owners right to recover back the possession
of the property and title thereto from the defendant has by the
long period of 37 years and by the patentees inaction and neglect
been converted into a stale demand.
Laches, in a general sense, is failure or neglect, for an
unreasonable and unexplained length of time, to do that which,
by the exercise of due diligence, could or should have been done
earlier; it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled
to assert it (Tijam vs. Sibonghanoy, 32 SCRA 29). Since
imprescriptibility is one of the basic features of a Torrens title, it is
not an ordinary delay in asserting ones right that will give rise to
the application of the principle of laches, otherwise, registered
title can easily be defeated by prescription. This is precisely the
reason why, in the cases cited, the delay or inaction by the
 registered owners in asserting their rights was considered
unreasonable and unexplained because it took them from 32 to
37 years to do so. In contrast, the delay in the case at bar was only
fourteen years.
While possession of defendants Felicidad vda. De Cabrera and
Marykane Cabrera could not have ripened into ownership as
already discussed, they are possessors in good faith of the portion
occupied by them and, therefore, entitled to the benefits
accorded by the Civil Code as such.[7]
Sisters Felicidad vda. de Cabrera and Marykane Cabrera,
together with Felicidad Teokemian are now before the Court as
Petitioners in this Petition for Review on Certiorari, seeking relief
from the respondent courts decision, assigning as errors the
following:
A
RESPONDENT COURT OF APPEALS ERRED IN RULING THAT
PRIVATE RESPONDENTS COMPLAINT FILED IN 1988 FOR QUIETING
OF TITLE WHICH ACTUALLY IS ONE FOR RECOVERY OF
OWNERSHIP AND POSSESSION AS FOUND BY RESPONDENT
COURT IS NOT BARRED BY LACHES BECAUSE:
1. A PERIOD OF 30 YEARS HAD ELAPSED FROM 1958 WHEN TORRENS
TITLE WAS ISSUED TO PRIVATE RESPONDENT TO 1988 WHEN HER
COMPLAINT BELOW WAS FILED DURING WHICH PERIOD OF TIME
THE PROPERTY HAS BEEN IN OPEN, CONTINUOUS AND ADVERSE
POSSESSION OF THE ORIGINAL OWNER, FELICIDAD TEOKEMIAN,
FROM 1958, OR EVEN EARLIER IN 1941 WHEN SHE INHERITED THE
PROPERTY, TO 1972 WHEN SHE SOLD IT TO THE CABRERAS WHO
CONTINUED THE PRIOR POSSESSION UNTIL 1988 WHEN PRIVATE
RESPONDENTS COMPLAINT WAS FILED.
2. ASSUMING ARGUENDO RESPONDENT COURTS HOLDING THAT ONLY
14 YEARS HAD ELAPSED COUNTED FROM 1974 WHEN CABRERAS
POSSESSION WAS QUESTIONED BY PRIVATE RESPONDENTS
BROTHERS, STILL THAT PERIOD CONSTITUTES LACHES.
B reconveyance has already been barred by prescription,[11] which is
RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT
LACHES DOES NOT APPLY BECAUSE WHAT WAS SOLD TO THE
CABRERAS WAS A DEFINITE PORTION OF THE COMMUNITY
PROPERTY BEFORE PARTITION, HENCE, VOID AND THAT
ALBERTANA TEOKEMIAN WHO SIGNED THE DOCUMENT OF SALE
IN FAVOR OF THE CABRERAS HAD NO AUTHORITY FROM HER
SISTER-CO-OWNER FELICIDAD TEOKEMIAN TO EXECUTE THE DEED
OF CONVEYANCE.[8]
The bone of the petitioners contention rests on the alleged
waiver of the plaintiff to recover any interest she had in the one-
third portion of the property inherited by Daniel, Albertana and
Felicidad Teokemian from their late father, Domingo, due to the
long period of time which lapsed from the time the plaintiffs title
was registered until the action for quieting of title was instituted.
We find merit in the petition.
At the outset, it must be observed that the Certificate of
Title of the plaintiff, which was derived from Free Patent No. V-
79089, issued in the name of Virgilia Orais, leaves much to be
desired in propriety, considering that the Deed of Sale executed
by Daniel and Albertana Teokemian, on one hand and Andres
Orais on the other, did not bear the signature of Felicidad
Teokemian, and therefore, did not cover the latters share.
It was the respondent appellate court which observed that
the registration of the plaintiffs title over the subject property was
fraudulent insofar as it involved the one-third interest of Felicidad
Teokemian who did not sign the Deed of Sale in favor of plaintiffs
predecessor-in-interest and, therefore, the latter held that
portion as a trustee of an implied trust for the benefit of Felicidad,
pursuant to Art. 1456 of the Civil Code.[9] Needless to state, these
conclusions, being matters of fact, are entitled to our full
affirmation, since they are congruent with the findings of the trial
court, thus:
It would seem from the facts of the case that the basis of the right
of plaintiff over the land in litigation specifically Lot No. 2239 now
titled in the name of the plaintiff, located at Buayahon, Abejod,
Cateel, Davao Oriental, proceeded from the Deed of Sale
executed by Daniel Teokemian and Albertana Teokemian on
January 16, 1950 acknowledged before Judge Proserador Danao
as Notary Ex Oficio. Taking a hard look over the aforesaid deed of
sale (Exh. B) the said document apparently included the third heir
of Domingo Teokemian Felicidad Teokemian because her name
was typewritten together with her sister Albertana and brother
Daniel all surnamed Teokemian in the said document. Again this
fact will come to mind that the vendee Andres Orais was
anticipating at the time Felicidad Teokemian will also sell her
share in this portion of land (Lot No. 2239) which at the time of
the sale it was still unregistered land. The non-signing of Felicidad
Teokemian over her typewritten name in this deed of sale (Exh. B)
will attest to the fact that she did not sell her share in the lot in
question. After this sale the vendee Andres Orais through his
encargado Melecio Capilitan and later Servillano Abarca
immediately took possession of the two third portion of said
parcel of land respecting the third portion owned by Felicidad
Teokemian.[10]
However, the appellate court stated further that
nonetheless, the plaintiffs attempt to recover the property is
justified because defendant Felicidad Teokemians own action for
the same as stating that the very tardiness of the plaintiffs in
pursuing the present action for reconveyance of the subject
property has rendered the defendants defense nugatory, and has
made the fortress of the plaintiffs case impregnable.
This conclusion is incorrect. As can be discerned from the
established facts, the Certificates of Title of the vendees Orais are,
to say the least, irregular, and were issued in a calculated move to
deprive Felicidad Teokemian of her dominical rights over the
property reserved to her by descent. Plaintiff could not have
registered the part reserved to Felicidad Teokemian, as this was
not among those ceded in the Deed of Sale between
Daniel/Albertana Teokemian and Andres Orais. It must be
remembered that registration does not vest title, it is merely
evidence of such title over a particular property. (Embrado vs.
Court of Appeals)[12]
The defense of indefeasibility of the Torrens Title does not
extend to a transferee who takes the certificate of title with
notice of a flaw in his title. (Anonuevo vs. Court of Appeals)[13] The
principle of indefeasibility of title is unavailing where there was
fraud that attended the issuance of the free patents and titles.
(Meneses vs. Court of Appeals)[14]
 Be that as it may, that the right of the defendants for
reconveyance of the subject property arising from an implied trust
under Article 1456 of the Civil Code is material to the instant case,
such remedy has not yet lapsed, as erroneously submitted by the
plaintiffs, and, is thus, a bar to the plaintiffs action. In the case of
Heirs of Jose Olviga vs. Court of Appeals,[15] we observed that an
action for reconveyance of a parcel of land based on implied or
constructive trust prescribes in ten years, the point of reference
being the date of registration of the deed or the date of the
issuance of the certificate of title over the property, but this rule
applies only when the plaintiff or the person enforcing the trust is
not in possession of the property, since if a person claiming to be
the owner thereof is in actual possession of the property, as the
defendant is in the instant case, the right to seek reconveyance,
which in effect seeks to quiet title to the property, does not
prescribe. The reason for this is that one who is in actual
possession of a piece of land claiming to be the owner thereof
may wait until his possession is disturbed or his title is attacked
before taking steps to vindicate his right, the reason for the rule
being, that his undisturbed possession gives him a continuing
right to seek the aid of a court of equity to ascertain and
determine the nature of the adverse claim of a third party and its
effect on his own title, which right can be claimed only by one
who is in possession.
As it is, before the period of prescription may start, it must
be shown that (a) the trustee has performed unequivocal acts of
repudiation amounting to an ouster of the cestui que trust; (b)
such positive acts of repudiation have been made known to
the cestui que trust; and, (c) the evidence thereon is clear and
positive.[16]
In the case at bar, the defendant Felicidad Teokemian, and
thereafter, the Cabreras, were in actual possession of the
property since it was left to Felicidad Teokemian by her father in
1941, which possession had not been interrupted, despite the sale
of the two-third portion thereof to the plaintiff in 1950, and the
latters procurement of a Certificate of Title over the subject
property in 1957. Until the institution of the present action in
1988, plaintiffs, likewise, have not displayed any unequivocal act
of repudiation, which could be considered as an assertion of
adverse interest from the defendants, which satisfies the above-
quoted requisites. Thus, it cannot be argued that the right of
reconveyance on the part of the defendants, and its use as
defense in the present suit, has been lost by prescription.
On the other hand, the action for reconveyance (quieting of
title) of the plaintiff was instituted only in 1988, that is, thirty
years from the time the plaintiffs husband was able to acquire
Certificate of Title covering the properties inherited by the
Teokemians, and apparently including that portion belonging to
Felicidad Teokemian. In the meantime, defendant Felicidad vda.
De Cabrera and her late husband have been actively in possession
of the same, tilling it, and constructing an irrigation system
thereon. This must surely constitute such tardiness on the part of
the plaintiff constituting the basis for laches.
Laches has been defined as the failure or neglect, for an
unreasonable and unexplained length of time, to do that which by
exercising due diligence could or should have been done earlier; it
is negligence or omission to assert a right within a reasonable
time, warranting a presumption that the party entitled to assert it
either has abandoned it or declined to assert it.[17] The defense of
laches is an equitable one and does not concern itself with the
character of the defendants title, but only with whether or not by
reason of plaintiffs long inaction or inexcusable neglect, he should
be barred from asserting his claim at all, because to allow him to
do so would be inequitable and unjust to defendant. Laches is not
concerned merely with lapse of time, unlike prescription. While
the latter deals with the fact of delay, laches deals with the effect
of unreasonable delay.[18]
This Court emphasized in Mejia de Lucas vs.
Gampona,[19] the reason upon which the rule is based is not alone
the lapse of time during which the neglect to enforce the right has
existed, but the changes of condition which may have arisen
during the period in which there has been neglect. In other words,
where a court finds that the position of the parties has to change,
that equitable relief cannot be afforded without doing injustice,
or that the intervening rights of third persons may be destroyed
or seriously impaired, it will not exert its equitable powers in
order to save one from the consequences of his own neglect.
In our jurisdiction, it is an enshrined rule that even a
registered owner of property may be barred from recovering
possession of property by virtue of laches. Under the Land
Registration Act (now the Property Registration Decree), no title
to registered land in derogation to that of the registered owner
shall be acquired by prescription or adverse possession. The same
is not true with regard to Laches.[20] As we have stated earlier in
Mejia de Lucas vs. Gamponia, while the defendant may not be
considered as having acquired title by virtue of his and his
predecessors long continued possession (37 years) the original
owners right to recover back the possession of the property and
the title thereto from the defendant has, by the latters long
period of possession and by patentees inaction and neglect, been
converted into a stale demand.
The argument that laches does not apply because what was
sold to the Cabreras was a definite portion of the community
property, and, therefore, void, is likewise untenable.
Under Article 493 of the Civil Code:
Each co-owner shall have the full ownership of his part and of the
fruits and benefits pertaining thereto, and even he may therefore
alienate, assign or mortgage it, and even substitute another
person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the
co-ownership.
In Go Ong vs. Court of Appeals,[21] this Court ruled that the
heirs, as co-owners, shall each have the full ownership of his part
and the fruits and benefits pertaining to it. An heir may,
therefore, alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when the personal rights
are involved. But the effect of the alienation or mortgage, with
respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the
co-ownership.
Undisputed is the fact that since the sale of the two-third
portion of the subject property to the plaintiff, the latter had
allowed Felicidad Teokemian to occupy that one-third portion
allotted to her. There has, therefore, been a partial partition,
where the transferees of an undivided portion of the land allowed
a co-owner of the property to occupy a definite portion thereof
and has not disturbed the same, for a period too long to be
ignored--the possessor is in a better condition or right (Potior est
conditio possidentis).
 Clearly, the plaintiff in this instance is barred from asserting VILLARAMA, JR., J.:
her alleged right over the portion subject matter in the instant
case on the ground that their right has been lost by laches. In
Bailon-Casilao vs. Court of Appeals, we ruled that:
Before us on appeal by way of a petition for review on
As early as 1923, this Court has ruled that even if a co-owner sells
the whole property as his, the sale will affect only his own share certiorari under Rule 45 is the Court of Appeals (CA) August 28,
but not those of the other co-owners who did not consent to the
2003 Decision[1] which dismissed petitioner Estrella Tiongco
sale (Punzalan vs. Boon Liat, 44 Phil 320 [1923]). This is because
under the aforementioned codal provision, the sale or other Yareds appeal and affirmed the Decision[2] of the Regional Trial
dispostion affects only his undivided share and the transferee gets
only what would correspond to his grantor in the partition of the Court (RTC), Branch 26, of Iloilo City, dismissing petitioners
things owned in common (Ramirez vs. Bautista, 14 Phil 528
complaint for annulment of affidavit of adjudication, deeds of sale
[1909]). xxx For Article 494 of the Civil Code explicitly declares: No
prescription shall lie in favor of a co-owner or co-heir so long as and Transfer Certificates of Title (TCTs), reconveyance and
he expressly or impliedly recognizes the co-ownership.[22]
damages. Also assailed is the appellate courts November 27,
IN VIEW WHEREOF, the petition is hereby GRANTED. The 2003 Resolution[3] denying petitioners motion for reconsideration.
decision of the Court of Appeals dated January 7, 1993 is hereby
SET ASIDE. The decision of the trial court dated April 27, 1989 is
hereby REINSTATED in toto.
The factual antecedents, as culled from the records,
SO ORDERED.
follow:

Matilde, Jose, Vicente, and Felipe, all surnamed

Tiongco, were born to Atanacio and Maria Luis Tiongco. Together

they were known as the Heirs of Maria Luis de Tiongco.

The present dispute involves three parcels of land

namely, Lots 3244, 3246 and 1404, all located in Iloilo City. Lots

3244 and 1404 used to be covered by Original Certificates of Title

(OCTs) Nos. 484 and 1482, respectively, in the names of Matilde

(wife of Vicente Rodriguez), Jose (married to Carmen Sonora),

Vicente (married to Ursula Casador), and Felipe (married to

Sabina Montelibano), each in undivided share, while Lot 3246

ESTRELLA TIONGCO YARED G.R. No. 161360 used to be covered by OCT No. 368 in the name of Heirs of Maria
(Deceased) substituted by
Luis de Tiongco.[4]
CARMEN M. TIONGCO a.k.a. Present:
CARMEN MATILDE B.
TIONGCO, CORONA, C.J.,
Petitioner, Chairperson, While all of the Heirs of Maria Luis de Tiongco have
LEONARDO-DE CASTRO,
BERSAMIN, died, they were survived by their children and descendants.
- versus - DEL CASTILLO, and Among the legitimate children of Jose were petitioner and
VILLARAMA, JR., JJ.
Carmelo Tiongco, the father of respondent Jose B. Tiongco.[5]
JOSE B. TIONGCO and Promulgated:
ANTONIO G. DORONILA, JR.,
Respondents. October 19, 2011
Sometime in 1965, petitioner built her house
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
-x on Lot 1404[6] and sustained herself by collecting rentals from the

tenants of Lots 3244 and 3246. In 1968, petitioner, as one of the

DECISION
heirs of Jose, filed an adverse claim affecting all the rights,
interest and participation of her deceased father on the disputed Doronila, Jr. who was issued TCT No. T-4666 which cancelled TCT

lots, but the adverse claim was annotated only on OCT No. 484 No. T-4665. Catalino Torre also sold Lots 3244 and 1404 on the

and OCT No. 1482, respectively covering Lots 3244 and 1404.[7] same date to Doronila who was issued the corresponding new

TCTs.[13] However, just a few days later, or on April 2, 1979,

In 1983, respondent Jose prohibited petitioner from Doronila sold Lot 1404 back to respondent Jose. Lots 3244 and

collecting rentals from the tenants of Lots 3244 and 3246. 3246 were also sold back to respondent on January 17, 1980.[14]

In December 1983, respondent Jose filed a suit for recovery of

possession with preliminary injunction against several tenants of On October 2, 1990, petitioner filed a complaint before

Lots 3244 and 3246 wherein he obtained a judgment in his the court a quo against her nephew respondent Jose and

favor.[8] Respondent Jose also filed a case for unlawful detainer respondent Antonio G. Doronila, Jr. Petitioner argued that

with damages against petitioner as she was staying on Lot 1404. respondent Jose knowingly and wilfully made untruthful

While the RTC, Branch 33, of Iloilo City ruled in respondent Joses statements in the Affidavit of Adjudication because he knew that

favor, the CA reversed the RTCs decision and ruled in favor of there were still other living heirs entitled to the said

petitioner.[9] As such, respondent Jose never took possession of properties.[15] Petitioner claimed that the affidavit was null and

the properties. void ab initio and as such, it did not transmit or convey any right

of the original owners of the properties. Any transfer whatsoever

In 1988, when petitioner inquired at the Office of the is perforce likewise null and void.[16] Moreover, the petitioner

Register of Deeds of Iloilo City, she discovered that respondent averred that since respondent Jose executed said documents

Jose had already executed an Affidavit of through fraud, bad faith, illegal manipulation and

Adjudication[10] dated April 17, 1974, declaring that he is the only misrepresentation, Lots 3244 and 1404 should be reconveyed to

surviving heir of the registered owners and adjudicating unto its original registered owners and Lot 3246 to the heirs of Maria

himself Lots 3244, 3246 and 1404. Consequently, the OCTs of the Luis de Tiongco subject to subsequent partition among the

aforementioned lots were cancelled, and in place thereof, the heirs.[17] Petitioner also posited that granting for the sake of

Register of Deeds of Iloilo City issued TCT No. T-37195 argument that the affidavit of adjudication was simply voidable,

for Lot 3244, TCT No. T-4665 for Lot 3246, and TCT No. T-37193 respondent Jose became a trustee by constructive trust of the

for Lot 1404, all in the name of respondent Jose.[11] property for the benefit of the petitioner.[18]

Based on the records with the Register of Deeds, it also Respondent Jose, for his part, argued that the

appears that on May 10, 1974, the same day when the TCTs petitioners father, Jose, was not an heir of Maria Luis de Tiongco

covering Lots 3244 and 1404 were issued, respondent Jose sold but an heir of Maria Cresencia de Loiz y Gonzalez vda. De Tiongco.

the said lots to Catalino Torre. TCT Nos. T-37195 and T-37193 Respondent Jose claimed that he was the only legitimate son and

were thus cancelled and TCT Nos. T-37196 and T-37194 were that while it was true that he has two other siblings, he refused to

issued in the name of Catalino Torre.[12] acknowledge them because they are illegitimate.[19] Respondent

Jose denied that the series of sales of the properties was

Similarly, the records of the Register of Deeds showed fraudulent. He claimed that Lot 3244 was bought by the City

that Lot 3246 was likewise disposed of by respondent Jose. On of Iloilo from its own auction sale for tax delinquency and was

March 30, 1979, or barely two days after obtaining TCT No. T- merely resold to him. Respondent Jose averred that he has been

4665, respondent Jose sold Lot 3246 to respondent Antonio G. paying real property taxes on the said properties for more than
 OF HIMSELF THE PROPERTIES IN
ten (10) years and that petitioner collected rentals from Lots 3244 QUESTION OVER WHICH HE, AS
and 3246 only because he allowed her.[20] A LAWYER, KNOWS HE HAS NO
RIGHTS WHATSOEVER AND HE
ALSO KNOWS HAS BEEN IN
POSSESSION OF THE PETITIONER
After trial, the Iloilo City RTC ruled in favor of AND HER PREDECESSORS-IN-
INTEREST UNTIL THE PRESENT.
respondent Jose. The court a quo ruled that prescription has set in

since the complaint was filed only on October 2, 1990 or some B. THE HONORABLE COURT OF
APPEALS ERRED IN AFFIRMING
sixteen (16) years after respondent Jose caused to be registered THE DISMISSAL OF PETITIONERS
COMPLAINT BY THE LOWER
the affidavit of adjudication on May 10, 1974.[21] COURT ON THE GROUND OF
PRESCRIPTION BECAUSE THE
RESPONDENT JOSE B. TIONGCOS
Aggrieved, petitioner appealed to the CA[22] which, AFFIDAVIT OF ADJUDICATION,
BEING A TOTAL NULLITY, THE
however, sustained the trial courts ruling. The CA agreed with the ACTION TO DECLARE SUCH
NULLITY AND OF THOSE
trial court that an action for reconveyance can indeed be barred
SUBSEQUENT TRANSACTIONS
by prescription. According to the CA, when an action for ARISING FROM SAID
ADJUDICATION DOES NOT
reconveyance is based on fraud, it must be filed within four years PRESCRIBE, ESPECIALLY BECAUSE
IN THIS CASE THE PETITIONER
from discovery of the fraud, and such discovery is deemed to have AND HER PREDECESSORS-IN-
taken place from the issuance of the original certificate of title. On INTEREST HAVE ALWAYS BEEN IN
POSSESSION OF THE LOTS IN
the other hand, an action for reconveyance based on an implied QUESTION AND RESPONDENT
JOSE B. TIONGCO HAS NEVER
or constructive trust prescribes in ten (10) years from the date of BEEN IN POSSESSION
issuance of the original certificate of title or transfer certificate of THEREOF.[24]

title. For the rule is that the registration of an instrument in the C. FURTHER, EVEN IF ARGUENDO,
THE AFFIDAVIT OF
Office of the Register of Deeds constitutes constructive notice to ADJUDICATION IS VOIDABLE,
THE HONORABLE COURT OF
the whole world and therefore the discovery of fraud is deemed
APPEALS STILL ERRED IN
to have taken place at the time of registration.[23] AFFIRMING THE DISMISSAL OF
THE COMPLAINT BY THE LOWER
COURT ON THE GROUND OF
PRESCRIPTION BECAUSE THE
Petitioner filed a motion for reconsideration of the RESPONDENT, JOSE B. TIONGCO,
above ruling, but the CA as aforesaid, denied petitioners BEING A LAWYER AND BEING
AWARE OF PETITIONERS
motion. Hence, the present petition for review on certiorari. OWNERSHIP OF THE LOTS IN
QUESTION, THE SAID AFFIDAVIT
OF ADJUDICATION MAKES THE
RESPONDENT AN IMPLIED
Petitioner raised the following arguments in the TRUSTEE THEREOF FOR THE
petition, to wit: PETITIONER AND THE ACTION
FOR RECONVEYANCE BASED ON
TRUST DOES NOT PRESCRIBE SO
A. THE HONORABLE COURT OF
LONG AS THE BENEFICIARY LIKE
APPEALS ERRED IN AFFIRMING
THE PETITIONER HAS BEEN IN
THE LOWER COURT THAT THE
ACTUAL PHYSICAL POSSESSION
AFFIDAVIT OF ADJUDICATION
OF THE PROPERTY SUBJECT
EXECUTED BY RESPONDENT JOSE
THEREOF, AS HELD IN THE CASE
B. TIONGCO, WHO IS A LAWYER
OF VDA. DE CABRERA VS. COURT
AND IS AWARE OF ITS NULLITY,
OF APPEALS (267 SCRA 339).[25]
IS MERELY VOIDABLE; ON THE
CONTRARY, SAID DOCUMENT IS
A COMPLETE NULLITY BECAUSE
RESPONDENT JOSE B. TIONGCO
HAS MALICIOUSLY AND IN BAD The only issue in this case is who has a better right
FAITH ADJUDICATED IN FAVOR over the properties.
 The petition is meritorious.
The Court agrees with the CAs disquisition that an
action for reconveyance can indeed be barred by prescription. In a
long line of cases decided by this Court, we ruled that an action
for reconveyance based on implied or constructive trust must
perforce prescribe in ten (10) years from the issuance of
the Torrens title over the property.[26]
However, there is an exception to this rule. In the case
of Heirs of Pomposa Saludares v. Court of Appeals,[27] the Court
reiterating the ruling in Millena v. Court of
Appeals,[28] held that there is but one instance when prescription
cannot be invoked in an action for reconveyance, that is, when
the plaintiff is in possession of the land to be reconveyed. In Heirs
of Pomposa Saludares,[29] this Court explained that the Court in a
series of cases,[30] has permitted the filing of an action for
reconveyance despite the lapse of more than ten (10) years from
the issuance of title to the land and declared that said action,
when based on fraud, is imprescriptible as long as the land has
not passed to an innocent buyer for value. But in all those cases,
the common factual backdrop was that the registered owners
were never in possession of the disputed property. The exception
was based on the theory that registration proceedings could not
be used as a shield for fraud or for enriching a person at the
expense of another.
In Alfredo v. Borras,[31] the Court ruled that
prescription does not run against the plaintiff in actual possession
of the disputed land because such plaintiff has a right to wait until
his possession is disturbed or his title is questioned before
initiating an action to vindicate his right. His undisturbed
possession gives him the continuing right to seek the aid of a
court of equity to determine the nature of the adverse claim of a
third party and its effect on his title. The Court held that where
the plaintiff in an action for reconveyance remains in possession
of the subject land, the action for reconveyance becomes in effect
an action to quiet title to property, which is not subject
to prescription.
The Court reiterated such rule in the case of Vda. de
Cabrera v. Court of Appeals,[32] wherein we ruled that the
imprescriptibility of an action for reconveyance based on implied
or constructive trust applies only when the plaintiff or the person
enforcing the trust is not in possession of the property. In effect,
the action for reconveyance is an action to quiet the property
title, which does not prescribe.
Similarly, in the case of David v. Malay[33] the Court
held that there was no doubt about the fact that an action for
reconveyance based on an implied trust ordinarily prescribes in
ten (10) years. This rule assumes, however, that there is an actual
need to initiate that action, for when the right of the true and real
owner is recognized, expressly or implicitly such as when he
remains undisturbed in his possession, the statute of limitation
would yet be irrelevant. An action for reconveyance, if
nonetheless brought, would be in the nature of a suit for quieting
of title, or its equivalent, an action that is imprescriptible. In that
case, the Court reiterated the ruling in Faja v. Court of
Appeals[34] which we quote:
x x x There is settled jurisprudence that one
who is in actual possession of a piece of
land claiming to be owner thereof may wait
until his possession is disturbed or his title is
attacked before taking steps to vindicate his
right, the reason for the rule being, that his
undisturbed possession gives him a
continuing right to seek the aid of a court of
equity to ascertain and determine the
nature of the adverse claim of a third party
and its effect on his own title, which right
can be claimed only by one who is in
possession. No better situation can be
conceived at the moment for Us to apply
this rule on equity than that of herein
petitioners whose mother, Felipa Faja, was
in possession of the litigated property for
no less than 30 years and was suddenly
confronted with a claim that the land she
had been occupying and cultivating all these
 years, was titled in the name of a third
person. We hold that in such a situation the property of another, without notice that some other person has a
right to quiet title to the property, to seek
its reconveyance and annul any certificate right to, or interest in, such property and pays a full and fair price
of title covering it, accrued only from the
for the same, at the time of such purchase, or before he has
time the one in possession was made aware
of a claim adverse to his own, and it is only notice of the claim or interest of some other persons in the
then that the statutory period
of prescription commences to run against property. He is one who buys the property with the belief that the
such possessor.
person from whom he receives the thing was the owner and could

convey title to the property. A purchaser can not close his eyes to
In this case, petitioners possession was disturbed in
facts which should put a reasonable man on his guard and still
1983 when respondent Jose filed a case for recovery of
claim that he acted in good faith.
possession.[35] The RTC of Iloilo City ruled in respondent Joses

favor but the CA on November 28, 1991, during the pendency of

And while it is settled that every person dealing with a
the present controversy with the court a quo, ruled in favor of
property registered under the Torrens title need not inquire
petitioner.[36] Petitioner never lost possession of the said
further but only has to rely on the title, this rule has an exception.
properties, and as such, she is in a position to file the complaint
The exception is when the party has actual knowledge of facts and
with the court a quo to protect her rights and clear whatever
circumstances that would impel a reasonably cautious man to
doubts has been cast on her title by the issuance of TCTs in
make such inquiry or when the purchaser has some knowledge of
respondent Joses name.
a defect or the lack of title in his vendor or of sufficient facts to

induce a reasonably prudent man to inquire into the status of the

The Court further observes that the circuitous sale
title of the property in litigation. The presence of anything which
transactions of these properties from respondent Jose to Catalino
excites or arouses suspicion should then prompt the vendee to
Torre, then to Antonio Doronila, Jr., and back again to respondent
look beyond the certificate and investigate the title of the vendor
Jose were quite unusual. However, this successive transfers of
appearing on the face of said certificate. One who falls within the
title from one hand to another could not cleanse the illegality of
exception can neither be denominated an innocent purchaser for
respondent Joses act of adjudicating to himself all of the disputed
value nor a purchaser in good faith and hence does not merit the
properties so as to entitle him to the protection of the law as a
protection of the law.[39]
buyer in good faith. Respondent Jose himself admitted that there

exists other heirs of the registered owners in the OCTs. Even the
In this case, when the subject properties were sold to
RTC found that [t]hese allegations contained in the Affidavit of
Catalino Torre and subsequently to Doronila, respondent Jose was
Adjudication executed by defendant Jose B. Tiongco are false
not in possession of the said properties. Such fact should have put
because defendant Jose B. Tiongco is not the only surviving heir of
the vendees on guard and should have inquired on the interest of
Jose Tiongco, Matilde Tiongco, Vicente Tiongco and Felipe Tiongco
the respondent Jose regarding the subject properties.[40] But
as the latters have other children and grandchildren who are also
regardless of such defect on transfer to third persons, the
their surviving heirs.[37]
properties again reverted back to respondent Jose. Respondent

Jose cannot claim lack of knowledge of the defects surrounding

In the case of Sandoval v. Court of Appeals,[38] the
the cancellation of the OCTs over the properties and benefit from
Court defined an innocent purchaser for value as one who buys
his fraudulent actions. The subsequent sale of the properties to
Catalino Torre and Doronila will not cure the nullity of the
certificates of title obtained by respondent Jose on the basis of
the false and fraudulent Affidavit of Adjudication.
WHEREFORE, the petition for review on certiorari
is GRANTED. The August 28, 2003 Decision and November 27,
2003 Resolution of the Court of Appeals in CA-G.R. CV No. 44794
are hereby REVERSED and SET ASIDE. The Register of Deeds of
Iloilo City is ordered to RESTORE Original Certificates of Title Nos.
484, 1482, and 368, respectively covering Lots 3244, 1404 and
3246, under the name/s of the registered original owners thereof.
Furthermore, respondent Atty. Jose B. Tiongco
is ORDERED to SHOW CAUSE, within ten (10) days from notice
hereof, why he should not be sanctioned as a member of the bar
for executing the April 17, 1974 Affidavit of Adjudication and
registering the same with the Register of Deeds.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 152007 January 22, 2007
PROCOPIO TAPUROC, HEIRS OF ANTONIA EBE (Deceased)
represented by her children namely: HEIRS OF CELEDONIA
PUTONG, namely: FORTUNATO ESCUDERO, TERESITA
TABALDINA, CONCORDIO E. NEBRIA, PEDRO ESCUDERO and
LUISA PEDRERA; HEIRS OF EUFEMIO PUTONG, namely: RICARDO
PUTONG and PORFERIA PUTONG; HEIRS OF GREGORIO PUTONG,
namely: ROSALIO PUTONG, PERSEVERANDA LOPEZ, BERNARDO
PUTONG and ROSALINDA OMAGAC; HEIRS OF MARIANO
PUTONG, namely: SERAPIA DALHOG, TEODORA AYENG,
MARCIANO PUTONG, RESTITUTA LIQUIT, SERAPIA LUAY,
FAUSTINO PUTONG and SOFRONIA PATROLLA, ALL
REPRESENTED BY THEIR ATTORNEY-IN- FACT, AUREA P.
MERCIDOR, Petitioners,
vs.
CARMELITA LOQUELLANO VDA. DE MENDE and the HEIRS OF
EVANS MENDE, namely: ERIC MITCHEL, ERIC LYNDON, ERIC
FERDINAND, JOSE ERIC ERVIN and JENNIFER MILDRED, ALL
SURNAMED MENDE and the REGISTER OF DEEDS OF THE CITY OF
TAGBILARAN, Respondents.
DECISION
GARCIA, J.:
Under consideration is this petition for review under Rule 45 of
the Rules of Court to nullify and set aside the following issuances
of the Court of Appeals (CA) in CA-G.R. CV No. 64548, to wit:
1. Decision1 dated September 21, 2001, affirming an
earlier decision of the Regional Trial Court (RTC) of
Tagbilaran City, Branch 47, in an action for Declaration
of Nullity of Deed of Sale, Cancellation of Transfer
Certificate of Title (TCT) No. (8585) T-4767 and all
Subsequent Documents and Damages, thereat
commenced by the herein petitioners against the
respondents; and
2. Resolution2 dated January 23, 2002, denying the
petitioners motion for reconsideration.
The petition embodies an alternative prayer for this Court to
remand the case to the trial court for the presentation of an
expert witness.
The facts:
On September 19, 1996, in the RTC of Tagbilaran City, a Complaint
for Declaration of Nullity of Deed of Sale, Cancellation of TCT No.
(8585) T-4767 and all Subsequent Documents and Damages3 was
filed by the petitioners against respondents Carmelita Loquellano
Vda. de Mende, the Heirs of Evans B. Mende, and the Register of
Deeds of the City of Tagbilaran. Thereat docketed as Civil Case No.
5970 and raffled to Branch 47 of the court, the Complaint alleges
that petitioners Procopio Tapuroc and all the successors-in-
interest of deceased co-owner Antonia Ebe are the co-owners, co-
heirs and/or descendants of the original owners of a parcel of
land with an area of 5,795 square meters, more or less, situated in
the Barrio (now District) of Booy, Tagbilaran, Bohol and previously
covered by TCT No. 3444; that sometime in 1992, when the
petitioners decided to partition the subject property, they
discovered from the Office of the City Assessor that the title
covering the land was already in the name of a certain Evans
Mende by virtue of a Deed of Sale purportedly executed in favor
of the latter by their predecessors-in-interest on December 30,
1967; that said Deed of Sale is a forged document because the
alleged vendors therein, who were Procopio Tapuroc and the
predecessors-in-interest of the other petitioners, did not sign the
conveying deed nor receive any consideration therefor; and that
one of the alleged vendors, Antonia Ebe, had already passed away
in 1960, or long before the purported Deed of Sale was said to
have been executed in 1967. Petitioners, as plaintiffs, thus pray
for the nullification of the same Deed of Sale, the cancellation of
the title issued pursuant thereto in the name of Evans Mende and
the restoration of the previous title in their names, plus damages.
In their Answer,4 the respondent Mendes, as defendants, denied
the material allegations of the Complaint and averred that the
late Evans Mende, husband of respondent Carmelita Loquellano
Vda. de Mende and father of the herein co-respondents, bought
the subject parcel of land from its previous owners on December
12, 1967 as evidenced by a Deed of Sale duly notarized by Atty.
Rodolfo Yap. They further assert that they had been in open,
continuous, and peaceful possession of the land in question from
the time of said sale, and had been religiously paying the realty
taxes due thereon. By way of affirmative defense, the
respondents assert that petitioners cause of action, if any, had
already prescribed in view of the unreasonable delay in filing the
suit in court, let alone the fact that their (respondents) title has
become indefeasible.
On June 7, 1999, after due proceedings, the trial court came out
with its decision5 finding that the evidence adduced by the
plaintiffs (now petitioners) was insufficient to establish their claim
that the questioned Deed of Sale was a forgery. The court
explained that despite the opportunity given them, the plaintiffs
failed to present a handwriting expert to determine whether the
said Deed of Sale was indeed a forged instrument, adding that
laches had already set in because of plaintiffs inaction and
neglect in questioning the supposed forged character of the
document after the lapse of more than twenty-nine (29) years
from the time of its execution. Accordingly, the trial court
rendered judgment dismissing the Complaint, thus:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby
rendered DISMISSING the complaint for lack of merit. No
compensation for damages, moral, exemplary and litigation
expenses is awarded for failure of plaintiffs (sic) to prove by
preponderance of evidence the existence of malice or bad faith in
filing the instant case.
SO ORDERED.
From the adverse decision of the trial court, the petitioners went
on appeal to the CA in CA-G.R. CV No. 64548, faulting the court of
origin in ruling that they failed to present convincing evidence to
prove the fact of forgery in the execution of the assailed Deed of
Sale. They likewise faulted the lower court in denying their motion
to have the original copy of the Deed of Sale in dispute and their
own Special Power of Attorney containing the genuine signatures
of their predecessors-in-interest, be examined by a handwriting
expert.
As stated at the outset hereof, the appellate court, in its
Decision6 of September 21, 2001, dismissed the petitioners
appeal and affirmed that of the trial court. Their motion for
reconsideration having been denied by the CA in its Resolution7 of
January 23, 2002, the petitioners are now with this Court via the
instant recourse on their main submission that -
THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE
ERROR WHEN IT DISMISSED THE APPEAL OF THE PETITIONERS
DESPITE SUFFICIENCY OF SUPPORTING EVIDENCE TO WARRANT A
FAVORABLE JUDGMENT ON THE PART OF THE PETITIONERS,
and presenting for our resolution the following issues:
I
WHETHER OR NOT THE DEED OF SALE ALLEGEDLY EXECUTED ON
DECEMBER 30, 1967 BETWEEN THE PETITIONERS PREDECESSORS-
IN-INTEREST AND THE RESPONDENTS IS VALID.
II
WHETHER OR NOT THE COURT OF APPEALS HAS CONTRADICTED
ITSELF AND ARRIVED AT A CONCLUSION CONTRARY TO THE
RECORDS, LAW AND THE APPLICABLE JURISPRUDENCE.
The recourse must fail.
As it is, the petitioners call for a review of the facts of the case.
This is evident from the pleadings they filed with this Court. In
their main petition8 and Memorandum,9 the petitioners
emphatically state:
The issue in the case at bar boils down to whether or not the
signatures of the petitioners predecessors-in-interest and
Procopio Tapuroc (the only surviving vendor to the alleged deed
of sale) were forged; and if they were, is the declaration of nullity
of the said deed of sale dated December 13, 1967 is proper (sic).
Clearly, the foregoing statement calls for a determination of the
truth or falsehood of an alleged fact, a matter not for this Court to
resolve. Well-settled is the rule that factual questions may not be
raised in a petition for review on certiorari. Section 1 of Rule 45 of
the Revised Rules of Court is explicit. It reads:
SECTION 1. Filing of petition with Supreme Court. A party
desiring to appeal by certiorari from a judgment or final order or
resolution of the Court of Appeals, the Sandiganbayan, the
Regional Trial Court or other courts whenever authorized by law,
may file with the Supreme Court a verified petition for review on
certiorari. The petition shall raise only questions of law which
must be distinctly set forth. (Emphasis supplied)
Evident it is from the above that the function of the Court in
petitions for review on certiorari is limited to reviewing errors of
law that may have been committed by the lower courts. And, as a
matter of sound practice and procedure, the Court defers and
accords finality to the factual findings of trial courts, more so
when, as here, such findings are undisturbed by the appellate
court. This factual determination, as a matter of long and sound
appellate practice, deserves great weight and shall not be
disturbed on appeal, save only for the most compelling
reasons,10 such as when that determination is clearly without
evidentiary support or when grave abuse of discretion has been
committed.11 This is as it should be since the Court, in petitions for
review of CA decisions under Rule 45 of the Rules of Court, usually
limits its inquiry only to questions of law. Stated otherwise, it is
not the function of the Court to analyze and weigh all over again
the evidence or premises supportive of the factual holdings of
lower courts.12 The Court refrains from further scrutiny of factual
findings of trial courts, more so when those findings are affirmed
by the CA, as here. To do otherwise would defeat the very
essence of Rule 45 and would convert the Court into a trier of
facts, which it is not meant to be.13
What is more, it appears undisputed that the assailed Deed of
Sale is a public document, having been duly notarized by a certain
Atty. Rodolfo Yap who, unfortunately, had already passed away.
Being a notarial instrument, the deed in question is a public
document and as such enjoys the presumption of regularity in its
execution. To overthrow that presumption, sufficient, clear and
convincing evidence is required, otherwise the document should
be upheld.14
Petitioners maintain, however, that by merely examining the
signatures in the questioned Deed of Sale and the genuine
signatures of their predecessors-in-interest in their Special Power
of Attorney, the glaring dissimilarities between the two sets of
signatures are immediately evident to support their claim of
forgery.
We are not convinced.
As a rule, forgery cannot be presumed. It must be proved by clear,
positive and convincing evidence. Mere allegation of forgery is not
evidence and the burden of proof lies on the party alleging
it.15 Here, the petitioners failed to discharge their burden.
As it were, the petitioners merely alleged that they filed two
motions before the trial court to have the original copy of the
documents in the Office of the Register of Deeds of Tagbilaran
City be examined by handwriting experts but their motions were
ignored by the trial court. They then harp on the excuse that they
could not be expected to prove forgery if the trial court denied
them the opportunity to do so.
We are not persuaded.
The trial court correctly ruled that the parties themselves dictate
the course and flow of the presentation of evidence, as well as the
witnesses for each side. Considering that the case before it is civil,
not criminal, the lower court certainly cannot, on its own, issue an
order requiring a handwriting expert to appear before it and
compare the documents presented by the parties. It behooves
upon the parties themselves to call forth their own set of
witnesses and present their own evidence to bolster their
respective claims. If the petitioners failed to present an expert
witness, only themselves ought to be blamed. For, as the trial
court itself pointed out in its decision:
x x x. Plaintiffs, despite the opportunity given them by this Court,
failed to present a handwriting expert to determine whether
there was indeed forgery in the execution of the subject Deed of
Sale. In the absence of the testimony of the handwriting expert,
the allegations of forgery by the plaintiffs is merely self-
serving. Unfortunately, this Court is not in the position to assess
or evaluate the differences and similarities in the questioned
signatures, much less, categorically state whether or not forgery
exists. Neither could this court rely on the observation of the
plaintiffs as to the alleged "glaring differences and dissimilarities"
of the questioned signatures. (Underscoring ours)
Moreover, the technical procedure utilized by handwriting
experts, while usually helpful in the examination of forged
documents, is not mandatory or indispensable to the examination
or comparison of handwritings.[16]
In Jimenez v. Commission on Ecumenical Mission and Relations of
the United Presbyterian Church in the USA,[17]the Court identified
and explained the factors involved in the examination and
comparison of handwritings:
xxx [T]he authenticity of a questioned signature cannot be
determined solely upon its general characteristics, similarities or
dissimilarities with the genuine signature. Dissimilarities as
regards spontaneity, rhythm, pressure of the pen, loops in the
strokes, signs of stops, shades, etc., that may be found between
the questioned signatures and the genuine one are not decisive
on the question of the formers authenticity. The result of
examinations of questioned handwriting, even with the benefit of
aid of experts and scientific instruments, is, at best, inconclusive.
There are other factors that must be taken into consideration. The
position of the writer, the condition of the surface on which the
paper where the questioned signature is written is placed, his
state of mind, feelings and nerves, and the kind of pen and/or
paper used, play an important role on the general appearance of
the signature. Unless, therefore, there is, in a given case, absolute
absence, or manifest dearth, of direct or circumstantial
competent evidence on the character of the questioned
handwriting, much weight should not be given to characteristic
similarities, or dissimilarities, between that questioned
handwriting and an authentic one.
And to determine forgery, the Court in Cesar v.
Sandiganbayan18 (quoting Osborn, The Problem of Proof) wrote:
The process of identification, therefore, must include the
determination of the extent, kind, and significance of this
resemblance as well as of the variation. It then becomes
necessary to determine whether the variation is due to the
operation of a different personality, or is only the expected and
inevitable variation found in the genuine writing of the same
writer. It is also necessary to decide whether the resemblance is
the result of a more or less skillful imitation, or is the habitual and
characteristic resemblance which naturally appears in a genuine
handwriting. When these two questions are correctly answered
the whole problem of identification is solved.
In the present case, all that the petitioners had to offer by way of
evidence on the issue of forgery was their bare denial that their
predecessors-in-interest signed the subject Deed of Sale. Such
denial will not suffice to overcome the presumption of regularity
of notarized documents, to overthrow which, the countervailing
evidence must be clear, convincing and more than merely
preponderant.19
Moreover, and as aptly pointed out by the lower court in its
decision of June 7, 1999:
However, even if it were true that the signature of Antonia Ebe is
forged, it cannot brush aside the fact that all the heirs of Antonia
Ebe, namely: Celedonia Putong, Eufemio Putong, Gregorio Putong
and Mariano Putong all signed in the Deed of Absolute Sale. As
earlier discussed their signatures cannot be said to have been
forged as evidence presented to prove the same is found to be
insufficient. Henceforth, all the rightful heirs who could question
the subject sale are themselves signatories of the supposed
questionable transaction.
As a final note, we emphasize that a Torrens title cannot be
collaterally attacked. The question on the validity of a Torrens
title, whether fraudulently issued or not, can be raised only in an
action expressly instituted for that purpose. The title represented
by the certificate cannot be changed, altered, modified, enlarged,
diminished, or cancelled in a collateral proceeding. The action for
the declaration of nullity of deed of sale commenced by the
petitioners in the RTC of Tagbilaran City is not the direct
proceeding required by law to attack a Torrens certificate of title.
WHEREFORE, the instant petition is DENIED and the challenged
decision of the CA is AFFIRMED.

Meanwhile, granting that Procopio Tapurocs signature found on No pronouncement as to costs.

Exh. C is indeed a forgery, he testified in open court that he
discovered the sale and the fact of Mendes possession of the
SO ORDERED.
subject land in 1967 yet and did not do anything about it.

At the other end of the spectrum, the respondents presented

sufficient proof of their claim of ownership over the property in
dispute. The respondent Mendes maintain that they had been in
continuous, peaceful and open possession of the property since
1967, the year of the alleged sale, or for more than thirty (30)
years now. No less than the petitioners themselves acknowledged
this in their pleadings20 before this Court. And beginning the year
1968, the respondents have been religiously paying the realty
taxes due on the same property. Likewise, when TCT No. 3444
was lost, respondent Carmelita Loquellano Vda. de Mende filed a
petition for judicial reconstitution to secure a second owners
copy of the lost title. Said petition went through the proper
procedure and thereafter Carmelita was issued a second owners
copy of TCT No. 3444 which was later changed to TCT No. (8585)
T-4767.

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

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

CRESENCIANA TUBO G.R. No. 175720

Not to be overlooked is the fact that the petitioners filed their RODRIGUEZ (now deceased),
complaint of declaration of nullity only after twenty-nine (29) substituted by SUSANA A. LLAGAS,
years from the execution of the alleged forged deed of sale. In the Petitioner, Present:
meanwhile, title to the property had already been in the name of Ynares-Santiago, J. (Chairperson),
respondent Mendes since 1967. The Mendes had been in open, - versus - Austria-Martinez,
continuous and peaceful possession of the subject land, and had C
been religiously paying the realty taxes due thereon. These are h
hard facts that ought not to be disregarded. The Court, in a long i
line of cases,21 has uniformly held in favor of the registered owner c
who had been in possession of a disputed property for a o
considerable period of time. With the Mendes possession in this -
case having been in the concept of an owner and the land itself N
registered in their names for more than thirty (30) years now, a
their title thereto had become indefeasible and their possession z
could no longer be disturbed. The petitioners failure to take the a
necessary steps to assert their alleged right for at least twenty- r
nine (29) years from date of registration of title is fatal to their i
cause of action on the ground of laches.
 o
, respondent Evangeline Rodriguez), apartment A, respondent
N
a Buenaventura Rodriguez, apartment B, and respondent Belen
c
h Rodriguez, apartment C.[3]
u
r
a
, However, on June 14, 1984, Juanito executed a Deed

a of Absolute Sale over the property in favor of petitioner.[4] Thus,

n
d TCT No. 144865 was cancelled and a new TCT No. 150431 was
R
issued in the name of the petitioner.[5]
e
y
e
s
The case arose when petitioner filed on September 20,
,
2001 a complaint for unlawful detainer against the respondents,
J
J alleging that she is the lawful and registered owner of the
.
EVANGELINE RODRIGUEZ, property; and that in 1984, she allowed respondents Evangeline,
BELEN RODRIGUEZ and Promulgated:
BUENAVENTURA RODRIGUEZ, Buenaventura and Belen, out of kindness and tolerance, to
Respondents. September 11, 2007
personally occupy units A, B and D, respectively. However,
x --------------------------------------------------------------------------------------
-- x without her knowledge and consent, respondents separately

DECISION leased the units to Montano Magpantay, Mel Navarro and

YNARES-SANTIAGO, J.: Socorro Escota, who despite repeated demands, failed and

refused to vacate the premises and to pay the rentals thereof.[6]

This petition for review on certiorari assails the Decision[1] of the

Court of Appeals in CA-G.R. SP No. 91442 dated June 27, 2006, In their Answer, respondents claimed ownership over the subject

which set aside the Decision of the Regional Trial Court (RTC) of property by succession. They alleged that while petitioner is the

Makati City, Branch 134, in Civil Case No. 03-517, and reinstated registered owner of the property, however, she is not the lawful

the Decision of the Metropolitan Trial Court (MTC) of Makati City, owner thereof because the June 14, 1984 Deed of Absolute Sale

Branch 63, in Civil Case No. 75717, dismissing the complaint for was simulated and void. As in Civil Case No. 01-1641 now pending

ejectment; as well as the Resolution denying the motion for before the RTC of Makati City, Branch 141, which they filed to

reconsideration. assail the validity of the said sale, respondents maintain that

petitioner exerted undue influence over their father, who at that

Juanito Rodriguez owned a five-door apartment located at San time was seriously ill, to agree to the sale of the property for

Jose Street, Guadalupe Nuevo, Makati City, and covered by TCT only P20,000.00 after knowing that only two apartments were

No. 144865.[2] On October 27, 1983, Juanito executed a Huling given to her in the Huling Habilin at Testamento. Further, she had

Habilin at Testamento giving petitioner Cresenciana Tubo no cause of action against them for being a party to the August

Rodriguez, his live-in partner, apartments D and E, and his 23, 1990 Partition Agreement wherein they recognized each other

children Benjamin Rodriguez (the deceased husband of

 beginning 13 August 2001 until they finally
as co-owners and partitioned the property in accordance with the vacate the premises and the costs of this
suit.
provision of the last will and testament.[7]
SO ORDERED.[9]

On February 26, 2002, the MTC rendered a judgment in favor of

the respondents and held that the deed of sale was simulated Aggrieved, respondents filed a petition for review

otherwise petitioner would not have entered into the Partition before the Court of Appeals which reversed and set aside the

Agreement, which legally conferred upon each heir exclusive decision of the RTC and reinstated the decision of the MTC. It held

ownership over their respective shares, thus: that the MTC correctly received evidence on ownership since the

question of possession could not be resolved without deciding the

WHEREFORE, the Complaint is
DISMISSED. Plaintiff is ordered to pay issue of ownership. Further, the Huling Habilin at
attorneys fees of P10,000.00 and the costs
of suit in favor of defendants. Testamento transmitted ownership of the specific apartments not

SO ORDERED.[8] only to the respondents but also to the petitioner; and pursuant

thereto, the parties executed the Partition Agreement in

accordance with the wishes of the testator, thus:

On appeal, the RTC reversed the decision of the

MTC. It held that petitioners certificate of title is a conclusive WHEREFORE, this Court resolves
to REVERSE and SET ASIDE the Decision of
evidence of ownership of the land described therein; and that the Regional Trial Court. The decision
dated February 26, 2002 of the
unless and until said title has been annulled by a court of Metropolitan Trial Court, Branch
63, Makati City in Civil Case No. 75717
competent jurisdiction, such title is existing and valid. This is true dismissing the complaint for ejectment is
hereby REINSTATED.
also with respect to the deed of sale. The present action, which
SO ORDERED.[10]
involves only the issue of physical or material possession, is not

the proper action to challenge it. Further, the MTC erred when it
The motion for reconsideration was denied hence, petitioner filed
relied heavily on the Huling Habilin at Testamento, which was not
the present petition for review raising the following errors:
probated hence has no effect and no right can be claimed

therein. The Partition Agreement which was allegedly entered I.

into pursuant to the Huling Habilin at Testamento should not also THE COURT OF APPEALS COMMITTED A
REVERSIBLE ERROR OF LAW AND GRAVE
be considered. Thus: ABUSE OF DISCRETION IN REVERSING AND
SETTING ASIDE THE DECISION OF THE
REGIONAL TRIAL COURT AND REINSTATING
WHEREFORE, premises considered, the
THE DECISION OF THE METROPOLITAN
decision rendered by the Metropolitan Trial
TRIAL COURT DISMISSING PETITIONERS
Court, Branch 63, Makati City, is hereby
COMPLAINT FOR UNLAWFUL DETAINER.
ordered REVERSED AND SET
ASIDE. Consequently, judgment is hereby
II.
rendered ordering the defendants and all
persons claiming rights under them to
THE COURT OF APPEALS COMMITTED A
vacate the premises and surrender the
REVERSIBLE ERROR OF LAW AND GRAVE
possession thereof to the
ABUSE OF DISCRETION IN DECLARING THAT
plaintiff. Defendants are likewise ordered to
THE PROPERTY, A PARCEL OF LAND UPON
pay jointly and severally the plaintiff an
WHICH A FIVE-UNIT APARTMENT STANDS,
amount of P5,000.00 a month per unit
BECAME THE SUBJECT OF JUANITO
 RODRIGUEZS HULING HABILIN AT
TESTAMENTO WHEREIN THE PROPERTY termination of the right to hold possession, by virtue of any
WAS DISTRIBUTED TO HIS HEIRS (HEREIN
RESPONDENTS) INCLUDING THE contract, express or implied.[12] The sole issue to be resolved is the
RESPONDENT (PETITIONER HEREIN).[11]
question as to who is entitled to the physical or material

possession of the premises or possession de facto.[13] Being a

Petitioner alleges that as the registered owner of the summary proceeding intended to provide an expeditious means

subject property, she enjoys the right of possession thereof and of protecting actual possession or right to possession of property,

that question of ownership cannot be raised in an ejectment case the question of title is not involved[14] and should be raised by the

unless it is intertwined with the issue of possession. While the affected party in an appropriate action in the proper court.[15]

court may look into the evidence of title or ownership and

possession de jure to determine the nature of possession, it However, when the issue of ownership is raised the

cannot resolve the issue of ownership because the resolution of court is not ousted of its jurisdiction. Section 16 of Rule 70 of the

said issue would effect an adjudication on ownership which is not Rules of Court provides:

proper in the summary action for unlawful detainer. Petitioner

SEC 16. Resolving defense of
insists that the Court of Appeals erred in ruling that the Huling ownership. When the defendant raises the
defense of ownership in his pleadings and
Habilin at Testamento transmitted ownership of the specific the question of possession cannot be
resolved without deciding the issue of
apartments disregarding the fact that the same is not probated ownership, the issue of ownership shall be
resolved only to determine the issue of
yet and that the testator changed or revoked his will by selling the possession.

property to petitioner prior to his death.

Thus, all that the trial court can do is to make an initial

Contrarily, respondents pray that the instant petition for review
determination of who is the owner of the property so that it can
be dismissed since the resolution of the question of ownership by
resolve who is entitled to its possession absent other evidence to
the MTC and the Court of Appeals was provisional only to resolve
resolve ownership.[16]But this adjudication is only provisional and
the issue of possession. Petitioner can always avail of legal
does not bar or prejudice an action between the same parties
remedies to have the issue of ownership passed upon by the
involving title to the property.[17]
proper court. Aware of the provisional nature of the resolution on

ownership in ejectment cases, respondents filed Civil Case No. 01-

In the case at bar, petitioners cause of action for
1641 to assail the validity of the deed of sale of the property and
unlawful detainer was based on her alleged ownership of land
the registration thereof in petitioners name.
covered by TCT No. 150431 and that she merely tolerated

respondents stay thereat.However, when respondents leased the

The petition has merit.
apartments to other persons without her consent, their

possession as well as those persons claiming right under them

An action for unlawful detainer exists when a person unlawfully
became unlawful upon their refusal to vacate the premises and to
withholds possession of any land or building against or from a
pay the rent. On the other hand, respondents assailed petitioners
lessor, vendor, vendee or other persons, after the expiration or
title by claiming that the deed of sale upon which it was based of his death. Thus, as owner of the property, he had the absolute

was simulated and void. They insisted that they were co-owners right to dispose of it during his lifetime. Now, whether or not the

thus, they have the right to possess the said property. To prove disposition was valid is an issue that can be resolved only in Civil

their claim, they presented the Huling Habilin at Testamento of Case No. 01-1641, an action instituted by the respondents for that

Juanito Rodriguez and the Partition Agreement. purpose.

The lower courts considered the following We are, thus, left with the deed of sale and the certificate of title

documentary evidence in arriving at their respective over the property to consider.

decisions, albeit the RTC decision contradicts that of the MTC and

Court of Appeals: 1) Huling Habilin at Testamento executed by We agree with the RTC that a certificate of title is a

Juanito Rodriguez on October 27, 1983; 2) Deed of Sale of the conclusive evidence of ownership of the land described therein;

property executed by Juanito Rodriguez and the petitioner on the validity of which shall not be subject to a collateral attack,

June 14, 1984; 3) TCT No. 150431 in the name of the petitioner; especially in an ejectment case which is summary in nature.

and 4) the August 23, 1990 Partition Agreement executed by both

the respondents and the petitioner. In Ross Rica Sales Center, Inc. v. Ong,[19] the Court held

that:

Based on the foregoing documentary evidence, we find

The long settled rule is that the
that there is preponderance of evidence in favor of the petitioners issue of ownership cannot be subject of a
collateral attack.
claim. Respondents failed to prove their right of possession, as
In Apostol v. Court of Appeals,
the Huling Habilin at Testamento and the Partition Agreement this Court had the occasion to clarify this:

have no legal effect since the will has not been probated. Before . . . Under
Section 48 of
any will can have force or validity it must be probated. This cannot Presidential Decree
No. 1529, a certificate
be dispensed with and is a matter of public policy.[18] Article 838 of title shall not be
subject to collateral
of the Civil Code mandates that [n]o will shall pass either real or attack. It cannot be
altered, modified or
personal property unless it is proved and allowed in accordance
cancelled, except in a
direct proceeding for
with the Rules of Court. As the will was not probated, the Partition
that purpose in
accordance with law.
Agreement which was executed pursuant thereto can not be
The issue of the
given effect. Thus, the fact that petitioner was a party to said validity of the title of
the respondents can
agreement becomes immaterial in the determination of the issue only be assailed in an
action expressly
of possession. instituted for that
purpose. Whether or
not the petitioners
have the right to
Moreover, at the time the deed of sale was executed claim ownership over
the property is
in favor of the petitioner, Juanito Rodriguez remained the owner beyond the power of
the court a quo to
thereof since ownership would only pass to his heirs at the time determine in an
 action for unlawful
detainer. No. 03-517, reversing the Decision of the Metropolitan Trial Court

(MTC) of Makati City, Branch 63, in Civil Case No. 75717,

Further, in Co v. Militar,[20] it was held that: is REINSTATED.

[T]he Torrens System was adopted in this

country because it was believed to be the SO ORDERED.
most effective measure to guarantee the
integrity of land titles and to protect their
indefeasibility once the claim of ownership
is established and recognized.

It is settled that a Torrens Certificate of title

is indefeasible and binding upon the whole
world unless and until it has been nullified
by a court of competent jurisdiction. Under
existing statutory and decisional law, the
power to pass upon the validity of such
RUBEN C. CORPUZ, represented by Attorney-in-Fact Wenifreda G.R. No. 18382
certificate of title at the first instance
C. Agullana,
properly belongs to the Regional Trial
Petitioner,
Courts in a direct proceeding for
cancellation of title.
-versus-
Present:
As the registered owner, petitioner had a
right to the possession of the property,
CARPIO, J.,
which is one of the attributes of ownership.
Sps. HILARION AGUSTIN and Chairperson,
xxx
JUSTA AGUSTIN, PEREZ,
Respondents. SERENO,
REYES, and
PERLAS-BERNA
We emphasize, however, that our ruling on the issue of

ownership is only provisional to determine who between the Promulgated:

parties has the better right of possession. It is, therefore, not January 18, 20

conclusive as to the issue of ownership, which is the subject

matter of Civil Case No. 01-1641. Our ruling that petitioner has a

better right of possession was arrived at on the basis of evidence

without prejudice to the eventual outcome of the annulment x-------------------------------------------------

----------x
case, where the issue as to who has title to the property in
DECISION
question is fully threshed out. As the law now stands, in an
SERENO, J.:
ejectment suit, the question of ownership may be provisionally

ruled upon for the sole purpose of determining who is entitled to This Petition for Review on Certiorari under Rule 45 of the Rules
possession de facto. of Court assails the Decision[1] dated 08 January 2008 of the Court

of Appeals (CA) in CA-G.R. SP No. 90645, which affirmed the

WHEREFORE, in view of the foregoing, the Decision of the Court Decision of the Regional Trial Court (RTC) of Laoag City and its
of Appeals in CA-G.R. SP No. 91442 dated June 27, Resolution[2] dated 15 July 2008 denying the Motion for
2006 is REVERSED and SET ASIDE. The Decision of Reconsideration. The RTC, in the exercise of its appellate
the Regional Trial Court ofMakati City, Branch 134, in Civil Case jurisdiction, affirmed the Decision of the Municipal Trial Court
(MTC) of Laoag City, which had dismissed the unlawful detainer Ruben alleged further that he has the
better right to possess subject
case filed by herein petitioner. property having acquired the same
from his father, Francisco, who
executed a Deed of Quitclaim in his
The Factual Antecedents
favor on March 15, 1971.

The Court adopts the findings of fact of the CA as follows: Spouses Agustin, in their Answer,
Ruben C. Corpuz (Ruben) filed a interposed the defense that on June 5,
complaint for ejectment against 1971 Francisco Corpuz, Ruben's father,
Spouses Hilarion and Justa Agustin on disposed of subject property by
the allegation that he is the registered executing a Deed of Absolute Sale in
owner of two parcels of land located in their favor for a consideration of
Santa Joaquina, Laoag City covered by Eleven Thousand One Hundred Fifty
TCT No. 12980 issued on October 29, Pesos (P11,150.00).
1976 by the Laoag City Register of
Deeds and with technical descriptions The Municipal Trial Court found for the
as follows: spouses Agustin and dismissed the
complaint.
1) A parcel of land (Lot
No. 20 of the In sum, considering
Cadastral Survey of the evidence of the
Laoag), with defendants which
improvements shows that they
thereon, situated in entered into and
the barrio of Santa occupied Lot No. 20
Joaquina, Municipalit and the 9,657 sq. m.
y of Laoag. Bounded portion of Lot No.
x x x containing an 11711 as buyers or
area of five thousand owners, disproving
seven hundred and the allegation of the
fifty nine (5,759) plaintiff that
square meters more defendants were
or less x x x. merely allowed by
Francisco Corpuz to
2) A parcel of land (Lot occupy the subject
No. 11711 of the properties, being his
Cadastral Survey of relatives, and
Laoag), with the considering further
improvements the length of time
thereon, situated in that the defendants
the barrio of Santa have been in
Joaquina, Municipalit possession, as
y of Laoag. Bounded owners, of Lot No. 20
x x x, containing an and the 9,657 sq. m.
area of twenty portion of Lot No.
thousand seven 11711, and have been
hundred and forty continuously
five (20,745) square exercising their rights
meters, more or less of ownership
x x x. thereon, this court is
of the view and holds,
Aforesaid parcels of land were in so far as this case is
formerly owned by Elias Duldulao in concerned, that the
whose name Original Certificate of defendants are the
Title No. O-1717 was issued. Duldulao ones entitled to the
sold said properties on August 27, possession of Lot No.
1951 to Francisco D. Corpuz, father of 20 and the 9,657 sq.
Ruben C. Corpuz. The elder Corpuz m. portion of Lot No.
allowed spouses Agustin to occupy 11711.
subject properties, the latter being
relatives. WHEREFO
RE, premises
Despite demand to vacate, the considered, this case,
Agustins refused to leave the premises. is hereby dismissed.
 SO ORDERED. ownership. Thus, in the context of an unlawful detainer case

On appeal, Branch instituted by petitioner against respondents, the appellate court

XVI, Regional Trial Court of Laoag City a
ffirmed said dismissal, the dispositive concluded that respondents possession of the property was not
portion of said decision states:
by mere tolerance of its former owner petitioner's father but was
WHEREFORE,
premises considered, in the exercise of ownership.[8]
the Appeal is hereby
DISMISSED for lack of
merit and the The CA noted that petitioner had knowledge of his fathers sale of
JUDGMENT of the
Municipal Trial Court the properties to respondents as early as 1973. However, despite
in Cities, Branch 01,
Laoag City is hereby knowledge of the sale, petitioner failed to initiate any action to
AFFIRMED, with costs
against the plaintiff- annul it and oust respondents from the subject properties.[9] The
appellant.
appellate court rejected his contention that, as registered owner
SO ORDERED.[3]
of the disputed properties, he had a better right to possession

thereof, compared to the unregistered Deed of Sale relied upon

Petitioner assailed the Decision of the RTC, affirming the earlier
by respondents in their defense of the same properties. The CA
dismissal of the case by the MTC, by instituting an appeal with
ruled that the inaction on his part despite knowledge of the sale
the CA. On 08 January 2008, the appellate court through its
in 1973 was equivalent to registration of respondents
Fourteenth Division dismissed his appeal.[4] It noted that his
unregistered deed.[10] In dismissing his appeal, the CA concluded
father engaged in a double sale when he conveyed the disputed
that respondents possession was not ... anchored on mere
properties to petitioner and respondents. The Quitclaim
tolerance nor on any of the grounds for forcible entry or unlawful
executed by the elder Corpuz in favor of petitioner was dated 15
detainer; hence the complaint for ejectment must fail.[11] The
March 1971, while the Deed of Sale with respondents was later,
dispositive portion of the assailed Decision reads:
on 15 June 1971; both documents were notarized shortly after
WHEREFORE, in view of the foregoing, the
their execution.[5] The Quitclaim, which was subsequently instant petition is hereby DISMISSED. The
decision of Branch
inscribed at the back of Original Certificate of Title (OCT) No. O- XVI, Regional Trial Court of Laoag City in
Civil Case No. 13293-16 is hereby
1717 on 29 October 1976,[6] resulted in the issuance of Transfer AFFIRMED.

Certificate of Title (TCT) No. T-12980 in the name of petitioner.

The Deed of Sale executed with respondents was, however, not SO ORDERED.[12]

annotated at the back of OCT No. O-1717 and remained

unregistered.[7] The Issues

Petitioner assigns the following errors in this Petition for Review

Based on the above findings, the CA ruled that
on Certiorari:
petitioner had knowledge of the sale of the disputed real
I. THE HONORABLE COURT OF
property executed between Francisco Corpuz, petitioner's father, APPEALS SERIOUSLY ERRED IN FAILING
TO CONSIDER THE LEGAL OWNERSHIP
and respondents. Due to this conveyance by the elder Corpuz to OF PETITIONER ON THE DISPUTED
PROPERTY TO CLAIM BETTER RIGHT TO
respondents, the latter's possession thereof was in the nature of POSSESSION.
 II. THE HONORABLE COURT OF resolve the basic question of who is entitled to physical
APPEALS SERIOUSLY ERRED IN THE
APPRECIATION OF THE possession of the premises, possession referring to possession de
ALLEGED SALE IN FAVOR OF
RESPONDENTS TO RULE THAT THEY facto, and not possession de jure.[15]
HAVE BETTER RIGHT TO POSSESSION.

III. THE HONORABLE COURT OF Where the parties to an ejectment case raise the issue
APPEALS SERIOUSLY ERRED IN FAILING
TO CONSIDER THE CASE OF JACINTO of ownership, the courts may pass upon that issue to determine
CO VS. MILITAR, ET AL. (421 SCRA 455)
WHICH IS SIMILAR TO THE INSTANT who between the parties has the better right to possess the
CASE.
property. However, where the issue of ownership is inseparably
IV. THE HONORABLE COURT OF
APPEALS SERIOUSLY ERRED IN linked to that of possession, adjudication of the ownership issue is
DENYING THE PETITION FOR REVIEW
RAISED BEFORE IT.[13] not final and binding, but only for the purpose of resolving the

issue of possession. The adjudication of the issue of ownership is

Petitioner presents to this Court for resolution the core issue of only provisional, and not a bar to an action between the same

his Petition: who between the parties has the right to possession parties involving title to the property.[16]

of the disputed properties -- petitioner, who is the registered

In the instant case, the position of respondents is that they are
owner under TCT No. T-12980; or respondents, who have a
occupying the disputed properties as owners, having acquired
notarized yet unregistered Deed of Absolute Sale over the same
these from petitioner's father through a Deed of Absolute Sale
properties?
executed in 1971. Respondents believe that they cannot be

dispossessed of the disputed properties, since they are the

The Court's Ruling
owners and are in actual possession thereof up to this date.

We DENY the Petition. Petitioner, however, rebuts this claim of ownership, contending

Although this case does not present a novel question of law, there that he has registered the disputed properties in his name and has

is a need to discuss the nature of an ejectment case for the been issued a land title under the Torrens system. He asserts that,

recovery of physical possession in relation to the Torrens system. having registered the properties in his name, he is the recognized

A resolution of the issue would be relevant to the determination owner and consequently has the better right to possession.

of who has the better right to possession in this unlawful detainer

Indeed, a title issued under the Torrens system is entitled to all
case.
the attributes of property ownership, which necessarily includes

One of the three kinds of action for the recovery of possession of possession.[17] Petitioner is correct that as a Torrens title holder

real property is accion interdictal, or an ejectment proceeding ... over the subject properties, he is the rightful owner and is entitled

which may be either that for forcible entry (detentacion) or to possession thereof. However, the lower courts and the

unlawful detainer (desahucio), which is a summary action for the appellate court consistently found that possession of the disputed

recovery of physical possession where the dispossession has not properties by respondents was in the nature of ownership, and

lasted for more than one year, and should be brought in the not by mere tolerance of the elder Corpuz. In fact, they have been

proper inferior court.[14] In ejectment proceedings, the courts


in continuous, open and notorious possession of the property for
more than 30 years up to this day.
Petitioner cites Jacinto Co v. Rizal Militar, et
al.,[18] which has facts and legal issues identical to those of the
instant case. The petitioner therein filed an unlawful detainer
case against the respondents over a disputed property. He had a
Torrens title thereto, while the respondents as actual occupants
of the property claimed ownership thereof based on their
unregistered Deeds of Sale. The principal issue was who between
the two parties had the better right to possess the subject
property.
This Court resolved the issue by upholding the title
holder as the one who had the better right to possession of the
disputed property based on the following justification:
We have, time and again, held that the
only issue for resolution in an unlawful
detainer case is physical or material
possession of the property involved,
independent of any claim of ownership by
any of the party litigants. Moreover, an
ejectment suit is summary in nature and is
not susceptible to circumvention by the
simple expedient of asserting ownership
over the property.
In forcible entry and unlawful
detainer cases, even if the defendant raises
the question of ownership in his pleadings
and the question of possession cannot be
resolved without deciding the issue of
ownership, the lower courts and the Court
of Appeals, nonetheless, have the
undoubted competence to provisionally
resolve the issue of ownership for the sole
purpose of determining the issue of
Possession.
Such decision, however, does
not bind the title or affect the ownership of
the land nor is conclusive of the facts
therein found in a case between the same
parties upon a different cause of action
involving possession.
In the instant case, the evidence
showed that as between the parties, it is
the petitioner who has a Torrens Title to
the property. Respondents merely showed
their unregistered deeds of sale in support
of their claims. The Metropolitan Trial
Court correctly relied on the transfer
certificate of title in the name of
petitioner.
In Tenio-Obsequio v. Court of
Appeals, it was held that the Torrens
System was adopted in this country
because it was believed to be the most
effective measure to guarantee the
integrity of land titles and to protect their
indefeasibility once the claim of ownership
is established and recognized.
It is settled that a Torrens
Certificate of title is indefeasible and
binding upon the whole world unless and
until it has been nullified by a court of
competent jurisdiction. Under existing
statutory and decisional law, the power to
pass upon the validity of such certificate of
title at the first instance properly belongs
to the Regional Trial Courts in a direct
proceeding for cancellation of title.
As the registered owner,
petitioner had a right to the possession of
the property, which is one of the attributes
of his ownership. Respondents' argument
that petitioner is not an innocent
purchaser for value and was guilty of bad
faith in having the subject land registered
in his name is a collateral attack on the title
of petitioner, which is not allowed. A
certificate of title cannot be subject to a
collateral attack and can be altered,
modified or cancelled only in a direct
proceeding in accordance with law. [19]
The pronouncement in Co v. Militar was later
reiterated in Spouses Pascual v. Spouses Coronel[20] and
in Spouses Barias v. Heirs of Bartolome Boneo, et al.,[21] wherein
we consistently held the age-old rule that the person who has a
Torrens Title over a land is entitled to possession thereof.[22]
However, we cannot lose sight of the fact that the present
petitioner has instituted an unlawful detainer case against
respondents. It is an established fact that for more than three
decades, the latter have been in continuous possession of the
subject property, which, as such, is in the concept of ownership
and not by mere tolerance of petitioners father. Under these
circumstances, petitioner cannot simply oust respondents from
possession through the summary procedure of an ejectment
proceeding.
Instructive on this matter is Carbonilla
Abiera,[23] which reads thus:
Without a doubt, the registered
owner of real property is entitled to its
possession. However, the owner cannot
simply wrest possession thereof from
whoever is in actual occupation of the
property. To recover possession, he must
resort to the proper judicial remedy and,
once he chooses what action to file, he is
required to satisfy the conditions necessary
for such action to prosper.
In the present case, petitioner
opted to file an ejectment case against
respondents. Ejectment casesforcible entry
and unlawful detainerare summary
proceedings designed to provide
expeditious means to protect actual
possession or the right to possession of the
property involved. The only question that
the courts resolve in ejectment
proceedings is: who is entitled to the
physical possession of the premises, that is,
to the possession de facto and not to the
possession de jure. It does not even matter
if a partys title to the property is
questionable. For this reason, an
ejectment case will not necessarily be
decided in favor of one who has
presented proof of ownership of the
subject property. Key jurisdictional facts
constitutive of the particular ejectment
case filed must be averred in the complaint
and sufficiently proven.
The statements in the complaint
that respondents possession of the
building was by mere tolerance of
petitioner clearly make out a case for
unlawful detainer. Unlawful detainer
involves the persons withholding from
another of the possession of the real
property to which the latter is entitled,
after the expiration or termination of the
formers right to hold possession under the
contract, either expressed or implied.
A requisite for a valid cause of
action in an unlawful detainer case is that
possession must be originally lawful, and
such possession must have turned unlawful
only upon the expiration of the right to
possess. It must be shown that the
possession was initially lawful; hence, the
basis of such lawful possession must be
established. If, as in this case, the claim is
that such possession is by mere tolerance
of the plaintiff, the acts of tolerance must
be proved. (Emphasis supplied.)
In this case, petitioner has not proven that respondents
continued possession of the subject properties was by mere
tolerance of his father, except by a mere allegation thereof. In
v.
fact, petitioner has not established when respondents possession
of the properties became unlawful a requisite for a valid cause of
action in an unlawful detainer case.
In Canlas v. Tubil,[24] we enumerated the elements that
constitute the sufficiency of a complaint for unlawful detainer, as
follows:
Well-settled is the rule that what
determines the nature of the action as well
as the court which has jurisdiction over
the case are the allegations in the
complaint. In ejectment cases, the
complaint should embody such statement
of facts as to bring the party clearly within
the class of cases for which the statutes
provide a remedy, as these proceedings are
summary in nature. The complaint must
show enough on its face to give the court
jurisdiction without resort to parol
evidence.
Unlawful detainer is an action to
recover possession of real property from
one who illegally withholds possession after
the expiration or termination of his right to
hold possession under any contract, express
or implied. The possession of the defendant
in unlawful detainer is originally legal but
became illegal due to the expiration or
termination of the right to possess.
An unlawful detainer proceeding
is summary in nature, jurisdiction of which
lies in the proper municipal trial court or
metropolitan trial court. The action must be
brought within one year from the date of
last demand and the issue in said case is the
right to physical possession.
... ... ...
In Cabrera v. Getaruela, the Court held
that a complaint sufficiently alleges a cause
of action for unlawful detainer if it recites
the following:
(1) initially, possession of
property by the defendant
was by contract with or by
tolerance of the plaintiff;
(2) eventually, such possession
became illegal upon notice
by plaintiff to defendant of
 the termination of the (But) where a party has
latters right of possession; knowledge of a prior existing interest which
is unregistered at that time he acquired a
(3) thereafter, the defendant right to the same land, his knowledge of
remained in possession of that prior unregistered interest has the
the property and deprived effect of registration as to him. Knowledge
the plaintiff of the of an unregistered sale is equivalent to
enjoyment thereof; and registration. As held in Fernandez v. Court
of Appeals [189 SCRA 780 (1990)],
(4) within one year from the
last demand on defendant Section 50
to vacate the property, the of Act No. 496 (now
plaintiff instituted the Sec. 51 of P.D. 1529),
complaint for ejectment. provides that the
registration of the
deed is the operative
act to bind or affect
Based on the above, it is obvious that petitioner has not the land insofar as
third persons are
complied with the requirements sufficient to warrant the success concerned. But where
the party has
of his unlawful detainer Complaint against respondents. The knowledge of a prior
existing interest
lower courts and the CA have consistently upheld the which is unregistered
at the time he
entitlement of respondents to continued possession of the
acquired a right to
the same land, his
subject properties, since their possession has been established as
knowledge of that
prior unregistered
one in the concept of ownership. Thus, the courts correctly
interest has the effect
of registration as to
dismissed the unlawful detainer case of petitioner.
him. The Torrens
system cannot be
used as a shield for
We concur in the appellate courts findings that
the commission of
fraud (Gustillo v.
petitioners father engaged in a double sale of the disputed
Maravilla, 48 Phil.
442). [Emphasis
properties. The records of the case show that it took petitioner
supplied.]
more or less five years from 1971 when he acquired the property

from his father to 1976 when petitioner registered the

In this case, the Quitclaim executed by the elder
conveyance and caused the issuance of the land title registered in
Corpuz in favor of petitioner was executed ahead of the Deed of
his name under the Torrens system. Respondents, on the other
Sale of respondents. Thus, the sale of the subject properties by
hand, continued their possession of the properties, but without
petitioners father to respondents cannot be considered as a prior
bothering to register them or to initiate any action to fortify their
interest at the time that petitioner came to know of the
ownership.
transaction.

We cannot, however, sustain the appellate courts

We also note that, based on the records, respondents do not
conclusion that petitioner's failure to initiate any action to annul
dispute the existence of TCT No. T-12980 registered in the name
the sale to respondents and oust them from the disputed
of petitioner. They allege, though, that the land title issued to him
properties had the effect of registration of respondents
was an act of fraud [26] on his part. We find this argument to be
unregistered Deed of Absolute Sale. We held thus in Ruiz, Sr. v.
equivalent to a collateral attack against the Torrens title of
Court of Appeals [25]:

petitioner an attack we cannot allow in the instant unlawful
detainer case.
It is settled in jurisprudence that a Torrens certificate
of title cannot be the subject of collateral attack.[27] Such attack
must be direct and not by a collateral proceeding.[28] It is a well-
established doctrine that the title represented by the certificate
cannot be changed, altered, modified, enlarged, or diminished in
a collateral proceeding.[29] Considering that this is an unlawful
detainer case wherein the sole issue to be decided is
possession de facto rather than possession de jure, a collateral
attack by herein respondents on petitioner's title is proscribed.
Our ruling in the present case is only to resolve the
issue of who has the better right to possession in relation to the
issue of disputed ownership of the subject properties. Questions
as to the validity of petitioner's Torrens title can be ventilated in a
proper suit instituted to directly attack its validity, an issue that
we cannot resolve definitively in this unlawful detainer case.
WHEREFORE, in view of the foregoing, we deny the
instant Petition for lack of merit. The Decisions of the Court of
Appeals in CA-G.R. SP No. 90645 (dated January 08, 2008), of the
Regional Trial Court of Laoag City in Civil Case No. 3111-13293-65,
as well as of the Municipal Trial Court of Laoag City in Civil Case
No. 3111 -- all dismissing the unlawful detainer case of petitioner
are AFFIRMED.
We make no pronouncements as to attorney's fees for
lack of evidence. SO ORDERED.
G.R. No. 191432, September 02, 2015
TERESA D. TUAZON, Petitioner, v. SPOUSES ANGEL AND
MARCOSA ISAGON, Respondents.
DECISION
BRION, J.:
We resolve the petition for review on certiorari filed by petitioner
Teresa Tuazon (Teresa) to challenge the October 28, 2009
Decision and February 11, 2010 Resolution of the Court of
Appeals in CA-G.R. SP No. 107937, penned by Associate Justice
Marlene Gonzales-Sison with Associate Justices Andres B. Reyes,
Jr. and Vicente S.E. Veloso, concurring.
The Facts
During their lifetime, spouses Melencio Diaz and Dolores Gulay
(Dolores) owned Lot 103 of the Santa Rosa Estate, Barangay
Aplaya, Sta. Rosa, Laguna, consisting of 499 square meters (Lot
103). They had three daughters named Maria, Paciencia, and
Esperanza. Melencio and Maria predeceased Dolores. On May 28,
1955, Dolores, Paciencia, and Esperanza adjudicated Lot 103 to
Dolores through a Deed of Extrajudicial Settlement. Maria's
children who were still minors at that time were not included in
the settlement.
On March 17, 1956, Dolores sold Lot 103 to Isabel Torres through
a Bilihang Tuluyan (Deed of Absolute Sale). Subsequently, Isabel
Torres sold Lot 103 to Teresa on September 29, 1973.
On October 12, 1973, Maria's children, namely Gloria, Angel,
Felix, and Flaviano, all surnamed Isagon, executed a Deed of
Conformity. In this instrument, they honored the Deed of
Extrajudicial Settlement executed by their grandmother and
aunts, subject to the condition that they would get one-sixth of
Lot 103 as their share.
Gloria, Felix, and Flaviano also sold their.shares to Teresa. On the
other hand, Angel mortgaged his share to Teresa on October 20,
1975, through a Kasulatan ng Sanglaan. His share consisted of
20.75 square meters which was one-fourth of the one-sixth share
in the property. Angel Isagon thereafter refused and failed to
redeem the mortgaged property.
Teresa has been paying the real estate taxes due on Lot 103 since
1974 up to the present. Lot 103 is covered by an undated and
reconstituted Transfer Certificate of Title (TCT) No. (N.A.) RT-
1925 issued in Teresa's name.
Sometime in 1972, the petitioner's brother, Antonio Tuazon
(Antonio), allowed Spouses Angel and Marcosa Isagon
(respondents) to build a small hut on a portion of Lot 103 without
Teresa's knowledge. The respondents and their children were
then living by the seashore and Antonio feared that their house
could be swept away by the floods during a typhoon.
In 2000, the respondents started to construct a house on the
disputed property despite Teresa's protest. For years, however,
Teresa tolerated their possession and use of the contested area.
In 2007, Teresa filed a complaint against the respondents before
the Lupon Tagapamayapa of Barangay Aplaya. The parties failed
to reach any amicable settlement.
On January 24, 2007, Teresa sent a final demand letter to
respondents to vacate and to pay rental fees. The respondents did
not reply.
On September 11, 2007, Teresa filed a complaint for unlawful
detainer against the respondents before the Municipal Trial Court
in Cities (MTCC), City of Sta. Rosa, Laguna. She prayed that the
respondents be ordered to vacate the subject property and to pay
compensation for its use and occupancy.

In their answer, the respondents alleged that they were occupying
the subject property as owners. They also alleged that Teresa
fraudulently obtained TCT No. (N.A.) RT-1925.
The MTCC and RTC Rulings
The MTCC, in its judgment on January 25, 2008, decided in favor
of Teresa and ordered the respondents to vacate the subject
property and to pay reasonable rent and attorney's fees. The
MTCC held that Teresa was the owner of the property as shown
by TCT No. (N.A.) RT-1925, and as owner, she was entitled to
enjoy the right of possession over the subject property. It added
that a property registered under the Torrens system could not be
collaterally attacked in an action for unlawful retainer.
On appeal, the Regional Trial Court (RTC) in Bifian, Laguna,
affirmed in toto the decision of the MTCC. The RTC denied the
respondents' motion for reconsideration.
The CA Ruling
The respondents appealed the RTC's ruling to the CA.
In its October 28, 2009 Decision, the CA reversed the RTC's ruling.
The CA noted that Angel Isagon executed a real estate mortgage
in favor of Teresa over a portion of Lot 103 but had failed to
redeem it. Citing Article 2088 of the Civil Code, the CA concluded
that Teresa was a mere mortgagee and had no right to eject the
respondents. Instead of foreclosing the property, Teresa filed this
action for unlawful detainer. The CA added that a mortgage was
not an instrument that transferred ownership; thus, the disputed
property still belonged to the respondents.
The Petition
Teresa's present petition for review on certiorari argues that she
is the registered owner, not a mere mortgagee, of the property as
shown by TCT No. (N.A.) RT-1925. Section 51 of Presidential
Decree No. 1929 expressly states that registration is the operative
act that conveys registered land. Thus, the TCT is the best proof of
ownership.
She adds that the only issue in an unlawful detainer case is the
physical possession of the property. As the registered owner, she
has the right to enjoy all the rights of an owner under Articles 428
and 429 of the Civil Code, including actual possession.
Our Ruling
We grant the petition.
The sole issue here is who has the better right of physical
possession between the registered owner as shown in the
certificate of title and the mortgagor as shown in the Kasulatan ng
Sanglaan.
While the CA is correct that a mortgage does not transfer
ownership, the indefeasibility of a Torrens title should have been
given primary consideration.
An action for unlawful detainer is summary in nature and cannot
be delayed by a mere assertion of ownership as a defense.1 When
the parties to an ejectment case raise the issue of ownership, the
court may pass upon that issue only if needed to determine who
between the parties has a better right to possess the
property.2 Furthermore, the adjudication on the issue of
ownership is only provisional,3 and subject to a separate
proceeding that the parties may initiate to settle the issue of
ownership.
A person who possesses a title issued under the Torrens system is
entitled to all the attributes of ownership including possession.4 A
certificate of title cannot be subject to a collateral attack in an
action for unlawful detainer. A collateral attack is made when, in
an action to obtain a different relief, the validity of a certificate of
title is questioned.5
In the present case, the respondents alleged in their answer that
the certificate of title issued in the name of Teresa was
fraudulently obtained. This defense constitutes a collateral attack
on the title and should not therefore be entertained. To directly
assail the validity of TCT No. (N.A.) RT-1925, a direct action for
reconveyance must be filed.6
In the present case, based on the certificate of title, Teresa is the
owner of the subject property and is entitled to its physical
possession.
WHEREFORE, we hereby GRANT the petition for review
on certiorari. The Decision dated October 28, 2009, and the
Resolution dated February 11, 2010, of the Court of Appeals in
CA-G.R. SP No. 107937 are hereby REVERSED and SET ASIDE. The
decision dated October 15, 2008, of Branch 25 of the Regional
Trial Court, Bian, Laguna, in Civil Case No. B-7472, is
hereby REINSTATED.
SO ORDERED.
UDK No. 7671 June 23, 1988
DEVELOPMENT BANK OF THE PHILIPPINES, registrant-appellant,
vs.
THE ACTING REGISTER DEEDS OF NUEVA ECIJA, respondent-
appellee.
NARVASA, J.:
This case, rather cut-and-dried as far as factual background is
concerned, turns upon a determination of the true meaning and
intendment of Section 56 of Presidential Decree No. 1529, 1 which
in part reads:
Sec. 56. Primary Entry Book; fees, certified
copies. Each Register of Deeds shall keep
a primary entry book in which, upon
 payment of the entry fee, he shall enter, in
the order of their reception, all instruments
including copies of writs and processes filed
with him relating to registered land. He
shall, as a preliminary process in
registration, note in such book the date,
hour and minute of reception of all
instruments, in the order in which they
were received. They shall be regarded as
registered from the time so noted, and the
memorandum of each instrument, when
made on the certificate of title to which it
refers, shall bear the same date: Provided,
that the national government as well as the
provincial and city governments shall be
exempt from the payment of such fees in
advance in order to be entitled to entry and
registration.
xxx xxx xxx
The facts are few and undisputed. On June 13, 1980, the
Development Bank of the Philippines (hereafter, DBP) presented
for registration to the Register of Deeds of Nueva Ecija,
Cabanatuan City, a sheriff's certificate of sale in its favor of two
parcels of land covered by Transfer Certificates of Title Nos. NT-
149033 and NT-149034, both in the names of the spouses Andres
Bautista and Marcelina Calison, which said institution had
acquired as the highest bidder at an extrajudicial foreclosure sale.
The transaction was entered as Entry No. 8191 in the Registry's
Primary Entry Book and DBP paid the requisite registration fees
on the same day. Annotation of the sale on the covering
certificates of title could not, however be effected because the
originals of those certificates were found to be missing from the
files of the Registry, where they were supposed to be kept, and
could not be located. 2 On the advice of the Register of Deeds,
DBP instituted proceedings in the Court of First Instance of Nueva
Ecija to reconstitute said certificates, and reconstitution was
ordered by that court in a decision rendered on June 15,
1982. 3 For reasons not apparent on the record, the certificates of
title were reconstituted only on June 19,1984. 4
On June 25, 1984, DBP sought annotation on the reconstituted
titles of the certificate of sale subject of Entry No. 8191 on the
basis of that same four-year-old entry. The Acting Register of
Deeds, being in doubt of the proper action to take on the
solicitation, took the matter to the Commissioner of Land
Registration by consulta raising two questions: (a) whether the
certificate of sale could be registered using the old Entry No. 8191
made in 1980 notwithstanding the fact that the original copies of
the reconstituted certificates of title were issued only on June 19,
1984; and (b) if the first query was answered affirmatively,
whether he could sign the proposed annotation, having assumed
his duties only in July 1982.5
The resolution on the consulta held that Entry No. 8191 had been
rendered "... ineffective due to the impossibility of accomplishing
registration at the time the document was entered because of the
non-availability of the certificate (sic) of title involved. For said
certificate of sale to be admitted for registration, there is a need
for it to be re-entered now that the titles have been reconstituted
upon payment of new entry fees," and by-passed the second
query as having been rendered moot and academic by the answer
to the first. 6
Unwilling to accept that result, the DBP appealed the resolution
to the Court of Appeals (then the Intermediate Appellate
Court) 7 which, after reviewing the record, certified the appeal to
this Court as involving a question purely of law.8
The appealed resolution appears to be based upon a reading of
the cited Section 56 of PD No. 1529, and particularly of the
provision therein referring to the Register's act of making a
primary entry as " ... a preliminary process in registration ...," as
depriving of any effect a primary entry without a corresponding
annotation thereof on the certificate of title to which the
instrument subject of said entry refers.
That view fails to find support from a consideration of entire
context of said Section 56 which in another part also provides that
the instrument subject of a primary entry "... shall be regarded as
registered from the time so noted ...," and, at the very least, gives
such entry from the moment of its making the effect of putting
the whole world on notice of the existence the instrument on
entered. Such effect (of registration) clearly attaches to the mere
making of the entry without regard to the subsequent step of
annotating a memorandum of the instrument subject of the entry
on the certificate of title to which it refers. Indeed, said Section, in
also providing that the annotation, "... when made ... shall bear
the same date ..." as the entry, may be said to contemplate
unspecified intervals of time occurring between the making of a
primary entry and that of the corresponding annotation on the
certificate of title without robbing the entry of the effect of being
equivalent to registration. Neither, therefore, is the implication in
the appealed resolution that annotation must annotation entry
immediately or in short order justified by the language of Section
56.
Furthermore, it is amply clear that the four-year hiatus between
primary entry and proposed annotation in this case has not been
of DBP's making. Though it was under no necessity to present the
owner's duplicates of the certificates of title affected for purposes
of primary entry, since the transaction sought to be recorded was
an involuntary transaction, 9 and the record is silent as to whether
it presented them or not, there is nonetheless every probability
that it did so. It was the mortgagee of the lands covered by those
titles and it is usual in mortgage transactions that the owner's
duplicates of the encumbered titles are yielded into the custody
of the mortgage until the mortgage is discharged. Moreover, the
certificates of title were reconstituted from the owner's
duplicates, 10 and again it is to be presumed that said duplicates
were presented by DBP, the petitioner in the reconstitution
proceedings.
It is, furthermore, admitted that the requisite registration fees
were fully paid and that the certificate of sale was registrable on
its face. 11 DBP, therefore, complied with all that was required of it
for purposes of both primary entry and annotation of the
certificate of sale. It cannot be blamed that annotation could not
be made contemporaneously with the entry because the originals
of the subject certificates of title were missing and could not be
found, since it had nothing to do with their safekeeping. If anyone
was responsible for failure of annotation, it was the Register of
Deeds who was chargeable with the keeping and custody of those
documents.
It does not, therefore, make sense to require DBP to repeat the
process of primary entry, paying anew the entry fees as the
appealed resolution disposes, in order to procure annotation
which through no fault on its part, had to be deferred until the
originals of the certificates of title were found or reconstituted.
That it is hardly just or equitable to do so also seems to have
occurred to the Solicitor General, who dilutes his argument in
support of the appealed resolution with the suggestion that "...
the making of a new entry ... would be the more orderly
procedure," and that DBP should not be made to pay filing fees
anew.12
Jurisprudence on the subject, while it has not been entirely
consistent, is not wanting. In Government vs. Aballe, 13this Court
ruled that " ... (a)lthough a notice of attachment has not been
noted on the certificate of title, its notation in the book of entry of
the register of deeds produces all the effects which the law gives
to its registration or inscription." Seemingly, that ruling was
abandoned in the wartime case of Basa vs. De la Rama, 14 where it
was held that the entry of an instrument in the primary entry
book produces no legal effect unless a memorandum thereof is
noted on the certificate of title. Villasor vs. Camon, 15 however,
clarified that Aballe was never really abandoned or reversed
insofar as it applied to involuntary transactions. Said the Court in
that case, which involved a voluntary transactions a deed of
assignment of rights in a parcel of land and its improvements:
The appellant cannot invoke in support of
her contention, the ruling laid down in the
case of Government of the Philippine
Islands vs. Aballe, 60 Phil., 986, which was
followed in Director of Lands vs. Abad, 61
Phil. 479, to the effect that an attachment
entered upon the entry book is duly
registered although the duplicate certificate
is not presented at the time of registration
to the register of deeds. Appellant cannot
invoked said ruling, not because it has been
abandoned by the Supreme Court during the
Japanese occupation in the case of Bass VS.
De la Rama, et al., ... in which it was said
that "we are constrained to abandon the
ruling in said two cases,"- it was not
abandoned for the decision was concurred
by only two justices or less than a majority,
and said statement was not necessary or an
obiter dictum and against the law, as
correctly stated by the two associate
justices who dissented and only concurred in
the result, but because said ruling,
subsisting and in force, does not support
appellant's contention, for it is only
applicable to registration of involuntary
instruments, such as attachment, or other
liens and adverse claims of any description.
This ruling is correct or in conformity with
the provisions of section 72 of Act No. 496,
which do not require the production by the
registrant of the duplicate certificate of the
land to be affected, ... (emphasis supplied)
The decision in Villasor also quoted with approval the following
excerpt from an earlier case, Philippine National Bank vs.
Fernandez. 16
Coming now to the second ground on which
the appellant bases his claims, we find that
when Simona Fausa executed the
document, Exhibit 3, on October 17, 1928,
conveying her interest in the land to the
appellant, her interest therein had already
been attached by the provincial sheriff and
also by him at public auction to the
Philippine National Bank, and the certificate
of sale filed in the office of the register of
deeds in accordance with the law (sections
429 and 450 of the Code of Civil Procedure).
It was not necessary for the sheriff to
present the owner's duplicate of the
certificate of title when he filed notice of
attachment with the register of deeds, nor
was it necessary for the Philippine National
Bank to present the owner's duplicate when
the bank filed its certificate of sale for
registration (sections 71 and 72 of Act No.
496).
Later cases appear to have applied the Aballe ruling that entry in
the day book, even without the corresponding annotation on the
certificate of title, is equivalent to, or produces the effect of,
registration to voluntary transactions, provided the requisite fees
are paid and the owner's duplicates of the certificates of title
affected are presented. Thus, in Levin vs. Bass, et al., 17 it was
held:
... Under the Torrens system the act of
registration is the operative act to convey
and affect the land. Do the entry in the day
book of a deed of sale which was presented
and filed together with owner's duplicate
certificate of title which the office of the
Registrar of Deeds and full payment of
registration fees constitute a complete act
of registration which operates to convey
and affect the land? In voluntary
registration, such as a sale, mortgage, lease
and the like, if the owner's duplicate
certificate be not surrendered and
presented or if no payment of registration
fees be made within 15 days, entry in the
day book of the deed of sale does not
operate to convey and affect the land sold.
In involuntary registration, such as an
attachment, levy upon execution, lis
pendens and the like entry thereof in the
day book is a sufficient notice to all persons
of such adverse claim. ... The
pronouncement of the court below is to the
effect that an innocent purchaser for value
has no right to the property because he is
not a holder of a certificate of title to such
property acquired by him for value and in
good faith. It amounts to holding that for
failure of the Registrar of Deeds to comply
and perform his duty, an innocent
purchaser for value loses that character-he
is not an "innocent holder for value of a
certificate of title." ... Neither violence to,
nor stretching of the meaning of, the law
would be done, if we should hold that an
innocent purchaser for value of registered
land becomes the registered owner and in
 contemplation of law the holder of a Therefore, without necessarily holding that annotation of a
certificate thereof the moment he presents primary entry on the original of the certificate of title may be
the owner's duplicate certificate of title to deferred indefinitely without prejudice to the legal effect of said
the property sold and pays the full amount entry, the Court rules that in the particular situation here
of registration fees, because what remains obtaining, annotation of the disputed entry on the reconstituted
to be done lies not within his power to originals of the certificates of title to which it refers is entirely
perform. The Registrar of Deeds is in duty proper and justified. To hold said entry "ineffective," as does the
bound to perform it. We believe that is a appealed resolution, amounts to declaring that it did not, and
reasonable and practical interpretation of does not, protect the registrant (DBP) from claims arising, or
the law under considerations-a construction transactions made, thereafter which are adverse to or in
which would lead to no inconsistency and derogation of the rights created or conveyed by the transaction
injustice. (emphasis supplied) thus entered. That, surely, is a result that is neither just nor can,
by any reasonable interpretation of Section 56 of PD 1529, be
asserted as warranted by its terms.
A similar ruling was made in Potenciano vs. Dineros, et
al., 18 concerning land a deed of sale of which was entered in the
day book upon payment of the corresponding fees and The qualms implicit in the query of the respondent (and present
presentation of the owner's duplicate of the covering certificate appellee) register of deeds about making annotation of an entry
of title, on November 4, 1944. However, due to the confusion effected before he assumed that office are more imagined than
arising from the bombing of Manila (this having happened during real. He would only be making a memorandum of an instrument
the final months of the Japanese Occupation), the papers and of its entry based on or reciting details which are already of
presented by the registrant were either lost or destroyed, no indubitable record and, pursuant to the express command of the
certificate of title was issued to him and as far as the records of law, giving said memorandum the same date as the entry. No part
the Register of Deeds showed, the property remained in the name of that function is exclusive to the incumbent of the office at the
of the vendor. Another party later sued the vendor, obtained time entry was made or is forbidden to any of his successors.
judgment against him and purchased the property on execution
sale. In affirming judgment annulling the execution sale in an
WHEREFORE, the appealed resolution of the Acting Commissioner
action brought by the original purchaser, this Court held:
of Land Registration is SET ASIDE. The respondent-appellee
Register of Deeds of Nueva Ecija, or his successor, is ordered to
The judgment creditor contends that entry annotate on the originals of the reconstituted Transfer
of the deed in the day book is not sufficient Certificates of Title Nos. NT-149033 and NT-149034 of his Registry
registration. Both upon law and authority a memorandum of the certificate of sale in favor of appellant
this contention must be rejected. Section 56 Development Bank of the Philippines as entered under Entry No.
of the Land Registration Act says that deeds 8191 dated June 13, 1980 of the Primary Entry (Day) Book of said
relating to registered land shall, upon Registry. No pronouncement as to costs.
payment of the filing fees, be entered in the
entry book also called day book in the
SO ORDERED.
same section with notation of the year,
month, day, hour, and minute of their
reception and that "they shall be regarded
as registered from the moment so
noted." And applying this provision in the
cases of Levin vs. Bass, etc., G.R. Nos. L-
4340 to 4346, decided on May 28, 1952,
this Court held that "an innocent purchaser
for value of registered land becomes the
registered owner and in contemplation of
law the holder of a certificate thereof the
moment he presents and files a duly
notarized and lawful deed of sale and the
same is entered on the day book and at the
same time he surrenders or presents the
owner's duplicate certificate of title to the
property sold and pays the full amount of
registration fees, because what remains to
be done lies not within his power to
perform."

Current doctrine thus seems to be that entry alone produces the

effect of registration, whether the transaction entered is a
voluntary or an involuntary one, so long as the registrant has
complied with all that is required of him for purposes of entry and
annotation, and nothing more remains to be done but a duty
incumbent solely on the register of deeds.
 On April 19, 1983, spouses Augusto and Luz Basa loaned from

NHA the amount of P556,827.10 secured by a real estate

NATIONAL HOUSING G.R. No. 149121
mortgage over their properties covered by Transfer Certificates of
AUTHORITY,
Present:
Title (TCTs) Nos. 287008 and 285413, located at No. 30 San
Petitioner,
Antonio St., San Francisco del Monte, Quezon City.[2] Spouses Basa
PUNO, C.J.,
did not pay the loan despite repeated demands. To collect its
Chairperson,
credit, the NHA, on August 9, 1990, filed a verified petition for
CARPIO,*
extrajudicial foreclosure of mortgage before the Sheriffs Office

- versus - LEONARDO-DE CASTRO,

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

BERSAMIN, and

VILLARAMA, JR., JJ.

After notice and publication, the properties were sold at public

Promulgated: auction where NHA emerged as the highest bidder.[4] On April 16,
AUGUSTO BASA, JR., LUZ
BASA and EDUARDO S. 1991, the sheriffs certificate of sale was registered and annotated
BASA,
only on the owners duplicate copies of the titles in the hands of
April 20, 2010
Respondents.
the respondents, since the titles in the custody of the Register of
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
-x Deeds were among those burned down when a fire gutted

the City Hall of Quezon City on June 11, 1988.[5]

DECISION
On April 16, 1992, the redemption period expired,[6] without

respondents having redeemed the properties. Shortly thereafter,

on April 24, 1992, NHA executed an Affidavit of Consolidation of

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

inscribed by the Register of Deeds on the certificates of title in the

This Petition for Review on Certiorari under Rule 45 of hand of NHA under Entry No. 6572/T-287008-PR-29207.[8]

the Rules of Court seeks to set aside the Amended Decision[1] of

the Court of Appeals dated November 27, 2000 and its Resolution

dated July 19, 2001 denying the motion for reconsideration of the On June 18, 1992, NHA filed a petition for the issuance of a Writ

National Housing Authority (NHA). of Possession. The said petition was granted by the Regional Trial

Court (RTC) in an Order[9] dated August 4, 1992.

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

ordering spouses Augusto and Luz Basa to vacate the subject respondents to redeem the mortgaged properties in the amount

lots. The writ, however, remained unserved. This compelled NHA of P21,160.00, and to cancel the Writ of Possession dated March

to move for the issuance of an alias writ of possession on April 28, 9, 1993.

1993.

NHA opposed respondents petition for intervention.[18] It

Before the RTC could resolve the motion for the issuance of an countered that the extrajudicial foreclosure sale was conducted

alias writ of possession, respondents spouses Basa and Eduardo validly and made in accordance with Act No. 3135 as evidenced by

Basa, on June 2, 1993, filed a Motion for Leave to Intervene and the publication of the Notice of Sheriffs Sale in the Manila Times

Petition in Intervention (with Prayer for Temporary Restraining in its issues dated July 14, 21 and 28, 1990.[19] NHA also said that

Order and/or Writ of Preliminary Injunction).[11] Respondents respondents had been furnished with a copy of the Notice of

anchored said petition for intervention on Section 8[12] of Act No. Sheriffs Sale as shown at the bottom portion of said

3135, as amended, which gives the debtor/mortgagor the remedy notice.[20] NHA maintained that respondents right of redemption

to petition that the sale be set aside and the writ of possession be had long expired on April 15, 1992 since the certificate of sale was

cancelled. In the said petition for intervention, respondents inscribed on their TCT Nos. 285413 and 287008 a year earlier, or

averred that the extrajudicial foreclosure of the subject properties on April 16, 1991. It pointed out that the RTC, via its Order

was a nullity since notices were not posted and published, written dated August 4, 1992, had already ruled that respondents right of

notices of foreclosure were not given to them, and notices of sale redemption was already gone without them exercising said

were not tendered to the occupants of the sold properties, right.Since said order had already attained finality, the ruling

thereby denying them the opportunity to ventilate their therein could no longer be disturbed.

rights.[13] Respondents likewise insisted that even

assuming arguendo that the foreclosure sale were valid, they

were still entitled to redeem the same since the one-year On January 2, 1995, the RTC issued the first assailed Order[21] with

redemption period from the registration of the sheriffs certificate the following directives: 1) granting the issuance of the alias writ

of foreclosure sale had not yet prescribed.[14] Citing Bernardez v. of possession which allowed NHA to take possession of the

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

instrument is deemed registered only upon actual inscription on treating the same as the petition to set aside sale mentioned in

the certificate of title in the custody of the civil registrar.[17] Since [Sec. 8] of Act No. 3155; and 3) granting the issuance of a Writ of

the sheriffs certificate was only inscribed on the owners duplicate Preliminary Injunction in favor of respondents that ordered NHA

certificate of title, and not on the certificate of title in the to refrain from selling or disposing of the contested

possession of the Register of Deeds, then there was no effective properties. The pertinent portion of the order reads:

registration and the one-year redemption period had not even

begun to run. Thus, respondents asked the RTC, among others, to

 After examining the record and following
precedents x x x this Court hereby orders: Alias Writ of Possession. NHA stressed that another reason why

the petition for intervention should be denied was the finality of

the Order dated August 4, 1992 declaring respondents right of

1. The issuance of an alias writ of
possession; redemption barred by prescription. Lastly, NHA asserted that the

writ of possession was issued as a matter of course upon filing of

2. Admission of the Petition in the proper motion and thereby, the court was bereft of
Intervention, treating the same as the
discretion.
petition to set aside sale, etc., mentioned in
[Sec. 8] of Act No. 3155;
In the second assailed Order[24] dated September 4, 1995, the RTC

denied NHAs motion for reconsideration reasoning that the

3. The issuance of a writ of
preliminary injunction, after a BOND in the
amount of P20,000.00 had been duly filed
by intervenors, ordering movant National
Housing Authority, its agents and/or any
other person acting under its command, to
desist and refrain from selling or in any
manner from disposing of the subject
properties covered by TCT Nos. 287008 and
285413 and located at No. 30, San Antonio
Street, San Francisco del Monte, Quezon
City, pending the termination of this
proceeding and/or unless a contrary order
is issued by this Court;
4. Setting the hearing of the
petition in intervention (to set aside)
on March 17, 1995, at 8:30 a.m.[22]
admission of the intervention was sanctioned by Section 8 of Act
No. 3135. As to the grant of preliminary injunction, the RTC made
the justification that if the NHA was not restrained, the judgment
which may be favorable to respondents would be ineffectual. The
order partly provides:
The motion is without merit. The admission
of the intervention is sanctioned by Sec. 8
of Act No. 3135. And, because, otherwise or
if no preliminary injunction is issued, the
movant NHA may, before final judgment, do
or continue the doing of the act with the
intervenor asks the court to restrain, and
thus make ineffectual the final judgment
rendered afterwards which may grant the
relief sought by the intervenor.

ACCORDINGLY, the motion for

NHA filed a motion for reconsideration[23] assailing the RTCs Order reconsideration is DENIED. [25]

insofar as it admitted respondents motion for intervention and

issued a writ of preliminary injunction. NHA argued that

respondents should have assailed the foreclosure sale during the

hearing in the petition for the issuance of a Writ of Possession, Undaunted, NHA filed on November 24, 1995, a special civil action

and not during the hearing in the petition for the issuance of an for certiorari and prohibition before the Court of Appeals.

alias writ of possession since the petition referred to in Section 8

of Act No. 3135 pertains to the original petition for the issuance of

the Writ of Possession and not the Motion for the Issuance of an
The Court of Appeals rendered a Decision[26] dated February 24, injunction by the RTC was uncalled for as it would effectively

2000, in favor of the NHA. It declared null and void the assailed defeat the right of NHA to possession, the latter having been

orders of the RTC dated January 2, 1995 and September 4, 1995, entitled by virtue of the grant of the alias writ of possession.

to the extent that the said orders admitted the petition in

Respondents filed a motion for reconsideration.[28] They alleged
intervention and granted the issuance of the preliminary
that since they raised the issue that their right of redemption had
injunction; but it upheld the grant of the alias writ of possession,
not prescribed, said fact should have changed the whole scenario
thus:
such that the issuance of a writ of possession ceased to be

summary in nature and was no longer ministerial. Respondents

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

executory, respondents argued that said order did not

constitute res judicataso as to bar the filing of the petition for

The Court of Appeals defended its affirmation of the RTCs grant of
intervention since the said order was not a judgment on the
the alias writ of possession in NHAs favor by saying that it was a
merits that could attain finality.
necessary consequence after the earlier writ was left unserved to

the party.It further explained that NHA was entitled to the writ of

possession as a matter of course after the lapse of the

Also, respondents would like the Court of Appeals to treat the
redemption period.
petition for intervention not only as an opposition to the issuance

of the alias writ of possession, but also as a proper remedy under

Section 8 of Act No. 3135, as amended, in view of the various

As to the RTCs admission of respondents petition for intervention,
issues raised.
the appellate court opined that it was improperly and erroneously

made. The Court of Appeals believed that the only recourse

available to a mortgagor, in this case the respondents, in a

On November 27, 2000, the Court of Appeals, in its Amended
foreclosure sale is to question the validity of the sale through a
Decision, reconsidered its earlier stance. It declared that the
petition to set aside the sale and to cancel the writ of possession,
period of redemption had not expired as the certificate of sale
a summary procedure provided for under Section 112 of the Land
had not been registered or annotated in the original copies of the
Registration Act. It also observed that the grant of the preliminary
titles supposedly kept with the Register of Deeds since said titles
 OF SALE IN THE PRIMARY ENTRY
were earlier razed by fire. Taking its cue from Bass v. De la BOOK OF THE REGISTER OF
DEEDS AND ON THE OWNERS
Rama where the Court purportedly made a ruling that entry of a
DUPLICATE TITLE IS SUFFICIENT
document, such as sale of real property, in the entry book is COMPLIANCE WITH THE
REQUIREMENT
insufficient to treat such document as registered, unless the same OF LAW ON REGISTRATION.

had been annotated on the certificate of title; the Court of

Appeals went on to say that the entry of the certificate of sale in

2. WHETHER OR NOT THE CASE OF BASS VS.
the owners duplicate of the titles could not have been sufficient DE LA RAMA HAS BEEN
SUPERSEDED.[31]
to register the same since anyone who would wish to check with

the Register of Deeds would not see any annotation. Thus, entry

made on the owners duplicate of the titles cannot be considered

Respondents, on the other hand, offered the following as issues:
notice that would bind the whole world. Having been deprived of

their right of redemption, the Court of Appeals deemed it proper I

to allow respondents to intervene. The dispositive part of the

amended decision decrees:

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

II
Unfazed, NHA filed a motion for reconsideration, which the Court

of Appeals denied in its July 19, 2001 Resolution, to wit:

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

Hence, the instant petition.

On the procedural aspect, respondents question NHAs alleged

failure to include in its petition copies of material portions of the

record such as pleadings filed in the RTC and the Court of Appeals
In its memorandum, NHA tendered the following
as required under Section 4, Rule 45 of the Rules of
issues:
Court. Respondents also pointed out the purported defective

verification of NHA in view of the fact that it merely stated that

1. WHETHER OR NOT THE ANNOTATION OF the one verifying had read the allegations of the petition and that
THE SHERIFFS CERTIFICATE
the same were true and correct to the best of his where it was allegedly ruled that the primary entry alone of the

knowledge. According to respondents, such declarations were not transaction produces the effect of registration so long as the

in accordance with the rules which require that a verified pleading registrant has complied with all that is required of him for

must state that the affiant had read the pleading and that the purposes of entry and annotation.

allegations therein were true and correct based on his personal

In contrast, respondents submit that annotation of the sheriffs
knowledge and not only to the best of his knowledge.
certificate of sale on the owners copy is inadequate to propel the

As to the merits, NHA stresses that the annotation and running of the redemption period. They firmly believe that for the

entry in the owners duplicate certificate of titles of the sheriffs sale instrument to be considered as registered, the inscription

certificate of sale are sufficient compliance with the requirement must be made on the reconstituted titles.

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

Registration Administration Circular No. 3 dated December 6,

1988, entitled Entry and Provisional Registration of Instruments Respondents disagree with NHAs opinion that Bass v. De la

Pending Reconstitution of Title which allegedly authorized all Rama was superceded by Development Bank of the Philippines v.

Registers of Deeds to accept for entry and provisional registration Acting Register of Deeds of Nueva Ecija. They are of the

instruments affecting lost or destroyed certificates of title pending persuasion that the ruling in DBP pertains exclusively to the

reconstitution of the original. The legality and validity of the unique factual milieu and the issues attendant therein, but not to

disputed registration on its duplicate copies of the sheriffs the instant case where Bass purportedly applies. Respondents

certificate of sale, NHA insists, are backed by this Courts ruling also assail NHAs citation of Sta. Ignacia Rural Bank, Inc. v. Court of

in Development Bank of the Philippines v. Acting Register of Deeds Appeals.[34] According to them, said case finds no application to

of Nueva Ecija,[33] where purportedly, this Court made a favorable the instant controversy because the issue involved in the former

interpretation of Section 56 of Presidential Decree No. 1529. NHA was whether the redemption period should be reckoned from the

says that the inscription of the sheriffs certificate of sale only to date of the auction sale or the registration of the certificate of

the owners duplicate copies, but not to those in the custody of sale, which ostensibly is not the bone of contention in this case.

the register of deeds is justified as the latter were burned

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

sale in the original copies. Ascribing NHAs inaction to have the burned titles reconstituted,

respondents assert that such neglect should not be used as a

justification for the non-inscription in the original titles of the

NHA faults the Court of Appeals reliance on Bass v. De la certificate of sale.Additionally, respondents insist that the

Rama since the ruling therein stating that entry and annotation of question of whether the redemption period should be reckoned

a sale instrument on the owners duplicate copy only as from the inscription on the owners duplicate copies is a factual

insufficient registration, was already abandoned in Development and legal issue that is appropriately adjudicated in a hearing on

Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija, the merits of their petition in intervention, and not in the instant
special civil action for certiorari and prohibition which is limited in reconstitution of the said titles. This Court finds that NHA

scope, namely, whether the RTC committed grave abuse of substantially complied with the requirements under Section 4 of

discretion amounting to lack of jurisdiction in admitting their Rule 45. The same conclusion was arrived at by this Court

petition in intervention. in Development Bank of the Philippines v. Family Foods

Manufacturing Co., Ltd.[36] when it was faced with the same

procedural objection, thus:

Respondents reiterate that the issuance of the writ of possession

prayed for by NHA before the RTC is no longer ministerial since it

As held by this Court in Air
raised the issue of whether their period of redemption has Philippines Corporation v. Zamora:

already expired.They cite Barican v. Intermediate Appellate

Court[35] as the authority to this argument.

[E]ven if a
document is relevant
We dwell first with the procedural issues before the main and pertinent to the
petition, it need not
controversy. Respondents contend that the instant petition is be appended if it is
shown that the
dismissible on the ground that NHA failed to attach pleadings filed
contents thereof can
in the RTC and the Court of Appeals as required under Section 4, also [be] found in
another document
Rule 45 of the Rules of Court which partly provides: already attached to
the petition. Thus, if
the material
allegations in a
SEC. 4. Contents of petition. The position paper are
petition shall be filed in eighteen (18) summarized in a
copies, with the original copy intended for questioned judgment,
the court being indicated as such by the it will suffice that only
petitioner, and shall x x x (d) be a certified true copy
accompanied by a clearly legible duplicate of the judgment is
original, or a certified true copy of the attached.
judgment or final order or resolution
certified by the clerk of court of the court a
quo and the requisite number of plain
copies thereof, and such material portions Third, a
of the record as would support the petition; petition lacking an
x x x. essential pleading or
part of the case
record may still be
given due course or
reinstated (if earlier
dismissed) upon
showing that
In its petition, NHA attached the February 24, petitioner later
submitted the
2000 Decision, the November 27, 2000 Amended Decision, and
documents required,
the July 19, 2001 Resolution all of the Court of Appeals; copies of or that it will serve
the higher interest of
the transfer certificates of title of the disputed properties; and justice that the case

the June 13, 1994 Order of the Quezon City RTC ordering the
 be decided on the and belief, or upon knowledge, information
merits. and belief, or lacks a proper verification,
shall be treated as an unsigned pleading.

Nevertheless, even if the

pleadings and other supporting documents
were not attached to the petition, the
dismissal is unwarranted because the CA
records containing the promissory notes The reason for requiring verification in the petition is
and the real estate and chattel mortgages
were elevated to this Court. Without a to secure an assurance that the allegations of a pleading are true
doubt, we have sufficient basis to actually
and completely dispose of the case. and correct; are not speculative or merely imagined; and have

We must stress that cases been made in good faith.[37] To achieve this purpose, the
should be determined on the merits, after
all parties have been given full opportunity verification of a pleading is made through an affidavit or sworn
to ventilate their causes and defenses,
statement confirming that the affiant has read the pleading
rather than on technicalities or procedural
imperfections. In that way, the ends of whose allegations are true and correct of the affiant's personal
justice would be served better. Rules of
procedure are mere tools designed to knowledge or based on authentic records.[38]
expedite the decision or resolution of cases
and other matters pending in court. A strict
and rigid application of rules, resulting in
technicalities that tend to frustrate rather
than promote substantial justice, must be The General Manager of NHA verified the petition as
avoided. In fact, Section 6 of Rule 1 states
that the Rules shall be liberally construed in follows:
order to promote their objective of
ensuring the just, speedy and inexpensive
disposition of every action and proceeding.
3. I have read the allegations
contained therein and that the same are
true and correct to the best of my own
personal knowledge.[39]
Contrary to respondents assertion, NHAs verification conforms to

the rule. Section 4, Rule 7 of the Rules of Court states:

SEC. 4. Verification. Except when
otherwise specifically required by law or
rule, pleadings need not be under oath,
verified or accompanied by affidavit.
A reading of the above verification reveals nothing objectionable
about it. The affiant confirmed that he had read the allegations in
the petition which were true and correct based on his personal

knowledge.The addition of the words to the best before the

A pleading is verified by an affidavit that the phrase of my personal knowledge did not violate the requirement
affiant has read the pleading and that the
under Section 4 of Rule 7, it being sufficient that the affiant
allegations therein are true and correct of
his personal knowledge or based on declared that the allegations in the petition are true and correct
authentic records.
based on his personal knowledge.

A pleading required to be verified which

contains a verification based on information
 Now, as to the merits of the case. The main issue primary book was considered sufficient registration since [DBP]

before us is whether the annotation of the sheriffs certificate of cannot be blamed that annotation could not be made

sale on the owners duplicate certificate of titles is sufficient contemporaneously with the entry because the originals of the

registration considering that the inscription on the original subject certificates of title were missing and could not be found,

certificates could not be made as the same got burned. since it had nothing to do with their safekeeping. If anyone was

responsible for failure of annotation, it was the Register of Deeds

Jurisprudence is replete with analogous cases. Of foremost
who was chargeable with the keeping and custody of those
importance is Development Bank of the Philippines v. Acting
documents.[42] To buttress its conclusion, the Court reviewed the
Register of Deeds of Nueva Ecija[40] where the Court listed cases
relevant jurisprudence starting from 1934. The Court noted that
where the transaction or instrument was annotated not on the
before the Second World War, particularly in Government of the
original certificate but somewhere else. In that case, DBP,
Philippine Islands v. Aballe,[43] the prevailing doctrine was an
following the extrajudicial foreclosure sale where it emerged as
inscription in the book of entry even without the notation on the
the highest bidder, registered with the Register of Deeds the
certificate of title was considered as satisfactory and produced all
sheriffs certificate of sale in its favor. After it had paid the
the effects which the law gave to its registration. During the war,
required fees, said transaction was entered in the primary entry
however, the Court observed that there was apparent departure
book. However, the annotation of the said transaction to the
from said ruling since in Bass v. De la Rama, the holding was that
originals of the certificates of title could not be done because the
entry of an instrument in the primary entry book does not confer
same titles were missing from the files of the Registry. This
any legal effect without a memorandum thereof inscribed on the
prompted DBP to commence reconstitution proceedings of the
certificate of title.[44] DBP noted that Bass v. De la Rama, however,
lost titles. Four years had passed before the missing certificates of
survived only for a little while since later cases appear to have
title were reconstituted. When DBP sought the inscription of the
applied the Aballe ruling that entry in the day book, even without
four-year old sale transaction on the reconstituted titles, the
the corresponding annotation on the certificate of title, is
Acting Register of Deeds, being in doubt of the proper action to
equivalent to, or produces the effect of, registration to voluntary
take, referred the matter to the Commissioner of the Land
transactions, provided the requisite fees are paid and the owners
Registration Authority by consulta, the latter resolved against the
duplicates of the certificates of title affected are presented.[45]
annotation of the sale transaction and opined that said entry was

ineffective due to the impossibility of accomplishing registration These later cases are Levin v. Bass[46] and Potenciano v.

at the time the document was entered because of the non- Dineros,[47] both of which involve the issue of whether entry in the

availability of the certificate (sic) of title involved.[41] In other day book of a deed of sale, payment of the fees, and presentation

words, annotation on the primary book was deemed insufficient of the owners duplicate certificate of title constitute a complete

registration. The Court disagreed with this posture. Considering act of registration.[48]

that DBP had paid all the fees and complied with all the

requirements for purposes of both primary entry and annotation

of the certificate of sale, the Court declared that mere entry in the
 valid entry of the instrument in the primary
Simply, respondents resort to Bass v. De la Rama is futile as the entry book. Such entry is equivalent to
registration. Injunction would not lie
same was abandoned by the later
anymore, as the act sought to be enjoined
cases, i.e., Bass, Potenciano and DBP. had already become a fait accompli or an
accomplished act.[51]

In the recent case of Autocorp Group v. Court of Appeals,[49] the

respondent was awarded the foreclosed parcels of land. A sheriffs

Indeed, the prevailing rule is that there is effective registration
certificate of sale was thereafter issued in its favor. Thereafter,
once the registrant has fulfilled all that is needed of him for
petitioners in that case filed a complaint before the RTC with a
purposes of entry and annotation, so that what is left to be
prayer for the issuance of an ex parte TRO aimed at preventing
accomplished lies solely on the register of deeds. The Court thus
the Register of Deeds from registering the said certificate of sale
once held:
in the name of the respondent and from taking possession of the

subject properties.[50] Before the RTC could issue a TRO,

respondent presented the sheriffs certificate of sale to the Current doctrine thus seems to be that
entry alone produces the effect of
Register of Deeds who entered the same certificate in the primary registration, whether the transaction
entered is a voluntary or an involuntary
book, even if the registration fee was paid only the following one, so long as the registrant has complied
with all that is required of him for purposes
day. Four days after, the RTC issued a TRO directing the Register
of entry and annotation, and nothing more
of Deeds to refrain from registering the said sheriffs certificate of remains to be done but a duty incumbent
solely on the register of deeds.[52]
sale. A preliminary injunction was thereafter issued as the TRO

was about to expire. The preliminary injunction was questioned

by therein respondent. One of the main issues raised there was

whether the entry of the certificate of sale in the primary book

In the case under consideration, NHA presented the sheriffs
was equivalent to registration such that the TRO and the
certificate of sale to the Register of Deeds and the same was
preliminary injunction issues would not lie anymore as the act
entered as Entry No. 2873 and said entry was further annotated in
sought to be restrained had become an accomplished act. The
the owners transfer certificate of title.[53] A year later and after
Court held that the TRO and the preliminary injunction had
the mortgagors did not redeem the said properties, respondents
already become moot and academic by the earlier entry of the
filed with the Register of Deeds an Affidavit of Consolidation of
certificate of sale in the primary entry book which was
Ownership[54]after which the same instrument was presumably
tantamount to registration, thus:
entered into in the day book as the same was annotated in the

owners duplicate copy.[55] Just like

In fine, petitioners prayer for the in DBP, Levin, Potenciano and Autocorp, NHA followed the
issuance of a writ of injunction, to prevent
procedure in order to have its sheriffs certificate of sale
the register of deeds from registering the
subject certificate of sale, had been annotated in the transfer certificates of title. There would be,
rendered moot and academic by the
 Presidential Decree No. 1529 be asserted as
therefore, no reason not to apply the ruling in said cases to this warranted by its terms.[57]

one. It was not NHAs fault that the certificate of sale was not

annotated on the transfer certificates of title which were

supposed to be in the custody of the Registrar, since the same

were burned. Neither could NHA be blamed for the fact that there What is more, in Autocorp Group v. Court of Appeals,[58] the

were no reconstituted titles available during the time of pertinent DBP ruling was applied, thereby demonstrating that the

inscription as it had taken the necessary steps in having the same said ruling in DBP may be applied to other cases with similar

reconstituted as early as July 15, 1988.[56] NHA did everything factual and legal issues, viz:

within its power to assert its right.

Petitioners contend that the aforecited case

of DBP is not apropos to the case at bar.
Allegedly, in DBP, the bank not only paid
While it may be true that, in DBP, the Court ruled that in the
the registration fees but also presented the
particular situation here obtaining, annotation of the disputed owners duplicate certificate of title. We find
no merit in petitioners posture x x x.
entry on the reconstituted originals of the certificates of title to

which it refers is entirely proper and justified, this does not mean,
xxxx
as respondents insist, that the ruling therein applies exclusively to

the factual milieu and the issue obtaining in said case, and not to

similar cases. There is nothing in the subject declaration that
categorically states its pro hac vice character. For in truth, what
the said statement really conveys is that the current doctrine that
entry in the primary book produces the effect of registration can
be applied in the situation obtaining in that case since the
registrant therein complied with all that was required of it, hence,
Like in DBP v. Acting Register of Deeds of
Nueva Ecija, the instrument involved in the
case at bar, is a sheriffs certificate of sale,
We hold now, as we held therein, that the
registrant is under no necessity to present
the owners duplicates of the certificates of
title affected, for purposes of primary entry,
as the transaction sought to be recorded is
an involuntary transaction.

it was fairly reasonable that its acts be given the effect of

registration, just as the Court did in the past cases. In fact the xxxx

Court there continued with this pronouncement:

x x x Such entry is equivalent to

registration. Injunction would not lie
anymore, as the act sought to be enjoined
To hold said entry ineffective, as
had already become a fait accompli or an
does the appealed resolution, amounts to
accomplished act.[59]
declaring that it did not, and does not,
protect the registrant (DBP) from claims
arising, or transactions made, thereafter
which are adverse to or in derogation of the
rights created or conveyed by the
transaction thus entered. That, surely, is a
result that is neither just nor can, by any
reasonable interpretation of Section 56 of
Moreover, respondents stand on the non-applicability of respondents had been furnished with a copy of the Notice of

the DBP case to other cases, absent any statement thereof to Sheriffs Sale as shown at the bottom portion of said

such effect, contravenes the principle of stare decisis which urges notice.[66]From all these, it would tend to show that respondents

that courts are to apply principles declared in prior decisions that aspersion of non-compliance with the requirements of

are substantially similar to a pending case.[60] foreclosure sale is a futile attempt to salvage its statutory right to

redeem their foreclosed properties, which right had long been

lost by inaction.

Since entry of the certificate of sale was validly registered, the

redemption period accruing to respondents commenced

therefrom, since the one-year period of redemption is reckoned Considering that the foreclosure sale and its subsequent

from the date of registration of the certificate of sale.[61] It must registration with the Register of Deeds were done validly, there is

be noted that on April 16, 1991, the sheriffs certificate of sale was no reason for the non-issuance of the writ of possession. A writ of

registered and annotated only on the owners duplicate copies of possession is an order directing the sheriff to place a person in

the titles and on April 16, 1992, the redemption period expired, possession of a real or personal property, such as when a property

without respondents having redeemed the properties. In fact, is extrajudicially foreclosed.[67] Section 7 of Act No. 3135 provides

on April 24, 1992, NHA executed an Affidavit of Consolidation of for the rule in the issuance of the writ of possession involving

Ownership. Clearly, respondents have lost their opportunity to extrajudicial foreclosure sales of real estate mortgage, to wit:

redeem the properties in question.

Sec. 7. In any sale made under

the provisions of this Act, the purchaser
may petition the [Regional Trial Court] of
As regards respondents allegation on the defect in the publication
the province or place where the property
and notice requirements of the extrajudicial foreclosure sale, the or any part thereof is situated, to give
him possession thereof during the
same is unavailing. The rule is that it is the mortgagor who alleges redemption period, furnishing bond in an
amount equivalent to the use of the
absence of a requisite who has the burden of establishing such
property for a period of twelve months,
fact.[62] This is so because foreclosure proceedings have in their to indemnify the debtor in case it be
shown that the sale was made without
favor the presumption of regularity and the burden of evidence to violating the mortgage or without
complying with the requirements of this
rebut the same is on the party who questions it.[63] Here, except Act. Such petition shall be made under
oath and filed in the form of an ex
for their bare allegations, respondents failed to present any
parte motion in the registration or
evidence to support them. In addition, NHA stated in its Comment cadastral proceedings if the property is
registered, or in special proceedings in
to Motion for Leave of Court to Intervenethat it had complied with the case of property registered under the
Mortgage Law or under section one
the publication of the Notice of Sheriffs Sale in the Manila Times
hundred and ninety-four of the
in the latters issues dated July 14, 21 and 28, 1990.[64] It also Administrative Code, or of any other real
property encumbered with a mortgage
claimed that an Affidavit of Publication of said newspaper was duly registered in the office of any
register of deeds in accordance with any
attached as Annex B in the said comment.[65] NHA also said that
 existing law, and in each case the clerk of
the court shall, upon the filing of such in Barican v. Intermediate Appellate Court.[75] Unfortunately for
petition, collect the fees specified in
them, the instant case does not even come close to the cited
paragraph eleven of section one hundred
and fourteen of Act Numbered Four case. There, the Court deemed it inequitable to issue a writ of
Hundred and ninety-six, as amended by
Act Numbered Twenty-eight hundred possession in favor of the purchaser in the auction sale
and sixty-six, and the court shall, upon
considering that the property involved was already in the
approval of the bond, order that a writ of
possession issue, addressed to the sheriff possession of a third person by virtue of a deed of sale with
of the province in which the property is
situated, who shall execute said order assumption of mortgage even before the purchaser could register
immediately.
the sheriffs certificate of sale. Also, the auction buyer therein

This provision of law authorizes the purchaser in a unreasonably deferred to exercise its right to acquire possession

foreclosure sale to apply for a writ of possession during the over the property. These circumstances are not present in the

instant case.
redemption period by filing an ex parte motion under oath for

that purpose in the corresponding registration or cadastral

Moreover, in Fernandez v. Espinoza,[76] the Court
proceeding in the case of property with Torrens title.[68] Upon the
refused to apply the ruling in Barican v. Intermediate Appellate
filing of such motion and the approval of the corresponding bond,
Court[77] and Cometa v. Intermediate Appellate Court,[78] two cases
the law also in express terms directs the court to issue the order
which are exemptions to the stated rule, reasoning that:
for a writ of possession.[69]

The time-honored precept is that after the consolidation of titles

In Cometa, which actually involved
in the buyers name, for failure of the mortgagor to redeem, the execution of judgment for the prevailing
party in a damages suit, the subject
writ of possession becomes a matter of right.[70] Its issuance to a properties were sold at the public auction
at an unusually lower price, while
purchaser in an extrajudicial foreclosure is merely a ministerial
in Barican, the mortgagee bank took five
function.[71] The writ of possession issues as a matter of course years from the time of foreclosure before
filing the petition for the issuance of writ of
upon the filing of the proper motion and the approval of the possession. We have considered these
equitable and peculiar circumstances
corresponding bond. The judge issuing the writ following these
in Cometa and Barican to justify the
express provisions of law neither exercises his official discretion relaxation of the otherwise absolute rule.
None of these exceptional circumstances,
nor judgment.[72] As such, the court granting the writ cannot be however, attended herein so as to place the
instant case in the same stature as that
charged with having acted without jurisdiction or with grave
of Cometa and Barican. Instead, the ruling
abuse of discretion.[73] To accentuate the writs ministerial in Vaca v. Court of Appeals is on all fours
with the present petition. In Vaca, there is
character, the Court disallowed injunction to prohibit its issuance no dispute that the property was not
redeemed within one year from the
despite a pending action for annulment of mortgage or the registration of the extrajudicial foreclosure
sale; thus, the mortgagee bank acquired an
foreclosure itself.[74]
absolute right, as purchaser, to the issuance
of the writ of possession. Similarly, UOB, as
Believing that the instant case does not come within the the purchaser at the auction sale in the
instant case, is entitled as a matter of right,
penumbra of the foregoing rule, respondents resort to the ruling to the issuance of the writ of possession.
 DECISION
Just as in Fernandez, this Court does not see any

compelling reason to veer away from the established rule.

In fine, this Court finds that the Court of Appeals LEONARDO-DE CASTRO, J.:

committed reversible error in ruling that the annotation of NHAs

sheriffs certificate of sale on the duplicate certificates of title was

not effective registration and in holding that respondents

This is a Petition for Review on Certiorari assailing the
redemption period had not expired.
Decision[1] of the Court of Appeals in CA-G.R. SP No. 94479 dated

WHEREFORE, premises considered, the instant petition April 18, 2007 and its Resolution[2] dated September 18, 2007.

is hereby GRANTED. The Amended Decision of the Court of

Appeals dated November 27, 2000 is SET ASIDE

SO ORDERED. On June 3, 2004, petitioner Durawood Construction

and Lumber Supply, Inc. (Durawood) filed an action for sum of

money plus damages with a prayer for the issuance of a writ of

preliminary attachment against LBB Construction and

DURAWOOD CONSTRUCTION G.R. No. 179884
AND LUMBER SUPPLY, INC., Development Corporation (LBB Construction) and its president
Present:
Petitioner, Leticia Barber (Barber) before the Regional Trial Court (RTC) of

CORONA, C.J., Antipolo. In said suit, which was docketed as Civil Case No. 04-

Chairperson, 7240, Durawood prayed for the sum of P665,385.50 as payment

LEONARDO-DE CASTRO, for construction materials delivered to LBB Construction.

BERSAMIN,

- versus - DEL CASTILLO, and

On June 14, 2004, the RTC issued an Order granting
VILLARAMA, JR., JJ.
Durawoods prayer for the issuance of a writ of attachment. On

June 16, 2004, the corresponding writ was issued.

Promulgated:

CANDICE S. BONA, January 25, 2012 On June 17, 2004, Sheriff Rolando C. Leyva (Sheriff

Respondent. Leyva) levied on a 344-square meter parcel of land in Richdale

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Subdivision, Antipolo City covered by Transfer Certificate of Title
-x
(TCT) No. R-17571 in the name of LBB Construction. A Notice of

Levy on Attachment was annotated in TCT No. R-17571s

Memorandum of Encumbrances on the same day, June 17, 2004.

 1. Ordering the defendants to
pay plaintiff the sum of Six
Hundred Sixty[-]Five
Thousand Three Hundred
On July 13, 2004, respondent Candice S. Bona (Candice)
Eighty[-]Five Pesos and
filed a Motion seeking leave to intervene in Civil Case No. 04- Fifty Centavos
(P665,385.50) plus two
7240. Attached to said Motion was Candices Answer in percent (2%) interest per
month from May 11, 2004
Intervention, her Third Party Claim addressed to Sheriff Leyva, and
up to the present;
a copy of TCT No. R-17571. Candice claimed therein that she is a

co-owner of the property covered by TCT No. R-17571. She alleged

2. Ordering the defendants to
that LBB Construction had sold the property to her and her pay plaintiff twenty-five
percent (25%) of the
siblings, Michael Angelo S. Bona, Diane Sheila S. Bona, Glenda May
amount due to the plaintiff
S. Bona and Johann Louie Sebastian S. Bona, through a Deed of by way of attorneys fees;
and
Absolute Sale dated June 2, 2004.Candice asserted that the sale is

the subject of Entry No. 30549 dated June 16, 2004 in the books of
3. To pay the costs of suit.[4]
the Registry of Deeds of Antipolo City, while the levy on

attachment is only Entry No. 30590 dated June 17, 2004. What

was attached to the Motion was a copy of TCT No. R-17571, and
The Decision became final and executory. On
not a title in Candice and her co-owners names.
September 12, 2005, Durawood filed a Motion for the Issuance of

a Writ of Execution. On November 15, 2005, the RTC issued a Writ

of Execution. It was when this Writ was about to be enforced that

On August 11, 2004, the RTC issued an Order granting
Durawood discovered the cancellation of TCT No. R-17571 and the
Candices Motion to Intervene.
issuance of TCT No. R-22522 in the name of Candice and her

LBB Construction and Barber filed their Answer in Civil siblings.

Case No. 04-7240, but failed to attend the scheduled hearings,

It would appear from the records that on June 16,
including the pre-trial. Consequently, Durawood was allowed to
2004, the supposed Register of Deeds of Antipolo City, Atty. Randy
present its evidence ex parte.
A. Rutaquio (Atty. Rutaquio), cancelled TCT No. R-17571 and

On July 21, 2005, the RTC rendered its Decision[3] in Civil issued TCT No. R-22522 in the name of Candice and her co-

Case No. 04-7240 in favor of Durawood. The dispositive portion of owners. The parties, however, do not dispute that said

the Decision reads: cancellation of the old TCT and issuance of the new one

WHEREFORE, in view of the
foregoing consideration, judgment is
rendered in favor of the plaintiff and
against the defendants, viz:
was antedated, since Atty. Rutaquio was still the Register of Deeds
of Malabon on said date.[5] According to a certification of the Land
Registration Authority,[6] it was a certain Atty. Edgar D. Santos

(Atty. Santos) who was the Acting Register of Deeds of Antipolo

City on June 16, 2004.


Durawood filed a Motion to Reinstate Notice of Levy on
Attachment in TCT No. R-22522 and Cite Atty. Randy A. Rutaquio
for Contempt[7] on the following grounds:
5. The cancellation of TCT No. R-
17571 and the issuance of TCT No. R-22522
was made by Atty. Randy A. Rutaquio who,
on June 2004, was not the Register of
Deeds of Antipolo City. As evidence of such
fact, plaintiff corporation was issued a
certification by LRA Human Resource
Management Officer IV Loreto I. Orense
that Atty. Edgar D. Santos was the Acting
Register of Deeds of Antipolo City from June
1-30, 2004.
6. While the Deed of Sale
annotated in TCT No. R-17571 appears to
have been made on June 16, 2004, the fact
of its inscription was made after that of the
levy on attachment as it obviously appears
below and next to it.
7. The records of this case reveal
that in the Third Party Claim filed by
Candice Bona sometime in July 2004, there
was never any mention of any recording
about a Deed of Absolute Sale in the
Memorandum of Encumbrances in TCT No.
R-17571. It is difficult to comprehend that
Atty. Hernando U. Salvador, Bonas lawyer,
would miss mentioning that a Deed of
Absolute Sale was inscribed ahead of the
notice of levy on attachment if ever such
sale was made on June 16, 2004.
8. Thus, under the
circumstances, plaintiff corporation cannot
help speculate that [the] Deed of Sale
between LBB Construction and the Bonas
was made to appear to have been recorded
a day before the attachment.
9. While the Notice of Levy on
Attachment was inscribed in TCT No. R-
17571 ahead and before of the Deed of Sale
between LBB Construction Co., Inc. and the
Bonas, the said notice was not carried over
in TCT No. R-22522 despite the fact that
there was no order coming from this
Honorable Court dissolving the Writ of
Preliminary Attachment dated June 16,
2004.
10. Randy Rutaquios
unauthorized acts of cancelling TCT No. R-
17571 and issuing TCT No. R-22522 without
inscribing the Notice of Levy on Attachment
despite the absence of a court order
dissolving the writ of Preliminary
Attachment constitute improper conduct
tending to directly or indirectly to impede,
obstruct or degrade the administration of
justice.[8]
Atty. Rutaquio filed a Manifestation alleging that the
sale was entered in the Primary Entry Book prior to the Levy on
Attachment. The two transactions were assigned to different
examiners and it just so happened that the examiner to whom the
levy on attachment was assigned was able to inscribe the
memorandum ahead of the sale, although the inscription of the
sale was entered ahead of the levy. The levy on attachment was
not inscribed on TCT No. R-22522 because allegedly the sale
should have priority and preference. The cancellation of TCT No. R-
17571 and the issuance of TCT No. R-22522 was already
completed when he took over the position of Atty. Santos as
Acting Register of Deeds and was therefore already clothed with
the authority to issue and sign TCT No. R-22522.
Atty. Rutaquio also submitted a letter dated June 25,
2004 from Atty. Santos to Land Registration Authority (LRA)
Administrator Benedicto B. Ulep (Administrator Ulep) consulting
the latter as regards the registration of the Deed of Absolute Sale
and the Notice of Levy on Attachment.[9] In said letter received by
the LRA on July 1, 2004, Atty. Santos stated that he had not acted

on the Deed of Absolute Sale since the required registration fees
were not paid therefor.[10] Administrator Ulep was able to reply to
said letter on October 6, 2004, when Atty. Rutaquio was already
the Acting Register of Deeds.Administrator Ulep stated that since
the Deed of Sale was considered registered on June 16, 2004, the
same shall take precedence over the Notice of Levy on Attachment
registered on June 17, 2004.[11]
Acting on the Motion to Reinstate Notice of Levy on
Attachment in TCT No. R-22522 and Cite Atty. Randy A. Rutaquio
for Contempt, the RTC issued an Order[12] dated March 2, 2006,
ruling in favor of Durawood. The RTC gave great weight to the
certification by LRA Human Resource Management Officer IV
Loreto I. Orense that Atty. Santos was the Acting Register of Deeds
from June 1-30, 2004, and held that this proves the fact that Atty.
Santos was the only person authorized to sign and approve all the
transactions with the Registry of Deeds of Antipolo City at the
time. Moreover, according to the RTC, the alienation of LBB
Construction in favor of the Bonas without leaving sufficient
property to pay its obligation is considered by law in fraud of
creditor under Articles 1381[13] and 1387[14] of the Civil Code.
The RTC did not rule on Durawoods prayer to cite Atty.
Rutaquio for contempt. The dispositive portion of the March 2,
2006 Order reads:
WHEREFORE, premises
considered, the instant motion to reinstate
notice of levy on attachment in TCT No. R-
22522 now in the name of the intervenors
is hereby GRANTED its non-inscription
therein having been made without order of
this Court.
The Register of Deeds of
Antipolo City is directed to reinstate the
notice of levy on attachment in TCT No. R-
22522 in the names of intervenors
immediately upon receipt of this Order.[15]
Candice filed a Motion for Reconsideration of the
above Order. In the meantime, on March 13, 2006, Sheriff Leyva
issued a Notice of Sheriffs Sale setting the sale of the property
covered by TCT No. R-22522 at public auction on April 11, 2006 at
10:00 a.m., pursuant to the November 15, 2005 Writ of
Execution. Candice filed an Urgent Ex-Parte Motion to Order the
Branch Sheriff to Desist from the Sale of Intervenors Property for
Being Premature, which was granted by the RTC in an Order dated
March 29, 2006.
On March 8, 2006, the new Acting Register of Deeds
Jose S. Loriega, Jr. complied with the March 6, 2006 Order of the
RTC by reinstating in TCT No. R-22522 the Notice of Levy on
Attachment in favor of Durawood.
On April 7, 2006, the RTC issued an Order denying
Candices Motion for Reconsideration. In said Order, the RTC
highlighted its observation that in TCT No. R-17571, the inscription
of the levy on attachment by Atty. Santos dated June 17, 2004 was
in page A (the dorsal portion) of the title, while the supposedly
earlier inscription of the Deed of Sale by Atty. Rutaquio dated June
16, 2004 was found in page B (a separate page) of the title. The
RTC found this fact, as well as the above-mentioned certification
that Atty. Santos was the Acting Register of Deeds of Antipolo City
from June 1 to 30, 2004, sufficient proof of the irregularity of the
June 16, 2004 inscription of the Deed of Sale.
On April 11, 2006, Sheriff Leyva sold the subject
property at public auction for P1,259,727.90 with Durawood being
the lone bidder, and issued the corresponding Certificate of 94 on Certificates of title and documents left unsigned by former

Sale. The sale was inscribed in TCT No. R-22522 on the same Register of Deeds, which provides:

date.[16]

It has been brought to the

attention of this Registration that, in some
Registries, there are certificates of title with
Candice filed with the Court of Appeals a Petition
the full transcriptions and inscriptions,
for Certiorari and Prohibition assailing the March 2, 2006 and April including the volume and page numbers,
the title number, the date and the name of
7, 2006 Orders of the RTC. the former Register of Deeds, already
typewritten thereon but which, for some
reasons, cannot anymore be signed by the
On April 18, 2007, the Court of Appeals rendered the
former official. In such cases and to resolve
assailed Decision in favor of Candice. According to the Court of this problem, the present Register of Deeds
may, without changing or altering the
Appeals, the sequence of presentation of the entries in the TCT transcriptions and inscriptions, affix his
signature below the name of the former
cannot control the determination of the rights of the claimants
Register of Deeds but placing the actual
over a disputed property. It is the registration in the Primary Entry date and time of signing enclosed in
parenthesis below his signature.[17]
Book (also referred to in other cases as the day book) that

establishes the order of reception of instruments affecting The Court of Appeals accepted Atty. Rutaquios

registered land. As explained by Atty. Rutaquio, the entry in the manifestation that he signed TCT No. R-22522 subsequent to June

day book is only the preliminary step in the registration. The 16, 2004, on a date when he was already the Acting Register of

inscription of the levy on attachment on TCT No. R-17571 (which Deeds of Antipolo City.Since the entry in the Primary Entry Book

was made before the inscription of the Deed of Sale on said title) was made at the time of the incumbency of Atty. Santos, the name

retroacts to the date of entry in the Primary Entry Book, which is of the latter still appears on the document. According to the Court

June 17, 2004. However, the inscription of the Deed of Sale on TCT of Appeals, Candice cannot be made to suffer for the failure of

No. R-17571, although made after the inscription of the levy on Atty. Rutaquio to affix the date when he signed the

attachment, retroacts to the earlier date of entry in the Primary document. Furthermore, a certificate of title, once registered,

Entry Book, which is June 16, 2004. cannot be impugned, altered, changed, modified, enlarged or

diminished except in a direct proceeding permitted by law. Finally,

an action for rescission of contracts entered into in fraud of

As regards the issuance by Atty. Rutaquio of TCT No. R- creditors cannot be instituted except when the party suffering

22522 on June 16, 2004 despite the fact that he was not yet the damage has no other legal means to obtain reparation for the

Register of Deeds of Antipolo City at that time, the Court of same.[18]

Appeals held that there was substantial compliance with the

The dispositive portion of the Decision reads:
National Land Titles and Deeds Registration Administration
WHEREFORE, in view of the
(NALTDRA; now the Land Registration Authority [LRA]) Circular No. foregoing, the assailed Orders of public
respondent judge ordering the
reinstatement of the subject notice of levy
 on attachment in TCT No. R-22522 are
hereby ANNULLED and SET ASIDE. As a
result thereof, the public auction sale
carried out pursuant to said levy is also
declared null and void.[19]
Durawood filed a Motion for Reconsideration, but the
same was denied by the Court of Appeals in its Resolution dated
September 18, 2007.
Durawood filed the instant Petition for Review, with
the following Assignment of Errors:
I.
THE COURT OF APPEALS IGNORED THE FACT
THAT NON-PAYMENT OF THE REQUIRED
REGISTRATION FEES BY CANDICE S. BONA
AND HER SIBLINGS DID NOT COMPLETE THE
REGISTRATION OF THE DEED OF ABSOLUTE
SALE ON JUNE 16, 2004.
II.
THE COURT OF APPEALS GRAVELY ERRED
WHEN IT DISREGARDED THE FACT THAT
NALTDRA CIRCULAR NO. 94 WAS NOT
COMPLIED WITH BY ATTY. RANDY
RUTAQUIO.
III.
THE COURT OF APPEALS GRAVELY ERRED
WHEN IT FAILED TO CONSIDER THAT THE
ENTRIES IN TCT NO. R-17571 (THE
PREDECESSOR OF TCT NO. R-22522) ARE
EVIDENCES OF THE FACTS STATED THEREIN.
IV.
THE COURT OF APPEALS OVERLOOKED THE
FACT THAT THE REAL PROPERTY COVERED
BY TCT NO. R-17571 AND SUBSEQUENTLY
BY TCT NO. R-22522 HAS ALREADY BEEN
ATTACHED BUT WAS UNILATERALLY
RELEASED FROM THE COURTS
JURISDICTION BY A USURPER.[20]
All these allegations are specific matters to be resolved
by this Court in determining the overriding issue of the case at bar:
whether the Court of Appeals correctly granted Candices Petition
for Certiorariand Prohibition on its finding that the RTC
committed grave abuse of discretion in issuing its March 2, 2006
and April 7, 2006 Orders. In other words, the main issue to be
determined by this Court is whether or not there was grave abuse
of discretion in the RTCs order to reinstate the notice of levy on
attachment in TCT No. R-22522. Grave abuse of discretion signifies
such capricious and whimsical exercise of judgment that is
equivalent to lack of jurisdiction. The abuse of discretion must be
grave as where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, and must be so
patent and gross as to amount to an evasion of positive duty or to
a virtual refusal to perform the duty enjoined by or to act all in
contemplation of law.[21]
The Court of Appeals, in considering the date of entry
in the day book of the Registry of Deeds as controlling over the
presentation of the entries in TCT No. R-17571, relied on Section
56 of Presidential Decree No. 1529 which provides that:
SEC. 56. Primary Entry Book;
fees; certified copies. Each Register of Deeds
shall keep a primary entry book in which,
upon payment of the entry fee, he shall
enter, in the order of their reception, all
instruments including copies of writs and
processes filed with him relating to
registered land. He shall, as a preliminary
process in registration, note in such book
the date, hour and minute of reception of
 all instruments, in the order in which they
were received. They shall be regarded as Book to be equivalent to registration despite even the failure to
registered from the time so noted, and
annotate said instruments in the corresponding certificates of title.
the memorandum of each instrument,
when made on the certificate of title to
which it refers, shall bear the same date: Based on this alone, it appears that the RTC was in
Provided, that the national government as
well as the provincial and city governments error when it considered the registration of the Absolute Deed of
shall be exempt from the payment of such
Sale on June 16, 2004 inferior to the registration of the Notice of
fees in advance in order to be entitled to
entry and registration. (Emphasis supplied.) Levy on Attachment on June 17, 2004 on the ground that the

Attachment was annotated on TCT No. R-17571 earlier than the

Deed of Sale. As discussed in the above-mentioned cases, the

annotation in the certificate of title is not determinative of the

The consequence of the highlighted portion of the
effectivity of the registration of the subject instrument.
above section is two-fold: (1) in determining the date in which an

instrument is considered registered, the reckoning point is However, a close reading of the above-mentioned

cases reveals that for the entry of instruments in the Primary Entry
the time of the reception of such instrument as noted in the

Primary Entry Book; and (2) when the memorandum of the Book to be equivalent to registration, certain requirements have

instrument is later made on the certificate of title to which it to be met. Thus, we held in Levin that:

refers, such memorandum shall bear the same date as that of the Do the entry in the day book of a deed of
sale which was presented and filed together
reception of the instrument as noted in the Primary Entry with the owner's duplicate certificate of
title with the office of the Registrar of
Book. Pursuant to the second consequence stated above, the Deeds and full payment of registration fees
constitute a complete act of registration
Court of Appeals held that Atty. Rutaquio correctly placed the date
which operates to convey and affect the
of entry in the Primary Entry Book as the date of the land? In voluntary registration, such as a
sale, mortgage, lease and the like, if the
memorandum of the registration of the deed of sale in TCT No. R- owner's duplicate certificate be not
surrendered and presented or if no
17571.
payment of registration fees be made
within 15 days, entry in the day book of
the deed of sale does not operate to
convey and affect the land sold. x x x.[28]

As regards the first consequence, this Court has applied

Levin, which was decided in 1952, applied Section 56 of
the same in several cases. Thus, in the old cases of Levin v.
the Land Registration Act[29] which provides:
Bass,[22] Potenciano v. Dineros,[23] and Development Bank of the
Sec. 56. Each register of deeds
Philippines v. Acting Register of Deeds of Nueva Ecija,[24] as well as
shall keep an entry book in which, upon
in the fairly recent cases of Autocorp Group v. Court of payment of the filing fee, he shall enter in
the order of their reception all deeds and
Appeals,[25] Armed Forces and Police Mutual Benefit Association, other voluntary instruments, and all copies
of writs or other process filed with him
Inc. v. Santiago,[26] and National Housing Authority v. Basa,
relating to registered land. He shall note in
Jr.,[27] we upheld the entry of instruments in the Primary Entry such book the year, month, day, hour, and
minute of reception of all instruments in
the order in which they were
received. They shall be regarded as
 registered from the time so noted, and the
memorandum of each instrument when
made on the certificate of title to which it
refers shall bear the same date; Provided,
however, That no registration, annotation,
or memorandum on a certificate of title
shall be made unless the fees prescribed
therefor by this Act are paid within fifteen
days' time after the date of the registration
of the deed, instrument, order or
document in the entry book or day book,
and in case said fee is not paid within the
time above mentioned, such entry shall be
null and void: Provided further, That the
Insular Government and the provincial and
municipal governments need not pay such
fees in advance in order to be entitled to
entry or registration. (Emphasis supplied.)
This provision is the precursor of the aforequoted
Section 56 of Presidential Decree No. 1529, which seems to have
dispensed with the provision nullifying the registration if the
required fees are not paid:
SEC. 56. Primary Entry Book;
fees; certified copies. Each Register of Deeds
shall keep a primary entry book in which,
upon payment of the entry fee, he shall
enter, in the order of their reception, all
instruments including copies of writs and
processes filed with him relating to
registered land. He shall, as a preliminary
process in registration, note in such book
the date, hour and minute of reception of
all instruments, in the order in which they
were received. They shall be regarded as
registered from the time so noted, and the
memorandum of each instrument, when
made on the certificate of title to which it
refers, shall bear the same date: Provided,
that the national government as well as the
provincial and city governments shall be
exempt from the payment of such fees in
advance in order to be entitled to entry and
registration.
In Development Bank of the Philippines v. Acting
Register of Deeds of Nueva Ecija,[30] this Court applied the
provisions of Presidential Decree No. 1529 and modified the
doctrine as follows:
Current doctrine thus seems to
be that entry alone produces the effect of
registration, whether the transaction
entered is a voluntary or an involuntary
one, so long as the registrant has complied
with all that is required of him for
purposes of entry and annotation, and
nothing more remains to be done but a
duty incumbent solely on the register of
deeds.[31]
This pronouncement, which was reiterated in National
Housing Authority v. Basa, Jr.,[32] shows that for the entry to be
considered to have the effect of registration, there is still a need to
comply with all that is required for entry and registration,
including the payment of the prescribed fees. Thus, in Autocorp
Group v. Court of Appeals,[33] this Court compared the date when
the required fees were paid with the therein assailed writ of
preliminary injunction:
Petitioners contend that
payment of the entry fee is a condition sine
qua non before any valid entry can be made
in the primary entry book. Allegedly, the
Court of Appeals resorted to judicial
legislation when it held that the subsequent
payment of the entry fee was curative and a
substantial compliance with the law.
Petitioners claim that the ruling in DBP vs.
Acting Register of Deeds of Nueva
Ecija does not apply to this case. As there
was no valid registration, petitioners
conclude that the order of the trial court
issuing a writ of preliminary injunction was
proper, considering the irregularities
present in the conduct of the extrajudicial
foreclosure x x x.
We find the petition bereft of
merit.
 e
c
First. The objection as to the e
payment of the requisite fees is i
unavailing. There is no question that the v
fees were paid, albeit belatedly. e
Respondent bank presented the certificate d
of sale to the Office of the Register of Deeds
of Cebu City for registration on January 21, b
1999 at 4:30 p.m. As the cashier had y
already left, the Office could not receive the
payment for entry and registration fees, but t
still, the certificate of sale was entered in h
the primary entry book. The following day, e
respondent bank paid the requisite entry
and registration fees. Given the peculiar L
facts of the case, we agree with the Court of R
Appeals that the payment of respondent A
bank must be deemed to be substantial :
compliance with the law; and, the entry of
the instrument the day before, should not J
be invalidated. In any case, even if we u
consider the entry to have been made l
on January 22, the important fact is that y
the entry in the primary entry book was
done prior to the issuance of the writ of 0
injunction [on February 15, 1999; TRO 1
issued on January 25, 1999] by the trial ,
court.[34] (Emphases supplied.)
2
0
0
4
]
Records in the case at bar reveal that as of June 25,

2004, the date of the letter of Atty. Santos seeking the opinion of
HON. BENEDICTO B. ULEP
the LRA as regards the registration of the Deed of Sale and the
Administrator
Notice of Levy on Attachment, the required registration fees for
This Authority
the Deed of Sale has not yet been paid:

2
5
Sir:

J
u
n This has reference to the TCT No.
e R-17571/T-87 registered under the name of
LBB Construction and Development
2 Corporation relative to the Deed of
0 Absolute Sale with Entry No. 30549, which
0 was sought to be registered on 16 June
4 2004 at 11:20 a.m. (a photocopy of which is
hereto attached as Annex A).
[
r
 However, on 17 June 2004 at
11:45 a.m. a Notice of Levy on Attachment
(a photocopy of which is hereto attached as
Annex B) with Entry No. 30590 was filed
and annotated against TCT No. R-17571/T-
87.
In view of the foregoing, we are
now in a quandary as to what proper steps
should be taken. It should be noted further
that the required registration fees of the
abovementioned sale was not paid the
reason for which the same was not
immediately acted upon by the
undersigned.[35]
Since there was still no compliance of all that is
required x x x for purposes of entry and annotation[36] of the Deed
of Sale as of June 25, 2004, we are constrained to rule that the
registration of the Notice of Levy on Attachment on June 17,
2004 should take precedence over the former. Considering that
the Notice of Levy on Attachment was deemed registered earlier
than the Deed of Sale, the TCT issued pursuant to the latter should
contain the annotation of the Attachment.
In view of the foregoing, we find that the RTC was, in
fact, acting properly when it ordered the reinstatement of the
Notice of Levy on Attachment in TCT No. R-22522. Since the RTC
cannot be considered as to have acted in grave abuse of its
discretion in issuing such Order, the Petition for Certiorari assailing
the same should have been dismissed.
WHEREFORE, premises considered, the instant Petition
for Review on Certiorari is hereby GRANTED. The Decision of the
Court of Appeals in CA-G.R. SP No. 94479 dated April 18, 2007 and
its Resolution dated September 18, 2007 are REVERSED and SET
ASIDE.
SO ORDERED.
G.R. No. 199180, July 27, 2016
THELMA RODRIGUEZ, JOINED BY HER
HUSBAND, Petitioners, v. SPOUSES JAIME SIOSON AND ARMI
SIOSON, ET AL., Respondents.
DECISION
REYES, J.:
Before the Court is a petition for review1 under Rule 45 of the
Rules of Court assailing the Decision2dated May 26, 2011 and
Resolution3 dated October 21, 2011 of the Court of Appeals (CA)
in CA-G.R. CV No. 94867, which nullified the Joint Decision4 dated
August 13, 2009 of the Regional Trial Court (RTC) of Bataan,
Branch 3.
The Facts
This petition is the aftermath of a series of sales transactions
entered into by Neri delos Reyes (Neri) over a portion of a
property formerly identified as Lot 398, with an area of 22,398
square meters, covered by Transfer Certificate of Title (TCT) No. T-
86275 and registered in the name of "Neri delos Reyes, married to
Violeta Lacuata."5chanrobleslaw
Sometime in 1997, the Municipality of Orani, Bataan
(Municipality) purchased from Neri an area of about 1.7 hectare
of Lot 398, to be used for the extension of the Municipality's
public market. Among other things, it was agreed that upon full
payment of the purchase price, Neri will surrender the mother
title to the Municipality for subdivision of the property on the
condition that Neri will equitably share in the expense
thereof.6chanrobleslaw
Lot 398 was subsequently subdivided into 5 lots: Lot 398-A, Lot
398-B, Lot 398-C, Lot 398-D, and Lot 398-E. Lots 398-C and 398-D
pertain to the portions that were sold to the Municipality, while
Lot 398-E is a road lot. Consequently, only Lots 398-A and 398-B
were left as the remaining portions over which Neri retained
absolute title. TCT Nos. T-209894 and T-209895 were then
respectively issued over Lots 398-A and 398-B and were both
registered in the name of "Neri delos Reyes, married to Violeta
Lacuata." The owner's duplicate copies of TCT Nos. T-209894 and
T-209895, however, were retained by the Municipality pending
Neri's payment of his share in the expenses incurred for the
subdivision of Lot 398. These were placed under the custody of
the Municipal Treasurer, where they continue to
remain.7chanrobleslaw
Neri, however, alleged that then Municipal Mayor Mario Zuiga
suggested that he sell Lot 398-A to his aunt, petitioner Thelma
Rodriguez (Thelma). The Municipality would then expropriate the
same from Thelma. Neri agreed to the suggestion.8chanrobleslaw
After agreeing to the amount of P1,243,000.00 as the selling price,
Thelma, on March 20, 1997, issued a check for said amount
payable to Neri. When it fell due, no sufficient funds were
available to cover the check. Consequently, it was agreed that
Thelma would pay the purchase price in installments from March
20, 1997 to September 4, 1997. Thelma, however, was only able
to pay P442,293.50.9chanrobleslaw
On November 12, 2001, Thelma caused the annotation of an
adverse claim on TCT No. T-209894.10At about the same time,
Thelma saw an announcement that a new Orani Common
Terminal would be built on Lot 398-A. As she has not yet entered
into any agreement regarding the utilization of said lot, Thelma
filed a Complaint for Injunction docketed as Civil Case No.
7394 against then incumbent mayor Efren Pascual, Jr. (Mayor
Pascual), and the Municipality under claim of ownership. To
support her claim, Thelma incorporated in her complaint a copy of
an undated and unnotarized deed of absolute sale allegedly
executed by Neri in her favor.11chanrobleslaw
In their joint verified answer, Mayor Pascual and the Municipality
acknowledged that Thelma became the owner of Lot 398-A by
way of purchase from Neri.12chanrobleslaw
In 2002, Neri executed an affidavit claiming that the owner's
copies of TCT No. T-209894 (covering Lot 398-A) and TCT No. T-
209895 (covering Lot 398-B) were lost, which was annotated on
the original copy of TCT No. T-209894 on May 8, 2002.13 Two days
after, or on May 10, 2002, Neri caused the cancellation of
Thelma's adverse claim.14 Neri also caused the reconstitution of
new owner's copies of TCT Nos. T-209894 and T-
209895.15 Thereafter, new copies of TCT Nos. T-209894 and T-
209895 were issued, and Neri then sold Lot 398-A to Spouses
Jaime and Armi Sioson, Spouses Joan and Joseph Camacho, and
Agnes Samonte (respondents) - in a deed of sale dated November
27, 2002. A special power of attorney was executed by Violeta
delos Reyes (Violeta) in favor of Neri for the purpose.
Consequently, TCT No. T-209894 was cancelled, and TCT No. T-
226775 was thus issued in the respondents'
names.16chanrobleslaw
Upon the issuance of TCT No. T-226775, the respondents declared
Lot 398-A for tax purposes and paid them accordingly. They
sought to take actual possession thereof by filling it; however,
after they filled said lot with about 40 truckloads of soil/fillings,
Thelma sent two armed blue guards who entered the premises
and set up a tent therein. The respondents brought the matter to
the attention of barangay authorities who referred them to the
municipal mayor. As the municipal mayor did not take any action,
the respondents filed a forcible entry case against Thelma before
the Municipal Circuit Trial Court of Orani-Samal, Bataan, docketed
as Civil Case No. 843. The said ejectment case is still
pending.17chanrobleslaw
After Thelma learned of the second sale of Lot 398-A, she filed
against the respondents a complaint for the Declaration of Nullity
of the Second Sale and TCT No. T-226775 on February 11, 2003,
docketed as Civil Case No. 7664. In support of her claim, Thelma
once again presented a deed of absolute sale executed by Neri in
her favor. This time, the deed of sale she presented was duly
signed by her and Neri, witnessed, notarized and dated April 10,
1997.18chanrobleslaw
The respondents countered that they are innocent purchasers for
value having bought Lot 398-A at the time when Thelma's adverse
claim was already cancelled. While they admit Thelma's
possession of the subject property, they, however, qualify that
possession is being contested in a separate action for forcible
entry.19chanrobleslaw
The respondents also filed a verified answer-in-intervention in
Civil Case No. 7394 (injunction case) contending that they are the
present registered owners of Lot 398-A, and as such, Thelma is
not entitled to any relief.20chanrobleslaw
Ruling of the RTC
The RTC jointly heard Civil Case No. 7394 and Civil Case No. 7664
and after trial, rendered judgment in favor of Thelma. The
dispositive portion of the Joint Decision21 dated August 13, 2009
reads:ChanRoblesVirtualawlibrary
WHEREFORE, judgment is hereby rendered declaring
that:ChanRoblesVirtualawlibrary
1) [Thelma] is entitled to the relief of permanent injunction
prayed for in Civil Case No. 7394 against the respondents. Insofar
as defendants [Mayor Pascual] and the [Municipality] are
concerned, not only did they acknowledge expressly the
ownership of [Thelma] of Lot 398-A, they have disowned the
commission of any act in derogation of [Thelma's] right of
ownership of the lot and did not contest anymore the action of
[Thelma] in said case;
2) Insofar as Civil Case No. 7664 is concerned, the second deed of
sale entered into by [Neri] with the [respondents] is hereby
declared null and void, and [TCT] No. T-226775 of the Registry of
Deeds of Bataan which was issued by defendant Register of Deeds
pursuant to said second deed of sale is likewise declared null and
void, and accordingly, the Register of Deeds for the Province of
Bataan is ordered to cancel said certificate of title and to reinstate
[TCT] No. T-209894 in the name of [Neri], married to [Violeta];
3) The new owner's copy of [TCT] No. T-209894 is hereby declared
null and void as the original owner's copy is not lost but actually
exists and is presently in the custody of the Municipal Treasurer of
Orani, Bataan. In consequence, defendant Register of Deeds of
Bataan is directed to cancel said new owner's copy of [TCT] No. T-
209894; and cralawlawlibrary
4) [The respondents] are hereby ordered to jointly and severally
pay to [Thelma] attorney's fees in the amount of Twenty[-]Five
Thousand Pesos (P25,000.00).
All counterclaims of [the respondents] are denied for lack of basis
in fact and in law.
No pronouncement as to costs.
SO ORDERED.22chanroblesvirtuallawlibrary
The RTC concluded that by Neri's admission that he sold the
subject lot to Thelma for a consideration of P1,243,000.00, and his
acknowledgement receipt of P442,293.50 as partial payment from
the latter, the transaction between Thelma and Neri should be
regarded as an executed contract of sale. Hence, Lot 398-A was
subjected to a double sale when Neri sold the same property to
the respondents.23 The RTC further ruled that the contract of sale
between Neri and the respondents is null and void because it was
transacted and executed at the time when Neri was no longer the
owner of Lot 398-A. It was legally inexistent for lack of object
certain. Thereupon, the fact that the respondents were able to
register their acquisition first is of no moment. Registration does
not legitimize a void contract and thus, TCT No. T-226775 should
be cancelled.24chanrobleslaw
The respondents moved for reconsideration but it was denied by
the RTC per Order25cralawred dated January 13, 2010. Hence,
they elevated their case to the CA.
Ruling of the CA
On May 26, 2011, the CA promulgated the assailed
Decision,26 with the following dispositive
portion:ChanRoblesVirtualawlibrary
WHEREFORE, the instant Appeal is GRANTED. The Joint Decision
dated August 13, 2009 and the Order dated January 13, 2010 of
the [RTC] of Bataan are hereby declared NULL and VOID insofar as
it (1) granted permanent injunction in favor of [Thelma] in Civil
Case No. 7394 against [the respondents];T2) declared null and
void the deed of sale between [Neri] and [the respondents] in
Civil Case No. 7664; (3) declared null and void the [TCT] No. T-
226775; (4) ordered the cancellation of [TCT] No. T-226775 and
reinstatement of [TCT] No. T-209894 in the name of [Neri],
married to [Violeta]; and (5) ordered the payment of attorney's
fees.
Consequently, the following are hereby declared VALID: (1) the
Deed of Sale between [Neri] and [the respondents]; and (2) the
[TCT] No. T-226775 in the names of [the respondents].
This Decision is without prejudice to any right which [Thelma] may
have against [Neri] for the refund of the amount of Four Hundred
Forty-Two Thousand Two Hundred Ninety-Three and 50/100
Pesos (P442,293.50).
The Complaints in Civil Cases Nos. 7394 and 7664 are
hereby DISMISSED.
SO ORDERED.27 (Emphasis in the original)
Contrary to the findings of the RTC, the CA found that the
contract between Neri and Thelma was a mere contract to
sell and not a contract of sale; hence, there was no double sale of
Lot 93 8-A. According to the CA, the question of whether or not
the respondents are buyers in good faith is unavailing since the
concept of a "buyer in good faith" finds relevance only in cases of
double sale. The CA further stated that even if it is assumed that
the contract between Neri and Thelma was an absolute contract
of sale, the same is nonetheless void for lack of consent of Neri's
wife, Violeta, insofar as the object of the transaction is a conjugal
property.
Thelma moved for reconsideration of the CA decision, which was
denied for lack of merit in Resolution28 dated October 21, 2011.
Hence this petition.
Thelma argues that there was double sale and the CA erred in
reversing the RTC decision: (1) by interpreting the sale between
Thelma and Neri as a mere contract to sell; (2) by declaring the
deed of sale in favor of Thelma as null and void due to lack of
Violeta's consent or conformity; and (3) by declaring the
respondents as buyers in good faith despite prior registration of
Thelma's notice of adverse claim in TCT No. T-209894, and her
actual possession of the subject property.29chanrobleslaw
Ruling of the Court
The resolution of this case basically rests on the determination of
whether the transaction between Neri and Thelma is a contract of
sale or a contract to sell. The rule on double sale, as provided in
Article 1544 of the Civil Code,30 does not apply to a case where
there was a sale to one party of the land itself while the other
contract was a mere promise to sell the land or at most an actual
assignment of the right to repurchase the same
land.31chanrobleslaw
Both the RTC and the CA concur in the finding that Neri agreed to
sell Lot 398-A to Thelma for an agreed price of P1,243,000.00. The
RTC, however, concluded that by Neri's admission that he sold the
subject lot to Thelma for a consideration of P1,243,000.00, and
that he acknowledged receipt of P442,293.50 as partial payment
from the latter, the transaction between Thelma and Neri should
be regarded as an executed contract of sale, and not a merely
executory one. The RTC likewise took into consideration Thelma's
alleged possession of the property and Neri's failure to rescind the
contract as indicative of the nature of their agreement as one of
sale.32chanrobleslaw
On the other hand, the CA ruled that "the contract between
Thelma and Neri was a mere contract to sell, the transfer of
ownership over Lot 398-A being conditioned on Thelma's full
payment of the purchase price."33 As regards the existence of the
two contracts of sale, the CA concluded that Thelma admitted on
trial that the first deed of sale was only meant to be an
acknowledgment receipt for the down payment she made on the
subject lot, and the second deed of sale was allegedly executed
after Thelma pays in full the purchase price of the lot.
A review of this case shows that the CA ruled in accord with
existing jurisprudence.
"The real character of the contract is not the title given, but the
intention of the parties."34 In this case, there exist two deeds of
absolute sale. Though identically worded, the first contract was
undated, not notarized, signed only by Neri, and was presented in
Civil Case No. 7394 for Injunction,35 while the second deed was
dated April 10, 1997, notarized on September 5, 1997, signed by
both Neri and Thelma, and was presented in Civil Case No. 7664
for Declaration of Nullity of Deed of Sale and Title.36chanrobleslaw
In determining the nature of the agreement between Thelma and
Neri, the CA took note of these two documents, and, coupled with
Thelma's own admissions, correctly found that it was a mere
contract to sell. According to the CA:ChanRoblesVirtualawlibrary
During trial, Thelma explained the apparent disparity between the
two (2) "deeds of absolute sale" by testifying that the undated
and unnotarized deed of sale served only as a "receipt" which was
signed by Neri when the latter received the downpayment for the
lot. The dated and notarized deed of sale, on the other hand, was
signed by both Thelma and Neri upon Thelma's alleged full
payment of the purchase price:
chanRoblesvirtualLawlibraryx x x x
Second, the execution of the "deed of absolute sale" dated August
10, 1997 and the transfer and delivery of the title to Thelma's
name covering Lot No. 398-A were conditioned upon full payment
of the purchase price.
Thelma testified that the "deed of absolute sale" dated August 10,
1997 and which was attached to Thelma's complaint in Civil Case
No. 7664 was signed by her, Neri and their witnesses only upon
full payment of the purchase price. Thelma further testified that
she and Neri agreed to place the amount of the purchase price on
the deed of absolute sale only at the time when Thelma had fully
paid the same: x x x37 (Italics ours and emphasis deleted)
Despite the denomination of their agreement as one of sale, the
circumstances tend to show that Neri agreed to sell the subject
property to Thelma on the condition that title and ownership
would pass or be transferred upon the full payment of the
purchase price. This is the very nature of a contract to sell, which
is a "bilateral contract whereby the prospective seller, while
expressly reserving the ownership of the property despite delivery
thereof to the prospective buyer, binds himself to sell the
property exclusively to the prospective buyer upon fulfillment of
the condition agreed upon, i.e., the full payment of the purchase
price."38 As stated by the Court, the agreement to execute a deed
of sale upon full payment of the purchase price "shows that the
vendors reserved title to the subject property until full payment
of the purchase price."39chanrobleslaw
It was likewise established that Thelma was not able to pay the
full purchase price, and that she was only able to pay P442,293.50
of the agreed selling price of P1,243,000.00. The RTC, in fact,
made the following findings: (1) the consideration for Lot 398-A
was P1,243,000.00; (2) Thelma issued a check on March 20, 1997
for said amount, payable to Neri; (3) the agreement was that the
check would only be held by Neri for safekeeping as it was yet
unsure if there was ample funds to cover the check; (4) the check
was not covered by sufficient funds when presented for payment,
so Thelma subsequently paid Neri in installments starting from
March 20, 1997 to September 4, 1997; and (5) Neri acknowledged
receipt from Thelma the total amount of
P442,293.50.40chanrobleslaw
Finally, while the CA correctly ruled that the agreement was a
contract to sell, the Court, however, does not share its position
that the subject property is a conjugal property, and as such, the
absence of Violeta's consent should be held as among the factors
which could have adversely affected the validity of the purported
contract of sale between Neri and Thelma. This is due to the
following reasons: first, the subject property, Lot 398-A, is
registered in the name of "Neri delos Reyes, married to Violeta
Lacuata," and so was its mother lot, Lot 398. In Metropolitan Bank
and Trust Company v. Tan,47 it was held that such form of
registration is determinative of the property's nature as
paraphemal. That the only import of the title is that Neri is the
owner of the subject property, it being registered in his name
alone, and that he is married to Violeta; and second, the record is
bereft of proof that said property was acquired during Neri and
Violeta's marriage - such that, the presumption under Article 116
of the Family Code that properties acquired during the marriage
are presumed to be conjugal cannot apply.
WHEREFORE, the petition is DENIED for lack of merit. Accordingly,
the Decision dated May 26, 2011 and Resolution dated October
21, 2011 of the Court of Appeals in CA-G.R. CV No. 94867
are AFFIRMED.
SO ORDERED.

To bolster her claim, Thelma insists that she now holds title over
the subject property after Neri allegedly delivered the subject lot
to her right after the execution of the sale.41 There is, however,
nothing on record to support this claim aside from her bare
assertions. There was no testimony or any proof on her part
showing when and how she took possession of the property. At
best, what is extant from the records is that Thelma paid taxes on
the property for the years 2000 and 2001, which was three years
after the alleged sale. "But tax declarations, by themselves, are
not conclusive evidence of ownership of real property."42 Aside
from this, the tax receipts showed that the property was still
declared in the name of Neri.43chanrobleslaw

Moreover, the alleged delivery of the property, even if true, is

irrelevant considering that in a contract to sell, ownership is
retained by the registered owner in spite of the partial payment
of the purchase price and delivery of possession of the property.
Thus, in Roque v. Aguado,44 the Court ruled that since the
petitioners have not paid the final installment of the purchase
price, the condition which would have triggered the parties'
obligation to enter into and thereby perfect a contract of sale
cannot be deemed to have been fulfilled; consequently, they
"cannot validly claim ownership over the subject portion even if
they had made an initial payment and even took possession of
the same."45chanrobleslaw

Accordingly, the CA did not commit any reversible error in

concluding that "the contract between Thelma and Neri was a
mere contract to sell, the transfer of ownership over Lot 398-A
being conditioned on Thelma's full payment of the purchase price.
Having failed to pay the purchase price in full, Thelma cannot
claim ownership over Lot 398-A and Neri is not legally proscribed
from alienating the same lot to other buyers."46chanrobleslaw
 Certificate of Title (TCT) No. 20626[4] (entire property) in the name

of the late petitioner Go Kim Chuan (Go Kim Chuan).[5]

CECILIA AMODIA VDA. DE MELENCION, VENERANDA AMODIA, FELIPE AMODIA, EUTIQUIO
AMODIA and GO KIM CHUAN, G.R. No. 148846
Petitioners,
The entire property was originally owned by Esteban

Bonghanoy[6] who had only one child, Juana Bonghanoy-

- versus -
Amodia,[7] mother of the late Leoncia Amodia and petitioners

Cecilia Amodia Vda. de Melencion, Veneranda Amodia, Felipe

HONORABLE COURT OF APPEALS and
AZNAR BROTHERS REALTY COMPANY, Amodia, and Eutiquio Amodia[8] (the Amodias). The entire
Respondents.
property was brought under the operation of the Torrens

System.[9] However, the title thereto was lost during the Second

World War.

On July 10, 1964, the Amodias allegedly executed an Extra-Judicial

Partition of Real Estate with Deed of Absolute Sale[10] whereby

they extra-judicially settled the estate of Esteban Bonghanoy and

conveyed the subject property to respondent Aznar Brothers

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Realty Company (AZNAR) for a consideration of P10,200.00.

-x
On August 10, 1964, the said Extra-Judicial Partition of Real Estate

DECISION with Deed of Absolute Sale was registered under Act 3344[11] as

there was no title on file at the Register of Deeds of Lapu-Lapu

NACHURA, J.:

City (Register of Deeds). Thereafter, AZNAR made some

Before this Court is a Petition for Review on Certiorari[1] under
improvements and constructed a beach house thereon.
Rule 45 of the Rules of Civil Procedure seeking the reversal of the

Court of Appeals (CA) Decision[2] dated March 30, 2001 and

On February 18, 1989, petitioners Cecilia Amodia Vda. de
praying that the Decision[3] of the Regional Trial Court (RTC)
Melencion, Veneranda Amodia, Felipe Amodia and Eutiquio
of Lapu-Lapu City, dated February 18, 1993, be upheld.
Amodia[12] (petitioners Amodias) executed a Deed of Extra-Judicial
The Facts
Settlement with Absolute Sale,[13]conveying the subject property

in favor of Go Kim Chuan for and in consideration of P70,000.00.

The subject property is a 30,351 square meter parcel of land The lost title covering the subject property was reconstituted
(subject property) particularly denominated as Lot No. 3368, pursuant to Republic Act (RA) No. 26.[14] A reconstituted title
located at Suba-basbas, Marigondon, Lapu-Lapu City, Cebu, and particularly designated as Original Certificate of Title (OCT) No.
part of a total area of 30,777 square meters covered by Transfer RO-2899 was issued in the name of Esteban Bonghanoy[15] and,

subsequently, a derivative title (TCT No. 20626) was issued in the

name of Go Kim Chuan on December 1, 1989. Thereafter, Go Kim

Chuan exercised control and dominion over the subject property The CA's Decision

in an adverse and continuous manner and in the concept of an

On March 30, 2001, the CA rendered a Decision holding that the
owner.
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale

On February 14, 1990, AZNAR wrote a letter[16] to petitioners executed by the Amodias in favor of AZNAR was registered ahead

Amodias asking the latter to withdraw and/or nullify the sale of the Deed of Extra-Judicial Settlement with Absolute Sale in

entered into between them and Go Kim Chuan. On the same date, favor of Go Kim Chuan, thus, pursuant to Article 1544 of the New

a Notice of Adverse Claim[17] was annotated by AZNAR on TCT No. Civil Code, the former deed should be given preference over the

20626. Because petitioners did not heed AZNAR's demand, latter; that AZNAR's adverse claim was annotated earlier than the

on April 25, 1990, AZNAR filed a case against petitioners Amodias execution of the Deed of Extra-Judicial Settlement with Absolute

and Go Kim Chuan for Annulment of Sale and Cancellation of TCT Sale in favor of Go Kim Chuan; hence, the latter should have

No. 20626[18] alleging that the sale to Go Kim Chuan was an invalid respected said adverse claim and should have made inquiries as

second sale of the subject property which had earlier been sold to to possible defects that may exist in the title over the subject

it. Petitioners Amodias denied that they executed the Extra- property; and that in the absence of a final determination by a

Judicial Partition of Real Estate with Deed of Absolute Sale in favor court of proper jurisdiction

of AZNAR, claiming that their purported signatures thereon were on the alleged forged signatures of the Amodias in the Extra-

forged.[19] Trial on the merits ensued. Judicial Partition of Real Estate with Deed of Absolute Sale, the

The RTC's Decision finding of the document examiner was insufficient for the RTC to

rule in favor of the petitioners.

On February 18, 1993, the RTC dismissed AZNAR's complaint and

declared Go Kim Chuan as the real owner of the subject property. The CA disposed of the case in this wise:
WHEREFORE, premises
The RTC ratiocinated that the signatures of the Amodias in the considered, the assailed decision dated
February 18, 1993 of the Regional Trial
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale Court of Lapu-Lapu City, Branch 27, in Civil
Case No. 2254-L is
executed in favor of AZNAR were found by the document hereby REVERSED and SET ASIDE and a new
one is hereby entered as follows:
examiner of the Philippine Constabulary (PC) Crime Laboratory to
(1) Declaring plaintiff-
be forged, thus, the said deed did not convey anything in favor of appellant
Aznar
AZNAR. Moreover, the subject property had been brought under Brothers
Realty Compa
the Land Registration Act; hence, all transactions involving the ny as the real
owner of the
same should have complied with the said law. Finally, the RTC land in
question;
held that AZNAR failed to show that Go Kim Chuan acquired the
(2) Declaring both the
subject property in bad faith.
Deed of Extra-
judicial
Settlement
with Absolute
Aggrieved, AZNAR appealed the RTC Decision to the CA.[20]
Sale dated Fe
 bruary 1, Even assuming arguendo that the lot in
1989 execute question was duly registered under Act
d 3344 as an unregistered land, it is without
by Felipe Amo prejudice to better rights and the
dia, Cecilia provision of Article 1544 of the New Civil
Amodia, Code would be inapplicable;
Veneranda A.
Ibag III
and Eustaquio
Amodia in The Honorable Court of Appeals erred in
favor of Go holding that an adverse claim was already
Kim Chuan existing at the time the subject land was
and the sold to petitioner Go Kim Chuan; on the
Transfer contrary, the latter had purchased the
Certificate of said land in good faith and for value,
Title No. without notice of any fact that would
20626 in the reasonably impel a closer inquiry as to
name of Go the possibility of a defect in the vendor's
Kim Chuan title; and
as NULL AND
VOID;
IV
(3) Ordering Go Kim
Chuan to The Court of Appeals has misapplied the
deliver to the case of Heirs of Severa Gregorio v. CA,
aforesaid 300 SCRA 565, cited in support of its
plaintiff- ruling that the court a quo committed
appellant the error in appreciating the testimony of an
possession of expert witness as to the forgery of the
the land in first Deed of Sale.[24]
question and
to execute a
registrable In its Comment[25] dated September 18, 2001, AZNAR argued,
deed of
conveyance of among others, that the Petition is dismissible because the
the subject
property to Verification and Certification of Non-forum Shopping were not
the said
plaintiff- signed by all the petitioners, invoking this Court's Decision in the
appellant.
case of Loquias v. Office of the Ombudsman,[26] and that the same
No costs.
were signed only by one April Socorro Go, daughter of the late Go
SO ORDERED.[21]
Kim Chuan, who did not even appear to be authorized to file the

Petitioners filed a Motion for Reconsideration[22] which the CA instant case in behalf of the other petitioners.

denied in its Resolution[23] dated June 5, 2001.

In their Reply[27] dated October 22, 2001, petitioners contended

that April Socorro Go is one of the legitimate children and an heir

Hence, this Petition based on the following grounds:
of the late Go Kim Chuan and, as such, she has personal
I
knowledge of the truth of the facts alleged in the Petition.
Lot 3368 was already a registered land
Petitioners submitted that they substantially complied with the
under Act 496, thus, the registration by
respondent of the Deed of Sale in 1964
Rules of Court by attaching the required Verification and
under Act 3344 produces no legal effect
whatsoever; Certification of Non-Forum Shopping and since the same are

required simply to facilitate and promote the orderly

II
administration of justice, compliance therewith should not be the rendition of the assailed CA Decision, he sent several letters to

imposed with absolute literalness. petitioners Amodias but they did not reply; hence, the Heirs of Go

Kim Chuan, left with no choice, filed the instant case before this
On December 19, 2001, petitioners, through counsel, filed a
Court on their own.
Motion[28] for Leave to Admit Amended Petition[29] for Review

on Certiorari (Amended Petition). Petitioners manifested that they The Court issued a Resolution[33] dated September 16, 2002 giving

were seeking to correct a defect in the designation of parties and due course to the Petition and requiring the parties to submit

prayed that the Heirs of Go Kim Chuan, namely, Estrella S. Go, their respective Memoranda.

Sonia Beth Go-Reynes, Daryl Go, and April Socorro Go be

In their Memorandum,[34] petitioners Heirs of Go Kim Chuan
impleaded as petitioners instead of the earlier designated
reiterate the same issues raised in the Original Petition and the
petitioners, Cecilia Amodia Vda. de Melencion, Veneranda
Amended Petition. They argue that Act 3344 only refers to
Amodia, Felipe Amodia, Eutiquio Amodia, and Go Kim Chuan.
transactions affecting lands or interests therein not previously
Counsel for petitioners admitted that he inadvertently included
registered under the Spanish Mortgage Law or under the Torrens
the petitioners Amodias in the initial Petition for Review
system; that if AZNAR could not have registered the sale in 1964
on Certiorari (Original Petition), as they were parties before the
under Act 496 because the title over the subject property was
RTC and CA. The counsel also manifested that he was only
lost, AZNAR should have availed itself of the remedy of
representing the Heirs of Go Kim Chuan in this case. Lastly, he
reconstitution; that registration under Act 3344 is without legal
claimed that other than the substitution of the original
effect and could not operate as constructive notice to petitioners
petitioners, both the Original Petition and Amended Petition
and third persons, hence, may not be used as basis for the
uniformly raised the same issues and should be given due course
application of Art. 1544 of the New Civil Code; that the Notice of
in the greater interest of justice and that the instant Motion was
Adverse Claim of AZNAR was annotated on TCT No. 20626 only on
not interposed for delay.
February 14, 1990 after the execution of the Deed of Extra-

Per directive of the Court,[30] AZNAR filed its Comment[31] on the Judicial Settlement with Absolute Sale in favor of Go Kim Chuan

said motion wherein AZNAR manifested that it had no serious on February 18, 1989, hence, the CA erred when it held that Go

objection to the admission of the Amended Petition if the same Kim Chuan was not a buyer in good faith for supposedly having

was intended merely to implead the Heirs of Go Kim Chuan as knowledge of such adverse claim; and that the doctrine laid down

petitioners. However, AZNAR interposed strong opposition to the in Heirs of Severa Gregorio v. CA[35] is inapplicable since it referred

Amended Petition's admission since the names of the petitioners to a case wherein the original copy of the document under review

Amodias were deleted without their written consent. was not produced in evidence while in the instant case, the

original copy of the Extra-Judicial Partition of Real Estate with

In their Reply,[32] the Heirs of Go Kim Chuan, through counsel,
Deed of Absolute Sale executed by the Amodias in favor of AZNAR
claimed that petitioners Amodias were excluded from the
was presented before the trial court judge.
Amended Petition because they can no longer be located despite

diligent efforts exerted by counsel. The counsel claims that after

On the other hand, in its Memorandum,[36] AZNAR maintains that compliance with the rules on Verification and Certification of Non-

the Original Petition is dismissible because the Verification and Forum Shopping.

Certification of Non-Forum Shopping thereof were not signed by

In this regard, the case of Iglesia ni Cristo v. Ponferrada[37] is
all the petitioners. AZNAR further claims that the Amended
instructive, viz.:
Petition was filed in order to cure a fatal defect which should not
The purpose of verification is simply to
be countenanced by this Court. AZNAR also contends that Go Kim secure an assurance that the allegations
of the petition (or complaint) have been
Chuan was a buyer in bad faith as he had prior constructive notice made in good faith; or are true and
correct, not merely speculative. This
that the subject property was sold to AZNAR because the sale was requirement is simply a condition
affecting the form of pleadings, and
registered with the Register of Deeds under Act 3344; that the noncompliance therewith does not
necessarily render it fatally defective.
1964 sale was registered under Act 3344 because the subject Indeed, verification is only a formal, not a
jurisdictional requirement.
property was not actually covered by a Torrens title at the time;
The issue in the present case is not the
that there was no other mode of registration except under Act
lack of verification but the sufficiency of
one executed by only one of plaintiffs.
3344; that Go Kim Chuan had to wait for the reconstitution
This Court held in Ateneo de Naga
University v. Manalo, that the verification
of the lost title, hence, it could not be said that he examined any
requirement is deemed substantially
certificate of title and could feign ignorance of the sale in favor of complied with when, as in the present
case, only one of the heirs-plaintiffs, who
AZNAR; that the second sale did not transfer the subject property has sufficient knowledge and belief to
swear to the truth of the allegations in
to Go Kim Chuan since it was no longer within the vendors' power the petition (complaint), signed the
verification attached to it. Such
to convey; that with respect to the issue of forgery, the finding of verification is deemed sufficient
assurance that the matters alleged in the
the document examiner is not conclusive; and that such issue was petition have been made in good faith or
are true and correct, not merely
belied by petitioner Veneranda Amodia herself when she declared speculative.

that the negotiated sale in 1964 between AZNAR and the Amodias The same liberality should likewise be
applied to the certification against forum
was not consummated because the latter did not receive the full shopping. The general rule is that the
certification must be signed by all
consideration for the subject property. plaintiffs in a case and the signature of
only one of them is insufficient. However,
Before resolving the main issues raised, the Court shall first deal the Court has also stressed in a number
of cases that the rules on forum shopping
with an apparent procedural lapse in this case. were designed to promote and facilitate
the orderly administration of justice and
thus should not be interpreted with such
Counsel for petitioners filed a Motion for Leave to Admit absolute literalness as to subvert its own
ultimate and legitimate objective. The
Amended Petition for Review on Certiorari in order to implead the rule of substantial compliance may be
availed of with respect to the contents of
Heirs of the late Go Kim Chuan as the new petitioners and to the certification. This is because the
requirement
delete the names of petitioners Amodias because they could no of strict compliance with the provisions
merely underscores its mandatory
longer be located. Said petitioners sought the relaxation of the
nature in that the certification cannot be
altogether dispensed with or its
rules so that in the interest of justice, the case can be decided on
requirements completely disregarded.
the merits. AZNAR opposes the Amended Petition because it was

allegedly filed to cure a fatal defect in the original petition non-

Thus, we held in Iglesia ni Cristo that the commonality of interest does not depend entirely on the testimonies of handwriting

is material and crucial to relaxation of the Rules. experts, because the judge must conduct an independent

examination of the questioned signature in order to arrive at a

In the case at bench, the petitioners in the Amended Petition are
reasonable conclusion as to its authenticity.[39]
Heirs of the late Go Kim Chuan. They represent their predecessor-

in-interest in whose favor a title was issued covering the subject

The RTC's finding with respect to the issue of forgery reads:
property and said title is sought to be canceled by AZNAR. Clearly,
After a thorough study of the pleadings and
there is presence of the commonality of interest referred to evidence of the parties, the court finds that
preponderance of evidence heavily tilts in
in Iglesia ni Cristo. Under the circumstances, the rules may be favor of the defendants. The document
relied upon by the plaintiff in its claim of
reasonably and liberally construed to avoid a patent denial of ownership over the land in question, the
extrajudicial partition and sale, has been
substantial justice, because it cannot be denied that the ends of found by the document examiner of the PC
Crime Laboratory to be a forgery. Being a
justice are better served when cases are determined on the forgery, said document conveyed nothing in
favor of the plaintiff. Hence, plaintiff's claim
merits after all parties are given full opportunity to ventilate their of ownership over the same has no more
leg to stand on. x x x[40]
causes and defenses rather than on technicality or some

procedural imperfections.[38]
While it is true that the original document was produced before
The Issues the RTC, the finding of forgery relies wholly on the testimony of

the document examiner. It falls short of the required independent

We now proceed to the merits of the case. From the issues raised,
examination to be conducted by the trial court judge. Other than
there are ultimately two questions that require resolution:
the statement of the document examiner, the RTC decision
First, did the CA misapply the doctrine in Heirs of Severa Gregorio contains no other basis to support its conclusion
v. CA in ruling that the RTC committed an error in appreciating the of the existence of forgery. Accordingly, the CA was correct in
testimony of an expert witness as to the forgery of the Extra- rejecting the RTCs finding and in applying the doctrine laid down
Judicial Partition of Real Estate with Deed of Absolute Sale? in the case of Heirs of Severa Gregorio v. CA.

Second, who between Go Kim Chuan and AZNAR has the better
However, we resolve the second question in favor of Go Kim
right over the subject property?
Chuan.

We resolve the first question in the negative.

Without doubt, we have here a case of double sale of registered

Forgery cannot be presumed. It must be proved by clear, positive land. Apropos is Article 1544 of the New Civil Code which

and convincing evidence and the burden of proof rests on the provides:

party alleging forgery. Handwriting experts are usually helpful in

ART. 1544. If the same thing
the examination of forged documents because of the technical should have been sold to different
vendees, the ownership shall be transferred
procedure involved in analyzing them. But 1resort to these to the person who may have first taken
experts is not mandatory or indispensable. A finding of forgery
 possession thereof in good faith, if it should
be movable property. considered registered, as the term is used under Art. 1544 of the

Should it be immovable New Civil Code.[47]

property, the ownership shall belong to the
person acquiring it who in good faith first
recorded it in the Registry of Property.
In this case, since the Extra-Judicial Partition of Real Estate with
Should there be no inscription,
the ownership shall pertain to the person Deed of Absolute Sale in favor of AZNAR was registered under Act
who in good faith was first in the
possession; and, in the absence thereof, to No. 3344 and not under Act No. 496, the said document is
the person who presents the oldest title,
provided there is good faith. deemed not registered.[48] Rather, it was the sale in favor of Go

Kim Chuan which was registered under Act No. 496.

We have already ruled that the registration contemplated in this

AZNAR insists that since there was no Torrens title on file in 1964,
provision refers to registration under the Torrens System, which
insofar as the vendors, AZNAR, and the Register of Deeds are
considers the act of registration as the operative act[41] that gives
concerned, the subject property was unregistered at the time.
validity to the transfer or creates a lien upon the land.[42] This rule
The contention is untenable. The fact that the certificate of title
precisely applies to cases involving conflicting rights over
over the registered land is lost does not convert it into
registered property and those of innocent transferees who relied
unregistered land. After all, a certificate of title is merely an
on the clean title of the properties.[43] Thus, we held that
evidence of ownership or title over the particular property
registration must be done in the proper registry in order to bind
described therein.[49] This Court agrees with the petitioners that
the same.[44]
AZNAR should have availed itself of the legal remedy of

reconstitution of the lost certificate of title, instead of registration

In the case at bench, it is uncontroverted that the subject under Act 3344. We note that in Aznar Brothers Realty Company

property was under the operation of the Torrens System even v. Aying,[50]AZNAR, beset with the similar problem of a lost

before the respective conveyances to AZNAR and Go Kim Chuan certificate of title over a registered land, sought the reconstitution

were made. AZNAR knew of this, and admits this as fact. Yet, thereof. It is unfortunate that, in the instant case, despite the sale

despite this knowledge, AZNAR registered the sale in its favor of the subject property way back in 1964 and the existence of the

under Act 3344 on the contention that at the time of sale, there remedy of reconstitution at that time, AZNAR opted to register

was no title on file. We are not persuaded by such a lame excuse. the same under the improper registry (Act 3344) and allowed

such status to lie undisturbed. From 1964 to 1989, AZNAR did not

Act 3344 provides for the system of recording of transactions or bother to have the lost title reconstituted or even have the

claims over unregistered real estate[45] without prejudice to a subject property declared under its name for taxation

third party with a better right.[46] But if the land is registered purposes. Vigilantibus, non dormientibus, jura subveniunt. Laws

under the Land Registration Act (and therefore has a Torrens must come to the assistance of the vigilant, not of the sleepy.[51]

Title), and it is sold and the sale is registered not under the Land

Registration Act but under Act 3344, as amended, such sale is not Although it is obvious that Go Kim Chuan registered the sale in his

favor under Act 496 while AZNAR did not, we still cannot make an
outright award of the subject property to the petitioners solely on manifestly overlooked certain relevant facts which, if properly

that basis. For the law is clear:mere registration of title is not considered, would justify a different conclusion.[53]

enough. Good faith must accompany the registration. The instant case falls squarely within the foregoing exceptions.

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

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

an adverse claim which was not previously annotated on the lost

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

Citing Santiago v. Court of Appeals,[55] AZNAR contends that even

The CA found that AZNAR registered its Notice of Adverse Claim if the adverse claim was annotated on TCT No. 20626 only on

ahead of the Deed of Extra-Judicial Settlement with Absolute Sale February 4, 1990, the prior registration of the sale in its favor

in favor of Go Kim Chuan. Because of this, the CA declared that Go under Act 3344 served as constructive notice to Go Kim Chuan

Kim Chuan was not a buyer in good faith, because he should have and thus negates the latter's claim of good faith, since the Court

respected such adverse claim or, at least, inquired into the validity held in that case, Registration, however, by the first buyer under

thereof. Act 3344 can have the effect of constructive notice to the second

buyer that can defeat his right as such buyer in good faith.
We do not agree.

AZNAR's reliance on Santiago is misplaced. In Santiago, the first

While factual issues are not within the province of this Court, as it
buyers registered the sale under the Torrens System, as can be
is not a trier of facts and is not required to examine the oral and
inferred from the issuance of the TCT in their names. There was
documentary evidence de novo, this Court has the authority to
no registration under Act 3344.Conversely, in the instant case,
review and, in proper cases, reverse the factual findings of lower
AZNAR registered the sale in its favor under Act 3344 despite its
courts in the following instances: (a) when the findings of fact of
full knowledge that the subject property is under the operation of
the trial court are in conflict with those of the appellate court; (b)
the Torrens System. To repeat, there can be no constructive
when the judgment of the appellate court is based on a
notice to the second buyer through registration under Act 3344 if
misapprehension of facts; and, (c) when the appellate court
the property is registered under the Torrens system.[56]
Moreover, before buying the subject property, Go Kim Chuan is REVERSED and SET ASIDE. The Decision of

made verifications with the Office of the City Assessor of Lapu- the Regional Trial Court of Lapu-Lapu City, Branch 27, in Civil Case

Lapu City and the Register of Deeds. He likewise visited the No. 2254-L, is REINSTATED. No costs.

premises of the subject property and found that nobody

interposed any adverse claim against the Amodias. After he SO ORDERED.

decided to buy the subject property, he paid all taxes in arrears,

caused the publication of the Deed of Extra-Judicial Settlement

with Absolute Sale in a newspaper of general circulation, caused

the reconstitution of the lost certificate of title and caused the

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

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

doubted.

We also note that AZNAR's complaint for cancellation of title

contains no allegation that the (second) purchaser was aware of

defects in his title. In the absence of such an allegation and proof

of bad faith, it would be grossly inappropriate for this Court to

G.R. No. 149238 November 22, 2007
render judgment against the purchaser who had already acquired
SIXTO ANTONIO, petitioner,
title not only because of lack of evidence, but also because of the vs.
SPS. SOFRONIO SANTOS & AURORA SANTOS, SPS. LUIS
indefeasibility and conclusiveness of such title.[58]
LIBERATO & ANGELINA LIBERATO and SPS. MARIO CRUZ &
VICTORIA CRUZ, respondents.

Finally, it is worth stressing that the Torrens system was adopted RESOLUTION

in this country because it was believed to be the most effective

measure to guarantee the integrity of land titles and to insure
their indefeasibility once the claim of ownership is established
and recognized. If a person purchases a piece of land on the
assurance that the seller's title thereto is valid, he should not run
the risk of losing his acquisition. If this were permitted, public
QUISUMBING, J.:
This is an appeal from the Decision1 dated July 31, 2001 of the
Court of Appeals in CA-G.R. CV No. 58246, affirming, with
modification, the Decision2 dated October 7, 1997 of Branch 72,
Regional Trial Court (RTC) in Antipolo, Rizal in Civil Case No. 1261-
A. The RTC had dismissed the complaint for Reconveyance,
Annulment of Title and Damages filed by petitioner Sixto Antonio
against respondents.

confidence in the system would be eroded and land transactions The antecedent facts, culled from the records, are as follows:

would have to be attended by complicated and not necessarily
conclusive investigations and proof of ownership.[59]
WHEREFORE, the instant petition for review is GRANTED. The
On September 19, 1988, petitioner Sixto Antonio filed before
Branch 72, RTC, Antipolo, Rizal, a complaint for Reconveyance,
Annulment of Title and Damages against respondents spouses
Sofronio and Aurora Santos, Luis and Angelina Liberato, and
Mario and Victoria Cruz. The complaint was docketed as Civil Case
No. 1261-A.

Decision of the Court of Appeals in CA-G.R. CV No. 51814

In his complaint,3 Antonio alleged that he is the absolute owner of
a 13,159-square meter parcel of land denominated as Lot No.
11703, CAD 688-D, Cainta-Taytay Cadastre, situated in Barangay
San Juan, Cainta, Rizal. He averred that, as evidenced by
certificates of payment of realty taxes for the years 1918 and
1919, the property was previously owned by his father and that in
1984, he filed before Branch 71, RTC, Antipolo, Rizal, an
application for the registration of two parcels of land, one of
which was Lot No. 11703, CAD 688-D, situated in Barangay San
Juan, Cainta, Rizal. His application was docketed as Land
Registration Case No. 142-A (LRC No. 142-A).
Although the RTC, Branch 71, declared him the true and absolute
owner in fee simple of the two parcels of land he applied for, it
set aside its decision with respect to Lot No. 11703, CAD 688-D in
an Order dated August 21, 1986, to avoid duplication of issuance
of titles.
Antonio said that after investigation, he discovered that Lot No.
11703, CAD 688-D was already titled in the name of respondents.
He then filed the complaint for Reconveyance, Annulment of Title
and Damages against respondents, averring that respondents
committed fraud in their application for titling because they made
it appear in their application for registration that the subject
property was located in Pinagbuhatan, Pasig, Rizal, when in fact,
the property is located in Barangay San Juan, Cainta, Rizal. He
added, respondents also made it appear in their application for
registration that the subject property is bound on the North East
by the Pasig River when in fact it is bound on the North East by
the Tapayan River. Furthermore, the Pasig River does not traverse
any portion of the jurisdiction of Cainta, Rizal. He argued that
Original Certificate of Title No. 108 (OCT No. 108) in respondents
names, insofar as it included Lot No. 11703, CAD 688-D, is,
therefore, null and void because it was obtained through
fraudulent misrepresentations and machinations.
In their Answer4 dated July 26, 1989, respondents averred that
OCT No. 108 was duly issued to them by the Register of Deeds for
Metro Manila, District II, on May 20, 1977. They alleged that prior
to the issuance of OCT No. 108, they, as registered owners, had
always been in peaceful possession of the property and at no time
had Antonio possessed the property, nor did he ever make any
claim against the said property.
The RTC of Antipolo, Rizal, Branch 72, in a Decision dated October
7, 1997 dismissed the complaint and ordered Antonio to pay
respondents moral damages and attorneys fees. The dispositive
portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby
rendered DISMISSING the instant complaint, and
orders plaintiff as follows:
1. To pay defendants Sofronio Santos, Aurora Santos,
Sps. Luis Liberato and Angelina Santos, the amount of
P100,000.00 each, by way of moral damages;
2. To pay defendants the amount of P60,000.00, by
way of attorneys fees, and costs of suit.
SO ORDERED.5
The Court of Appeals in a Decision dated July 31, 2001 affirmed
with modification the abovementioned decision by deleting the
award of moral damages and attorneys fees. The dispositive
portion of the decision of the Court of Appeals states:
WHEREFORE, with modification deleting [or] setting
aside the award for moral damages and attorneys
fees, the decision appealed from is AFFIRMED with
costs against the plaintiff-appellant.
SO ORDERED.6
Hence, the instant petition, raising the following issues:
I.
THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED IN NOT HOLDING THAT THE DECISION IN LAND
REGISTRATION CASE NO. 142-A, LRC RECORD NO.
58707, REGIONAL TRIAL COURT OF ANTIPOLO CITY,
BRANCH 71, IS SUFFICIENT BASIS OF PETITIONERS
CLAIM OF RIGHT OF OWNERSHIP OVER THE PROPERTY
SUBJECT OF ACTION FOR RECONVEYANCE.
II.
THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED IN TREATING PETITIONERS ACTION FOR
RECONVEYANCE AS ONE FOR TITLING OF A PARCEL OF
LAND.
III.
THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED IN NOT HOLDING THAT RESPONDENTS HAVE
FRAUDULENTLY REGISTERED AND TITLED SUBJECT
PROPERTY IN THEIR NAMES.
IV.
THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED IN HOLDING THAT RESPONDENTS MOTHER
ACQUIRED SUBJECT PROPERTY FROM HER FATHER,
GAVINO SANTOS, WHICH THE LATTER ALLEGEDLY
PURCHASED FROM LADISLAO RIVERA.
V.
THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED IN AFFIRMING THE DECISION OF THE COURT A
QUO DISMISSING PETITIONERS ACTION FOR
RECONVEYANCE.7
Simply put, the issues raised are: (1) Did the Court of Appeals err
in not holding that the decision in LRC No. 142-A was sufficient
basis of petitioners claim of ownership over the subject property?
(2) Did the Court of Appeals and RTC erroneously treat
petitioners action for reconveyance as one for titling of a parcel
of land? (3) Did respondents fraudulently title the subject
property in their names? (4) Did the Court of Appeals err in
finding that respondents mother acquired the subject property
from her father, Gavino Santos, who purchased it from Ladislao
Rivera? and (5) Did the Court of Appeals err in affirming the
decision of the RTC dismissing petitioners action for
reconveyance?
Petitioner argues that the Court of Appeals erred in not holding
that the decision in LRC No. 142-A is sufficient basis for his claim
of ownership over the property; in treating his action for
reconveyance as one for titling; in not holding that respondents
had fraudulently registered the property in their names; and in
holding that respondents mother had acquired the subject
property from her father, Gavino Santos, who allegedly bought
the property from Ladislao Rivera.
Respondents, on the other hand, in their Comments,8 contend
that they have proved they have a better title to the property.
They argue that petitioners attempt to register Lot No. 11703,
CAD 688-D in his name is tainted with fraud, and that petitioner
had failed to adduce any evidence of fraud on their part. They
assert that their documentary and testimonial evidence which
were unrebutted by petitioner show original ownership of the
land by Ladislao Rivera from whom their grandfather bought the
property.
After serious consideration, we find that petitioners arguments
lack merit.
On the first issue, petitioner argues that in LRC No. 142-A, the RTC
of Antipolo, Branch 71, rendered a Decision on January 7, 1986
adjudicating ownership of two lots, including Lot No. 11703, CAD
688-D, in his favor. He adds that on February 19, 1986, after said
decision has become final and executory, the said RTC issued a
certification for issuance of decree, directing the Land
Registration Commission to issue the corresponding decree of
registration. Hence, he argues, his right of ownership over the
land has already been fully established, but no certificate of title
was issued to him only because the property was already
registered in the name of respondents.
But we agree with respondents that petitioner cannot rely on the
decision in LRC No. 142-A. As pointed out by the Court of Appeals,
even if a title had been issued to petitioner based on said
decision, his title would be of a later date than the title of
respondents, hence inefficacious and ineffective. This Court has
ruled that, when two certificates of title are issued to different
persons covering the same land in whole or in part, the earlier in
date must prevail; and in case of successive registrations where
more than one certificate is issued over the same land, the person
holding a prior certificate is entitled to the land as against a
person who relies on a subsequent certificate.9
On the second issue, petitioner contends that it is very apparent
the RTC and Court of Appeals had the notion that his case a
quo was not an action for reconveyance, but rather an application
for registration of land where the applicant and oppositor had to
prove their respective registrable titles. This, he adds, could be
gleaned from the RTCs findings that "the claim of plaintiff on the
basis of said documents cannot prevail over the adverse, public,
open, peaceful and continuous possession by the defendants over
the subject property," and that "it was indubitably shown that the
defendants have occupied said property since time immemorial
while plaintiff has never at anytime taken possession of said
property."
We find petitioners contentions unconvincing. For an action for
reconveyance based on fraud to prosper, this Court has held that
the party seeking reconveyance must prove by clear and
convincing evidence his title to the property and the fact of
fraud.10 The RTC, in making the abovementioned findings, was not
treating petitioners action for reconveyance as one for titling of
property. But it was weighing whether petitioner has, by clear and
convincing evidence, proven his title to the property. Moreover,
the RTC, in its decision, discussed the merits of petitioners
ground for his action for reconveyance, i.e. whether or not
respondents committed fraud in titling the subject property in
their names. The RTC held that as shown by public records in the
custody of the RTC, Pasig City and the Land Registration Authority,
petitioners claim that the property was fraudulently titled in the
names of respondents is baseless. Thus, petitioners contention
that the RTC and the Court of Appeals treated his action for
reconveyance as one for titling of property lacks any persuasive
basis.
On the third and fourth issues, we find them to be factual issues,
hence beyond our jurisdiction to resolve. In a petition for review
under Rule 45 of the 1997 Rules of Civil Procedure, this Courts
power of review is limited to questions of law only.11
Note, however, should be taken of the established doctrine that
an action for reconveyance resulting from fraud prescribes four
years from the discovery of the fraud. Such discovery is deemed
to have taken place upon the issuance of the certificate of title
over the property. Registration of real property is considered a
constructive notice to all persons, thus, the four-year period shall
be counted therefrom.12 It appears that OCT No. 108 was issued
to respondents by the Register of Deeds for Metro Manila on May
20, 1977. From the time of registration of the land in the name of
respondents on May 20, 1977 to the filing of the complaint on
September 19, 1988, more than four years had already elapsed.
Hence, it cannot be denied that petitioners action had already
prescribed.
Based on the foregoing considerations, we find that the Court of
Appeals did not err in affirming the decision of the RTC dismissing
petitioners action for reconveyance.
Finally, concerning the deletion of moral damages and attorneys
fees, we agree with the ruling of the Court of Appeals that here an
award of moral damages is not warranted since the record is
bereft of any proof that Antonio acted maliciously or in bad faith
in filing the action.13 Neither should attorneys fees be awarded.
The accepted rule is that the reason for the award of attorneys
fees must be stated in the text of the trial courts decision;
otherwise, if it is stated only in the dispositive portion of the
decision, the same must be disallowed.14 In this case, we find that
the trial courts decision failed to show the reason for the award
of attorneys fees, hence it was properly deleted by the appellate
court.
WHEREFORE, the petition is DENIED for lack of merit. The assailed
Decision dated July 31, 2001 of the Court of Appeals in CA-G.R. CV
No. 58246 is AFFIRMED. No pronouncement as to costs.
SO ORDERED.

G.R. No. 196577 February 25, 2013
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
BARBARA SAMPAGA POBLETE, Respondent.
DECISION
CARPIO, J.:
The Case
This Petition for Review on Certiorari1 seeks to reverse the Court
of Appeals' Decision2 dated 28 September 20 I 0 and its
Resolution3 dated 19 April 2011 in C A-G.R. CV No. 91666. The
Court of Appeals (C A) affirmed in toto the Decision4 of the
Regional Trial Court (RTC) of San Jose, Occidental Mindoro, Branch
46, in Civil Case No. R-1331.
The Facts
The facts, as culled from the records, are as follows:
Petitioner Land Bank of the Philippines (Land Bank) is a banking
institution organized and existing under Philippine laws.
Respondent Barbara Sampaga Poblete (Poblete) is the registered
owner of a parcel of land, known as Lot No. 29, with an area of
455 square meters, located in Buenavista, Sablayan, Occidental
Mindoro, under Original Certificate of Title (OCT) No. P-12026. In
October 1997, Poblete obtained a 300,000.00 loan from
Kabalikat ng Pamayanan ng Nagnanais Tumulong at Yumaman
Multi-Purpose Cooperative (Kapantay). Poblete mortgaged Lot
No. 29 to Kapantay to guarantee payment of the loan. Kapantay,
in turn, used OCT No. P-12026 as collateral under its Loan Account
No. 97-CC-013 with Land Bank-Sablayan Branch.
In November 1998, Poblete decided to sell Lot No. 29 to pay her
loan. She instructed her son-in-law Domingo Balen (Balen) to look
for a buyer. Balen referred Angelito Joseph Maniego (Maniego) to
Poblete. According to Poblete, Maniego agreed to buy Lot No. 29
for 900,000.00, but Maniego suggested that a deed of absolute
sale for 300,000.00 be executed instead to reduce the taxes.
Thus, Poblete executed the Deed of Absolute Sale dated 9
November 1998 (Deed dated 9 November 1998) with 300,000.00
as consideration.5 In the Deed dated 9 November 1998, Poblete
described herself as a "widow." Poblete, then, asked Balen to
deliver the Deed dated 9 November 1998 to Maniego and to
receive the payment in her behalf. Balen testified that he
delivered the Deed dated 9 November 1998 to Maniego.
However, Balen stated that he did not receive from Maniego the
agreed purchase price. Maniego told Balen that he would pay the
amount upon his return from the United States. In an Affidavit
dated 19 November 1998, Poblete stated that she agreed to have
the payment deposited in her Land Bank Savings Account.6
Based on a Certification issued by Land Bank-Sablayan Branch
Department Manager Marcelino Pulayan on 20 August
1999,7 Maniego paid Kapantays Loan Account No. 97-CC-013 for
448,202.08. On 8 June 2000, Maniego applied for a loan of
1,000,000.00 with Land Bank, using OCT No. P 12026 as
collateral. Land Bank alleged that as a condition for the approval
of the loan, the title of the collateral should first be transferred to
Maniego.
On 14 August 2000, pursuant to a Deed of Absolute Sale dated 11
August 2000 (Deed dated 11 August 2000),8the Register of Deeds
of Occidental Mindoro issued Transfer Certificate of Title (TCT)
No. T-20151 in Maniegos name. On 15 August 2000, Maniego and
Land Bank executed a Credit Line Agreement and a Real Estate
Mortgage over TCT No. T- 20151. On the same day, Land Bank
released the 1,000,000.00 loan proceeds to Maniego.
Subsequently, Maniego failed to pay the loan with Land Bank. On
4 November 2002, Land Bank filed an Application for Extra-judicial
Foreclosure of Real Estate Mortgage stating that Maniegos total
indebtedness amounted to 1,154,388.88.
On 2 December 2002, Poblete filed a Complaint for Nullification of
the Deed dated 11 August 2000 and TCT No. T-20151,
Reconveyance of Title and Damages with Prayer for Temporary
Restraining Order and/or Issuance of Writ of Preliminary
Injunction. Named defendants were Maniego, Land Bank, the
Register of Deeds of Occidental Mindoro and Elsa Z. Aguirre in her
capacity as Acting Clerk of Court of RTC San Jose, Occidental
Mindoro. In her Complaint, Poblete alleged that despite her
demands on Maniego, she did not receive the consideration of
900,000.00 for Lot No. 29. She claimed that without her
knowledge, Maniego used the Deed dated 9 November 1998 to
acquire OCT No. P-12026 from Kapantay. Upon her verification
with the Register of Deeds, the Deed dated 11 August 2000 was
used to obtain TCT No. T-20151. Poblete claimed that the Deed
dated 11 August 2000 bearing her and her deceased husbands,
Primo Poblete, supposed signatures was a forgery as their
signatures were forged. As proof of the forgery, Poblete
presented the Death Certificate dated 27 April 1996 of her
husband and Report No. 294-502 of the Technical Services
Department of the National Bureau of Investigation showing that
the signatures in the Deed dated 11 August 2000 were forgeries.
Accordingly, Poblete also filed a case for estafa through
falsification of public document against Maniego and sought
injunction of the impending foreclosure proceeding.
On 7 January 2003, Land Bank filed its Answer with Compulsory
Counterclaim and Cross-claim. Land Bank claimed that it is a
mortgagee in good faith and it observed due diligence prior to
approving the loan by verifying Maniegos title with the Office of
the Register of Deeds. Land Bank likewise interposed a cross-claim
against Maniego for the payment of the loan, with interest,
penalties and other charges. Maniego, on the other hand,
separately filed his Answer. Maniego denied the allegations of
Poblete and claimed that it was Poblete who forged the Deed
dated 11 August 2000. He also alleged that he paid the
consideration of the sale to Poblete and even her loans from
Kapantay and Land Bank.
The Ruling of the Regional Trial Court
On 28 December 2007, the RTC of San Jose, Occidental Mindoro,
Branch 46, rendered a Decision in favor of Poblete, the dispositive
portion of which reads:
WHEREFORE, by preponderance of evidence, judgment is hereby
rendered in favor of the plaintiff and against the defendants, as
follows:
1. Declaring the Deed of Sale dated August 11, 2000
over O.C.T. No. P-12026, as null and void;
2. Declaring Transfer of Certificate of Title No. T-20151
as null and void, it having been issued on the basis of a
spurious and forged document;
3. The preliminary [i]njunction issued directing the
defendants to refrain from proceedings [sic] with the
auction sale of the plaintiffs properties, dated
February 10, 2002, is hereby made permanent;
4. Ordering defendant Angelito Joseph Maniego to
return to the plaintiff O.C.T. No. P-12026; and
5. Ordering defendant Angelito Joseph Maniego to pay
plaintiff the amount of 50,000.00, as and for
reasonable attorneys fees.
Judgment is furthermore rendered on the cross-claim of
defendant Land Bank of the Philippines against defendant
Angelito Joseph Maniego, as follows:
A. Ordering defendant Angelito Joseph Maniego to pay
his co-defendant [L]and Bank of the Philippines his
loan with a principal of 1,000,000.00, plus interests,
penalties and other charges thereon; and
B. Ordering defendant Angelito Joseph Maniego to pay
the costs of this suit.
SO ORDERED.9
The RTC ruled that the sale between Poblete and Maniego was a
nullity. The RTC found that the agreed consideration was
900,000.00 and Maniego failed to pay the consideration.
Furthermore, the signatures of Poblete and her deceased
husband were proven to be forgeries. The RTC also ruled that
Land Bank was not a mortgagee in good faith because it failed to
exercise the diligence required of banking institutions. The RTC
explained that had Land Bank exercised due diligence, it would
have known before approving the loan that the sale between
Poblete and Maniego had not been consummated. Nevertheless,
the RTC granted Land Banks cross-claim against Maniego.
In an Order dated 17 March 2008, the RTC denied the Motion for
Reconsideration filed by Land Bank for want of merit. Thereafter,
Land Bank and Maniego separately challenged the RTCs Decision
before the CA.
The Ruling of the Court of Appeals
On 28 September 2010, the CA promulgated its Decision
affirming in toto the Decision of the RTC.10 Both Land Bank and
Maniego filed their Motions for Reconsideration but the CA
denied both motions on 19 April 2011.11
In a Resolution dated 13 July 2011,12 the Second Division of this
Court denied the Petition for Review on Certiorari filed by
Maniego. This Resolution became final and executory on 19
January 2012.
On the other hand, Land Bank filed this petition.
The Issues
Land Bank seeks a reversal and raises the following issues for
resolution:
1. THE COURT OF APPEALS (FORMER SPECIAL
ELEVENTH DIVISION) ERRED IN UPHOLDING THE
FINDING OF THE TRIAL COURT DECLARING TCT NO. T-
20151 AS NULL AND VOID. THE COURT OF APPEALS
MISCONSTRUED AND MISAPPRECIATED THE EVIDENCE
AND THE LAW IN NOT FINDING TCT NO. T-20151
REGISTERED IN THE NAME OF ANGELITO JOSEPH
MANIEGO AS VALID.
2. THE COURT OF APPEALS (FORMER SPECIAL
ELEVENTH DIVISION) MISCONSTRUED THE EVIDENCE
AND THE LAW IN NOT FINDING LAND BANK A
MORTGAGEE IN GOOD FAITH.
3. THE COURT OF APPEALS (FORMER SPECIAL
ELEVENTH DIVISION) MISCONSTRUED THE EVIDENCE
AND THE LAW IN NOT FINDING THE RESPONDENT AND
ANGELITO JOSEPH MANIEGO AS IN PARI DELICTO.
4. THE COURT OF APPEALS (FORMER SPECIAL
ELEVENTH DIVISION) ERRED IN NOT APPLYING THE
PRINCIPLE OF ESTOPPEL OR LACHES ON RESPONDENT
IN THAT THE PROXIMATE CAUSE OF HER LOSS WAS
HER NEGLIGENCE TO SAFEGUARD HER RIGHTS OVER
THE SUBJECT PROPERTY, THEREBY ENABLING
ANGELITO JOSEPH MANIEGO TO MORTGAGE THE
SAME WITH LAND BANK.13
The Ruling of the Court
We do not find merit in the petition.
A petition for review under Rule 45 of the Rules of Court
specifically provides that only questions of law may be raised,
subject to exceptional circumstances14 which are not present in
this case. Hence, factual findings of the trial court, especially if
affirmed by the CA, are binding on us.15 In this case, both the RTC
and the CA found that the signatures of Poblete and her deceased
husband in the Deed dated 11 August 2000 were forged by
Maniego. In addition, the evidence is preponderant that Maniego
did not pay the consideration for the sale. Since the issue on the
genuineness of the Deed dated 11 August 2000 is essentially a
question of fact, we are not dutybound to analyze and weigh the
evidence again.16
It is a well-entrenched rule, as aptly applied by the CA, that a
forged or fraudulent deed is a nullity and conveys no
title.17 Moreover, where the deed of sale states that the purchase
price has been paid but in fact has never been paid, the deed of
sale is void ab initio for lack of consideration.18 Since the Deed
dated 11 August 2000 is void, the corresponding TCT No. T-20151
issued pursuant to the same deed is likewise void. In Yu Bun Guan
v. Ong,19the Court ruled that there was no legal basis for the
issuance of the certificate of title and the CA correctly cancelled
the same when the deed of absolute sale was completely
simulated, void and without effect. In Erea v. Querrer-
Kauffman,20 the Court held that when the instrument presented
for registration is forged, even if accompanied by the owners
duplicate certificate of title, the registered owner does not
thereby lose his title, and neither does the mortgagee acquire any
right or title to the property. In such a case, the mortgagee under
the forged instrument is not a mortgagee protected by law.21
The issue on the nullity of Maniegos title had already been
foreclosed when this Court denied Maniegos petition for review
in the Resolution dated 13 July 2011, which became final and
executory on 19 January 2012.22 It is settled that a decision that
has acquired finality becomes immutable and unalterable and
may no longer be modified in any respect, even if the
modification is meant to correct erroneous conclusions of fact or
law and whether it will be made by the court that rendered it or
by the highest court of the land.23 This is without prejudice,
however, to the right of Maniego to recover from Poblete what he
paid to Kapantay for the account of Poblete, otherwise there will
be unjust enrichment by Poblete.
Since TCT No. T-20151 has been declared void by final judgment,
the Real Estate Mortgage constituted over it is also void. In a real
estate mortgage contract, it is essential that the mortgagor be the
absolute owner of the property to be mortgaged; otherwise, the
mortgage is void.24
Land Bank insists that it is a mortgagee in good faith since it
verified Maniegos title, did a credit investigation, and inspected
Lot No. 29. The issue of being a mortgagee in good faith is a
factual matter, which cannot be raised in this petition.25
However, to settle the issue, we carefully examined the records to
determine whether or not Land Bank is a mortgagee in good
faith.1wphi1
There is indeed a situation where, despite the fact that the
mortgagor is not the owner of the mortgaged property, his title
being fraudulent, the mortgage contract and any foreclosure sale
arising therefrom are given effect by reason of public policy.26 This
is the doctrine of "the mortgagee in good faith" based on the rule
that buyers or mortgagees dealing with property covered by a
Torrens Certificate of Title are not required to go beyond what
appears on the face of the title.27 However, it has been
consistently held that this rule does not apply to banks, which are
required to observe a higher standard of diligence.28 A bank
whose business is impressed with public interest is expected to
exercise more care and prudence in its dealings than a private
individual, even in cases involving registered lands.29 A bank
cannot assume that, simply because the title offered as security is
on its face free of any encumbrances or lien, it is relieved of the
responsibility of taking further steps to verify the title and inspect
the properties to be mortgaged.30
Applying the same principles, we do not find Land Bank to be a
mortgagee in good faith.
Good faith, or the lack of it, is a question of intention.31 In
ascertaining intention, courts are necessarily controlled by the
evidence as to the conduct and outward acts by which alone the
inward motive may, with safety, be determined.32
Based on the evidence, Land Bank processed Maniegos loan
application upon his presentation of OCT No. P-12026, which was
still under the name of Poblete. Land Bank even ignored the fact
that Kapantay previously used Pobletes title as collateral in its
loan account with Land Bank.33 In Bank of Commerce v. San Pablo,
Jr.,34 we held that when "the person applying for the loan is other
than the registered owner of the real property being mortgaged,
[such fact] should have already raised a red flag and which should
have induced the Bank x x x to make inquiries into and confirm x x
x [the] authority to mortgage x x x. A person who deliberately
ignores a significant fact that could create suspicion in an
otherwise reasonable person is not an innocent purchaser for
value."
The records do not even show that Land Bank investigated and
inspected the property to ascertain its actual occupants. Land
Bank merely mentioned that it inspected Lot No. 29 to appraise
the value of the property. We take judicial notice of the standard
practice of banks, before approving a loan, to send
representatives to the premises of the land offered as collateral to
investigate its real owners.35 In Prudential Bank v. Kim Hyeun
Soon,36 the Court held that the bank failed to exercise due
diligence although its representative conducted an ocular
inspection, because the representative concentrated only on the
appraisal of the property and failed to inquire as to who were the
then occupants of the property.
Land Bank claims that it conditioned the approval of the loan
upon the transfer of title to Maniego, but admits processing the
loan based on Maniegos assurances that title would soon be
his.37 Thus, only one day after Maniego obtained TCT No. T-20151
under his name, Land Bank and Maniego executed a Credit Line
Agreement and a Real Estate Mortgage. Because of Land Banks
haste in granting the loan, it appears that Maniegos loan was
already completely processed while the collateral was still in the
name of Poblete. This is also supported by the testimony of Land
Bank Customer Assistant Andresito Osano.38
Where the mortgagee acted with haste in granting the mortgage
loan and did not ascertain the ownership of the land being
mortgaged, as well as the authority of the supposed agent
executing the mortgage, it cannot be considered an innocent
mortgagee.39
Since Land Bank is not a mortgagee in good faith, it is not entitled
to protection. The injunction against the foreclosure proceeding
in the present case should be made permanent. Since Lot No. 29
has not been transferred to a third person who is an innocent
purchaser for value, ownership of the lot remains with Poblete.
This is without prejudice to the right of either party to proceed
against Maniego.
On the allegation that Poblete is in pari delicto with Maniego, we
find the principle inapplicable. The pari delicto rule provides that
"when two parties are equally at fault, the law leaves them as
they are and denies recovery by either one of them."40 We adopt
the factual finding of the RTC and the CA that only Maniego is at
fault.
Finally, on the issues of estoppel and laches, such were not raised
before the trial court.1wphi1 I fence, we cannot rule upon the
same. It is settled that an issue which was neither alleged in the
complaint nor raised during the trial cannot be raised for the tirst
time on appeal, as such a recourse would be offensive to the basic
rules of t}1ir play, justice and due process, since the opposing
party would be deprived of the opp01iunity to introduce evidence
rebutting such new issue.41
WHEREFORE, we DENY the petition. We AFFIRM the 28
September 2010 Decision and the 19 April 2011 Resolution of the
Court of Appeals in CA-Ci.R. CV No. 91666. The injunction against
the foreclosure proceeding, issued by the Regional Trial Court of
San Jose, Occidental Mindoro, Branch 46, is made permanent.
Costs against Land Bank.
SO ORDERED.
[G.R. No. 94457. October 16, 1997]
VICTORIA LEGARDA, petitioner, vs. THE HONORABLE COURT OF
APPEALS, NEW CATHAY HOUSE, INC., THE
HONORABLE REGIONAL TRIAL COURT OF QUEZON
CITY, BRANCH 94, respondents.
RESOLUTION
ROMERO, J.:
For our resolution is the motion for reconsideration of the
March 18, 1991, decision of the Courts's First Division, filed by
private respondents New Cathay House, Inc. (Cathay). A brief
narration of facts is in order.
The parties hereto entered into a lease agreement over a
certain Quezon City property owned by petitioner Victoria
Legarda. For some reason or another, she refused to sign the
contract although respondent lessee, Cathay, made a deposit and
a down payment of rentals, prompting the latter to file before the
Regional Trial Court of Quezon City, Branch 94 a
complaint[1] against the former for specific performance with
preliminary injunction and damages. The court a quo issued the
injunction. In the meantime, Legardas counsel, noted lawyer Dean
Antonio Coronel, requested a 10-day extension of time to file an
answer which the court granted. Atty. Coronel, however, failed to
file an answer within the extended period. His client was
eventually declared in default, Cathay was allowed to present
evidence ex-parte, and on March 25, 1985, a judgment by default
was reached by the trial court ordering Legarda to execute the
lease contract in favor of, and to pay damages to, Cathay.
On April 9, 1985, a copy of said decision was served on
Atty. Coronel but he took no action until the judgment became
final and executory. A month later, the trial court issued a writ of
execution and a public auction was held where Cathays manager,
Roberto V. Cabrera, Jr., as highest bidder, was awarded the
property for P376,500.00 in satisfaction of the judgment
debt. Consequently, a Certificate of Sale was issued by the sheriff
on June 27, 1985. Upon failure of Legarda to redeem her property
within the one-year redemption period, a Final Deed of Sale was
issued by the sheriff on July 8, 1986, which was registered by
Cabrera with the Register of Deeds three days later. Hence,
Legardas Transfer Certificate of Title (TCT) No. 270814 was
cancelled with the issuance of TCT No. 350892 in the name of
Cabrera.
Despite the lapse of over a year since the judgment by
default became final and executory, Atty. Coronel made no move
on behalf of his client. He did not even inform her of all these
developments. When Legarda did learn of the adverse decision,
she nevertheless did not lose faith in her counsel[2] and prevailed
upon him to seek appropriate relief. Thus, on October 23, 1986,
he filed a petition for annulment of judgment with prayer for the
issuance of a writ of preliminary mandatory injunction before the
Court of Appeals.[3]
On November 29, 1989, the appellate court rendered a
decision affirming the March 25, 1985, decision of the trial court,
dismissing the petition for annulment of judgment, and holding
Legarda bound by the negligence of her counsel. It considered her
allegation of fraud by Cathay to be improbable, and added that
there was pure and simple negligence on the part of petitioners
counsel who failed to file an answer and, later, a petition for relief
from judgment by default. Upon notice of the Court of Appeals
decision, Atty. Coronel again neglected to protect his clients
interest by failing to file a motion for reconsideration or to appeal
therefrom until said decision became final on December 21, 1989.
Sometime in March 1990, Legarda learned of the adverse
decision of the Court of Appeals dated November 29, 1989, not
from Atty. Coronel but from his secretary. She then hired a new
counsel for the purpose of elevating her case to this Court. The
new lawyer filed a petition for certiorari praying for the
annulment of the decision of the trial and appellate courts and of
the sheriffs sale, alleging, among other things, that Legarda lost in
the courts below because her previous lawyer was grossly
negligent and inefficient, whose omissions cannot possibly bind
her because this amounted to a violation of her right to due
process of law. She, therefore, asked Cathay (not Cabrera) to
reconvey the subject property to her.
On March 18, 1991, a decision[4] was rendered in this case
by Mr. Justice Gancayco, ruling, inter alia, as follows: (a) granting
the petition; (b) nullifying the trial courts decision dated March
25, 1985, the Court of Appeals decision dated November 29,
1989, the Sheriffs Certificate of Sale dated June 27, 1985, of the
property in question, and the subsequent final deed of sale
covering the same property; and (c) ordering Cathay to reconvey
said property to Legarda, and the Register of Deeds to cancel the
registration of said property in the name of Cathay (not Cabrera)
and to issue a new one in Legardas name.
The Court then declared that Atty. Coronel committed, not
just ordinary or simple negligence, but reckless, inexcusable and
gross negligence, which deprived his client of her property
without due process of law. His acts, or the lack of it, should not
be allowed to bind Legarda who has been consigned to penury
because her lawyer appeared to have abandoned her case not
once but repeatedly. Thus, the Court ruled against tolerating such
unjust enrichment of Cathay at Legardas expense, and noted that
counsels lack of devotion to duty is so gross and palpable that this
Court must come to the aid of his distraught client.
Aggrieved by this development, Cathay filed the instant
motion for reconsideration, alleging, inter alia, that reconveyance
is not possible because the subject property had already been
sold by its owner, Cabrera, even prior to the promulgation of said
decision.
By virtue of the Gancayco decision, Cathay was duty bound
to return the subject property to Legarda. The impossibility of this
directive is immediately apparent, for two reasons: First, Cathay
neither possessed nor owned the property so it is in no position to
reconvey the same; second, even if it did, ownership over the
property had already been validly transferred to innocent third
parties at the time of promulgation of said judgment.
There is no question that the highest bidder at the public
auction was Cathays manager. It has not been shown nor even
alleged, however, that Roberto Cabrera had all the time been
acting for or in behalf of Cathay. For all intents and purposes,
Cabrera was simply a vendee whose payment effectively
extinguished Legardas liability to Cathay as the judgment
creditor. No proof was ever presented which would reveal that
the sale occurred only on paper, with Cabrera acting as a mere
conduit for Cathay. What is clear from the records is that the
auction sale was conducted regularly, that a certificate of sale
and, subsequently, a final deed of sale were issued to Cabrera
which allowed him to consolidate his ownership over the subject
property, register it and obtain a title in his own name, and sell it
to Nancy Saw, an innocent purchaser for value, at a premium
price. Nothing on record would demonstrate that Cathay was the
beneficiary of the sale between Cabrera and Saw. Cabrera himself
maintained that he was acting in his private (as distinct from his
corporate) capacity[5] when he participated in the bidding.
Since the decision of the Court of Appeals gained finality on
December 21, 1989, the subject property has been sold and
ownership thereof transferred no less than three times, viz.: (a)
from Cabrera to Nancy Saw on March 21, 1990, four months after
the decision of the Court of Appeals became final and executory
and one year before the promulgation of the March 18, 1991,
decision under reconsideration; (b) from Nancy Saw to Lily Tanlo
Sy Chua on August 7, 1990, more than one year before the Court
issued a temporary restraining order in connection with this case;
and (c) from the spouses Victor and Lily Sy Chua to Janet Chong
Luminlun on April 3, 1992. With these transfers, Cabreras TCT No.
350892 gave way to Saws TCT No. 31672, then to Chuas TCT No.
31673, and finally to Luminluns TCT No. 99143, all issued by the
Register of Deeds of Quezon City on April 3, 1990, August 8, 1990,
and November 24, 1993, respectively.
We do not have to belabor the fact that all the successors-
in-interest of Cabrera to the subject lot were transferees for value
and in good faith, having relied as they did on the clean titles of
their predecessors. The successive owners were each armed with
their own indefeasible titles which automatically brought them
under the aegis of the Torrens System. As the Court declared in
Sandoval v. Court of Appeals,[6] (i)t is settled doctrine that one
who deals with property registered under the Torrens system
need not go beyond the same, but only has to rely on the title. He
is charged with notice only of such burdens and claims as are
annotated on the title.[7] In the case at bar, it is not disputed that
no notice of lis pendens was ever annotated on any of the titles of
the subsequent owners. And even if there were such a notice, it
would not have created a lien over the property because the main
office of a lien is to warn prospective buyers that the property
they intend to purchase is the subject of a pending
litigation. Therefore, since the property is already in the hands of
Luminlun, an innocent purchaser for value, it can no longer be
returned to its original owner by Cabrera, much less by Cathay
itself.
Another point to consider, though not raised as an issue in
this case, is the fact that Cabrera was impleaded as a party-
respondent only on August 12, 1991, after the promulgation of
the Gancayco decision.[8] The dispositive portion itself ordered
Cathay, instead of Cabrera to reconvey the property to
Legarda. Cabrera was never a party to this case, either as plaintiff-
appellee below or as respondent in the present action. Neither
did he ever act as Cathays representative. As we held in the
recent case of National Power Corporation v. NLRC, et
al.,[9] (j)urisdiction over a party is acquired by his voluntary
appearance or submission to the court or by the coercive process
issued by the court to him, generally by service of summons.[10] In
other words, until Cabrera was impleaded as party respondent
and ordered to file a comment in the August 12, 1991, resolution,
the Court never obtained jurisdiction over him, and to command
his principal to reconvey a piece of property which used to be HIS
would not only be inappropriate but would also constitute a real
deprivation of ones property without due process of law.
Assuming arguendo that reconveyance is possible, that
Cathay and Cabrera are one and the same and that Cabreras
payment redounded to the benefit of his principal, reconveyance,
under the facts and evidence obtaining in this case, would still not
address the issues raised herein
The application of the sale price to Legardas judgment debt
constituted a payment which extinguished her liability to Cathay
as the party in whose favor the obligation to pay damages was
established.[11] It was a payment in the sense that Cathay had to
resort to a court-supervised auction sale in order to execute the
judgment.[12] With the fulfillment of the judgment debtors
obligation, nothing else was required to be done.
Under the Gancayco ruling, the order of reconveyance was
premised on the alleged gross negligence of Legardas counsel
which should not be allowed to bind her as she was deprived of
her property without due process of law.
It is, however, basic that as long as a party was given the
opportunity to defend her interests in due course, she cannot be
said to have been denied due process of law, for this opportunity
to be heard is the very essence of due process. The chronology of
events shows that the case took its regular course in the trial and
appellate courts but Legardas counsel failed to act as any ordinary
counsel should have acted, his negligence every step of the way
amounting to abandonment, in the words of the Gancayco
decision. Yet, it cannot be denied that the proceedings which led
to the filing of this case were not attended by any irregularity. The
judgment by default was valid, so was the ensuing sale at public
auction. If Cabrera was adjudged highest bidder in said auction
sale, it was not through any machination on his part. All of his
actuations that led to the final registration of the title in his name
were aboveboard, untainted by any irregularity.
The fact that Cabrera is an officer of Cathay does not make
him a purchaser in bad faith. His act in representing the company
was never questioned nor disputed by Legarda. And while it is
true that he won in the bidding, it is likewise true that said bidding
was conducted by the book. There is no call to be alarmed that an
official of the company emerges as the winning bidder since in
some cases, the judgment creditor himself personally participates
in the bidding.
There is no gainsaying that Legarda is the judgment debtor
here. Her property was sold at public auction to satisfy the
judgment debt. She cannot claim that she was illegally deprived of
her property because such deprivation was done in accordance
with the rules on execution of judgments. Whether the money
used to pay for said property came from the judgment creditor or
its representative is not relevant. What is important is that it was
purchased for value. Cabrera parted with real money at the
auction. In his Sheriffs Certificate of Sale dated June 27,
1985,[13] Deputy Sheriff Angelito R. Mendoza certified, inter alia,
that the highest bidder paid to the Deputy Sheriff the said amount
of P376,500.00, the sale price of the levied property. If this does
not constitute payment, what then is it? Had there been no real
purchase and payment below, the subject property would never
have been awarded to Cabrera and registered in his name, and
the judgment debt would never have been satisfied. Thus, to
require either Cathay or Cabrera to reconvey the property would
be an unlawful intrusion into the lawful exercise of his proprietary
rights over the land in question, an act which would constitute an
actual denial of property without due process of law.
It may be true that the subject lot could have fetched a
higher price during the public auction, as Legarda claims, but the
fail to betray any hint of a bid higher than Cabreras which was
bypassed in his favor. Certainly, he could not help it if his bid of
only P376,500.00 was the highest. Moreover, in spite of this
allegedly low selling price, Legarda still failed to redeem her
property within the one-year redemption period. She could not
feign ignorance of said sale on account of her counsels failure to
so inform her, because such auction sales comply with
requirements of notice and publication under the Rules of
Court. In the absence of any clear and convincing proof that such
requirements were not followed, the presumption of regularity
stands. Legarda also claims that she was in the United States
during the redemption period, but she admits that she left the
Philippines only on July 13, 1985, or sixteen days after the auction
sale of June 27, 1985. Finally, she admits that her mother Ligaya
represented her during her absence.[14] In short, she was not
totally in the dark as to the fate of her property and she could
have exercised her right of redemption if she chose to, but she did
not.
Neither Cathay nor Cabrera should be made to suffer for
the gross negligence of Legardas counsel. If she may be said to be
innocent because she was ignorant of the acts of negligence of
her counsel, with more reason are respondents truly innocent. As
between two parties who may lose due to the negligence or
incompetence of the counsel of one, the party who was
responsible for making it happen should suffer the
consequences. This reflects the basic common law maxim, so
succinctly stated by Justice J.B.L. Reyes, that . . . (B)etween two
innocent parties, the one who made it possible for the wrong to
be done should be the one to bear the resulting loss.[15] In this
case, it was not respondents, Legarda, who misjudged and hired
the services of the lawyer who practically abandoned her case and
who continued to retain him even after his proven apathy and
negligence.
The Gancayco decision makes much of the fact that
Legarda is now consigned to penury and, therefore, this Court
must come to the aid of the distraught client. It must be
remembered that this Court renders decisions, not on the basis of
emotions but on its sound judgment, applying the relevant,
appropriate law. Much as it may pity Legarda, or any losing
litigant for that matter, it cannot play the role of a knight in
shining armor coming to the aid of someone, who through her
weakness, ignorance or misjudgment may have been bested in a
legal joust which complied with all the rules of legal proceedings.
In Vales v. Villa,[16] this Court warned against the danger of
jumping to the aid of a litigant who commits serious error of
judgment resulting in his own loss:
x x x Courts operate not because one person has been defeated or
overcome by another, but because he has been defeated or
overcome illegally. Men may do foolish things, make ridiculous
contracts, use miserable judgment, and lose money by them -
indeed, all they have in the world; but not for that alone can the
law intervene and restore. There must be, in addition, a violation
of law, the commission of what the law knows as an actionable
wrong, before the courts are authorized to lay hold of the
situation and remedy it."
Respondents should not be penalized for Legardas
mistake. If the subject property was at all sold, it was only after
the decisions of the trial and appellate courts had gained
finality. These twin judgments, which were nullified by the
Gancayco decision, should be respected and allowed to stand by
this Court for having become final and executory.
A judgment may be broadly defined as the decision or
sentence of the law given by a court or other tribunal as the result
of proceedings instituted therein.[17] It is a judicial act which
settles the issues, fixes the rights and liabilities of the parties, and
determines the proceeding, and it is regarded as the sentence of
the law pronounced by the court on the action or question before
it.[18]
In the case at bar, the trial courts judgment was based on
Cathays evidence after Legarda was declared in default. Damages
were duly awarded to Cathay, not whimsically, but upon proof of
its entitlement thereto. The issue of whether the plaintiff (Cathay)
deserved to recover damages because of the defendants
(Legardas) refusal to honor their lease agreement was
resolved. Consequently, the right of Cathay to be vindicated for
such breach and the liability incurred by Legarda in the process
were determined.
This judgment became final when she failed to avail of
remedies available to her, such as filing a motion for
reconsideration or appealing the case. At the time, the issues
raised in the complaint had already been determined and
disposed of by the trial court.[19] This is the stage of finality which
judgments must at one point or another reach. In our jurisdiction,
a judgment becomes ipso facto final when no appeal is perfected
or the reglementary period to appeal therefrom expires. The
necessity of giving finality to judgments that are not void is self-
evident. The interests of society impose it. The opposite view
might make litigations more unendurable than the wrongs (they
are) intended to redress. It would create doubt, real or imaginary,
and controversy would constantly arise as to what the judgment
or order was. Public policy and sound practice demand that, at
the risk of occasional errors, judgments of courts should become
final at some definite date fixed by law. The very object for which
courts were instituted was to put an end to
controversies.[20] When judgments of lower courts gain finality,
they, too, become inviolable, impervious to modification. They
may, then, no longer be reviewed, or in any way modified directly
or indirectly, by a higher court, not even by the Supreme
Court.[21] In other words, once a judgment becomes final, the only
errors that may be corrected are those which are clerical.[22]
From the foregoing precedents, it is readily apparent that
the real issue that must be resolved in this motion for
reconsideration is the alleged illegality of the final judgments of
the trial and appellate courts.
Void judgments may be classified into two groups: those
rendered by a court without jurisdiction to do so and those
obtained by fraud or collusion.[23] This case must be tested in light
of the guidelines governing the latter class of judgments. In this
regard, an action to annul a judgment on the ground of fraud will
not lie unless the fraud is extrinsic or collateral and facts upon
which it is based (have) not been controverted or resolved in the
case where (the) judgment was rendered.[24]Where is the fraud in
the case at bar? Was Legarda unlawfully barred from the
proceedings below? Did her counsel sell her out to the opponent?
It must be noted that, aside from the fact that no extrinsic
fraud attended the trial and resolution of this case, the
jurisdiction of the court a quo over the parties and the subject
matter was never raised as an issue by Legarda. Such being the
case, the decision of the trial court cannot be nullified. Errors of
judgment, if any, can only be reviewed on appeal, failing which
the decision becomes final and executory, valid and binding upon
the parties in the case and their successors in interest.[25]
At this juncture, it must be pointed out that while Legarda
went to the Court of Appeals claiming precisely that the trial
courts decision was fraudulently obtained, she grounded her
petition before the Supreme Court upon her estranged counsels
negligence. This could only imply that at the time she filed her
petition for annulment of judgment, she entertained no notion
that Atty. Coronel was being remiss in his duties. It was only after
the appellate courts decision had become final and executory, a
writ of execution issued, the property auctioned off then sold to
an innocent purchasers for value, that she began to protest the
alleged negligence of her attorney. In most cases, this would have
been dismissed outright for being dilatory and appearing as an act
of desperation on the part of a vanquished litigant. The Gancayco
ruling, unfortunately, ruled otherwise.
Fortunately, we now have an opportunity to rectify a grave
error of the past.
WHEREFORE, the Motion for Reconsideration of
respondent New Cathay House, Inc. is hereby
GRANTED. Consequently, the decision dated March 18, 1991, of
the Courts First Division is VACATED and SET ASIDE. A new
judgment is hereby entered DISMISSING the instant petition for
review and AFFIRMING the November 29, 1989, decision of the
Court of Appeals in CA-G.R. No. SP-10487. Costs against petitioner
Victoria Legarda.
SO ORDERED.
G.R. Nos. 185857-58, June 29, 2016
TRIFONIA D. GABUTAN, DECEASED, HEREIN REPRESENTED BY
HER HEIRS, NAMELY: ERLINDA LLAMES, ELISA ASOK, PRIMITIVO
GABUTAN, VALENTINA YANE; BUNA D. ACTUB, FELISIA TROCIO,
CRISANTA D. UBAUB, AND TIRSO DALONDONAN, DECEASED,
HEREIN REPRESENTED BY HIS HEIRS, NAMELY: MADELYN D.
REPOSAR AND JERRY DALONDONAN, MARY JANE GILIG, ALLAN
UBAUB, AND SPOUSES NICOLAS & EVELYN
DAILO, Petitioners, v.DANTE D. NACALABAN, HELEN N.
MAANDIG, SUSAN N. SIAO, AND CAGAYAN CAPITOL
COLLEGE, Respondents.
G.R. NOS. 194314-15
DANTE D. NACALABAN, HELEN N. MAANDIG, AND SUSAN N.
SIAO, AS HEIRS OF BALDOMERA D. VDA. DE
NACALABAN, Petitioners, v. TRIFONIA D. GABUTAN, BUNA D.
ACTUB, FELISIA D. TROCIO, CRISANTA D. UBAUB, AND TIRSO
DALONDONAN, DECEASED, HEREIN REPRESENTED BY HIS HEIRS,
NAMELY: MADELYN D. REPOSAR AND JERRY DALONDONAN,
MARY JANE GILIG, ALLAN UBAUB, AND SPOUSES NICOLAS &
EVELYN DAILO, CAGAYAN CAPITOL COLLEGE, REPRESENTED BY
ITS PRESIDENT, ATTY. CASIMIRO B. SUAREZ, JR.,
PRIVATE Respondent;
HON. LEONCIA R. DIMAGIBA (ASSOCIATE JUSTICE), HON. PAUL L.
HERNANDO (ASSOCIATE JUSTICE), HON. NINA G. ANTONIO-
VALENZUELA (ASSOCIATE JUSTICE), HON. EDGARDO T. LLOREN
(ASSOCIATE JUSTICE), HON. MICHAEL P. ELBINIAS (ASSOCIATE
JUSTICE), AND HON. JANE AURORA C. LANTION (ASSOCIATE
JUSTICE, ACTING CHAIRMAN), COURT OF APPEALS, CAGAYAN DE
ORO CITY (FORMER SPECIAL TWENTY-SECOND DIVISION),
PUBLICRespondents.
DECISION
JARDELEZA, J.:
Before us are consolidated petitions questioning the Court of
Appeals' (CA) Decision1 dated December 11, 2008 and
Resolution2 dated August 17, 2010 in CA-G.R. CV No. 68960-MIN
and CA-G.R. SP No. 53598-MIN.3 In G.R. Nos. 185857-58, the heirs
of Trifonia D. Gabutan and Tirso Dalondonan, Buna D. Actub,
Felisia Trocio and Crisanta D. Ubaub (Gabutan, et al.) filed a
partial appeal by way of a petition for review
on certiorari,4 seeking to reverse the portion of the CA Decision
declaring Cagayan Capital College (the College) as a buyer in good
faith. The other petition, G.R. Nos. 194314-15, is one
for certiorari5 filed by Dante D. Nacalaban, Helen N. Maandig, and
Susan N. Siao as heirs of Baldomera D. Vda. De Nacalaban
(Nacalaban, et al.). It seeks to annul the CA Decision and
Resolution which sustained the action for reconveyance filed by
Gabutan, et al.
The Antecedents
On January 25, 1957, Godofredo Nacalaban (Godofredo)
purchased an 800-square meter parcel of prime land (property) in
Poblacion, Cagayan de Oro City from Petra, Fortunata, Francisco
and Dolores, all surnamed Daamo.6 Pursuant to the sale, Transfer
Certificate of Title (TCT) No. T-22597covering the property was
issued in the name of Godofredo. He thereafter built a house on
it.8chanrobleslaw
Godofredo died on January 7, 1974.9 ITe was survived by his wife,
Baldomera, and their children, Dante, Helen, and Susan. On
March 19, 1979, Baldomera issued a Certification10 in favor of her
mother, Melecia. It provided, in effect, that Baldomera was
allowing her mother to build and occupy a house on the portion
of the property.11 Accordingly, the house was declared for
taxation purposes. The tax declaration12 presented in evidence
showed that Melecia owned the building on the land owned by
Godofredo.13chanrobleslaw
Baldomera died on September 11, 1994.14 On July 3, 1996, her
children executed an Extrajudicial Settlement of Estate of
Deceased Person with Sale15 (Extrajudicial Settlement with Sale)
where they adjudicated unto themselves the property and sold it
to the College. On August 22, 1996, TCT No. T-2259 was cancelled
and TCT No. T-11184616 covering the property was issued in the
name of the College.17chanrobleslaw
Melecia died on April 20, 199718 and was survived by her children,
Trifonia, Buna, Felisia, Crisanta, and Tirso.
In aletter19
dated May 5, 1997, the College demanded Trifonia D.
Gabutan, Mary Jane Gilig, Allan Ubaub, and Evelyn Dailo, the heirs
of Melecia who were occupying the house on the property, to
vacate the premises.20chanrobleslaw
On July 7, 1997, Gabutan, et al. filed a Complaint for
Reconveyance of Real Property, Declaration of Nullity of
Contracts, Partition and Damages with Writ of Preliminary
Attachment and Injunction21against Nacalaban, et al. and the
College. They alleged that: (1) Melecia bought the property using
her own money but Godofredo had the Deed of Absolute Sale
executed in his name instead of his mother-in-law;22 (2)
Godofredo and Baldomera were only trustees of the property in
favor of the real owner and beneficiary, Melecia;23 (3) they only
knew about the Extrajudicial Settlement with Sale upon
verification with the Registry of Deeds;24 and (4) the College was a
buyer in bad faith, being aware they were co-owners of the
property.25cralawredchanrobleslaw
In its Answer with Affirmative Defenses,26 the College claimed that
it is a buyer in good faith and for value, having "made exhaustive
investigations and verifications from all reliable sources" that
Melecia and her heirs were staying in the property by mere
tolerance.27 It alleged that: (1) in the tax declaration28 of the
residential house, Melecia admitted that the lot owner is
Godofredo;29 (2) the occupancy permit of Melecia was issued only
after Godofredo issued a certification30 to the effect that Melecia
was allowed to occupy a portion of the property;31 and (3) the
Extrajudicial Settlement with Sale was published in three
consecutive issues of Mindanao Post, a newspaper of general
circulation.32chanrobleslaw
In their Answer with Counterclaim,33 Nacalaban, et al. denied the
allegations of Gabutan, et al. They claimed to have acquired the
property by intestate succession from their parents, who in their
lifetime, exercised unequivocal and absolute ownership over the
property.34 Nacalaban, et al. also set up the defenses of laches
and prescription, and asserted that the action for reconveyance
was improper because the property had already been sold to an
innocent purchaser for value.35chanrobleslaw
On September 10, 1997, the College filed a separate Complaint
for Unlawful Detainer and Damages36with the Municipal Trial
Court in Cities (MTCC) against Trifonia, Mary Jane, Allan, Evelyn
and Nicolas Dailo (Heirs of Melecia). In their Answer with
Affirmative and/or Negative Defenses with Compulsory
Counterclaim,37 the Heirs of Melecia claimed that they own and
possess the property in co-ownership with Nacalaban, et al. and
Gabutan, et al. because it was purchased by Melecia, their
common predecessor.38 They also claimed that the house in which
they reside was constructed at her expense.39 The College had
prior knowledge of this co-ownership, and hence, was a purchaser
in bad faith.40 The Heirs of Melecia also raised the defense of
forum-shopping in view of the pendency of the action for
reconveyance.41 They then concluded that in view of the issues
and the value of the property, as well, the MTCC had no
jurisdiction over the case.42chanrobleslaw
The MTCC found it had jurisdiction to hear the case and ruled in
favor of the College:43chanrobleslaw
WHEREFORE, JUDGMENT is hereby rendered ordering each of the
defendants to:
chanRoblesvirtualLawlibrarya.) Immediately vacate the property
of the plaintiff;
b.) Pay the plaintiff the monthly use compensation for the
continued use of the property at the rate of P500.00 per month
from MAY 5, 1997 until the property is actually vacated;
c.) Pay the plaintiff Attorney's fees amounting to P5,000.00 per
defendant;
d.) Pay for litigation expenses at the rate of P1,000.00 per
defendant.
SO ORDERED.44chanroblesvirtuallawlibrary
On appeal, the Regional Trial Court (RTC) affirmed the MTCC's
Decision46 in all respects, except that the Heirs of Melecia were
given 30 days from notice to vacate the property.47 They filed a
motion for reconsideration, but it was denied.49 Thus, the Heirs of
Melecia filed a petition for review50 before the CA, docketed as
CA-G.R. SP No. 53598.51chanrobleslaw
Meanwhile, in the reconveyance case, the RTC rendered a
Decision52 in favor of Gabutan, et al. The RTC found the
testimonies of their witnesses credible, in that the money of
Melecia was used in buying the property but the name of
Godofredo was used when the title was obtained because
Godofredo lived in Cagayan de Oro City while Melecia lived in
Bornay, Gitagum, Misamis Oriental.53Thus, the RTC held that a
trust was established by operation of law pursuant to Article 1448
of the Civil Code.54 The dispositive portion of the RTC's Decision
reads:
chanRoblesvirtualLawlibrary
WHEREFORE, judgment is hereby rendered, and this Court
hereby:
1. Declares that the Spouses Godofredo and Baldomera
Nacalaban held the land covered by Transfer
Certificate of Title No. T-2259 issued in the name of
Godofredo Nacalaban married to Baldomera
Dalondonan issued on January 13, 1959 in trust for
Melecia Vda. de Dalondonan with the Spouses as the
trustees and Melecia Vda. de Dalondonan as the cestui
que trust;
2. Declares that upon the death of Melecia Vda. de
Dalondonan on August 20, 1997, the ownership and
beneficial interest of the foregoing Land passed to the
plaintiffs and individual defendants by operation of law
as legal heirs of Melecia Vda. de Dalondonan;
3. Nullifies the Extrajudicial Settlement of Estate of
Deceased Person with Sale executed by the individual
defendants on July 30, 1996 and known as Doc. No.
326; Page No. 67; Book No. XX; Series of 1996 in the
Notarial Register of Notary Public Victoriano M. Jacot
with respect to the Extrajudicial settlement by the
individual defendants of the land referred to above;
4. Declares that defendant Cagayan Capitol College was a
buyer in good faith and for value of the land referred
to above, and, accordingly, declares that said
defendant now owns the land;
5. Orders defendant Cagayan Capitol College to inform
this Court in writing within thirty (30) days from receipt
of this decision the amount of the purchase price of
the land referred to above bought by it from the
individual defendants the amount of which should
approximate the prevailing market value of the land at
the time of the purchase;
6. Orders the individual defendants namely, Dante D.
Nacalaban, Helen N. Maandig, and Susan N. Siao,
jointly and severally, to deliver and turn over to the
plaintiffs, within thirty (30) days from receipt of this
decision, plaintiffs' shares of the proceeds of the sale
of the land referred to above the amount of which is
equivalent to live-sixth (5/6) of said proceeds with the
remaining one-sixth (1/6) to be retained by the
individual defendants as their share by virtue of their
being the legal heirs of Baldomera D. Nacalaban;
SO ORDERED.55chanroblesvirtuallawlibrary
Both parties filed separate appeals from this Decision before the
CA.57 In a Resolution58 dated October 7, 2004, the CA consolidated
both appeals.
The C A rendered its Decision59 on December 11, 2008 dismissing
the consolidated appeals and affirming in toto the RTC Decisions
in the unlawful detainer case and the action for reconveyance.
The CA held that: (1) the defense of co-ownership based on an
implied trust by a defendant in an unlawful detainer case shall not
divest the MTCC of jurisdiction over the case;60 (2) the dead man's
statute does not apply because Gabutan, et al.'s counsel did not
interpose any objection when the testimony of Crisanta Ubaub
was offered and Gabutan, et al.'s counsel even examined
her;61 (3) Nacalaban, et al.'s claim that Gabutan, et al.'s witnesses
are not competent to testify on matters which took place before
the death of Godofredo and Melecia is without merit because
Gabutan, et al. have not specified these witnesses and such
hearsay evidence alluded to;62 (4) the parole evidence rule does
not apply because Melecia and Nacalaban, et al. were not parties
to the Deed of Conditional Sale;63 (5) the action for reconveyance
has not yet prescribed because Gabutan, et al. are in possession
of the property;64 and (6) the College is a buyer in good
faith.65chanrobleslaw
Nacalaban, et al. filed their motion for reconsideration of the CA
Decision, but it was denied in a Resolution66 dated August 17,
2010. Hence, they filed the present petition for certiorari67 under
Rule 65, where they allege that: (1) the action for reconveyance
already expired;68 (2) for an action for reconveyance to prosper,
the property should not have passed into the hands of another
who bought the property in good faith and for value;69 and (3) the
title of Godofredo under TCT No. T-2259 which was issued on
January 13, 1959 could not be attacked
collaterally.70chanrobleslaw
On the other hand, Gabutan, et al. filed the present petition for
review on certiorari71 under Rule 45, seeking a partial appeal of
the CA Decision. In their petition, Gabutan, et al. allege that the
College is not a buyer in good faith because it did not buy the
property from the registered owner.72 Since Godofredo was the
registered owner of the property and not Nacalaban, et al., the
College should have exercised a higher degree of prudence in
establishing their capacity to sell it.73 Further, despite knowing
that other persons possessed the property, the College did not
inquire with Gabutan, et al. the nature of their stay on the
property.74 Under Section 1, paragraph 2, Rule 74 of the Rules of
Court, the publication of the Extrajudicial Settlement with Sale
was also without prejudice to claims of other persons who had no
notice or participation thereof.75 Finally, Gabutan, et al. argue that
they cannot be ejected from the property because there is no
evidence to show that their stay was by mere tolerance, and that
Melecia was a builder in good faith.76chanrobleslaw
Considering that the petitions assail the same CA Decision and
involve the same parties, we issued a Resolution77 dated
December 13, 2010 consolidating them.
The Issues
The issues for resolution are:
chanRoblesvirtualLawlibrary
 1. Whether the petition for certiorari of Nacalaban, et al.
shall prosper;
2. Whether the action for reconveyance was proper; and
3. Whether the College is a buyer in good faith.
Our Ruling
I. The petition for certiorari of
Nacalaban, et al. is a wrong
remedy
Pursuant to Section 1, Rule 45 of the Rules of Court,78 the proper
remedy to obtain a reversal of judgment on the merits, final order
or resolution is an appeal. The Resolution dated August 17, 2010
of the CA, which affirmed its Decision dated December 11, 2008,
was a final resolution that disposed of the appeal by Nacalaban, et
al. and left nothing more to be done by the CA in respect to the
said case. Thus, Nacalaban, et al. should have filed an appeal in
the form of a petition for review on certiorari and not a petition
for certiorari under Rule 65, which is a special civil action.
Rule 65 is a limited form of review and is a remedy of last
recourse. This extraordinary action lies only where there is no
appeal nor plain, speedy and adequate remedy in the ordinary
course of law.79 In Malayang Manggagawa ng Stayfast Phils., Inc.
v. National Labor Relations Comission,80 we held that appeal
would still be the proper remedy from a judgment on the merits,
final order or resolution even if the error ascribed to the court
rendering the judgment is its lack of jurisdiction over the subject
matter, or the exercise of power in excess thereof, or grave abuse
of discretion in the findings of fact or of law set out in the
decision, order or resolution. The existence and availability of the
right of appeal prohibits the resort to certiorari because one of
the requirements for the latter remedy is that there should be no
appeal.81 We have always declared that a petition for certiorari is
not a substitute for an appeal where the latter remedy is available
but was lost through fault or negligence.82chanrobleslaw
Here, Nacalaban, et al. received the assailed Resolution dated
August 17, 2010 on September 7, 2010.83 Under the Rules of
Court, they had 15 days or until September 22, 2010 to file an
appeal before us. Nacalaban, et al. allowed this period to lapse
without doing so and, instead, filed a petition for certiorari on
November 5, 2010.84 Being the wrong remedy, the petition of
Nacalaban, et al. is, therefore, dismissible. Although there are
exceptions85 to this general rule, none applies in this case.
In spite of the consolidation we have ordered, we cannot treat the
petition of Nacalaban, et al. as one under Rule 45. We have the
discretion to treat a Rule 65 petition for certiorari as a Rule 45
petition for review on certiorari if (1) the petition is filed within
the reglementary period for filing a petition for review; (2) when
errors of judgment are averred; and (3) when there is sufficient
reason to justify the relaxation of the rules.86 The first and third
requisites are absent in this case. To reiterate, the petition was
filed beyond the 15-day reglementary period of filing a petition
for review on certiorari. As will be discussed, we also find no
compelling reason to relax the rules.
II. The action for reconveyance
filed by Gabutan, et al.
is proper
a. An implied resulting trust was
created between Melecia and
Godofredo
We stress at the outset that the question of existence of an
implied trust is factual, hence, ordinarily outside the purview of
Rule 45.87 The resolution of factual issues is the function of the
lower courts whose findings, when aptly supported by evidence,
bind us. This is especially true when the CA affirms the lower
court's findings, as in this case. While we, under established
exceptional circumstances, had deviated from this rule, we do not
find this case to be under any of the exceptions.88 Even if we were
to disregard these established doctrinal rules, we would still
affirm the assailed CA rulings.
Article 1448 of the Civil Code provides in part that there is an
implied trust when property is sold, and the legal estate is granted
to one party but the price is paid by another for the purpose of
having the beneficial interest of the property. The former is the
trustee, while the latter is the beneficiary. The trust created here,
which is also referred to as a purchase money resulting
trust,89 occurs when there is (1) an actual payment of money,
property or services, or an equivalent, constituting valuable
consideration; (2) and such consideration must be furnished by
the alleged beneficiary of a resulting trust.90 These two elements
are present here.
Gabutan, et al., through the testimonies of Felisia, Crisanta, and
Trifonia, established that Melecia's money was used in buying the
property, but its title was placed in Godofredo's name. She
purchased the property because Felisia wanted to build a
pharmacy on it.91 On one occasion in Melecia's house, and when
the entire family was present, Melecia gave Godofredo the money
to purchase the property.92 Melecia entrusted the money to
Godofredo because he was in Cagayan de Oro, and per Melecia's
instruction, the deed of sale covering the property was placed in
his name.93 It was allegedly her practice to buy properties and
place them in her children's name, but it was understood that she
and her children co-own the properties.94chanrobleslaw
Melecia built a residential building on the property, where her
daughter Crisanta and some of her grandchildren
resided.95 Godofredo also thereafter built a house on the
property. Twice, he also mortgaged the property to secure loans.
Melecia allowed him to do so because she trusted him.96After
Godofredo's death, and when Baldomera fell ill, there were family
discussions to transfer the title in Melecia's name so Melecia's
children can divide it together with the rest of Melecia's
properties. The plans, however, always fell
through.97chanrobleslaw
Both the RTC and CA found credence on these pieces of
testimonial evidence that an implied resulting trust exists.
Reliance on these testimonies will not violate the parol evidence
rule, as Nacalaban, et al. once raised. In Tong v. Go Tiat Kun,98 we
ruled that since an implied trust is neither dependent upon an
express agreement nor required to be evidenced by writing,
Article 1457 of our Civil Code authorizes the admission of parol
evidence to prove their existence. What is crucial is the intention
to create a trust.99 We cautioned, however, that the parol
evidence that is required to establish the existence of an implied
trust necessarily has to be trustworthy and it cannot rest on loose,
equivocal or indefinite declarations.100 The testimonies of Felisia,
Crisanta, and Trifonia satisfy these requirements. They are
consistent and agree in all material points in reference to the
circumstances behind the arrangement between Melecia and
Godofredo. We agree with the RTC when it said that this
arrangement among family members is not unusual, especially in
the 1950s.101chanrobleslaw
Nacalaban, et al., on the other hand, denied the arrangement
between Melecia and Godofredo, and maintained that it was
really the latter who purchased the property from its original
owners, as evidenced by their possession of the Deed of
Conditional Sale and the title being in Godofredo's name.102 It is
telling, however, that Nacalaban, et al. failed to provide the
details of the sale, specifically with regard to how Godofredo
could have been able to afford the purchase price himself, which
would have directly refuted the allegation that Melecia's money
was used in the purchase. As the RTC aptly observed, if Godofredo
really bought the property with his own money, it was surprising
that Baldomera did not transfer the title of the property to her
name when Godofredo died in 1974. Baldomera did not do so
until her death in 1994 despite being pressed by her siblings to
partition the property. The RTC correctly deduced that this only
meant that Baldomera acknowledged that the property belongs
to Melecia.103chanrobleslaw
Having established the creation of an implied resulting trust, the
action for reconveyance filed by Gabutan, et al., the heirs of
Melecia in whose benefit the trust was created, is proper. An
action for reconveyance is a legal and equitable remedy granted
to the rightful landowner, whose land was wrongfully or
erroneously registered in the name of another, to compel the
registered owner to transfer or reconvey the land to him.104 It will
not amount to a collateral attack on the title, contrary to the
allegation of Nacalaban, et al.105 We explained in Hortiznela v.
Tagufa:106chanrobleslaw
x x x As a matter of fact, an action for reconveyance is a
recognized remedy, an action in personam, available to a person
whose property has been wrongfully registered under the Torrens
system in another's name. In an action for reconveyance, the
decree is not sought to be set aside. It does not seek to set aside
the decree but, respecting it as incontrovertible and no longer
open to review, seeks to transfer or reconvey the land from the
registered owner to the rightful owner. Reconveyance is always
available as long as the property has not passed to an innocent
third person for value.
There is no quibble that a certificate of title, like in the case at
bench, can only be questioned through a direct proceeding. The
MCTC and the CA, however, failed to take into account that in a
complaint for reconveyance, the decree of registration is
respected as incontrovertible and is not being questioned. What is
being sought is the transfer of the property wrongfully or
erroneously registered in another's name to its rightful owner or
to the one with a better right. If the registration of the land is
fraudulent, the person in whose name the land is registered holds
it as a mere trustee, and the real owner is entitled to file an action
for reconveyance of the property.107chanroblesvirtuallawlibrary
The fact that the property was already titled in Godofredo's name,
and later transferred to the College, is not a hindrance to an
action for reconveyance based on an implied trust. The title did
not operate to vest ownership upon the property in favor of the
College. As held in Naval v. Court of Appeals:108chanrobleslaw
xxx Registration of a piece of land under the Torrens System does
not create or vest title, because it is not a mode of acquiring
ownership. A certificate of title is merely an evidence of
ownership or title over the particular property described therein.
It cannot be used to protect a usurper from the true owner; nor
can it be used as a shield for the commission of fraud; neither
does it permit one to enrich himself at the expense of others. Its
issuance in favor of a particular person does not foreclose the
possibility that the real property may be co-owned with persons
not named in the certificate, or that it may be held in trust for
another person by the registered owner.109
Moreover, the body of the Complaint filed by Gabutan, et
al. shows that it is not only for the reconveyance of the property
but also for the annulment of TCT No. T-111846 issued in the
name of the College.110 Gabutan, et al. questioned the validity of
the sale to the College and claimed co-ownership over the
property. Thus, we can rule on the validity of TCT No. T-111846
since the Complaint is a direct attack on the title of the College.
b. The action for reconveyance is imprescriptible
because the plaintiffs are in possession of
the property
An action for reconveyance based on an implied or a constructive
trust prescribes 10 years from the alleged fraudulent registration
or date of issuance of the certificate of title over the property.
However, an action for reconveyance based on implied or
constructive trust is imprescriptible if the plaintiff or the person
enforcing the trust is in possession of the property. In effect, the
action for reconveyance is an action to quiet the property title,
which does not prescribe.111 The reason is that the one who is in
actual possession of the land claiming to be its owner may wait
until his possession is disturbed or his title is attacked before
taking steps to vindicate his right. His undisturbed possession
gives him a continuing right to seek the aid of a court of equity to
ascertain and determine the nature of the adverse claim of a third
party and its effect on his own title, which right can be claimed
only by one who is in possession.112chanrobleslaw
The fact of actual possession of Gabutan, et al. of the property,
during the lifetime of Melecia and even after her death, is an
undisputed and established fact. The College has even filed an
ejectment case against the Heirs of Melecia for this
reason.113 Thus, their complaint for reconveyance is
imprescriptible. It follows, with more reason, that Gabutan, et al.
cannot be held guilty of laches as the said doctrine, which is one
in equity, cannot be set up to resist the enforcement of an
imprescriptible legal right.114chanrobleslaw
III.The property shall be reconveyed to the estate of Melecia
The Extrajudicial Settlement with Sale executed
between Nacalaban, et al. and the College is void
Having established the creation of an implied resulting trust
between Melecia and Godofredo, the law thereby creates the
obligation of the trustee to reconvey the property and its title in
favor of the true owner.115 The true owner, Melecia, died in 1997
and was succeeded by her children and grandchildren. The
property, therefore, must be reconveyed to her estate.
The execution of the Extrajudicial Settlement with Sale between
Godofredo's heirs and the College will not defeat the legal
obligation to reconvey the property because at the time of its
execution in 1996, Melecia was still alive. Hence, Nacalaban, et al.
did not have the right or authority to sell the property. Nemo dat
quod non habet. One can sell only what one owns or is authorized
to sell, and the buyer can acquire no more right than what the
seller can transfer legally.116 Nacalaban, et al. cannot find refuge
in their argument that the property was registered in their
father's name and that after his death, his rights passed to them
as his legal heirs. To repeat, title to property does not vest
ownership but is a mere proof that such property has been
registered.117chanrobleslaw
The College is a buyer in bad faith
Despite the finding that the property was owned by Melecia and
upon her death, by her heirs, the lower courts still sustained the
ownership of the College of the property on the ground that it is
an innocent purchaser for value.118 The lower courts' findings are
grounded on the following: (i) Gabutan, et al.'s claim was never
annotated on Godofredo's title; (ii) the Extrajudicial Settlement
with Sale was duly published and the College was able to effect
the transfer of the title in its name; (iii) Baldomera issued a
certification in favor of Melecia allowing her to occupy a portion
of the lot; and (iv) the tax declaration showed that Melecia owned
only the building on the land owned by
Godofredo.119chanrobleslaw
The RTC reiterated the rule that the buyer of a land registered
under the Torrens System may rely upon the face of the
certificate of title and does not have to look beyond it.120 The CA,
on the other hand, held that when taken together, these facts
would reasonably constitute enough reason for the College or any
buyer to conclude that the property is free from any adverse
claim, thereby making any further investigation unnecessary.
Absent any showing that the College knew of the actual
arrangement between Godofredo and Melecia, it must be
deemed a buyer in good faith.121chanrobleslaw
Gabutan, et al. alleged that the lower courts erred in ruling that
the College is a buyer in good faith, raising the following: (1)
Nacalaban, et al. are not the registered owners of the property;
Godofredo is the registered owner who died on January 7,
1974;122 (2) not being the registered owners, the College, as
buyer, is expected to examine not only the certificate of title but
all factual circumstances necessary for him to determine if there
are any flaws in the title of the transferor, or in his capacity to
transfer the property;123 and (3) the College knew that other
persons possessed the property so it should have first established
the capacity of the Nacalaban children to sell the
property.124chanrobleslaw
Whether one is a buyer in good faith and whether due diligence
and prudence were exercised are questions of fact.125 As we have
already mentioned, only questions of law may be raised in a
petition for review on certiorari under Rule 45 of the Rules of
Court. We see an exception, however, to this general rule relative
to the finding that the College is a buyer in good faith. We hold
that the RTC's finding that the College is a buyer in good faith,
which finding was upheld by the CA, was based on an obvious
misapprehension of facts and was clearly not supported by law
and jurisprudence.
In Bautista v. Silva,126 we reiterated the requisites for one to be
considered a purchaser in good faith:
chanRoblesvirtualLawlibrary
A buyer for value in good Faith is one who buys property of
another, without notice that some other person has a right to, or
interest in, such property and pays full and fair price for the same,
at the time of such purchase, or before he has notice of the claim
or interest of some other persons in the property. He buys the
property with the welt-founded belief that the person from whom
he receives the thing had title to the property and capacity to
convey it.
To prove good faith, a buyer of registered and titled land need
only show that he relied on the face of the title to the property.
He need not prove that he made further inquiry for he is not
obliged to explore beyond the four corners of the title. Such
degree of proof of good faith, however, is sufficient only when
the following
conditions concur: first, the seller is the registered owner of the
land; second, the latter is in possession thereof; and third, at the
time of the sale, the buyer was not aware of any claim or
interest of some other person in the property, or of any defect
or restriction in the title of the seller or in his capacity to convey
title to the property.
Absent one or two of the foregoing conditions, then the law itself
puts the buyer on notice and obliges the latter to exercise a
higher degree of diligence by scrutinizing the certificate of title
and examining all factual circumstances in order to determine the
seller's title and capacity to transfer any interest in the property.
Under such circumstance, it is no longer sufficient for said buyer
to merely show that he relied on the face of the title; he must
now also show that he exercised reasonable precaution by
inquiring beyond the title. Failure to exercise such degree of
precaution makes him a buyer in bad faith.127 (Emphasis supplied.)
Thus, the College, which has the burden to prove the status of
being a purchaser in good faith, is required to prove
the concurrence of the above conditions. This onus
probandi cannot be discharged by mere invocation of the legal
presumption of good faith.128 We find that the College failed to
discharge this burden.
Firstly, as correctly pointed out by Gabutan, et al., Nacalaban, et
al. are not the registered owners of the property, but Godofredo.
In Bautista v. Court of Appeals,129 we held:
chanRoblesvirtualLawlibrary
However, it is important to note that petitioners did not buy the
land from the registered owner, Dionisio Santiago. They bought it
from his heirs, Maria dcla Cruz and Jose Santiago.
Where a purchaser buys from one who is not the registered
owner himself, the law requires a higher degree of prudence even
if the land object of the transaction is registered. One who buys
from one who is not the registered owner is expected to examine
not only the certificate of title but all factual circumstances
necessary for him to determine if there are any flaws in the title
of the transferor, or in his capacity to transfer the land.130
Secondly, the College was aware that aside from Nacalaban, et al.,
the Heirs of Melecia, were also in possession of the property. The
College cited the tax declaration which bore an annotation that
Melecia owned a residential building and Godofredo owned the
lot.131 Also, apart from filing an ejectment case against the Heirs
of Melecia, the College retained part of the purchase price for the
demolition of Melecia's building as well.132chanrobleslaw
In Occea v. Esponilla,133 we held that petitioner-spouses were
not purchasers in good faith when they merely relied on the
representation of the seller regarding the nature of possession of
the occupants of the land:
 judgment. The total amount shall thereafter earn
chanRoblesvirtualLawlibrary interest at the rate of six percent (6%) per annum from
In the case at bar, we find that petitioner-spouses failed to prove the finality of judgment until its satisfaction;142 and
good faith in their purchase and registration of the land, x x x At
the trial, Tomas Occena admitted that he found houses built on 3. The Register of Deeds is ordered to cancel TCT No. T-l
the land during its ocular inspection prior to his purchase. He 11846 in the name of the College.
relied on the representation of vendor Arnold that these houses
were owned by squatters and that he was merely tolerating
4. The property should be reconveyed to the Estate of
their presence on the land. Tomas should have verified from the
the late Melecia Dalondonan with the institution of the
occupants of the land the nature and authority of their
proper proceedings for its partition and titling.
possession instead of merely relying on the representation of
the vendor that they were squatters, having seen for himself
that the land was occupied by persons other than the vendor
who was not in possession of the land at that time, x x SO ORDERED.
x134 (Emphasis supplied.)

Although the College in its Answer alleged that it made an

G.R. No. 195825 February 27, 2013
exhaustive investigation and verification from all reliable sources
and found that the possession of Melecia and her heirs was
merely tolerated,135 it failed to specify who or what these sources SPOUSES ALFONSO AND MARIA ANGELES CUSI, Petitioners,
were. There is no evidence that the College did inquire from vs.
Melecia or her heirs themselves, who were occupying the LILIA V. DOMINGO, Respondent.
property, the nature and authority of their possession. It is not
far-fetched to conclude, therefore, that the College merely relied x-----------------------x
on the representations of the sellers and the documents they
presented. In this regard, the College is not a buyer in good faith.
G.R. No. 195871
The "honesty of intention" which constitutes good faith implies
a freedom from knowledge of circumstances which ought to put RAMONA LIZA L. DE VERA, Petitioner,
a person on inquiry.136 If the land purchased is in the possession vs
of a person other than the vendor, the purchaser must be wary LILIA V. DOMINGO AND SPOUSES RADELIA AND ALFRED
and must investigate the rights of the actual possessor.137 Without SY, Respondents.
such inquiry, the purchaser cannot be said to be in good faith and
cannot have any right over the property.138chanrobleslaw
DECISION
We are aware that in the ejectment case, the MTCC and RTC ruled
in favor of the College. We emphasize, though, that the ruling on BERSAMIN, J.:
the College's better right of possession was without prejudice to
the eventual outcome of the reconveyance case where the issue
Under the Torrens system of land registration, the registered
of ownership was fully threshed out. We have held that the sole
owner of realty cannot be deprived of her property through fraud,
issue for resolution in an unlawful detainer case is physical or
unless a transferee acquires the property as an innocent
material possession of the property involved, independent of any
purchaser for value. A transferee who acquires the property
claim of ownership by any of the parties. When the defendant,
covered by a reissued owner's copy of the certificate of title
however, raises the defense of ownership in his pleadings and the
without taking the ordinary precautions of honest persons in
question of possession cannot be resolved without deciding the
doing business and examining the records of the proper Registry
issue of ownership, the issue of ownership shall be resolved only
of Deeds, or who fails to pay the full market value of the property
to determine the issue of possession.139 Thus, the ruling on the
is not considered an innocent purchaser for value.
ejectment case is not conclusive as to the issue of
ownership. 140chanrobleslaw
Under review in these consolidated appeals is the Decision
WHEREFORE, in view of the foregoing, the petition promulgated on July 16, 2010,1 whereby the Court of Appeals (CA)
for certiorari in G.R. Nos. 194314-14 is DENIED and the petition in CA-G.R. CV No. 90452 affirmed the revised decision rendered
for review on certiorari in G.R. Nos. 185857-58 is GRANTED. The on March 1, 2007 by the Regional Trial Court in Quezon City (RTC)
Decision of the Court of Appeals dated December 11, 2008 and its against the petitioners and their seller.2
Resolution dated August 17, 2010 are AFFIRMED with the
following MODIFICATIONS: Antecedents

1. Cagayan Capitol College is hereby declared a buyer in
bad faith, who has no right to possession and
ownership of the property;
2. Nacalaban, et al. are ordered to return the purchase
price paid on the property to the College, plus interest
at the rate of six percent (6%) per annum computed
from July 23, 1997141 until the date of finality of this
The property in dispute was a vacant unfenced lot situated in
White Plains, Quezon City and covered by Transfer Certificate of
Title (TCT) No. N-165606 issued in the name of respondent Lilia V.
Domingo by the Registry of Deeds of Quezon City. It had an area
of 658 square meters.3 In July 1999, Domingo learned that
construction activities were being undertaken on her property
without her consent. She soon unearthed the series of anomalous
transactions affecting her property.
On July 18, 1997, one Radelia Sy (Sy),4 representing herself as the
owner of the property, petitioned the RTC for the issuance of a
new owners copy of Domingos TCT No. N-165606, appending to
her petition a deed of absolute sale dated July 14, 1997
purportedly executed in her favor by Domingo;5 and an affidavit
of loss dated July 17, 1997,6 whereby she claimed that her bag
containing the owners copy of TCT No. N-165606 had been
snatched from her on July 13, 1997 while she was at the SM City
in North EDSA, Quezon City. The RTC granted Sys petition on
August 26, 1997.7 The Registry of Deeds of Quezon City then
issued a new owners duplicate copy of TCT No. N-165606, which
was later cancelled by virtue of the deed of absolute sale dated
July 14, 1997, and in its stead the Registry of Deeds of Quezon City
issued TCT No. 186142 in Sys name.8
Sy subsequently subdivided the property into two, and sold each
half by way of contract to sell to Spouses Edgardo and Ramona
Liza De Vera and to Spouses Alfonso and Maria Angeles Cusi. The
existence of the individual contracts to sell was annotated on the
dorsal portion of Sys TCT No. 186142 as Entry No. PE-8907/N-
186142,9 stating that the consideration of the sale was
1,000,000.00 for each set of buyers, or for a total of
2,000,000.00 for the entire property that had an actual worth of
not less than 14,000,000.00. TCT No. 186142 in the name of Sy
was then cancelled by virtue of the deeds of sale executed
between Sy and Spouses De Vera, and between Sy and Spouses
Cusi, to whom were respectively issued TCT No. 18956810 and TCT
No. 189569.11 All the while, the transactions between Sy and the
De Veras, and between Sy and the Cusis were unknown to
Domingo, whose TCT No. N-165606 remained in her undisturbed
possession.12
It turned out that the construction activities taking place on the
property that Domingo learned about were upon the initiative of
the De Veras in the exercise of their dominical and possessory
rights.
Domingo commenced this action against Sy and her spouse, the
De Veras and the Cusis in the RTC, the complaint being docketed
as Civil Case No. Q-99-39312 and entitled Lilia V. Domingo v.
Spouses Radelia and Alfred Sy, Spouses Alfonso G. and Maria
Angeles S. Cusi, Spouses Edgardo M. and Ramona Liza L. De Vera,
BPI Family Savings Bank and The Register of Deeds of Quezon City,
seeking the annulment or cancellation of titles, injunction and
damages. Domingo applied for the issuance of a writ of
preliminary prohibitory and mandatory injunction, and a
temporary restraining order (TRO).13 The RTC granted Domingos
application for the TRO enjoining the defendants from proceeding
with the construction activities on the property. The RTC later
granted her application for the writ of preliminary injunction.
Ruling of the RTC
On September 30, 2003, the RTC rendered a decision,14 disposing:
WHEREFORE, in view of all the foregoing judgment is hereby
rendered:
(a) declaring the sale between Lilia V. Domingo and
Radella Sy void and of (sic) effect;
(b) declaring the Sps. Edgardo and Ramona Liza De
Vera and Sps. Alfonso and Maria Angeles Cusi to be
purchasers in good faith and for value;
(c) lifting the writ of preliminary injunction;
(d) finding defendant Radella Sy liable to the plaintiff
Lilia Domingo liable (sic) for damages, as follows:
1. Fourteen Million Pesos (14,000,000.00)
representing the value of the property
covered by TCT No. 165606 plus legal rate
of interest until fully paid;
2. One Million Pesos (1,000,000.00)
representing moral damages;
3. Five Hundred Thousand Pesos
(500,000.00) representing exemplary
damages;
4. Five Hundred Thousand Pesos
(500,000.00) representing attorneys fees;
5. Two Hundred Thousand Pesos
(200,000.00) representing litigation
expenses; and
6. Costs of Suit.
IT IS SO ORDERED.
Acting on the motions for reconsideration separately filed by Sy
and Domingo,15 the RTC reconsidered and set aside its September
30, 2003 decision, and allowed the presentation of rebuttal and
sur-rebuttal evidence.
On March 1, 2007, the RTC rendered a new decision,16 ruling:
WHEREFORE, in view of the foregoing, Judgment is hereby
rendered:
(a) Declaring the sale between Lilia Domingo and
Radelia Sy void and of no effect;
(b) Declaring the Sps. Edgardo and Ramona Liza De
Vera and Sps. Alfonso and Maria Angeles Cusi not
purchasers in good faith and for value;
(c) TCT Nos. 189568 and 189569 are hereby cancelled
and declared Null and Void Ab Initio;
(d) Directing the Register of Deeds of Quezon City to
annotate this Order on TCT No. 189568 and 189569;
(e) TCT No. 165606 in the name of Lilia Domingo is
hereby revalidated; and,
 (f) Finding defendant Radelia Sy liable to the plaintiff
Lilia V. Domingo liable (sic) for damages, as follows:
1. One Million Pesos (1,000,000.00)
representing moral damages;
2. Five Hundred Thousand Pesos
(500,000.00) representing exemplary
damages;
3. Five Hundred Thousand Pesos
(500,000.00) representing attorneys fees;
4. Two Hundred Thousand Pesos
(200,000.00) representing litigation
expenses; and,
5. Costs of suit.
This Decision is without prejudice to whatever civil action for
recovery and damages, the defendants Sps. De Vera and Sps. Cusi
may have against defendant Spouses Radelia and Alfred Sy.
SO ORDERED.
Ruling of the CA
On appeal, the assignment of errors each set of appellants made
was as follows:
Spouses Cusi
a) THE REGIONAL TRIAL COURT GRAVELY ERRED IN
FINDING THAT DEFENDANTS SPOUSES ALFONSO AND
MARIA ANGELES CUSI ARE NOT PURCHASERS IN GOOD
FAITH AND FOR VALUE.
b) THE REGIONAL TRIAL COURT GRAVELY ERRED IN
FAILING TO RESOLVE THE ISSUE OF WHETHER OR NOT
CODEFENDANTS SPOUSES RADELIA SY AND ALFRED SY
ARE LIABLE FOR SPOUSES CUSIS CROSS-CLAIM.
c) THE REGIONAL TRIAL COURT ERRED IN FAILING TO
AWARD DAMAGES AND ATTORNEYS FEES TO
DEFENDANTS SPOUSES CUSI.17
Spouses Sy
a) THE TRIAL COURT A QUO ERRED IN HOLDING THAT
THE SALE BETWEEN LILIA DOMINGO AND RADELIA SY
VOID AND OF NO EFFECT AND WAS PROCURRED (sic)
THROUGH FRAUDULENT MEANS.
b) THAT THE HONORABLE COURT ERRED IN
AWARDING ACTUAL MORAL DAMAGES, EXEMPLARY
DAMAGES AND ATTORNEYS FEES AND LITIGATION
EXPENSES THE SAME BEING NULL AND VOID FOR
BEING CONTRARY TO LAW.
c) THAT THE SAID DECISION IS CONTRARY TO LAW AND
JURISPRUDENCE AND IS NOT SUPPORTED BY
EVIDENCE, AS THE SAME CONTAIN SERIOUS
REVERSIBLE ERRORS WHEN THE COURT A QUO
DECLARED THAT TCT NOS. 189568 AND 189569
CANCELLED AND DECLARED NULL AND VOID AB INITIO.
d) THE INSTANT ASSAILED DECISION OF THE
HONORABLE COURT HAVE (sic) DEPRIVED
DEFENDANT[S] SPOUSES SY OF THEIR BASIC
CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW.18
Spouses De Vera
a) THE LOWER COURT ERRED IN HOLDING THAT THE
DE VERA SPOUSES ARE NOT PURCHASERS IN GOOD
FAITH AND NOT ENTITLED TO THE POSSESSION OF THE
PROPERTY COVERED BY TCT NO. N-189568.
b) THE LOWER COURT ALSO ERRED IN NOT AWARDING
DEFENDANT-APPELLANT DE VERA HER
COUNTERCLAIMS AGAINST PLAINTIFF-APPELLEE.19
As stated, the CA promulgated its decision on July 16, 2010,
affirming the RTC with modification of the damages to be paid by
the Sys to Domingo, viz:
WHEREFORE, premises considered, the instant appeal
is denied. Accordingly, the Decision dated March 1, 2007 of the
Regional Trial Court is hereby AFFIRMED with the modification on
the award of damages to be paid by defendants-appellants
Spouses Radelia and Alfred Sy in favor of the plaintiff-appellee
Lilia V. Domingo, to wit;
1. 500,000.00 by way of moral damages;
2. 200,000.00 by way of exemplary damages;
3. 100,000.00 as attorneys fees and litigation
expenses.
SO ORDERED.20
The CA held that the sale of the property from Domingo to Sy was
null and void and conveyed no title to the latter for being effected
by forging the signature of Domingo; that Sy thereby acquired no
right in the property that she could convey to the Cusis and De
Veras as her buyers; that although acknowledging that a
purchaser could rely on what appeared on the face of the
certificate of title, the Cusis and De Veras did not have the status
of purchasers in good faith and for value by reason of their being
aware of Sys TCT No. 186142 being a reconstituted owners copy,
thereby requiring them to conduct an inquiry or investigation into
the status of the title of Sy in the property, and not simply rely on
the face of Sys TCT No. 186142; and that the Cusis and De Veras
were also aware of other facts that should further put them on
guard, particularly the several nearly simultaneous transactions
respecting the property, and the undervaluation of the purchase
price from 7,000,000.00/half to only 1,000,000.00/half to
enable Sy to pay a lesser capital gains tax.
The CA later on denied the motions for reconsideration.21
Issues
Hence, this appeal via petitions for review on certiorari by the
Cusis (G.R. No. 195825) and Ramona Liza L. De Vera22 (G.R. No.
195871).
In G.R. No. 195825, the Cusis submit the following issues:23
I root of title. The State issues an official certificate of title to attest
WHETHER OR NOT THE HONORABLE COURT OF
APPEALS ERRED IN FINDING THAT TRANSFER
CERTIFICATE OF TITLE NO. 186142 REGISTERED IN THE
NAME OF RADELIA SY IS A RECONSTITUTED TITLE.
II
WHETHER OR NOT THE PETITIONERS ARE BUYERS IN
GOOD FAITH AND FOR VALUE.
III
GRANTING, WITHOUT ADMITTING, THAT THE
DECISION OF THE HONORABLE COURT OF APPEALS IS
CORRECT WITH RESPECT TO THE SECOND ISSUE,
WHETHER OR NOT PETITIONERS ARE ENTITLED TO
REIMBURSEMENT OF ALL THE PAYMENTS MADE BY
PETITIONERS TO THEIR CODEFENDANTS SPOUSES
ALFRED AND RADELIA SY IN ADDITION TO DAMAGES
AND ATTORNEYS FEES.
In G.R. No. 195871, De Vera asserts that the primordial issue is
whether or not she was an innocent purchaser for value and in
good faith.
Ruling of the Court
The petitions for review are bereft of merit.
Firstly, now beyond dispute is the nullity of the transfer of
Domingos property to Sy because both lower courts united in so
finding. The unanimity in findings of both the RTC and the CA on
this all-important aspect of the case is now conclusive on the
Court in view of their consistency thereon as well as by reason of
such findings being fully supported by preponderant evidence. We
consider to be significant that the Sys no longer came to the Court
for further review, thereby rendering the judgment of the CA on
the issue of nullity final and immutable as to them.
Secondly, the Cusis and De Vera commonly contend that the CA
gravely erred in not considering them to be purchasers in good
faith and for value. They argue that Sys TCT No. 186142 was free
of any liens or encumbrances that could have excited their
suspicion; and that they nonetheless even went beyond the task
of examining the face of Sys TCT No. 186142, recounting every
single detail of their quest to ascertain the validity of Sys title, but
did not find anything by which to doubt her title.
The Court concurs with the finding by the CA that the Cusis and
De Vera were not purchasers for value and in good faith. The
records simply do not support their common contention in that
respect.
Under the Torrens system of land registration,24 the State is
required to maintain a register of landholdings that guarantees
indefeasible title to those included in the register. The system has
been instituted to combat the problems of uncertainty,
complexity and cost associated with old title systems that
depended upon proof of an unbroken chain of title back to a good
to the fact that the person named is the owner of the property
described therein, subject to such liens and encumbrances as
thereon noted or what the law warrants or reserves.25
One of the guiding tenets underlying the Torrens system is the
curtain principle, in that one does not need to go behind the
certificate of title because it contains all the information about
the title of its holder. This principle dispenses with the need of
proving ownership by long complicated documents kept by the
registered owner, which may be necessary under a private
conveyancing system, and assures that all the necessary
information regarding ownership is on the certificate of title.
Consequently, the avowed objective of the Torrens system is to
obviate possible conflicts of title by giving the public the right to
rely upon the face of the Torrens certificate and, as a rule, to
dispense with the necessity of inquiring further; on the part of the
registered owner, the system gives him complete peace of mind
that he would be secured in his ownership as long as he has not
voluntarily disposed of any right over the covered land.26
The Philippines adopted the Torrens system through Act No.
496,27 also known as the Land Registration Act, which was
approved on November 6, 1902 and took effect on February 1,
1903. In this jurisdiction, therefore, "a person dealing in
registered land has the right to rely on the Torrens certificate of
title and to dispense with the need of inquiring
further, except when the party has actual knowledge of facts and
circumstances that would impel a reasonably cautious man to
make such inquiry".28
To obtain a grasp of whether a person has actual knowledge of
facts and circumstances that would impel a reasonably cautious
man to make such inquiry, an internal matter, necessitates an
analysis of evidence of a persons conduct.29 That renders the
determination of intent as a factual issue,30 something that the
Court does not normally involve itself in because of its not being a
trier of facts. Indeed, as a rule, the review function of the Court is
limited to a review of the law involved.
But the Court now delves into the facts relating to the issue of
innocence of the petitioners in their purchase of the property,
considering that the RTC, through its original decision, at first
regarded them to have been innocent purchasers who were not
aware of any flaw or defect in Sys title based on the fact that the
property had been unfenced and vacant. The RTC also regarded
the petitioners making of reasonable verifications as their
exercise of the due diligence required of an ordinary buyer.31 The
RTC later completely turned around through another decision,
however, and it was such decision that the CA affirmed subject to
the modifications of the damages granted to Domingo.
There is no question that the petitioners exerted some effort as
buyers to determine whether the property did rightfully belong to
Sy. For one, they did not find any encumbrance, like a notice of lis
pendens, being annotated on the TCT of Sy. Nonetheless, their
observance of a certain degree of diligence within the context of
the principles underlying the Torrens system
was not their only barometer under the law and jurisprudence by
which to gauge the validity of their acquisition of title. As the
purchasers of the property, they also came under the clear
obligation to purchase the property not only in good faith but also
for value.
Therein lay the problem. The petitioners were shown to have
been deficient in their vigilance as buyers of the property. It was
not enough for them to show that the property was unfenced and
vacant; otherwise, it would be too easy for any registered owner
to lose her property, including its possession, through illegal
occupation. Nor was it safe for them to simply rely on the face of
Sys TCT No. 186142 in view of the fact that they were aware that
her TCT was derived from a duplicate owners copy reissued by
virtue of the loss of the original duplicate owners copy. That
circumstance should have already alerted them to the need to
inquire beyond the face of Sys TCT No. 186142. There were other
circumstances, like the almost simultaneous transactions affecting
the property within a short span of time, as well as the gross
undervaluation of the property in the deeds of sale, ostensibly at
the behest of Sy to minimize her liabilities for the capital gains tax,
that also excited suspicion, and required them to be extra-
cautious in dealing with Sy on the property.
To the Court, the CAs treatment of Sys TCT No. 186142 as similar
to a reconstituted copy of a Torrens certificate of title was not
unwarranted. In doing so, the CA cited the ruling in Barstowe
Philippines Corporation v. Republic,32 where the Court, quoting
from precedents, opined that "the nature of a reconstituted
Transfer Certificate of Title of registered land is similar to that of a
second Owners Duplicate Transfer Certificate of Title," in that
"both are issued, after the proper proceedings, on the
representation of the registered owner that the original of the
said TCT or the original of the Owners Duplicate TCT, respectively,
was lost and could not be located or found despite diligent efforts
exerted for that purpose;"33 and that both were "subsequent
copies of the originals thereof," a fact that a "cursory examination
of these subsequent copies would show" and "put on notice of
such fact [anyone dealing with such copies who is] thus warned to
be extracareful."34
Verily, the Court has treated a reissued duplicate owners copy of
a TCT as merely a reconstituted certificate of title. In Garcia v.
Court of Appeals,35 a case with striking similarities to this one, an
impostor succeeded in tricking a court of law into granting his
petition for the issuance of a duplicate owners copy of the
supposedly lost TCT. The impostor then had the TCT cancelled by
presenting a purported deed of sale between him and the
registered owners, both of whom had already been dead for some
time, and another TCT was then issued in the impostors own
name. This issuance in the impostors own name was followed by
the issuance of yet another TCT in favor of a third party,
supposedly the buyer of the impostor. In turn, the impostors
transferee (already the registered owner in his own name)
mortgaged the property to Spouses Miguel and Adela Lazaro, who
then caused the annotation of the mortgage on the TCT. All the
while, the original duplicate owners copy of the TCT remained in
the hands of an heir of the deceased registered owners with his
co-heirs knowledge and consent.
The inevitable litigation ensued, and ultimately ended up with the
Court.1wphi1 The Lazaros, as the mortgagees, claimed good
faith, and urged the Court to find in their favor. But the Court
rebuffed their urging, holding instead that they did not deal on
the property in good faith because: (a) "the title of the property
mortgaged to the Lazaros was a second owners duplicate TCT,
which is, in effect a reconstituted title. This circumstance should
have alerted them to make the necessary investigation, but they
did not;" and (b) their argument, that "because the TCT of the
property on which their mortgage lien was annotated did not
contain the annotation: "Reconstituted title," the treatment of
the reissued duplicate owners copy of the TCT as akin to a
reconstituted title did not apply, had no merit considering that:
"The nature of a reconstituted Transfer Certificate of Title of
registered land is similar to that of a second Owner's Duplicate
Transfer Certificate of Title. Both are issued, after the proper
proceedings, on the representation of the registered owner that
the original of the said TCT or the original of the Owner's
Duplicate TCT, respectively, was lost and could not be located or
found despite diligent efforts exerted for that purpose. Both,
therefore, are subsequent copies of the originals thereof. A
cursory examination of these subsequent copies would show that
they are not the originals. Anyone dealing with such copies are
put on notice of such fact and thus warned to be extra-careful.
This warning the mortgagees Lazaros did not heed, or they just
ignored it."36
The fraud committed in Garcia paralleled the fraud committed
here.1wphi1 The registered owner of the property was Domingo,
who remained in the custody of her TCT all along; the impostor
was Sy, who succeeded in obtaining a duplicate owners copy; and
the Cusis and the De Veras were similarly situated as the Spouses
Lazaro, the mortgagees in Garcia. The Cusis and the De Veras did
not investigate beyond the face of Sys TCT No. 186142, despite
the certificate derived from the reissued duplicate owners copy
being akin to a reconstituted TCT. Thereby, they denied
themselves the innocence and good faith they supposedly clothed
themselves with when they dealt with Sy on the property.
The records also show that the forged deed of sale from Domingo
to Sy appeared to be executed on July 14, 1997; that the affidavit
of loss by which Sy would later on support her petition for the
issuance of the duplicate owners copy of Domingos TCT No.
165606 was executed on July 17, 1997, the very same day in
which Sy registered the affidavit of loss in the Registry of Deeds of
Quezon City; that Sy filed the petition for the issuance of the
duplicate owners copy of Domingos TCT No. 165606; that the
RTC granted her petition on August 26, 1997; and that on October
31, 1997, a real estate mortgage was executed in favor of one
Emma Turingan, with the mortgage being annotated on TCT No.
165606 on November 10, 1997.
Being the buyers of the registered realty, the Cusis and the De
Veras were aware of the aforementioned several almost
simultaneous transactions affecting the property. Their
awareness, if it was not actual, was at least presumed, and ought
to have put them on their guard, for, as the CA pointed out, the
RTC observed that "[t]hese almost simultaneous transactions,
particularly the date of the alleged loss of the TCT No. 165606 and
the purported Deed of Sale, suffice[d] to arouse suspicion on [the
part of] any person dealing with the subject property."37 Simple
prudence would then have impelled them as honest persons to Resultantly, the Court affirms the lower courts, and restores to
make deeper inquiries to clear the suspiciousness haunting Sys Domingo her rights of dominion over the propetiy.
title. But they still went on with their respective purchase of the
property without making the deeper inquiries. In that regard, they
WHEREFORE, the Court AFFIRMS the decision of the Court of
were not acting in good faith.
Appeals promulgated on July 16, 201 0; and ORDERS the
petitioners to pay the costs of suit.
Another circumstance indicating that the Cusis and the De Veras
were not innocent purchasers for value was the gross
SO ORDERED.
undervaluation of the property in the deeds of sale at the measly
price of 1,000,000.00 for each half when the true market value
was then in the aggregate of at least 14,000,000.00 for the
entire property. Even if the undervaluation was to accommodate
the request of Sy to enable her to minimize her liabilities for the
capital gains tax, their acquiescence to the fraud perpetrated
against the Government, no less, still rendered them as parties to
the wrongdoing. They were not any less guilty at all. In the
ultimate analysis, their supposed passivity respecting the
arrangement to perpetrate the fraud was not even plausible,
because they knew as the buyers that they were not personally
liable for the capital gains taxes and thus had nothing to gain by
their acquiescence. There was simply no acceptable reason for
them to have acquiesced to the fraud, or for them not to have
rightfully insisted on the declaration of the full value of the realty
in their deeds of sale. By letting their respective deeds of sale
reflect the grossly inadequate price, they should suffer the
consequences, including the inference of their bad faith in
transacting the sales in their favor.

De Vera particularly insists that she and her late husband did not
have any hand in the undervaluation; and that Sy, having
prepared the deed of sale, should alone be held responsible for
the undervaluation that had inured only to her benefit as the
seller. However, such insistence was rendered of no consequence
herein by the fact that neither she nor her late husband had seen
fit to rectify the undervaluation. It is notable that the De Veras
were contracting parties who appeared to have transacted with
full freedom from undue influence from Sy or anyone else.

Although the petitioners argue that the actual consideration of G.R. No. 192669 April 21, 2014
the sale was nearly 7,000,000.00 for each half of the property,
the Court rejects their argument as devoid of factual basis, for RAUL SABERON, JOAN F. SABERON and JACQUELINE
they did not adduce evidence of the actual payment of that SABERON, Petitioners,
amount to Sy. Accordingly, the recitals of the deeds of sale were vs.
controlling on the consideration of the sales. OSCAR VENTANILLA, JR., and CARMEN GLORIA D.
VENTANILLA, Respondents.
Good faith is the honest intention to abstain from taking
unconscientious advantage of another. It means the "freedom RESOLUTION
from knowledge and circumstances which ought to put a person
on inquiry."38
MENDOZA, J.:

Given this notion of good faith, therefore, a purchaser in good

For resolution of the Court is a motion for reconsideration of the
faith is one who buys the property of another without notice that
Court's January 19, 2011 Resolution1 which denied the petition of
some other person has a right to, or interest in, such property and
Raul F. Saberon, Jr., Joan F. Saberon and Jacqueline F. Saberon
pays full and fair price for the same.38 As an examination of the
(Saberons). In effect, it affirmed the March 12, 2010 Decision2 and
records shows, the petitioners were not innocent purchasers in
the June 18, 2010 Resolution3 of the Court of Appeals (CA) in CA-
good faith and for value. Their failure to investigate Sy's title
G.R. CV No. 85520, holding that the June 21, 2005 Decision of the
despite the nearly simultaneous transactions on the property that
Regional Trial Court, Branch 80, Quezon City (RTC) in Civil Case
ought to have put them on inquiry manifested their awareness of
No. 96-26486, was correct in, among others, ordering the
the flaw in Sy's title. That they did not also appear to have paid
cancellation of Transfer Certificate of Title (TCT) Nos. 55396 and
the full price for their share of the property evinced their not
55397 in the name of the Saberons and Samuel Marquez
having paid true value.39
(Marquez).
This case is an offshoot of two (2) cases involving the same
property, docketed as G.R. No. 82978 and G.R. No. 107282, which
had been decided by the Court with finality on November 22,
1990 and March 16, 1994, respectively.
Antecedent Facts
total amount of 73,122.35 for the two lots, the Ventanillas
offered to pay the balance to MRCI. To their shock, their names as
lot buyers did not appear in MRCIs records. Instead, MRCI
showed them a copy of the contract to sell signed by Valencia, in
favor of Crisostomo. MRCI refused the Ventanillas offer to pay for
the remainder of the contract price.

Aggrieved, the Ventanillas commenced an action for specific

In the earlier cases, Manila Remnant Co., Inc. (MRCI) was the
performance, annulment of deeds and damages against MRCI,
petitioner, being the owner of several parcels of land situated in
AUVC, and Crisostomo with the Court of First Instance, Branch 17-
Quezon City, constituting the subdivision known as Capitol Homes
B, Quezon City (CFI Quezon City) docketed as Civil Case No. 26411,
Subdivision Nos. I and II. On July 25, 1972, MRCI entered into a
where Crisostomo was declared in default for his failure to file an
contract with A.U. Valencia & Co. Inc. (AUVC) entitled
answer.
"Confirmation of Land Development and Sales Contract," whereby
for a consideration, including sales commission and management
fee, the latter was to develop the aforesaid subdivision with On November 17, 1980, the CFI Quezon City rendered a decision
authority to manage the sales thereof; execute contracts to sell to declaring the contracts to sell in favor of the Ventanillas as valid
lot buyers; and issue official receipts. At that time, the president and subsisting, and annulling the contract to sell in favor of
of AUVC, was Artemio U. Valencia (Valencia). Crisostomo. It ordered the MRCI to execute an absolute deed of
sale in favor of the Ventanillas, free from all liens and
encumbrances. Damages and attorney's fees in the total amount
On March 3, 1970, MRCI and AUVC executed two (2) contracts to
of 210,000.00 were also awarded to the Ventanillas for which
sell covering Lots 1 and 2 of Block 17, in favor of Oscar C.
the MRCI, AUVC, and Crisostomo were held solidarily liable. The
Ventanilla, Jr. and Carmen Gloria D. Ventanilla (Ventanillas), for
CFI Quezon City ruled further that if for any reason the transfer of
the combined contract price of 66,571.00 payable monthly for
the lots could not be effected, MRCI, AUVC and Crisostomo would
ten (10) years. The Ventanillas paid the down payment as
be solidarily liable to the Ventanillas for the reimbursement of the
stipulated in the two (2) contracts.
sum of 73,122.35, representing the amount they paid for the
two (2) lots, and the legal interest thereon from March 1970, plus
On March 13, 1970, Valencia, holding out himself as president of the decreed damages and attorney's fees. Valencia was also held
MRCI, and without the knowledge of the Ventanillas, resold the liable to MRCI for moral and exemplary damages and attorney's
same property to Carlos Crisostomo (Crisostomo), without any fees.
consideration. Valencia transmitted the fictitious contract with
Crisostomo to MRCI while he kept the contracts to sell with the
On separate appeals filed by AUVC and MRCI, the CA sustained
Ventanillas in his private office files. All the amounts paid by the
the CFI Quezon Citys decision in toto.
latter were deposited in Valencias bank account and remitted to
MRCI as payments of Crisostomo. The Ventanillas continued to
pay the monthly installment. The 1990 Case

Thereafter, MRCI terminated its business relationship with AUVC MRCI then filed before this Court a petition for certiorari docketed
on account of irregularities discovered in its collection and as G.R. No. 82978, to review the decision of the CA upholding the
remittances. Consequently, Valencia was removed as president by solidary liability of MRCI, AUVC and Crisostomo for the payment
the Board of Directors of MRCI. He then stopped transmitting the of moral and exemplary damages and attorney's fees to the
Ventanillas monthly installments which at that time, already Ventanillas.
amounted to 17,925.40 for Lot 1 and 18,141.95 for Lot 2
(appearing in MRCIs records as credited under the name of
On November 22, 1990, this Court affirmed the decision of the CA
Crisostomo).
and declared the judgment of the CFI Quezon City immediately
executory.
On June 8, 1973, AUVC sued MRCI to impugn the abrogation of
their agency agreement before the Court of First Instance, Branch
Encouraged by the seeming triumph of their cause, the
19, Manila (CFI Manila), which eventually ordered all lot buyers to
Ventanillas moved for the issuance of a writ of execution in Civil
deposit their monthly amortizations with the court. On July 17,
Case No. 26411. The writ was issued on May 3, 1991, and served
1973, AUVC informed the Ventanillas that it was still authorized
upon MRCI on May 9, 1991. A notice of levy was annotated in the
by the trial court to collect the monthly amortizations and
titles of MRCI on May 31, 1991.
requested them to continue remitting their payment, with the
assurance that said payments would be deposited later in court.
In a manifestation and motion, however, MRCI alleged that the
subject properties could not longer be delivered to the Ventanillas
For AUVCs failure to forward its collections to the trial court as
because they had already been sold to Samuel Marquez
ordered, MRCI caused the publication of a notice cancelling the
(Marquez) on February 7, 1990, while its petition was pending
contracts to sell of some lot buyers including those of Crisostomo
before this Court. Nevertheless, MRCI offered to reimburse the
in whose name the payments of the Ventanillas had been
amount paid by the Ventanillas, including legal interest plus
credited.
damages. MRCI also prayed that its tender of payment be
accepted and that all garnishments on their accounts lifted.
It was not until March 1978 when the Ventanillas discovered
Valencias deception. Believing that they had already remitted the
The Ventanillas accepted the amount of 210,000.00 as damages On top of all this, there are other circumstances that cast
and attorneys fees but rejected the reimbursement offered by suspicion on the validity, not to say the very existence, of the
MRCI in lieu of the execution of the absolute deed of sale. They contract with Marquez.
contended that the alleged sale to Marquez was void, fraudulent,
and in contempt of court and that no claim of ownership over the
First, the contract to sell in favor of Marquez was entered into
properties in question had ever been made by Marquez.
after the lapse of almost ten years from the rendition of the
judgment of the trial court upholding the sale to the Ventanillas.
On July 19, 1991, the CFI Quezon City ordered that the
garnishment made by the Sheriff upon the bank account of MRCI
Second, the petitioner did not invoke the contract with Marquez
could be lifted only upon the deposit to the Court of the amount
during the hearing on the motion for the issuance of the writ of
of 500,000.00 in cash.
execution filed by the private respondents. It disclosed the
contract only after the writ of execution had been served upon it.
MRCI then moved for reconsideration praying that it be ordered
to reimburse the Ventanillas in the amount of 263,074.10 and
Third, in its manifestation and motion dated December 21, 1990,
that the garnishment of its bank deposit be lifted. This plea was
the petitioner said it was ready to deliver the titles to the
denied twice by the trial court prompting MRCI to file another
Ventanillas provided that their counterclaims against private
petition for certiorari with the CA, which ruled that the contract to
respondents were paid or offset first. There was no mention of
sell in favor of Marquez did not constitute a legal impediment to
the contract to sell with Marquez on February 7, 1990.
the immediate execution of the judgment. Furthermore, it held
that the cash bond fixed by the trial court for the lifting of the
garnishment was fair and reasonable because the value of the lot Fourth, Marquez has not intervened in any of these proceedings
in question had considerably increased. to assert and protect his rights to the subject property as an
alleged purchaser in good faith.
The 1994 Case
At any rate, even if it be assumed that the contract to sell in favor
of Marquez is valid, it cannot prevail over the final and executory
From the CA, the case was elevated to this Court as G.R. No.
judgment ordering MRCI to execute an absolute deed of sale in
107282 where MRCI argued that the sale of the properties to
favor of the Ventanillas. No less importantly, the records do not
Marquez was valid because at the time of the sale, the issue of
show that Marquez has already paid the supposed balance
the validity of the sale to the Ventanillas had not yet been
amounting to 616,000.00 of the original price of over
resolved. Further, there was no specific injunction against it re-
800,000.00. (Emphasis supplied)
selling the property. As a buyer in good faith, Marquez had a right
to rely on the recitals in the certificate of title. The subject matter
of the controversy having been passed to an innocent purchaser As it turned out, the execution of the judgment in favor of the
for value, the execution of the absolute deed of sale in favor of Ventanillas was yet far from fruition. Samuel Cleofe, Register of
the Ventanillas could not be ordered by the trial court. Deeds for Quezon City (ROD Cleofe) revealed to them, that on
March 11, 1992, MRCI registered a deed of absolute sale to
Marquez who eventually sold the same property to the Saberons,
The Ventanillas countered that the validity of the sale to them had
which conveyance was registered in July 1992. ROD Cleofe opined
already been established even while the previous petition was still
that a judicial order for the cancellation of the titles in the name
awaiting resolution. The petition only questioned the solidary
of the Saberons was essential before he complied with the writ of
liability of MRCI to the Ventanillas. Hence, the portion of the
execution in Civil Case No. 26411. Apparently, the notice of levy,
decision ordering MRCI to execute an absolute deed of sale in
through inadvertence, was not carried over to the title issued to
their favor had already become final and executory when MRCI
Marquez, the same being a junior encumbrance which was
failed to appeal it to the Court. Thus, an order enjoining MRCI
entered after the contract to sell to Marquez had already been
from reselling the property in litigation was unnecessary. Besides,
annotated.
the unusual lack of interest, on the part of Marquez, to protect
and assert his right over the disputed property was, to the
Ventanillas, a clear indication that the alleged sale to him was Civil Case No. Q-96-26486
merely a ploy of MRCI to evade the execution of the absolute
deed of sale in their favor. Once again, the Ventanillas were constrained to go to court to
seek the annulment of the deed of sale executed between MRCI
On March 16, 1994, the Court settled the controversy in this wise: and Marquez as well as the deed of sale between Marquez and
the Saberons, as the fruits of void conveyances. The case was
docketed as Civil Case No. Q-96-26486 with the Regional Trial
The validity of the contract to sell in favor of the Ventanilla
Court, Branch 80, Quezon City (RTC).
spouses is not disputed by the parties. Even in the previous
petition, the recognition of that contract was not assigned as
error of either the trial court or appellate court. The fact that the During the trial, all the defendants, including Edgar Krohn Jr.
MRCI did not question the legality of the award for damages to (Krohn) as President of MRCI, and Bede Tabalingcos (Tabalingcos)
the Ventanillas also shows that it even then already as its legal counsel, filed their respective answers, except Marquez
acknowledged the validity of the contract to sell in favor of the who was declared in default.
private respondents.
On June 21, 2005, the RTC rendered its decision, the dispositive
portion of which reads:
Wherefore, premises considered, judgment is hereby rendered in
favour of plaintiffs, the spouses Oscar and Carmen Ventanilla, and
against defendants MRCI, Krohn, Tabalingcos, Marquez and
Saberon, as follows:
(1) Declaring the Transfer Certificated of Title Nos.
55396 and 55397 in the name of Samuel Marquez, and
Transfer Certificates of Title Nos. 63140 and 63141 in
the names of Raul, Jr., Joan and Jacqueline Saberon as
null and void;
(2) Ordering defendant MRCI to receive payment of
the balance of the purchase price to be paid by the
plaintiffs and to execute a Deed of Absolute Sale in
favour of the plaintiffs, and in case of failure thereof,
ordering plaintiffs to consign the amount with this
Court;
(3) Ordering the Register of Deeds to cancel the titles
in the name of Marquez and the Saberons, and to issue
new certificates of title in the name of the spouses
Ventanillas upon registration of the Deed of Absolute
Sale in favour of the plaintiffs or proof of their
consignment;
(4) Ordering defendant MRCI, Krohn, Tabalingcos and
Marquez to pay plaintiffs, jointly and severally, the
sums of:
a. 100,000.00, as moral damages; and
b. 50,000.00, as attorneys fees.
(5) Ordering defendant MRCI, Krohn, Tabalingcos and
Marquez to pay defendants Saberon, jointly and
severally, the sum of 7,118,155.88 representing the
value of the properties in dispute and the value of the
improvements introduced by defendants Saberon; and
(6) Ordering the defendants to pay the costs of the
suit.
Defendants counterclaims are hereby dismissed for lack of merit.
Separate appeals were instituted by MRCI and Tabalingcos, on
one hand, and the Saberons, on the other. The former contended
that no fraudulent act could be attributed to them for the sale of
the property to the title of Marquez, considering that ROD Cleofe
was the one who inadvertently omitted the carrying over of the
notice of levy to Marquez who consequently secured a clean title
to the lot. MRCI Tabalingcos further claimed that the sale to
Marquez was effected while the previous case was still pending,
at a time when they had every liberty to believe in the legality of
their position.
Meanwhile, the Saberons relied on one central argumentthat
they were purchasers in good faith, having relied on the
correctness of the certificates of title covering the lots in
question; and therefore, holders of a valid and indefeasible title.
In the assailed decision, the CA made its conclusion hinged on the
following findings:
When MRCI executed a Contract to Sell in favor of Marquez in
February 1990, it was in the throes of an appeal from the Decision
in Civil Case No. 26411 where its very first Contracts to Sell to the
Ventanillas were upheld over those of Crisostomo. The Marquez
Contract to Sell was in fact the third in a row, and registered a
year later, on May 21, 1991, appears as the first recorded entry in
MRCIs titles. The notice of levy in Civil Case No. 26411 came ten
days later, on May 31, 1991. Then, in February 1992, MRCI
executed a deed of absolute sale to Marquez and when the new
titles were issued in Marquez name, the notice of levy was not
carried over. A few months later, these titles were cancelled by
virtue of a deed of sale to the Saberons and, on the same day, TCT
63140 and 63141 were issued clean to them.
According to the CA, the arguments espoused by MRCI and
Tabalingcos were untenable. The said parties were found guilty of
bad faith for selling the lots to Marquez at a time when litigation
as to the validity of the first sale to the Ventanillas was still
pending. In other words, MRCI was sufficiently aware of the Court
decision confirming its failure to supervise and control the affairs
of its authorized agent, AUVC, which led to the explicit
pronouncement that the first sale to the Ventanillas was valid.
This should have served as a warning to MRCI that it could no
longer deal with the property in deference to the Courts ruling
and affirmation of the trial courts order to execute the deed of
sale in favor of the Ventanillas. Obviously, MRCI took no heed of
this caveat. The titles had been transferred yet again to the
Saberons, who claimed to be purchasers in good faith.
Unfortunately, there was an exception to the general rule. The CA
cited AFP Mutual Benefit Association Inc. v. Santiago,4 where the
Court ruled that with respect to involuntary liens, an entry of a
notice of levy and attachment in the primary entry or day book of
the Registry of Deeds was considered as sufficient notice to all
persons that the land was already subject to attachment.
Resultantly, attachment was duly perfected and bound the land.
The Present Petition
Aggrieved by this CA ruling, the Saberons filed the present
petition. They claimed that in 1992, a certain Tiks Bautista offered
the lots to Raul Saberon, who, after being given photocopies of
the titles to the land, inquired with the Registry of Deeds for
Quezon City (ROD-QC) to verify the authenticity of the same. He
found no encumbrances or annotations on the said titles, other
than restrictions for construction and negotiation. As agreed
upon, he paid Marquez the amount of Two Million One Hundred
Thousand Pesos (2,100,000.00) as purchase price for the lots.
Upon payment of the real property taxes, a certification was
issued by the Office of the City Treasurer for the purpose of
transferring the title over the property.
Thereafter, Marquez executed the Deed of Absolute Sale in favor
of the Saberons. The ROD-QC then issued TCT Nos. 63140 and
63141 in their names.
Unknown to the Saberons, the former owner of the properties
had entered into contracts to sell with the Ventanillas, way back
in 1970. It was only upon receipt of the summons in the case filed
by the Ventanillas with the RTC that they learned of the present
controversy.
With the RTC and the CA rulings against their title over the
properties, the Saberons now come to the Court with their
vehement insistence that they were purchasers in good faith and
for value. Before purchasing the lots, they exercised due diligence
and found no encumbrance or annotations on the titles. At the
same time, the Ventanillas also failed to rebut the presumption of
their good faith as there was no showing that they confederated
with MRCI and its officers to deprive the Ventanillas of their right
over the subject properties.
According to the Saberons, the CA likewise erred in ruling that
there was no constructive notice of the levy made upon the
subject lands. They claimed that the appellate court could not
solely rely on AFP Mutual Benefit Association Inc. v.
Santiago.5 Instead, they urged the Court to interpret
Sections 52 and 42 of Presidential Decree (P.D.) No. 1529 which
cover the effects of registration and the manner thereof; and to
examine Section 54 which shows that, in addition to the filing of
the instrument creating, transferring or claiming interest in
registered land less than ownership, a brief memorandum of such
shall be made by the Register of Deeds on the certificate of title
and signed by him. Hence, the ruling in AFP, that an entry of a
notice of levy and attachment in the primary entry or day book of
the Registry of Deeds was sufficient notice to all persons that the
land was already subject to such attachment, would be rendered
as a superfluity in light of the mandatory character of the said
provision.
The Saberons further pointed that the claim of the Ventanillas
over the subject properties never ripened into ownership as they
failed to consign the balance on the purchase price stipulated on
the contracts to sell, thus preventing the obligatory force of the
contract from taking effect.
On October 4, 2010, the Court required the Ventanillas to file
their comment to the petition.6 On January 19, 2011, the Court
resolved to deny the Saberons petition for failure to sufficiently
show any reversible error in the assailed judgment by the CA.7 In
its June 15, 2011 Resolution,8 the Court required the Ventanillas
to comment on the motion for reconsideration filed by the
Saberons.
Resolution of the Court
At first glance, it would seem that the case involves convoluted
issues brought about by the number of times the Ventanillas were
impelled by circumstances to seek judicial action. Nonetheless,
the antecedents would readily reveal that the essential facts are
not disputed: 1) that the subject properties have indeed been the
objects of various transfers effected by MRCI leading to the
current controversy between the Saberons and the Ventanillas;
and 2) that prior to the sale to the Saberons, a notice of levy as an
encumbrance was already in existence.
Sections 51 and 52 of P.D. No. 1529 explain the purpose and
effects of registering both voluntary and involuntary instruments,
to wit:
Section 51. Conveyance and other dealings by registered owner.
An owner of registered land may convey, mortgage, lease, charge
or otherwise deal with the same in accordance with existing laws.
He may use such forms of deeds, mortgages, leases or other
voluntary instruments as are sufficient in law. But no deed,
mortgage, lease, or other voluntary instrument, except a will
purporting to convey or affect registered land shall take effect as
a conveyance or bind the land, but shall operate only as a contract
between the parties and as evidence of authority to the Register
of Deeds to make registration.
The act of registration shall be the operative act to convey or
affect the land insofar as third persons are concerned, and in all
cases under this Decree, the registration shall be made in the
office of the Register of Deeds for the province or city where the
land lies.
Section 52. Constructive notice upon registration. Every
conveyance, mortgage, lease, lien, attachment, order, judgment,
instrument or entry affecting registered land shall, if registered,
filed or entered in the office of the Register of Deeds for the
province or city where the land to which it relates lies, be
constructive notice to all persons from the time of such
registering, filing or entering.
These provisions encapsulate the rule that documents, like the
certificates of title do not effect a conveyance of or encumbrances
on a parcel of land. Registration is the operative act that conveys
ownership or affects the land insofar as third persons are
concerned. By virtue of registration, a constructive notice to the
whole world of such voluntary or involuntary instrument or court
writ or processes, is thereby created.
The question of utmost relevance to this case, then, is this:
whether or not the registration of the notice of levy had produced
constructive notice that would bind third persons despite the
failure of the ROD-QC to annotate the same in the certificates of
title?
In answering these questions, the Court is beckoned to rule on
two conflicting rights over the subject properties: the right of the
Ventanillas to acquire the title to the registered land from the
moment of inscription of the notice of levy on the day book (or
entry book), on one hand; and the right of the Saberons to rely on
what appears on the certificate of title for purposes of voluntary
dealings with the same parcel of land, on the other.
The Saberons maintain that they had no notice of any defect,
irregularity or encumbrance in the titles of the property they
purchased. In its decision, however, the RTC pointed out that their
suspicion should have been aroused by the circumstance that
Marquez, who was not engaged in the buy-and-sell business and
had the property for only a few months, would offer the same for
sale. Although the RTC found that the Saberons may not be
considered as innocent purchasers for value because of this
circumstance, it, nonetheless, ruled that they, who might well be
unwilling victims of the fraudulent scheme employed by MRCI and
Marquez, were entitled to actual and compensatory damages.
To this latter finding, the Court agrees. The Saberons could not be
said to have authored the entanglement they found themselves
in. No fault can be attributed to them for relying on the face of
the title presented by Marquez. This is bolstered by the fact that
the RTC decision shows no categorical finding that the Saberons
purchase of the lots from Marquez was tainted with bad faith.
That the Saberons should have harbored doubts against Marquez
is too high a standard to impose on a buyer of titled land. This is in
consonance to the rule that the one who deals with property
registered under the Torrens system is charged with notice only of
such burdens and claims as are annotated on the title.9 "All
persons dealing with property covered by Torrens certificate of
title are not required to explore further than what the Torrens
title upon its face indicates in quest for any hidden defect or
inchoate right that may subsequently defeat his right
thereto."10 These rules remain as essential features of the Torrens
system. The present case does not entail a modification or
overturning of these principles.
Be that as it may, no fault can likewise be imputed to the
Ventanillas.
In ultimately ruling for the Ventanillas, the courts a quo focused
on the superiority of their notice of levy and the constructive
notice against the whole world which it had produced and which
effectively bound third persons including the Saberons.
It has already been established in the two previous cases decided
by the Court that the contracts to sell executed in favor of the
Ventanillas are valid and subsisting. Clearly, it has been
acknowledged, even by MRCI, as can be seen in the latters own
choice to only question their solidary liability in the 1990 case and
its failure to assign the same as an error in the 1994 case. In the
same vein, the issue on Marquezs title had already been passed
upon and settled in the 1994 case. That he purchased the lots
prior to the annotation of the notice of levy in MRCIs title was of
no moment. In fact, the Court explicitly declared that MRCIs
transaction with Marquez "cannot prevail over the final and
executory judgment ordering MRCI to execute an absolute deed
of sale in favor of the Ventanillas."
These favorable findings prompted the Ventanillas to register the
notice of levy on the properties. The records show that on the
strength of a final and executory decision by the Court, they
successfully obtained a writ of execution from the RTC and a
notice of levy was then entered, albeit on the primary entry book
only. The contract to sell to Marquez was registered on May 21,
1991, while the notice of levy was issued ten (10) days later, or on
May 31, 1991. In February 1992, MRCI executed the Deed of Sale
with Marquez, under whose name the clean titles, sans the notice
of levy, were issued. A year later, or on March 11, 1992, MRCI
registered the deed of sale to Marquez who later sold the same
property to the Saberons.
This complex situation could have been avoided if it were not for
the failure of ROD Cleofe to carry over the notice of levy to
Marquezs title, serving as a senior encumbrance that might have
dissuaded the Saberons from purchasing the properties.
The Court agrees with the position of the RTC in rejecting ROD
Cleofes theory.
Distinctions between a contract to sell and a contract of sale are
well-established in urisprudence.1wphi1 In a contract of sale, the
title to the property passes to the vendee upon the delivery of the
thing sold; in a contract to sell, ownership is, by agreement,
reserved in the vendor and is not to pass to the vendee until full
payment of the purchase price. Otherwise stated, in a contract of
sale, the vendor loses ownership over the property and cannot
recover it until and unless the contract is resolved or rescinded;
whereas, in a contract to sell, title is retained by the vendor until
full payment of the price. In the latter contract, payment of the
price is a positive suspensive condition, failure of which is not a
breach but an event that prevents the obligation of the vendor to
convey title from becoming effective.11
It is undeniable, therefore, that no title was transferred to
Marquez upon the annotation of the contract to sell on MRCIs
title. As correctly found by the trial court, the contract to sell
cannot be substituted by the Deed of Absolute Sale as a "mere
conclusion" of the previous contract since the owners of the
properties under the two instruments are different.12
Considering that the deed of sale in favor of Marquez was of later
registration, the notice of levy should have been carried over to
the title as a senior encumbrance.
Corollary to this is the rule that a levy of a judgment debtor
creates a lien, which nothing can subsequently destroy except the
very dissolution of the attachment of the levy itself.13 Prior
registration of the lien creates a preference, since the act of
registration is the operative act to convey and affect the
land.14 Jurisprudence dictates that the said lien continues until the
debt is paid, or the sale is had under an execution issued on the
judgment or until the judgment is satisfied, or the attachment is
discharged or vacated in the same manner provided by law.
Under no law, not even P.D. No. 1529, is it stated that an
attachment shall be discharged upon sale of the property other
than under execution.15
Additionally, Section 59 of P.D. No. 1529 provides that, "[i]f, at the
time of the transfer, subsisting encumbrances or annotations
appear in the registration book, they shall be carried over and
stated in the new certificate or certificates, except so far as they
may be simultaneously released or discharged." This provision
undoubtedly speaks of the ministerial duty on the part of the
Register of Deeds to carry over existing encumbrances to the
certificates of title.
From the foregoing, ROD Cleofes theory that a deed of sale, as a
mere conclusion of a contract to sell, turns into a senior
encumbrance which may surpass a notice of levy, has no leg to
stand on. It was, in fact, properly rejected by the courts a quo.
Verily, the controversy at hand arose not from the Ventanillas
fault, but from ROD Cleofes misplaced understanding of his duty
under the law.
Surely, the Ventanillas had every right to presume that the
Register of Deeds would carry over the notice of levy to
subsequent titles covering the subject properties. The notice was
registered precisely to bind the properties and to serve as caution
to third persons who might potentially deal with the property
under the custody of the law. In DBP v. Acting Register of Deeds of
Nueva Ecija,16 the Court ruled that entry alone produced the
effect of registration, whether the transaction entered was a
voluntary or involuntary one, so long as the registrant had
complied with all that was required of him for purposes of entry
and annotation, and nothing more remained to be done but a
duty incumbent solely on the Register of Deeds.
While the Court is not unmindful that a buyer is charged with
notice only of such burdens and claims as are annotated on the
title, the RTC and the CA are both correct in applying the rule as to
the effects of involuntary registration. In cases of voluntary
registration of documents, an innocent purchaser for value of
registered land becomes the registered owner, and, in
contemplation of law the holder of a certificate of title, the
moment he presents and files a duly notarized and valid deed of
sale and the same is entered in the day book and at the same time
he surrenders or presents the owner's duplicate certificate of title
covering the land sold and pays the registration fees, because
what remains to be done lies not within his power to perform.
The Register of Deeds is duty bound to perform it.17 In cases of
involuntary registration, an entry thereof in the day book is a
sufficient notice to all persons even if the owner's duplicate
certificate of title is not presented to the register of deeds.
Therefore, in the registration of an attachment, levy upon
execution, notice of lis pendens, and the like, the entry thereof in
the day book is a sufficient notice to all persons of such adverse
claim.18
This rule was reiterated in the more recent case of Armed Forces
and Police Mutual Benefit Association, Inc., v. Santiago,19 as relied
upon by the CA. In AFP, the Notice of Levy was presented for
registration in the Registry of Deeds of Pasig City. The Notice was
entered in the Primary Entry Book, but was not annotated on the
TCT because the original copy of the said title on file in the
Registry of Deeds was not available at that time. Six (6) days after
the presentation of the Notice of Levy, the Deed of Absolute Sale
involving the same parcel of land was presented for registration
and likewise entered. The deed of sale was examined by the same
employee who examined the notice of levy, but she failed to
notice that the title subject of the sale was the same title which
was the subject of the notice of levy earlier presented. Unaware
of the previous presentation of the notice of levy, the Register of
Deeds issued a certificate of title in the name of the vendee on
the basis of the deed of sale. The Register of Deeds in AFP
immediately requested the vendee to surrender the documents in
light of the mistake discovered so that he could take appropriate
rectification or correction. Settling the issue on whether the
notice of levy could be annotated in the certificate of title, the
Court ruled in the affirmative on the ground that the preference
created by the levy on attachment was not diminished by the
subsequent registration of the prior sale. Superiority and
preference in rights were given to the registration of the levy on
attachment; although the notice of attachment had not been
noted on the certificate of title, its notation in the book of entry of
the Register of Deeds produced all the effects which the law gave
to its registration or inscription, to wit:
Under the rule of notice, it is presumed that the purchaser has
examined every instrument of record affecting the title. Such
presumption is irrebuttable. He is charged with notice of every
fact shown by the record and is presumed to know every fact
shown by the record and to know every fact which an
examination of the record would have disclosed. This
presumption cannot be overcome by proof of innocence or good
faith. Otherwise, the very purpose and object of the law requiring
a record would be destroyed. Such presumption cannot be
defeated by proof of want of knowledge of what the record
contains any more than one may be permitted to show that he
was ignorant of the provisions of the law. The rule that all persons
must take notice of the facts which the public record contains is a
rule of law. The rule must be absolute; any variation would lead to
endless confusion and useless litigation. For these reasons, a
declaration from the court that respondent was in bad faith is not
necessary in order that the notice of levy on attachment may be
annotated on TCT No. PT-94912.
The fact that the notice of levy on attachment was not annotated
on the original title on file in the Registry of Deeds, which resulted
in its non-annotation on the title TCT No. PT-94912, should not
prejudice petitioner. As long as the requisites required by law in
order to effect attachment are complied with and the appropriate
fees duly paid, attachment is duly perfected. The attachment
already binds the land. This is because what remains to be done
lies not within the petitioners power to perform but is a duty
incumbent solely on the Register of Deeds. (Emphasis supplied)
In the case at bench, the notice of levy covering the subject
property was annotated in the entry book of the ROD QC prior to
the issuance of a TCT in the name of the Saberons. Clearly, the
Ventanillas levy was placed on record prior to the sale. This
shows the superiority and preference in rights of the Ventanillas
over the property as against the Saberons. In AFP, the Court
upheld the registration of the levy on attachment in the primary
entry book as a senior encumbrance despite the mistake of the
ROD, the Court must, a fortiori, sustain the notice of levy
registered by the Ventanillas notwithstanding the nonfeasance of
ROD Cleofe. Again, the prevailing rule is that there is effective
registration once the registrant has fulfilled all that is needed of
him for purposes of entry and annotation, so that what is left to
be accomplished lies solely on the Register of Deeds.20
Suffice it to say, no bad faith can be ascribed to the parties alike.
Nevertheless, the equal footing of the parties necessarily tilts in
favor of the superiority of the Ventanillas notice of levy, as
discussed.
The Court also sees no reason to dwell in the contention that the
rights or interests of the Ventanillas in the subject properties
never ripened into ownership. It bears stressing that the previous
decisions discussed herein already sealed the validity of the
contract to sell issued to the Ventanillas decades ago. As found by
the RTC, it was MRCIs obstinate refusal to accept their tender of
payment, not to mention the devious transfer of the property,
which caused the decade-long delay of the execution of the deed
of sale in their favor. This is a finding that the Court, which is not a
trier of facts, will have to respect.
In the same vein, the attribution of laches against the Ventanillas
is flawed. Their failure to learn about the structures being built on
the subject lands and the payment of real property taxes by the
Saberons is not sufficient justification to withhold the declaration
of their ownership over it. Against a different factual milieu,
laches may be said to have set it but not so in this case. While the
Ventanillas may have been unaware that improvements were
being erected over the lots, this obliviousness can, by no means,
be treated as a lack of vigilance on their part. It bears stressing
that the Ventanillas are now of advanced age and retired as
university professors. Considering the length of litigation which
they had to endure in order to assert their right over the property
which they have painstakingly paid for decades ago, to hold now
that they have been remiss in the protection of their rights would
be the height of impropriety, if not injustice. To exact from them
an obligation to visit the land in litigation every so often, lest they
be held to have slept on their rights, is iniquitous and
unreasonable. All told, the Ventanillas remain as innocent victims
of deception.
The Court deems it significant to note that the amount of
7,118,115.88 awarded to the Saberons by the RTC is to be
satisfied by MRCI, Krohn, Tabalingcos, and Marquez, who have
not been impleaded as parties to the present petition, thus,
rendering the said award final and executory. The said amount,
however, is separate and distinct from those provided under
Article 44821 in relation to Article 54622 of the Civil Code. In the
petition, the Saberons invoked the said provisions, claiming that
they are entitled to reimbursement of all the expenses incurred in
the introduction of improvements on the subject lands amounting
to 23,058,822.79.
The Court finds the Saberons to be builders in good faith.
No less than the court a quo observed that "no actual evidence
that the Saberons connived with the MRCI and Marquez to have
the titles registered in their names to the prejudice of the
(Ventanillas)" and that what was obvious was that "the Saberons
dealt with clean certificates of titles." Also quite telling on this
point is the finding that MRCI, Krohn, Tabalingcos, and Marquez
are liable to the Saberons. The RTC reasoned out in the following
wise:
This Court is not convinced, however that defendants Saberon
took part in the fraudulent scheme employed by the other
defendants against the plaintiffs. Although they may not be
considered as innocent purchasers for value shown in the
discussion above, this Court is not ready to conclude that the
Saberons joined the other defendants in their efforts to frustrate
plaintiffs rights over the disputed properties. On the contrary,
they may be considered victims of the same fraudulent employed
by defendants MRCI and Marquez, and thus can rightfully claim
damages from the same.23
Consequently, Article 448 in relation to Article 546 of the Civil
Code will apply.1wphi1 The provisions respectively read:
Article 448. The owner of the land on which anything has been
built, sow or planted in good faith, shall have the right to
appropriate, as his own the works, sowing, or planting, after
payment of the indemnity provided for in Article 546 and 548, or
to oblige the one who built or planted to pay the price of the land,
and the one who sowed, the proper rent. However, the builder or
planter cannot be obliged to buy the land and if its value is
considerably more than that of the building or trees. In such case,
he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease and
in case disagreement, the court shall fix the terms thereof.
Article 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the
thing until he has been reimbursed therefore.
Useful expenses shall be refunded only to the possessor in good
faith with the same right of retention, the person who has
defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which
the thing may have acquired by reason thereof.
Thus, the two options available to the Ventanillas: 1) they may
exercise the right to appropriate after payment of indemnity
representing the value of the improvements introduced and the
necessary and useful expenses defrayed on the subject lots; or 2)
they may forego payment of the said indemnity and instead,
oblige the Saberons to pay the price of the land.
Should the Ventanillas elect to appropriate the improvements,
the trial court is ordered to determine the value of the
improvements and the necessary and useful expenses after
hearing and reception of evidence. Should the Ventanillas,
however, pursue the option to oblige the Saberons to pay the
"price of the land," the trial court is ordered to determine said
price to be paid to the V entanillas.
WHEREFORE, the Motion for Reconsideration is PARTIALLY
GRANTED. The appealed March 12, 2010 Decision and the June
18, 2010 Resolution of the Court of Appeals in CA-G.R. CV No.
85520 are AFFIRMED with modification in that the Ventanillas are
given a period of sixty ( 60) days from finality of this Resolution to
decide whether to pay the Saberons the value of the
improvements and the necessary and useful expenses defrayed
on the 2 lots or to oblige the Saberons to pay them the "price" of
said lots. Depending on the option exercised by the Ventanillas,
the case is hereby remanded to the court of origin for further
proceedings as to the determination of reimbursement due to the
petitioners or of the "price" of the subject lots due to the
Ventanillas.
SO ORDERED.
[G.R. No. 128354. April 26, 2005]
HOME BANKERS SAVINGS & TRUST CO., petitioner, vs. THE
HONORABLE COURT OF APPEALS, PABLO N.
AREVALO, FRANCISCO A. UY, SPOUSES LEANDRO A.
SORIANO, JR. and LILIAN SORIANO, ALFREDO LIM and
FELISA CHI LIM/ALFREDO LIM, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review on certiorari under Rule
45 of the Rules of Court seeking to annul the Decision[1] of the
Court of Appeals (CA) dated November 28, 1996 in CA-G.R. SP No.
40892 and its Resolution dated February 19, 1997 denying
petitioners motion for reconsideration.
Each of private respondents entered into separate
contracts to sell with TransAmerican Sales and Exposition
(TransAmerican) through the latters Owner/General Manager,
Engr. Jesus Garcia, involving certain portions of land covered by
Transfer Certificate of Title (TCT) No. 19155, located at No. 45
Gen. Lim Street, Heroes Hill, Quezon City, together with one unit
three-storey townhouse to be built on each portion, as follows:
Respondent Pablo N. Arevalo purchased the portion of land
denominated as Unit No. 5[2] for the amount of P750,000.00 on
August 21, 1988 and had already fully paid the purchase price on
September 3, 1988;
Respondent Alfredo Lim purchased the portion of land
denominated as Unit No. 1[3] for the amount of P800,000.00 on
December 22, 1988 and fully paid the same upon execution of the
agreement on the same day;
Respondent Francisco A. Uy purchased the portion of land
denominated as Unit No. 6[4] on October 29, 1988 in the amount
of P800,000.00 payable in installments and had allegedly made a
total payment of P581,507.41. He ordered to stop the payment of
all [postdated] checks from September 1990 to November 1995
on the ground of non-completion of his unit and had later learned
of the foreclosure of the property;
Respondent spouses Leandro A. Soriano, Jr. and Lilian Soriano
purchased the portion of land denominated as Unit No. 3[5] on
February 15, 1990 in the amount of P1,600,000.00 and had
allegedly made a payment of P669,960.00. They had stopped
paying because of non-completion of the project and had later
learned of the foreclosure of the property;
Respondents Alfredo Lim and Santos Lim purchased the portion of
land denominated as Unit No. 7[6] for P700,000.00 on October
1988 and had been fully paid as of March 18, 1989; Santos Lim
subsequently sold and assigned his share of the property to
private respondent Felisa Chi Lim on May 12, 1989.
It is stipulated in their respective contracts that their individual
townhouses will be fully completed and constructed as per plans
and specifications and the respective titles thereto shall be
delivered and transferred to private respondents free from all
liens and encumbrances upon their full payment of the purchase
price. However, despite repeated demands,
Garcia/TransAmerican failed to comply with their undertakings.
On May 30, 1989, Engr. Garcia and his wife Lorelie Garcia
obtained from petitioner Home Bankers Savings and Trust
Company (formerly Home Savings Bank and Trust Company) a
loan in the amount of P4,000,000.00 and without the prior
approval of the Housing and Land Use Regulatory Board (HLURB),
the spouses mortgaged[7] eight lots covered by TCT Nos. 3349 to
3356 as collateral. Petitioner registered its mortgage on these
titles without any other encumbrance or lien annotated therein.
The proceeds of the loan were intended for the development of
the lots into an eight-unit townhouse project. However, five out
of these eight titles turned out to be private respondents
townhouses subject of the contracts to sell with
Garcia/TransAmerican.
When the loan became due, Garcia failed to pay his
obligation to petitioner. Consequently, petitioner instituted an
extrajudicial foreclosure[8] on the subject lots and being the
highest bidder in the public auction, a certificate of sale[9] in its
favor was issued by the sheriff on February 26, 1990.
Subsequently, the sheriffs certificate of sale was registered and
annotated on the titles of the subject lots in the Register of Deeds
of Quezon City.
On November 8, 1990, private respondents filed a
complaint with the Office of Appeals, Adjudication and Legal
Affairs (OAALA), HLURB, against Garcia/TransAmerican as
seller/developer of the property and petitioner, as indispensable
party, for non-delivery of titles and non-completion of the
subdivision project.[10] They prayed for the completion of the
units, annulment of the mortgage in favor of petitioner, release of
the mortgage on the lots with fully paid owners and delivery of
their titles, and for petitioner to compute individual loan values of
amortizing respondents and to accept payments from them and
damages.
Petitioner filed its Answer contending that private
respondents have no cause of action against it; that at the time of
the loan application and execution of the promissory note and
real estate mortgage by Garcia, there were no known individual
buyers of the subject land nor annotation of any contracts, liens
or encumbrances of third persons on the titles of the subject lots;
that the loan was granted and released without notifying HLURB
as it was not necessary.
Private respondents filed their Reply and a motion for the
judgment on the pleadings. Petitioner did not file a rejoinder.
Private respondents filed a manifestation reiterating for a
judgment on their pleadings and asked that the reliefs prayed for
be rendered as far as petitioner was concerned. Upon motion of
private respondents, the case against Garcia/TransAmerican was
archived for failure to serve summons on him/it despite efforts to
locate his whereabouts or its office. The case was then considered
submitted for decision.
On August 16, 1991, OAALA rendered its Decision,[11] the
dispositive portion of which reads:
WHEREFORE, Judgment is hereby rendered as follows:
1. Declaring the mortgage executed by and between respondents
Engr. Jesus Garcia/TransAmerican Sales and Exposition and Home
Bankers Savings and Trust Company (formerly Home Savings Bank
and Trust Company) to be unenforceable as against all the
complainants;
2. Ordering the Register of Deeds of Quezon City to cancel the
annotations of the mortgage indebtedness between respondents
Engr. Jesus Garcia and Home Bankers Savings and Trust Company
(formerly Home Savings Bank and Trust Company);
3. Ordering, likewise the Register of Deeds of Quezon City to
cancel the annotation of the Certificate of Sale in favor of the
respondent Home Bankers Savings and Trust Company on the
following Transfer Certificates of Title to wit:
1) TCT No. 3350
2) TCT No. 3351
3) TCT No. 3352
4) TCT No. 3354
5) TCT No. 3356
4. Ordering respondent Home Bankers Savings and Trust
Company (formerly Home Savings Bank and Trust Company) to:
4.1. AS TO THE FIRST CAUSE OF
ACTION
Deliver to Complainant
Pablo N. Arevalo TCT No.
3352 free from all liens
and encumbrances.
 4.2. AS TO THE SECOND CAUSE OF
ACTION
Deliver to Complainant
Alfredo Lim TCT No. 3356
free from all liens and
encumbrances.
4.3. AS TO THE THIRD CAUSE OF
ACTION
To compute and/or
determine the loan value
of complainant Francisco
A. Uy who was not able to
complete or make full
payment and to accept
payment and/or receive
amortization from said
complainant Francisco A.
Uy and upon full payment
to deliver TCT No. 3351
free from all liens and
encumbrances.
4.4. AS TO THE FOURTH CAUSE OF
ACTION
To compute and/or
determine the loan value
of Complainant Spouses
Leandro A. Soriano, Jr.
and Lilian Soriano who
were not able to complete
or make full payment and
to accept and/or receive
amortization from said
Complainants Soriano and
upon full payment to
deliver TCT No. 3354 free
from all liens and
encumbrances.
4.5. AS TO THE FIFTH CAUSE OF
ACTION
Deliver to complainant
Alfredo Lim and Felisa Chi
Lim TCT No. 3350 free
from all liens and
encumbrances.
without prejudice to its right to require respondent Engr. Jesus
Garcia/TransAmerican to constitute new collaterals in lieu of the
said titles sufficient in value to cover the mortgage obligation.[12]
Petitioner filed an appeal with the Board of Commissioners
of the HLURB which dismissed the same in a decision dated June
15, 1992.[13] Petitioner then elevated the case to the Office of the
President which rendered a decision dated June 30,
1995[14] dismissing the appeal and affirming the June 15, 1992
decision of the HLURB. Petitioners motion for reconsideration was
also denied in a Resolution dated May 7, 1996.[15]
Petitioner filed a petition for review with the CA which, in
the herein assailed decision dated November 28, 1996, denied the
petition and affirmed the decision of the Office of the President.
The CA applied the case of Union Bank of the Philippines vs.
HLURB, et al.,[16] where it was held that the act of a subdivision
developer of mortgaging the subdivision without the knowledge
and consent of a unit buyer and without the approval of the
National Housing Authority (NHA, now HLURB) is violative of
Section 18 of P.D. No. 957 thus, falling under the exclusive
jurisdiction of HLURB.
The CA upheld the findings of the OAALA, HLURB that
private respondents had already entered into separate contracts
to sell with TransAmerican as early as 1988 while it was only in
1989 that spouses Garcia applied for a loan with petitioner and
executed a mortgage contract over the subject lots; that the
proceeds of the loan were purposely intended for the
development of a property which was the same property subject
of the contracts to sell; that despite the contracts to sell,
Garcia/TransAmerican did not apprise petitioner of the existence
of these contracts nor did petitioner exhaust any effort to inquire
into their existence since petitioner merely relied on the
purported clean reconstituted titles in the name of Garcia; that
the mortgage of the subject lots without the consent of the
buyers and the authorization of the HLURB is a clear violation of
P.D. No. 957; that the mortgage contract is void and
unenforceable against private respondents.
Petitioners motion for reconsideration was denied by the
CA in its Resolution dated February 19, 1997.[17]
Petitioner is now before us raising the following grounds in
support of its petition:
A. THE OFFICE OF THE PRESIDENT ERRED IN RULING
THAT THE HLURB HAS JURISDICTION TO NULLIFY
OR DECLARE UNENFORCEABLE THE REAL ESTATE
MORTGAGE VALIDLY CONSTITUTED BY THE
OWNER.
B. ASSUMING ARGUENDO THAT THE HLURB HAS
JURISDICTION, RESPONDENT COURT
MANIFESTLY ERRED IN FINDING THE REAL
ESTATE MORTGAGE IN FAVOR OF HOME AS
INVALID AND UNENFORCEABLE AGAINST
RESPONDENTS.
C. IN THE EVENT THAT THE DECISION OF THE
RESPONDENT COURT FINDING THE REAL ESTATE
MORTGAGE IN FAVOR OF HOME AS INVALID
AND UNENFORCEABLE AGAINST RESPONDENTS
IS UPHELD, THE UNREGISTERED CONTRACTS TO
SELL IN FAVOR OF RESPONDENTS SHOULD ALSO
BE HELD VALID ONLY AS TO THE PARTIES
THERETO BUT UNENFORCEABLE AGAINST
PETITIONER.
Private respondents filed their Comment and petitioner
filed its Reply thereto.
In a Resolution dated February 23, 2004, we gave due
course to the petition and required the parties to submit their
respective memoranda which they complied with.
The petition is devoid of merit.
Notably, the issues raised are mere rehash of the issues
already passed upon by the HLURB, the Office of the President
and the CA which we uphold as we find no reversible errors
committed.
 Petitioner claims that HLURB has no power to declare the have exclusive jurisdiction to hear and decide cases of the
mortgage contract over real property executed between a real following nature:
estate developer and petitioner, a banking institution, void or
unenforceable, as it is properly within the jurisdiction of the
A. Unsound real estate business
Regional Trial Court. Petitioner asserts that being a mortgagee of
practices;
the subject lots and a purchaser in good faith, it is not a project
owner, developer, or dealer contemplated under P.D. No. 1344, B. Claims involving refund and any other
the law which expanded the jurisdiction of the NHA; and that claims filed by subdivision
since there is no seller-buyer relationship existing between it and lot or condominium unit
private respondents, HLURB has no jurisdiction to rule on the buyer against the project
validity of the mortgage and to annul foreclosure proceedings. owner, developer, dealer,
broker or salesman; and
The argument is untenable.
C. Cases involving specific performance
The CA did not err in affirming the decision of the Office of
of contractual and
the President that HLURB has jurisdiction to declare invalid the
statutory obligations filed
mortgage contract executed between Garcia/TransAmerican and
by buyers of subdivision
petitioner over the subject lots insofar as private respondents are
lot or condominium unit
concerned. It correctly relied on Union Bank of the Philippines vs.
against the owner,
HLURB, et al.[18] where we squarely ruled on the question of
developer, broker or
HLURBs jurisdiction to hear and decide a condominium buyers
salesman.
complaint for: (a) annulment of a real estate mortgage
constituted by the project owner without the consent of the
buyer and without the prior written approval of the NHA; (b) On February 7, 1981, Executive Order No. 648 transferred the
annulment of the foreclosure sale; and (c) annulment of the regulatory and quasi-judicial functions of the NHA to the Human
condominium certificate of title that was issued to the highest Settlements Regulatory Commission.
bidder at the foreclosure sale, thus:
Sec. 8. TRANSFER OF FUNCTIONS. The regulatory functions of the
. . . The issue in HLURB Case No. REM-062689-4077 is the validity National Housing Authority pursuant to Presidential Decree Nos.
of the real estate mortgage of Davids condominium unit that 957, 1216, 1344 and other related laws are hereby transferred to
FRDC executed in favor of the Union Bank and Far East Bank the Commission, together with such applicable personnel,
without prior approval of the National Housing Authority and the appropriation, records, equipment and property necessary for the
legality of the title which the mortgage banks acquired as highest enforcement and implementation of such functions. Among these
bidder therefore in the extrajudicial foreclosure sale. The regulatory functions are:
applicable provisions of P.D. No. 957, otherwise known as The
Subdivision and Condominium Buyers Protective Decree are 1. Regulation of the real estate
quoted hereunder as follows: trade and business:

Sec. 3. NATIONAL HOUSING AUTHORITY. The National Housing ...

Authority shall have exclusive jurisdiction to regulate the real 7. Approval of mortgage on any
estate trade and business in accordance with the provisions of subdivision lot or
this Decree. condominium unit made
by the owner or
Section 18. Mortgages No mortgage on any unit or lot shall be developer;
made by the owner or developer without prior written approval
of the authority. Such approval shall not be granted unless it is ...
shown that the proceeds of the mortgage loan shall be used for 11. Hear and decide cases on
the development of the condominium or subdivision project and unsound real estate
effective measures have been provided to ensure such utilization. business practices; claims
The loan value of each lot or unit covered by the mortgage shall involving refund filed
be determined and the buyer thereof if any shall be notified against project owners,
before the release of the loan. The buyer may, at his option, pay developers, dealers,
his installment for the lot or unit directly to the mortgagee who brokers, or salesmen; and
shall apply the payments to the corresponding mortgage cases of specific
indebtedness secured by the particular lot or unit being paid for, performance.
with a view to enabling said buyer to obtain title over the lot or
unit promptly after full payment thereof.
Executive Order No. 90 dated December 17, 1986 changed the
name of the Human Settlements Regulatory Commission to
P.D. No. 1344 of April 2, 1978 expanded the jurisdiction of the Housing and Land Use Regulatory Board (HLURB).
National Housing Authority to include the following:

Clearly, FRDCs act of mortgaging the condominium project to

Sec. 1. In the exercise of its function to regulate the real estate Bancom and FEBTC, without the knowledge and consent of David
trade and business and in addition to its powers provided for in as buyer of a unit therein, and without the approval of the NHA
Presidential Decree No. 957, the National Housing Authority shall (now HLURB) as required by P.D. No. 957, was not only an
unsound real estate business practice but also highly prejudicial to
the buyer. David, who has a cause of action for annulment of the
mortgage, the mortgage foreclosure sale, and the condominium
certificate of title that was issued to the UBP and FEBTC as the
highest bidders at the sale. The case falls within the exclusive
jurisdiction of the NHA (now HLURB) as provided in P.D. No. 957
of 1976 and P.D. No. 1344 of 1978.
...
We hold that the jurisdiction of the HLURB to regulate the real
estate trade is broad enough to include jurisdiction over
complaints for specific performance of the sale, or annulment of
the mortgage, of a condominium unit, with damages.[19]
Petitioner avers that the Union Bank ruling is not applicable
in its case, since it had no knowledge of any buyer of the subject
lots at the time the mortgage was constituted; that there was no
construction in the subject lots at the time petitioner accepted
the same as collateral; that the title to the subject property was
still in the process of being reconstituted and the loan was in fact
meant for the development of the subject lots into an eight-unit
townhouse project.
We are not persuaded.
Contrary to petitioners claim that there were no buyers of
the subject lots at the time of the constitution of the mortgage,
records show that private respondents Arevalo, Uy, Alfredo Lim
and Santos Lim had entered into contracts to sell with
Garcia/TransAmerican as early as 1988 for their respective lots. In
fact, they, except for Uy, had already fully paid their townhouse
units in 1988 without the certificates of title being delivered to
them. Garcia mortgaged the subject lots without their knowledge
and consent.
While private respondents spouses Soriano bought the
subject lots after the constitution of the mortgage in favor of
petitioner, the subject lots are, as early as 1988, subdivision lots
which as defined under Section 2(e) of P.D. No. 957 to mean any
of the lots, whether residential, commercial, industrial, or
recreational in a subdivision project[20] are entitled to the
protection of P.D. No. 957.
Under Section 18 of P.D. No. 957, it is provided that no
mortgage on any unit or lot shall be made by the owner or
developer without prior written approval of the authority. Such
approval shall not be granted unless it is shown that the proceeds
of the mortgage loan shall be used for the development of the
condominium or subdivision project and effective measures have
been provided to ensure such utilization. As in the Union Bank,
the mortgage was constituted on the subject lots in favor of
petitioner without the prior written approval from the HLURB,
thus HLURB has jurisdiction to rule on the validity of the
mortgage.
Notwithstanding that petitioner became the owner of the
subject lots by being the highest bidder in the extrajudicial
foreclosure sale, it must be remembered that it was first a
mortgagee of the same. Since the lot was mortgaged in violation
of Section 18 of P.D. No. 957, HLURB has jurisdiction to declare
the mortgage void insofar as private respondents are concerned
and to annul the foreclosure sale. In Far East Bank and Trust Co.
vs. Marquez,[21] we held that Section 18 of P.D. No. 957 is a
prohibitory law, and acts committed contrary to it are void. We
said:
In determining whether a law is mandatory, it is necessary to
ascertain the legislative intent, as stated by Sen. Arturo M.
Tolentino, an authority on civil law:
There is no well-defined rule by which a mandatory or prohibitory
law may, in all circumstances, be distinguished from one which is
directory, suppletory, or permissive. In the determination of this
question, the prime object is to ascertain the legislative intention.
Generally speaking, those provisions which are mere matter of
form, or which are not material, do not affect any substantial
right, and do not relate to the essence of the thing to be done, so
that compliance is a matter of convenience rather than substance,
are considered to be directory. On the other hand, statutory
provisions which relate to matters of substance, affect substantial
rights and are the very essence of the thing required to be done,
are regarded as mandatory.
In Philippine National Bank vs. Office of the President, we had
occasion to mull over the intent of P.D. No. 957 thus:
. . . [T]he unmistakable intent of the law [is] to protect innocent
lot buyers from scheming subdivision developers. As between
these small lot buyers and the gigantic financial institutions which
the developers deal with, it is obvious that the law as an
instrument of social justice must favor the weak. Indeed, the
petitioner Bank had at its disposal vast resources with which it
could adequately protect its loan activities, and therefore is
presumed to have conducted the usual due diligence checking
and ascertaining (whether thru ocular inspection or other modes
of investigation) the actual status, condition, utilization and
occupancy of the property offered as collateral, . . . On the other
hand, private respondents obviously were powerless to discover
attempt of the land developer to hypothecate the property being
sold to them. It was precisely in order to deal with this kind of
situation that P.D. No. 957 was enacted, its very essence and
intendment being to provide a protective mantle over helpless
citizens who may fall prey to the razzmatazz of what P.D. No. 957
termed unscrupulous subdivision and condominium sellers.
Concededly, P.D. No. 957 aims to protect innocent lot buyers.
Section 18 of the decree directly addresses the problem of fraud
committed against buyers when the lot they have contracted to
purchase, and which they have religiously paid for, is mortgaged
without their knowledge. The avowed purpose of P.D. No. 957
compels the reading of Section 18 as prohibitory acts committed
contrary to it are void. Such construal ensures the attainment of
the purpose of the law: to protect lot buyers, so that they do not
end up still homeless despite having fully paid for their home lots
with their hard-earned cash.[22]
Since the mortgage is void, HLURBs orders of the cancellation of
the sheriffs certificate of sale, release of the mortgaged lots and
delivery of the corresponding titles to respondents who had fully
paid the purchase price of the units are but the necessary
consequences of the invalidity of the mortgage for the protection
of private respondents.
Anent the second issue, petitioner contends that since the
titles on their face were free from any claims, liens and
encumbrances at the time of the mortgage, it is not obliged under
the law to go beyond the certificates of title registered under the
Torrens system and had every reason to rely on the correctness
and validity of those titles.
 We are not convinced.
While the cases[23] cited by petitioner held that the
mortgagee is not under obligation to look beyond the certificate
of title when on its face, it was free from lien or encumbrances,
the mortgagees therein were considered in good faith as they
were totally innocent and free from negligence or wrongdoing in
the transaction. In this case, petitioner knew that the loan it was
extending to Garcia/TransAmerican was for the purpose of the
development of the eight-unit townhouses. Petitioners insistence
that prior to the approval of the loan, it undertook a thorough
check on the property and found the titles free from liens and
encumbrances would not suffice. It was incumbent upon
petitioner to inquire into the status of the lots which includes
verification on whether Garcia had secured the authority from the
HLURB to mortgage the subject lots. Petitioner failed to do so. We
likewise find petitioner negligent in failing to even ascertain from
Garcia if there are buyers of the lots who turned out to be private
respondents. Petitioners want of knowledge due to its negligence
takes the place of registration, thus it is presumed to know the
rights of respondents over the lot. The conversion of the status of
petitioner from mortgagee to buyer-owner will not lessen the
importance of such knowledge.[24] Neither will the conversion set
aside the consequence of its negligence as a mortgagee.[25]
Judicial notice can be taken of the uniform practice of
banks to investigate, examine and assess the real estate offered
as security for the application of a loan. We cannot
overemphasize the fact that the Bank cannot barefacedly argue
that simply because the title or titles offered as security were
clean of any encumbrances or lien, that it was thereby relieved of
taking any other step to verify the over-reaching implications
should the subdivision be auctioned on foreclosure.[26] We
find apropos to cite our ruling in Far East Bank and Trust Co. vs.
Marquez, thus:[27]
Petitioner argues that it is an innocent mortgagee whose lien
must be respected and protected, since the title offered as
security was clean of any encumbrances or lien. We do not agree.
. . . As a general rule, where there is nothing on the certificate of
title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the purchaser is not
required to explore further than what the Torrens Title upon its
face indicates in quest for any hidden defect or inchoate right that
may subsequently defeat his right thereto. This rule, however,
admits of an exception as where the purchaser or mortgagee has
knowledge of a defect or lack of title in the vendor, or that he was
aware of sufficient facts to induce a reasonably prudent man to
inquire into the status of the property in litigation.
Petitioner bank should have considered that it was dealing with a
[townhouse] project that was already in progress. A reasonable
person should have been aware that, to finance the project,
sources of funds could have been used other than the loan, which
was intended to serve the purpose only partially. Hence, there
was need to verify whether any part of the property was already
the subject of any other contract involving buyers or potential
buyers. In granting the loan, petitioner bank should not have been
content merely with a clean title, considering the presence of
circumstances indicating the need for a thorough investigation of
the existence of buyers like respondent. Having been wanting in
care and prudence, the latter cannot be deemed to be an
innocent mortgagee.
Petitioner cannot claim to be a mortgagee in good faith. Indeed it
was negligent, as found by the Office of the President and by the
CA. Petitioner should not have relied only on the representation
of the mortgagor that the latter had secured all requisite permits
and licenses from the government agencies concerned. The
former should have required the submission of certified true
copies of those documents and verified their authenticity through
its own independent effort.
Having been negligent in finding out what respondents rights
were over the lot, petitioner must be deemed to possess
constructive knowledge of those rights.
As to the third issue, petitioner contends that private
respondents were negligent in failing to register their contracts to
sell in accordance with Section 17 of P.D. No. 957; that private
respondents unregistered contracts to sell are binding only on
them and Garcia/TransAmerican but not on petitioner which had
no actual or constructive notice of the sale at the time the
mortgage was constituted.
We disagree.
Section 17 of P.D. No. 957[28] provides that the seller shall
register the contracts to sell with the Register of Deeds of Quezon
City. Thus, it is Garcias responsibility as seller to register the
contracts and petitioner should not blame private respondents for
not doing so. As we have said earlier, considering petitioners
negligence in ascertaining the existence or absence of authority
from HLURB for Garcia/TransAmerican to mortgage the subject
lots, petitioner cannot claim to be an innocent purchaser for value
and in good faith. Petitioner is bound by private respondents
contracts to sell executed with Garcia/TransAmerican.
The last paragraph of Section 18 of P.D. No. 957 provides
that respondents who have not yet paid in full have the option to
pay their installment for the lot directly to the mortgagee
(petitioner) who is required to apply such payments to the
corresponding mortgage indebtedness secured by the particular
lot or unit being paid for, with a view to enabling said buyer to
obtain title over the lot or unit promptly after full payment
thereof. Thus, petitioner is obliged to accept the payment of
remaining unpaid amortizations, without prejudice to petitioner
banks seeking relief against the subdivision developer.[29]
Notably, although no issue was taken on the fact that the
case against Garcia/TransAmerican, the developer/seller and
mortgagor of the subject lots, was archived for failure to serve
summons on him/it as his whereabouts or the office could not be
located, it must be stated that Garcia/TransAmerican is not an
indispensable party since a final determination on the validity of
the mortgage over the subject lots can be rendered against
petitioner. Thus, the absence of Garcia/TransAmerican did not
hamper the OAALA from resolving the dispute between private
respondents and petitioner.
In China Bank vs. Oliver,[30] we held that the mortgagor,
who allegedly misrepresented herself to be Mercedes M. Oliver,
the registered owner of TCT No. S-50195, is not an indispensable
party in a case filed by a person claiming to be the true registered
owner, for annulment of mortgage and cancellation of title
against the mortgagee, China Bank. We found therein that even
without the mortgagor, the true Mercedes Oliver can prove in her
complaint that she is the real person referred in the title and she
is not the same person using the name who entered into a deed
of mortgage with the mortgagee, China Bank.
 In the present case, private respondents, in their GOVERNMENT SERVICE
complaint, alleged that the mortgage was constituted without the INSURANCE SYSTEM (GSIS) and
prior written approval of the HLURB which is in violation of Spouses VICTOR and MILAGROS
Section 18 of P.D. No. 957. Petitioners admission that it granted MANLONGAT, Promulgated:
and released the loan without notifying the HLURB because of its Respondents. November 23, 2011
belief that it was not necessary to do so, is fatal to petitioners
defense. As a consequence thereof, the mortgage constituted in x-------------------------------------------------------------
favor of petitioner can be declared invalid as against private ------x
respondents even without the presence of Garcia/TransAmerican.
It is worthy to mention that the assailed decision was rendered
merely against petitioner and had not made any pronouncement DECIS ION
as to Garcia/TransAmericans liability to private respondents for
the non-completion of the projects; or to herein petitioner, as
mortgagee.
DEL CASTILLO, J.:
The present case merely involves the liability of petitioner
bank to private respondents as buyers of the lots and townhouse
units. A transferee pendente lite of registered land, whose title bears a notice of a

WHEREFORE, the petition is DISMISSED for lack of merit. pending litigation involving his transferors title to the said land, is bound by

SO ORDERED. the outcome of the litigation, whether it be for or against his

transferor. Given this principle, the modification of the final decision against

the transferor in order to include the transferee pendente lite does not

violate the doctrine of immutability of final judgments. His inclusion does

not add to or change the judgment; it is only a legal consequence of the

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

party.

Before the Court is a Petition for Review[1] assailing the validity of the

February 9, 2005 Order[2] of Branch 160 of the Regional Trial Court (RTC)

of Pasig City. The said Order denied petitioners motion for supplemental

writ of execution:[3]

Conformably with Section 8, Rule 39, 1997 Rules

of Civil Procedure, execution in this case can only
be implemented as far as what has been decreed
in the decision dated September 11, 2001,
qualified by the Order of this Court dated January
20, 2003 with respect [to] the payment of
attorneys fees.
COL. FRANCISCO DELA MERCED, G.R. No. 167140
substituted by his heirs namely,
In view thereof, plaintiffs motion for
LUIS CESAR DELA MERCED,
supplemental writ of execution is DENIED.
BLANQUITA DELA
MERCED nee MACATANGAY, and Present:
SO ORDERED.[4]
MARIA OLIVIA M. PAREDES,
CORONA, C.J.,
Chairperson,
Petitioners, LEONARDO-DE CASTRO,
The September 11, 2001 Decision referred to in the assailed Order was
BERSAMIN,
rendered by this Court in G.R. No. 140398, entitled Col. Francisco Dela
- versus - DEL CASTILLO, and
Merced, substituted by his heirs, namely, BLANQUITA E. DELA MERCED,
VILLARAMA, JR., JJ.
LUIS CESAR DELA MERCED, BLANQUITA E. DELA MERCED (nee Later, the Zulueta spouses mortgaged[9] several lots contained in TCT No.

MACATANGAY), and MARIA OLIVIA M. PAREDES, v. GOVERNMENT 26105 to the GSIS, which eventually foreclosed on the mortgaged

SERVICE INSURANCE SYSTEM (GSIS) and SPOUSES VICTOR and MILAGROS properties, including the subject properties. Upon consolidation of GSISs

MANLONGAT.[5] The fallo of the said Decision reads: ownership, TCT No. 26105 in Zuluetas name was cancelled, and TCT No.

23554[10] was issued in GSISs name.[11]

WHEREFORE, in view of the foregoing, the
petition is GRANTED. The decision of the Court of
Appeals is REVERSED AND SET ASIDE. The
decision of the Regional Trial Court of Pasig City, Upon learning of the foreclosure, petitioners predecessor, Francisco Dela
Branch 160, in Civil Case Nos. 51410 and 51470,
is REINSTATED. The foreclosure sale of Lot Nos. 6, Merced (Dela Merced) filed a complaint[12] praying for the nullity of the GSIS
7, 8 and 10 of Block 2 and Lot 8 of Block 8 of the
property originally covered by TCT 26105, and the foreclosure on the subject properties (Lots 6, 7, 8, and 10 of Block 2 and Lot
subsequent certificates of titles issued to GSIS as
well as TCT No. PT-94007 in the name of Elizabeth 8 of Block 8) on the ground that he, not the Zuluetas, was the owner of
Manlongat, are declared NULL AND VOID. The
Register of Deeds of Pasig City is ordered these lots at the time of the foreclosure. Dela Merced also impleaded
to CANCEL all present certificates of title in the
name of GSIS and Elizabeth Manlongat covering Victor and Milagros Manlongat,[13] who were claiming Lot 6, Block 2 by
the above-mentioned properties, and
virtue of a sale executed by the GSIS in their daughters (Elizabeth
to ISSUE new certificates of title over the same in
the name of petitioners as co-owners
Manlongat) favor.[14] Dela Merced argued that, due to the nullity of GSISs
thereof. Respondents GSIS and spouses Victor
and Milagros Manlongat are ORDERED to pay,
foreclosure over the subject properties, it had no ownership right that
jointly and severally, attorneys fees in the
increased amount of P50,000.00, and to pay the could be transferred to Elizabeth Manlongat.
costs.

SO ORDERED.[6]
Dela Merced caused the annotation of lis pendens[15] on GSISs TCT No.

23554 on September 21, 1984 in order to protect his interests in the

G.R. No. 140398 has long attained finality[7] but could not be executed
subject properties. Dela Merced died in 1988 and was substituted by his
because of the objections raised by the Register of Deeds (RD) and
heirs, the petitioners in the instant case.
respondent Government Service Insurance System (GSIS). These

objections, which the trial court found insurmountable in its assailed

After a protracted litigation, the case reached this Court as G.R. No.
February 9, 2005 Order, are now presented to us for resolution.
140398. On September 11, 2001, a Decision[16] was rendered in petitioners

favor. The Court nullified GSISs foreclosure of the subject properties

Factual antecedents
because these lots were never part of its mortgage agreement with the

Zulueta spouses. The dispositive portion of said Decision reads:

This case involves five registered parcels of land located within the Antonio

Subdivision, Pasig City Lots 6, 7, 8, and 10 of Block 2 and Lot 8 of Block 8
(subject properties). These lots were originally owned by, and titled in the
name of, Jose C. Zulueta (Zulueta), as evidenced by Transfer Certificate of
Title (TCT) No. 26105.[8] TCT No. 26105 contains several lots, other than the
subject properties, within the Antonio Subdivision.
WHEREFORE, in view of the foregoing, the
petition is GRANTED. The decision of the Court of
Appeals is REVERSED AND SET ASIDE. The
decision of the Regional Trial Court of Pasig City,
Branch 160, in Civil Case Nos. 51410 and 51470,
is REINSTATED. The foreclosure sale of Lot Nos. 6,
7, 8 and 10 of Block 2 and Lot 8 of Block 8 of the
property originally covered by TCT 26105, and the
subsequent certificates of titles issued to GSIS as
well as TCT No. PT-94007 in the name of Elizabeth
Manlongat, are declared NULL AND VOID. The
 Register of Deeds of Pasig City is ordered
to CANCEL all present certificates of title in the
name of GSIS and Elizabeth Manlongat covering
the above-mentioned properties, and
to ISSUE new certificates of tile over the same in
the name of petitioners as co-owners thereof.
Respondents GSIS and spouses Victor and
Milagros Manlongat are ORDERED to pay, jointly
and severally, attorneys fees in the increased
amount of P50,000.00, and to pay the costs.[17]
Judgment was entered on April 23, 2002.[18]
Pursuant to the finality of the above Decision, petitioners filed a Motion for
Execution[19] with Branch 160 of the RTC of Pasig City.
First obstacle:
GSISs alleged exemption from execution
GSIS opposed the motion for execution, citing as basis Section 39
of Republic Act No. 8291 (RA 8291), also known as the GSIS Act of
1997. The said provision allegedly exempts GSIS funds and properties from
attachment, garnishment, execution, levy and other court processes.[20]
On January 20, 2003, the trial court granted petitioners motion for
execution; but held in abeyance the execution of the award of attorneys
fees, pending clarification before the higher courts of the issue of GSISs
exemption under Section 39 of RA 8291. The said Order is reproduced
below:
Acting on the Motion for Execution filed by the
plaintiff herein together with the opposition of
defendant GSIS, and considering that the
judgment has already become final and
executory, the same is hereby Granted.
As prayed for, let a writ of execution issue to
enforce the judgment of this court.
However, with respect to the payment of
attorneys fees in the increased amount
of P50,000.00 which has to be paid jointly and
severally by the GSIS and Sps. Manlongat, the
same is held in abeyance as far as GSIS is
concerned pending clarification by the GSIS
before the Supreme Court on the issue of
whether its funds and assets are exempt from
execution pursuant to Section 39, R.A. 8291,
otherwise known as the GSIS Act of 1997.
SO ORDERED.[21]
A writ of execution was issued on July 24, 2003.[22]
Eventually, GSIS filed with the Court of Appeals (CA) a petition
for certiorari and prohibition against the trial courts implementation of the
writ of execution against it.[23] The petition, docketed as CA-G.R. SP No.
87821, presented the issue whether the trial judge gravely abused her
discretion in ordering execution against GSIS funds and properties despite
their alleged express and absolute exemption from execution,
garnishment, and other court processes under Section 39 of RA 8291.[24]
In its October 28, 2005 Decision, the CA dismissed GSISs petition and held
that execution may be enforced against it.[25] The ratio of the appellate
court is reproduced in part:
Public respondent court presided by Hon. Amelia
A. Fabros did not commit grave abuse of
discretion when it issued the Writ of Execution
dated 24 July 2003. It must be considered that the
properties which (Lots 6, 7, 8, and 10 of Block 2
and Lot 8 of Block 8 of Antonio Subdivision) were
the subject of the writ of execution in the instant
case are not the properties of petitioner GSIS. In
the court a quos Decision dated October 23, 1987
and reiterated in the Honorable Supreme Courts
Decision dated September 11, 2001, it
declared inter alia that the certificates of title
issued to petitioner GSIS pertaining to Lot Nos. 6,
7, 8, and 10 of Block 2 and Lot 8 of Block 8 are null
and void and further directed inter alia the
Register of Deeds of Pasig City to cancel all the
present certificates of title in the name of
petitioner GSIS. x x x[26]
xxxx
[P]etitioner GSIS has no interest over the subject
properties and x x x had never validly acquired
ownership thereof. x x x[27] Therefore, any and all
[rights] that petitioner GSIS may have on the
subject properties were non-existent from the
very beginning. Verily, the court a quowas right
then in issuing the writ of execution dated 24 July
2003 and that petitioner GSIS claim that it should
be exempted from execution has no basis in fact
and in law.[28]
xxxx
We lay stress that the pronouncement made in
the abovementioned SC circular and in the case of
Commissioner of Public Highways vs. San Diego,
cited in the Armovit case find no application in the
case at bar. It must be noted that the properties
referred to therein are those owned by
government which could not be seized under writ
 of execution to satisfy such judgment because to Alleged inadequacy of the fallo
do so, there is a necessity for the corresponding
appropriation of public funds by Congress before
the same could be disbursed. In this instant case,
it has already been settled that the herein After the resolution of the issue of GSISs exemption, petitioners
properties involved are not owned by petitioner
GSIS; hence, there is no prohibition that the same encountered more problems with the execution of the September 11,
could be executed and that there is no public
funds involved which require the corresponding 2001 Decision in G.R. No. 140398. According to the RD of Pasig City,
appropriation thereof. x x x[29]
Policarpio Espenesin, he could not enforce the Decision in G.R. No. 140398
xxxx
as worded.
In fine, the execution of the subject properties is
proper for to assert otherwise, would be The order to cancel the titles of GSIS over Lots 7 and 8 of Block 2 allegedly
depriving private respondents dela Merced and
Paredes of their properties without due process could not be enforced because GSIS no longer had title over these two lots.
of law as it had been clearly established on record
GSIS had already conveyed these lots in 1985 and 1988 to Diogenes
that they really owned the subject properties.To
sustain petitioner GSIS view that it should be
Bartolome (Lot 8) and Antonio Dimaguila [Dimaguila] (Lot 7),
exempt from execution would be putting the
subject properties beyond the reach of the
respectively. At present, Lot 7 of Block 2 is titled in Dimaguilas name (TCT
rightful owners thereof x x x. Likewise, to uphold
petitioner GSIS theory would inevitably lead to a No. PT-67466)[36] while Lot 8 of Block 2 is titled in the name of Bartolomes
disastrous consequence and lend imprimatur to
deprivation of property without due process of assignee, Zenaida Victorino [Victorino] (TCT No. 53031).[37] While both titles
law. Additionally, to grant petitioner GSIS prayer
that the subject properties be exempt from contain notices of lis pendens carried over from GSISs title,[38] the RD
execution without any factual and legal basis
thereof would resultantly remain the same in the claimed that the writ of execution must first be modified to include the
custody or control of petitioner GSIS which
unjustly enriches itself at the expense of private cancellation of derivative titles of the GSIS title.
respondents dela Merced and Paredes and who
the latter could be deprived of the beneficial
use/ownership thereof when in the very first
place they were able to establish the ownership The RD also found difficulty in implementing the order to cancel GSISs titles
thereof. Every person who through an act or
performance by another, or any other means, over Lot 10 of Block 2 and Lot 8 of Block 8 and to issue new ones in
acquires or comes into possession of something
at the expense of the latter without just or legal petitioners name because no such individual titles exist in his records. The
ground, shall return the same to him.[30]
RD posited that these two lots must still be included in GSISs mother title,
xxxx
TCT No. 23554. The RD opined that he cannot cancel GSISs mother title,
WHEREFORE, premises considered, the instant
PETITION FOR CERTIORARI and PROHIBITION is even if it contains Lot 10 of Block 2 and Lot 8 of Block 8 because it would
hereby DISMISSED. Accordingly, the Writ of
Execution dated 24 July 2003 and the Order dated affect other lots that might still be included therein.
16 September 2004 both rendered by the
Regional Trial Court of Pasig City, Branch
160 stand.
The RD further lamented that assuming he could cancel GSISs mother title
SO ORDERED. [31]
with respect to Lot 10 of Block 2 and Lot 8 of Block 8, there is still no way

that he could issue new titles over these lots in petitioners name. This is
GSISs motion for reconsideration of the above Decision was denied in the
because his office has no information regarding the technical descriptions
June 30, 2006 Resolution of the appellate court.[32] GSIS appealed the CA
for these two lots. The RD thus suggested that the parties provide him with
Decision to this Court[33] but the petition was denied in a Resolution dated
these relevant information before he can proceed.
February 12, 2007,[34]which denial was entered in the Book of Judgments

on October 2, 2007.[35]
Second obstacle:
In order to address these difficulties, petitioners filed before the trial court a Lastly, GSIS again raises its earlier argument that the September 11, 2001

Motion for Supplemental Writ of Execution.[39] They prayed for a Decision in G.R. No. 140398 cannot be enforced because of GSISs

supplemental writ ordering the RD to cancel the titles over Lots 7 and 8 of exemption from court processes under RA 8291.

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

directing the GSIS and the Bureau of Lands to supply the RD with the Petitioners arguments

technical descriptions of Lot 10, Block 2, and Lot 8, Block 8.[40] Petitioners counter that the September 11, 2001 Decision in G.R. No.

140398 can be enforced against GSISs transferees pendente lite because

GSIS opposed the issuance of a supplemental writ of execution.[41] these transferees were given notice of the pendency of the case by virtue

of the notice of lis pendens that had been inscribed on GSISs TCT No. 23554

On February 9, 2005, Judge Amelia A. Fabros issued the assailed order as early as September 21, 1984. In fact, when TCT No. 23554 was cancelled

denying petitioners motion for supplemental writ of execution. with respect to Lots 7 and 8 of Block 2 in order to issue new titles in

Dimaguilas and Victorinos names, this notice was carried over to their

Respondents arguments respective titles. Moreover, the conveyance of these lots to Victorino and

Dimaguila transpired in 1985 and 1988, respectively; clearly during the

The Manlongats could not be served with copies of the Courts resolutions; pendency of the case and with notice of the questions surrounding GSISs

hence the Court dispensed with their comment.[42] ownership over these properties.

GSIS argues that petitioners motion was properly denied because it seeks As transferees pendente lite, Dimaguilas and Victorinos titles are proper

to modify a final and executory Decision. The September 11, 2001 Decision subjects of writs of execution even if they were not actual parties to the

in G.R. No. 140398 only ordered the cancellation of GSISs titles over the case. Petitioners cite Voluntad v. Spouses Dizon[43] as their authority.[44]

subject properties. It did not order the cancellation of all derivative titles of

GSISs transferees; nor did it order the GSIS to perform acts such as With regard to the issuance of new titles for Lot 10, Block 2 and Lot 8, Block

providing the RD with the technical descriptions for Lot 10, Block 2 8, petitioners argue that GSIS can be compelled to provide the RD with

and Lot 8, Block 8. GSIS maintains that a supplemental writ that includes their respective technical descriptions. This power is granted to the courts

such additional orders is null and void for non-conformity with the under Section 10, Rule 39 of the Rules of Court.[45]

judgment.

Petitioners maintain that execution of the Decision in G.R. No. 140398

Further, GSIS argues that the inclusion of derivative titles in the September should not be confined to the literal terms contained only in the fallo or the

11, 2001 Decision in G.R. No. 140398 would deprive the holders of these dispositive portion.[46]

derivative titles their day in court. GSIS opines that the holders of the

derivative titles are not bound by the judgment against GSIS because these As regards GSISs alleged exemption, petitioners posit that the GSIS can no

holders are strangers to the action between GSIS and petitioners. longer raise the issue of exemption from execution given that the CA had

already rendered its Decision on that question in CA-G.R. SP No. 87821. The

said Decision was affirmed by this Court in G.R. No. 173391 through our
 e
February 12, 2007 Resolution[47] and entry of judgment in that case was n
t
made on October 2, 2007.[48]
a
Issues g
a
Can GSIS still raise the issue of exemption? i
n
Whether a final and executory judgment against GSIS and Manlongat can s
be enforced against their successors-in-interest or holders of derivative t
titles
t
Whether an order to cancel title to a particular property includes an order r
to provide technical descriptions and segregate it from its mother title a
n
s
f
Our Ruling e
r
On the issue of GSISs exemption e
e
s
The issue of GSISs alleged exemption under RA 8291 had been finally
p
e
decided against GSIS in G.R. No. 173391, when this Court denied GSISs
n
d
petition for review. The denial rendered the CA Decision in CA-G.R. SP No.
e
87821 final and executory. GSISs attempt to resurrect the same issue by n
t
interjecting the same in this proceeding is barred by the principle of law of e

the case, which states that determinations of questions of law will generally l
i
be held to govern a case throughout all its subsequent stages where such t
e
determination has already been made on a prior appeal to a court of last

resort.[49] The Decision in G.R. No. 173391 allowing the execution of the
A notice of lis pendens is an announcement to the whole world that a
judgment against GSIS is the law of the case and controls the proceedings
particular real property is in litigation, serving as a warning that one who
below which are already in the execution stage.
acquires an interest over said property does so at his own risk, or that he

E gambles on the result of the litigation over the said property.[50] The effect
n
f of the annotation of lis pendens on future transactions over the subject
o
r property is discussed by an authority on land titles and registration:
c
e
m Once a notice of lis pendens has been duly
e registered, any cancellation or issuance of the title
n of the land involved as well as any subsequent
t transaction affecting the same, would have to be
subject to the outcome of the litigation. In other
o words, upon the termination of the litigation
f there can be no risk of losing the property or any
part thereof as a result of any conveyance of the
j land or any encumbrance that may be made
u thereon posterior to the filing of the notice of lis
d pendens.[51]
g
m
It is not disputed that petitioners caused the annotation of lis pendens on
TCT No. 23554, which covers Lots 7 and 8 of Block 2, as early as September
21, 1984.[52] On July 29, 1985 and August 24, 1998, TCT No. 23554 was
cancelled with respect to Lots 7 and 8 of Block 2 and new individual titles
were issued to Victorino and Dimaguila. Both titles had the notice of lis
pendens which was carried over from TCT No. 23554. Ineluctably, both
Victorino and Dimaguila had notice of the litigation involving GSISs
ownership over the subject properties, and were bound by the outcome of
the litigation. When a transferee pendente lite takes property with notice
of lis pendens, such transferee undertakes to respect the outcome of the
litigation. As held in Selph v. Vda. de Aguilar,[53] an order to cancel the
transferors title may be enforced against his transferee, whose title is
expressly subject to the outcome of the litigation by the fact of the
annotation of lis pendens.
The existence of these entries on Dimaguilas and Victorinos titles bars any
defense of good faith[54] against petitioners and effectively makes Dimaguila
and Victorino mere privies of GSIS and subject to whatever rights GSIS
might have in the subject properties, which (as it turns out) is none at
all. What Dimaguila and Victorino possess are derivative titles of the GSISs
title over Lots 7 and 8 of Block 2, which this Court has finally adjudicated to
be null and void. Given the legal maxim that a spring cannot rise higher
than its source, it follows that Dimaguilas and Victorinos titles, or any other
title over the subject properties that are derived from TCT No. 23554 of the
GSIS, are likewise null and void. As explained by this Court in another case,
the title obtained by the transferee pendente lite affords him no special
protection; he cannot invoke the rights of a purchaser in good faith and
cannot acquire better rights than those of his predecessor-in-interest.[55]
In Voluntad v. Spouses Dizon,[56] the Court allowed the issuance of an alias
writ of execution against the transferees pendente lite, who had knowledge
of the pending litigation on the basis of the annotation of the notice of lis
pendens on their titles. The Court clarified therein that there was no need
for the victorious [parties] to file a separate action to enforce their right to
recover the property as against the new registered owners.[57]
In Associated Bank v. Pronstroller,[58] the Court affirmed the judgments of
the trial and appellate courts cancelling the titles of the spouses Vaca, who
were transferees pendente lite of Associated Bank, despite the fact that the
spouses Vaca were not parties to the case between Associated Bank and
the Pronstrollers. The Court explained therein:
Admittedly, during the pendency of the case,
respondents timely registered a notice of lis
pendens to warn the whole world that the
property was the subject of a pending litigation.
Lis pendens, which literally means pending suit,
refers to the jurisdiction, power or control which a
court acquires over property involved in a suit,
pending the continuance of the action, and until
final judgment. Founded upon public policy and
necessity, lis pendens is intended to keep the
properties in litigation within the power of the
court until the litigation is terminated, and to
prevent the defeat of the judgment or decree by
subsequent alienation. x x x
The filing of a notice of lis pendens has a twofold
effect: (1) to keep the subject matter of the
litigation within the power of the court until the
entry of the final judgment to prevent the defeat
of the final judgment by successive alienations;
and (2) to bind a purchaser, bona fide or not, of
the land subject of the litigation to the judgment
or decree that the court will promulgate
subsequently.
This registration, therefore, gives the court clear
authority to cancel the title of the spouses Vaca,
since the sale of the subject property was made
after the notice of lis pendens. x x x[59]
Upon Associated Banks MR, the spouses Vaca filed a motion to intervene
arguing that they had a real interest in assailing the July 14, 2008 Decision,
which ordered the cancellation of their title. The Court denied the
intervention. It was held that the interests of the spouses Vaca in the
subject property were properly represented in the action by their
transferor/vendor Associated Bank, which was already a party thereto. As
transferees pendente lite, the spouses Vaca stand exactly in the shoes of
their predecessor-in-interest, Associated Bank.[60]
The Court cannot accept GSISs theory that the dispositive portion of the
Decision in G.R. No. 140398 is enforceable only against GSISs title because it
does not contain the phrase and all its derivative titles. GSISs narrow
interpretation would render nugatory the principle that a final judgment ostensible ownership over the lots by the simple expedience that they are

against a party is binding on his privies and successors-in-interest. We included in a mother title, instead of individual titles. That result is

cannot sustain this interpretation. In Cabresos v. Judge Tiro,[61] the Court manifestly contrary to the Courts ruling and would subvert the very

upheld the respondent judges issuance of an alias writ of execution against purpose of bringing this case for a complete resolution.

the successors-in-interest of the losing litigant despite the fact that these A similar predicament was ruled upon by the Court in Republic Surety and

successors-in-interest were not mentioned in the judgment and were Insurance Co., Inc. v. Intermediate Appellate Court.[62] In that case, the Court

never parties to the case. The Court explained that an action is binding on declared that Republic Mines had no right to the property involved but

the privies of the litigants even if such privies are not literally parties to the during the execution, the RD refused to cancel the TCT in Republic Mines

action. Their inclusion in the writ of execution does not vary or exceed the name on the ground that the dispositive portion of the trial courts Decision

terms of the judgment. In the same way, the inclusion of the derivative did not order the RD to cancel the title and to revive the old title in favor of

titles in the writ of execution will not alter the Decision in G.R. No. 140398 the victorious party. The Court held that the missing order to cancel and

ordering the cancellation of GSISs title. revive should be deemed implied in the trial courts decision. Speaking

through Justice Feliciano, the Court explained thus:

Cancellation of title
What is involved here is not what is ordinarily
regarded as a clerical error in the dispositive part
of the decision of the Court of First Instance,
The RD claimed that it cannot execute the order to cancel the GSISs titles which type of error is perhaps best typified by an
error in arithmetical computation. At the same
over Lot 10, Block 2 and Lot 8, Block 8 because it has no record of GSISs title time, what is involved here is not a correction of
an erroneous judgment or dispositive portion of a
over these two lots. The RD theorized that these lots are included in a judgment. What we believe is involved here is in
the nature of an inadvertent omission on the part
mother title in GSISs possession and would still have to be segregated of the Court of First Instance x x x, of what might
be described as a logical follow-through of
therefrom. To effectuate such segregation, the RD needed the technical something set forth both in the body of the
decision and in the dispositive portion thereof: the
descriptions of the two lots and the mother title. Thus, petitioners ask that inevitable follow-through, or translation into,
operational or behavioral terms, of the
the GSIS be compelled to surrender its title over, as well as the technical
annulment of the Deed of Sale with Assumption
of Mortgage, from which petitioners' title or claim
descriptions of, Lot 10, Block 2 and Lot 8, Block 8.
of title embodied in TCT 133153 flows. The
dispositive portion of the decision itself declares
GSIS refused to turn over the needed documents and information, claiming
the nullity ab initio of the simulated Deed of Sale
that these acts go beyond what were ordered in the Decision in G.R. No. with Assumption of Mortgage and instructed the
petitioners and all persons claiming under them
140398. GSISs protestations ring hollow. to vacate the subject premises and to turn over
possession thereof to the respondent-spouses.
Paragraph B of the same dispositive portion,
confirming the real estate mortgage executed by
The order contained in the Decision in G.R. No. 140398 is for the RD to the respondent-spouses also necessarily assumes
that Title No. 133153 in the name of petitioner
cancel GSISs titles over Lot 10, Block 2 and Lot 8, Block 8, inter alia. Whether Republic Mines is null and void and therefore to
be cancelled, since it is indispensable that the
these titles are individual or contained in a mother title is of no mortgagors have title to the real property given
under mortgage to the creditor (Article 2085 [2],
consequence. The RD has to cause their cancellation. If the cancellation can Civil Code).[63]

only be carried out by requiring GSIS or the Bureau of Lands to provide the xxxx

necessary information, then they can be compelled to do so. Otherwise, There are powerful considerations of an equitable
nature which impel us to the conclusions we
the Courts decision would be rendered inefficacious, and GSIS would retain reach here. Substantial justice cannot be served if
 the petitioner Republic Mines, having absolutely
no right, legal or equitable, to the property
involved, its claim thereto being based upon a
transaction which was not only simulated but also
immoral and unconscionable, should be allowed
to retain the Transfer Certificate of Title in its
name. The petitioner would thereby be in a
position to inflict infinite mischief upon the
respondent-spouses whom they deprived for 15
years of the possession of the property of which
they were and are lawful owners, and whom they
compelled to litigate for 15 years to recover their
own property. The judicial process as we know it
and as administered by this Court cannot permit
such a situation to subsist. It cannot be an
adequate remedy for the respondent-spouses to
have to start once more in the Court of First
Instance, to ask that court to clarify its own
judgment, a process which could be prolonged by
the filing of petitions for review in the Court of
Appeals and eventually in this Court once more.
Public policy of the most fundamental and
insistent kind requires that litigation must at last
come to an end if it is not to become more
pernicious and unbearable than the very injustice
or wrong sought to be corrected thereby. That
public policy demands that we cut this knot here
and now.[64]
When a judgment calls for the issuance of a new title in favor of the
winning party (as in the instant case), it logically follows that the judgment
also requires the losing party to surrender its title for cancellation. It is the
only sensible way by which the decision may be enforced. To this end,
petitioners can obtain a court order requiring the registered owner to
surrender the same and directing the entry of a new certificate of title in
petitioners favor.[65] The trial court should have granted petitioners motion
for supplemental writ of execution as it had authority to issue the
necessary orders to aid the execution of the final judgment.[66]
GSISs objection that these orders cannot be enforced because they do not
literally appear in the Decision in G.R. No. 140398 is unreasonable. GSIS
would have the Court spell out the wheres, whys, and hows of the
execution. GSIS wants a dispositive portion that is a step-by-step detailed
description of what needs to be done for purposes of execution. This
expectation is unreasonable and absurd.
WHEREFORE, the petition is GRANTED. The February 9, 2005 Order of
Branch 160 of the Regional Trial Court of Pasig City is REVERSED and SET
ASIDE. The September 11, 2001 Decision in G.R. No. 140398 is clarified to
read as follows:
WHEREFORE, in view of the foregoing, the
petition is GRANTED. The decision of the Court of
Appeals is REVERSED AND SET ASIDE.
The decision of
the Regional Trial Court of Pasig City, Branch 160,
in Civil Case Nos. 51410 and 51470, is
REINSTATED. The foreclosure sale of Lot Nos. 6, 7,
8 and 10 of Block 2 and Lot 8 of Block 8 of the
property originally covered by TCT No. 26105, and
the subsequent certificates of titles issued to GSIS
as well as TCT No. PT-94007 in the name of
Elizabeth Manlongat, and their respective
derivative titles are declared NULL AND VOID.
The Register of Deeds of Pasig City is ordered to
CANCEL all present certificates of title covering the
above-mentioned properties, whether contained
in individual titles or in a mother title, in the
name of GSIS and Elizabeth Manlongat, or in the
name of their privies, successors-in-interest or
transferees pendente lite, and to ISSUE new
certificates of title over the same in the name of
petitioners as co-owners thereof.
GSIS and the Bureau of Lands are ordered to
supply the necessary documents and
information for the proper enforcement of the
above orders.
Respondents GSIS and spouses Victor and
Milagros Manlongat are ORDERED to pay, jointly
and severally, attorneys fees in the increased
amount of P50,000.00, and to pay the costs.
SO ORDERED.
The trial court is ordered to ISSUE the writ of execution in accordance with
the above clarified dispositive portion.
GSIS is seriously warned not to further delay the execution of this case.
SO ORDERED.
G.R. No. 204280, November 09, 2016
EVELYN V. RUIZ, Petitioner, v. BERNARDO F.
DIMAILIG, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari assails the October 22, 2012
Decision1 of the Court of Appeals (CA) in CA-GR. CV No. 95046
which reversed and set aside the November 26,2009
Decision2 and the March 19, 2010 Order3 of the Regional Trial
Court (RTC) of Cavite City, Branch 16 in Civil Case No. N-7573. The
CA declared void the Real Estate Mortgage (REM) constituted on
the property covered by Transfer Certificate of title (TCT) No. T-
361747.
Factual Antecedents
Respondent Bernardo F. Dimailig (Bernardo) was the registered
owner of a parcel of land covered by TCT No. T-361747 located in
Alapan, Imus, Cavite.4 In October 1997, he entrusted the owner's
copy of the said TCT to his brother, Jovannie,5 who in turn gave
the title to Editha Sanggalang (Editha), a broker, for its intended
sale. However, in January 1998, the property was mortgaged to
Evelyn V. Ruiz (Evelyn) as evidenced by a Deed of REM6 without
Bernardo's knowledge and consent. Hence, Bernardo instituted
this suit for annulment of the Deed of REM.7
In her Answer,8 Evelyn contended that she met Jovannie when
she inspected the subject property and assured her that Bernardo
owned the property and his title thereto was genuine. She further
claimed that Jovannie mortgaged the property to her. She also
insisted that as a mortgagee in good faith and for value, the REM
cannot be annulled and that she had the right to keep the owner's
copy of TCT No. T-361747 until the loan was fully paid to her.
During pre-trial the parties arrived at the following stipulations:9
1. That x x x it was not [Bernardo] who signed as mortgagor in the
subject Deed of Real Estate Mortgage.
2. That there was a demand letter sent to [Evelyn] x x x to cause a
release of mortgage on the subject property.
3. The x x x controversy [was referred] to the Barangay for
conciliation and mediation.
[4.] That Jovannie x x x is the brother
[Bernardo].chanroblesvirtuallawlibrary
Thereafter, trial on the merits ensued.
Bernardo testified that when he went abroad on October 19,
1997, he left the owner's copy of the TCT of the subject property
to Jovannie as they intended to sell the subject
property.10 However, on January 26, 1998, a REM was executed
on the subject property. Bernardo argued that his alleged
signature appearing therein was merely forged11 as he was still
abroad at that time. When he learned in September or November
1998 that Editha mortgaged the subject property, he personally
told Evelyn that the REM was fake and demanded the return of
his title. Not heeding his request, he filed a complaint for estafa
through falsification of public document against Editha and
Evelyn. The criminal case against Evelyn was dismissed12 while
Editha was found guilty as charged.13
Jovannie also took the witness stand. He testified that sometime
in December 1997, Editha convinced him to surrender the owner's
copy of TCT No. T-361747 which she would show her
buyer.14Subsequently, however, Editha informed him that she
misplaced the title. Hence, he executed in August 199815 an
affidavit of loss and registered it with the Register of Deeds
(RD).16 In September 1998, Editha finally admitted that the title
was not lost but was in Evelyn's possession because of the
REM.17 Upon learning this, Jovannie inquired from Evelyn if Editha
mortgaged Bernardo's property to her. Purportedly, Evelyn
confirmed said mortgage and told him that she would not return
the owner's copy of TCT No. T-361747 unless Editha pay the
loan,18 Jovannie also alleged that he told Evelyn that Bernardo's
alleged signature in the REM was not genuine since he was
abroad at the time of its execution.19
On the other hand, Evelyn maintained that she was a mortgagee
in good faith. She testified that sales agents - Editha, Corazon
Encarnacion, and a certain Parani, - and a person introducing
himself as ''Bernardo" mortgaged the subject property to her for
P300,000.00 payable within a period of three months.20 She
asserted that even after the expiration of said period, "Bernardo"
failed to pay the loan.21
Evelyn narrated that before accepting the mortgage of the subject
property, she, the sales agents, her aunt, and Bernardo," visited
the property. She pointed out that her companions inspected it
while she stayed in the vehicle as she was still recuperating from
an operation.22 She admitted that she neither verified from the
neighborhood the owner of the property nor approached the
occupant thereof.23
Moreover, Evelyn asserted that when the Deed of REM was
executed, the person who introduced himself as Bernardo
presented a community tax certificate and his picture as proof of
identity.24 She admitted that she did not ask for any identification
card from "Bernardo."25cralawred
Contrary to the allegation in her Answer that Jovannie mortgaged
the property, Evelyn clarified that she met Jovannie for the first
time when he went to her house and told her that Bernardo could
not have mortgaged the property to her as he was abroad.26
of Corazon Abella Ruiz (Corazon), the sister-in-law of Evelyn, was
presented to corroborate her testimony. Corazon averred that in
January 1998, she accompanied Evelyn and several others in
inspecting the subject property.27 The day after the inspection,
Evelyn and "Bernardo'' executed the Deed of REM in the office of
a certain Atty. Ignacio; Evelyn handed P300,000.00 to Editha, not
to "Bernardo;"28 in turn, Editha handed to Evelyn the owner's
copy of TCT No. T-361747.29
Ruling of the Regional Trial Court
On November 26, 2009, the RTC dismissed the Complaint. It held
that while Bernardo was the registered owner of the subject
property, Evelyn was a mortgagee in good faith because she was
unaware that the person who represented himself as Bernardo
was an impostor. It noted that Evelyn caused the verification of
the title of the property with the RD and found the same to be
free from any lien or encumbrance. Evelyn also inspected the
property and met Jovannie during such inspection. Finally, the
RTC declared that there was no showing of any circumstance that
would cause Evelyn to doubt the validity of the title or the
property covered by it. In fine, Evelyn did all that was necessary
before parting with her money and entering Into the REM.
On March 19, 2010, the RTC denied Bernardo's Motion for
Reconsideration. Thus, he appealed to the CA.
Ruling of the Court of Appeals
On October 22, 2012, the CA rendered the assailed Decision
reversing and setting aside the RTC Decision. The decretal portion
of the CA Decision reads: ChanRoblesVirtualawlibrary
WHEREFORE, the appeal is GRANTED. The assailed dispositions of
the RTC are REVERSED and SET ASIDE. Tile complaint of Bernardo
F. Dimailig is GRANTED. The Deed of Real Estate Mortgage
constituted on the real property covered by TCT No. T-361747 of
the Registry of Deeds for the Province of Cavite, registered in his
name, is DECLARED null and void. Evelyn V. Ruiz is ORDERED to
reconvey or return to him the owner's duplicate copy of the said
title. His claims for the payment of attorney's fees and costs of
suits are DENIED. Costs against Evelyn V. Ruiz.
SO ORDERED.30
The CA held that the "innocent purchaser (mortgagor in this case)
for value protected by law is one who purchases a titled land by
virtue of a deed executed by the registered owner himself, not by
a forged deed."31 Since the Deed of REM was forged, and the title
to the subject property is still in the name of the rightful owner,
and the mortgagor is a different person who only pretended to be
the owner, then Evelyn cannot seek protection from the cloak of
the principle of mortgagee in good faith. The CA held that in this
case, ''the registered owner will not personally lose his title."32
The CA further decreed that Evelyn's claim of good faith cannot
stand as she failed to verify the real identity of the person
introduced by Editha as Bernardo. It noted that the impostor did
not even exhibit any identification card to prove his identity; and,
by Evelyn's admission, she merely relied on the representation of
Editha relative to the identity of "Bernardo." It also held that
Evelyn transacted only with Editha despite the fact that the
purported owner was present during the inspection of the
property, and during the execution of the REM.
In sum, the CA ruled that for being a forged instrument, the Deed
of REM was a nullity, and the owner's copy of TCT No. T-361747
must be returned to its rightful owner, Bernardo.
Issue
Hence, Evelyn filed this Petition raising the sole assignment of
error as follows: ChanRoblesVirtualawlibrary
[T]he Court of Appeals erred in holding that petitioner is not a
mortgagee in good faith despite the presence of substantial
evidence to support such conclusion of fact.33
Petitioners Arguments
Petitioner insists that she is a mortgagee in good faith. She claims
that she was totally unaware of the fraudulent acts employed by
Editha, Jovannie, and the impostor to obtain a loan from her. She
stresses that a person dealing with a property covered by a
certificate of title is not required to look beyond what appears on
the face of the title.
Respondent's Arguments
Bernardo, on his end, contends that since the person who
mortgaged the property was a mere impostor, then Evelyn cannot
claim that she was a mortgagee in good faith. This is because a
mortgage is void where the mortgagor has no title at all to the
property subject of such mortgage.
Bernardo asserts that there were circumstances that should have
aroused suspicion on the part of Evelyn relative to the
mortgagor's title over the property. He specifies that throughout
the negotiation of the mortgage, Evelyn transacted only with
Editha, not with "Bernardo," despite the fact that Editha and the
other real estate agents who assisted Evelyn in the mortgage
transaction were not armed with a power of attorney.
Bernardo likewise stresses that although Evelyn caused the
inspection of the subject property, she herself admitted that she
did not alight from the vehicle during the inspection, and she
failed to verify the actual occupant of the property.
Our Ruling
The Petition is without merit.
As a rule, the issue of whether a person is a mortgagee in good
faith is not within the ambit of a Rule 45 Petition. The
determination of presence or absence of good faith, and of
negligence factual matters, which are outside the scope of a
petition for review on certiorari.34 Nevertheless, this rule allows
certain exceptions including cases where the RTC and the CA
arrived at different or conflicting factual findings,35 as in the case
at bench. As such, the Court deems it necessary to re-examine
and re-evaluate the factual findings of the CA as they differ with
those of the RTC.
No valid mortgage will arise unless the mortgagor has a valid title
or ownership over the mortgaged property. By way of exception,
a mortgagee can invoke that he or she derived title even if the
mortgagor's title on the property is defective, if he or she acted in
good faith. In such instance, the mortgagee must prove that no
circumstance that should have aroused her suspicion on the
veracity of the mortgagor's title on the property was
disregarded.36
Such doctrine of mortgagee in good faith presupposes "that the
mortgagor, who is not the rightful owner of the property, has
already succeeded in obtaining a Torrens title over the property in
his name and that, after obtaining the said title, he succeeds in
mortgaging the property to another who relies on what appears
on the said title."37 In short, the doctrine of mortgagee in good
faith assumes that the title to the subject property had already
been transferred or registered in the name of the impostor who
thereafter transacts with a mortgagee who acted in good faith. In
the case at bench, it must be emphasized that the title remained
to be registered in the name of Bernardo, the rightful and real
owner, and not in the name of the impostor.
The burden of proof that one is a mortgagee in good faith and for
value lies with the person who claims such status. A mortgagee
cannot simply ignore facts that should have put a reasonable
person on guard, and thereafter claim that he or she acted in
good truth under the belief that the mortgagor's title is not
defective.38 And, such good faith entails an honest intention to
refrain from taking unconscientious advantage of another.39
In other words, in order for a mortgagee to invoke the doctrine of
mortgagee in good faith, the impostor must have succeeded in
obtaining a Torrens title in his name and thereafter in mortgaging
the property. Where the mortgagor is an impostor who only
pretended to be the registered owner, and acting on such
pretense, mortgaged the property to another, the mortgagor
evidently did not succeed in having the property titled in his or
her name, and the mortgagee cannot rely on such pretense as
what appears on the title is not the impostor's name but that of
the registered owner.40
In this case, Evelyn insists that she is a mortgagee in good faith
and for value. Thus, she has the burden to prove such claim and
must provide necessary evidence to support the same.
Unfortunately, Evelyn failed to discharge her burden.
First, the Deed of REM was established to be a forged instrument.
As aptly discussed by the CA, Bernardo did not and could not have
executed it as he was abroad at the time of its execution, to
wit: ChanRoblesVirtualawlibrary
Verily, Bernardo could not have affixed his signature on the said
deed on January 26, 1998 for he left the Philippines on October
19, 1997, x x x and only returned to the Philippines on March 21,
1998. Not only that, his signature on his Seafarer's Identification
and Record Book is remarkably different from the signature on
the assailed mortgage contract. The variance is obvious even to
the untrained eye. This is further bolstered by Evelyn's admission
that Bernardo was not the one who represented himself as the
registered owner of the subject property and was not the one
who signed the questioned contract. Thus, there can be no
denying the fact that the signature on the Deed of Real Estate
Mortgage was not affixed or signed by the same person.41
In fact, during pre-trial, both parties agreed that it was not
Bernardo who signed as the mortgagor in the Deed of REM. It was
only an impostor - representing himself as Bernardo - who
mortgaged the property. This impostor is not only without rightful
ownership on the mortgaged property, he also has no Torrens
title in his own name involving said property.
Simply put, for being a forged instrument, the Deed of REM is a
nullity and conveys no title.42
Second, Evelyn cannot invoke the protection given to a mortgagee
in good faith. As discussed, the title to the subject property
remained registered in the name of Bernardo. It was not
transferred to the impostor's name when Evelyn transacted with
the latter. Hence, the principle of mortgagee in good faith finds no
application; correspondingly, Evelyn cannot not seek refuge
therefrom.
Third, even assuming that the impostor has caused the property
to be titled in his name as if he had rightful ownership thereof,
Evelyn would still not be deemed a mortgagee in good faith. This
is because Evelyn did not take the necessary steps to determine
any defect in the title of the alleged owner of the mortgaged
property. She deliberately ignored pertinent facts that should
have aroused suspicion on the veracity of the title of the
mortgagor "Bernardo."43
One, while ''Bernardo" introduced himself to Evelyn as the owner
of the property, he did not present any proof of identification. To
recall, he only exhibited his community tax certificate and a
picture when he introduced himself to Evelyn. Bernardo's"
failure to sufficiently establish his identity should have aroused
suspicion on the part of Evelyn whether the person she was
transacting with is the real Bernardo or a mere impostor. She
should have investigated further and verified the identity of
"Bernardo" but she failed to do so. She even admitted that she
did not at all ask for any identification card from "Bernardo."
Two, Evelyn also ignored the fact that "Bernardo" did not
participate in the negotiations/transactions leading to the
execution of the Deed of REM. Notably, no power of attorney was
given to Editha who supposedly transacted in behalf of Bernardo.
Despite "Bernardo's" presence during the ocular inspection of the
property and execution of the mortgage contract, it was Editha
who transacted with Evelyn. As gathered from the testimony of
Corazon, after the execution of the deed, Evelyn handed the loan
amount of P300,000.00 to Editha, not to "Bernardo," and it was
Editha who handed to Evelyn the owner's copy of TCT No. T-
361747.
Three, Evelyn likewise failed to ascertain the supposed title of
"Bernardo" over the property. Evelyn admitted that during the
ocular inspection, she remained in the vehicle. She did not inquire
from the subject property's occupant or from the occupants of
the surrounding properties if they knew "Bernardo" and whether
or not he owned the subject property.
Notably, the RTC misapprehended certain facts when it held that
Evelyn inspected the property and met Jovannie during the
inspection. By her own account, Evelyn clarified that she met
Jovannie for the first time only when the latter visited her house
to inform her that an impostor mortgaged Bernardo's property to
her.
Four, the Court observes that Evelyn hastily granted the loan and
entered into the mortgage contract. As also testified by Corazon,
a day after the supposed ocular inspection on the property,
Evelyn and "Bernardo" executed the Deed of REM even without
Evelyn verifying the identity of the property's occupant as well as
the right of the mortgagor, if any, over the same. Indeed, where
the mortgagee acted with haste in granting the loan, without first
determining the ownership of the property being mortgaged, the
mortgagee cannot be considered as an innocent mortgagee in
good faith.44
Thus, considering that the mortgage contract was forged as it was
entered into by Evelyn with an impostor, the registered owner of
the property, Bernardo, correspondingly did not lose his title
thereon, and Evelyn did not acquire any right or title on the
property and cannot invoke that she is a mortgagee in good faith
and for value.45
WHEREFORE, the Petition is DENIED. Accordingly, the October 22,
2012 Decision of the Court of Appeals in CA-G.R. CV No. 95046
is AFFIRMED.
SO ORDERED.
G.R. No. 169890 March 12, 2007
FELICIANO ESGUERRA, CANUTO ESGUERRA, JUSTA ESGUERRA,
ANGEL ESGUERRA, FIDELA ESGUERRA, CLARA ESGUERRA, and
PEDRO ESGUERRA, Petitioners,
vs.
VIRGINIA TRINIDAD, PRIMITIVA TRINIDAD, and THE REGISTER OF
DEEDS OF MEYCAUAYAN, BULACAN, Respondents.
DECISION
CARPIO MORALES, J.:
Involved in the present controversy are two parcels of land
located in Camalig, Meycauayan, Bulacan.
Felipe Esguerra and Praxedes de Vera (Esguerra spouses) were the
owners of several parcels of land in Camalig, Meycauayan,
Bulacan among them a 35,284-square meter parcel of land
covered by Tax Declaration No. 10374, half of which (17,642
square meters) they sold to their grandchildren, herein petitioners
Feliciano, Canuto, Justa, Angel, Fidela, Clara and Pedro, all
surnamed Esguerra; and a 23,989-square meter
parcel of land covered by Tax Declaration No. 12080, 23,489
square meters of which they also sold to petitioners, and the
remaining 500 square meters they sold to their other
grandchildren, the brothers Eulalio and Julian Trinidad (Trinidad
brothers).
Also sold to the Trinidad brothers were a 7,048-square meter
parcel of land covered by Tax Declaration No. 9059, a 4,618-
square meter parcel of land covered by Tax Declaration No.
12081, and a 768-square meter parcel of land covered by Tax
Declaration No. 13989.
The Esguerra spouses executed the necessary Deed of Sale in
favor of petitioners on August 11, 1937,1 and that in favor of the
Trinidad brothers on August 17, 1937.2 Both documents were
executed before notary public Maximo Abao.
Eulalio Trinidad later sold his share of the land to his daughters-
respondents herein, via a notarized Kasulatan ng Bilihang Tuluyan
ng Lupa3 dated October 13, 1965. A portion of the land consisting
of 1,693 square meters was later assigned Lot No. 3593 during a
cadastral survey conducted in the late 1960s.
On respondents application for registration of title, the then
Court of First Instance (CFI) of Bulacan, by Decision4of February
20, 1967, awarded Lot No. 3593 in their favor in Land Registration
Case No. N-323-V. Pursuant to the Decision, the Land Registration
Commission (LRC, now the Land Registration Authority [LRA])
issued Decree No. N-114039 by virtue of which the Register of
Deeds of Bulacan issued OCT No. 0-36315 in the name of
respondents.
Meanwhile, under a notarized Bilihan ng Lupa6 dated November
10, 1958, petitioners sold to respondents parents Eulalio Trinidad
and Damiana Rodeadilla (Trinidad spouses) a portion of about
5,000 square meters of the 23,489-square meter of land which
they previously acquired from the Esguerra spouses.7
During the same cadastral survey conducted in the late 1960s, it
was discovered that the about 5,000-square meter portion of
petitioners parcel of land sold to the Trinidad spouses which was
assigned Lot No. 3591 actually measured 6,268 square meters.
In a subsequent application for registration of title over Lot No.
3591, docketed as Land Registration Case No. N-335-V, the CFI, by
Decision8 of August 21, 1972, awarded Lot No. 3591 in favor of
Eulalio Trinidad. Pursuant to the Decision, the LRC issued Decree
No. N-149491 by virtue of which the Register of Deeds of Bulacan
issued OCT No. 0-64989 in the name of Trinidad.
Upon the death of the Trinidad spouses, Lot No. 3591 covered by
OCT No. 0-6498 was transmitted to respondents by succession.
Petitioners, alleging that upon verification with the LRA they
discovered the issuance of the above-stated two OCTs, filed on
August 29, 1994 before the Regional Trial Court (RTC) of Malolos,
Bulacan two separate complaints for their nullification on the
ground that they were procured through fraud or
misrepresentation.
In the first complaint, docketed as Civil Case No. 737-M-94,
petitioners sought the cancellation of OCT No. 0-3631.
In the other complaint, docketed as Civil Case No. 738-M-94,
petitioners sought the cancellation of OCT No. 0-6498.
Both cases were consolidated and tried before Branch 79 of the
RTC which, after trial, dismissed the cases by Joint Decision10 of
May 15, 1997.
Their appeal with the Court of Appeals having been dismissed by
Decision of February 28, 2005, a reconsideration of which was, by
Resolution of October 3, 2005,11 denied, petitioners filed the
instant petition.
Petitioners fault the appellate court
1. . . . in misappreciating the fact that the act of the
respondent Eulalio Trinidad in acquiring the property
from Felipe Esguerra constituted fraud.
2. . . . in the [i]nterpretation and application of the
provisions of Article 1542 of the New Civil Code.
3. . . . in ruling that there is prescription, res judicata,
and violation of the non-[forum] shopping.12
In their Comment, respondents assailed the petition as lacking
verification and certification against forum shopping and failing to
attach to it an affidavit of service and material portions of the
record in support thereof. Petitioners counter that the procedural
deficiencies have been mooted by the filing of a Compliance.
A check of the rollo shows that attached to the petition are an
Affidavit of Service dated November 21, 2005 and the appellate
courts Decision of February 28, 2005 and Resolution of October
3, 2005; and that on January 16, 2006 or almost three months
following the last day to file the petition, petitioners submitted,
not at their own instance,13 a Verification and Sworn Certification
on Non-Forum Shopping signed by petitioner Pedro Esguerra who
cited honest and excusable mistake behind the omission to
submit the same.
This Court has strictly enforced the requirement of verification
and certification, obedience to which and to other procedural
rules is needed if fair results are to be expected
therefrom.14 While exceptional cases have been considered to
correct patent injustice concomitant to a liberal application of the
rules of procedure, there should be an effort on the part of the
party invoking liberality to advance a reasonable or meritorious
explanation for his failure to comply with the rules.15 In
petitioners case, no such explanation has been advanced.
With regard to petitioners failure to attach material portions of
the record in support of the petition, this requirement is not a
mere technicality but an essential requisite for the determination
of prima facie basis for giving due course to the petition.16 As a
rule, a petition which lacks copies of essential pleadings and
portions of the case record may be dismissed. Much discretion is
left to the reviewing court, however, to determine the necessity
for such copies as the exact nature of the pleadings and portions
of the case record which must accompany a petition is not
specified.17
At all events, technicality aside, the petition must be denied.
It is settled that fraud is a question of fact and the circumstances
constituting the same must be alleged and proved in the court
below.18
In the present cases, as did the trial court, the appellate court
found no fraud in respondents acquisition and registration of the
land, viz:
. . . Appellant Pedro Esguerra even testified that he does not know
how appellees were able to secure a title over the lot in question
and that they never sold Lot No. 3593 to Virginia Trinidad since it
is part of the whole lot of 23,489 square meters. The said
testimony is a mere conclusion on the part of appellants. On the
other hand, the evidence shows that appellees acquired title over
the subject property by virtue of a deed of sale executed by their
father Eulalio Trinidad in their favor.
xxxx
[T]hey failed to establish that appellees acquisition of the
certificate of title is fraudulent. In fact, in their two complaints,
appellants acknowledged that appellees observed and took the
initial procedural steps in the registration of the land, thus ruling
out fraud in the acquisition of the certificate of title. . . .19
Factual findings of the trial court, when affirmed by the Court of
Appeals, are final, conclusive and binding on this Court,20 which is
not a trier of facts,21 hence, bereft of function under Rule 45 to
examine and weigh the probative value of the evidence
presented,22 its jurisdiction being limited only to the review and
revision of errors of law.23 Albeit there are exceptions24 to this
rule, the cases at bar do not fall thereunder, there being no
showing that the trial and appellate courts overlooked matters
which, if considered, would alter their outcome.
Under the Torrens System, an OCT enjoys a presumption of
validity, which correlatively carries a strong presumption that the
provisions of the law governing the registration of land which led
to its issuance have been duly followed.25 Fraud being a serious
charge, it must be supported by clear and convincing
proof.26 Petitioners failed to discharge the burden of proof,
however.
On the questioned interpretation and application by the appellate
court of Article 1542 of the Civil Code reading:
In the sale of real estate, made for a lump sum and not at the rate
of a certain sum for a unit of measure or number, there shall be
no increase or decrease of the price, although there be a greater
or less areas or number than that stated in the contract.
The same rule shall be applied when two or more immovables are
sold for a single price; but if, besides mentioning the boundaries,
which is indispensable in every conveyance of real estate, its area
or number should be designated in the contract, the vendor shall
be bound to deliver all that is included within said boundaries,
even when it exceeds the area or number specified in the
contract; and, should he not be able to do so, he shall suffer a
reduction in the price, in proportion to what is lacking in the area
or number, unless the contract is rescinded because the vendee
does not accede to the failure to deliver what has been stipulated.
(Emphasis and underscoring supplied),
while petitioners admittedly sold Lot No. 3591 to the Trinidad
spouses, they contend that what they sold were only 5,000 square
meters and not 6,268 square meters, and thus claim the excess of
1,268 square meters.
In sales involving real estate, the parties may choose between two
types of pricing agreement: a unit price contract wherein the
purchase price is determined by way of reference to a stated rate
per unit area (e.g., 1,000 per square meter), or a lump sum
contract which states a full purchase price for an immovable the
area of which may be declared based on an estimate or where
both the area and boundaries are stated (e.g., 1 million for 1,000
square meters, etc.). In Rudolf Lietz, Inc. v. Court of Appeals,27 the
Court discussed the distinction:
. . . In a unit price contract, the statement of area of immovable is
not conclusive and the price may be reduced or increased
depending on the area actually delivered. If the vendor delivers
less than the area agreed upon, the vendee may oblige the vendor
to deliver all that may be stated in the contract or demand for the
proportionate reduction of the purchase price if delivery is not
possible. If the vendor delivers more than the area stated in the
contract, the vendee has the option to accept only the amount
agreed upon or to accept the whole area, provided he pays for
the additional area at the contract rate.
xxxx
In the case where the area of the immovable is stated in the
contract based on an estimate, the actual area delivered may not
measure up exactly with the area stated in the contract.
According to Article 1542 of the Civil Code, in the sale of real
estate, made for a lump sum and not at the rate of a certain sum
for a unit of measure or number, there shall be no increase or
decrease of the price, although there be a greater or less areas or
number than that stated in the contract. . . .
xxxx
Where both the area and the boundaries of the immovable are
declared, the area covered within the boundaries of the
immovable prevails over the stated area. In cases of conflict
between areas and boundaries, it is the latter which should
prevail. What really defines a piece of ground is not the area,
calculated with more or less certainty, mentioned in its
description, but the boundaries therein laid down, as enclosing
the land and indicating its limits. In a contract of sale of land in a
mass, it is well established that the specific boundaries stated in
the contract must control over any statement with respect to the
area contained within its boundaries. It is not of vital consequence
that a deed or contract of sale of land should disclose the area
with mathematical accuracy. It is sufficient if its extent is
objectively indicated with sufficient precision to enable one to
identify it. An error as to the superficial area is immaterial. Thus,
the obligation of the vendor is to deliver everything within the
boundaries, inasmuch as it is the entirety thereof that
distinguishes the determinate object.28 (Emphasis and
underscoring supplied)
The courts below correctly characterized the sale of Lot No. 3591
as one involving a lump sum contract. The Bilihan ng Lupa shows
that the parties agreed on the purchase price of 1,000.00 on a
predetermined, albeit unsurveyed, area of 5,000 square meters
and not on a particular rate per unit area. As noted by the Court
of Appeals, the identity of the realty was sufficiently described as
riceland:
It is clear from the afore-quoted Bilihan ng Lupa that what
appellants sold to Eulalio was the "bahaging palayan." Though
measured as 5,000 square meters, more or less, such
measurement is only an approximation, and not an exact
measurement. Moreover, we take note of the fact that the said
deed of sale mentioned the boundaries covering the whole area
of 33,489 square meters, including the "bahaging palayan." Had
appellants intended to sell only a portion of the "bahaging
palayan," they could have stated the specific area in the deed of
sale and not the entire "bahaging palayan" . . . .29
In fine, under Article 1542, what is controlling is the entire land
included within the boundaries, regardless of whether the real
area should be greater or smaller than that recited in the deed.
This is particularly true since the area of the land in OCT No. 0-
6498 was described in the deed as "humigit kumulang," that is,
more or less.30
A caveat is in order, however. The use of "more or less" or similar
words in designating quantity covers only a reasonable excess or
deficiency. A vendee of land sold in gross or with the description
"more or less" with reference to its area does not thereby ipso
facto take all risk of quantity in the land.31
Numerical data are not of course the sole gauge of
unreasonableness of the excess or deficiency in area. Courts must
consider a host of other factors. In one case,32 the Court found
substantial discrepancy in area due to contemporaneous
circumstances. Citing change in the physical nature of the
property, it was therein established that the excess area at the
southern portion was a product of reclamation, which explained
why the lands technical description in the deed of sale indicated
the seashore as its southern boundary, hence, the inclusion of the
reclaimed area was declared unreasonable.
In OCT No. 0-6498, the increase by a fourth of a fraction of the
area indicated in the deed of sale cannot be considered as an
unreasonable excess. Most importantly, the circumstances
attendant to the inclusion of the excess area bare nothing atypical
or significant to hint at unreasonableness. It must be noted that
the land was not yet technically surveyed at the time of the sale.
As vendors who themselves executed the Bilihan ng Lupa,
petitioners may rightly be presumed to have acquired a good
estimate of the value and area of the bahaging palayan.
As for the last assigned error, the appellate court, in finding that
the complaints were time-barred, noted that when the complaints
were filed in 1994, more than 27 years had elapsed from the
issuance of OCT No. 0-3631 and more than 20 years from the
issuance of OCT No. 0-6498. The prescriptive period of one (1)
year had thus set in.1awphi1.nt
Petitioners reliance on Agne v. Director of Lands33 is misplaced
since the cancellation of title was predicated not on the ground of
fraud but on want of jurisdiction. Even assuming that petitioners
actions are in the nature of a suit for quieting of title, which is
imprescriptible, the actions still necessarily fail since petitioners
failed to establish the existence of fraud.
A word on Republic Act No. 716034 which was raised by
petitioners in their petition. It expressly requires the parties to
undergo a conciliation process under the Katarungang
Pambarangay, as a precondition to filing a complaint in
court,35 non-compliance with this condition precedent does not
prevent a court of competent jurisdiction from exercising its
power of adjudication over a case unless the defendants object
thereto. The objection should be seasonably made before the
court first taking cognizance of the complaint, and must be raised
in the Answer or in such other pleading allowed under the Rules
of Court.36
While petitioners admittedly failed to comply with the
requirement of barangay conciliation, they assert that
respondents waived such objection when they failed to raise it in
their Answer. Contrary to petitioners claim, however, the records
reveal that respondents raised their objection in their Amended
Answers37 filed in both cases.
IN FINE, it is a fundamental principle in land registration that a
certificate of title serves as evidence of an indefeasible and
incontrovertible title to the property in favor of the person whose
name appears therein. Such indefeasibility commences after the
lapse or expiration of one year from the date of entry of the
decree of registration when all persons are considered to have a
constructive notice of the title to the property. After the lapse of
one year, therefore, title to the property can no longer be
contested. This system was so effected in order to quiet title to
land.38
WHEREFORE, the petition is DENIED. The assailed Decision and
Resolution of the Court of Appeals are AFFIRMED.
Costs against petitioners.
SO ORDERED.
G.R. No. 148225 March 3, 2010
CARMEN DEL PRADO, Petitioner,
vs.
SPOUSES ANTONIO L. CABALLERO and LEONARDA
CABALLERO, Respondents.
DECISION
NACHURA, J.:
This is a petition for review on certiorari of the decision1 of the
Court of Appeals (CA) dated September 26, 2000 and its
resolution denying the motion for reconsideration thereof.
The facts are as follows:
In a judgment rendered on February 1, 1985 in Cadastral Case No.
N-6 (LRC Rec. No. N-611), Judge Juan Y. Reyes of the Regional Trial
Court (RTC) of Cebu City, Branch 14, adjudicated in favor of
Spouses Antonio L. Caballero and Leonarda B. Caballero several
parcels of land situated in Guba, Cebu City, one of which was
Cadastral Lot No. 11909, the subject of this controversy.2 On May
21, 1987, Antonio Caballero moved for the issuance of the final
decree of registration for their lots.3 Consequently, on May 25,
1987, the same court, through then Presiding Judge Renato C.
Dacudao, ordered the National Land Titles and Deeds Registration
Administration to issue the decree of registration and the
corresponding titles of the lots in favor of the Caballeros.4
On June 11, 1990, respondents sold to petitioner, Carmen del
Prado, Lot No. 11909 on the basis of the tax declaration covering
the property. The pertinent portion of the deed of sale reads as
follows:
That we, Spouses ANTONIO L. CABALLERO and LEONARDA B.
CABALLERO, Filipinos, both of legal age and residents of
Talamban, Cebu City, Philippines, for and in consideration of the
sum of FORTY THOUSAND PESOS (40,000.00), Philippine
Currency, paid by CARMEN DEL PRADO, Filipino, of legal age,
single and a resident of Sikatuna St., Cebu City, Philippines, the
receipt of which is full is hereby acknowledged, do by these
presents SELL, CEDE, TRANSFER, ASSIGN & CONVEY unto the said
CARMEN DEL PRADO, her heirs, assigns and/or successors-in-
interest, one (1) unregistered parcel of land, situated at Guba,
Cebu City, Philippines, and more particularly described and
bounded, as follows:
"A parcel of land known as Cad. Lot No. 11909, bounded as
follows:
North : Lot 11903
East : Lot 11908
West : Lot 11910
South : Lot 11858 & 11912
containing an area of 4,000 square meters, more or less, covered
by Tax Dec. No. 00787 of the Cebu City Assessors Office, Cebu
City." of which parcel of land we are the absolute and lawful
owners.
Original Certificate of Title (OCT) No. 1305, covering Lot No.
11909, was issued only on November 15, 1990, and entered in the
"Registration Book" of the City of Cebu on December 19,
1990.5 Therein, the technical description of Lot No. 11909 states
that said lot measures about 14,457 square meters, more or less.6
On March 20, 1991, petitioner filed in the same cadastral
proceedings a "Petition for Registration of Document Under
Presidential Decree (P.D.) 1529"7 in order that a certificate of title
be issued in her name, covering the whole Lot No. 11909. In the
petition, petitioner alleged that the tenor of the instrument of
sale indicated that the sale was for a lump sum or cuerpo cierto,
in which case, the vendor was bound to deliver all that was
included within said boundaries even when it exceeded the area
specified in the contract. Respondents opposed, on the main
ground that only 4,000 sq m of Lot No. 11909 was sold to
petitioner. They claimed that the sale was not for a cuerpo cierto.
They moved for the outright dismissal of the petition on grounds
of prescription and lack of jurisdiction.
After trial on the merits, the court found that petitioner had
established a clear and positive right to Lot No. 11909. The
intended sale between the parties was for a lump sum, since
there was no evidence presented that the property was sold for a
price per unit. It was apparent that the subject matter of the sale
was the parcel of land, known as Cadastral Lot No. 11909, and not
only a portion thereof.8
Thus, on August 2, 1993, the court a quo rendered its decision
with the following dispositive portion:
WHEREFORE, premises considered, the petition is hereby granted
and judgment is hereby rendered in favor of herein petitioner.
The Register of Deeds of the City of Cebu is hereby ordered and
directed to effect the registration in his office of the Deed of
Absolute Sale between Spouses Antonio Caballero and Leonarda
Caballero and Petitioner, Carmen del Prado dated June 11, 1990
covering Lot No. 11909 after payment of all fees prescribed by
law. Additionally, the Register of Deeds of the City of Cebu is
hereby ordered to cancel Original Certificate No. 1305 in the
name of Antonio Caballero and Leonarda Caballero and the
Transfer Certificate of Title be issued in the name of Petitioner
Carmen del Prado covering the entire parcel of land known as
Cadastral Lot No. 11909.9
An appeal was duly filed. On September 26, 2000, the CA
promulgated the assailed decision, reversing and setting aside the
decision of the RTC.
The CA no longer touched on the character of the sale, because it
found that petitioner availed herself of an improper remedy. The
"petition for registration of document" is not one of the remedies
provided under P.D. No. 1529, after the original registration has
been effected. Thus, the CA ruled that the lower court committed
an error when it assumed jurisdiction over the petition, which
prayed for a remedy not sanctioned under the Property
Registration Decree. Accordingly, the CA disposed, as follows:
IN VIEW OF ALL THE FOREGOING, the appealed decision
is REVERSED and SET ASIDE and a new one entered dismissing the
petition for lack of jurisdiction. No pronouncement as to costs.10
Aggrieved, petitioner filed the instant petition, raising the
following issues:
I. WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE
ERROR IN MAKING FINDINGS OF FACT CONTRARY TO THAT OF
THE TRIAL COURT[;]
II. WHETHER OR NOT THE COURT OF APPEALS COMMITTED
GRAVE ERROR IN FAILING TO RULE THAT THE SALE OF THE LOT IS
FOR A LUMP SUM OR CUERPO CIERTO[;]
III. WHETHER OR NOT THE COURT A QUO HAS JURISDICTION
OVER THE PETITION FOR REGISTRATION OF THE DEED OF
ABSOLUTE SALE DATED 11 JUNE 1990 EXECUTED BETWEEN
HEREIN PETITIONER AND RESPONDENTS[.]11
The core issue in this case is whether or not the sale of the land
was for a lump sum or not.
Petitioner asserts that the plain language of the Deed of Sale
shows that it is a sale of a real estate for a lump sum, governed
under Article 1542 of the Civil Code.12 In the contract, it was
stated that the land contains an area of 4,000 sq m more or less,
bounded on the North by Lot No. 11903, on the East by Lot No.
11908, on the South by Lot Nos. 11858 & 11912, and on the West
by Lot No. 11910. When the OCT was issued, the area of Lot No.
11909 was declared to be 14,475 sq m, with an excess of 10,475
sq m. In accordance with Article 1542, respondents are, therefore,
duty-bound to deliver the whole area within the boundaries
stated, without any corresponding increase in the price. Thus,
petitioner concludes that she is entitled to have the certificate of
title, covering the whole Lot No. 11909, which was originally
issued in the names of respondents, transferred to her name.
We do not agree.
In Esguerra v. Trinidad,13 the Court had occasion to discuss the
matter of sales involving real estates. The Courts pronouncement
is quite instructive:
In sales involving real estate, the parties may choose between two
types of pricing agreement: a unit price contract wherein the
purchase price is determined by way of reference to a stated rate
per unit area (e.g., 1,000 per square meter), or a lump sum
contract which states a full purchase price for an immovable the
area of which may be declared based on the estimate or where
both the area and boundaries are stated (e.g., 1 million for 1,000
square meters, etc.). In Rudolf Lietz, Inc. v. Court of Appeals (478
SCRA 451), the Court discussed the distinction:
"In a unit price contract, the statement of area of immovable is
not conclusive and the price may be reduced or increased
depending on the area actually delivered. If the vendor delivers
less than the area agreed upon, the vendee may oblige the vendor
to deliver all that may be stated in the contract or demand for the
proportionate reduction of the purchase price if delivery is not
possible. If the vendor delivers more than the area stated in the
contract, the vendee has the option to accept only the amount
agreed upon or to accept the whole area, provided he pays for
the additional area at the contract rate.
xxxx
In the case where the area of an immovable is stated in the
contract based on an estimate, the actual area delivered may not
measure up exactly with the area stated in the contract.
According to Article 1542 of the Civil Code, in the sale of real
estate, made for a lump sum and not at the rate of a certain sum
for a unit of measure or number, there shall be no increase or
decrease of the price, although there be a greater or less areas or
number than that stated in the contract. . . .
xxxx
Where both the area and the boundaries of the immovable are
declared, the area covered within the boundaries of the
immovable prevails over the stated area. In cases of conflict
between areas and boundaries, it is the latter which should
prevail. What really defines a piece of ground is not the area,
calculated with more or less certainty, mentioned in its
description, but the boundaries therein laid down, as enclosing
the land and indicating its limits. In a contract of sale of land in a
mass, it is well established that the specific boundaries stated in
the contract must control over any statement with respect to the
area contained within its boundaries. It is not of vital consequence
that a deed or contract of sale of land should disclose the area
with mathematical accuracy. It is sufficient if its extent is
objectively indicated with sufficient precision to enable one to
identify it. An error as to the superficial area is immaterial. Thus,
the obligation of the vendor is to deliver everything within the
boundaries, inasmuch as it is the entirety thereof that
distinguishes the determinate object.14
The Court, however, clarified that the rule laid down in Article
1542 is not hard and fast and admits of an exception. It held:
A caveat is in order, however. The use of "more or less" or similar
words in designating quantity covers only a reasonable excess or
deficiency. A vendee of land sold in gross or with the description
"more or less" with reference to its area does not thereby ipso
facto take all risk of quantity in the land..
Numerical data are not of course the sole gauge of
unreasonableness of the excess or deficiency in area. Courts must
consider a host of other factors. In one case (see Roble v. Arbasa,
414 Phil. 343 [2001]), the Court found substantial discrepancy in
area due to contemporaneous circumstances. Citing change in the
physical nature of the property, it was therein established that the
excess area at the southern portion was a product of reclamation,
which explained why the lands technical description in the deed
of sale indicated the seashore as its southern boundary, hence,
the inclusion of the reclaimed area was declared unreasonable.15
In the instant case, the deed of sale is not one of a unit price
contract. The parties agreed on the purchase price of 40,000.00
for a predetermined area of 4,000 sq m, more or less, bounded on
the North by Lot No. 11903, on the East by Lot No. 11908, on the
South by Lot Nos. 11858 & 11912, and on the West by Lot No.
11910. In a contract of sale of land in a mass, the specific
boundaries stated in the contract must control over any other
statement, with respect to the area contained within its
boundaries.161avvphi1
Blacks Law Dictionary17 defines the phrase "more or less" to
mean:
About; substantially; or approximately; implying that both parties
assume the risk of any ordinary discrepancy. The words are
intended to cover slight or unimportant inaccuracies in quantity,
Carter v. Finch, 186 Ark. 954, 57 S.W.2d 408; and are ordinarily to
be interpreted as taking care of unsubstantial differences or
differences of small importance compared to the whole number
of items transferred.
Clearly, the discrepancy of 10,475 sq m cannot be considered a
slight difference in quantity. The difference in the area is
obviously sizeable and too substantial to be overlooked. It is not a
reasonable excess or deficiency that should be deemed included
in the deed of sale.
We take exception to the avowed rule that this Court is not a trier
of facts. After an assiduous scrutiny of the records, we lend
credence to respondents claim that they intended to sell only
4,000 sq m of the whole Lot No. 11909, contrary to the findings of
the lower court. The records reveal that when the parties made
an ocular inspection, petitioner specifically pointed to that portion
of the lot, which she preferred to purchase, since there were
mango trees planted and a deep well thereon. After the sale,
respondents delivered and segregated the area of 4,000 sq m in
favor of petitioner by fencing off the area of 10,475 sq m
belonging to them.18
Contracts are the law between the contracting parties. Sale, by its
very nature, is a consensual contract, because it is perfected by
mere consent. The essential elements of a contract of sale are the
following: (a) consent or meeting of the minds, that is, consent to
transfer ownership in exchange for the price; (b) determinate
subject matter; and (c) price certain in money or its equivalent. All
these elements are present in the instant case.19
More importantly, we find no reversible error in the decision of
the CA. Petitioners recourse, by filing the petition for registration
in the same cadastral case, was improper. It is a fundamental
principle in land registration that a certificate of title serves as
evidence of an indefeasible and incontrovertible title to the
property in favor of the person whose name appears therein.
Such indefeasibility commences after one year from the date of
entry of the decree of registration.20 Inasmuch as the petition for
registration of document did not interrupt the running of the
period to file the appropriate petition for review and considering
that the prescribed one-year period had long since expired, the
decree of registration, as well as the certificate of title issued in
favor of respondents, had become incontrovertible.21
WHEREFORE, the petition is DENIED.
SO ORDERED.
 G.R. No. 170540
square meters and covered by Transfer Certificate of Title (TCT)
Present:
No. T-10759 of the Register of Deeds of

the Province of Cagayan.[3]

QUISUMBING,** J.,

CARPIO, J., Chairperson,

The subject property was previously owned by herein respondent

CHICO-NAZARIO,
EUFEMIA BALATICO VDA. DE Natalia Aguinaldo Vda. de Lim. On July 18, 1975, Lim mortgaged
AGATEP, PERALTA, and
Petitioner, the lot to the Philippine National Bank (PNB), Tuguegarao Branch,
ABAD,*** JJ.
to secure a loan of P30,000.00 which she obtained from the said

- versus - bank. The mortgage contract was duly annotated on TCT No. T-
Promulgated:
10759. Lim was not able to pay her loan prompting PNB to
*
ROBERTA L.
October 28, 2009 foreclose the property. On April 13, 1983, the subject parcel of
RODRIGUEZ and NATALIA
AGUINALDO VDA. DE LIM,
Respondents. land was sold at public auction to PNB as the highest bidder.[4] Lim
x---------------------------------------------------x
failed to redeem the property. After the expiration of the one-

year redemption period allowed by law, PNB consolidated its

DECISION ownership over the disputed land.[5] As a consequence, TCT No. T-

10759 in the name of Lim was canceled and a new certificate of

title (TCT No. T-65894) was issued in the name of PNB

PERALTA, J.
on November 8, 1985.[6]

Meanwhile, on August 18, 1976, while the mortgage was still in

Before the Court is a petition for review on certiorari under Rule
effect, Lim sold the subject property to herein petitioner's
45 of the Rules of Court seeking the reversal and setting aside of
husband, Isaac Agatep (Agatep), for a sum
the Decision[1] of the Court of Appeals (CA) dated September 9,
of P18,000.00.[7] However, the sale was not registered. Neither did
2005 in CA-G.R. CV No. 83163which affirmed the May 12, 2004
Lim deliver the title to petitioner or her husband. Nonetheless,
Decision of the Regional Trial Court (RTC) of Aparri, Cagayan,
Agatep took possession of the same, fenced it with barbed wire
Branch 8, in Civil Case No. 08-298. Petitioner also assails the CA
and introduced improvements thereon. Subsequently, Agatep
Resolution[2] dated November 16, 2005 denying her motion for
died in 1978. Despite his death, his heirs, including herein
reconsideration.
petitioner, continued to possess the property.

The factual and procedural antecedents of the case are as follows:

In July 1992, the subject lot was included among PNB's acquired

assets for sale. Later on, an invitation to bid was duly published.
The present case arose from a dispute involving a parcel of land
On April 20, 1993, the disputed parcel of land was sold to herein
located at Zinundungan, Lasam, Cagayan with an area of 1,377
respondent Roberta L. Rodriguez (Rodriguez), who is the daughter
of respondent Lim.[8] Subsequently, TCT No. T-65894, in the name equity, petitioner should be awarded an adequate compensation

of PNB, was canceled and a new title (TCT No. T-89400) was for the value of the loss suffered.

issued in the name of Rodriguez.[9]

Herein petitioner filed an appeal with the CA contending that the

On January 27, 1995, herein petitioner filed a Complaint[10] for RTC erred in not considering the merit of the evidence and

reconveyance and/or damages with the RTC of Aparri, Cagayan arguments proven and submitted by petitioner on the issues

against herein respondents. defined and agreed upon by the parties. Petitioner also averred

that the RTC erred in deciding the case on issues different from

Later, the complaint was amended to implead PNB as a party- those defined and agreed upon by the parties during the pre-trial

defendant.[11] conference and that the trial court further erred in dismissing the

amended complaint.

On January 20, 2000, the RTC dismissed the amended complaint

for failure of herein petitioner (then plaintiff) to file her Pre-Trial On September 9, 2005, the CA rendered its Decision dismissing

Brief.[12] Petitioner filed a motion for reconsideration but the RTC herein petitioner's appeal for lack of merit and affirming the

denied it. Thereafter, trial ensued. assailed Decision of the RTC.

On May 12, 2004, the RTC rendered judgment in favor of herein Petitioner filed a motion for reconsideration, but the CA denied it

respondents.[13] The dispositive portion of the Decision reads as in its Resolution dated November 16, 2005.

follows:

WHEREFORE, the Court hereby renders

judgment to wit:
Hence, the present petition with the following assignment of
1. Dismiss the instant complaint for
reconveyance for lack of merit;
errors:
2. Sustain the legality of TCT No.
10559[14] in the name of defendant Roberta
Rodriguez; and IV.1. IN AFFIRMING THE DECISION OF THE
TRIAL COURT IN DISMISSING THE AMENDED
3. Award actual damages in favor of plaintiff COMPLAINT AGAINST THE PNB, THE
Eufemia Balatico Vda. de Agatep against APPELLATE COURT COMMITTED A
defendant Natalia Aguinaldo Vda. de Lim in REVERSIBLE ERROR;
the amount of Php18,000.00 with legal
interest to be computed from the filing of
the instant case up to the full completion of IV.2. IN HOLDING THAT
its payment. NOTWITHSTANDING THE DISMISSAL OF THE
AMENDED COMPLAINT AS AGAINST PNB,
THE TRIAL COURT IN ITS DECISION
NONETHELESS FULLY PASSED UPON THE
SO DECIDED.[15]
MERITS OF APPELLANT'S CAUSE OF ACTION
AGAINST THE SAID MORTGAGEE BANK, THE
In awarding damages in favor of herein petitioner, the RTC ruled
APPELLATE COURT COMMITTED A
REVERSIBLE ERROR;
that Lim enriched herself at the expense of petitioner and her

husband by benefiting from the proceeds of the sale but failing to IV.3. AS A NECESSARY CONSEQUENCE OF
THE ERROR IV.2, THE RULING OF THE
deliver the object of such sale. Hence, on grounds of justice and
 APPELLATE COURT THAT PNB IS A amendments to the
MORTGAGEE, BUYER AND LATER SELLER IN pleadings;
GOOD FAITH, IS A REVERSIBLE ERROR;
(d) The possibility of
obtaining stipulations
IV.4. THE DECISION, ANNEX A, ERRED IN or admissions of facts
REJECTING PETITIONER'S ARGUMENTS and of documents to
THAT PNB DID NOT ACQUIRE OWNERSHIP avoid unnecessary
OVER THE PROPERTY IN QUESTION; proof;
(e) The limitation of
IV.5. THE DECISION, ANNEX A, ERRED IN the number of
RULING THAT PETITIONER'S CONTENTION witnesses;
THAT THE TRIAL COURT DECIDED THE CASE
UPON SUCH ISSUES DIFFERENT FROM (f) The advisability of
THOSE AGREED UPON DURING THE PRE- a preliminary
TRIAL CONFERENCE DESERVES SCANT reference of issues to
CONSIDERATION; AND a commissioner;
(g) The propriety of
IV.6. THE DECISION, ANNEX A, ERRED IN rendering judgment
RULING THAT PETITIONER IS NOT ENTITLED on the pleadings, or
TO HER CAUSE OF ACTION OF summary judgment,
RECONVEYANCE.[16] or of dismissing the
action should a valid
In her first assigned error, petitioner contends that Section 6, Rule ground therefor be
found to exist;
18 of the Rules of Court does not require another pre-trial, as well (h) The advisability or
necessity of
as the filing of another pre-trial brief, when the complaint is suspending the
proceedings; and
amended to implead another defendant.
(i) Such other matters
as may aid in the
prompt disposition of
the action.[18]
The Court does not agree.

In consonance with these objectives, Section 6, Rule 18 of the

In Tiu v. Middleton,[17] the Court, giving emphasis on the
Rules of Court, as amended, provides:
importance of a pre-trial, held that:

SEC. 6. Pre-trial brief. The parties shall file

Pre-trial is an answer to the clarion call for with the court and serve on the adverse
the speedy disposition of cases. Although it party, in such manner as shall ensure their
was discretionary under the 1940 Rules of receipt thereof at least three (3) days
Court, it was made mandatory under the before the date of the pre-trial, their
1964 Rules and the subsequent respective pre-trial briefs which shall
amendments in 1997. Hailed as the most contain, among others:
important procedural innovation in Anglo-
Saxon justice in the nineteenth century, (a) A statement of
pre-trial seeks to achieve the following: their
willingness to
(a) The possibility of enter into
an amicable amicable
settlement or of a settlement or
submission to alternative
alternative modes of modes of
dispute resolution; dispute
resolution,
(b) The simplification indicating the
of the issues; desired
(c) The necessity or terms
desirability of thereof;
 (b) A summary of
admitted commensurate with the degree of his thought[less]ness in not
facts and
proposed complying with the procedure.[20]
stipulation of
facts;

(c) The issues to be Petitioner posits that even if an amended complaint is filed for the
tried or
resolved; purpose of impleading another party as defendant, where no

additional cause of action was alleged and the amount of prayer

(d) The documents or for damages in the original complaint was the same, another pre-
exhibits to be
presented, trial is not required and a second pre-trial brief need not be filed.
stating the
purpose
thereof;
It must be pointed out, however, that in the cases[21] cited by
(e) A manifestation of
their having petitioner to support her argument, the Court found no need for a
availed, or
their second pre-trial precisely because there are no additional causes
intention to
avail, of action alleged and the impleaded defendants merely adopted
themselves
of discovery and repleaded all the pleadings of the original defendants.
procedures
or referral to Petitioner's reliance on the above-cited cases is misplaced
commissione
rs; and because, in the present case, the RTC correctly found that

petitioner had a separate cause of action against PNB. A separate

(f) The number and
names of the
cause of action necessarily means additional cause of action.
witnesses,
and the
Moreover, the defenses adopted by PNB are completely different
substance of
their from the defenses of Lim and Rodriguez, necessitating a separate
respective
testimonies. determination of the matters enumerated under Section 6, Rule

Failure to file the pre-trial brief shall have 18 of the Rules of Court insofar as PNB and petitioner are
the same effect as failure to appear at the
pre-trial. concerned. On these bases, we find no error in the ruling of the

CA which sustained the trial court's dismissal of the amended

complaint against PNB for failure of petitioner to file her pre-trial

The pre-trial brief serves as a guide during the pre-trial
brief.
conference so as to simplify, abbreviate and expedite the trial if

not to dispense with it. It is a devise essential to the speedy

Corollarily, Sections 4 and 5 of the same Rule state:
disposition of disputes, and parties cannot brush it aside as a

mere technicality.[19] In addition, pre-trial rules are not to be Sec. 4. Appearance of parties. It shall be the
duty of the parties and their counsel to
belittled or dismissed, because their non-observance may result in appear at the pre-trial. The non-appearance
of a party may be excused only if a valid
prejudice to a partys substantive rights. Like all rules, they should cause is shown therefor or if a
representative shall appear in his behalf
be followed except only for the most persuasive of reasons when fully authorized in writing to enter into an
amicable settlement, to submit to
they may be relaxed to relieve a litigant of an injustice not
alternative modes of dispute resolution,
 and to enter into stipulations or admissions
of facts and of documents. It is true that the judgment of the trial and appellate courts in the

Sec. 5. Effect of failure to appear. The present case could not bind the PNB for the latter is not a party to
failure of the plaintiff to appear when so
required pursuant to the next preceding the case. However, this does not mean that the trial and appellate
section shall be cause for dismissal of the
action. The dismissal shall be with courts are precluded from making findings which are necessary
prejudice, unless otherwise ordered by the
court. x x x for a just, complete and proper resolution of the issues raised in

the present case. The Court finds no error in the determination by

In the present case, the Court observes that in the Order of the the trial and appellate courts of the question of whether or not

RTC dated June 6, 2000,[22] the trial court noted the absence of PNB was a mortgagee, buyer and, later on, seller in good faith as

both the petitioner and her counsel during the scheduled pre-trial this would bear upon the ultimate issue of whether petitioner is

conference with respect to the amended complaint impleading entitled to reconveyance.

PNB. Under the above-quoted Rules, such absence is an additional

ground to dismiss the action against PNB. Petitioner insists that PNB is not a mortgagee in good faith

asserting that, if it only exercised due diligence, it would have

Whether an order of dismissal should be maintained under the found out that petitioner and her husband were already in

circumstances of a particular case or whether it should be set adverse possession of the subject property as early as two years

aside depends on the sound discretion of the trial before the same was sold to them. This claim, however, is

court.[23] Considering the circumstances established on record in contradicted by no less than petitioner's averments in her Brief

the instant case, the Court finds no cogent reason to set aside the filed with the CA wherein she stated that [i]mmediately after the

order of the RTC dismissing the complaint of petitioner against sale, the land was delivered to Isaac Agatep x x x Since that time

PNB. up to the present, Isaac Agatep and after his death, the Appellant

have been in continuous, uninterrupted, adverse and public

With respect to the second and third assignment of errors, possession of the said parcel of land.[24] The foregoing assertion

petitioner argues that the CA erred in sustaining the RTC when it only shows that petitioner's husband took possession of the

passed upon the merits of petitioner's cause of action against PNB subject lot only after the same was sold to him.

notwithstanding the fact that the complaint against the latter was

already dismissed. Petitioner contends that a person who was not In any case, the Court finds no error in the findings of both the

impleaded in a case could not be bound by the decision rendered RTC and the CA that PNB is indeed an innocent mortgagee for

therein. Petitioner then proceeds to conclude that the CA erred in value. When the lots were mortgaged to PNB by Lim, the titles

sustaining the trial court's finding that PNB was a mortgagee, thereto were in the latter's name, and they showed neither vice

buyer and seller in good faith. nor infirmity. In accepting the mortgage, PNB was not required to

make any further investigation of the titles to the properties being

The Court is not persuaded. given as security, and could rely entirely on what was stated in the

aforesaid title. The public interest in upholding the indefeasibility

of a certificate of title, as evidence of the lawful ownership of the

land or of any encumbrance thereon, protects a buyer or Under the aforementioned article, the mere
execution of the deed of sale in a public
mortgagee who, in good faith, relies upon what appears on the document is equivalent to the delivery of
the property. Likewise, this Court had held
face of the certificate of title.[25] that:

It is settled
that the buyer in a
foreclosure sale
In her fourth assigned error, petitioner contends that PNB did not becomes the absolute
owner of the
acquire ownership over the disputed lot because the said property purchased if
it is not redeemed
property was not delivered to it. Petitioner asserts that the during the period of
one year after the
execution of a public document does not constitute sufficient registration of the
sale. As such, he is
delivery to PNB, considering that the subject property is in the entitled to the
possession of the said
adverse possession, under claim of ownership, of petitioner and property and can
demand it at any time
her predecessor-in-interest. Petitioner further assails the ruling of following the
consolidation of
the CA that PNB, who was the buyer in the foreclosure sale,
ownership in his
name and the
became the absolute owner of the property purchased when it
issuance to him of a
new transfer
consolidated its ownership thereof for failure of the mortgagor
certificate of title.
The buyer can, in fact,
Lim to redeem the subject property during the period of one year
demand possession
after the registration of the sale. of the land even
during the
redemption period
except that he has to
The Court finds petitioner's arguments untenable. post a bond in
accordance with
Section 7 of Act No.
3133, as amended.
The Court's ruling in Manuel R. Dulay Enterprises, Inc. v. Court of No such bond is
required after the
Appeals[26] is instructive, to wit: redemption period if
the property is not
redeemed.
Petitioner's contention that private Possession of the
respondent Torres never acquired land then becomes an
ownership over the subject property since absolute right of the
the latter was never in actual possession of purchaser as
the subject property nor was the property confirmed owner.
delivered to him is also without merit.
Therefore, prior physical delivery or
Paragraph 1, Article 1498 of the New Civil possession is not legally required since the
Code provides: execution of the Deed of Sale is deemed
equivalent to delivery.[27]
When the sale is made through a
public instrument,
the execution thereof
shall be equivalent to
the delivery of the This ruling was reiterated in Spouses Sabio v. The International
thing which is the
object of the Corporate Bank, Inc.[28] wherein it was held that:
contract, if from the
deed the contrary
Notwithstanding the presence of illegal
does not appear or
occupants on the subject property, transfer
cannot clearly be
of ownership by symbolic delivery under
inferred.
 Article 1498 can still be effected through
the execution of the deed of conveyance.
As we held in Power Commercial and
Industrial Corp. v. Court of Appeals [274 It bears to reiterate the undisputed fact, in the instant case, that
SCRA 597, 610], the key word is control,
not possession, of the subject property. Lim mortgaged the subject property to PNB prior to selling the
Considering that the deed of conveyance
proposed by respondents did not stipulate same to petitioner's husband. Settled is the rule that a mortgage
or infer that petitioners could not exercise
control over said property, delivery can be is an accessory contract intended to secure the performance of
effected through the mere execution of
said deed. the principal obligation. One of its characteristics is that it is

x x x It is sufficient that there are no legal inseparable from the property. It adheres to the property
impediments to prevent petitioners from
gaining physical possession of the subject regardless of who its owner may subsequently be.[30]
property. As stated above, prior physical
delivery or possession is not legally required
and the execution of the deed of sale or
conveyance is deemed equivalent to
This is true even in the case of a real estate mortgage because,
delivery. This deed operates as a formal or
symbolic delivery of the property sold and pursuant to Article 2126 of the Civil Code, the mortgage directly
authorizes the buyer or transferee to use
the document as proof of ownership. and immediately subjects the property upon which it is imposed,
Nothing more is required.[29]
whoever the possessor may be, to the fulfillment of the obligation

for whose security it was constituted. It is inseparable from the

Thus, the execution of the Deed of Sale in favor of PNB, after the property mortgaged as it is a right in rem - a lien on the property

expiration of the redemption period, is deemed equivalent to whoever its owner may be. It subsists notwithstanding a change in

delivery. ownership; in short, the personality of the owner is disregarded.

Thus, all subsequent purchasers must respect the mortgage

As to petitioner's contention that the execution of a public whether the transfer to them be with or without the consent of

document in favor of PNB did not constitute sufficient delivery to the mortgagee, for such mortgage until discharged follows the

it because the property involved is in the actual and adverse property.[31]

possession of petitioner and her husband, it must be noted that

petitioner and her husband's possession of the disputed lot is Petitioner avers that she and her husband were not aware of the

derived from their right as buyers of the subject parcel of land. As mortgage contract which was executed between PNB and Lim
buyers or transferees, petitioner and her husband simply stepped prior to the sale of the subject property by the latter to her

into the shoes of Lim, who, prior to selling the subject property to husband. The fact remains, however, that the mortgage was

them, mortgaged the same to PNB. As Lim's successors-in- registered and annotated on the certificate of title covering the
interest, their possession could not be said to be adverse to that subject property.

of Lim. Thus, they are also bound to recognize and respect the

mortgage entered into by the latter. Their possession of the It is settled that registration in the public registry is notice to the
disputed lot could not, therefore, be considered as a legal whole world.[32] Every conveyance, mortgage, lease, lien,

impediment which could prevent PNB from acquiring ownership attachment, order, judgment, instrument or entry affecting

and possession thereof. registered land shall, if registered, filed or entered in the Office of
the Register of Deeds of the province or city where the land to us, a cursory reading of the issues enumerated in the Pre-Trial

which it relates lies, be constructive notice to all persons from the Order of the RTC would readily show that the complete and

time of such registering, filing or entering.[33] Under the rule of proper resolution of these issues would necessarily include all

notice, it is presumed that the purchaser has examined every other matters pertinent to determining whether herein

instrument of record affecting the title. Such presumption may petitioner is the lawful owner of the subject property and is,

not be rebutted. He is charged with notice of every fact shown by therefore, entitled to reconveyance. It would be illogical not to

the record and is presumed to know every fact shown by the touch on the question of whether the mortgage contract between

record and to know every fact which an examination of the record Lim and PNB is binding on petitioner and her husband or whether

would have disclosed. This presumption cannot be overcome by PNB lawfully foreclosed and acquired ownership of the subject

any claim of innocence or good faith. Otherwise, the very purpose property because a resolution of these issues is determinative of

and object of the law requiring a record would be destroyed. Such whether there are no impediments in petitioner and her

presumption cannot be defeated by proof of want of knowledge husband's acquisition of ownership of the disputed lot.

of what the record contains any more than one may be permitted

to show that he was ignorant of the provisions of the law. The rule Coming to the last assigned error, the Court agrees with the

that all persons must take notice of the facts which the public disquisition of the CA that an action for reconveyance is one that

record contains is a rule of law. The rule must be absolute; any seeks to transfer property, wrongfully registered by another, to its

variation would lead to endless confusion and useless rightful and legal owner.[36] From the foregoing discussions, the

litigation.[34] In the present case, since the mortgage contract was Court finds no sufficient reason to depart from the findings of the

registered, petitioner may not claim lack of knowledge thereof as RTC and the CA that, based on the evidence on record, there was

a valid defense. The subsequent sale of the property to no wrongful registration of the property, first in the name of PNB

petitioner's husband cannot defeat the rights of PNB as the as the purchaser when the property was auctioned and,

mortgagee and, subsequently, the purchaser at the auction sale subsequently, in the name of respondent Rodriguez who bought

whose rights were derived from a prior mortgage validly the subject property when the same was offered for sale by PNB.

registered. Hence, the CA did not commit error in affirming the RTC's

dismissal of herein petitioner's complaint for reconveyance.

In her fifth assignment of error, petitioner contends that the trial

court deviated from the issues identified in the Pre-Trial Order WHEREFORE, the petition is DENIED. The assailed Decision and

and that the case was decided on issues different from those Resolution of the Court of Appeals, dated September 9,

agreed upon during the pre-trial. Settled is the rule that a pre-trial 2005 and November 16, 2005, respectively, in CA-G.R. CV No.

order is not meant to be a detailed catalogue of each and every 83163 are AFFIRMED.

issue that is to be or may be taken up during the trial. Issues that

are impliedly included therein or may be inferable therefrom by SO ORDERED.

necessary implication are as much integral parts of the pre-trial

order as those that are expressly stipulated.[35] In the case before

JOSEPH L. SY, NELSON GOLPEO and JOHN TAN, G.R. No. 154450
Nenita F. Scott, Spouses Juanito and Josefina Jamilar, Joseph L. Sy,
Petitioners,
Nelson Golpeo and John Tan, and the Register of

Deeds, Caloocan City. Said case was docketed as Civil Case No. C-

- versus - 15791.
Present:

The antecedents are as follows:

NICOLAS CAPISTRANO, JR., substituted by JOSEFA B. CAPISTRANO,
REMEDIOS TERESITA B. CAPISTRANO and MARIO GREGORIO B. CAPISTRANO; YNARES-SANTIAGO, J.,
Sometime in 1980, Nenita Scott (Scott) approached respondent
NENITA F. SCOTT; SPS. JUANITO JAMILAR and JOSEFINA JAMILAR; SPS.
MARIANO GILTURA and ADELA GILTURA, Chairperson,
Nicolas Capistrano, Jr. (Capistrano) and offered her services to

Respondents. helpAUSTRIA-MARTINEZ,
him sell his 13,785 square meters of land covered by Transfer

CHICO-NAZARIO,
Certificate of Title (TCT) No. 76496 of the Register of Deeds of

Caloocan City. Capistrano

NACHURA, and gave her a temporary authority to sell

which expired without any sale transaction being made. To his

REYES, JJ.
shock, he discovered later that TCT No. 76496, which was in his

name, had already been cancelled on June 24, 1992 and a new
Promulgated:
one, TCT No. 249959, issued over the same property on the same

date to Josefina A. Jamilar. TCT No. 249959 likewise had already

July 28, 2008
been cancelled and replaced by three (3) TCTs (Nos. 251524,

251525, and 251526), all in the names of the Jamilar spouses. TCT

x------------------------------------------------------------------------------------x Nos. 251524 and 251526 had also been cancelled and replaced by

TCT Nos. 262286 and 262287 issued to Nelson Golpeo and John B.

Tan, respectively.

RESOLUTION
Upon further inquiries, Capistrano also discovered the following:

NACHURA, J.:
1. The cancellation of his TCT No.
76496 and the issuance of TCT
No. 249959 to Jamilar were
based upon two (2) deeds of
This is a petition for review on certiorari under Rule 45 of the sale, i.e., a Deed of Absolute Sale
purportedly executed by him in
Rules of Court of the Decision of the Court of Appeals (CA) favor of Scott on March 9,
1980 and a Deed of Absolute
dated July 23, 2002 in CA-G.R. CV No. 53314. Sale allegedly executed by Scott
in favor of Jamilar on May 17,
The case originated from an action for reconveyance of a large 1990.

tract of land in Caloocan City before the Regional Trial Court 2. The supposed 1980 sale from
him to Scott was
(RTC), Branch 129, Caloocan City, entitled Nicolas Capistrano, Jr. v. for P150,000.00; but despite the
lapse of more than 10 years
 thereafter, the alleged 1990 sale
from Scott to Jamilar was also
for P150,000.00.
3. Both deeds were presented for
registration simultaneously
on June 24, 1992.
4. Although the deed in favor of
Scott states that it was executed
on March 9, 1980, the
annotation thereof at the back
of TCT No. 76496 states that the
date of the instrument is March
9, 1990.
5. Even if there was no direct sale
from Capistrano to Jamilar, the
transfer of title was made
directly to the latter. No TCT was
issued in favor of Scott.
6. The issuance of TCT No. 249959
in favor of Jamilar was with the
help of Joseph Sy, who provided
for (sic) money for the payment
of the capital gains tax,
documentary stamps, transfer
fees and other expenses of
registration of the deeds of sale.
7. On July 8, 1992, an Affidavit of
Adverse Claim was annotated at
the back of Jamilars TCT No.
249959 at the instance of Sy,
Golpeo, and Tan under a
Contract to Sell in their favor by
the Jamilar spouses. Said
contract was executed sometime
in May, 1992 when the title to
the property was still in the
name of Capistrano.
8. Around July 28, 1992, upon
request of the Jamilar spouses,
TCT No. 249959 was cancelled
and three (3) new certificates of
title (TCT Nos. 251524, 251525,
and 251526) all in the name of
Jamilar on the basis of an alleged
subdivision plan (No. Psd-13-
011917) without Capistranos
knowledge and consent as
registered owner. The notice of
adverse claim of Sy, Golpeo, and
Tan was carried over to the
three new titles.
9. Around August 18, 1992, Sy,
Golpeo, and Tan filed Civil Case
No. C-15551 against the Jamilars
and another couple, the Giltura
spouses, for alleged violations of
the Contract to Sell. They caused
a notice of lis pendens to be
annotated on the three (3) TCTs
in Jamilars name. Said civil case,
however, was not prosecuted.
10. On January 26, 1993, a Deed of
Absolute Sale was executed by
the Jamilars and the Gilturas, in
favor of Golpeo and Tan. Thus,
TCT Nos. 251524 and 251526
were cancelled and TCT Nos.
262286 and 262287 were issued
to Golpeo and Tan,
respectively. TCT No. 251525
remained in the name of
Jamilar.[1]
Thus, the action for reconveyance filed by Capistrano,
alleging that his and his wifes signatures on the purported deed of
absolute sale in favor of Scott were forgeries; that the owners
duplicate copy of TCT No. 76496 in his name had always been in
his possession; and that Scott, the Jamilar spouses, Golpeo, and
Tan were not innocent purchasers for value because they all
participated in defrauding him of his property. Capistrano
claimed P1,000,000.00 from all defendants as moral
damages, P100,000.00 as exemplary damages; and P100,000.00
as attorneys fees.
In their Answer with Counterclaim, the Jamilar spouses
denied the allegations in the complaint and claimed that
Capistrano had no cause of action against them, as there was no
privity of transaction between them; the issuance of TCT No.
249959 in their names was proper, valid, and legal; and that
Capistrano was in estoppel. By way of counterclaim, they
sought P50,000.00 as actual damages, P50,000.00 as moral
damages, P50,000.00 as exemplary damages, and P50,000.00 as whatever amount she may be made to pay Capistrano; that she

attorneys fees. was entitled to P50,000.00 as moral damages and P50,000.00 as

attorneys fees from her co-defendants due to their fraudulent

In their Answer, Sy, Golpeo, and Tan denied the
conduct.
allegations in the complaint and alleged that Capistrano had no

cause of action against them; that at the time they bought the Later, Sy, Golpeo, and Tan filed a third-party complaint

property from the Jamilars and the Gilturas as unregistered against the Giltura spouses who were the Jamilars alleged co-

owners, there was nothing in the certificates of title that would vendors of the subject property.

indicate any vice in its ownership; that a buyer in good faith of a

registered realty need not look beyond the Torrens title to search

for any defect; and that they were innocent purchasers of the Thereafter, trial on the merits ensued.

land for value. As counterclaim, they sought P500,000.00 as moral

Subsequently, the trial court decided in favor of
damages and P50,000.00 as attorneys fees.
Capistrano. In its Decision dated May 7, 1996, adopting the theory

of Capistrano as presented in his memorandum, the trial court

rendered judgment as follows:

In her Answer with Cross-claim, Scott denied the

allegations in the complaint and alleged that she had no

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

that, even if she were the owner, she would never have sold it at

so low a price. 3. Ordering defendant Register of

Deeds to cause the cancellation
By way of Cross-claim against Sy, Golpeo, Tan, and the of TCT Nos. 262286 and 262287
registered in the names of
Jamilars, Scott alleged that when she was looking for a buyer of defendants Nelson Golpeo and
John B. Tan;
the property, the Jamilars helped her locate the property, and

they became conversant with the details of the ownership and

other particulars thereof; that only the other defendants were 4. Ordering defendant Register of
Deeds to cause the issuance to
responsible for the seeming criminal conspiracy in defrauding plaintiff of three (3) new TCTs, in
replacement of the aforesaid
Capistrano; that in the event she would be held liable to him, her TCTs Nos. 251525, 262286 and
other co-defendants should be ordered to reimburse her of 262287;
 property, with legal interest thereon from the date of the filing of
5. Ordering all the private
the complaint until full payment.
defendants in the above-
captioned case to pay plaintiff,
jointly and severally, the reduced Hence, this petition, with petitioners insisting that they were
amount of P400,000.00 as moral
damages; innocent purchasers for value of the parcels of land covered by

TCT Nos. 262286 and 262287. They claim that when they

negotiated with the Jamilars for the purchase of the property,

6. Ordering all the private
defendants in the above- although the title thereto was still in the name of Capistrano, the
captioned case to pay to
plaintiff, jointly and severally, documents shown to them the court order directing the issuance
the reduced sum of P50,000.00
of a new owners duplicate copy of TCT No. 76496, the new
as exemplary damages;
owners duplicate copy thereof, the tax declaration, the deed of

absolute sale between Capistrano and Scott, the deed of absolute

7. Ordering all the private
defendants in the above- sale between Scott and Jamilar, and the real estate tax receipts
captioned case to pay plaintiffs
there was nothing that aroused their suspicion so as to compel
counsel, jointly and severally,
the reduced amount them to look beyond the Torrens title. They asseverated that
of P70,000.00 as attorneys fees,
plus costs of suit; there was nothing wrong in financing the cancellation of

Capistranos title and the issuance of titles to the Jamilars because

the money they spent therefor was considered part of the

8. Ordering the dismissal of
defendants Sy, Golpeo and Tans purchase price they paid for their property.
Cross-Claim against defendant
spouses Jamilar;

In their Comment, the heirs of Capistrano, who were

9. Ordering the dismissal of
defendants Sy, Golpeo and Tans substituted after the latters death, reiterated the factual
Third-Party Complaint against
defendant spouses Giltura; and circumstances which should have alerted the petitioners to

conduct further investigation, thus

10. Ordering the dismissal of the

Counterclaims against plaintiff.
(a) Why the Deed of Absolute Sale
supposedly executed by
Capistrano had remained
SO ORDERED.[2]
unregistered for so
long, i.e., from March 9, 1980 up
On appeal, the CA, in its Decision dated July 23, 2002, affirmed to June 1992, when they were
negotiating with the Jamilars and
the Decision of the trial court with the modification that the the Gilturas for their purchase of
the subject property;
Jamilar spouses were ordered to return to Sy, Golpeo, and Tan the

amount of P1,679,260.00 representing their full payment for the

 (b) Whether or not the owners copy
of Capistranos certificate of title conflicting; (f) when the CA, in making its findings, went beyond
had really been lost;
the issues of the case and the same were contrary to the
(c) Whether Capistrano really sold admissions of both the appellant and appellee.[4] Not one of these
his property to Scott and
whether Scott actually sold it to exceptional circumstances is present in this case.
the Jamilars, which matters were
easily ascertainable as both
First. The CA was correct in upholding the finding of the trial court
Capistrano and Scott were still
alive and their names appear on that the purported sale of the property from Capistrano to Scott
so many documents;
was a forgery, and resort to a handwriting expert was not even
(d) Why the consideration for both
the March 9, 1980 sale and necessary as the specimen signature submitted by Capistrano
the May 17, 1990 sale was the
during trial showed marked variance from that found in the deed
same (P150,000.00), despite the
lapse of more than 10 years; of absolute sale. The technical procedure utilized by handwriting

(e) Why the price was so low experts, while usually helpful in the examination of forged
(P10.88 per square meter, both
in 1980 and in 1990) when the documents, is not mandatory or indispensable to the examination
petitioners were willing to pay or comparison of handwritings.[5]
and actually paid P150.00 per
square meter in May 1992; and

(f) Whether or not both deeds of

sale were authentic.[3]
By the same token, we agree with the CA when it held that the

deed of sale between Scott and the Jamilars was also forged, as it

noted the stark differences between the signatures of Scott in the

In addition, the heirs of Capistrano pointed out that
deed of sale and those in her handwritten letters to Capistrano.
petitioners entered into negotiations over the property, not with

the registered owner thereof, but only with those claiming Second. In finding that the Jamilar spouses were not innocent
ownership thereof based on questionable deeds of sale. purchasers for value of the subject property, the CA properly held

that they should have known that the signatures of Scott and
The petition should be denied. The arguments
Capistrano were forgeries due to the patent variance of the
proffered by petitioners all pertain to factual issues which have
signatures in the two deeds of sale shown to them by Scott, when
already been passed upon by both the trial court and the CA.
Scott presented to them the deeds of sale, one allegedly executed

Findings of facts of the CA are final and conclusive and cannot be by Capistrano in her favor covering his property; and the other

reviewed on appeal, as long as they are based on substantial allegedly executed by Scott in favor of Capistrano over her

evidence. While, admittedly, there are exceptions to this rule such property, the P40,000.00 consideration for which ostensibly

as: (a) when the conclusion is a finding grounded entirely on constituted her initial and partial payment for the sale of

speculations, surmises or conjectures; (b) when the inference Capistranos property to her.

made is manifestly mistaken, absurd or impossible; (c) when there

The CA also correctly found the Gilturas not innocent purchasers
is grave abuse of discretion; (d) when the judgment is based on a
for value, because they failed to check the veracity of the
misapprehension of facts; (e) when the findings of facts are
allegation of Jamilar that he acquired the property from duplicate copy thereof by filing an affidavit of loss and a petition

Capistrano. for the issuance of another owners duplicate copy of TCT No.

76496. The minimum requirement of a good faith buyer is that

In ruling that Sy was not an innocent purchaser for value, we
the vendee of the real property should at least see the owners
share the observation of the appellate court that Sy knew that the
duplicate copy of the title.[6] A person who deals with registered
title to the property was still in the name of Capistrano, but failed
land through someone who is not the registered owner is
to verify the claim of the Jamilar spouses regarding the transfer of
expected to look beyond the certificate of title and examine all
ownership of the property by asking for the copies of the deeds of
the factual circumstances thereof in order to determine if the
absolute sale between Capistrano and Scott, and between Scott
vendor has the capacity to transfer any interest in the land. He
and Jamilar. Sy should have likewise inquired why the Gilturas had
has the duty to ascertain the identity of the person with whom he
to affix their conformity to the contract to sell by asking for a copy
is dealing and the latters legal authority to convey.[7]
of the deed of sale between the Jamilars and the Gilturas. Had Sy

done so, he would have learned that the Jamilars claimed that Finally, there is the questionable cancellation of the certificate of

they purchased the property from Capistrano and not from Scott. title of Capistrano which resulted in the immediate issuance of a

certificate of title in favor of the Jamilar spouses despite the claim

that Capistrano sold his property to Scott and it was Scott who

We also note, as found by both the trial court and the CA, Tans sold the same to the Jamilars.

testimony that he, Golpeo and Sy are brothers, he and Golpeo

In light of the foregoing disquisitions, based on the
having been adopted by Sys father. Tan also testified that he and
evidence on record, we find no error in the findings of the CA as
Golpeo were privy to the transaction between Sy and the Jamilars
to warrant a discretionary judicial review by this Court.
and the Gilturas, as shown by their collective act of filing a

complaint for specific performance to enforce the contract to sell. WHEREFORE, the petition is DENIED DUE COURSE for failure to

establish reversible error on the part of the Court of

Also noteworthy and something that would have ordinarily
Appeals. Costs against petitioners.
aroused suspicion is the fact that even before the supposed

execution of the deed of sale by Scott in favor of the Jamilars, the

latter had already caused the subdivision of the property into nine
SO ORDERED.
(9) lots, with the title to the property still in the name of

Capistrano.

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

76496 in the name of Capistrano had always been in his

possession since he gave Scott only a photocopy thereof pursuant

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

other hand, the Jamilars were able to acquire a new owners

 Resolution[2] of the CA which denied petitioners Motion for

Reconsideration of its October 31, 1995 Decision.

The Facts

On November 19, 1981, petitioner Domingo Realty

filed its November 15, 1981 Complaint[3] with the Pasay City RTC

against Antonio M. Acero, who conducted business under the firm

name A.M. Acero Trading,[4] David Victorio, John Doe, and Peter

DOMINGO REALTY, INC. G.R. No. 126236 Doe, for recovery of possession of three (3) parcels of land located
and AYALA STEEL
MANUFACTURING CO., INC., in Cupang, Muntinlupa, Metro Manila, covered by (1) Transfer
Petitioners,
Present: Certificate of Title (TCT) No. (75600) S-107639-Land Records of

QUISUMBING, J., Chairperson, Rizal; (2) TCT No. (67006) S-107640-Land Records of Rizal; and (3)
- versus - CARPIO,
CARPIO MORALES, TCT No. (67007) S-107643-Land Records of Rizal (the subject
TINGA, and
VELASCO, JR., JJ. properties). The said lots have an aggregate area of 26,705 square

COURT OF APPEALS and Promulgated: meters, more or less, on a portion of which Acero had constructed
ANTONIO M. ACERO,
Respondents. January 26, 2007 a factory building for the manufacture of hollow blocks, as alleged
x--------------------------------------------------------------------------------------
---x by Domingo Realty.

DECISION
VELASCO, JR., J.:
On January 4, 1982, defendants Acero and Victorio

filed their December 21, 1981 Answer[5] to the Complaint in Civil

Good judgment comes from experience, and
often experience comes from bad judgment.
Case No. 9581-P. Acero alleged that he merely leased the land
Rita Mae Brown
from his co-defendant David Victorio, who, in turn, claimed to

The Case own the property on which the hollow blocks factory of Acero

stood. In the Answer, Victorio assailed the validity of the TCTs of

This Petition for Review on Certiorari, under Rule 45 of Domingo Realty, alleging that the said TCTs emanated from

the Revised Rules of Court, seeks the reversal of the October 31, spurious deeds of sale, and claimed that he and his predecessors-

1995 Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. in-interest had been in possession of the property for more than

33407, entitled Antonio M. Acero v. Hon. Sofronio G. Sayo, et al., 70 years.

which annulled the December 7, 1987 Decision based on a

Compromise Agreement among petitioner Domingo Realty, Inc. On December 3, 1987, Mariano Yu representing

(Domingo Realty), respondent Antonio M. Acero, and defendant Domingo Realty, Luis Recato Dy[6], and Antonio M. Acero, all

Luis Recato Dy in Civil Case No. 9581-P before the Pasay City assisted by counsels, executed a Compromise Agreement, which

Regional Trial Court (RTC), Branch CXI; and the August 28, 1996 contained the following stipulations, to wit:
 withdraw and/or move to dismiss
the same under the spirit of this
1. That defendants admit and agreement;
recognize the ownership of the
plaintiff over the property subject 5. That defendants likewise waive
of this case, covered by TCT No. S- all claims for damages including
107639 (75600), S-107643 (67007), attorneys fees against the plaintiff;
and S-107640 (67006) with a total
area of 26,705 square meters; 6. That plaintiff acknowledges the
benefit done by defendant Luis
2. That defendant Luis Recato Dy Recato Dy on the property by
admits and recognizes that his title incurring expenses in protecting
covered by TCT No. 108027 has and preserving the property by
been proven not to be genuine and way of construction of perimeter
that the area indicated therein is fence and maintaining a caretaker
inside the property of the plaintiff; therein and plaintiff has agreed to
pay Luis Recato Dy the amount of
3. That defendant Acero admits P100,000.00 upon approval of this
that the property he is presently agreement by this Honorable
occupying by way of lease is Court.[7]
encroaching on a portion of the
property of the plaintiff and
assume[s] and undertakes to
vacate, remove and clear any and Acting on the Compromise Agreement, the Pasay City
all structures erected inside the
property of the plaintiff by himself RTC rendered the December 7, 1987 Decision which adopted the
and other third parties, duly
authorized and/or who have an aforequoted six (6) stipulations and approved the Compromise
existing agreement with defendant
Acero, and shall deliver said Agreement.
portion of the property of the
plaintiff free and clear of any
unauthorized structures, shanties, To implement the said Decision, Domingo Realty filed
occupants, squatters or lessees
within a period of sixty (60) days its January 21, 1988 Motion[8] asking the trial court for permission
from date of signing of this
compromise agreement. Should to conduct a re-survey of the subject properties, which was
defendant Acero fail in his
obligation to vacate, remove and granted in the January 22, 1988 Order.[9]
clear the structures erected inside
the property of the plaintiff within
the period of 60 days afore-
On February 2, 1988, respondent Acero filed his January 29, 1988
mentioned, plaintiff shall be
entitled to a writ of execution for
Motion to Nullify the Compromise Agreement,[10] claiming that
the immediate demolition or
removal of said structure to fully the January 22, 1988 Order authorizing the survey plan of
implement this agreement; and
ejectment of all squatters and petitioner Domingo Realty as the basis of a resurvey would violate
occupants and lessees, including
the dependents to fully implement the Compromise Agreement since the whole area he occupied
this agreement;
would be adjudged as owned by the realty firm.
4. That plaintiff admits and
recognizes that defendant Luis
Recato Dy bought and occupied
the property in good faith and for On March 18, 1988, Acero filed a Motion to Resurvey,[11] whereby
value whereas defendant Acero
leased the portion of said property it was alleged that the parties agreed to have the disputed lots re-
likewise in good faith and for value
hereby waives absolutely and surveyed by the Bureau of Lands. Thus, the trial court issued
unconditionally all claims including
attorneys fees against both the March 21, 1988 Order[12]directing the Director of Lands to
defendants in all cases pending in
any court whether by virtue of any conduct a re-survey of the subject properties.
judgment or under the present
complaint and undertake to
In his June 9, 1989 Report, Elpidio T. De Lara, Chief of the On April 8, 1991, petitioners filed a Manifestation with Motion

Technical Services Division of the Lands Management Section of praying for the denial of respondents Motion to Nullify the

the National Capital Region - Department of Environment and Compromise Agreement and for the approval of Verification

Natural Resources, submitted to the trial court Verification Survey Survey Plan No. Vs-13-000135 prepared by Engr. Lara of the

Plan No. Vs-13-000135. In the said Verification Survey Plan, Bureau of Lands. The Pasay City RTC issued the December 6,

petitioners TCTs covered the entire land occupied by the 1991 Order[18] denying respondent Aceros Motion to Nullify the

respondents hollow block factory.[13] Compromise Agreement. As a consequence, petitioners filed a

Motion for Execution on December 10, 1991.[19]

On April 10, 1990, petitioner Ayala Steel Manufacturing Co., Inc.

(Ayala Steel) filed its March 30, 1990 Motion for Substitution On January 6, 1992, respondent filed an undated

alleging that it had purchased the subject lots, attaching to the Manifestation[20] claiming, among others, that it was on record

motion TCT Nos. 152528, 152529, and 152530 all in its name, as that the Compromise Agreement was only as to a portion of the

proof of purchase.[14] land being occupied by respondent, which is about 2,000 square

meters, more or less. He reiterated the same contentions in

The said motion was opposed by Acero claiming that this case has his December 21, 1991 Manifestation.[21]

already been terminated in accordance with the compromise

agreement of the parties, hence, substitution will no longer be On January 13, 1992, respondent filed a Motion to Modify Order

necessary and justified under the circumstances.[15] The motion Dated 6 December 91,[22] claiming that the said Order modified

was not resolved which explains why both transferor Domingo the Compromise Agreement considering that it allegedly involved

Realty and transferee Ayala Steel are co-petitioners in the instant only 1,357 square meters and not the entire lot;[23] and if not

petition. amended, the Order would deviate from the principle that no

man shall enrich himself at the expense of the other.

In its December 28, 1990 Order,[16] the trial court directed Acero
In its January 15, 1992 Order,[24] the trial court approved the
to conduct his own re-survey of the lots based on the technical
issuance of a Writ of Execution to enforce the December 7,
description appearing in the TCTs of Domingo Realty and to have
1987 Decision. On February 3, 1992, respondent Acero
the re-survey plans approved by the Bureau of Lands. The Order
subsequently filed a Motion for Reconsideration[25]of the January
resulted from Aceros contention that he occupied only 2,000
15, 1992 Order arguing that the Order was premature and that
square meters of petitioners property.
Verification Survey Plan No. Vs-13-000135 violated the

Compromise Agreement.
Acero employed the services of Engr. Eligio L. Cruz who came up
On January 18, 1992, the Pasay City Hall was gutted by fire,
with Verification Survey Plan No. Vs-13-000185. However, when
destroying the records of the lower court, including those of this
the said Verification Survey Plan was presented to the Bureau of
case. Thus, after reconstituting the records, the trial court issued
Lands for approval, it was rejected because Engr. Cruz failed to

comply with the requirements of the Bureau.[17]

the October 6, 1992 Order,[26] reiterating its January 15, the Rules of Court, against petitioners and Judge Sofronio G. Sayo

1992 Order and ordering the issuance of a Writ of Execution. as presiding judge of the lower court. In the petition, respondent

sought to nullify and set aside the RTC Orders dated December 6,

On October 23, 1992, respondent filed a Manifestation and 1991, January 15, 1992, October 6, 1992, January 12, 1994, and

Compliance,[27] alleging that Verification Survey Plan No. Vs-13- February 1, 1994, all of which pertain to the execution of the

000185 had been approved by the Regional Director of the DENR; December 7, 1987 Decision on the Compromise

thus, he moved for the annulment of the October 6, 1992 Order Agreement. Significantly, respondent did not seek the annulment

granting the Writ of Execution in favor of petitioners. of said judgment but merely reiterated the issue that under the

Compromise Agreement, he would only be vacating a portion of

Given the conflicting Verification Survey Plans of the parties, the the property he was occupying.

trial court issued the October 11, 1993 Order[28] requiring the

Bureau of Lands Director to determine which of the two survey The Ruling of the Court of Appeals

plans was correct.

On October 31, 1995, the CA promulgated the assailed Decision,

Subsequently, Regional Technical Director Eriberto V. Almazan of the fallo of which reads:

the Land Registration Authority issued the November 24,

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

SO ORDERED.[35]
Respondents Motion for Reconsideration[32] of the January 12,

1994 Order was denied in the February 1, 1994 Order[33] of the

In discarding the December 7, 1987 Decision based on the
Pasay City RTC.
Compromise Agreement, the appellate court ratiocinated that

David Victorio, the alleged lessor of Acero, was not a party to the
Aggrieved, respondent Acero filed before the CA his February 23,
Compromise Agreement; thus, there would always remain the
1994 Petition for Certiorari and Mandamus with Urgent Prayer for
probability that he might eventually resurface and assail the
Issuance of a Temporary Restraining Order,[34] under Rule 65 of
 FINAL, EXECUTORY, IMMUTABLE
Compromise Agreement, giving rise to another suit. Moreover, AND UNALTERABLE;

the CA found the Compromise Agreement vague, not having 3. THE RESPONDENT COURT OF
APPEALS ERRED IN NULLIFYING
stipulated a mutually agreed upon surveyor, who would survey AND SETTING ASIDE JUDGMENT
ON COMPROMISE AGREEMENT
the properties using as a basis, survey plans acceptable to both, AND THE COMPROMISE
AGREEMENT ITSELF AS WELL AS
and to thereafter submit a report to the court.[36] THE SUBSEQUENT ORDERS OF THE
COURT A QUO BASED ON FRAUD
OR MISTAKE THOUGH SAID ISSUES
WERE NOT RAISED BEFORE THE
Likewise, the CA sustained Aceros belief that he would only have COURT A QUO, AND NO EVIDENCE
WAS INTRODUCED TO
to vacate a portion of the property he was presently occupying,
SUBSTANTIATE FRAUD OR
MISTAKE BEFORE THE COURT A
which was tantamount to a mistake that served as basis for the
QUO;
nullification of the Compromise Agreement entered into.
4. THE RESPONDENT COURT OF
APPEALS ERRED WHEN IT RULED
THAT THE NON-INCLUSION OF ONE
On January 17, 1996, petitioners filed a Motion for OF THE PARTIES IN THIS CASE, AND
THE VAGUENESS OF THE
Reconsideration[37] of the adverse Decision, which was COMPROMISE AGREEMENT ARE
GROUNDS TO NULLIFY AND SET
consequently rejected in the CAs August 28, 1996 Resolution. ASIDE THE COMPROMISE
AGREEMENT; AND
Thus, the instant petition is in our hands.
5. THE RESPONDENT COURT OF
APPEALS ERRED WHEN IT
ENTERTAINED THE PETITION FOR
The Issues CERTIORARI AND MANDAMUS
THOUGH IT WAS FILED BEYOND
REASONABLE TIME IF NOT BARRED
BY LACHES.[38]
The issues as stated in the petition are as follows:

1. THE RESPONDENT COURT OF Restated, the issues are:

APPEALS ERRED IN NULLIFYING
AND SETTING ASIDE JUDGMENT I.
ON COMPROMISE AGREEMENT
AND THE COMPROMISE WHETHER THE PETITION BEFORE
AGREEMENT ITSELF AS WELL AS THE COURT OF APPEALS WAS
THE SUBSEQUENT ORDERS OF THE FILED OUT OF TIME OR BARRED BY
COURT A QUO THOUGH THERE IS LACHES;
NO MOTION TO SET ASIDE THE
JUDGMENT ON THE COMPROMISE II.
AGREEMENT BEFORE THE COURT A
QUO ON THE GROUND OF FRAUD, WHETHER THE NON-INCLUSION OF
MISTAKE OR DURESS; DAVID VICTORIO WOULD NULLIFY
2. THE RESPONDENT COURT OF THE COMPROMISE AGREEMENT;
APPEALS ERRED IN NULLIFYING
AND SETTING ASIDE THE
JUDGMENT ON COMPROMISE
AGREEMENT AND THE
COMPROMISE AGREEMENT ITSELF
AS WELL AS THE SUBSEQUENT III.
ORDERS OF THE COURT OF QUO
[SIC] THOUGH IN THE PETITION WHETHER THE JUDGMENT ON
FOR CERTIORARI AND MANDAMUS COMPROMISE AGREEMENT
BEFORE RESPONDENT COURT OF SHOULD BE SET ASIDE ON THE
APPEALS, PRIVATE RESPONDENT GROUND OF VAGUENESS; AND
ARGUED THAT JUDGMENT ON
COMPROMISE AGREEMENT IS IV.
 WHETHER THE JUDGMENT ON challenge a judgment if the 15-day period from receipt of
COMPROMISE AGREEMENT
SHOULD BE SET ASIDE ON THE judgment for taking an appeal has not yet expired. This motion is
GROUND OF MISTAKE.
the most plain, speedy, and adequate remedy in law to assail a

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

The Courts Ruling
immediately executory, can still be annulled for vices of consent

or forgery.[39]
The petition is meritorious.

Prior to the effectivity of the 1997 Rules of Civil Procedure on July

The preliminary issue involves the query of what proper remedy is
1, 1997, an order denying a motion for new trial or
available to a party who believes that his consent in a
reconsideration was not appealable since the judgment in the
compromise agreement was vitiated by mistake upon which a
case is not yet final. The remedy is to appeal from the challenged
judgment was rendered by a court of law.
decision and the denial of the motion for reconsideration or new
There is no question that a contract where the consent
trial is assigned as an error in the appeal.[40] Under the present
is given through mistake, violence, intimidation, undue influence,
[1997] Rules of Civil Procedure, the same rule was maintained
or fraud is voidable under Article 1330 of the Civil Code. If the
that the order denying said motion is still unappealable and the
contract assumes the form of a Compromise Agreement between
rule is still to appeal from the judgment and not from the order
the parties in a civil case, then a judgment rendered on the basis
rejecting the motion for reconsideration/new trial.
of such covenant is final, unappealable, and immediately

executory. If one of the parties claims that his consent was

If the 15-day period for taking an appeal has lapsed, then the
obtained through fraud, mistake, or duress, he must file a motion
aggrieved party can avail of Rule 38 by filing a petition for relief
with the trial court that approved the compromise agreement to
from judgment which should be done within 60 days after the
reconsider the judgment and nullify or set aside said contract on
petitioner learns of the judgment, but not more than six (6)
any of the said grounds for annulment of contract within 15 days
months after such judgment or final order was entered. Prior to
from notice of judgment. Under Rule 37, said party can either file
the effectivity of the 1997 Rules of Civil Procedure in 1997, if the
a motion for new trial or reconsideration. A party can file a
court denies the petition under Rule 38, the remedy is to appeal
motion for new trial based on fraud, accident or mistake,
from the order of denial and not from the judgment since said
excusable negligence, or newly discovered evidence.
decision has already become final and already

unappealable.[41] However, in the appeal from said order, the

On the other hand, a party may decide to seek the recall or
appellant may likewise assail the judgment. Under the 1997 Rules
modification of the judgment by means of a motion for
of Civil Procedure, the aggrieved party can no longer appeal from
reconsideration on the ground that the decision or final order is
the order denying the petition since this is proscribed under
contrary to law if the consent was procured through fraud,
Section 1 of Rule 41. The remedy of the party is to file a special
mistake, or duress. Thus, the motion for a new trial or motion for
civil action for certiorari under Rule 65 from the order rejecting
reconsideration is the readily available remedy for a party to
the petition for relief from judgment.
 10. February 1, 1994 the trial court issued the Order which denied

The records of the case reveal the following: respondents Motion for Reconsideration of its January 12,

1994 Order; and

1. December 3, 1987 the parties signed the Compromise

Agreement; 11. April 4, 1994 Acero filed with the CA a petition for certiorari in

CA-G.R. SP No. 33407 entitled Antonio M. Acero v. Domingo

2. December 7, 1987 a decision/judgment was rendered based on Realty, Inc., et al.

the December 3, 1987 Compromise Agreement;

In his undated Manifestation, respondent Acero admitted having

3. February 2, 1988 Acero filed a Motion to Nullify the received a copy of the December 7, 1987 Decision on December

Compromise Agreement; 11, 1987. However, it was only on February 2, 1988 when he filed

a Motion to Nullify the Compromise Agreement which was

4. December 6, 1991 the trial court denied Aceros Motion to discarded for lack of merit by the trial court on December 6,

Nullify the Compromise Agreement; 1991. If the Motion to Nullify the Compromise Agreement is

treated as a motion for reconsideration and/or for new trial, then

5. December 11, 1991 defendant Acero received the December 6, Acero should have filed an appeal from the December 7, 1987

1991 Order which denied said motion;[42] Decision and assigned as error the December 6, 1991 Order

denying said motion pursuant to the rules existing prior to the

6. December 26, 1991 the 15-day period to appeal to the CA 1997 Rules of Civil Procedure. He failed to file such appeal but

expired by the failure of defendant Acero to file an appeal with instead filed a petition for certiorari under Rule 65 with the CA

said appellate court; on April 4, 1994. This is prejudicial to respondent Acero as the

special civil action of certiorari is not the proper remedy. If the

7. January 15, 1992 the trial court issued the Order which granted aggrieved party does not interpose a timely appeal from the

petitioners motion for the issuance of a Writ of Execution; adverse decision, a special civil action for certiorari is not available

8. October 6, 1992 the trial court reiterated its January 15, 1992 as a substitute for a lost appeal.[43]

Order directing the issuance of a Writ of Execution after the

records of the case were lost in a fire that gutted the Pasay City What respondent Acero should have done was to file a petition

Hall; for relief from judgment when he became aware that he lost his

right of appeal on December 26, 1991. Even with this approach,

9. January 12, 1994 the trial court issued the Order which directed defendant Acero was also remiss.

the implementation of the Writ of Execution prayed for by

petitioners; In sum, the petition for certiorari instituted by respondent Acero

with the CA is a wrong remedy; a simple appeal to the CA would

have sufficed. Since the certiorari action is an improper legal In the present case, the Order denying the Motion to Nullify the

action, the petition should have been rejected outright by the CA. Compromise Agreement was issued on December 6, 1991. The

petition for certiorari was filed on April 4, 1994. The period of two

Assuming arguendo that a petition for certiorari with the CA is the (2) years and four (4) months cannot be considered fair and

appropriate remedy, still, said petition was filed out of time. reasonable. With respect to the January 15, 1992 Order granting

the writ of execution and the October 6, 1992 Order directing the

The petition before the CA was filed prior to the effectivity of the issuance of the writ, it is evident that the petition before the CA

1997 Rules of Court when there was still no prescribed period was filed more than three (3) months after the receipt by

within which to file said petition, unlike in the present Section 4 of respondent Acero of said orders and the filing of the petition is

Rule 65 wherein a Petition for Certiorari and Mandamus must be likewise unreasonably delayed.

filed within 60 days from notice of the judgment, final order, or

resolution appealed from, or of the denial of the petitioners On the second issue, petitioners assail the ruling of the appellate

motion for new trial or reconsideration after notice of judgment. court that David Victorio who is claimed to be the lessor of Acero,

and who is impleaded as a defendant in Civil Case No. 9581-P, was

Section 4, Rule 65 previously read: not made a party to the Compromise Agreement and hence, he

may later assail the compromise agreement as not binding upon

Section 4. Where petition filed.The
petition may be filed in the him, thereby giving rise to another suit.[46]
Supreme Court, or, if it relates to
the acts or omissions of an inferior
court, or of a corporation, board or
officer or person, in a Court of First We find merit in petitioners position.
Instance having jurisdiction
thereof. It may also be filed in the
Court of Appeals if it is in aid of its
appellate jurisdiction. The CA was unable to cite a law or jurisprudence that supports

Petitions for certiorari under Rules the annulment of a compromise agreement if one of the parties in
43, 44 and 45 shall be filed with
the Supreme Court. a case is not included in the settlement. The only legal effect of

the non-inclusion of a party in a compromise agreement is that

said party cannot be bound by the terms of the agreement. The

Before the 1997 Rules of Civil Procedure became effective on July
Compromise Agreement shall however be valid and binding as to
1, 1997, the yardstick to determine the timeliness of a petition for
the parties who signed thereto.[47]
certiorari under Rule 65 was the reasonableness of the time that

had elapsed from receipt of notice of the assailed order/s of the

The issue of ownership between petitioners and David Victorio
trial court up to the filing of the appeal with the CA.[44] In a
can be threshed out by the trial court in Civil Case No. 9581-P. The
number of cases, the Court ruled that reasonable time can be
proper thing to do is to remand the case for continuation of the
[45]
pegged at three (3) months.
proceedings between petitioners and defendant David Victorio

but not to annul the partial judgment between petitioners and

respondent Acero which has been pending execution for 20 years.

With regard to the third issue, petitioners assail the ruling of the Moreover, vagueness is defined in Blacks Law Dictionary as:

CA that the Compromise Agreement is vague as there is still a indefinite, uncertain; not susceptible of being understood.

need to determine the exact metes and bounds of the

encroachment on the petitioners lot. A perusal of the entire Compromise Agreement will negate any

contention that there is vagueness in its provisions. It must be

The object of a contract, in order to be considered as remembered that in the interpretation of contracts, an

certain, need not specify such object with absolute certainty. It is instrument must be construed so as to give effect to all the

enough that the object is determinable in order for it to be provisions of these contracts.[49] Thus, the Compromise

considered as certain. Article 1349 of the Civil Code provides: Agreement must be considered as a whole.
Article 1349. The object of every
contract must be determinate as
to its kind. The fact that the
quantity is not determinate shall The alleged vagueness revolves around the term portion in
not be an obstacle to the existence
of the contract, provided it is paragraph three (3) of the Compromise Agreement,[50] taken
possible to determine the same,
without the need of a new contract together with paragraph one (1) which we quote:
between the parties.

1. That defendants admit and

recognize the ownership of the
In the instant case, the title over the subject property contains a plaintiff over the property subject
of this case, covered by TCT No. S-
technical description that provides the metes and bounds of the 107639 (75600), S-107643 (67007),
and S-107640 (67006) with a total
property of petitioners. Such technical description is the final area of 26,705 square meters;

determinant of the extent of the property of petitioners. Thus, the xxxx

3. That defendant Acero admits
area of petitioners property is determinable based on the that the property he is presently
occupying by way of lease is
technical descriptions contained in the TCTs. encroaching on a portion of the
property of the plaintiff and
assume and undertakes to vacate,
remove and clear any and all
Notably, the determination made by the Bureau of structures erected inside the
property of the plaintiff by himself
Landsthat Verification Survey Plan No. Vs-13-000135 is the correct and other third parties, duly
authorized and/or who have an
Planis controlling and shall prevail over Verification Survey Plan existing agreement with defendant
Acero, and shall deliver said
No. Vs-13-000185 submitted by Acero. Findings of fact by portion of the property of the
plaintiff free and clear of any
administrative agencies, having acquired expertise in their field of unauthorized structures, shanties,
occupants, squatters or lessees
specialization, must be given great weight by this Court.[48] Even if
within a period of sixty (60) days
from date of signing of this
the exact area of encroachment is not specified in the agreement,
compromise agreement. Should
defendant Acero fail in his
it can still be determined from the technical description of the
obligation to vacate, remove and
title of plaintiff which defendant Acero admitted to be clear the structures erected inside
the property of the plaintiff within
correct. Thus, the object of the Compromise Agreement is the period of 60 days afore-
mentioned, plaintiff shall be
considered determinate and specific. entitled to a writ of execution for
the immediate demolition or
 removal of said structure to fully
implement this agreement; and Steel, the Court finds that the true and real agreement between
ejectment of all squatters and
occupants and lessees, including the parties is that any encroachment by respondent Acero on the
the dependents to fully implement
this agreement. (Emphasis lot of petitioners will be surrendered to the latter. This is apparent
supplied.)
from the undertaking in paragraph 3 that defendant Acero

undertakes to vacate, remove and clear any and all structures

Respondent harps on their contention that the term portion in erected inside the property of the plaintiff. This prestation results

paragraph 3 of the Compromise Agreement refers to the property from the admission against the interest of respondent Acero that

which they are occupying. Respondents interpretation of he admits and recognizes the ownership of the plaintiff (Domingo

paragraph 3 of the Compromise Agreement is mistaken as it is Realty) over the subject lot. The controlling word therefore

anchored on his belief that the encroachment on the property of is encroachmentwhether it involves a portion of or the entire lot

petitioners is only a portion and not the entire lot he is claimed by defendant David Victorio. To reiterate, the word

occupying. This is apparent from his Supplement to his Petition portion refers to petitioners lot and not that of Aceros. Contrary

for Certiorari and Mandamus where he explained: to the disposition of the CA, we rule that the terms of the

Compromise Agreement are clear and leave no doubt upon the

Petitioner [Acero] entered
into this agreement because of his well- intent of the parties that respondent Acero will vacate, remove,
founded belief and conviction that a
portion of the property he is and clear any and all structures erected inside petitioners
occupying encroaches only a
property, the ownership of which is not denied by him. The literal
portion of the property of private
respondent. In fine, only a portion of
meaning of the stipulations in the Compromise Agreement will
the property petitioner is occupying
(not all of it) encroaches on a portion of
control under Article 1370 of the Civil Code. Thus, the alleged
the property of private respondent.[51]
vagueness in the object of the agreement cannot be made an

excuse for its nullification.

This contention is incorrect. The agreement is clear

that respondent Acero admitted that the property he is presently

Finally, with regard to the fourth issue, petitioners question the
occupying by way of lease is encroaching on a portion of the
finding of the CA that the compromise judgment can be set aside
property of the plaintiff. Thus, whether it is only a portion or the
on the ground of mistake under Article 2038 of the Civil Code,
entire lot Acero is leasing that will be affected by the agreement is
because respondent Acero gave his consent to the Compromise
of no importance. What controls is the encroachment on the lot
Agreement in good faith that he would only vacate a portion of
of petitioner Domingo Realty regardless of whether the entire lot
his lot in favor of petitioner Domingo Realty.
or only a portion occupied by Acero will be covered by the

encroachment.
We rule otherwise.

While it may be the honest belief of respondent Acero that only a

Articles 2038 and 1330 of the Civil Code allow a party to a
portion of the lot he is occupying encroaches on the 26,705-
contract, on the ground of mistake, to nullify a compromise
square meter lot of petitioner Domingo Realty and later, Ayala
agreement, viz:
 and area of the lot he leased from David Victorio. Before
Article 2038. A compromise in
which there is mistake, fraud, consenting to the agreement, he could have simply hired a
violence, intimidation, undue
influence, or falsity of documents, geodetic engineer to conduct a verification survey and determine
is subject to the provisions of
Article 1330 of this Code. the actual encroachment of the area he was leasing on the titled

Article 1330. A contract where the
consent is given through mistake,
violence, intimidation, undue
influence, or fraud is voidable
(emphasis supplied).
lot of petitioner Domingo Realty. Had he undertaken such a
precautionary measure, he would have known that the entire
area he was occupying intruded into the titled lot of petitioners

and possibly, he would not have signed the agreement.

Mistake has been defined as a misunderstanding of the meaning

In this factual milieu, respondent Acero could have easily averted
or implication of something or a wrong action or statement
the alleged mistake in the contract; but through palpable neglect,
[52]
proceeding from a faulty judgment x x x.
he failed to undertake the measures expected of a person of

ordinary prudence. Without doubt, this kind of mistake cannot be

Article 1333 of the Civil Code of the Philippines however states
resorted to by respondent Acero as a ground to nullify an
that there is no mistake if the party alleging it knew the doubt,
otherwise clear, legal, and valid agreement, even though the
contingency or risk affecting the object of the contract.
document may become adverse and even ruinous to his business.

Under this provision of law, it is presumed that the parties to a

Moreover, respondent failed to state in the Compromise
contract know and understand the import of their agreement.
Agreement that he intended to vacate only a portion of the
Thus, civil law expert Arturo M. Tolentino opined that:
property he was leasing. Such provision being beneficial to
To invalidate consent, the error
must be excusable. It must be real
respondent, he, in the exercise of the proper diligence required,
error, and not one that could have
been avoided by the party alleging
should have made sure that such matter was specified in the
it. The error must arise from facts
unknown to him. He cannot allege Compromise Agreement. Respondent Aceros failure to have the
an error which refers to a fact
known to him, or which he should said stipulation incorporated in the Compromise Agreement is
have known by ordinary diligent
examination of the facts. An error negligence on his part and insufficient to abrogate said
so patent and obvious that
nobody could have made it, or agreement.
one which could have been
avoided by ordinary prudence,
cannot be invoked by the one who
made it in order to annul his In Torres v. Court of Appeals,[54] which was also cited in LL and
contract. A mistake that is caused
by manifest negligence cannot Company Development and Agro-Industrial Corporation v. Huang
invalidate a juridical
act.[53] (Emphasis supplied.) Chao Chun,[55] it was held that:

Under Article 1315 of the Civil

Prior to the execution of the Compromise Agreement, respondent Code, contracts bind the parties
not only to what has been
Acero was already aware of the technical description of the titled expressly stipulated, but also to all
necessary consequences thereof,
lots of petitioner Domingo Realty and more so, of the boundaries as follows:
 case. This holds true even if all the
ART. 1315. gains appear to be on one side
Contracts and all the sacrifices on the
are other (emphasis supplied).[56]
perfected by
mere
consent, and
from that One final note. While the Court can commiserate with respondent
moment the
parties are Acero in his sad plight, nonetheless we have no power to make or
bound not
only to the alter contracts in order to save him from the adverse stipulations
fulfillment of
what has in the Compromise Agreement.Hopefully this case will serve as a
been
expressly precaution to prospective parties to a contract involving titled
stipulated
but also to lands for them to exercise the diligence of a reasonably prudent
all the
consequence person by undertaking measures to ensure the legality of the title
s which,
and the accurate metes and bounds of the lot embraced in the
according to
their nature,
title. It is advisable that such parties (1) verify the origin, history,
may be in
keeping with
authenticity, and validity of the title with the Office of the Register
good faith,
usage and of Deeds and the Land Registration Authority; (2) engage the
law.
services of a competent and reliable geodetic engineer to verify
It is undisputed that petitioners are
educated and are thus presumed the boundary, metes, and bounds of the lot subject of said title
to have understood the terms of
the contract they voluntarily based on the technical description in the said title and the
signed. If it was not in consonance
with their expectations, they approved survey plan in the Land Management Bureau; (3)
should have objected to it and
insisted on the provisions they conduct an actual ocular inspection of the lot; (4) inquire from the
wanted.
owners and possessors of adjoining lots with respect to the true
Courts are not authorized to
extricate parties from the and legal ownership of the lot in question; (5) put up signs that
necessary consequences of their
acts, and the fact that the said lot is being purchased, leased, or encumbered; and (6)
contractual stipulations may turn
out to be financially undertake such other measures to make the general public aware
disadvantageous will not relieve
parties thereto of their that said lot will be subject to alienation, lease, or encumbrance
obligations. They cannot now
disavow the relationship formed by the parties. Respondent Acero, for all his woes, may have a
from such agreement due to their
supposed misunderstanding of its legal recourse against lessor David Victorio who inveigled him to
terms.
lease the lot which turned out to be owned by another.

The mere fact that the Compromise Agreement favors one party WHEREFORE, the petition is hereby GRANTED and the

does not render it invalid. We ruled in Amarante v. Court of assailed Decision and Resolution of the CA are REVERSED. The

Appeals that: questioned Orders of the Pasay City RTC dated December 6, 1991,
Compromises are generally to be
favored and cannot be set aside if January 15, 1992, October 6, 1992, January 12, 1994, and
the parties acted in good faith and
February 1, 1994, including the Decision dated December 7, 1987,
made reciprocal concessions to
each other in order to terminate a
are AFFIRMED. The case is remanded to the Pasay RTC, Branch III

for further proceedings with respect to petitioner Domingo
Realtys November 15, 1981 Complaint[57] against one of the
defendants, David Victorio. No costs. SO ORDERED.
G.R. No. 204369 September 17, 2014
ENRIQUETA M. LOCSIN, Petitioner,
vs.
BERNARDO HIZON, CARLOS HIZON, SPS. JOSE MANUEL &
LOURDES GUEVARA, Respondents.
DECISION
VELASCO, JR., J.:
Nature of the Case
Before Us is a Petition for Review on Certiorari under Rule 45
assailing the Decision1 and Resolution of the Court of Appeals
(CA), dated June 6, 2012 and October 30, 2012, respectively, in
CA-G.R. CV No. 96659 entitled Enriqueta M Locsin v. Marylou
Bolos, et al. In reversing the ruling of the trial court, the CA held
that respondents are innocent purchasers in good faith and for
value of the subject property.
The Facts
Petitioner Enriqueta M. Locsin (Locsin) was the registered owner
of a 760-sq.m. lot covered by Transfer Certificate of Title (TCT) No.
235094, located at 49 Don Vicente St., Don Antonio Heights
Subdivision, Brgy. Holy Spirit, Capitol, Quezon City. In 1992, she
filed an ejectment case, Civil Case No. 38-6633,2 against one Billy
Aceron (Aceron) before the Metropolitan Trial Court, Branch 3 8
in Quezon City (MTC) to recover possession over the land in issue.
Eventually, the two entered into a compromise agreement, which
the MTC approved on August 6, 1993.3
Locsin later went to the United States without knowing whether
Aceron has complied with his part of the bargain under the
compromise agreement. In spite of her absence, however, she
continued to pay the real property taxes on the subject lot.
In 1994, after discovering thather copy of TCT No. 235094 was
missing, Locsin filed a petition for administrative reconstruction in
order to secure a new one, TCT No. RT-97467. Sometime in early
2002, she then requested her counsel to check the status of the
subject lot. It was then that they discovered the following:
1. One Marylou Bolos (Bolos) had TCT No. RT-97467
cancelled on February 11, 1999, and then secured a
new one, TCT No. N-200074, in her favor by registering
a Deed of Absolute Sale dated November 3, 1979
allegedly executed by Locsin with the Registry of
Deeds;
2. Bolos later sold the subject lot to Bernardo Hizon
(Bernardo) for PhP 1.5 million, but it was titled under
Carlos Hizons (Carlos) name on August 12, 1999.
Carlos is Bernardos son;
3. On October 1, 1999, Bernardo, claiming to be the
owner of the property, filed a Motion for Issuance of
Writ of Execution for the enforcement of the court-
approved compromise agreement in Civil Case No. 38-
6633;
4. The property was already occupied and was, in fact,
up for sale.
On May 9, 2002, Locsin, through counsel, sent Carlos a letter
requesting the return of the property since her signature in the
purported deed of sale in favor of Bolos was a forgery. In a letter-
reply dated May 20, 2002, Carlos denied Locsins request, claiming
that he was unaware of any defect or flaw in Bolos title and he is,
thus, an innocent purchaser for value and good faith. On June 13,
2002,4 Bernardo met with Locsins counsel and discussed the
possibility of a compromise. He ended the meeting with a promise
to come up with a win-win situation for his son and Locsin, a
promise which turned out to be deceitful, for, on July 15, 2002,
Locsin learned that Carlos had already sold the property for PhP
1.5 million to his sister and her husband, herein respondents
Lourdes and Jose Manuel Guevara (spouses Guevara),
respectively, who, as early as May 24, 2002, had a new certificate
of title, TCT No. N-237083, issued in their names. The spouses
Guevara then immediately mortgaged the said property to secure
a PhP 2.5 million loan/credit facility with Damar Credit
Corporation (DCC).
It was against the foregoing backdrop of events that Locsin filed
an action for reconveyance, annulment ofTCT No. N-237083, the
cancellation of the mortgage lien annotated thereon, and
damages, against Bolos, Bernardo, Carlos, the Sps. Guevara, DCC,
and the Register of Deeds, Quezon City, docketed as Civil Case No.
Q-02-47925, which was tried by the Regional Trial Court, Branch
77 in Quezon City (RTC). The charges against DCC, however,
weredropped on joint motion ofthe parties. This is in view of the
cancellation of the mortgage for failure of the spouses Guevara to
avail of the loan/credit facility DCC extended in their favor.5
Ruling of the Trial Court
On November 19, 2010, the RTC rendered a Decision6 dismissing
the complaint and finding for respondents,as defendants thereat,
holding that: (a) there is insufficient evidence to showthat Locsins
signature in the Deed of Absolute Sale between her and Bolos is a
forgery; (b) the questioned deed is a public document, having
been notarized; thus, it has, in its favor, the presumption of
regularity; (c) Locsin cannot simply rely on the apparent
difference of the signatures in the deed and in the documents
presented by her to prove her allegation of forgery; (d) the
transfers of title from Bolos to Carlos and from Carlos to the
spouses Guevara are valid and regular; (e) Bernardo, Carlos, and
the spouses Guevara are all buyers in good faith. Aggrieved,
petitioner appealed the case to the CA.
Ruling of the Court of Appeals
The CA, in its assailed Decision, ruled that it was erroneous for the
RTC to hold that Locsin failed to prove that her signature was
forged. In its appreciation of the evidence, the CA found that,
indeed, Locsins signature in the Deed of Absolute Sale in favor of
Bolos differs from her signatures in the other documents offered
as evidence.
The CA, however, affirmed the RTCs finding that herein
respondents are innocent purchasers for value. Citing Casimiro
Development Corp. v. Renato L. Mateo,7 the appellate court held
that respondents, having dealt with property registered under the
Torrens System, need not go beyond the certificate of title, but
only has to rely on the said certificate. Moreover, as the CA
added, any notice of defect or flaw in the title of the vendor
should encompass facts and circumstances that would impel a
reasonably prudent man to inquire into the status of the title of
the property in order to amount to bad faith.
Accordingly, the CA ruled that Locsin can no longer recover the
subject lot.8 Hence, the insant petition.
Arguments
Petitioner Locsin insists that Bernardo was well aware, at the time
he purchased the subject property, of a possible defect in Bolos
title since he knew that another person, Aceron, was then
occupying the lot in issue.9 As a matter of fact, Bernardo even
moved for the execution of the compromise agreement between
Locsin and Aceron inCivil Case No. 38-6633 in order to enforce to
oust Aceron of his possession over the property.10
Thus, petitioner maintains that Bernardo, knowing as he did the
incidents involving the subject property,should have acted as a
reasonably diligent buyer in verifying the authenticity of
Bolostitle instead of closing his eyes to the possibility of a
defecttherein. Essentially, petitioner argues that Bernardos
stubborn refusal to make an inquiry beyond the face of Bolos title
is indicative of his lack of prudence in protecting himself from
possible defects or flaws therein, and consequently bars him from
interposing the protection accorded toan innocent purchaser for
value.
As regards Carlos and the Sps. Guevaras admissions and
testimonies, petitioner points out that when these are placed
side-by-side with the concurrent circumstances in the case, it is
readily revealed that the transfer from the former to the latter
was only simulated and intended to keep the property out of
petitioners reach.
For their part, respondents maintain that they had the right to
rely solely upon the face of Bolos clean title, considering that it
was free from any lien or encumbrance. They are not even
required, so they claim, to check on the validity of the sale from
which they derived their title.11 Too, respondents claim that their
knowledge of Acerons possession cannot be the basis for an
allegation of bad faith, for the property was purchased on an "asis
where-is" basis. The Issue
Considering that the finding of the CAthat Locsins signature in the
Deed of Absolute Sale in favor of Bolos was indeed bogus
commands itself for concurrence, the resolution of the present
petition lies on this singular issuewhether or not respondents
are innocent purchasers for value.12
The Courts Ruling
The petition is meritorious.
Procedural issue
As a general rule, only questions of law may be raised in a petition
for review on certiorari.13 This Court is not a trier offacts; and in
the exercise of the power of review, we do not normally
undertake the re-examination of the evidence presented by the
contending parties during the trial of the case.14 This rule,
however, admits of exceptions.For one, the findings of fact of the
CA will not bind the parties in cases where the inference made on
the evidence is mistaken, as here.15
That being said, we now proceed to the core of the controversy.
Precautionary measures for buyers of real property
An innocent purchaser for value is one who buys the property of
another without notice that some other person has a right to or
interest in it, and who pays a full and fair price atthe time of the
purchase or before receiving any notice of another persons
claim.16 As such, a defective title or one the procurement of
which is tainted with fraud and misrepresentationmay be the
source of a completely legal and valid title, provided that the
buyer is an innocent third person who, in good faith, relied on the
correctness of the certificate of title, or an innocent purchaser for
value.17
Complementing this is the mirror doctrine which echoes the
doctrinal rule that every person dealing with registered land may
safely rely on the correctness of the certificate of title issued
therefor and is in no way obliged to go beyond the certificate to
determine the condition of the property.18 The recognized
exceptions to this rule are stated as follows:
[A] person dealing with registeredland has a right to rely on the
Torrens certificate of title and to dispense with the need of
inquiring further except when the party has actual knowledge of
facts and circumstances that would impel a reasonably cautious
man to make such inquiry or when the purchaser has knowledge
of a defect or the lack of title in his vendor or of sufficient facts to
induce a reasonably prudent man to inquire into the status of the
title of the property in litigation. The presence of anything which
excites or arouses suspicion should then prompt the vendee to
look beyond the certificate and investigate the title of the vendor
appearing on the face of said certificate. One who falls within the
exception can neither be denominated an innocent purchaser for
value nor a purchaser in good faith and, hence, does not merit the
protection of the law.19 (emphasis added)
Thus, in Domingo Realty, Inc. v. CA,20 we emphasized the need for
prospective parties to a contract involving titled lands to exercise
the diligence of a reasonably prudent person in ensuring the
legality of the title, and the accuracy of the metes and bounds of
the lot embraced therein, by undertaking precautionary
measures, such as:
1. Verifying the origin, history, authenticity, and
validity of the title with the Office of the Register of
Deeds and the Land Registration Authority;
 2. Engaging the services of a competent and reliable
geodetic engineer to verify the boundary,metes, and
bounds of the lot subject of said title based on the
technical description in the said title and the approved
survey plan in the Land Management Bureau;
3. Conducting an actual ocular inspection of the lot;
4. Inquiring from the owners and possessors of
adjoining lots with respect to the true and legal
ownership of the lot in question;
5. Putting up of signs that said lot is being purchased,
leased, or encumbered; and
6. Undertaking such other measures to make the
general public aware that said lot will be subject to
alienation, lease, or encumbrance by the parties.
In the case at bar, Bolos certificate of title was concededly free
from liens and encumbrances on its face. However, the failure of
Carlos and the spouses Guevara to exercise the necessary level
ofcaution in light of the factual milieu surrounding the sequence
of transfers from Bolos to respondents bars the application of the
mirror doctrine and inspires the Courts concurrence
withpetitioners proposition.
Carlos is not an innocent purchaser for value
Foremost, the Court is of the view that Bernardo negotiated with
Bolos for the property as Carlos agent. This is bolstered by the
fact that he was the one who arranged for the saleand eventual
registration of the property in Carlos favor. Carlos testified during
the May 27, 2009 hearing:21
Q: Are you privy with the negotiations between your father, Mr.
Bernardo Hizon, and your co-defendant, Marylou Bolos, the
alleged seller?
A: No, Maam.
Q: Do you remember having signed a Deed of Absolute Sale,
dated August 12, 1999?
A: Yes, Maam.
Q: And, at that time that you have signed the Deed, was Marylou
Bolos present?
A: No, Maam.
Q: Who negotiated and arranged for the sale of the property
between Marylou Bolos and you? A: It was my father. (emphasis
ours)
Consistent with the rule that the principal is chargeable and
bound by the knowledge of, or notice to, his agent received in
that capacity,22 any information available and known to Bernardo
is deemed similarly available and known to Carlos, including the
following:
1. Bernardo knew that Bolos, from whom he
purchased the subject property, never acquired
possession over the lot. As a matter of fact, in his
March 11, 2009 direct testimony,23 Bernardo admitted
having knowledge of Acerons lot possession as well as
the compromise agreement between petitioner and
Aceron.
2. Bolos purported Deed of Sale was executed on
November 3, 1979 but the ejectment case commenced
by Locsin against Aceron was in 1992, or thirteen
(13)years after the property was supposedly
transferred to Bolos.
3. The August 6, 1993 Judgment,24 issued by the MTC
on the compromise agreement between Locsin and
Aceron, clearly stated therein that "[o]n August 2,
1993,the parties [Aceron and Locsin] submitted to [the
MTC] for approval a Compromise Agreement dated
July 28, 1993." It further indicated that "[Aceron]
acknowledges [Locsins] right of possessionto [the
subject property], being the registered owner thereof."
Having knowledge of the foregoing facts, Bernardo and Carlos, to
our mind, should have been impelled to investigate the reason
behind the arrangement. They should have been pressed to
inquire into the status of the title of the property in litigation in
order to protect Carlos interest. It should have struck them as
odd that it was Locsin, not Bolos, who sought the recovery of
possession by commencing an ejectment case against Aceron, and
even entered into a compromiseagreement with the latter years
afterthe purported sale in Bolos favor. Instead, Bernardo and
Carlos took inconsistent positions when they argued for the
validity of the transfer of the property in favor of Bolos, but in the
same breath prayed for the enforcement of the compromise
agreement entered into by Locsin.
At this point it is well to emphasize that entering into a
compromise agreement is an act of strict dominion.25 If Bolos
already acquired ownership of the property as early as 1979, it
should have been her who entered into a compromise agreement
with Aceron in 1993, not her predecessor-in-interest, Locsin, who,
theoretically, had already divested herself of ownership thereof.
The spouses Guevara are not innocent purchasers for value
As regards the transfer of the property from Carlos to the spouses
Guevara, We find the existence of the sale highly suspicious. For
one, there is a dearth of evidence to support the respondent
spouses position that the sale was a bona fide transaction. Evenif
we repeatedly sift through the evidence on record, still we cannot
findany document, contract, or deed evidencing the sale in favor
of the spouses Guevara. The same goes for the purported
payment of the purchase price of the property in the amount of
PhP 1.5 million in favor of Carlos. As a matter of fact, the only
documentary evidence that they presented were as follows:
1. Deed of Sale between Locsin and Bolos;
 2. TCT No. 200074 issued in Bolos name;
3. TCT No. N-205332 in Carlos name;
4. TCT No. N-237083 in the nameof the Sps. Guevara.
To bridge the gap in their documentary evidence, respondents
proffer their own testimonies explaining the circumstances
surrounding the alleged sale.26 However, basic is the rule that
bare and self-serving allegations, unsubstantiated by evidence,
are not equivalent to proof under the Rules.27 As such, we cannot
give credence to their representations that the sale between
them actually transpired.
Furthermore, and noticeably enough,the transfer from Carlos to
the spouses Guevara was effected only fifteen(15) days after
Locsin demanded the surrender of the property fromCarlos.
Reviewing the timeline:
May 9, 2002: Locsins counsel sent a letter to Carlos, requesting
that he return the property to Locsin since the latters signature in
the purported deed of sale between her and Bolos was a forgery.
May 20, 2002:Carlos counsel replied to Locsins May 9, 2002
letter, claiming that Carlos was unaware of any defect or flaw in
Bolos title, making him an innocent purchaserof the subject
property.
May 24, 2002: The Sps. Guevara allegedly purchased the property
from Carlos.
When Bernardo met with Locsinscounsel on June 13, 2002, and
personally made a commitment to comeup with a win-win
situation for his son and Locsin, he knew fully well, too,that the
property had already been purportedly transferred to his
daughter and son-in-law, the spouses Guevara, for he, no less,
facilitated the same. This, to us, isglaring evidence of bad faith
and an apparent intention to mislead Locsin into believing that
she could no longer recover the subject property.
Also, the fact that Lourdes Guevara and Carlos are siblings, and
that Carlos agent in his dealings concerning the property is his
own father, renders incredible the argument thatLourdes had no
knowledge whatsoever of Locsins claim of ownership atthe time
of the purported sale.
Indeed, the fact that the spouses Guevara never intended to be
the owner in good faith and for value of the lot is further made
manifest by their lack of interest in protecting themselvesin the
case. It does not even appear in their testimonies that they, at the
very least, intended to vigilantly protect their claim over the
property and prevent Locsin take it away from them. What they
did was to simply appoint Bernardo as their attorney-in-fact to
handle the situation and never bothered acquainting themselves
with the developments in the case.28 To be sure, respondent Jose
Manuel Guevara was not even presented asa witness in the case.
There is also strong reason to believethat even the mortgage in
favor of DCC was a mere ploy tomake it appear that the Sps.
Guevara exercised acts of dominion over the subject property.
This is so considering the proximity between the propertys
registration in their names and its being subjected to the
mortgage. Most telling is that the credit line secured by the
mortgage was never used by the spouses, resulting in the
mortgages cancellation and the exclusion of DCC as a party in
Civil Case No. Q-02-47925.1wphi1
These circumstances, taken altogether, strongly indicate that
Carlos and the spouses Guevara failed to exercise the necessary
level of caution expected of a bona fide buyer and even
performed acts that are highly suspect. Consequently, this Court
could not give respondents the protection accorded to innocent
purchasers in good faith and for value.
Locsin is entitled to nominal damages
We now delve into petitioners prayer for exemplary damages,
attorneys fees, and costs of suit. Here, the Court notes that
petitioner failed to specifically pray that moral damages be
awarded. Additionally, she never invoked any of the grounds that
would have warranted the award of moral damages. As can be
gleaned from the records, lacking from her testimony is any claim
that she suffered any form of physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, or any other similar
circumstance.29 Thus, we are constrained to refrain from awarding
moral damages in favor of petitioner.
In the same vein, exemplary damages cannot be awarded in favor
of petitioner. Well-settled that this species of damages is allowed
only in addition to moral damages such that no exemplary
damages can be awarded unless the claimant first establishes his
clear right to moral damages.30 Consequently, despite our finding
that respondents acted in a fraudulent manner, petitioners claim
for exemplary damages is unavailing at this point.
Nevertheless, we find an award for nominal damages to be in
order. Under prevailing jurisprudence, nominal damages are
"recoverable where a legal right is technically violated and must
be vindicated against an invasion that has produced no actual
present loss of any kind or where there has been a breach of
contract and no substantial injury or actual damages whatsoever
have been or can be shown."31 As expounded in Almeda v.
Cario,32 a violation of the plaintiffs right, even if only technical, is
sufficient to support an award of nominal damages. So long as
there is a showing of a violation of the right of the plaintiff, as
herein petitioner, an award of nominal damages is proper.33
In the case at bar, this Court recognizes that petitioner was unduly
deprived of her ownership rights overthe property, and was
compelled to litigate for its recovery, for almost ten (10) years.
Clearly, this could have entitled her to actual or compensatory
damages had she quantified and proved, during trial, the amounts
which could have accrued in her favor, including commercial fruits
such as reasonable rent covering the pendency of the case.
Nonetheless, petitioners failure to prove actual or compensatory
damages does not erase the fact that her property rights were
unlawfully invaded by respondents, entitling her to nominal
damages.
As to the amount to be awarded, it bears stressing that the same
is addressed to the sound discretion ofthe court, taking into
account the relevant circumstances.34 Considering the length of
time petitioner was deprived of her property and the bad faith
attending respondents actuations in the extant case, we find the
amount of seventy-five thousand pesos (PhP 75,000) as sufficient
nominal damages. Moreover, respondents should be held jointly
and severally liable for the said amount, attorneys fees in the
amount of an additional seventy-fivethousand pesos (PhP
75,000), and the costs of the suit.
WHEREFORE, in light of the foregoing, the Petition is hereby
GRANTED. The assailed Decision of the Court of Appeals dated
June 6, 2012 in CA-G.R. CV No. 96659 affirming the Decision of the
Regional Trial Court, Branch 77, Quezon City, in Civil Case No. Q-
02-47925; as well as its Resolution dated October 30, 2012,
denying reconsideration thereof, are hereby REVERSED and SET
ASIDE. TCT No. N-200074 in the name of Marylou Bolos, and the
titles descending therefrom, namely, TCT Nos. N-205332 and N-
237083 in the name of Carlos Hizon, and the Spouses Jose Manuel
& Lourdes Guevara, respectively, are hereby declared NULL and
VOID. Respondents and all other persons acting under their
authority are hereby DIRECTED to surrender possession of the
subject property in favor of petitioner. Respondents Bernardo
Hizon, Carlos Hizon, and the spouses Jose Manuel and Lourdes
Guevara shall jointly and severally pay petitioner PhP 75,000 as
nominal damages, PhP 75,000 as attorney's fees, and costs of suit.
The Register of Deeds of Quezon City is hereby ORDERED to (1)
cancel TCT No. N-237083; (2) reinstate TCT No. RT-97467; and (3)
reissue TCT No. RT-97467 in favor of petitioner, without requiring
from petitioner payment for any and all expenses in performing
the three acts.
SO ORDERED.
[G. R. No. 102377. July 5, 1996]
ALFREDO SAJONAS and CONCHITA SAJONAS, petitioners, vs. THE
COURT OF APPEALS, DOMINGO A. PILARES, SHERIFF
ROBERTO GARCIA OF QUEZON CITY and REGISTER OF
DEEDS OF MARIKINA, respondents.
DECISION
TORRES, JR., J.:
A word or group of words conveys intentions. When used
truncatedly, its meaning disappears and breeds conflict. Thus, it is
written - By thy words shalt thou be justified, and by thy words
shalt thou be condemned. (Matthew, 12:37)
Construing the new words of a statute separately is
the raison detre of this appeal.
Essentially, the case before us is for cancellation of the
inscription of a Notice of Levy on Execution from a certificate of
Title covering a parcel of real property. The inscription was caused
to be made by the private respondent on Transfer Certificate of
Title No. N-79073 of the Register of Deeds of Marikina, issued in
the name of the spouses Ernesto B. Uychocde and Lucita Jarin,
and was later carried over to and annotated on Transfer
Certificate of Title No. N-109417 of the same registry, issued in
the name of the spouses Alfredo Sajonas and Conchita R. Sajonas,
who purchased the parcel of land from the Uychocdes, and are
now the petitioners in this case.
The facts are not disputed, and are hereby reproduced as
follows:
On September 22, 1983, the spouses Ernesto Uychocde and Lucita
Jarin agreed to sell a parcel of residential land located in Antipolo,
Rizal to the spouses Alfredo Sajonas and Conchita R. Sajonas on
installment basis as evidenced by a Contract to Sell dated
September 22, 1983. The property was registered in the names of
the Uychocde spouses under TCT No. N-79073 of the Register of
Deeds of Marikina, Rizal. On August 27, 1984, the Sajonas couple
caused the annotation of an adverse claim based on the said
Contract to Sell on the title of the subject property, which was
inscribed as Entry No. 116017. Upon full payment of the purchase
price, the Uychocdes executed a Deed of Sale involving the
property in question in favor of the Sajonas couple on September
4, 1984. The deed of absolute sale was registered almost a year
after, or on August 28, 1985.
Meanwhile, it appears that Domingo Pilares (defendant-appellant)
filed Civil Case No. Q-28850 for collection of sum of money
against Ernesto Uychocde. On June 25, 1980, a Compromise
Agreement was entered into by the parties in the said case under
which Ernesto Uychocde acknowledged his monetary obligation
to Domingo Pilares amounting to P27,800 and agreed to pay the
same in two years from June 25, 1980. When Uychocde failed to
comply with his undertaking in the compromise agreement,
defendant-appellant Pilares moved for the issuance of a writ of
execution to enforce the decision based on the compromise
agreement, which the court granted in its order dated August 3,
1982. Accordingly, a writ of execution was issued on August 12,
1982 by the CFI of Quezon City where the civil case was pending.
Pursuant to the order of execution dated August 3, 1982, a notice
of levy on execution was issued on February 12, 1985. On
February 12, 1985, defendant sheriff Roberto Garcia of Quezon
City presented said notice of levy on execution before the Register
of Deeds of Marikina and the same was annotated at the back of
TCT No. 79073 as Entry No. 123283.
When the deed of absolute sale dated September 4 1984 was
registered on August 28, 1985, TCT No. N-79073 was cancelled
and in lieu thereof, TCT No. N-109417 was ssued in the name of
the Sajonas couple. The notice of levy on execution annotated by
defendant sheriff was carried over to the new title. On October
21, 1985, the Sajonas couple filed a Third Party Claim with the
sheriff of Quezon City, hence the auction sale of the subject
property did not push through as scheduled.
On January 10, 1986, the Sajonas spouses demanded the
cancellation of the notice of levy on execution upon defendant-
appellant Pilares, through a letter to their lawyer, Atty. Melchor
Flores. Despite said demand, defendant-appellant Pilares refused
to cause the cancellation of said annotation. In view thereof,
plaintiffs-appellees filed this complaint dated January 11, 1986 on
February 5, 1986.[1]
The Sajonases filed their complaint[2] in the Regional Trial
Court of Rizal, Branch 71, against Domingo Pilares, the judgment
creditor of the Uychocdes. The relevant portion of the complaint
alleges:
7. That at the time the notice of levy was annotated by the
defendant, the Uychocde spouses, debtors of the defendant, have
already transferred, conveyed and assigned all their title, rights
and interests to the plaintiffs and there was no more title, rights
or interests therein which the defendant could levy upon;
8. That the annotation of the levy on execution which was carried
over to the title of said plaintiffs is illegal and invalid and was
made in utter bad faith, in view of the existence of the Adverse
Claim annotated by the plaintiffs on the corresponding title of the
Uychocde spouses;
9. That a demand was made by the plaintiffs upon the defendant
Domingo A. Pilares, to cause the cancellation of the said notice of
levy but the latter, without justifiable reason and with the sole
purpose of harassing and embarrassing the plaintiffs ignored and
refused plaintiffs demand;
10. That in view of the neglect, failure and refusal of the
defendant to cause the cancellation of the notice of levy on
execution, the plaintiffs were compelled to litigate and engage the
services of the undersigned counsel, to protect their rights and
interests, for which they agreed to pay attorneys fees in the
amount of P10,000 and appearance fees of P500 per day in
court.[3]
Pilares filed his answer with compulsory counterclaim[4] on
March 8, 1986, raising special and affirmative defenses, the
relevant portions of which are as follows:
10. Plaintiff has no cause of action against herein defendants;
11. Assuming, without however admitting that they filed an
adverse claim against the property covered by TCT No. 79073
registered under the name of spouses Ernesto Uychocde on
August 27, 1984, the same ceases to have any legal force and
effect (30) days thereafter pursuant to Section 70 of P.D. 1529;
12. The Notice of Levy annotated at the back of TCT No. 79073
being effected pursuant to the Writ of Execution dated August 31,
1982, duly issued by the CFI (now RTC) of Quezon City proceeding
from a decision rendered in Civil Case No. 28859 in favor of herein
defendant against Ernesto Uychocde, is undoubtedly proper and
appropriate because the property is registered in the name of the
judgment debtor and is not among those exempted from
execution;
13. Assuming without admitting that the property subject matter
of this case was in fact sold by the registered owner in favor of the
herein plaintiffs, the sale is the null and void (sic) and without any
legal force and effect because it was done in fraud of a judgment
creditor, the defendant Pilares.[5]
Pilares likewise sought moral and exemplary damages in a
counterclaim against the Sajonas spouses. The parties appeared
at pre-trial proceedings on January 21, 1987,[6] after which, trial
on the merits ensued.
The trial court rendered its decision on February 15,
1989.[7] It found in favor of the Sajonas couple, and ordered the
cancellation of the Notice of Levy from Transfer Certificate of Title
No. N-109417.
The court a quo stated, thus:
After going over the evidence presented by the parties, the court
finds that although the title of the subject matter of the Notice of
Levy on Execution was still in the name of the Spouses Uychocde
when the same was annotated on the said title, an earlier
Affidavit of Adverse Claim was annotated on the same title by the
plaintiffs who earlier bought said property from the Uychocdes.
It is a well settled rule in this jurisdiction (Guidote vs. Maravilla, 48
Phil. 442) that actual notice of an adverse claim is equivalent to
registration and the subsequent registration of the Notice of Levy
could not have any legal effect in any respect on account of prior
inscription of the adverse claim annotated on the title of the
Uychocdes.
xxx xxx xxx
On the issue of whether or not plaintiffs are buyers in good faith
of the property of the spouses Uychocde even notwithstanding
the claim of the defendant that said sale executed by the spouses
was made in fraud of creditors, the Court finds that the evidence
in this instance is bare of any indication that said plaintiffs as
purchasers had notice beforehand of the claim of the defendant
over said property or that the same is involved in a litigation
between said spouses and the defendant. Good faith is the
opposite of fraud and bad faith, and the existence of any bad faith
must be established by competent proof.[8] (Cai vs. Henson, 51
Phil 606)
xxx xxx xxx
In view of the foregoing, the Court renders judgment in favor of
the plaintiffs and against the defendant Pilares, as follows:
1. Ordering the cancellation of the Notice of Levy on Execution
annotated on Transfer Certificate of Title No. N-109417.
2. Ordering said defendant to pay the amount of P5,000 as
attorneys fees.
3. Dismissing the Counterclaim interposed by said defendant.
Said defendant is likewise ordered to pay the costs.
Dissatisfied, Pilares appealed to the Court of Appeals[9],
assigning errors on the part of the lower court. The appellate
court reversed the lower courts decision, and upheld the
annotation of the levy on execution on the certificate of title,
thus:
WHEREFORE, the decision of the lower court dated February 15,
1989 is reversed and set aside and this complaint is dismissed.
Costs against the plaintiffs-appellees."[10]
The Sajonas couple are now before us, on a Petition for
Review on Certiorari[11], praying inter alia to set aside the Court of
Appeals decision, and to reinstate that of the Regional Trial Court.
Private respondent filed his Comment[12] on March 5, 1992,
after which, the parties were ordered to file their respective
Memoranda. Private respondent complied thereto on April 27,
1994[13], while petitioners were able to submit their
Memorandum on September 29, 1992.[14]
Petitioner assigns the following as errors of the appellate
court, to wit:
I 1529, an adverse claim shall be effective only for a period of 30
THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON THE
30-DAY PERIOD FOR ADVERSE CLAIM UNDER SECTION 70 OF P.D.
NO. 1529 IS ABSOLUTE INASMUCH AS IT FAILED TO READ OR
CONSTRUE THE PROVISION IN ITS ENTIRETY AND TO RECONCILE
THE APPARENT INCONSISTENCY WITHIN THE PROVISION IN
ORDER TO GIVE EFFECT TO IT AS A WHOLE.
II
THE LOWER COURT ERRED IN INTERPRETING SECTION 70 OF P.D.
NO. 1529 IN SUCH WISE ON THE GROUND THAT IT VIOLATES
PETITIONERS SUBSTANTIAL RIGHT TO DUE PROCESS.
Primarily, we are being asked to ascertain who among the
parties in suit has a better right over the property in question. The
petitioners derive their claim from the right of ownership arising
from a perfected contract of absolute sale between them and the
registered owners of the property, such right being attested to by
the notice of adverse claim[15] annotated on TCT No. N-79073 as
early as August 27, 1984. Private respondent on the other hand,
claims the right to levy on the property, and have it sold on
execution to satisfy his judgment credit, arising from Civil Case
No. Q-28850[16] against the Uychocdes, from whose title,
petitioners derived their own.
Concededly, annotation of an adverse claim is a measure
designed to protect the interest of a person over a piece of real
property where the registration of such interest or right is not
otherwise provided for by the Land Registration Act or Act 496
(now P.D. 1529 or the Property Registration Decree), and serves a
warning to third parties dealing with said property that someone
is claiming an interest on the same or a better right than that of
the registered owner thereof. Such notice is registered by filing a
sworn statement with the Register of Deeds of the province
where the property is located, setting forth the basis of the
claimed right together with other dates pertinent thereto.[17]
The registration of an adverse claim is expressly recognized
under Section 70 of P.D. No. 1529.*
Noting the changes made in the terminology of the
provisions of the law, private respondent interpreted this to mean
that a Notice of Adverse Claim remains effective only for a period
of 30 days from its annotation, and does not automatically lose its
force afterwards. Private respondent further maintains that the
notice of adverse claim was annotated on August 27, 1984, hence,
it will be effective only up to September 26, 1984, after which it
will no longer have any binding force and effect pursuant to
Section 70 of P.D. No. 1529. Thus, the sale in favor of the
petitioners by the Uychocdes was made in order to defraud their
creditor (Pilares), as the same was executed subsequent to their
having defaulted in the payment of their obligation based on a
compromise agreement.[18]
The respondent appellate court upheld private
respondents theory when it ruled:
The above stated conclusion of the lower court is based on the
premise that the adverse claim filed by plaintiffs-appellees is still
effective despite the lapse of 30 days from the date of
registration. However, under the provisions of Section 70 of P.D.
days from the date of its registration. The provision of this Decree
is clear and specific.
xxx xxx xxx
It should be noted that the adverse claim provision in Section 110
of the Land Registration Act (Act 496) does not provide for a
period of effectivity of the annotation of an adverse claim. P.D.
No. 1529, however, now specifically provides for only 30 days. If
the intention of the law was for the adverse claim to remain
effective until cancelled by petition of the interested party, then
the aforecited provision in P.D. No. 1529 stating the period of
effectivity would not have been inserted in the law.
Since the adverse claim was annotated On August 27, 1984, it was
effective only until September 26, 1984. Hence, when the
defendant sheriff annotated the notice of levy on execution on
February 12, 1985, said adverse claim was already ineffective. It
cannot be said that actual or prior knowledge of the existence of
the adverse claim on the Uychocdes title is equivalent to
registration inasmuch as the adverse claim was already ineffective
when the notice of levy on execution was annotated. Thus, the act
of defendant sheriff in annotating the notice of levy on execution
was proper and justified.
The appellate court relied on the rule of statutory
construction that Section 70 is specific and unambiguous and
hence, needs no interpretation nor construction.[19] Perforce, the
appellate court stated, the provision was clear enough to warrant
immediate enforcement, and no interpretation was needed to
give it force and effect. A fortiori, an adverse claim shall be
effective only for a period of thirty (30) days from the date of its
registration, after which it shall be without force and
effect.Continuing, the court further stated;
. . . clearly, the issue now has been reduced to one of preference-
which should be preferred between the notice of levy on
execution and the deed of absolute sale. The Deed of Absolute
Sale was executed on September 4, 1984, but was registered only
on August 28, 1985, while the notice of levy on execution was
annotated six (6) months prior to the registration of the sale on
February 12, 1985.
In the case of Landig vs. U.S. Commercial Co., 89 Phil 638 it was
held that where a sale is recorded later than an attachment,
although the former is of an earlier date, the sale must give way
to the attachment on the ground that the act of registration is the
operative act to affect the land. A similar ruling was restated
in Campillo vs. Court of Appeals (129 SCRA 513).
xxx xxx xxx
The reason for these rulings may be found in Section 51 of P.D.
1529, otherwise known as the Property Registration Decree,
which provides as follows:
Section 51. Conveyance and other dealings by the registered
owner.- An owner of registered land may convey, mortgage,
lease, charge, or otherwise deal with the same in accordance with
existing laws. He may use such forms of deeds, mortgages, leases
or other voluntary instruments as are sufficient in law. But no
deed, mortgage, lease or other voluntary instrument, except a will
purporting to convey or affect registered land shall take effect as a
conveyance or bind the land, but shall operate only as a contract
between the parties and as evidence of authority to the Register of
Deeds to make registration.
The act of registration shall be the operative act to convey or
affect the land in so far as third persons are concerned, and in all
cases under the Decree, the registration shall be made in the office
of the Register of Deeds for the province or city where the land
lies. (Italics supplied by the lower court.)
Under the Torrens system, registration is the operative act
which gives validity to the transfer or creates a lien upon the
land. A person dealing with registered land is not required to go
behind the register to determine the condition of the
property. He is only charged with notice of the burdens on the
property which are noted on the face of the register or certificate
of title.[20]
Although we have relied on the foregoing rule, in many
cases coming before us, the same, however, does not fit in the
case at bar. While it is the act of registration which is the
operative act which conveys or affects the land insofar as third
persons are concerned, it is likewise true, that the subsequent
sale of property covered by a Certificate of Title cannot prevail
over an adverse claim, duly sworn to and annotated on the
certificate of title previous to the sale.[21] While it is true that
under the provisions of the Property Registration Decree, deeds
of conveyance of property registered under the system, or any
interest therein only take effect as a conveyance to bind the land
upon its registration, and that a purchaser is not required to
explore further than what the Torrens title, upon its face,
indicates in quest for any hidden defect or inchoate right that may
subsequently defeat his right thereto, nonetheless, this rule is not
absolute. Thus, one who buys from the registered owner need not
have to look behind the certificate of title, he is, nevertheless,
bound by the liens and encumbrances annotated thereon. One
who buys without checking the vendors title takes all the risks and
losses consequent to such failure.[22]
In PNB vs. Court of Appeals, we held that the subsequent
sale of the property to the De Castro spouses cannot prevail over
the adverse claim of Perez, which was inscribed on the banks
certificate of title on October 6, 1958. That should have put said
spouses on notice, and they can claim no better legal right over
and above that of Perez. The TCT issued in the spouses names on
July, 1959 also carried the said annotation of adverse
claim. Consequently, they are not entitled to any interest on the
price they paid for the property.[23]
Then again, in Gardner vs. Court of Appeals, we said that
the statement of respondent court in its resolution of reversal
that until the validity of an adverse claim is determined judicially,
it cannot be considered a flaw in the vendors title contradicts the
very object of adverse claims. As stated earlier, the annotation of
an adverse claim is a measure designed to protect the interest of
a person over a piece of real property, and serves as a notice and
warning to third parties dealing with said property that someone
is claiming an interest on the same or has a better right than the
registered owner thereof. A subsequent sale cannot prevail over
the adverse claim which was previously annotated in the
certificate of title over the property.[24]
The question may be posed, was the adverse claim
inscribed in the Transfer Certificate of Title No. N-109417 still in
force when private respondent caused the notice of levy on
execution to be registered and annotated in the said title,
considering that more than thirty days had already lapsed since it
was annotated? This is a decisive factor in the resolution of this
instant case.
If the adverse claim was still in effect, then respondents are
charged with knowledge of pre-existing interest over the subject
property, and thus, petitioners are entitled to the cancellation of
the notice of levy attached to the certificate of title.
For a definitive answer to this query, we refer to the law
itself. Section 110 of Act 496 or the Land Registration Act reads:
Sec. 110. Whoever claims any part or interest in registered lands
adverse to the registered owner, arising subsequent to the date of
the original registration, may, if no other provision is made in this
Act for registering the same, make a statement in writing setting
forth fully his alleged right or interest, and how or under whom
acquired, and a reference to the volume and page of the
certificate of title of the registered owner, and a description of
the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the
adverse claimants residence, and designate a place at which all
notices may be served upon him. The statement shall be entitled
to registration as an adverse claim, and the court, upon a petition
of any party in interest, shall grant a speedy hearing upon the
question of the validity of such adverse claim and shall enter such
decree therein as justice and equity may require. If the claim is
adjudged to be invalid, the registration shall be cancelled. If in any
case, the court after notice and hearing shall find that a claim thus
registered was frivolous or vexatious, it may tax the adverse
claimant double or treble the costs in its discretion.
The validity of the above-mentioned rules on adverse
claims has to be reexamined in the light of the changes
introduced by P.D. 1529, which provides:
Sec. 70 Adverse Claim- Whoever claims any part or interest in
registered land adverse to the registered owner, arising
subsequent to the date of the original registration, may, if no
other provision is made in this decree for registering the same,
make a statement in writing setting forth fully his alleged right or
interest, and how or under whom acquired, a reference to the
number of certificate of title of the registered owner, the name of
the registered owner, and a description of the land in which the
right or interest is claimed.
The statement shall be signed and sworn to, and shall state the
adverse claimants residence, and a place at which all notices may
be served upon him. This statement shall be entitled to
registration as an adverse claim on the certificate of title. The
adverse claim shall be effective for a period of thirty days from the
date of registration. After the lapse of said period, the annotation
of adverse claim may be cancelled upon filing of a verified petition
therefor by the party in interest: Provided, however, that after
cancellation, no second adverse claim based on the same ground
shall be registered by the same claimant.
Before the lapse of thirty days aforesaid, any party in interest may
file a petition in the Court of First Instance where the land is
situated for the cancellation of the adverse claim, and the court
shall grant a speedy hearing upon the question of the validity of
such adverse claim, and shall render judgment as may be just and
equitable. If the adverse claim is adjudged to be invalid, the
registration thereof shall be ordered cancelled. If, in any case, the
court, after notice and hearing shall find that the adverse claim
thus registered was frivolous, it may fine the claimant in an
amount not less than one thousand pesos, nor more than five
thousand pesos, in its discretion. Before the lapse of thirty days,
the claimant may withdraw his adverse claim by filing with the
Register of Deeds a sworn petition to that effect. (Italics ours)
In construing the law aforesaid, care should be taken that
every part thereof be given effect and a construction that could
render a provision inoperative should be avoided, and
inconsistent provisions should be reconciled whenever possible as
parts of a harmonious whole.[25] For taken in solitude, a word or
phrase might easily convey a meaning quite different from the
one actually intended and evident when a word or phrase is
considered with those with which it is associated.[26] In
ascertaining the period of effectivity of an inscription of adverse
claim, we must read the law in its entirety. Sentence three,
paragraph two of Section 70 of P.D. 1529 provides:
The adverse claim shall be effective for a period of thirty days
from the date of registration.
At first blush, the provision in question would seem to
restrict the effectivity of the adverse claim to thirty days. But the
above provision cannot and should not be treated separately, but
should be read in relation to the sentence following, which reads:
After the lapse of said period, the annotation of adverse
claim may be cancelled upon filing of a verified petition therefor
by the party in interest.
If the rationale of the law was for the adverse claim to ipso
facto lose force and effect after the lapse of thirty days, then it
would not have been necessary to include the foregoing caveat to
clarify and complete the rule. For then, no adverse claim need be
cancelled. If it has been automatically terminated by mere lapse
of time, the law would not have required the party in interest to
do a useless act.
A statutes clauses and phrases must not be taken
separately, but in its relation to the statutes totality. Each statute
must, in fact, be construed as to harmonize it with the pre-
existing body of laws. Unless clearly repugnant, provisions of
statutes must be reconciled. The printed pages of the published
Act, its history, origin, and its purposes may be examined by the
courts in their construction.[27] An eminent authority on the
subject matter states the rule candidly:
A statute is passed as a whole and not in parts or sections, and is
animated by one general purpose and intent. Consequently, each
part or section should be construed in connection with every
other part or section so as to produce a harmonious whole. It is
not proper to confine its intention to the one section construed. It
is always an unsafe way of construing a statute or contract to
divide it by a process of etymological dissection, into separate
words, and then apply to each, thus separated from the context,
some particular meaning to be attached to any word or phrase
usually to be ascertained from the context.[28]
Construing the provision as a whole would reconcile the
apparent inconsistency between the portions of the law such that
the provision on cancellation of adverse claim by verified petition
would serve to qualify the provision on the effectivity period. The
law, taken together, simply means that the cancellation of the
adverse claim is still necessary to render it ineffective, otherwise,
the inscription will remain annotated and shall continue as a lien
upon the property. For if the adverse claim has already ceased to
be effective upon the lapse of said period, its cancellation is no
longer necessary and the process of cancellation would be a
useless ceremony.[29]
It should be noted that the law employs the phrase may be
cancelled, which obviously indicates, as inherent in its decision
making power, that the court may or may not order the
cancellation of an adverse claim, notwithstanding such provision
limiting the effectivity of an adverse claim for thirty days from the
date of registration. The court cannot be bound by such period as
it would be inconsistent with the very authority vested in it. A
fortiori, the limitation on the period of effectivity is immaterial in
determining the validity or invalidity of an adverse claim which is
the principal issue to be decided in the court hearing. It will
therefore depend upon the evidence at a proper hearing for the
court to determine whether it will order the cancellation of the
adverse claim or not.[30]
To interpret the effectivity period of the adverse claim as
absolute and without qualification limited to thirty days defeats
the very purpose for which the statute provides for the remedy of
an inscription of adverse claim, as the annotation of an adverse
claim is a measure designed to protect the interest of a person
over a piece of real property where the registration of such
interest or right is not otherwise provided for by the Land
Registration Act or Act 496 (now P.D. 1529 or the Property
Registration Decree), and serves as a warning to third parties
dealing with said property that someone is claiming an interest or
the same or a better right than the registered owner thereof.[31]
The reason why the law provides for a hearing where the
validity of the adverse claim is to be threshed out is to afford the
adverse claimant an opportunity to be heard, providing a venue
where the propriety of his claimed interest can be established or
revoked, all for the purpose of determining at last the existence of
any encumbrance on the title arising from such adverse
claim. This is in line with the provision immediately following:
Provided, however, that after cancellation, no second adverse
claim shall be registered by the same claimant.
Should the adverse claimant fail to sustain his interest in
the property, the adverse claimant will be precluded from
registering a second adverse claim based on the same ground.
It was held that validity or efficaciousness of the claim may
only be determined by the Court upon petition by an interested
party, in which event, the Court shall order the immediate hearing
thereof and make the proper adjudication as justice and equity
may warrant. And it is only when such claim is found
unmeritorious that the registration of the adverse claim may be
cancelled, thereby protecting the interest of the adverse claimant
and giving notice and warning to third parties.[32]
In sum, the disputed inscription of adverse claim on the
Transfer Certificate of Title No. N-79073 was still in effect on
February 12, 1985 when Quezon City Sheriff Roberto Garcia
annotated the notice of levy on execution thereto. Consequently,
he is charged with knowledge that the property sought to be
levied upon on execution was encumbered by an interest the
same as or better than that of the registered owner thereof. Such
notice of levy cannot prevail over the existing adverse claim
inscribed on the certificate of title in favor of the petitioners. This
can be deduced from the pertinent provision of the Rules of
Court, to wit:
Section 16. Effect of levy on execution as to third persons- The
levy on execution shall create a lien in favor of the judgment
creditor over the right, title and interest of the judgment debtor
in such property at the time of the levy, subject to
liens or encumbrances then existing. (Italics supplied)
To hold otherwise would be to deprive petitioners of their
property, who waited a long time to complete payments on their
property, convinced that their interest was amply protected by
the inscribed adverse claim.
As lucidly observed by the trial court in the challenged
decision:
True, the foregoing section provides that an adverse claim shall be
effective for a period of thirty days from the date of
registration. Does this mean however, that the plaintiffs thereby
lost their right over the property in question? Stated in another,
did the lapse of the thirty day period automatically nullify the
contract to sell between the plaintiffs and the Uychocdes thereby
depriving the former of their vested right over the property?
It is respectfully submitted that it did not.[33]
As to whether or not the petitioners are buyers in good
faith of the subject property, the same should be made to rest on
the findings of the trial court. As pointedly observed by the
appellate court, there is no question that plaintiffs-appellees were
not aware of the pending case filed by Pilares against Uychocde at
the time of the sale of the property by the latter in their favor.
This was clearly elicited from the testimony of Conchita Sajonas,
wife of plaintiff, during cross-examination on April 21, 1988.[34]
ATTY. REYES
Q - Madam Witness, when Engr. Uychocde and his
wife offered to you and your husband the
property subject matter of this case, they
showed you the owners transfer certificate, is
it not?
A - Yes, sir.
Q - That was shown to you the very first time that
this lot was offered to you for sale?
A - Yes.
Q - After you were shown a copy of the title and
after you were informed that they are
desirous in selling the same, did you and your
husband decide to buy the same?
A - No, we did not decide right after seeing the
title. Of course, we visited...
Q - No, you just answer my question. You did not
immediately decide?
A - Yes.
Q - When did you finally decide to buy the same?
A - After seeing the site and after verifying from the
Register of Deeds in Marikina that it is free
from encumbrances, that was the time we
decided.
Q - How soon after you were offered this lot did you
verify the exact location and the genuineness
of the title, as soon after this was offered to
you?
A - I think its one week after they were offered.[35]
A purchaser in good faith and for value is one who buys
property of another without notice that some other person has a
right to or interest in such property and pays a full and fair price
for the same, at the time of such purchase, or before he has
notice of the claims or interest of some other person in the
property.[36] Good faith consists in an honest intention to abstain
from taking any unconscientious advantage of another.[37] Thus,
the claim of the private respondent that the sale executed by the
spouses was made in fraud of creditors has no basis in fact, there
being no evidence that the petitioners had any knowledge or
notice of the debt of the Uychocdes in favor of the private
respondents, nor of any claim by the latter over the Uychocdes
properties or that the same was involved in any litigation between
said spouses and the private respondent. While it may be stated
that good faith is presumed, conversely, bad faith must be
established by competent proof by the party alleging the
same. Sans such proof, the petitioners are deemed to be
purchasers in good faith, and their interest in the subject property
must not be disturbed.
At any rate, the Land Registration Act (Property
Registration Decree) guarantees to every purchaser of registered
land in good faith that they can take and hold the same free from
any and all prior claims, liens and encumbrances except those set
forth on the Certificate of Title and those expressly mentioned in
the ACT as having been preserved against it. Otherwise, the
efficacy of the conclusiveness of the Certificate of Title which the
Torrens system seeks to insure would be futile and nugatory.[38]
 ACCORDINGLY, the assailed decision of the respondent
Court of Appeals dated October 17, 1991 is hereby REVERSED and
SET ASIDE. The decision of the Regional Trial Court dated February
15, 1989 finding for the cancellation of the notice of levy on
execution from Transfer Certificate of Title No. N-109417 is
hereby REINSTATED.
The inscription of the notice of levy on execution on TCT
No. N-109417 is hereby CANCELLED.
Costs against private respondent.
SO ORDERED.
G.R. No. 142687 July 20, 2006
SPOUSES FRANCISCO and BERNARDINA RODRIGUEZ, petitioners,
vs.
HON. COURT OF APPEALS, SPOUSES CHRISTOPHER and MA.
ANGELICA BARRAMEDA, and SPOUSES ANTONIO and MARIDEL
CALINGO, respondents.
DECISION
PUNO, J.:
This is a petition for review of the decision of the Court of Appeals
dated September 7, 1999 in CA-G.R. CV No. 48772 and its
resolution dated March 31, 2000. The Court of Appeals reversed
the decision of the Regional Trial Court of Makati in Civil Case No.
92-3524.
The facts show that herein respondent Spouses Antonio and
Maridel Calingo (respondents Calingo) were the registered owners
of a house and lot located at No. 7903 Redwood Street, Marcelo
Green Village, Paraaque, Metro Manila. The property was
mortgaged to the Development Bank of the Philippines, which
mortgage was later absorbed by the Home Mutual Development
Fund (HMDF) or Pag-ibig.
On April 27, 1992, respondents Calingo and respondent Spouses
Christopher and Ma. Angelica Barrameda (respondents
Barrameda) entered into a contract of sale with assumption of
mortgage where the former sold to the latter the property in
question and the latter assumed to pay the outstanding loan
balance to the Development Bank of the
Philippines.1 Respondents Barrameda issued two checks in the
amounts of P150,000.00 and P528,539.76, for which respondents
Calingo issued a receipt dated April 24, 1992.2
In a letter dated April 23, 1992, respondent Antonio S. Calingo
informed HMDF/Pag-ibig about the sale of the property with
assumption of mortgage. Said letter, however, together with an
affidavit by respondents Calingo, was served upon HMDF/Pag-ibig
on October 2, 1992.3
On May 29, 1992, respondents Barrameda filed with the Register
of Deeds of Paraaque an affidavit of adverse claim on the
property. The adverse claim was inscribed at the back of the
certificate of title as Entry No. 3439.4
On June 1, 1992, respondent Ma. Angelica Paez-Barrameda wrote
HMDF, Mortgage and Loans Division informing the office that they
have purchased the subject property from the Calingo spouses
and that they filed a notice of adverse claim with the Register of
Deeds of Paraaque. They also sought assistance from said office
as regards the procedure for the full settlement of the loan
arrearages and the transfer of the property in their names.5
Respondents Barrameda moved into the property on June 2,
1992.
On July 13, 1992, a notice of levy with attachment on real
property by virtue of a writ of execution was annotated at the
back of the certificate of title of the property in question. The writ
of execution was issued by Judge Salvador Abad Santos, Regional
Trial Court of Makati, Branch 65 in connection with Civil Case No.
88-2159 involving a claim by herein petitioners, Spouses Francisco
and Bernardina Rodriguez, against respondents Calingo. Judge
Abad Santos issued the writ in favor of petitioners Rodriguez.6
On July 21, 1992, petitioners counsel, Atty. Nelson A. Loyola, sent
a letter to respondents Barrameda inquiring about the basis of
their occupation of the property in question.
On August 21, 1992, respondents Barrameda remitted to
respondents Calingo the amount of P364,992.07 to complete the
payment of the agreed purchase price. Respondents Calingo
acknowledged receipt of said amount and waived all their rights
to the property in favor of the Barrameda spouses. They also
guaranteed that the property was clear and free from any liens
and encumbrances, except the real estate mortgage assumed by
respondents Barrameda.7
On October 7, 1992, respondents Barrameda executed a joint
affidavit stating that they are the owners of the property in
question by virtue of a deed of sale with assumption of mortgage;
that they registered an affidavit of adverse claim with the Register
of Deeds of Paraaque; that the Sheriff of the Regional Trial
Court, Branch 65, Makati, Sheriff Manuel C. Dolor, levied said
property despite their adverse claim; and that they have acquired
the property long before the levy was made, and therefore, said
levy was illegal. They served a copy of the affidavit on petitioners
counsel, Atty. Loyola, who made a reply thereto on October 15,
1992.
In his letter to Christopher Barrameda dated October 15, 1992,
Atty. Loyola pointed out that the alleged deed of sale with
assumption of mortgage was not registered with the Register of
Deeds and that the records of the HMDF show that the property is
owned by the Calingo spouses. He urged the Barrameda spouses
to confer with the petitioners to amicably settle the controversy.8
On November 9, 1992, respondents Barrameda found a Notice of
Sheriffs Sale posted on their front gate, announcing the auction
sale of their house and lot on December 3, 1992 at 10:00 in the
morning.9
On November 20, 1992, pursuant to Rule 39, Section 17 of the
Revised Rules of Court, respondents Barrameda served a Notice of
Third Party Claim upon Sheriff Manuel C. Dolor, accompanied by
their affidavit of title.
On December 2, 1992, respondents Barrameda filed with the
Regional Trial Court of Makati a petition for quieting of title with
prayer for preliminary injunction. The petition prayed, among
others, that the execution sale of the property be enjoined, the
notice of levy and attachment inscribed on the certificate of title
be cancelled, and that respondents Barrameda be declared the
lawful and sole owners of the property in question.10
The trial court ruled in favor of herein petitioners and dismissed
respondents Barramedas petition for quieting of title. It ruled
that the annotation of respondents Barramedas adverse claim at
the back of the certificate of title was insufficient to establish their
claim over the property. It said that respondents Barrameda, as
buyers of the property, should have registered the title in their
names. Furthermore, respondents Barramedas adverse claim had
lost its efficacy after the lapse of thirty days in accordance with
the provisions of the Land Registration Act. The trial court also
found that there was collusion between respondents Barrameda
and respondents Calingo to transfer the property to defraud third
parties who may have a claim against the Calingos.11
The Court of Appeals, however, reversed the decision of the trial
court. Citing the ruling in Sajonas v. Court of Appeals,12 the
appellate court held that respondents Barramedas adverse claim
inscribed on the certificate of title was still effective at the time
the property was levied on execution. It said:
Therefore, the disputed inscription of adverse claim on
TCT No. 83612/57286 was still in effect on July 13,
1992 when the Rodriguezes caused the annotation of
the notice of levy on execution thereto. Consequently,
they are charged with knowledge that the property
sought to be levied upon on execution was
encumbered by an interest the same as or better than
that of the registered owner thereof. Such notice of
levy cannot prevail over the existing adverse claim
inscribed on the certificate of title in favor of the
Barramedas. xxx
The court held, therefore, that the notice of levy could not prevail
over respondents Barramedas adverse claim.
Petitioners moved for a reconsideration of the appellate courts
ruling, but the motion was denied.
Hence, this petition. Petitioners essentially argue that the remedy
of a petition for quieting of title was not available to respondents
Barrameda as they did not have a valid title to the property in
question; that the affidavit of adverse claim inscribed by
respondents Barrameda at the back of the certificate of title was
not sufficient to establish their claim to the property; and there
was collusion between respondents Barrameda and respondents
Calingo.
The principal issue that needs to be resolved in this case is
whether respondents Barramedas adverse claim on the property
should prevail over the levy on execution issued by another court
in satisfaction of a judgment against respondents Calingo.
We hold that it cannot.
Respondents Barrameda anchor their claim on the property on
the deed of sale with assumption of mortgage executed by them
and respondents Calingo on April 27, 1992. The Property
Registration Decree13 requires that such document be registered
with the Register of Deeds in order to be binding on third persons.
The law provides:
Sec. 51. Conveyance and other dealings by registered
owner. An owner of registered land may convey,
mortgage, lease, charge or otherwise deal with the
same in accordance with existing laws. He may use
such forms of deeds, mortgages, leases or other
voluntary instruments as are sufficient in law. But no
deed, mortgage, lease, or other voluntary instrument,
except a will purporting to convey or affect registered
land shall take effect as a conveyance or bind the
land, but shall operate only as a contract between the
parties and as evidence of authority to the Register of
Deeds to make registration.
The act of registration shall be the operative act to
convey or affect the land insofar as third persons are
concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register
of Deeds for the province or city where the land lies.
(emphasis supplied)
It is admitted in this case that the deed of sale with assumption of
mortgage was not registered, but instead, respondents
Barrameda filed an affidavit of adverse claim with the Register of
Deeds. The question now is whether the adverse claim is
sufficient to bind third parties such as herein petitioners.
In L.P. Leviste and Company, Inc. v. Noblejas,14 we explained
when an inscription of an adverse claim is sufficient to affect third
parties, thus:
The basis of respondent Villanuevas adverse claim was
an agreement to sell executed in her favor by Garcia
Realty. An agreement to sell is a voluntary instrument
as it is a wilful act of the registered owner. As such
voluntary instrument, Section 50 of Act No. 496 [now
Presidential Decree No. 1529] expressly provides that
the act of registration shall be the operative act to
convey and affect the land. And Section 55 of the same
Act requires the presentation of the owners duplicate
 certificate of title for the registration of any deed or property, before parting with his money, is expected to first
voluntary instrument. As the agreement to sell ensure that the title to the property he is about to purchase is
involves an interest less than an estate in fee simple, clear and free from any liabilities and that the sellers have the
the same should have been registered by filing it with proper authority to deal on the property.
the Register of Deeds who, in turn, makes a brief
memorandum thereof upon the original and owners
Again, we stress that the annotation of an adverse claim is a
duplicate certificate of title. The reason for requiring
measure designed to protect the interest of a person over a piece
the production of the owners duplicate certificate in
of property where the registration of such interest or right is not
the registration of a voluntary instrument is that, being
otherwise provided for by the law on registration of real
a wilful act of the registered owner, it is to be
property. Section 70 of Presidential Decree No. 1529 is clear:
presumed that he is interested in registering the
instrument and would willingly surrender, present or
produce his duplicate certificate of title to the Register Sec. 70. Adverse claim. Whoever claims any part or
of Deeds in order to accomplish such interest in registered land adverse to the registered
registration. However, where the owner refuses to owner, arising subsequent to the date of the original
surrender the duplicate certificate for the annotation registration, may, if no other provision is made in this
of the voluntary instrument, the grantee may file with Decree for registering the same, make a statement in
the Register of Deeds a statement setting forth his writing setting forth his alleged right or interest, and
adverse claim, as provided for in Section 110 of Act how or under whom acquired, a reference to the
No. 496. In such a case, the annotation of the number of the certificate of title of the registered
instrument upon the entry book is sufficient to affect owner, the name of the registered owner, and a
the real estate to which it relates, although Section 72 description of the land in which the right or interest is
of Act No. 496 imposes upon the Register of Deeds the claimed. xxx
duty to require the production by the [r]egistered
owner of his duplicate certificate for the inscription of The deed of sale with assumption of mortgage executed by
the adverse claim. The annotation of an adverse claim respondents Calingo and Barrameda is a registrable instrument. In
is a measure designed to protect the interest of a order to bind third parties, it must be registered with the Office of
person over a piece of real property where the the Register of Deeds. It was not shown in this case that there was
registration of such interest or right is not otherwise justifiable reason why the deed could not be registered. Hence,
provided for by the Land Registration Act, and serves the remedy of adverse claim cannot substitute for registration.
as a notice and warning to third parties dealing with
said property that someone is claiming an interest on
the same or a better right than the registered owner IN VIEW WHEREOF, the petition is GRANTED. The assailed
thereof. (emphases supplied) decision and resolution of the Court of Appeals are SET ASIDE and
the decision of the Regional Trial Court, Makati in Civil Case No.
92-3524 is REINSTATED. No cost. SO ORDERED.
In the case at bar, the reason given for the non-registration of the
deed of sale with assumption of mortgage was that the owners
duplicate copy of the certificate of title was in the possession of
HMDF. It was not shown, however, that either respondents
Barrameda or respondents Calingo exerted any effort to retrieve
the owners duplicate copy from the HMDF for the purpose of
registering the deed of sale with assumption of mortgage. In fact,
G.R. No. 187824 November 17, 2010
the parties did not even seek to obtain the consent of, much less
inform, the HMDF of the sale of the property. This, despite the
provision in the contract of mortgage prohibiting the mortgagor FILINVEST DEVELOPMENT CORPORATION, Petitioner,
(respondents Calingo) from selling or disposing the property vs.
without the written consent of the mortgagee.15 Respondents GOLDEN HAVEN MEMORIAL PARK, INC., Respondent.
Calingo, as party to the contract of mortgage, are charged with
the knowledge of such provision and are bound to comply x - - - - - - - - - - - - - - - - - - - - - - -x
therewith. Apparently, there was haste in disposing the property
that respondents Calingo informed HMDF of the sale only on
October 2, 1992 when they served a copy of their letter to said G.R. No. 188265
office regarding the transfer of the property to respondents
Barrameda. There was no reason for the parties failure to seek GOLDEN HAVEN MEMORIAL PARK, INC. Petitioner,
the approval of the HMDF to the sale as it appears from the letter vs.
of respondent Angelica Paez-Barrameda to HMDF that they were FILINVEST DEVELOPMENT CORPORATION, Respondent.
ready to pay in full the balance of the loan plus interest. What is
more suspect is that the judgment against respondents Calingo
ordering them to pay the petitioners the sum of P1,159,355.90 DECISION
was rendered on January 28, 1992, before the sale of the property
on April 27, 1992. We also find it unsettling that respondents ABAD, J.:
Barrameda, without any reservation or inquiry, readily remitted to
respondents Calingo the full payment for the property on August
These cases are about which of two real estate developers, both
21, 1992 despite knowledge of the levy on execution over the
buyers of the same lands, acted in good faith and has a better title
property in July of the same year. Any prudent buyer of real
to the same.
The Facts and the Case
Petronila Yap (Yap), Victoriano and Policarpio Vivar (the Vivars),
Benjamin Cruz (Cruz), Juan Aquino (Aquino), Gideon Corpuz
(Corpuz), and Francisco Sobremesana (Sobremesana), and some
other relatives inherited a parcel of land in Las Pias City covered
by Transfer Certificate of Title (TCT) 67462 RT-1. Subsequently,
the heirs had the land divided into 13 lots and, in a judicial
partition, the court distributed four of the lots as follows: a) Lots 1
and 12 to Aquino; b) Lot 2 to Corpuz and Sobremesana; and (c)
Lot 6 to Yap, Cruz, and the Vivars. The other lots were distributed
to the other heirs.
On March 6, 1989 Yap, acting for herself and for Cruz and the
Vivars, executed an agreement to sell Lot 6 in favor of Golden
Haven Memorial Park, Inc. (GHM), payable in three installments.
On July 31, 1989 another heir, Aquino, acting for himself and for
Corpuz and Sobremesana, also executed an agreement to sell Lots
1, 2, and 12 in favor of GHM, payable in the same manner. In both
instances, GHM paid the first installment upon execution of the
contract.
On August 4, 1989 GHM caused to be annotated a Notice of
Adverse Claim on TCT 67462 RT-1. On September 20, 1989 the
sellers of the four lots wrote GHM that they were still working on
the titling of the lots in their names and wanted to know if GHM
was still interested in proceeding with their agreements. GHM
replied in the affirmative on September 21, 1989 and said that it
was just waiting for the sellers titles so it can pay the second
installments.
Sometime in August of 1989, Filinvest Development Corporation
(Filinvest) applied for the transfer in its name of the titles over
Lots 2, 4, and 5 but the Las Pias Register of Deeds declined its
application. Upon inquiry, Filinvest learned that Lot 8, a lot
belonging to some other heir or heirs and covered by the same
mother title, had been sold to Household Development
Corporation (HDC), a sister company of GHM, and HDC held the
owners duplicate copy of that title. Filinvest immediately filed
against HDC a petition for the surrender and cancellation of the
co-owners duplicate copy of TCT 67462 RT-1. Filinvest alleged
that it bought Lots 1, 2, 6, and 12 of the property from their
respective owners as evidenced by three deeds of absolute sale in
its favor dated September 10, November 18, and December 29,
1989 and that Filinvest was entitled to the registrations of such
sales.
On January 14, 1991 GHM filed against the sellers and Filinvest a
complaint for the annulment of the deeds of sale issued in the
latters favor before the Regional Trial Court (RTC) of Las Pias
City in Civil Case 91-098. On March 16, 2006 the RTC rendered a
decision after trial, declaring the contracts to sell executed by
some of the heirs in GHMs favor valid and enforceable and the
sale in favor of Filinvest null and void. Only Filinvest appealed
among the defendants.
On November 25, 2008 the Court of Appeals (CA) affirmed the
RTC decision with respect to the validity of the contract to sell Lot
6 in GHMs favor. But the CA declared the contracts to sell Lots 1,
2, and 12 in GHMs favor void and the sale of the same lots in
favor of Filinvest valid.
Both parties filed their petitions for review before this Court,
Filinvest in G.R. 187824, and GHM in G.R. 188265.
The Issue Presented
The issue presented in these cases is whether or not the contracts
to sell that the sellers executed in GHMs favor covering the same
lots sold to Filinvest are valid and enforceable.
The Courts Ruling
To prove good faith, the rule is that the buyer of registered land
needs only show that he relied on the title that covers the
property. But this is true only when, at the time of the sale, the
buyer was unaware of any adverse claim to the
property.1 Otherwise, the law requires the buyer to exercise a
higher degree of diligence before proceeding with his purchase.
He must examine not only the certificate of title, but also the
sellers right and capacity to transfer any interest in the
property.2 In such a situation, the buyer must show that he
exercised reasonable precaution by inquiring beyond the four
corners of the title.3 Failing in these, he may be deemed a buyer in
bad faith.4
Here, Filinvest was on notice that GHM had caused to be
annotated on TCT 67462 RT-1, the mother title, as early as August
4, 1989 a notice of adverse claim covering Lot 6. This
notwithstanding, Filinvest still proceeded to buy Lots 1, 2, 6, and
12 on September 10, November 18, and December 29, 1989.
Filinvest of course contends that, although the title carried a
notice of adverse claim, that notice was only with respect to seller
Yaps interest in Lot 6 and it did not affect Lots 1, 2, 12, and the
remaining interests in Lot 6. The Court disagrees.
The annotation of an adverse claim is intended to protect the
claimants interest in the property.1avvphi1 The notice is a
warning to third parties dealing with the property that someone
claims an interest in it or asserts a better right than the registered
owner.5 Such notice constitutes, by operation of law, notice to the
whole world.6 Here, although the notice of adverse claim
pertained to only one lot and Filinvest wanted to acquire interest
in some other lots under the same title, the notice served as
warning to it that one of the owners was engaged in double
selling.
What is more, upon inquiry with the Register of Deeds of Las
Pias, Filinvest also learned that the heirs of Andres Aldana sold
Lot 8 to HDC and turned over the co-owners duplicate copy of
TCT 67462 RT-1 to that company which had since then kept the
title. Filinvest (referred to below as FDC) admits this fact in its
petition,7 thus:
Sometime in August 1989, FDC applied with the Register of Deeds
of Las Pias for the transfer and registration of Lots 2, 4, and 5 in
its name and surrendered the co-owners duplicate copy of TCT
No. (67462) RT-1 given to it by the Vivar family, but the Register of
Deeds of Las Pias City refused to do the transfer of title in the
name of FDC and instead demanded from FDC to surrender as
well the other co-owner's duplicate copy of TCT No. (67462) RT-1
which was issued to the heirs of Andres Aldana. Upon further
inquiry, FDC came to know that the heirs of Andres Aldana sold
Lot 8 and delivered their co-owner's duplicate copy of TCT No.
(67462) RT-1 to Household Development Corporation, a sister
company of respondent GHMPI. FDC made representations to
Household Development Corporation for the surrender of said co-
owner's duplicate copy of TCT No. (67462) RT-1 to the Register of
Deeds of Las Pias City, but Household Development Corporation
refused to do so.

Filinvests knowledge that GHM, a competitor, had bought Lot 6 in

which Filinvest was interested, that GHM had annotated an
adverse claim to that Lot 6, and that GHM had physical possession
of the title, should have put Filinvest on its toes regarding the
prospects it faced if it bought the other lots covered by the title in
question. Filinvest should have investigated the true status of Lots
1, 2, 6, and 12 by asking GHM the size and shape of its interest in
the lands covered by the same title, especially since both
companies were engaged in the business of developing lands. One
who has knowledge of facts which should have put him upon such FLOR MARTINEZ, represented by MACARIO MARTINEZ, authorized G.R. No. 16
inquiry and investigation cannot claim that he has acquired title to representative and Attorney-in-Fact,
the property in good faith as against the true owner of the land or
of an interest in it.8 Petitioner,
Present:
The Court upholds the validity of the contracts between GHM and
its sellers. As the trial court aptly observed, GHM entered into
valid contracts with its sellers but the latter simply and knowingly
refused without just cause to honor their obligations. The sellers CARPIO,* J.,
apparently had a sudden change of heart when they found out
that Filinvest was willing to pay more. CORONA, J., Ch
- versus -
As to the award of exemplary damages, the Court sustains the CA VELASCO, JR.,
ruling. This species of damages is allowed only in addition to
moral damages such that exemplary damages cannot be awarded NACHURA,
unless the claimant first establishes a clear right to moral
damages.9 Here, since GHM failed to prove that it is entitled to
PERALTA, JJ
moral damages, the RTCs award of exemplary damages had no
basis. But the grant of attorneys fees is proper. As the RTC noted,
this case has been pending since 1991, or for 19 years now. GHM
was forced to litigate and incur expenses in order to protect its ERNESTO G. GARCIA and EDILBERTO M. BRUA,
rights and interests. Promulgate
Respondents.
WHEREFORE, the Court GRANTS the petition in G.R. 188265 and
DISMISSES the petition in G.R. 187824. The Court likewise
REVERSES and SETS ASIDE the decision of the Court of Appeals Februar
dated November 25, 2008 in CA-G.R. CV 89448, and REINSTATES
the decision of the Regional Trial Court in Civil Case 91-098 dated
March 16, 2006 with the MODIFICATION that the award of x--------------------------------------------------------------------------------------
exemplary damages is DELETED.
---x
SO ORDERED.

DECISION

PERALTA, J.:

Before us is a special civil action for certiorari under Rule 65 of the

Rules of Court to annul and set aside the Decision[1] dated August

12, 2004 and the Resolution[2] dated November 18, 2004 of the

Court of Appeals (CA) in CA-G.R. CV No. 61591, which reversed

and set aside the Decision[3] dated April 15, 1998 and
Order[4] dated August 11, 1998 of the Regional Trial Court (RTC) of of P705,000.00. In the same deed, it was stated that the subject

Pasig, Branch 267, in Special Civil Action No. 574. property was only a partial payment of respondent

Brua's mortgage indebtedness to respondent Garcia, which he

The factual antecedents are as follows:
could no longer redeem from the latter. Respondent Garcia then

registered the Deed of Sale with the Registry of Deeds of Rizal on

Respondent Edilberto Brua was the registered owner of a parcel
October 24 1991, and a new TCT No. 5204[10] was issued in the
of land located in Mandaluyong, Rizal, covered by Transfer
names of respondent Garcia and his wife. However, the
Certificate of Title (TCT) No. 346026 of the Registry of Deeds of
annotations at the back of the previous title were carried over to
Rizal, which is the subject matter of this case. The property was
the new title, to wit: Entry No. 56837, a Notice of Levy on
first mortgaged to the Government Service Insurance System
Attachment and/or Levy inscribed on January 8, 1981;[11] Entry
(GSIS), and such mortgage was annotated at the back of TCT No.
No. 2881 showing a Notice of Levy on Execution in favor
346026 as Entry No. 91370, inscribed on June 5, 1974.[5] On
of petitioner Flor Martinez, which was inscribed on July 11,
February 5, 1980,respondent Brua obtained a loan from his
1988;[12] Entry No. 3706, which was a Certificate of Sale in favor of
brother-in-law, respondent Ernesto Garcia, in the amount of One
petitioner inscribed on September 2, 1988;[13] Entry
Hundred Fifty Thousand Pesos (P150,000.00) and, to secure the
No. 72854, which was a Notice of Levy on Execution in favor
payment of said loan, respondent Brua mortgaged the
of Pilipinas Bank inscribed on December 8, 1981;[14] and Entry No.
subjectproperty to respondent Garcia, as evidenced by a Deed of
16611 inscribed on October 24, 1991, which was the cancellation
Real Estate Mortgage[6] executed in respondent Garcia's
of respondent Brua's mortgage with GSIS.[15]
favor. Since the title to the subject property was in the possession

of the GSIS and respondent Garcia could not register the Deed of It appeared that the annotations found at the back of the title of

Real Estate Mortgage, he then executed an Affidavit of Adverse the subject property in favor of petitioner, i.e., Notice of Levy on

Claim[7] and registered it with the Registry of Deeds of Rizal on Attachment and/or Levy, Notice of Levy on Execution, and

June 23, 1980 as Entry No. 49853/T-346026,[8] which remained Certificate of Sale, were all made in connection with petitioner's

uncanceled up to this time. action for Collection of Sum of Money, which she filed against

respondent Brua at the RTC of Makati City, Branch 60, docketed

Sometime in October 1991, respondent Brua requested
as Civil Case No. 39633. In that case, a decision was rendered in
respondent Garcia to pay the former's loan with the GSIS, so that
favor of petitioner, where the RTC ordered respondent Brua to
the title to the subject property would be released to the latter.
pay the former the amount of P244,594.10, representing the
Respondent Garcia then paid GSIS the amount of P400,000.00
value of the dishonored checks plus 12% interest per annum as
and, thus, the title to the subject property was released to him.
damages and the premium paid by petitioner for the attachment

bond. The decision became final and executory as respondent

Brua failed to appeal the same, and a notice of levy on execution

On October 22, 1991, a Deed of Absolute Sale[9] was
was issued. A public auction was subsequently conducted, where
executed between respondents Garcia and Brua over the subject
the subject property was awarded to petitioner as the sole bidder
property, where respondent Brua sold the property in the amount
in the amount of P10,000.00, and a Certificate of Sale was issued In so ruling, the RTC found that the adverse claim which

in her favor. respondent Garcia caused to be annotated on the previous title of

the subject property, i.e, TCT No. 346026, on June 23, 1980 was
The annotation of Pilipinas Bank's Notice of Levy on Execution
predicated on his interest as a mortgagee of a loan
annotated as Entry No. 72854 on the title of the subject property
of P150,000.00, which he extended to respondent Brua; that
was by virtue of a civil case filed by Filipinas Manufacturers Bank,
respondent Garcia's adverse interest was merely that of a second
now known as Pilipinas Bank, against respondent Brua.
mortgagee, as he was not yet the purchaser of the subject

On February 9, 1994, respondents Garcia and Brua filed with the property as of said date; that when the judicial liens, i.e., Notice of

RTC of Pasig, Branch 267, an Action to Quiet Title, initially Levy on Attachment and/or Levy and Notice of Levy on Execution,

against petitioner due to the encumbrances/liens annotated on were caused to be registered by petitioner on respondent Brua's

respondent Garcia's new title. They contended that these title on January 8, 1981 and July 8, 1998, respectively, by virtue

encumbrances/liens were registered subsequent to the ofpetitioner being adjudged judgment creditor by Branch 60 of

annotation of respondent Garcia's adverse claim made in 1980, RTC Makati, respondent Garcia's claim became inferior to that

and prayed that these be canceled. Subsequently, the complaint of petitioner. The RTC said that respondent Garcia's inaction to

was amended to include Pilipinas Bank as an additional preserve his adverse claim as a second mortgagee, which was

defendant. Petitioner and Pilipinas Bank filed their respective inscribed on June 23, 1980, and his sudden decision to redeem

Answers thereto. and purchase the subject property from the GSIS in October 1991

-- when petitioner's Notice of Levy on Attachment and/or Levy,

Trial thereafter ensued.
Notice of Levy on Execution and Certificate of Sale were already

On April 15, 1998, the RTC rendered its decision dismissing inscribed at the back of respondent Brua's title -- showed bad

respondent Garcia's action for quieting of title, the dispositive faith on the part of respondent Garcia; that respondent Brua did

portion of which reads: not even testify or participate in the case, except when he was

WHEREFORE, impleaded as a plaintiff in the case. The RTC did not give credit to
PREMISES CONSIDERED, the instant
respondent Garcia's claim that he and respondent Brua had no
complaint is hereby dismissed for lack of
merit and judgment is hereby rendered in prior knowledge of the occurrence of a public auction and the
favor of defendants Flor Martinez and
Pilipinas Bank as against plaintiffs Ernesto consequent annotation of the certificate of sale, and found
Garcia and Edilberto Brua who are further
respondent Garcia to be a buyer in bad faith of the subject
directed to pay both defendants attorney's
fees in the amount of P50,000.00 each. property.

Accordingly, the judicial

inscriptions particularly, Entry No. 3706/T-
346026, annotation of certificate of sale
and Entry No. 72854/T-346026 are held to
The RTC also ruled that the Notice of Levy on Execution, which
be valid, subsisting liens which do not
constitute a cloud on Transfer Certificate of was annotated on December 8, 1981 as Entry No. 72854 on
Title No. 5204.[16]
respondent Brua's title arising from Civil Case No. 7262

entitled Pilipinas Bank v. Edilberto Brua, was a valid levy on the

subject property in favor of Pilipinas Bank. The levy could not be Affidavit of Adverse Claim on June 23, 1980, annotated it on the

canceled, as this would impair the interest of the bank which had title of the subject property under Entry No. 49853 and it has

been decided upon by a co-equal court. The RTC found that the remained uncanceled up to this time; that such adverse claim was

sale between respondents appeared to be tainted with bad faith, registered prior to the inscription of the Certificate of Sale in favor

which constrained petitioner and Pilipinas Bank from engaging the of petitioner under Entry No. 3706 and Pilipinas Bank's Notice of

services of lawyers; thus, the award of attorney's fees in the Levy on Execution under Entry No. 72854; that the prior

latter's favor. registration of respondent Garcia's adverse claim effectively gave

petitioner and Pilipinas Bank notice of the former's right to the

subject property and, thus, petitioner was deemed to have

Respondents' motion for reconsideration was denied by the RTC knowledge of respondent Garcia's claim and could not be

on August 11, 1998. considered as a buyer in good faith at the time she purchased the

subject property in the public auction; that petitioner could not

Respondents filed their appeal with the CA. However, respondent
claim that she was a purchaser in good faith, since respondent
Brua failed to file his appellant's brief; thus, his appeal was
Garcia's adverse claim was entered on June 23, 1980, eight years
considered abandoned and dismissed. Petitioner and Pilipinas
ahead of petitioner's Certificate of Sale on September 2, 1988;
Bank filed their respective appellees' briefs.
that when the Notice of Levy on Execution in favor of Pilipinas

On August 12, 2004, the CA reversed and set aside the RTC Bank was annotated on respondent Brua's title, the sheriff who

decision, the dispositive portion of which reads: caused the annotation was charged with knowledge that the

WHEREFORE, the appealed Decision dated property sought to be levied upon on execution was encumbered
April 15, 1998 is REVERSED and SET
by an interest, which was the same if not better than that of the
ASIDE. Granting the instant appeal, Entry
No. 72854 (Notice of Levy on Execution in registered owner thereof; and that such notice of levy could not
favor of Pilipinas Bank), Entry No. 2881
(Notice of Levy on Execution in favor of Flor prevail over the existing adverse claim of respondent Garcia
Martinez) and Entry No. 3706 (Certificate of
inscribed on the title as can be deduced from Section 12, Rule 39
Sale in favor of Flor Martinez) inscribed in
TCT No. 346026 and carried over to TCT No. of the Rules of Court.
5204, are hereby CANCELLED.[17]

The CA found that the RTC erred in concluding that respondent

The CA said that a subsequent sale of property covered by a
Garcia was a purchaser in bad faith, since his adverse claim was
certificate of title cannot prevail over an adverse claim, duly
entered in respondent Brua's title in 1980, and respondent Garcia
sworn to and annotated on the certificate of title previous to the
could not have foretold at the time he caused such annotation of
sale; that while one who buys a property from the registered
adverse claim that petitioner would purchase the same property
owner need not have to look behind the title, he is nevertheless
eight years thereafter; and that while good faith is presumed, bad
bound by the liens and encumbrances annotated thereon; and,
faith must be established by competent proof by the party
thus, one who buys without checking the vendor's title takes all
alleging the same; and, thus, in the absence of respondent
the risks and losses consequent to such failure. The CA found that

in order to protect his interest, respondent Garcia executed an

Garcia's bad faith, he is deemed to be a purchaser in good faith, respondent Brua could no longer discharge the GSIS obligation;

and his interest in the property must not be disturbed. and to avoid the foreclosure of the property by the GSIS,

respondent Brua asked Garcia to redeem it; that respondent

The CA also found that a Notice of Adverse Claim remains valid
Garcia's adverse claim in 1980 was not as a vendee of the
even after the lapse of 30 days, as provided for in Sec. 70 of
property like in Sajonas, but merely as a mortgagee.
Presidential Decree No. (PD) 1529 pursuant to our ruling

in Sajonas v. CA; that since no petition was filed by petitioner for

the cancellation of respondent Garcia's Notice of Adverse Claim,

Petitioner admits that respondent Garcia, as a mortgagee on the
the adverse claim subsisted and his rights over the subject
basis of which an adverse claim was inscribed on the title of the
property must consequently be upheld.
subject property, is protected by Sec. 12, Rule 39 of the Rules of

Petitioners motion for reconsideration was denied by the CA in a Court; and, thus, petitioner knows that she is obliged as a vendee

Resolution dated November 18, 2004. in the public sale to pay liens and encumbrances then existing at

the time of the sale on September 2, 1988, which necessarily

included the adverse claim of respondent Garcia in the amount

Petitioner is now before us via a petition for certiorari under Rule of P150,000.00.

65, alleging grave abuse of discretion amounting to lack or excess

In his Comment, respondent Garcia claims that the petition faces
of jurisdiction committed by the CA in issuing its assailed decision
outright dismissal, since the appropriate remedy of the petitioner
and resolution.
should have been a petition for review under Rule 45 which had

Petitioner contends that respondent Garcia's adverse claim is already lapsed; that when the CAreversed the RTC decision, such

nothing but a notice that he has an interest adverse to that of action did not constitute grave abuse of discretion since it had

respondent Brua to the extent of P150,000.00, which was the legal basis; that any lien or adverse claim earlier inscribed prevails

amount of the loan secured by a Deed of Real Estate Mortgage over those liens or adverse claims inscribed subsequent thereto.

executed by respondent Brua in favor of respondent Garcia; that

Respondent Brua did not file his comment. Thus, we dispensed
the adverse claim cannot be said to be superior to a final sale
with the filing of the same in a Resolution dated June 19, 2006.
conducted by the sheriff by authority of the court pursuant to a

judgment that has attained finality; that Sajonas v. CA, on which Petitioner filed her Reply, arguing that a petition

the CA anchored its decision, differs from this case, since the for certiorari may be availed of where appeal is inadequate and

adverse claim made in the title by therein petitioner Sajonas was ineffectual.

by virtue of a contract to sell; that unlike in this case, respondent

The parties submitted their respective memoranda as required in
Garcia caused the annotation of his adverse claim as a mortgagee
Our Resolution dated August 30, 2006.
of respondent Brua in the amount of P150,000.00 in 1980; and

respondent Garcia's payment of the GSIS loan in 1991, upon the We dismiss the petition.

request of respondent Brua, was presumably for the reason that

Petitioner should have filed a petition for review under Rule 45 a substitute for a lost appeal.[22] Certiorari will not be a cure for

of the Rules of Court instead of a petition for certiorari under Rule failure to timely file a petition for review on certiorari under Rule

65, since she is assailing the CA decision and resolution which are 45.[23]

final judgments. Rule 45 clearly provides that decisions, final While there are instances where the extraordinary remedy

orders or resolutions of the CA in any case, i.e., regardless of the of certiorari may be resorted to despite the availability of an

nature of the action or proceedings involved, may be appealed to appeal, the long line of decisions denying the special civil action

us by filing a petition for review, which is just a continuation of for certiorari, either before appeal was availed of or in instances

the appellate process over the original case.[18] And the petition where the appeal period had lapsed, far outnumber the instances

for review must be filed within fifteen (15) days from notice of the where certiorari was given due course.[24] The few significant

judgment or final order or resolution appealed from, or of the exceptions are: (1) when public welfare and the advancement of

denial of petitioner's motion for a new trial or reconsideration public policy dictate; (2) when the broader interests of justice so

filed in due time after notice of the judgment.[19] require; (3) when the writs issued are null; (4) when the

questioned order amounts to an oppressive exercise of judicial

In this case, petitioner received a copy of the CA Resolution authority,[25] which we find to be not present in this case. Notably,

denying her motion for reconsideration on November 24, 2004; petitioner did not even fail to advance an explanation why appeal

and, thus, under Rule 45, she has 15 days from receipt of such was not availed of, nor was there any showing that the issue

resolution, or until December 9, 2004, to file a petition for raised in the petition for certiorari could not be raised on appeal.

review. However, petitioner did not file a petition for review; Concomitant to a liberal application of the rules of procedure

instead, she filed a petition for certiorari under Rule 65 on January should be an effort on the part of the party invoking liberality to

24, 2005.[20] Hence, the CA decision and resolution have already adequately explain his failure to abide by the rules.[26]

attained finality, and petitioner has lost her right to appeal.

A petition for certiorari under Rule 65 is proper if a tribunal, a In fact, the argument raised by petitioner, i.e., that the Court of

board or an officer exercising judicial or quasi-judicial functions Appeals had no legal authority to vary the findings of the trial

has acted without or in excess of jurisdiction or with grave abuse court and substitute its own conclusion, which were patently

of discretion amounting to lack or excess of jurisdiction and there contrary to the trial court's findings, and conclusion, relates to

is no appeal, or any plain, speedy and adequate remedy in the the wisdom and soundness of the assailed CA decision and

ordinary course of law.[21] In this case, petitioner had the remedy resolution. Where the issue or question involved affects the

of appeal, and it was the speedy and adequate remedy in the wisdom or legal soundness of the decision not the jurisdiction of

ordinary course of law. Thus, a special civil action the court to render said decision the same is beyond the

for certiorari cannot be used as a substitute for an appeal that the province of a special civil action for certiorari.[27] Erroneous

petitioner has already lost. Certiorari cannot be allowed when a findings and conclusions do not render the appellate court

party to a case fails to appeal a judgment to the proper forum vulnerable to the corrective writ of certiorari, for where the court

despite the availability of that remedy, certiorari not being has jurisdiction over the case, even if its findings are not correct,
these would, at the most, constitute errors of law and not abuse liens existing against the property at the time the execution lien

of discretion correctible by certiorari.[28] For if every error attached, such as real estate mortgages.[33]

committed by the trial court or quasi-judicial agency were to be Respondent Garcia's adverse claim, which refers to the deed of

the proper subject of review by certiorari, then trial would never mortgage executed by respondent Brua in his favor, was

end, and the dockets of appellate courts would be clogged annotated on respondent Brua's title registered with the Registry

beyond measure.[29] of Deeds of Rizal on June 23, 1980 as Entry No. 49853. The

adverse claim was already existing when the Notice of Levy on

Even if we consider this petition for certiorari under Rule 65, it Execution, as well as the Certificate of Sale in favor of petitioner,

must be shown that the CA committed grave abuse of discretion was inscribed on July 11, 1988 and September 2, 1988,

equivalent to lack or excess of jurisdiction, and not mere errors respectively; and, hence, the adverse claim is sufficient to

of judgment, for the petition to be granted.[30] As we said, constitute constructive notice to petitioner regarding the subject

certiorari is not a remedy for errors of judgment, which are property. When petitioner registered her Notice of Levy on

correctible by appeal. By grave abuse of discretion is meant such Execution on the title of the subject property, she was charged

capricious and whimsical exercise of judgment as is equivalent to with the knowledge that the subject property sought to be levied

lack of jurisdiction, and mere abuse of discretion is not enough -- upon on execution was encumbered by an interest the same as or

it must be grave.[31] better than that of the registered owner thereof.[34] Thus, no

grave abuse of discretion was committed by the CA when it held

Petitioner contends that the adverse claim of respondent Garcia
that the notice of levy and subsequent sale of the subject
inscribed on the title of the subject property is but a notice that
property could not prevail over respondent Garcia's existing
the latter has an interest adverse to respondent Brua's title, to the
adverse claim inscribed on respondent Brua's certificate of title.
extent of P150,000.00 secured by a real estate mortgage, and

such adverse claim cannot be considered superior to that of a

The annotation of an adverse claim is a measure designed to
final sale conducted by the sheriff by virtue of a court judgment
protect the interest of a person over a piece of real property,
that has attained finality.
where the registration of such interest or right is not otherwise
Sec. 12, Rule 39 of the Rules of Court provides:
provided for by the Land Registration Act or Act No. 496 (now P.D.
SEC. 12. Effect of levy on execution as to
third persons. The levy on execution shall No.1529 or the Property Registration Decree), and serves a
create a lien in favor of the judgment
obligee over the right, title and interest of warning to third parties dealing with said property that someone
the judgment obligor in such property at
the time of the levy, subject to liens and is claiming an interest on the same or a better right than that of
encumbrances then existing.
the registered owner thereof.[35]

Clearly, the levy does not make the judgment creditor the owner
Petitioner cannot be considered as a buyer in good faith. A
of the property levied upon. He merely obtains a lien.[32] Such levy
purchaser in good faith and for value is one who buys the
on execution is subject and subordinate to all valid claims and
property of another without notice that some other person has a

right to or interest in such property and pays a full and fair price
for the same at the time of such purchase, or before he has notice execution on the title; if the adverse claim was still in effect, then

of the claims or interest of some other person in the respondent therein was charged with the knowledge of pre-

property.[36] Here, petitioner admitted on cross-examination that existing interest over the subject property and, thus, the

when she registered her notice of attachment in 1981 and the Sajonases were entitled to the cancellation of the notice of levy

levy on execution on July 11, 1988, she already saw respondent inscribed on the title.

Garcia's adverse claim inscribed on respondent Brua's title on

June 23, 1980.[37] We ruled in Sajonas that the inscription of the adverse claim on

the title of the subject property was still in effect on February 12,

Petitioner claims that Sajonas v. CA[38] is not applicable, since the 1985, when the sheriff annotated the notice of levy on execution

adverse claim registered on the title of the subject property made in favor of respondent therein; that respondent therein was

by the Sajonases in 1984 was by virtue of a contract to sell, so that charged with knowledge that the subject property sought to be

when the full purchase price was eventually paid on September 4, levied upon on execution was encumbered by an interest the

1984, a deed of sale of the property was subsequently executed same as or better than that of the registered owner thereof. We

and registered in the Registry of Deeds of Marikina on August 28, then said that such notice of levy could not prevail over the

1985; that when the respondent therein registered his notice levy existing adverse claim inscribed on the certificate of title in favor

on execution on February 12, 1985, such notice of levy could not of the Sajonases.

have precedence over the adverse claim, because there was no

more property to levy upon. In this case, however, respondent As in that case, the adverse claim of respondent Garcia based on

Garcia caused the annotation of his adverse claim only as a the Deed of Mortgage executed by respondent Brua over the

mortgagee of respondent Brua in the amount of P150,000.00 in subject land in the formers favor was existing when the Notice of

1980. The subsequent deed of sale was executed in 1991 between Levy on Execution was inscribed in favor of petitioner. Although

respondents Garcia and Brua after the former paid the latter's the deed of sale between respondents Brua and Garcia was done

loan from with the GSIS.When a new title was issued in after the notice of levy on execution and certificate of sale were

respondent Garcia's name, the notice of levy on execution and inscribed on the title, it was clearly stated in the deed that the

the certificate of sale were already annotated on the title of the subject property was only a partial payment for respondent Brua's

subject property; and, thus, the sale in favor of respondent Garcia mortgage indebtedness to respondent Garcia, which the former

could not prevail over the previous auction sale in petitioner's could no longer redeem from the latter. Thus, the sale of the

favor. subject property by respondent Brua to respondent Garcia was by

reason of respondent Brua's prior loan from respondent Garcia,

We are not impressed. which was secured by a mortgage on the subject property; and

this mortgage was registered and already existing on the title of

The issue posed in Sajonas was whether the adverse claim the subject property when the Notice of Levy on Execution and

inscribed on TCT No. N-190417 was still in force when private Certificate of Sale in favor of petitioner were inscribed thereon.

respondent therein caused the annotation of the notice of levy on

 n
Thus, petitioner's claim over the subject property must yield to d

the earlier encumbrance registered by respondent Garcia. G

A
R
C
WHEREFORE, the petition is DISMISSED. The Decision dated I
A
August 12, 2004 and Resolution dated November 18, 2004 of the ,

Court of Appeals in CA-G.R. CV No. 61591 are AFFIRMED. J

J
.

PHILIPPINE PRODUCERS
SO ORDERED. COOPERATIVE MARKETING
ASSOCIATION, INC.,
Respondent. Promulgated:

J
u
l
y

1
5
,
ESTANISLAO PADILLA, JR. G.R. No. 141256
2
Petitioner,
0
P
0
r
5
e
s
x----------------------------------------------x
e
n
t
DECISION
:
PANGANIBAN, J., Chairman
CORONA, J.:
S
AN
DO
VAL In implementing the involuntary transfer of title of real
-
GU
TIE property levied and sold on execution, is it enough for the
RRE
Z, executing party to file a motion with the court which rendered
- v e r s u s - CORONA,
C
Ajudgment, or does he need to file a separate action with the
R
P
Regional Trial Court?
I
O
This is a petition for review on certiorari[1] from a
M
O
Rdecision
A
L
E
S

a
of the Court of Appeals in CA-G.R. CV No. 53085,[2] and its 2654), all of the Bago Cadastre and registered in petitioners name,

resolution denying reconsideration,[3] both of which affirmed the were levied by virtue of that writ. On July 4, 1990, sheriff Renato

orders of the Regional Trial Court of Bacolod City, Branch 51.[4] T. Arimas auctioned off the lots to satisfy the judgment, with

respondent as the only bidder. On July 10, 1990, ex-officio

The undisputed facts of the case follow.[5]
provincial sheriff and clerk of court Antonio Arbis executed a

Petitioner and his wife are the registered owners of the

certificate of sale in favor of respondent. On August 13, 1990, the

following real properties: Lot Nos. 2904-A (covered by TCT No. T-

certificate of sale was recorded in the Register of Deeds.[12]

36090), 2312-C-5 (covered by TCT No. T-3849), and 2654 (covered

When petitioner failed to exercise his right of
by TCT No. T-8053), all situated in Bago City.
redemption within the 12-month period allowed by law, the

Respondent is a marketing cooperative which had a

court, on motion of respondent, ordered on February 5, 1992 the

money claim against petitioner.

issuance of a writ of possession for the sheriff to cause the

On April 24, 1987, respondent filed a civil case against delivery of the physical possession of the properties in favor of

respondent.[13]
petitioner for collection of a sum of money in the Regional Trial

Court of Bacolod City.[6] Despite receipt of summons on May 18,

On May 17, 1995, respondent filed a motion to direct

1987, petitioner (then defendant) opted not to file an

the Register of Deeds to issue new titles over the properties in its

answer.[7] On March 3, 1988, respondent (then plaintiff) moved to

name, alleging that the Register of Deeds (RD) of Bago City would

have petitioner-defendant declared in default, which the trial

not issue new titles (in respondents name) unless the owners

court granted on April 15, 1988.[8] Respondent presented its

copies were first surrendered to him. Respondent countered that

evidence on October 9, 1989.[9] On November 28, 1989, the trial

such surrender was impossible because this was an involuntary

court rendered a decision in respondents favor.[10] Petitioner was

sale and the owners copies were with petitioner.[14]

furnished a copy of this decision by mail on November 29, 1989

On July 3, 1995, the trial court issued an order granting

but, because of his failure to claim it, the copy was returned.[11]
the motion. In a subsequent order dated August 8, 1995, it denied

On May 31, 1990, the Court issued a writ of execution. petitioners motion for reconsideration. Petitioner appealed. Four

On June 4, 1990, the three lots (Lot 2904-A, Lot 2312-C-5 and Lot
years later, the Court of Appeals rendered the assailed decision (2) whether or not the motion in question is the proper

affirming the order of the trial court. remedy for cancelling petitioners certificates

Petitioner contends that respondents motion for the of title and new ones issued in its name.

RD to cancel the existing certificates of title and issue new ones in

On the first issue, we rule that the respondents right to
its name was in fact a real action and that the motion was
petition the court for the issuance of new certificates of title has
procedurally infirm because respondent did not furnish him a
not yet prescribed.
copy.[15] He also claims that under Section 6 of Rule 39 of the 1997

In Heirs of Blancaflor vs. Court of Appeals,[19] Sarmiento

Rules of Civil Procedure, the execution of the judgment was

Trading Corporation, predecessor-in-interest of the private

barred by prescription, given that the motion was filed more than

respondent Greater Manila Equipment Marketing Corporation,

5 years after the writ of execution was issued on March 23,

secured a writ of execution in 1968 by virtue of which it levied

1990.[16] He also argues that respondent failed to follow the

real property belonging to petitioners predecessor-in-interest,

correct procedure for the cancellation of a certificate of title and

Blancaflor. When the property was auctioned, Sarmiento Trading

the issuance of a new one, which is contained in Section 107 of PD

bid successfully and, in 1970, after the lapse of the one-year

1529.[17]

redemption period, consolidated its ownership over the lot.

In its comment,[18] respondent claims that the motion

Sarmiento Trading then filed a petition with the Court

dated May 15, 1995 to direct the RD to issue new certificates of

of First Instance to order the cancellation of Blancaflors title and

title was but a continuation of the series of events that began

the issuance of a new one in its name. In 1972, Sarmiento Trading

with the decision in its favor on November 28, 1989, and from

sold the lot to private respondent which, at the time, went by the
there, the auction of the properties and the issuance of a

name Sarmiento Distributors Corporation.

certificate of sale in 1990.

In 1988, the Deputy Register of Deeds of Iloilo wrote to

The two principal issues for consideration are: Blancaflor requesting him to surrender his owners duplicate copy

(1) whether or not respondents right to have new titles of the TCT. Blancaflor did not comply and the RD refused to issue

issued in its name is now barred by a new title. On May 25, 1989, private respondent filed a petition

prescription and
in the Regional Trial Court praying that the petitioners be ordered
to surrender the owners duplicate copy of the title. The Rules of Civil Procedure is misplaced. The fact of levy and sale

petitioners refused, claiming that respondents cause of action had constitutes execution, and not the action for the issuance of a

already prescribed. Ruling otherwise, we stated: new title. Here, because the levy and sale of the properties took
It is settled that execution is
enforced by the fact of levy and sale. The
result of such execution salewith place in June and July of 1990, respectively, or less than a year
Sarmiento Trading Corporation as the
highest bidderwas that title to Lot No. 22 after the decision became final and executory, the respondent
of TCT No. 14749 vested immediately in
the purchaser subject only to the judgment
debtors right to repurchase. Therefore, clearly exercised its rights in timely fashion.
upon Sarmiento Trading Corporations
purchase of Lot No. 22 covered by TCT No.
14749 at the auction sale, private In addition, petitioner himself admits his failure to
respondents successor-in-interest had
acquired a right over said title.
redeem the properties within the one-year period by adopting
The right acquired by the
purchaser at an execution sale is inchoate
the facts stated in the Court of Appeals decision.[21] There is thus
and does not become absolute until after
the expiration of the redemption period
without the right of redemption having no doubt he had been divested of his ownership of the contested
been exercised. But inchoate though it be,
it is like any other right, entitled to
protection and must be respected until lots.
extinguished by redemption. Gaudencio
Blancaflor was not able to redeem his
property after the expiration of the
redemption period, which was 12 months
after the entry or annotation of the Respondents position hinges on petitioners failure to
certificate of sale made on the back of TCT
No. 14749. Consequently, he had been
redeem the properties 12 months after the certificate of sale was
divested of all his rights to the
property. (underscoring ours)
recorded in the Register of Deeds on August 13, 1990. There is
In this case, the rule being invoked by
no uncertainty about respondents having become the new lawful
petitioner[20] states:
owner of the lots in question by virtue of the levy and the
SEC. 6. Execution by motion or
by independent action.A final and
executory judgment or order may be execution sale.
executed on motion within five (5) years
from the date of its entry. After the lapse
of such time, and before it is barred by the On the other hand, the issue of whether to acquire
statute of limitations, a judgment may be
enforced by action. The revived judgment
may also be enforced by motion within five new titles by mere motion or through a separate petition is an
(5) years from the date of its entry and
thereafter by action before it is barred by
entirely different matter.
the statute of limitations.

Petitioner is correct in assailing as improper respondents filing of

As should be evident from Blancaflor, petitioner
a mere motion for the cancellation of the old TCTs and the
Padillas reliance on Section 6 of Rule 39 of the 1997 Revised
issuance of new ones as a result of petitioners refusal to
surrender his owners duplicate TCTs.
Indeed, this called for a separate cadastral action
initiated via petition.
Section 107 of PD 1529,[22] formerly Section 111 of Act
496,[23] provides:
Sec. 107. Surrender of withheld duplicate
certificates.Where it is necessary to issue a
new certificate of title pursuant to any
involuntary instrument which divests the
title of the registered owner against his
consent or where a voluntary instrument
cannot be registered by reason of the
refusal or failure of the holder to surrender
the owners duplicate certificate of title,
the party in interest may file a petition in
court to compel the surrender of the same
to the Register of Deeds. The court, after
hearing, may order the registered owner
or any person withholding the duplicate
certificate to surrender the same, and
direct the entry of a new certificate or
memorandum upon such surrender. If the
person withholding the duplicate
certificate is not amenable to the process
of the court, or if for any reason the
outstanding owners duplicate certificate
cannot be delivered, the court may order
the annulment of the same as well as the
issuance of a new certificate of title in lieu
thereof. Such new certificate and all
duplicates thereof shall contain a
memorandum of the annulment of the
outstanding duplicate.
Respondent alleges that it resorted to filing the
contested motion because it could not obtain new certificates of
title, considering that petitioner refused to surrender his owners
duplicate TCTs. This contention is incorrect. The proper course of
action was to file a petition in court, rather than merely move, for
the issuance of new titles. This was the procedure followed
in Blancaflor by Sarmiento Trading which was in more or less the
same situation as the respondent in this case:[24]
Petitioners reliance on
prescription and laches is unavailing in this
instance. It was proper for Sarmiento
Trading Corporation to file a petition with
the Court of First Instance of Iloilo, acting
as a cadastral court, for the cancellation of
TCT No. 14749 in the name of Gaudencio
Blancaflor and the issuance of another in
its name. This is a procedure provided for
under Section 78 of Act No. 496 and
Section 75 of PD No. 1529
Section 78 of Act 496 reads:
Sec. 78. Upon the expiration of the time, if
any allowed by law for redemption after
registered land has been sold on any
execution, or taken or sold for the
enforcement of any lien of any description,
the person claiming under the execution or
under any deed or other instrument made
in the course of the proceedings to levy
such execution or enforce any lien, may
petition the court for the entry of a new
certificate to him, and the application may
be granted: Provided, however, That every
new certificate entered under this section
shall contain a memorandum of the nature
of the proceeding on which it is
based: Provided, further, That at any time
prior to the entry of a new certificate the
registered owner may pursue all his lawful
remedies to impeach or annul proceedings
under execution or to enforce liens of any
description.
Section 75 of PD 1529 provides:
Sec. 75. Application for new
certificate upon expiration of redemption
period.Upon the expiration of the time, if
any, allowed by law for redemption after
the registered land has been sold on
execution, or taken or sold for the
enforcement of a lien of any description,
except a mortgage lien, the purchaser at
such sale or anyone claiming under him
may petition the court for the entry of a
new certificate to him.
Before the entry of a new
certificate of title, the registered owner
may pursue all legal and equitable
remedies to impeach or annul such
proceedings.
 It is clear that PD 1529 provides the solution to new certificates of title in favor of respondent is ANULLED. SO

respondents quandary. The reasons behind the law make a lot of ORDERED.

sense; it provides due process to a registered landowner (in this

case the petitioner) and prevents the fraudulent or mistaken RUBEN C. REYES, G.R. No

conveyance of land, the value of which may exceed the judgment Petitioner,

obligation. Petitioner contends that only his interest in the subject

Presen

lots, and not that of his wife who was not a party to the suit,

should have been subjected to execution, and he should have had CARPIO

Chairpe
the opportunity to prove as much.
BRION,
- versus -
While we certainly will not condone any attempt by PEREZ,

SERENO
petitioner to frustrate the ends of justice the only way to

REYES,
describe his refusal to surrender his owners duplicates of the

certificates of title despite the final and executory judgment

against him respondent, on the other hand, cannot simply

Promu
TANG SOAT ING (JOANNA TANG)
disregard proper procedure for the issuance to it of new
and ANDO G. SY,
certificates of title. There was a law on the matter and respondent Decem
Respondents.

should have followed it. x-------------------------------------------------------------------------------------------x

In any event, respondent can still file the proper

petition with the cadastral court for the issuance of new titles in DECISION

its name.

WHEREFORE, the instant petition is hereby GRANTED. PEREZ, J.:

The decision of the Court of Appeals in CA-G.R. CV No. 53085 is

hereby REVERSED. The order of the Regional Trial Court of

Challenged in this petition for review on certiorari under Rule 45

Bacolod City ordering the Register of Deeds of Bago City to issue of the Rules of Court is the Decision[1] of the Court of Appeals in

CA-G.R. SP No. 96913 annulling and setting aside the Orders[2] of
the Regional Trial Court (RTC), Branch 7, Malolos, Bulacan which
denied respondents Tang Soat Ings (Joanna Tangs) and Ando Sys
Opposition (To MFR Farm, Inc.s Motion dated 25 April 2006) and
Motion (To declare void the sale of the property covered by TCT
No. 198753) dated May 23, 2006.
The controversy arose from a complaint for Enforcement of
Easement and Damages with Prayer for Preliminary Injunction
and Restraining Order filed by MFR Farms, Inc. (MFR) against
respondents docketed as Civil Case No. 1245-M. MFR complained
of respondents commercial and industrial use of their property
covered by Transfer Certificate of Title (TCT) No. T-198753, and
sought the enforcement of the encumbrance contained in their
title. MFR likewise asked for the payment of damages suffered by
its pig farm resulting from respondents illegal use of their
property.
After trial, the RTC granted MFRs complaint and specifically held
that:
x x x [Respondents] have defied the clear
undertaking stated in the title to the subject
property to limit the use thereof to
purposes not commercial or industrial in
character. x x x [U]sing the land as a
chemical processing site and as a storage
facility for chemicals is devoting it to
industrial purposes, which is not allowed
under the subsisting encumbrance on the
property.
x x x [R]elief is owing to [MFR], but the
grant thereof is rendered all the more
imperative in light of the manifestly
injurious effects which the business of
[respondents] is causing to the neighboring
estate, if not to the entire locality. x x x By
more than mere preponderance of
evidence has it been established that the
gaseous by-products of the chemical
manufacturing process are outright
pollutants which cause direct and manifest
harm to humans and animals alike, not to
mention other living things.
xxxx
WHEREFORE, judgment is hereby rendered: (a) ordering
[respondents] to desist from the further conduct of industrial or
commercial activities on the parcel of land covered by TCT No. T-
198753 of the Registry of Deeds of Bulacan, particularly the
manufacture and storage of chemicals thereat, including the
construction of buildings intended for purposes prohibited by the
title to the property; (b) making permanent the injunctions issued
by this Courts orders of May 3, 1982 and December 7, 1983; (c)
ordering [respondents] to pay [MFR] actual damages in the
amount of Six hundred Thirty-Nine Thousand Six hundred Fifty
(P639,650.00) Pesos, with legal rate of Twelve (12%)
percent interest from the filing of the complaint on January 15,
1982, until the same is fully paid; (d) ordering [respondents] to
pay [MFR] exemplary damages in the amount One Hundred
Thousand (P100,000.00) Pesos by way of example of correction
for the public good; (e) ordering [respondents] to pay MFR
attorneys fees in the amount of One Hundred Thousand
(P100,000.00) Pesos and to pay the costs of suit.[3]
On appeal by respondents docketed as CA G.R. CV No.
37808, the Court of Appeals affirmed with modification the ruling
of the RTC: the Court of Appeals reduced the rate of interest to six
percent (6%) and deleted the award of exemplary damages and
attorneys fees.[4]
MFR and respondents filed separate appeals
by certiorari[5] to this Court questioning the appellate courts
ruling. Unfortunately for the parties, we dismissed both appeals
for late payment of legal fees and late filing of the
petition.[6] By December 1, 1997, the decision of the Court of
Appeals in CA G.R. CV No. 37808 became final and executory, and
was recorded in the Book of Entries of Judgment.[7]
On September 28, 1998, upon motion of MFR, the RTC issued a
Writ of Execution.[8] Pursuant thereto, the Branch Clerk of Court
commanded the Sheriff of RTC, Branch 7, Malolos, Bulacan, Mr.
Leovino Legaspi (Sheriff Legaspi), to execute the Decision dated
 undersigned that he [did] not know what
September 12, 1991 as modified by the Court of Appeals.[9] Sheriff the lawyer said.[10]

Legaspi was likewise ordered to accomplish a return of the

A few days thereafter, on January 7, 1999, Sheriff
proceedings taken thereon in accordance with Section 14, Rule 39
Legaspi presented the Writ of Execution and the Notice of Levy on
of the Rules of Court.
Execution of Real Property[11] covering TCT No. T-198753 to the
On January 4, 1999, Sheriff Legaspi submitted a Sheriffs Report Register of Deeds of Bulacan Province.
manifesting:

That on October 2, 1998[,] the undersigned On February 4, 1999, the Notice of Levy was inscribed on TCT No.
was in receipt of the Writ of Execution
issued by Hon. Danilo A. Manalastas for T-198753.[12]
service thereof;

That on October 9, 1998[,] the undersigned On May 7, 1999, Sheriff Legaspi issued a Notice of Sale on
served copy of the Writ of Execution and
copy of the Notice dated October 9, 1998 to Execution of Real Property[13] which he likewise posted on the
[respondent] Tang Soat Ing giving him five
following places:
(5) days to comply [with] his obligations
under the Writ of Execution, thru Rodolfo
Mendez, caretaker of the [respondents], at
Tungkong Mangga, San Jose del Monte,
Bulacan. The undersigned inquired from the (a) The Bulletin Board of Municipal Hall
said caretaker about the personal of San Jose del Monte, Bulacan;
properties of Tang Soat Ing but he was told
that Tang Soat Ing has no more properties (b) The Bulletin Board of the Church of San
and the factory located in the compound is Jose del Monte, Bulacan;
being leased to other people;
(c) The Bulletin Board of the Chapel of
Gaya-gaya, San Jose del Monte,
Bulacan;
That on December 10, 1998[,] the
undersigned went back to Tang Soat Ing at (d) The Bulletin Board of the main entrance
Tungkong Mangga, Sa Jose del Monte, of the Provincial Capitol Building
Bulacan but said person was not there and of Malolos, Bulacan; and
also Rodolfo Mendez was not around
because he was in Manila; (e) The Posting Board of the Office of the
Ex-Officio Sheriff located at the
back of the Bulwagan
ng Katarungan Building, Malolos,
That on December 28, 1998[,] the Bulacan.[14]
undersigned went back to Tungkong
Mangga, San Jose del Monte, Bulacan and
talked to the caretaker[,] Rodolfo Mendez[,] On June 12, 19 & 26, 1999, the Notice of Sale on
and asked him what happened to the Execution of Real Property was published in The Times
papers he gave to [respondent] Tang Soat
Ing. The caretaker said that [respondent Newsweekly.[15]
Tang Soat Ing] called his lawyer and
informed [the latter] about the papers he
received. The caretaker also told the
On July 19, 1999, at the public auction of the subject property Respondents failed to file an Answer or any responsive pleading

covered by TCT No. T-198753, MFR was declared as the highest to MFRs Petition. Consequently, MFR moved to declare

bidder. On even date, Sheriff Legaspi issued a Certificate of respondents in default. The Motion to Declare Respondents in

Sale[16] which was registered with the Register of Deeds of Bulacan Default was served on Atty. Sumawang on June 11, 2005.

Province.
The RTC granted MFRs Motion to Declare Respondents in Default:

After more than five (5) years, on September 17, 2004, with thereafter, MFR presented evidence ex-parte.

respondents failing to exercise their right of redemption, MFR

During presentation of evidence ex-parte, MFR filed a Motion for
filed a Motion[17] asking the RTC to issue an order directing the
Substitution of Party Petitioner attaching thereto a Deed of
Register of Deeds of Bulacan Province to cancel TCT No. T-198753
Transfer of Interest declaring petitioner Ruben C. Reyes (Reyes)
in the name of respondents, and issue a new certificate of title in
acquisition of MFRs rights over the subject property. On January
the name of MFR.
2, 2006, the RTC issued an Order granting this latest motion: MFR

On September 28, 2004, the RTC denied the Motion holding that a was substituted by Reyes as party-petitioner.

mere motion is not sufficient for the cancellation of a certificate

In an Order dated January 10, 2006, the RTC granted the Petition,
of title. The RTC ruled that under Section 107[18] of Presidential
thus:
Decree No. 1529, the Property Registration Decree, a petition and

a hearing are required for the issuance of a new certificate of title.

WHEREFORE, finding merit in the instant
petition, the same is hereby granted.
On December 1, 2004, MFR filed a Petition[19] in the same case,
Accordingly, defendant/private respondent
under the same docket number, Civil Case No. 1245-M, before the Tang Soat Ing (Joanna Tang) is hereby
directed to surrender to the Court her
same execution court. In this new petition, MFR impleaded the duplicate owners copy of TCT No. T-198753
within thirty (30) days from receipt of this
Register of Deeds as additional defendant and prayed for the
Order. In [the event said] defendant/private
same reliefs as those prayed for in their previous motion with an respondent fails to surrender such owners
duplicate copy as directed hereinabove, the
additional prayer for the issuance of an order directing Register of Deeds of Bulacan is hereby
directed to cancel TCT No. T-198753 and
respondents to immediately surrender the Owners Duplicate
issue in lieu thereof a new owners duplicate
Copy of TCT No. T-198753. certificate of title in the name of Ruben C.
Reyes, who has substituted [MFR] by virtue
of a Deed of Transfer of Interest and
On three separate occasions, December 9, 2004 and February 8 pursuant to the order of this court
dated January 02, 2006.[21]
and 17, 2005, respondents, through their counsel of record, Atty.

T. J. Sumawang (Atty. Sumawang), received a copy of the

Copies of the Order were separately served on Atty. Sumawang,
Petition.[20]
Atty. Anacleto Diaz (Reyes counsel) and the Register of Deeds of

Bulacan Province on January 20 and February 2, 2006,

respectively.[22] However, service thereof to respondents counsel

was returned and rendered impossible. Apparently, Atty. Gaining no reprieve from the RTC, respondents filed a petition

Sumawang had already died in December 2005.[23] for certiorari before the Court of Appeals seeking to: (1) nullify the

trial courts twin Orders dated July 17, 2006 and October 20, 2006,
On April 27, 2006, Reyes filed another Motion praying that the
respectively; and (2) declare void the execution proceedings
Register of Deeds of Bulacan Province be directed to cancel TCT
relating to the sale of the subject property and the cancellation of
No. T-198753 in the name of respondents and to issue a new one
TCT No. T-198753.
in his (Reyes) name.

In yet another turn of events, the appellate court annulled and set
On May 19, 2006, new counsel for respondents entered its
aside the July 17, 2006 and October 20, 2006 Orders of the RTC:
appearance. Forthwith, on May 23, 2006, respondents, through

their new counsel, filed the previously adverted to Opposition and

WHEREFORE, the Petition is GRANTED and
Motion,[24] opposing Reyes April 27, 2006Motion and moving to
the Orders issued on July 17 and October
declare void the sale of the subject property. 20, 2006 are ANNULLED and SET
ASIDE. The public auction sale of the
property held on July 19, 1999 is declared
After an exchange of pleadings from the parties, the RTC issued invald and the Certificate of Sale issued by
Sheriff Leovino G. Legaspi on July 19, 1999
the Order denying respondents Opposition and Motion for lack of
in favor of [petitioner Reyes, substituting
merit. The RTC ruled that, Section 107 of PD 1529 does not MFR] covering the parcel of land embraced
in Transfer Certificate of Title No. T-198753
categorically state that the petition x x x should be in the form of is likewise declared null and void.[27]

a separate, distinct and original action to be filed in another court,

Aggrieved, Reyes filed a Motion for Reconsideration which
as otherwise it will create a situation in which the final judgment
resulted in another exchange of pleadings between the parties.
of a court, and its enforcement, may be subject to a review of, or
On December 9, 2008, the Court of Appeals denied the motion.
even reversal by another court of co-equal jurisdiction.[25] As

regards the motion to declare void the execution sale of the Hence, this impasse with the following issues for our resolution:

subject property covered by TCT No. T-198753, the RTC noted

1. Whether the execution sale of the subject property covered by
that there was substantial compliance with the requirements of
TCT No. T-198753 is void;
[Section 15, Rule 39 of the Rules of Court evidenced] in the

Sheriffs Report dated January 4, 1999, as well as the publication 2. Proceeding from the validity of the execution sale and the
and posting requirements, extant in the records of this case.[26] In consolidation of Reyes ownership over the subject property,
conclusion, the RTC ruled that respondents are estopped from whether Section 107 of Presidential Decree No. 1529
questioning the proceedings, after keeping silent thereon for a contemplates the filing of a separate cadastral case before the
long time, despite notice thereof. RTC acting as a land registration court.

Respondents filed a Motion for Reconsideration which the RTC The petition is partially impressed with merit.
denied in its Order dated October 20, 2006.
In declaring void the execution sale, the appellate court noted

that petitioner did not strictly comply with the requirements of

 Defendants did not present
Section 15, Rule 39 of the Rules of Court. The Court of Appeals evidence to rebut the no notice
allegation of the plaintiff.
relied on our holding in Villaceran v. Beltejar,[28] an administrative
Although in the defendant
case finding therein respondent Sheriff guilty of simple neglect of spouses pre-trial brief, there is
that general allegation that the
duty for failure to strictly comply with the rules on execution auction sale was made in
accordance with law, however,
sale. The Court of Appeals ruled that the deficiencies in the notice
there is no showing in the record
of execution sale were substantial and of such nature as to that the requirements with
respect to publication/posting of
prevent the court from applying the presumption of regularity in notices were complied with by
the defendants.
the performance of official functions by Sheriff Legaspi at the time

of the execution sale. On this score, the Court of Appeals pointed

out that it was incumbent upon Reyes part to prove that the Deliberating on the absence of
notice, the fact that the plaintiff
requirements of the law on execution sale have been fully did not come to know
that Lot 12 was being subjected
complied with. to an auction sale proves two
things: one, that no notice was
We disagree. posted in the place where the
property is located [and, two,
that] there was no auction sale
Contrary to the Court of Appeals holding, the burden of evidence that took place on March 30,
1992. . . .
to prove lack of compliance with Section 15, Rule 39 of the Rules

of Court rests on the party claiming lack thereof i.e., respondents.

Further, the defendants,

In Venzon v. Spouses Juan,[29] we declared that the
judgment debtor, as herein respondents, alleging lack of
compliance with the posting and publication requirements of the
auction sale in accordance with the rules, is behooved to prove
such allegation. We held, thus:
x x x. Whoever asserts a right dependent
for its existence upon a negative, must
establish the truth of the negative by a
preponderance of the evidence. This must
be the rule, or it must follow that rights, of
which a negative forms an essential
element, may be enforced without proof.
Thus, whenever the [partys] right depends
upon the truth of a negative, upon him is
cast the onus probandi, except in cases
where the matter is peculiarly within the
knowledge of the adverse party.
It was error, therefore, for the trial court to
hold that:
particularly defendant sheriff,
who is the most competent
person to testify that a written
notice of sale was made and
posted in accordance with law,
was not presented to the
witness stand. Neither was a
document presented like Sheriffs
Certificate of Posting to attest to
the fact that a written notice of
sale was posted before the
property was allegedly sold at
public auction. In fact, the record
is silent as (to) where the
auction sale was conducted.
By ruling in the foregoing
manner, the trial court incorrectly shifted
the plaintiffs burden of proof to the
defendants. It is true that the fact
of posting and publication of the notices is
a matter peculiarly within the knowledge
of the Deputy Sheriff. However, the trial
court did not acquire jurisdiction over him,
as he was not served with summons. At
 the time of the filing of the complaint, he
was no longer connected with the Caloocan the best price or a better bid may be made possible to minimize
RTC, Branch 126, which issued the writ of
prejudice to the judgment debtorwas realized.
execution. Hence, he could not testify in his
own behalf.

x x x [T]he duty imposed by Section [18] (c) Another thing militates against respondents claim of
is reposed upon the sheriff, who is charged
lack of knowledge of the encumbrance on their propertythe
with the enforcement of the writ.
Respondent spouses had a right to separate registrations of: (1) the Notice of Levy on TCT No. T-
presume that he had regularly performed
his duty. It was not incumbent upon them 198753; (2) the Certificate of Sale.
to present him as a witness for, in the
absence of the sheriff, the burden to prove
In this jurisdiction, we adhere to the doctrine that
lack of posting and publication remained
with petitioner.[30] (Emphasis supplied) registration in a public registry works as constructive notice to the

whole world.[34] Section 51 of Act No. 496, as amended by Section

Respondents made no attempt to meet this burden of
52 of Presidential Decree No. 1529, provides:
evidence, simply maintaining lack of notice of the entire
proceedings (execution and issuance of a new title over the
subject property) before the trial court.
We cannot subscribe to respondents belated
posturing. The disputable presumption that official duty has been
regularly performed was not overcome by respondents.[31] The
documents on record lead us to the inevitable conclusion that
SECTION 52. Constructive
notice upon registration.Every conveyance,
mortgage, lease, lien, attachment,
order, judgment, instrument or entry
affecting registered land shall, if registered,
filed or entered in the Office of the
Register of Deeds for the province or city
where the land to which it relates lies,
be constructive notice to all persons from
the time of such registering, filing, or
entering.

respondents had constructive, if not actual, notice of the

And, quite undeniably, respondents had constructive notice that
execution proceedings from the issuance of the Writ of Execution,
their property is subject of execution proceedings arising from
the levy on the subject property,[32] its subjection to execution
their judgment debt and in danger of forfeiture to their judgment
sale, up to and until the proceedings in the RTC relating to the
creditor.
issuance of a new certificate of title over the subject

property. Certainly, respondents are precluded from feigning Respondents consistently flouted the judgment in Civil

ignorance of MFR (substituted by Reyes) staking a claim thereon. Case No. 1245-M, as amended by the Decision of the Court of

Appeals in CA G.R. CV No. 37808, which became final and

There was substantial compliance with Section 15, Rule
executory on December 1, 1997, by their utter failure to respond
39 of the Rules of Court: the documents in support thereof, i.e.,
to the processes of the RTC in the execution proceedings despite
the Certificate of Posting issued by Sheriff Legaspi and the
their receipt of notice at each stage thereof. At the very least,
Affidavit of Publication executed by the publisher of The Times
respondents attack on the validity of the execution proceedings,
Newsweekly, appear to be in order.[33] In this case, the purpose of
culminating in the execution sale of the subject property, is
giving notice through posting and publication under Section 15(c)
barred by laches.
of the same ruleto let the public know of the sale to the end that
 Laches is the failure or neglect, for an unreasonable eight (8) years had lapsed, from the time respondents received a

and unexplained length of time, to do that which by exercising copy of the Writ of Execution in October 1998 until they, through

due diligence could or should have been done earlier; it is their new counsel, filed the Opposition and Motion in May 2006,

negligence or omission to assert a right within a reasonable time, before respondents were prodded into action.

warranting a presumption that the party entitled to assert it

We find obvious respondents brazen ploy to forestall
either has abandoned it or declined to assert it.[35] Laches thus
and thwart the execution of a final and executory judgment
operates as a bar in equity.[36]
against them. The death of their counsel, Atty. Sumawang, and

We hearken to the time-honored rule anchored on their engagement of a new one, does not minimize the hard fact

public policy: that respondents had notice of, not only the execution

[R]elief will be denied to a litigant whose proceedings, but also, the proceedings on the issuance of a new
claim or demand has become "stale," or
title over the subject property. Yet, respondents did not act on
who has acquiesced for an unreasonable
length of time, or who has not been vigilant any of these notices which were duly received by Atty.
or who has slept on his rights either by
negligence, folly or inattention. In other Sumawang. Respondents Motion to nullify the execution
words, public policy requires, for peace of
society, the discouragement of claims proceedings, from the levy on the subject property and sale
grown stale for non-assertion; thus laches
thereof, is an afterthought, a last-ditch effort to evade payment of
is an impediment to the assertion or
enforcement of a right which has become, their judgment debt. Their claim of ignorance of the execution
under the circumstances, inequitable or
unfair to permit.[37] (Emphasis supplied) proceedings flies in the face of the documents on record. This

bare-faced claim cannot trump the disputable presumption that a

person takes ordinary care of his concerns.[38] Consequently,

The records bear out that as of October 9, 1998, and respondents are estopped and barred from assailing the

on two occasions thereafter, December 10 & 28, 1998, Sheriff execution proceedings before the RTC.

Legaspi served a copy of the Writ of Execution on respondents,

Time and again, we have held that once a judgment
and followed up thereon. With no action forthcoming from
becomes final and executory, the prevailing party should not be
respondents, who are ostensibly evading payment of their
denied the fruits of his victory by some subterfuge devised by the
judgment debt, the Sheriff correctly levied on the subject
losing party.[39] We completely agree with the RTCs disquisition,
property. For more than five (5) years from the execution sale
thus:
thereof, with respondents not exercising their right of
Finally, after [MFR] had filed the petition in
redemption, up to the filing of a Motion, and subsequently, a
question pursuant to and in compliance
Petition for the issuance of a new certificate of title over the with the order of this court dated
September 28, 2004, to which no answer or
property in Reyes name, respondents made no effort to settle any responsive pleading was filed by
respondents or thru their lawyer, as the
their judgment debt, much less, to ascertain the status of the
latter was certainly notified of the
execution proceedings against them and the levy on, and proceedings in said petition, respondents
cannot now assail said proceedings after
consequent sale of, their property. Truly significant is the fact that keeping silent thereon for a long time, and
if indeed there was neglect on the part of
 their lawyer in informing them of or in
taking part in said proceedings, such that would invalidate the sale) to execution sales of real property
negligence of their counsel binds them as
under Rule 39 of the Rules of Court[43] is an obiter which should
client. There is likewise an evident lack of
prudence and due diligence on the part of not be definitive of the facts obtaining herein.
the respondents by their failure to inform
this court of the withdrawal of their former
counsel for a long period of time, and they The facts of this case demonstrate respondents
cannot now, by feigning ignorance of the
stubborn refusal to comply with the judgment against them by
proceedings had in the petition in question,
assail the same thru a new counsel. In other claiming lack of notice of the execution proceedings. We reiterate
words, respondents cannot be allowed to
keep silent on or refuse to participate in that this claim is belied by the evidence on record and cannot
proceedings that they know were taking
invalidate the enforcement and execution of a final and executory
place in connection with a final judgment
rendered against them and then suddenly, judgment of this Court. On the whole, respondents silence and
after said proceedings were long
terminated, come to court to question the inaction for eight (8) years from the time the subject property was
same through a new counsel. The
validly levied upon by the RTC, bars them from claiming invalidity
respondents are clearly in estoppel. Also,
the court finds no practical purpose and of the execution proceedings.
benefit in sustaining the theory posited by
respondents which, aside from the reasons
advanced earlier, will have no other effect
than to further unduly delay the execution
of a judgment that had long acquired
Notwithstanding the validity of the execution sale and
finality.[40]
Reyes consolidation of ownership over the subject property upon
xxxx
the lapse of the redemption period, we hold that Section 107 of
Respondents are clearly estopped from
assailing the proceedings in question by Presidential Decree No. 1529 contemplates the filing of a separate
their failure or refusal to participate therein
and original action before the RTC, acting as a land registration
despite their or their counsels knowledge
thereof, and it would be unjust for the court.
plaintiff to allow respondents to put in issue
the validity of said proceedings at this late
stage, thru another counsel, as they are Reyes argues that to require him to file his petition in
bound by the action or inaction of their
another court would unduly divest the RTC of its jurisdiction to
former counsel.[41]
enforce its final and executory decision. Reyes invokes our ruling

The Court of Appeals reliance on Villaceran v. in Natalia Realty, Inc. v. Court of Appeals[44] where we declared

Beltejar[42] is misplaced. Villaceran is an administrative case that jurisdiction of the court to execute its judgment continues

finding the Sheriff guilty of simple neglect of duty for failure to even after the judgment has become final for the purpose of

strictly comply with the rules on execution sale. We held therein enforcement of judgment.[45]

that there was no substantial compliance by the Sheriff with

Reyes reasoning is off tangent. Natalia is inapplicable
Section 15(c), Rule 39 of the Rules of Court. Our declaration
because the execution proceedings in this case have been
that [n]o reason exists not to apply the principle in the
completed and was terminated upon the execution sale of the
extrajudicial foreclosure sales of real property (statutory
subject property. Reyes already consolidated ownership over the
requirements of posting and publication must be strictly complied
subject property; as owner, he has a right to have the same
with since non-compliance could constitute a jurisdictional defect
registered in his name. This transfer of title to the subject Producers Cooperative Marketing Association, Inc.[47] Answering

property in Reyes name is no longer part of the execution the question: In implementing the involuntary transfer of title of

proceedings: the fact of levy and sale constitutes real property levied and sold on execution, is it enough for the

execution, not so is the action for the issuance of a new title.[46] executing party to file a motion with the court which rendered

judgment, or does he need to file a separate action with the

Indeed, the subsequent filing of a separate and original
Regional Trial Court, we unequivocally declared, thus:
action for the titling of the subject property in Reyes name, no
Petitioner is correct in assailing
longer involves the execution of the judgment in Civil Case No. as improper respondents filing of a mere
motion for the cancellation of the old TCTs
1245-M.
and the issuance of new ones as a result of
petitioners refusal to surrender his owners
Section 107 of the Property Registration Decree falls duplicate TCTs.

under PETITIONS AND ACTIONS AFTER ORIGINAL REGISTRATION,

Chapter X thereof. The provision reads: Indeed, this called for a

separate cadastral action initiated via
petition.

SECTION 107. Surrender of withhold

duplicate certificates. Where it is necessary
to issue a new certificate of title pursuant Section 107 of PD 1529, formerly
to any involuntary instrument which divests Section 111 of Act 496, provides:
the title of the registered owner against his
consent or where a voluntary instrument
cannot be registered by reason of the
xxxx
refusal or failure of the holder to surrender
the owner's duplicate certificate of title, the
party in interest may file a petition in court
to compel surrender of the same to the Respondent alleges that it
Register of Deeds. The court, after hearing, resorted to filing the contested motion
may order the registered owner or any because it could not obtain new certificates
person withholding the duplicate certificate of title, considering that petitioner refused
to surrender the same, and direct the entry to surrender his owners duplicate TCTs. This
of a new certificate or memorandum upon contention is incorrect. The proper course
such surrender. If the person withholding of action was to file a petition in court,
the duplicate certificate is not amenable to rather than merely move, for the issuance
the process of the court, or if not any of new titles. This was the procedure
reason the outstanding owner's duplicate followed in Blancaflor by Sarmiento Trading
certificate cannot be delivered, the court which was in more or less the same
may order the annulment of the same as situation as the respondent in this case:
well as the issuance of a new certificate of
title in lieu thereof. Such new certificate
and all duplicates thereof shall contain a
memorandum of the annulment of the Petitioners reliance
outstanding duplicate. on prescription and laches is
unavailing in this instance. It was
proper for Sarmiento Trading
That a succeeding registration of property in anothers
Corporation to file a petition
name, after its original registration, contemplates a separate with the Court of First Instance
of Iloilo, acting as a cadastral
original action is reinforced by our ruling in Padilla v. Philippine court, for the cancellation of
 TCT No. 14749 in the name of
Gaudencio Blancaflor and the
issuance of another in its
name. This is a procedure
provided for under Section 78 of
Act No. 496 and Section 75 of
PD No. 1529. . . .
Section 78 of Act 496
reads:
Sec. 78. Upon the
expiration of the time, if any
allowed by law for redemption
after registered land has been
sold on any execution, or taken
or sold for the enforcement of
any lien of any description, the
person claiming under the
execution or under any deed or
other instrument made in the
course of the proceedings to levy
such execution or enforce any
lien, may petition the court for
the entry of a new certificate to
him, and the application may be
granted: Provided, however, That
every new certificate entered
under this section shall contain a
memorandum of the nature of
the proceeding on which it is
based: Provided, further, That at
any time prior to the entry of a
new certificate the registered
owner may pursue all his lawful
remedies to impeach or annul
proceedings under execution or
to enforce liens of any
description.
Section 75 of PD 1529
provides:
Sec. 75. Application
for new certificate upon
expiration of redemption period.
Upon the expiration of the
time, if any, allowed by law for
redemption after the registered
land has been sold on execution,
or taken or sold for the
enforcement of a lien of any
description, except a mortgage
lien, the purchaser at such sale
or anyone claiming under him
may petition the court for the
entry of a new certificate to him.
Before the entry of a
new certificate of title, the
registered owner may pursue all
legal and equitable remedies to
impeach or annul such
proceedings.
It is clear that PD 1529 provides
the solution to respondents quandary. The
reasons behind the law make a lot of sense;
it provides due process to a registered
landowner (in this case the petitioner) and
prevents the fraudulent or mistaken
conveyance of land, the value of which may
exceed the judgment obligation. x x x.
While we certainly will not
condone any attempt by petitioner to
frustrate the ends of justice the only way
to describe his refusal to surrender his
owners duplicates of the certificates of title
despite the final and executory judgment
against him respondent, on the other
hand, cannot simply disregard proper
procedure for the issuance to it of new
certificates of title. There was a law on the
matter and respondent should have
followed it.
In any event, respondent can
still file the proper petition with the
cadastral court for the issuance of new
titles in its name.[48] (Emphasis supplied).
Plainly, Reyes must institute a separate cadastral action initiated
via petition.
WHEREFORE, the petition is PARTLY GRANTED. The Decision of
the Court of Appeals in CA G.R. SP No. 96913 annulling and setting
aside the Orders dated July 17, 2006 and October 20, 2006 issued
by the Regional Trial Court, Branch 7, Malolos, Bulacan in Civil
Case No. 1245-M is MODIFIED:

1. The public auction sale of the subject property covered by TCT
No. T-198753 on July 19, 1999 is declared VALID;
2. The Certificate of Sale issued by Sheriff Leovino Legaspi on July
19, 1999 in favor of MFR Farms, Inc. (substituted by petitioner
Ruben C. Reyes) covering the parcel of land embraced in Transfer
Certificate of Title No. T-198753 is likewise declared VALID; and
3. The Petition[49] dated October 29, 2004 filed by MFR
Farms, Inc. (substituted by Ruben C. Reyes) is DISMISSED without
prejudice to re-filing as a separate original action pursuant to
Section 107 of Presidential Decree No. 1529.
SO ORDERED.
[G.R. No. 136283. February 29, 2000]
VIEWMASTER CONSTRUCTION CORPORATION, petitioner, vs.
HON. REYNALDO Y. MAULIT in his official capacity as
administrator of the Land Registration Authority; and EDGARDO
CASTRO, acting register of deeds of Las Pias, Metro
Manila; respondents.
DECISION
PANGANIBAN, J.:
A notice of lis pendens may be registered when an action or a
proceeding directly affects the title to the land or the buildings
thereon; or the possession, the use or the occupation thereof.
Hence, the registration of such notice should be allowed if the
litigation involves the enforcement of an agreement for the co-
development of a parcel of land. h Y
Statement of the Case
Before us is a Petition for Review on Certiorari[1] assailing the
February 27, 1998 Decision[2] of the Court of Appeals (CA)[3] in CA-
GR SP No. 39649 and its November 12, 1998 Resolution[4] denying
reconsideration. The assailed Decision affirmed the
Resolution[5] of the Land Registration Authority (LRA) in Consulta
No. 2381, which ruled as follows:
"PREMISES CONSIDERED, this Authority is of
the considered view and so holds that the
Notice of Lis Pendens subject of this
consulta is not registrable."[6]
The Facts
The undisputed facts were summarized by the Court of Appeals as
follows:
"The subject property is known as the Las
Pias property registered in the name of
Peltan Development Inc. (now State
Properties Corporation) covered by Transfer
Certificate of Title No. (S-17992) 12473-A
situated in Barrio Tindig na Manga, Las Pias,
Rizal.
"The Chiong/Roxas family collectively owns
and controls State Investment Trust, Inc.
(formerly State Investment House, Inc.) and
is the major shareholder of the following
corporations, namely: State Land
Investment Corporation, Philippine
Development and Industrial Corporation
and Stronghold Realty Development.
"Sometime in 1995, the said family decided
to give control and ownership over the said
corporations to only one member of the
family, through the process of bidding
among the family members/stockholders of
the said companies. It was agreed that the
bidder who acquires 51% or more of the
said companies shall be deemed the
winner.
"Defendant Allen Roxas, one of the
stockholders of State Investment Trust, Inc.
applied for a loan with First Metro
Investment, Inc. (First Metro for brevity) in
the amount of P36,500,000.00 in order to
participate in the bidding. Es msc
"First Metro granted Allen Roxas' loan
application without collateral provided,
however, that he procure a
guarantor/surety/solidary co-debtor to
secure the payment of the said loan.
"Petitioner Viewmaster agreed to act as
guarantor for the aforementioned loan in
consideration for its participation in a Joint
Venture Project to co-develop the real
estate assets of State Investment Trust, Inc.
"After a series of negotiations, petitioner
Viewmaster and defendant Allen Roxas
agreed that should the latter prevail and
win in the bidding, he shall sell to petitioner
fifty percent (50%) of the total eventual
acquisitions of shares of stock in the State
Investment Trust, Inc., at a purchase price
equivalent to the successful bid price per
share plus an additiona1 ten percent (10%)
per share.
"As a result of the loans granted by First
Metro in consideration of and upon the
guaranty of petitioner Viewmaster,
defendant Allen Roxas, eventually gained
control and ownership of State Investment
Trust, Inc.
"However, notwithstanding the lapse of
two (2) years since defendant Allen Roxas
became the controlling stockholder of State
Investment Trust, Inc., he failed to take the
necessary action to implement the Joint
Venture Project with petitioner Viewmaster
to co-develop the subject properties.
"Thus, petitioner's counsel wrote defendant
Allen Roxas, reiterating petitioner's demand
to comply with the agreement to co-
develop the Las Pias Property and to set in
operation all the necessary steps towards
the realization of the said project.
"On September 8, 1995, petitioner
Viewmaster filed a Complaint for Specific
Performance, Enforcement of Implied Trust
and Damages against State Investment
Trust, Inc. Northeast Land Development,
Inc., State Properties Corporation (formerly
Peltan Development, Inc.) and defendant
Allen Roxas, in his capacity as Vice-
Chairman of State Investment Trust, Inc.,
and Chairman of Northeast Land
Development, Inc., State Properties
Corporation, which was docketed as Civil
Case No.65277. Esmm is
"On September 11,1995, petitioner
Viewmaster filed a Notice of Lis
Pendens with the Register of Deeds of
Quezon City and Las Pias for the annotation
of a Notice of Lis Pendens on Transfer
Certificate of Title No. (S-17992) 12473- A,
registered in the name of Peltan
Development, Inc. (now State Properties
Corporation).
"In a letter dated September 15, 1995, the
respondent Register of Deeds of Las Pias
denied the request for annotation of the
Notice of Lis Pendens on the following
grounds:
1. the request for annotation and the
complaint [do] not contain an adequate
description of the subject property;
2. petitioner's action only has an incidental
effect on the property in question. Esmso
"On September 20, 1995, petitioner filed an
appeal to the respondent Land Registration
Authority, which was docketed as Consulta
No. 2381.
"On December 14, 1995, the Respondent
Land Registration Authority issued the
assailed Resolution holding that petitioner's
'Notice of Lis Pendens' was not
registrable."[7]
Ruling of the Court of Appeals
In affirming the ruling of the LRA, the Court of Appeals held that
petitioner failed to adequately describe the subject property in
the Complaint and in the application for the registration of a
notice of lis pendens. The CA noted that while Transfer Certificate
of Title No. (S-17992) 12473-A indicated six parcels of land,
petitioner's application mentioned only one parcel.
Moreover, the CA also ruled that a notice of lis pendens may be
registered only when an action directly affects the title to or
possession of the real property. In the present case, the
proceedings instituted by petitioner affected the title or
possession incidentally only, not directly.
Hence, this Petition.[8]
Issues
Petitioner submits for the consideration of the Court the following
issues:
"I
Whether or not the petitioner failed to
adequately describe the subject property in
its complaint and in the notice of lis
pendens Mse sm
II
 Whether or not the Las Pias property is
directly involved in Civil Case No. 65277."[9]
The Court's Ruling
The Petition is meritorious.
First Issue: Description of Property
Petitioner contends that the absence of the property's technical
description in either the notice of lis pendens or the Complaint is
not a sufficient ground for rejecting its application, because a
copy of TCT No. (S-17992) 12473-A specifically describing the
property was attached to and made an integral part of both
documents.
On the other hand, respondents argue that petitioner failed to
provide an accurate description of the Las Pias property, which
was merely referred to as a "parcel of land."
The notice of lis pendens described the property as follows:
"A parcel of land situated in the Barrio of
Tindig na Manga, Municipality of Las Pias,
Province of Rizal x x x containing an area of
Seven Hundred Eighty Six Thousand One
Hundred Sixty Seven (786,167) square
meters, more or less."
By itself, the above does not adequately describe the subject
property, pursuant to Section 14 of Rule 13 of the Rules of Court
and Section 76 of Presidential Decree (PD) No.1529. It does not
distinguish the said property from other properties similarly
located in the Barrio of Tindig na Manga, Municipality of Las Pias,
Province of Rizal. Indeed, by the above description alone, it would
be impossible to identify the property.
In the paragraph directly preceding the description quoted above,
however, petitioner specifically stated that the property referred
to in the notice of lis pendens was the same parcel of land
covered by TCT No. (S-17992) 12473-A:
"Please be notified that on 08 September
1995, the [p]laintiff in the above-entitled
case filed an action against the above-
named [d]efendants for specific
performance, enforcement of an implied
trust and damages, now pending in the
Regional Trial Court of Pasig, Branch 166,
which action involves a parcel of land
covered by Transfer Certificate Title (TCT)
No. (S-17992) 12473-A, registered in the
name of Peltan Development Incorporated
which changed its corporate name to State
Properties Corporation, one of the
[d]efendants in the aforesaid case. The said
parcel of land is more particu1arly
described as follows: Ex sm
'A parcel of land
situated in the Barrio
of Tindig na Manga,
Municipality of Las
Pias, Province of Rizal
x x x containing an
area of Seven
Hundred Eighty Six
Thousand One
Hundred Sixty Seven
(786,167) square
meters, more or less.'
"Request is therefore made [for] your good
office to record this notice of pendency of
the aforementioned action in TCT No. (S-
17992) 12473-A for all legal purposes."[10]
As earlier noted, a copy of the TCT was attached to and made an
integral part of both documents. Consequently, the notice of lis
pendens submitted for registration, taken as a whole, leaves no
doubt as to the identity of the property, the technical description
of which appears on the attached TCT. We stress that the main
purpose of the requirement that the notice should contain a
technical description of the property is to ensure that the same
can be distinguished and readily identified. In this case, we agree
with petitioner that there was substantial compliance with this
requirement.
Second Issue: Property Directly Involved
In upholding the LRA, the Court of Appeals held that "the doctrine
of lis pendens has no application to a proceeding in which the only
object sought is the recovery of [a] money judgment, though the
title [to] or right or possession [of] a property may be incidentally
affected. It is thus essential that the property be directly affected
where the relief sought in the action or suit includes the recovery
of possession, or the enforcement [thereof], or an adjudication
between the conflicting claims of title, possession or right of
possession to specific property, or requiring its transfer or
sale."[11]
On the other hand, petitioner contends that the civil case subject
of the notice of lis pendens directly involved the land in question,
because it prayed for the enforcement of a prior agreement
between herein petitioner and Defendant Allen Roxas to co-
develop the latter's property.
We agree with the petitioner. A notice of lis pendens, which
literally means "pending suit," may involve actions that deal not
only with the title or possession of a property, but even with the
use or occupation thereof. Thus, Section 76 of PD 1529
reads: Jjjuris
"Sec. 76. Notice of lis pendens. -- No action
to recover possession of real estate, or to
quiet title thereto, or to remove clouds
upon the title thereof, or for partition, or
other proceedings of any kind in court
directly affecting the title to land or the use
or occupation thereof or the buildings
thereon, and no judgment, and no
proceeding to vacate or reverse any
judgment, shall have any effect upon
registered land as against persons other
 than the parties thereto, unless a In the present case, petitioner's Complaint docketed as Civil Case
memorandum or notice stating the No. 65277 clearly warrants the registration of a notice of lis
institution of such action or proceeding and pendens. The Complaint prayed for the following reliefs: Scjj
the court wherein the same is pending, as
well as the date of the institution thereof,
"1. Render judgment ordering the
together with a reference to the number of
Defendant Allen Roxas to sell fifty percent
the certificate of title, and an adequate
(50%) of his shareholdings in
description of the land affected and the
Defendant State Investment to Plaintiff at
registered owner thereof, shall have been
the price equivalent to the successful bid
filed and registered."
price per share plus an additional ten
percent (10%) per share and directing
In Magdalena Homeowners Association, Inc. v. Court of Defendants to co-develop with the Plaintiff
Appeals,[12] the Court did not confine the availability of lis the subject real properties;
pendens to cases involving the title to or possession of real
property. Thus, it held:
2. Render judgment ordering the Defendant
Allen Roxas to:
"According to Section 24, Rule 14[13] of the
Rules of Court and Section 76 of
a. Pay the Plaintiff the amount of at least
Presidential Decree No.1529, a notice of lis
Twenty Million Pesos (P20,000,000.00)
pendens is proper in the following
and/or such other amounts as may be
cases, viz.:
proven during the course of the trial, by
way of actual damages;
a).......An action to recover possession of
real estate;
b. Pay the Plaintiff the amount of at least
One Million Pesos (P1,000,000.00), by way
b).......An action to quiet title thereto; of moral damages;

c).......An action to remove clouds thereon; c. Pay the Plaintiff the amount of at least
One Million Pesos (P1,000,000.00), by way
of exemplary damages;
d).......An action for partition; and

d. Pay the Plaintiff the amount of Two

e).......Any other proceedings of any kind in
Hundred Fifty Thousand Pesos
Court directly affecting the title to the land
(P250,000.00) by way of attorney's fees;
or the use or occupation hereof or the
and
buildings thereon."

e. Pay expenses of litigation and costs of

In Villanueva v. Court of Appeals,[14] this Court further declared
suit."[15]
that the rule of lis pendens applied to suits brought "to establish
an equitable estate, interest, or right in specific real property or to
enforce any lien, charge, or encumbrance against it x x x." Thus, Undeniably, the prayer that Defendant Allen Roxas be ordered to
this Court observed that the said notice pertained to the sell 50 percent of his shareholdings in State Investment does not
following: Sjcj directly involve title to the property and is therefore not a proper
subject of a notice of lis pendens. Neither do the various amounts
of damages prayed for justify such annotation.
"x x x all suits or actions which directly
affect real property and not only those
which involve the question of title, but also We disagree, however, with the Court of Appeals and the
those which are brought to establish an respondents that the prayer for the co-development of the land
equitable estate, interest, or right, in was merely incidental to the sale of shares of defendant
specific real property or to enforce any lien, company. Jjsc
charge, or encumbrance against it, there
being in some cases a lis pendens, although
The Complaint shows that the loan obtained by Allen Roxas (one
at the commencement of the suit there is
of the defendants in the civil case) from First Metro was
no present vested interest, claim, or lien in
guaranteed by petitioner for two distinct considerations: (a) to
or on the property which it seeks to charge.
enable it to purchase 50 percent of the stocks that the said
It has also been held to apply in the case of
defendant may acquire in State Investment and (b) to co-develop
a proceeding to declare an absolute deed of
with the defendants the Quezon City and the Las Pias properties
mortgage, or to redeem from a foreclosure
of the corporation. In other words, the co-development of the
sale, or to establish a trust, or to suits for
said properties is a separate undertaking that did not arise from
the settlement and adjustment of
petitioner's acquisition of the defendant's shares in the
partnership interests."
corporation. To repeat, the co-development is not merely
auxiliary or incidental to the purchase of the shares; it is
a distinct consideration for Viewmaster's guaranty.[16]
Hence, by virtue of the alleged agreement with Allen Roxas,
petitioner has a direct -- not merely incidental -- interest in the Las
Pias property. Contrary to respondents' contention,[17] the action
involves not only the collection of a money judgment, but also the
enforcement of petitioner's right to co-develop and use the
property.
WHEREFORE, the Petition is hereby GRANTED and the assailed
Decision of the Court of Appeals REVERSED and SET ASIDE. The
Las Pias Register of Deeds is directed to cause the annotation of lis
pendens in TCT No. (S-17992) 12473-A. No costs.
SO ORDERED.

The Court must stress that the purpose of lis pendens is (1) to
protect the rights of the party causing the registration
thereof[18] and (2) to advise third persons who purchase or
contract on the subject property that they do so at their peril and
subject to the result of the pending litigation.[19] One who deals
with property subject of a notice of lis pendens cannot acquire
better rights than those of his predecessors-in-interest.[20] In [G.R. No. 148568. March 20, 2003]
Tanchoco v. Aquino,[21] the Court held:

"x x x. _ The doctrine of lis pendens is

founded upon reason of public policy and
necessity, the purpose of which is to keep
the subject matter of the litigation within
the power of the court until the judgment
or decree shall have been entered;
otherwise, by successive alienations
pending the litigation, its judgment or
decree shall be rendered abortive and
impossible of execution. Purchasers
pendente lite of the property subject of the
litigation after the notice of lis pendens is
inscribed in the Office of the Register of
Deeds are bound by the judgment against
their predecessors. x x x."
ATLANTIC ERECTORS, INC., petitioner, vs. HERBAL COVE REALTY
CORPORATION, respondent.
DECISION
PANGANIBAN, J.:
The pendency of a simple collection suit arising from the
alleged nonpayment of construction services, materials,
unrealized income and damages does not justify the annotation of
a notice of lis pendens on the title to a property where
construction has been done.

Without a notice of lis pendens, a third party who acquires the

property after relying only on the Certificate of Title would be
deemed a purchaser in good faith. Against such third party, the
supposed rights of petitioner cannot be enforced, because the
former is not bound by the property owner's undertakings not
annotated in the TCT.[22] Kyle
Likewise, there exists the possibility that the res of the civil case
would leave the control of the court and render ineffectual a
judgment therein. Indeed, according to petitioner, it was not even
informed when Allen Roxas exchanged the Quezon City property
for shares of stock in Northeast Land Development, Inc.[23] Hence,
it maintains that there is a clear risk that the same thing would be
done with the Las Pias property.
Statement of the Case
Before the Court is a Petition for Review on
Certiorari[1] under Rule 45 of the Rules of Court, challenging the
May 30, 2000 Decision[2] of the Court of Appeals (CA) in CA-GR SP
No. 56432. The dispositive portion of the Decision is reproduced
as follows:
WHEREFORE, the petition is granted and the assailed November 4,
1998 and October 22, 1999 orders annulled and set aside. The July
30, 1998 order of respondent judge is reinstated granting the
cancellation of the notices of lis pendens subject of this petition.[3]

In this light, the CA ruling left unprotected petitioner's claim of co- In its July 21, 2001 Resolution,[4] the CA denied petitioners
development over the Las Pias property. Hence, until the Motion for Reconsideration.
conflicting rights and interests are threshed out in the civil case
pending before the RTC, it will be in the best interest of the
parties and the public at large that a notice of the suit be given to
the whole world. The Facts

The Court is not here saying that petitioner is entitled to the

reliefs prayed for in its Complaint pending in the RTC. Verily, there
is no requirement that the right to or the interest in the property
subject of a lis pendens be proven by the applicant. The Rule
merely requires that an affirmative relief be claimed.[24] A
notation of lis pendens neither affects the merits of a case nor
creates a right or a lien.[25] It merely protects the applicant's
rights, which will be determined during the trial.
The factual antecedents of the case are summarized by the
CA in this wise:
On June 20, 1996, [respondent] and [petitioner] entered into a
Construction Contract whereby the former agreed to construct
four (4) units of [townhouses] designated as 16-A, 16-B, 17-A and
17-B and one (1) single detached unit for an original contract price
of P15,726,745.19 which was late[r] adjusted to P16,726,745.19
as a result of additional works. The contract period is 180 days
commencing [on] July 7, 1996 and to terminate on January 7,
1997. [Petitioner] claimed that the said period was not followed
due to reasons attributable to [respondent], namely: suspension
orders, additional works, force majeure, and unjustifiable acts of
omission or delay on the part of said [respondent]. [Respondent],
however, denied such claim and instead pointed to [petitioner] as
having exceeded the 180 day contract period aggravated by
defective workmanship and utilization of materials which are not
in compliance with specifications.
xxxxxxxxx
On November 21, 1997, [petitioner] filed a complaint for sum of
money with damages (Civil Case No. 97-2707) with the Regional
Trial Court of Makati entitled Atlantic Erectors, Incorporated vs.
Herbal Cove Realty Corp. and Ernest C. Escal[e]r. This case was
raffled to Branch 137, x x x Judge Santiago J. Ranada presiding. In
said initiatory pleading, [petitioner] AEI asked for the following
reliefs:
AFTER DUE NOTICE AND HEARING, to order x x x defendant to:
1. Pay plaintiff the sum of P4,854,229.94 for the unpaid
construction services already rendered;
2. To x x x pay plaintiff the sum of P1,595,551.00 for the
construction materials, equipment and tools of plaintiff held by
defendant;
3. To x x x pay plaintiff the sum of P2,250,000.00 for the [loss] x x
x of expected income from the construction project;
4. [T]o x x x pay plaintiff the sum of P800,000.00 for the cost of
income by way of rental from the equipment of plaintiff held by
defendants;
5. To x x x pay plaintiff the sum of P5,000,000.00 for moral
damages;
6. To x x x pay plaintiff the sum of P5,000,000.00 for exemplary
damages;
7. To x x x pay plaintiff the sum equivalent of 25% of the total
money claim plus P200,000.00 acceptance fee and P2,500.00 per
court appearance;
8. To x x x pay the cost of suit.
On the same day of November 21, 1997, [petitioner] filed a notice
of lis pendens for annotation of the pendency of Civil Case No. 97-
707 on titles TCTs nos. T-30228, 30229, 30230, 30231 and
30232. When the lots covered by said titles were subsequently
subdivided into 50 lots, the notices of lis pendens were carried
over to the titles of the subdivided lots, i.e., Transfer Certificate of
Title Nos. T-36179 to T-36226 and T-36245 to T-36246 of the
Register of Deeds of Tagaytay City.
On January 30, 1998, [respondent] and x x x Ernest L. Escaler, filed
a Motion to Dismiss [petitioners] Complaint for lack of jurisdiction
and for failure to state a cause of action. They claimed [that] the
Makati RTC has no jurisdiction over the subject matter of the case
because the parties Construction Contract contained a clause
requiring them to submit their dispute to arbitration.
xxxxxxxxx
On March 17, 1998, [RTC Judge Ranada] dismissed the Complaint
as against [respondent] for [petitioners] failure to comply with a
condition precedent to the filing of a court action which is the prior
resort to arbitration and as against x x x Escaler for failure of the
Complaint to state a cause of action x x x.
[Petitioner] filed a Motion for Reconsideration of the March 17,
1998 dismissal order. [Respondent] filed its Opposition thereto.
On April 24, 1998, [respondent] filed a Motion to Cancel Notice of
Lis Pendens. It argued that the notices of lis pendens are without
basis because [petitioners] action is a purely personal action to
collect a sum of money and recover damages and x x x does not
directly affect title to, use or possession of real property.
In his July 30, 1998 Order, [Judge Ranada] granted [respondents]
Motion to Cancel Notice of Lis Pendens x x x:
[Petitioner] filed a Motion for Reconsideration of the aforesaid
July 30, 1998 Order to which [respondent] filed an Opposition.
In a November 4, 1998 Order, [Judge Ranada,] while finding no
merit in the grounds raised by [petitioner] in its Motion for
Reconsideration, reversed his July 30, 1998 Order and reinstated
the notices of lis pendens, as follows:
1. The Court finds no merit in plaintiffs contention that in
dismissing the above-entitled case for lack of jurisdiction, and at
the same time granting defendant Herbal Coves motion to cancel
notice of lis pendens, the Court [took] an inconsistent
posture. The Rules provide that prior to the transmittal of the
original record on appeal, the court may issue orders for the
protection and preservation of the rights of the parties which do
not involve any matter litigated by the appeal (3rd par., Sec. 10,
Rule 41). Even as it declared itself without jurisdiction, this Court
still has power to act on incidents in this case, such as acting on
motions for reconsideration, for correction, for lifting of lis
pendens, or approving appeals, etc.
As correctly argued by defendant Herbal Cove, a notice of lis
pendens serves only as a precautionary measure or warning to
prospective buyers of a property that there is a pending litigation
involving the same.
The Court notes that when it issued the Order of 30 July 1998
lifting the notice of lis pendens, there was as yet no appeal filed
by plaintiff. Subsequently, on 10 September 1998, after a notice
of appeal was filed by plaintiff on 4 September 1998, the Branch
Clerk of Court was ordered by the Court to elevate the entire
records of the above-entitled case to the Court of Appeals. It
therefore results that the above-entitled case is still
pending. After a careful consideration of all matters relevant to
the lis pendens, the Court believes that justice will be better
served by setting aside the Order of 30 July 1998.
On November 27, 1998, [respondent] filed a Motion for
Reconsideration of the November 4, 1998 Order arguing that
allowing the notice of lis pendens to remain annotated on the
titles would defeat, not serve, the ends of justice and that
equitable considerations cannot be resorted to when there is an
applicable provision of law.
xxxxxxxxx
On October 22, 1999, [Judge Ranada] issued an order denying
[respondents] Motion for Reconsideration of the November 4,
1998 Order for lack of sufficient merit.[5]
Thereafter, Respondent Herbal Cove filed with the CA a
Petition for Certiorari.
Ruling of the Court of Appeals
Setting aside the Orders of the RTC dated November 4,
1998 and October 22, 1999, the CA reinstated the formers July 30,
1998 Order[6] granting Herbal Coves Motion to Cancel the Notice
of Lis Pendens. According to the appellate court, the re-
annotation of those notices was improper for want of any legal
basis. It specifically cited Section 76 of Presidential Decree No.
1529 (the Property Registration Decree). The decree provides that
the registration of such notices is allowed only when court
proceedings directly affect the title to, or the use or the
occupation of, the land or any building thereon.
The CA opined that the Complaint filed by petitioner in Civil
Case No. 97-2707 was intended purely to collect a sum of money
and to recover damages. The appellate court ruled that the
Complaint did not aver any ownership claim to the subject land or
any right of possession over the buildings constructed thereon. It
further declared that absent any claim on the title to the buildings
or on the possession thereof, the notices of lis pendens had no leg
to stand on.
Likewise, the CA held that Judge Ranada should have
maintained the notice cancellations, which he had directed in his
July 30, 1998 Order. Those notices were no longer necessary to
protect the rights of petitioner, inasmuch as it could have
procured protective relief from the Construction Industry Arbitral
Commission (CIAC), where provisional remedies were
available. The CA also mentioned petitioners admission that there
was already a pending case before the CIAC, which in fact
rendered a decision on March 11, 1999.
The appellate court further explained that the re-
annotation of the Notice of Lis Pendens was no longer warranted
after the court a quo had ruled that the latter had no jurisdiction
over the case. The former held that the rationale behind the
principle of lis pendens -- to keep the subject matter of the
litigation within the power of the court until the entry of final
judgment -- was no longer applicable. The reason for such
inapplicability was that the Makati RTC already declared that it
had no jurisdiction or power over the subject matter of the case.
Finally, the CA opined that petitioners Complaint had not
alleged or claimed, as basis for the continued annotation of the
Notice of Lis Pendens, the lien of contractors and laborers under
Article 2242 of the New Civil Code. Moreover, petitioner had not
even referred to any lien of whatever nature. Verily, the CA ruled
that the failure to allege and claim the contractors lien did not
warrant the continued annotation on the property titles of
Respondent Herbal Cove.
Hence, this Petition.[7]
The Issues
Petitioner raises the following issues for our consideration:
I. Whether or not money claims representing cost of
materials [for] and labor [on] the houses
constructed on a property [are] a proper lien for
annotation of lis pendens on the property title[.]
II. Whether or not the trial court[,] after having
declared itself without jurisdiction to try the
case[,] may still decide on [the] substantial issue
of the case.[8]
This Courts Ruling
The Petition has no merit.
First Issue:
Proper Basis for a
Notice of Lis Pendens
Petitioner avers that its money claim on the cost of labor
and materials for the townhouses it constructed on the
respondents land is a proper lien that justifies the annotation of a
notice of lis pendens on the land titles. According to petitioner,
the money claim constitutes a lien that can be enforced to secure
payment for the said obligations. It argues that, to preserve the
alleged improvement it had made on the subject land, such
annotation on the property titles of respondent is necessary.
On the other hand, Respondent Herbal Cove argues that the
annotation is bereft of any factual or legal basis, because petitioners
Complaint[9] does not directly affect the title to the property, or the
use or the possession thereof. It also claims that petitioners
Complaint did not assert ownership of the property or any right to
possess it. Moreover, respondent attacks as baseless
the annotation of the Notice of Lis Pendens through the
enforcement of a contractors lien under Article 2242 of the Civil
Code. It points out that the said provision applies only to cases in
which there are several creditors carrying on a legal action against
an insolvent debtor.
As a general rule, the only instances in which a notice of lis
pendens may be availed of are as follows: (a) an action to recover
possession of real estate; (b) an action for partition; and (c) any
other court proceedings that directly affect the title to the land or
the building thereon or the use or the occupation
thereof.[10] Additionally, this Court has held that resorting to lis
pendens is not necessarily confined to cases that involve title to or
possession of real property. This annotation also applies to suits
seeking to establish a right to, or an equitable estate or interest
in, a specific real property; or to enforce a lien, a charge or an
encumbrance against it.[11]
Apparently, petitioner proceeds on the premise that its
money claim involves the enforcement of a lien. Since the money
claim is for the nonpayment of materials and labor used in the
construction of townhouses, the lien referred to would have to be
that provided under Article 2242 of the Civil Code. This provision
describes a contractors lien over an immovable property as
follows:
Art. 2242. With reference to specific immovable property and real
rights of the debtor, the following claims, mortgages and liens
shall be preferred, and shall constitute an encumbrance on the
immovable or real right:
xxxxxxxxx
(3) Claims of laborers, masons, mechanics and other workmen, as
well as of architects, engineers and contractors, engaged in the
construction, reconstruction or repair of buildings, canals or other
works, upon said buildings, canals or other works;
(4) Claims of furnishers of materials used in the construction,
reconstruction, or repair of buildings, canals or other works, upon
said buildings, canals or other works[.] (Emphasis supplied)
However, a careful examination of petitioners Complaint,
as well as the reliefs it seeks, reveals that no such lien or interest
over the property was ever alleged. The Complaint merely asked
for the payment of construction services and materials plus
damages, without mentioning -- much less asserting -- a lien or an
encumbrance over the property. Verily, it was a purely personal
action and a simple collection case. It did not contain any material
averment of any enforceable right, interest or lien in connection
with the subject property.
As it is, petitioners money claim cannot be characterized as
an action that involves the enforcement of a lien or an
encumbrance, one that would thus warrant the annotation of the
Notice of Lis Pendens. Indeed, the nature of an action is
determined by the allegations of the complaint.[12]
Even assuming that petitioner had sufficiently alleged such
lien or encumbrance in its Complaint, the annotation of the
Notice of Lis Pendens would still be unjustified, because a
complaint for collection and damages is not the proper mode for
the enforcement of a contractors lien.
In J.L. Bernardo Construction v. Court of Appeals,[13] the
Court explained the concept of a contractors lien under Article
2242 of the Civil Code and the proper mode for its enforcement as
follows:
Articles 2241 and 2242 of the Civil Code enumerates certain
credits which enjoy preference with respect to specific personal
or real property of the debtor. Specifically, the contractors lien
claimed by the petitioners is granted under the third paragraph
of Article 2242 which provides that the claims of contractors
engaged in the construction, reconstruction or repair of buildings
or other works shall be preferred with respect to the specific
building or other immovable property constructed.
However, Article 2242 finds application when there is a
concurrence of credits, i.e., when the same specific property of
the debtor is subjected to the claims of several creditors and the
value of such property of the debtor is insufficient to pay in full
all the creditors.In such a situation, the question of preference
will arise, that is, there will be a need to determine which of the
creditors will be paid ahead of the others. Fundamental tenets of
due process will dictate that this statutory lien should then only
be enforced in the context of some kind of a proceeding where
the claims of all the preferred creditors may be bindingly
adjudicated, such as insolvency proceedings.[14] (Emphasis
supplied)
Clearly then, neither Article 2242 of the Civil Code nor the
enforcement of the lien thereunder is applicable here, because
petitioners Complaint failed to satisfy the foregoing
requirements. Nowhere does it show that respondents property
was subject to the claims of other creditors or was insufficient to
pay for all concurring debts. Moreover, the Complaint did not
pertain to insolvency proceedings or to any other action in which
the adjudication of claims of preferred creditors could be
ascertained.
Another factor negates the argument of petitioner that its
money claim involves the enforcement of a lien or the assertion of
title to or possession of the subject property: the fact that it filed
its action with the RTC of Makati, which is undisputedly bereft of
any jurisdiction over respondents property in Tagaytay
City. Certainly, actions affecting title to or possession of real
property or the assertion of any interest therein should be
commenced and tried in the proper court that has jurisdiction over
the area, where the real property involved or a portion thereof is
situated.[15] If petitioner really intended to assert its claim or
enforce its supposed lien, interest or right over respondents
subject properties, it would have instituted the proper
proceedings or filed a real action with the RTC of Tagaytay City,
which clearly had jurisdiction over those properties.[16]
Narciso Pea, a leading authority on the subject of land titles
and registration, gives an explicit exposition on the inapplicability
of the doctrine of lis pendens to certain actions and proceedings
that specifically include money claims. He explains in this wise:
By express provision of law, the doctrine of lis pendens does not
apply to attachments, levies of execution, or to proceedings for
the probate of wills, or for administration of the estate of
deceased persons in the Court of First Instance. Also, it is held
generally that the doctrine of lis pendens has no application to a
proceeding in which the only object sought is the recovery of a
money judgment, though the title or right of possession to
property be incidentally affected. It is essential that the property
be directly affected, as where the relief sought in the action or
suit includes the recovery of possession, or the enforcement of a
lien, or an adjudication between conflicting claims of title,
possession, or the right of possession to specific property, or
requiring its transfer or sale[17] (Emphasis supplied)
Pea adds that even if a party initially avails itself of a notice
of lis pendens upon the filing of a case in court, such notice is
rendered nugatory if the case turns out to be a purely personal
action. We quote him as follows:
It may be possible also that the case when commenced may
justify a resort to lis pendens, but during the progress thereof, it
develops to be purely a personal action for damages or
otherwise. In such event, the notice of lis pendens has
become functus officio.[18](Emphasis supplied)
Thus, when a complaint or an action is determined by the
courts to be in personam, the rationale for or purpose of the
notice of lis pendens ceases to exist. To be sure, this Court has
expressly and categorically declared that the annotation of a
notice of lis pendens on titles to properties is not proper in cases
wherein the proceedings instituted are actions in personam.[19]
Second Issue:
Jurisdiction of the Trial Court
Petitioner argues that the RTC had no jurisdiction to issue
the Order canceling the Notice of Lis Pendens as well as the Order
reinstating it. Supposedly, since both Orders were issued by the
trial court without jurisdiction, the annotation made by the
Register of Deeds of Tagaytay City must remain in force.
Petitioner avers that the trial court finally declared that the
latter had no jurisdiction over the case on July 27, 1998, in an
Order denying the formers Motion for Reconsideration of the
March 17, 1998 Order dismissing the Complaint. Petitioner insists
that the subsequent July 30, 1998 Order cancelling the subject
Notice of Lis Pendens is void, because it was issued by a court that
had no more jurisdiction over the case.
action for the enforcement of a contractors lien. Verily, the
annotation of the Notice of Lis Pendens on the subject property
titles should not have been made in the first place. The Complaint
filed before the Makati RTC -- for the collection of a sum of money
and for damages -- did not provide sufficient legal basis for such
annotation.
Finally, petitioner vehemently insists that the trial court
had no jurisdiction to cancel the Notice. Yet, the former filed
before the CA an appeal, docketed as CA-GR CV No.
65647,[21] questioning the RTCs dismissal of the Complaint for lack
of jurisdiction. Moreover, it must be remembered that it was
petitioner which had initially invoked the jurisdiction of the trial
court when the former sought a judgment for the recovery of
money and damages against respondent. Yet again, it was also
petitioner which assailed that same jurisdiction for issuing an
order unfavorable to the formers cause. Indeed, parties cannot
invoke the jurisdiction of a court to secure affirmative relief, then
repudiate or question that same jurisdiction after obtaining or
failing to obtain such relief.[22]
WHEREFORE, the Petition is hereby DENIED and the
assailed Decision AFFIRMED. Costs against petitioner.
SO ORDERED.

Rule 41 of the 1997 Rules on Civil Procedure, which governs

appeals from regional trial courts, expressly provides that RTCs
lose jurisdiction over a case when an appeal is filed. The rule reads
thus:

SEC. 9. Perfection of appeal; effect thereof. -- A partys appeal by

notice of appeal is deemed perfected as to him upon the filing of
the notice of appeal in due time.

xxxxxxxxx

In appeals by notice of appeal, the court loses jurisdiction over

the case upon the perfection of the appeals filed in due time and
the expiration of the time to appeal of the other
parties. (Emphasis supplied)
G.R. No. 189477 February 26, 2014

On the basis of the foregoing rule, the trial court lost

jurisdiction over the case only on August 31, 1998, when
petitioner filed its Notice of Appeal.[20] Thus, any order issued by
the RTC prior to that date should be considered valid, because the
court still had jurisdiction over the case. Accordingly, it still had
the authority or jurisdiction to issue the July 30, 1998 Order
canceling the Notice of Lis Pendens. On the other hand,
the November 4, 1998 Order that set aside the July 30,
1998Order and reinstated that Notice should be considered
without force and effect, because it was issued by the trial court
after it had already lost jurisdiction.
In any case, even if we were to adopt petitioners theory
that both the July 30, 1998 and the November 4, 1998 Orders
were void for having been issued without jurisdiction, the
annotation is still improper for lack of factual and legal bases.
As discussed previously, erroneously misplaced is the
reliance of petitioner on the premise that its money claim is an
HOMEOWNERS SAVINGS AND LOAN BANK, Petitioner-Appellant,
vs.
ASUNCION P. FELONIA and LYDIA C. DE GUZMAN, represented
by MARIBEL FRIAS, Respondents-Appellees.
MARIE MICHELLE P. DELGADO, REGISTER OF DEEDS OF LAS
PINAS CITY and RHANDOLFO B. AMANSEC, in his capacity as
Clerk of Court Ex-Officio Sheriff, Office of the Clerk of Court, Las
Pias City,Respondents-Defendants.
DECISION
PEREZ, J.:
Assailed in this Petition for Review on Certiorari is the
Decision1 and Resolution2 of the Court of Appeals (CA), in CA-G.R.
CV No. 87540, which affirmed with modifications, the Decision 3 of
the Regional Trial Court (RTC), reinstating the title of respondents
Asuncion Felonia (Felonia) and Lydia de Guzman (De Guzman) and
cancelling the title of Marie Michelle Delgado (Delgado).
The facts as culled from the records are as follows:
Felonia and De Guzman were the registered owners of a parcel of
land consisting of 532 square meters with a five-bedroom house,
covered by Transfer of Certificate of Title (TCT) No. T-402 issued
by the register of deeds of Las Pias City.
Sometime in June 1990, Felonia and De Guzman mortgaged the
property to Delgado to secure the loan in the amount of
1,655,000.00. However, instead of a real estate mortgage, the
parties executed a Deed of Absolute Sale with an Option to
Repurchase.4
On 20 December 1991, Felonia and De Guzman filed an action for
Reformation of Contract (Reformation case), docketed as Civil
Case No. 91-59654, before the RTC of Manila. On the findings that
it is "very apparent that the transaction had between the parties
is one of a mortgage and not a deed of sale with right to
repurchase,"5 the RTC, on 21 March 1995 rendered a judgment
favorable to Felonia and De Guzman. Thus:
WHEREFORE, judgment is hereby rendered directing the [Felonia
and De Guzman] and the [Delgado] to execute a deed of mortgage
over the property in question taking into account the payments
made and the imposition of the legal interests on the principal
loan.
On the other hand, the counterclaim is hereby dismissed for lack
of merit.
No pronouncements as to attorneys fees and damages in both
instances as the parties must bear their respective expenses
incident to this suit.6
Aggrieved, Delgado elevated the case to the CA where it was
docketed as CA-G.R. CV No. 49317. The CA affirmed the trial court
decision. On 16 October 2000, the CA decision became final and
executory.7
Inspite of the pendency of the Reformation case in which she was
the defendant, Delgado filed a "Petition for Consolidation of
Ownership of Property Sold with an Option to Repurchase and
Issuance of a New Certificate of Title" (Consolidation case) in the
RTC of Las Pias, on 20 June 1994.8 After an ex-parte hearing, the
RTC ordered the issuance of a new title under Delgados name,
thus:
WHEREFORE, judgment is rendered-
1. Declaring [DELGADO] as absolute owner of the
subject parcel of land covered by Transfer Certificate
of Title No. T-402 of the Register of Deeds of Las Pias,
Metro Manila;
2. Ordering the Register of Deeds of Las Pias, Metro
Manila to cancel Transfer Certificate of Title No. T-402
and issue in lieu thereof a new certificate of title and
owners duplicate copy thereof in the name of
[DELGADO].9
By virtue of the RTC decision, Delgado transferred the title to her
name. Hence, TCT No. T-402, registered in the names of Felonia
and De Guzman, was canceled and TCT No. 44848 in the name of
Delgado, was issued.
Aggrieved, Felonia and De Guzman elevated the case to the CA
through a Petition for Annulment of Judgment.10
Meanwhile, on 2 June 1995, Delgado mortgaged the subject
property to Homeowners Savings and Loan Bank (HSLB) using her
newly registered title. Three (3) days later, or on 5 June 1995,
HSLB caused the annotation of the mortgage.
On 14 September 1995, Felonia and De Guzman caused the
annotation of a Notice of Lis Pendens on Delgados title, TCT No.
44848. The Notice states:
Entry No. 8219/T-44848 NOTICE OF LIS PENDENS filed by Atty.
Humberto A. Jambora, Counsel for the Plaintiff, that a case been
commenced in the RTC, Branch 38, Manila, entitled ASUNCION P.
FELONIA and LYDIA DE GUZMAN thru VERONICA P. BELMONTE, as
Atty-in-fact (Plaintiffs) v.s. MARIE MICHELLE DELGADO defendant
in Civil Case No. 91-59654 for Reformation of Instrument.
Copy on file in this Registry.
Date of Instrument Sept. 11, 1995
Date of Inscription Sept. 14, 1995 at 9:55 a.m.11
On 20 November1997, HSLB foreclosed the subject property and
later consolidated ownership in its favor, causing the issuance of a
new title in its name, TCT No. 64668.
On 27 October 2000, the CA annulled and set aside the decision of
the RTC, Las Pias City in the Consolidation case. The decision of
the CA, declaring Felonia and De Guzman as the absolute owners
of the subject property and ordering the cancellation of Delgados
title, became final and executory on 1 December 2000.12 Thus:
WHEREFORE, the petition is GRANTED and the subject judgment
of the court a quo is ANNULLED and SET ASIDE.13
On 29 April 2003, Felonia and De Guzman, represented by Maribel
Frias (Frias), claiming to be the absolute owners of the subject
property, instituted the instant complaint against Delgado, HSLB,
Register of Deeds of Las Pias City and Rhandolfo B. Amansec
before the RTC of Las Pias City for Nullity of Mortgage and
Foreclosure Sale, Annulment of Titles of Delgado and HSLB, and
finally, Reconveyance of Possession and Ownership of the subject
property in their favor.
As defendant, HSLB asserted that Felonia and De Guzman are
barred from laches as they had slept on their rights to timely
annotate, by way of Notice of Lis Pendens, the pendency of the
Reformation case. HSLB also claimed that it should not be bound
by the decisions of the CA in the Reformation and Consolidation
cases because it was not a party therein.
Finally, HSLB asserted that it was a mortgagee in good faith
because the mortgage between Delgado and HSLB was annotated
on the title on 5 June 1995, whereas the Notice of Lis Pendens
was annotated only on 14 September 1995.
After trial, the RTC ruled in favor of Felonia and De Guzman as the
absolute owners of the subject property. The dispositive portion
of the RTC decision reads:
WHEREFORE, premises considered, the Court hereby finds for the
[Felonia and De Guzman] with references to the decision of the
Court of Appeals in CA-G.R. CV No. 49317 and CA-G.R. SP No.
43711 as THESE TWO DECISIONS CANNOT BE IGNORED and
against [Delgado] and [HSLB], Register of Deeds of Las Pias City
ordering the (sic) as follows:
1. The Register of Deeds of Las Pias City to cancel
Transfer Certificate of Title Nos. 44848 and T-64668 as
null and void and reinstating Transfer Certificate of
Title No. T-402 which shall contain a memorandum of
the fact and shall in all respect be entitled to like faith
and credit as the original certificate of title and shall,
thereafter be regarded as such for all intents and
purposes under the law;
2. Declaring the Mortgage Sheriffs Sale and the
Certificate of Sale issued in favor of HSLB null and void,
without prejudice to whatever rights the said Bank
may have against [Delgado];
3. Ordering [Delgado] to pay [Felonia and De Guzman]
the amount of PH500,000.00 for compensatory
damages;
4. Ordering [Delgado] to pay [Felonia and De Guzman]
the amount of PH500,000.00 for exemplary damages;
5. Ordering [Delgado] to pay [Felonia and De Guzman]
the amount of PH500,000.00 for moral damages;
6. Ordering [Delgado] to pay 20% of the total
obligations as and by way of attorneys fees;
7. Ordering [Delgado] to pay cost of suit.14
On appeal, the CA affirmed with modifications the trial court
decision. The dispositive portion of the appealed Decision reads:
WHEREFORE, in the light of the foregoing, the decision appealed
from is AFFIRMED with the MODIFICATIONS that the awards of
actual damages and attorneys fees are DELETED, moral and
exemplary damages are REDUCED to 50,000.00 each, and
Delgado is ordered to pay the appellees 25,000.00 as nominal
damages.15
Hence, this petition.
Notably, HSLB does not question the affirmance by the CA of the
trial courts ruling that TCT No. 44848, the certificate of title of its
mortgagor-vendor, and TCT No. 64668, the certificate of title that
was secured by virtue of the Sheriffs sale in its favor, should be
cancelled "as null and void" and that TCT No. T-402 in the name of
Felonia and De Guzman should be reinstated.
Recognizing the validity of TCT No. T-402 restored in the name of
Felonia and De Guzman, petitioners pray that the decision of the
CA be modified "to the effect that the mortgage lien in favor of
petitioner HSLB annotated as entry No. 4708-12 on TCT No. 44848
be [ordered] carried over on TCT No. T-402 after it is reinstated in
the name of [Felonia and De Guzman]."16
Proceeding from the ruling of the CA that it is a mortgagee in
good faith, HSLB argues that a denial of its prayer would run
counter to jurisprudence giving protection to a mortgagee in good
faith by reason of public policy.
We cannot grant the prayer of petitioner. The priorly registered
mortgage lien of HSLB is now worthless.
Arguably, HSLB was initially a mortgagee in good faith. In Bank of
Commerce v. San Pablo, Jr.,17 the doctrine of mortgagee in good
faith was explained:
There is, however, a situation where, despite the fact that the
mortgagor is not the owner of the mortgaged property, his title
being fraudulent, the mortgage contract and any foreclosure sale
arising there from are given effect by reason of public policy. This
is the doctrine of "the mortgagee in good faith" based on the rule
that all persons dealing with property covered by the Torrens
Certificates of Title, as buyers or mortgagees, are not required to
go beyond what appears on the face of the title. The public
interest in upholding indefeasibility of a certificate of title, as
evidence of lawful ownership of the land or of any encumbrance
thereon, protects a buyer or mortgagee who, in good faith, relied
upon what appears on the face of the certificate of title.
When the property was mortgaged to HSLB, the registered owner
of the subject property was Delgado who had in her name TCT No.
44848. Thus, HSLB cannot be faulted in relying on the face of
Delgados title. The records indicate that Delgado was at the time
of the mortgage in possession of the subject property and
Delgados title did not contain any annotation that would arouse
HSLBs suspicion. HSLB, as a mortgagee, had a right to rely in good
faith on Delgados title, and in the absence of any sign that might
arouse suspicion, HSLB had no obligation to undertake further
investigation. As held by this Court in Cebu International Finance
Corp. v.
CA:18
The prevailing jurisprudence is that a mortgagee has a right to rely
in good faith on the certificate of title of the mortgagor of the
property given as security and in the absence of any sign that
might arouse suspicion, has no obligation to undertake further
investigation. Hence, even if the mortgagor is not the rightful
owner of, or does not have a valid title to, the mortgaged
property, the mortgagee or transferee in good faith is nonetheless
entitled to protection.
However, the rights of the parties to the present case are defined Indeed, at the time HSLB bought the subject property, HSLB had
not by the determination of whether or not HSLB is a mortgagee actual knowledge of the annotated Notice of Lis Pendens. Instead
in good faith, but of whether or not HSLB is a purchaser in good of heeding the same, HSLB continued with the purchase knowing
faith. And, HSLB is not such a purchaser. the legal repercussions a notice of lis pendens entails. HSLB took
upon itself the risk that the Notice of Lis Pendens leads
to.1wphi1 As correctly found by the CA, "the notice of lis
A purchaser in good faith is defined as one who buys a property
pendens was annotated on 14 September 1995, whereas the
without notice that some other person has a right to, or interest
foreclosure sale, where the appellant was declared as the highest
in, the property and pays full and fair price at the time of
bidder, took place sometime in 1997. There is no doubt that at
purchase or before he has notice of the claim or interest of other
the time appellant purchased the subject property, it was aware
persons in the property.19
of the pending litigation concerning the same property and thus,
the title issued in its favor was subject to the outcome of said
When a prospective buyer is faced with facts and circumstances litigation."24
as to arouse his suspicion, he must take precautionary steps to
qualify as a purchaser in good faith. In Spouses Mathay v. CA,20 we
This ruling is in accord with Rehabilitation Finance Corp. v.
determined the duty of a prospective buyer:
Morales,25 which underscored the significance of a lis pendens,
then defined in Sec. 24, Rule 7 now Sec. 14 of Rule 13 in relation
Although it is a recognized principle that a person dealing on a to a mortgage priorly annotated on the title covering the
registered land need not go beyond its certificate of title, it is also property. Thus:
a firmly settled rule that where there are circumstances which
would put a party on guard and prompt him to investigate or
The notice of lis pendens in question was annotated on the back
inspect the property being sold to him, such as the presence of
of the certificate of title as a necessary incident of the civil action
occupants/tenants thereon, it is of course, expected from the
to recover the ownership of the property affected by it. The
purchaser of a valued piece of land to inquire first into the status
mortgage executed in favor of petitioner corporation was
or nature of possession of the occupants, i.e., whether or not the
annotated on the same title prior to the annotation of the notice
occupants possess the land en concepto de dueo, in the concept
of lis pendens; but when petitioner bought the property as the
of the owner. As is the common practice in the real estate
highest bidder at the auction sale made as an aftermath of the
industry, an ocular inspection of the premises involved is a
foreclosure of the mortgage, the title already bore the notice of lis
safeguard a cautious and prudent purchaser usually takes. Should
pendens. Held: While the notice of lis pendens cannot affect
he find out that the land he intends to buy is occupied by anybody
petitioners right as mortgagee, because the same was annotated
else other than the seller who, as in this case, is not in actual
subsequent to the mortgage, yet the said notice affects its right as
possession, it would then be incumbent upon the purchaser to
purchaser because notice of lis pendens simply means that a
verify the extent of the occupants possessory rights. The failure
certain property is involved in a litigation and serves as a notice to
of a prospective buyer to take such precautionary steps would
the whole world that one who buys the same does so at his own
mean negligence on his part and would thereby preclude him
risk.26
from claiming or invoking the rights of a purchaser in good faith.

The subject of the lis pendens on the title of HSLBs vendor,

In the case at bar, HSLB utterly failed to take the necessary
Delgado, is the "Reformation case" filed against Delgado by the
precautions.1wphi1 At the time the subject property was
herein respondents. The case was decided with finality by the CA
mortgaged, there was yet no annotated Notice of Lis Pendens.
in favor of herein respondents. The contract of sale in favor of
However, at the time HSLB purchased the subject property, the
Delgado was ordered reformed into a contract of mortgage. By
Notice of Lis Pendens was already annotated on the title.21
final decision of the CA, HSLBs vendor, Delgado, is not the
property owner but only a mortgagee. As it turned out, Delgado
Lis pendens is a Latin term which literally means, "a pending suit could not have constituted a valid mortgage on the property. That
or a pending litigation" while a notice of lis pendens is an the mortgagor be the absolute owner of the thing mortgaged is
announcement to the whole world that a real property is in an essential requisite of a contract of mortgage. Article 2085 (2) of
litigation, serving as a warning that anyone who acquires an the Civil Code specifically says so:
interest over the property does so at his/her own risk, or that
he/she gambles on the result of the litigation over the
Art. 2085. The following requisites are essential to the contracts
property.22 It is a warning to prospective buyers to take
of pledge and mortgage:
precautions and investigate the pending litigation.

xxxx
The purpose of a notice of lis pendens is to protect the rights of
the registrant while the case is pending resolution or decision.
With the notice of lis pendens duly recorded and remaining (2) That the pledgor or mortagagor be the absolute owner of the
uncancelled, the registrant could rest secure that he/she will not thing pledged or mortgaged.
lose the property or any part thereof during litigation.
Succinctly, for a valid mortgage to exist, ownership of the
The doctrine of lis pendens is founded upon reason of public property is an essential requisite.27
policy and necessity, the purpose of which is to keep the subject
matter of the litigation within the Courts jurisdiction until the
Reyes v. De Leon28 cited the case of Philippine National Bank v.
judgment or the decree have been entered; otherwise, by
Rocha29 where it was pronounced that "a mortgage of real
successive alienations pending the litigation, its judgment or
property executed by one who is not an owner thereof at the time
decree shall be rendered abortive and impossible of execution.23
of the execution of the mortgage is without legal existence." Such
that, according to DBP v. Prudential Bank,30 there being no valid
mortgage, there could also be no valid foreclosure or valid auction
sale.
We go back to Bank of Commerce v. San Pablo, Jr.31 where the
doctrine of mortgagee in good faith, upon which petitioner relies,
was clarified as "based on the rule that all persons dealing with
property covered by the Torrens Certificate of Title, as buyers or
mortgagees, are not required to go beyond what appears on the
face of the title. In turn, the rule is based on "x x x public interest
in upholding the indefeasibility of a certificate of title, as evidence
of lawful ownership of the land or of any encumbrance
thereon."32
On March 22, 2004, petitioner filed with the RTC of Las Pias City,
Branch 253 an original petition for the cancellation of the notice
of lis pendens, as well as of all the other entries of involuntary
encumbrances annotated on the original copy of TCT No. 49936.
Invoking the inherent power of the trial court to grant relief
according to the petition, petitioner prayed that the notice of lis
pendens as well as all the other annotations on the said title be
cancelled. Petitioner claimed that its owner's duplicate copy of
the TCT was clean at the time of its delivery and that it was
surprised to learn later on that the original copy of its TCT, on file
with the Register of Deeds, contained several entries which all
signified that the covered property had been subjected to various
claims. The subject notice of lis pendens is one of such
entries.8 The notations appearing on the title's memorandum of
encumbrances are as follows:

Insofar as the HSLB is concerned, there is no longer any public

Entry No. 81-8334/T-30459 - ADVERSE CLAIM - In an affidavit duly
interest in upholding the indefeasibility of the certificate of title of
subscribed and sworn to, BRUNO F. CASIM claims, among other
its mortgagor, Delgado. Such title has been nullified in a decision
things, that he has the right and interest over the property
that had become final and executory. Its own title, derived from
described herein in accordance with Doc. No. 336; Page No. 69;
the foreclosure of Delgado's mortgage in its favor, has likewise
Book No. 1; s. of 1981 of Not. Pub. of Makati, M.M., Romarie G.
been nullified in the very same decision that restored the
Villonco, dated August 4, 1981.
certificate of title in respondents' name. There is absolutely no
reason that can support the prayer of HSLB to have its mortgage
lien carried over and into the restored certificate of title of Date of inscription - Aug. 5, 1981 - 2:55 p.m.
respondents.
(Sgd) VICTORIANO S. TORRES, Actg. Reg. of Deeds
WHEREFORE, the Petition is DENIED. The Decision of the Court of
Appeals in CA-G.R. CV No. 87540 is AFFIRMED. SO ORDERED.
Entry No. 82-4676/T-49936 - CANCELLATION OF ADVERSE CLAIM
inscribed hereon under Entry No. 81-8334/T-30459 in accordance
with Doc. No. 247; Page 50; Book No. CXLI; s. of 1982 of Not. Pub.
of Pasay City, M.M., Julian G. Tubig, dated April 21, 1982.
G.R. No. 168655 July 2, 2010
Date of inscription - April 21, 1982 - 8:40 a.m.
J. CASIM CONSTRUCTION SUPPLIES, INC., Petitioner,
vs. (Sgd) VICTORIANO S. TORRES, Actg. Reg. of Deeds
REGISTRAR OF DEEDS OF LAS PIAS, Respondent.
INTESTATE ESTATE OF BRUNEO F. CASIM, (Purported) Intervenor.
Entry No. 82-4678/T-49936 - AFFIDAVIT - In accordance with the
affidavit duly executed by the herein registered owners, this title
DECISION is hereby cancelled and in lieu thereof TCT No. 49936/T-228 has
been issued in accordance with Doc. No. 249; Page No. 80; Book
No. CXLI; s. of 1982 of Not. Pub. of Pasay City, M.M., Julian G.
PERALTA, J.:
Tubig, dated April 21, 1982.

This is a petition for review under Rule 45 of the Rules of Court,

Date of inscription - April 21, 1982 - 8:44 a.m.
taken directly on a pure question of law from the April 14, 2005
Resolution1 and June 24, 2005 Order2 issued by the Regional Trial
Court (RTC) of Las Pias City, Branch 253 in Civil Case No. LP-04- (Sgd) VICTORIANO S. TORRES, Actg. Reg. of Deeds
00713 one for cancellation of notice of lis pendens. The assailed
Resolution dismissed for lack of jurisdiction the petition filed by J.
Entry No. 81-12423/T-30459 - NOTICE OF LIS PENDENS: By virtue
Casim Construction Supplies Inc. for cancellation of notice of lis
of the notice of Lis Pendens presented and filed by CESAR P.
pendens annotated on its certificate of title, whereas the assailed
MANALAYSAY, counsel for the plaintiff, notice is hereby given that
Order denied reconsideration.
a petition for review has been commenced and now pending in
the Court of First Instance of Rizal, Branch XXIX, Pasay, M.M, in
The facts follow. Civil Case No. LP-9438-P, BRUNEO F. CASIM, Plaintiff, vs. SPS.
JESUS A. CASIM & MARGARITA CHAVEZ and Sps. Urbano Nobleza
and Cristita J. Nobleza, and Filomena C. Antonio, Defendants,
Petitioner, represented herein by Rogelio C. Casim, is a duly
involving the property described herein.
organized domestic corporation4 in whose name Transfer
Certificate of Title (TCT) No. 49936,5 covering a 10,715-square
meter land was registered. Sometime in 1982, petitioner acquired Date of the instrument - Sept. 17, 1981
the covered property by virtue of a Deed of Absolute Sale6 and as
a result the mother title, TCT No. 30459 was cancelled and TCT
Date of the inscription - Sept. 18, 1981 - 3:55 p.m.
No. 49936 was issued in its stead.7
 (Sgd) VICTORIANO S. TORRES, Actg. Reg. of Deeds9 Petitioner moved for reconsideration,18 but it was denied in the
trial court's June 24, 2005 Order.19
To justify the cancellation, petitioner alleged that the notice of lis
pendens, in particular, was a forgery judging from the Now, raising the purely legal question of whether the RTC of Las
inconsistencies in the inscriber's signature as well as from the fact Pias City, Branch 253 has jurisdiction in an original action to
that the notice was entered non-chronologically, that is, the date cancel the notice of lis pendens annotated on the subject title as
thereof is much earlier than that of the preceding entry. In this an incident in a previous case, petitioner, in this present petition,
regard, it noted the lack of any transaction record on file with the ascribes error to the trial court in dismissing its petition for
Register of Deeds that would support the notice of lis pendens cancellation. An action for cancellation of notice of lis pendens,
annotation.10 petitioner believes, is not always ancillary to an existing main
action because a trial court has the inherent power to cause such
cancellation, especially in this case that petitioner was never a
Petitioner also stated that while Section 59 of Presidential Decree
party to the litigation to which the notice of lis pendens
(P.D.) No. 1529 requires the carry-over of subsisting
relates.20 Petitioner further posits that the trial court has
encumbrances in the new issuances of TCTs, petitioner's duplicate
committed an error in declining to rule on the allegation of
copy of the title did not contain any such carry-over, which means
forgery, especially since there is no transaction record on file with
that it was an innocent purchaser for value, especially since it was
the Register of Deeds relative to said entries. It likewise points out
never a party to the civil case referred to in the notice of lis
that granting the notice of lis pendens has been properly
pendens. Lastly, it alludes to the indefeasibility of its title despite
annotated on the title, the fact that its owner's duplicate title is
the fact that the mother title, TCT No. 30459, might have suffered
clean suggests that it was never a party to the civil case referred
from certain defects and constraints.11
to in the notice.21 Finally, petitioner posits that TCT No. 49936 is
indefeasible and holds it free from any liens and encumbrances
The Intestate Estate of Bruneo F. Casim, representing Bruneo F. which its mother title, TCT No. 30459, might have suffered.22
Casim, intervened in the instant case and filed a
Comment/Opposition12 in which it maintained that the RTC of Las
The Intestate Estate of Bruneo F. Casim (intervenor), in its
Pias did not have jurisdiction over the present action, because
Comment on the present petition, reiterates that the court a quo
the matter of canceling a notice of lis pendens lies within the
does not have jurisdiction to order the cancellation of the subject
jurisdiction of the court before which the main action referred to
notice of lis pendens because it is only the court exercising
in the notice is pending. In this regard, it emphasized that the case
jurisdiction over the property which may order the same that is,
referred to in the said notice had already attained finality as the
the court having jurisdiction over the main action in relation to
Supreme Court had issued an entry of judgment therein and that
which the registration of the notice has been sought. Also, it notes
the RTC of Makati City had ordered execution in that case.13 It
that even on the assumption that the trial court had such
cited the lack of legal basis for the petition in that nothing in the
jurisdiction, the petition for cancellation still has no legal basis as
allegations hints at any of the legal grounds for the cancellation of
petitioner failed to establish the grounds therefor. Also, the
notice of lis pendens.14 And, as opposed to petitioner's claim that
subject notice of lis pendens was validly carried over to TCT No.
there was no carry-over of encumbrances made in TCT No. 49936
49936 from the mother title, TCT No. 30459.
from the mother title TCT No. 30459, the latter would show that it
also had the same inscriptions as those found in TCT No. 49936
only that they were entered in the original copy on file with the In its Reply,23 petitioner, in a semantic slur, dealt primarily with
Register of Deeds. Also, as per Certification15 issued by the the supposed inconsistencies in intervenor's arguments. Yet the
Register of Deeds, petitioner's claim of lack of transaction record core of its contention is that the non-chronological annotation of
could not stand, because the said certification stated merely that the notice stands to be the best evidence of forgery. From this, it
the corresponding transaction record could no longer be retrieved advances the notion that forgery of the notice of lis pendens
and might, therefore, be considered as either lost or destroyed. suffices as a ground for the cancellation thereof which may be
availed of in an independent action by the aggrieved party.
On April 14, 2005, the trial court, ruling that it did not have
jurisdiction over the action, resolved to dismiss the petition and The petition is utterly unmeritorious.
declared that the action must have been filed before the same
court and in the same action in relation to which the annotation
Lis pendens which literally means pending suit refers to the
of the notice of lis pendens had been sought. Anent the allegation
jurisdiction, power or control which a court acquires over the
that the entries in the TCT were forged, the trial court pointed out
property involved in a suit, pending the continuance of the action,
that not only did petitioner resort to the wrong forum to
and until final judgment.24Founded upon public policy and
determine the existence of forgery, but also that forgery could not
necessity, lis pendens is intended to keep the properties in
be presumed merely from the alleged non-chronological entries in
litigation within the power of the court until the litigation is
the TCT but instead must be positively proved. In this connection,
terminated, and to prevent the defeat of the judgment or decree
the trial court noted petitioner's failure to name exactly who had
by subsequent alienation.25 Its notice is an announcement to the
committed the forgery, as well as the lack of evidence on which
whole world that a particular property is in litigation and serves as
the allegation could be based.16 The petition was disposed of as
a warning that one who acquires an interest over said property
follows:
does so at his own risk, or that he gambles on the result of the
litigation over said property.26
IN VIEW OF THE FOREGOING, the instant petition is hereby
DISMISSED.
A notice of lis pendens, once duly registered, may be cancelled by
the trial court before which the action involving the property is
SO ORDERED.17 pending. This power is said to be inherent in the trial court and is
exercised only under express provisions of law.27 Accordingly,
Section 14, Rule 13 of the 1997 Rules of Civil Procedure authorizes
the trial court to cancel a notice of lis pendens where it is properly
shown that the purpose of its annotation is for molesting the
adverse party, or that it is not necessary to protect the rights of
the party who caused it to be annotated. Be that as it may, the
power to cancel a notice of lis pendens is exercised only under
exceptional circumstances, such as: where such circumstances are
imputable to the party who caused the annotation; where the
litigation was unduly prolonged to the prejudice of the other party
because of several continuances procured by petitioner; where
the case which is the basis for the lis pendens notation was
dismissed for non prosequitur on the part of the plaintiff; or
where judgment was rendered against the party who caused such
a notation. In such instances, said notice is deemed ipso
facto cancelled.28
In theorizing that the RTC of Las Pias City, Branch 253 has the
inherent power to cancel the notice of lis pendens that was
incidentally registered in relation to Civil Case No. 2137, a case
which had been decided by the RTC of Makati City, Branch 62 and
affirmed by the Supreme Court on appeal, petitioner advocates
that the cancellation of such a notice is not always ancillary to a
main action.
The argument fails.
From the available records, it appears that the subject notice of lis
pendens had been recorded at the instance of Bruneo F. Casim
(Bruneo) in relation to Civil Case No. 213729 one for annulment
of sale and recovery of real property which he filed before the
RTC of Makati City, Branch 62 against the spouses Jesus and
Margarita Casim, predecessors-in-interest and stockholders of
petitioner corporation. That case involved the property subject of
the present case, then covered by TCT No. 30459. At the close of
the trial on the merits therein, the RTC of Makati rendered a
decision adverse to Bruneo and dismissed the complaint for lack
of merit.30 Aggrieved, Bruneo lodged an appeal with the Court of
Appeals, docketed as CA-G.R. CV No. 54204, which reversed and
set aside the trial court's decision.31 Expectedly, the spouses Jesus
and Margarita Casim elevated the case to the Supreme Court,
docketed as G.R. No. 151957, but their appeal was dismissed for
being filed out of time.32
A necessary incident of registering a notice of lis pendens is that
the property covered thereby is effectively placed, until the
litigation attains finality, under the power and control of the court
having jurisdiction over the case to which the notice relates.33 In
this sense, parties dealing with the given property are charged
with the knowledge of the existence of the action and are
deemed to take the property subject to the outcome of the
litigation.34 It is also in this sense that the power possessed by a
trial court to cancel the notice of lis pendens is said to be inherent
as the same is merely ancillary to the main action.351avvphi1
Thus, in Vda. de Kilayko v. Judge Tengco,36 Heirs of Maria
Marasigan v. Intermediate Appellate Court37 and Tanchoco v.
Aquino,38 it was held that the precautionary notice of lis pendens
may be ordered cancelled at any time by the court having
jurisdiction over the main action inasmuch as the same is merely
an incident to the said action. The pronouncement in Heirs of
Eugenio Lopez, Sr. v. Enriquez, citing Magdalena Homeowners
Association, Inc. v. Court of Appeals,39 is equally instructive
The notice of lis pendens x x x is ordinarily recorded without the
intervention of the court where the action is pending. The notice
is but an incident in an action, an extrajudicial one, to be sure. It
does not affect the merits thereof. It is intended merely to
constructively advise, or warn, all people who deal with the
property that they so deal with it at their own risk, and whatever
rights they may acquire in the property in any voluntary
transaction are subject to the results of the action, and may well
be inferior and subordinate to those which may be finally
determined and laid down therein. The cancellation of such a
precautionary notice is therefore also a mere incident in the
action, and may be ordered by the Court having jurisdiction of it
at any given time. x x x40
Clearly, the action for cancellation of the notice of lis pendens in
this case must have been filed not before the court a quo via an
original action but rather, before the RTC of Makati City, Branch
62 as an incident of the annulment case in relation to which its
registration was sought. Thus, it is the latter court that has
jurisdiction over the main case referred to in the notice and it is
that same court which exercises power and control over the real
property subject of the notice.
But even so, the petition could no longer be expected to pursue
before the proper forum inasmuch as the decision rendered in the
annulment case has already attained finality before both the
Court of Appeals and the Supreme Court on the appellate level,
unless of course there exists substantial and genuine claims
against the parties relative to the main case subject of the notice
of lis pendens.41 There is none in this case. It is thus well to note
that the precautionary notice that has been registered relative to
the annulment case then pending before the RTC of Makati City,
Branch 62 has served its purpose. With the finality of the decision
therein on appeal, the notice has already been rendered functus
officio. The rights of the parties, as well as of their successors-in-
interest, petitioner included, in relation to the subject property,
are hence to be decided according the said final decision.
To be sure, petitioner is not altogether precluded from pursuing a
specific remedy, only that the suitable course of action legally
available is not judicial but rather administrative. Section 77 of
P.D. No. 1529 provides the appropriate measure to have a notice
of lis pendens cancelled out from the title, that is by presenting to
the Register of Deeds, after finality of the judgment rendered in
the main action, a certificate executed by the clerk of court before
which the main action was pending to the effect that the case has
already been finally decided by the court, stating the manner of
the disposal thereof. Section 77 materially states:
SEC. 77. Cancellation of lis pendens. - Before final judgment, a
notice of lis pendens may be cancelled upon order of the court,
after proper showing that the notice is for the purpose of
molesting the adverse party, or that it is not necessary to protect
the rights of the party who caused it to be registered. It may also
be cancelled by the Register of Deeds upon verified petition of the
party who caused the registration thereof.
At any time after final judgment in favor of the defendant, or
other disposition of the action such as to terminate finally all
rights of the plaintiff in and to the land and/or buildings involved,
in any case in which a memorandum or notice of lis pendens has
been registered as provided in the preceding section, the notice
of lis pendens shall be deemed cancelled upon the registration of
a certificate of the clerk of court in which the action or proceeding Present:
was pending stating the manner of disposal thereof. 42
YNARES-SANTIAGO, J.,
Chairperson,
Lastly, petitioner tends to make an issue out of the fact that while
- versus - AUSTRIA-MARTINEZ,
the original TCT on file with the Register of Deeds does contain
CHICO-NAZARIO,
the annotations and notice referred to in this petition, its owner's
NACHURA, and
duplicate copy of the title nevertheless does not reflect the same
REYES, JJ.
non-chronological inscriptions. From this, petitioner submits its
puerile argument that the said annotations appearing on the
JULIE C. ARCALAS,
original copy of the TCT are all a forgery, and goes on to assert the
Respondent. Promulgated:
indefeasibility of its Torrens title as well as its supposed status as
an innocent purchaser for value in good faith. Yet we decline to
November 23, 2007
rule on these assumptions principally because they raise matters
x-------------------------------------------------
that call for factual determination which certainly are beyond the
x
competence of the Court to dispose of in this petition.

All told, we find that the RTC of Las Pias City, Branch 253 has DECISION
committed no reversible error in issuing the assailed Resolution
and Order dismissing for lack of jurisdiction the petition for
cancellation of notice of lis pendens filed by petitioner, and in CHICO-NAZARIO, J.:
denying reconsideration.

WHEREFORE, the petition is DENIED. The April 14, 2005

Resolution and the June 24, 2005 Order issued by the Regional This is a Special Civil Action for Certiorari under Rule 65 of the
Trial Court of Las Pias City, Branch 253, in Civil Case No. LP-04-
0071, are hereby AFFIRMED. Rules of Court, assailing the Resolution[1] dated 25 January 2005,

rendered by the Court of Appeals in C.A. G.R. CV No. 82872,

SO ORDERED.
dismissing the appeal filed by petitioner Arlyn Pineda (Pineda) for

failure to file her appellants brief. Under the assailed Resolution,

the Order[2] promulgated by Branch 27 of the Regional Trial Court

of Santa Cruz, Laguna (Laguna RTC), on 2 February 2004, granting

the petition of respondent Julie Arcalas (Arcalas) for the

cancellation of the Affidavit of Adverse Claim annotated at the

back of Transfer Certificate of Title (TCT) No. T-52319 under Entry

No. 324094, became final.

The subject property consists of three parcels of land,

which are described as Lot No. 3762-D with an area of 42,958

square meters, Lot No. 3762-E with an area of 4,436 square

meters, and Lot No. 3762-F with an area of 2,606 square meters,

the total area of which consists of 50,000 square meters. These

three lots are portions of Lot No. 3762, registered in the name of

Spouses Mauro Lateo and Encarnacion Evangelista

(spouses Lateo) under TCT No. T-52319, with a total area of

74,708 square meters, located at Barrios Duhat and Labuin, Santa

ARLYN* PINEDA, G.R. No. 170172
Petitioner, Cruz, Laguna. A certain Victoria Tolentino bought the said
property from the Spouses Lateo. Sometime later, Civil Case ACCORDINGLY, the motion is granted. The
Affidavit of Title and Third-Party Claim is set
No. Q-96-27884, for Sum of Money, was instituted aside to allow completion of execution
proceedings.[8]
by Arcalas against Victoria Tolentino. This case stemmed from an

indebtedness evidenced by a promissory note and four post-

On 2 February 2000, after the finality[9] of the Order of
dated checks later dishonored, which
the Quezon City RTC quashing Pinedas third-party claim, Pineda
Victoria Tolentino owed Arcalas.[3]
filed with the Office of the Register of Deeds of Laguna another
On 9 September 1997, Branch 93 of the Quezon City
Affidavit of Third Party Claim and caused the inscription of a
RTC, rendered judgment in favor of Arcalas and against
notice of adverse claim at the back of TCT No. T-52319 under
Victoria Tolentino.[4]
Entry No. 324094. [10]

On 15 December 1997, Pineda bought the subject

On 3 February 2000, Arcalas and Leonardo Byron P.
property from Victoria L. Tolentino.[5] Pineda alleged that upon
Perez, Jr. purchased Lot No. 3762 at an auction sale conducted by
payment of the purchase price, she took possession of the subject
the Deputy Sheriff of Quezon City. The sale was evidenced by a
property by allowing a tenant, Rodrigo Bautista to cultivate the
Sheriffs Certificate of Sale issued on the same day and registered
same. However, Pineda failed to register the subject property
as Entry No. 324225 at the back of TCT No. T-52319.[11]
under her name.[6]

Arcalas then filed an action for the cancellation of the

To execute the judgment, the Quezon City RTC levied
entry of Pinedas adverse claim before the Laguna RTC. The Laguna
upon the subject property and the Notice of Levy on Alias Writ of
RTC ordered the cancellation of the Notice of Adverse Claim
Execution dated 12 January 1999 was annotated as Entry No.
annotated as Entry No. 324094 at the back of TCT No. 52319 on
315074, in relation to Entry No. 319362, at the back of TCT No. T-
the ground of res judicata:
52319.[7]

The court order emanating from Branch 91

of the Regional Trial Court of Quezon City
Asserting ownership of the subject property, Pineda filed with the having become final and executory and no
relief therefrom having been filed by
Deputy Sheriff of the Quezon City RTC an Affidavit of Title and [Pineda], the said order granting the
[Arcalass] Motion to Set Aside Affidavit of
Third Party Claim. Arcalas filed a motion to set aside Pinedas Title and 3rd Party Claim should be given
due course and the corresponding
Affidavit of Title and Third Party Claim, which on 3 November
annotation at the back of TCT No. T-52319
as Entry No. 324094 dated February 2,
1999, the Quezon City RTC granted, to wit:
2000 should be expunged accordingly.[12]

Pineda appealed the Order of the Laguna RTC before

[Arcalas] showed that her levies
on the properties were duly registered
the Court of Appeals under Rule 44 of the Rules of Court. In a
while the alleged Deed of Absolute Sale
between the defendant Victoria Resolution dated 25 January 2005,[13] the appellate court
L. Tolentino and Analyn G. Pineda was
not. The levies being superior to the sale dismissed the appeal and considered it abandoned when Pineda
claimed by Ms. Pineda, the court rules to
quash and set aside her Affidavit of Title failed to file her appellants brief.
and Third Party Claim.
Pineda filed a Motion for Reconsideration, wherein it was plainly
stated that Pinedas counsel overlooked the period within which
he should file the appellants brief.[14] The said motion was denied
in a Resolution dated 26 May 2005.Pineda filed a Second Motion
for Reconsideration, which was denied on 7 October 2005.[15] No
appellants brief was attached to either motion
reconsideration.
Hence, the present Petition raising the following
issues:[16]
I.
WHETHER THE LEVY ON ALIAS WRIT OF
EXECUTION ISSUED BY THE REGIONAL TRIAL
COURT OF QUEZON CITY IN CIVIL CASE
NO. Q-96-27884 MAY EXEMPT THE
PORTION BOUGHT BY [PINEDA] FROM
VICTORIA TOLENTINO; [and]
II.
WHETHER THE POSSESSION OF [PINEDA] OF
THE 5 HECTARES PORTION OF LOT 3762 IS
ALREADY EQUIVALENT TO A TITLE DESPITE
THE ABSENCE OF REGISTRATION.
This petition must be dismissed.
The Court of Appeals properly dismissed the case for Pinedas
failure to file an appellants brief. This is in accordance with
Section 7 of Rule 44 of the Rules of Court, which imposes upon
the appellant the duty to file an appellants brief in ordinary
appealed cases before the Court of Appeals, thus:
Section 7. Appellants brief.It shall be the
duty of the appellant to file with the court,
within forty-five (45) days from receipt of
the notice of the clerk that all the evidence,
oral and documentary, are attached to the
record, seven (7) copies of his legibly
typewritten, mimeographed or printed
brief, with proof of service of two (2) copies
thereof upon the appellee.
In special cases appealed to the Court of Appeals, such
as certiorari,
prohibition, mandamus, quo warranto and habeas
corpus cases, a memorandum of appeal must be filed in
place of an appellants brief as provided in Section 10 of Rule
for 44 of the Rules of Court
Section 10. Time of filing memoranda in
special cases.In certiorari, prohibition,
mandamus, quo warranto and habeas
corpus cases, the parties shall file, in lieu of
briefs, their respective memoranda within a
non-extendible period of thirty (30) days
from receipt of the notice issued by the
clerk that all the evidence, oral and
documentary, is already attached to the
record.
The failure of the appellant to file his
memorandum within the
period therefor may be a ground for
dismissal of the appeal.
Non-filing of an appellants brief or a memorandum of appeal is
one of the explicitly recognized grounds of dismissal of the appeal
in Section 1 of Rule 50 of the Rules of Court:
Section 1. Grounds for dismissal of appeal. -
An appeal may be dismissed by the Court of
Appeals, on its own motion or on that of
the appellee, on the following grounds:
xxxx
(e) Failure of the appellant to serve and file
the required number of copies of his brief
or memorandum within the time provided
by these Rules;
This Court provided the rationale for requiring an appellants brief
in Enriquez v. Court of Appeals[17]:
[T]he appellants brief is mandatory for the
assignment of errors is vital to the decision
of the appeal on the merits. This is because
on appeal only errors specifically assigned
and properly argued in the brief or
memorandum will be considered, except
those affecting jurisdiction over the subject
 matter as well as plain and clerical
errors. Otherwise stated, an appellate court has stressed that the liberality in the application of rules of
has no power to resolve an unassigned
error, which does not affect the courts procedure may not be invoked if it will result in the wanton
jurisdiction over the subject matter, save
for a plain or clerical error. disregard of the rules or cause needless delay in the

administration of justice.[22] The Court eyes with disfavor the

Thus, in Casim v. Flordeliza,[18] this Court affirmed the dismissal of unjustified delay in the termination of cases; once a judgment has

an appeal, even when the filing of an appellants brief was merely become final, the winning party must not be deprived of the fruits

attended by delay and fell short of some of the requirements of of the verdict, through a mere subterfuge. The time spent by the

the Rules of Court. The Court, in Gonzales v. judiciary, more so of this Court, in taking cognizance and resolving

Gonzales,[19] reiterated that it is obligatory on the part of the cases is not limitless and cannot be wasted on cases devoid of any

appellant to submit or file a memorandum of appeal, and that right calling for vindication and are merely reprehensible efforts

failing such duty, the Rules of Court unmistakably command the to evade the operation of a decision that is final and executory.[23]

dismissal of the appeal.

In the present case, there is a clear intent on the part

In this case, Pineda did not even provide a proper of Pineda to delay the termination of the case, thereby

justification for her failure to file her appellants brief. It was depriving Arcalas of the fruits of a just verdict. The Quezon City

merely alleged in her Motion for Reconsideration that her counsel RTC already quashed Pinedas third party claim over the subject

overlooked the period within which to file the appellants property, yet she filed another adverse claim before the Office of

brief. Although Pineda filed no less than two motions for the Register of Deeds of Laguna based on the same allegations

reconsideration, Pineda had not, at any time, made any attempt and arguments previously settled by the Quezon City RTC. Arcalas,

to file her appellants brief. Nor did she supply any convincing thus, had to file another case to cause the cancellation of Pinedas

argument to establish her right to the subject property for which notice of adverse claim on TCT No. T-52319 before the Laguna

she seeks vindication. RTC. After the Laguna RTC gave due course to Arcalass petition,

Pineda filed a dilatory appeal before the Court of Appeals, where

Thus, this Court cannot reverse or fault the appellate she merely let the period for the filing of the appellants brief lapse

court for duly acting in faithful compliance with the rules of without exerting any effort to file one. The two motions for

procedure and established jurisprudence that it has been reconsideration and even the petition before this Court fail to

mandated to observe, nor turn a blind eye and tolerate the present new issues. They raised the very same issues which had

transgressions of these rules and doctrines.[20] An appealing party been consistently resolved by both the Quezon City RTC and the

must strictly comply with the requisites laid down in the Rules of Laguna RTC in favor of Arcalas, upholding the superiority of her

Court since the right to appeal is a purely statutory right.[21] lien over that of Pinedas unregistered sale. Considering all these

circumstances, there is no basis for the lenient application of

Even when this Court recognized the importance of procedural rules in this case; otherwise, it would result in a

deciding cases on the merits to better serve the ends of justice, it manifest injustice and the abuse of court processes.

As a rule, the negligence or mistake of counsel binds
the client.[24] The only exception to this rule is when the counsels
negligence is so gross that a party is deprived of due process and,
thus, loses life, honor or property on mere technicalities.[25] The
exception cannot apply to the present case, where Pineda is
merely repeating arguments that were already heard and decided
upon by courts of proper jurisdiction, and the absolute lack of
merit of the petition is at once obvious.
Pineda avers that she is not a party to Civil Case No. Q-
96-27884, heard before the Quezon City RTC, and that the levy on
the alias writ of execution issued in Civil Case No. Q-96-27884
cannot affect her purchase of subject property. Such position runs
contrary to law and jurisprudence.
Sections 51 and 52 of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree, provide
that:
Section 51. Conveyance and other dealings
by registered owner.An owner of registered
land may convey, mortgage, lease, charge
or otherwise deal with the same in
accordance with existing laws. He may use
such forms of deeds, mortgages, leases or
other voluntary instruments as are
sufficient in law. But no deed, mortgage,
lease, or other voluntary instrument,
except a will purporting to convey or affect
registered land shall take effect as a
conveyance or bind the land, but shall
operate only as a contract between the
parties and as evidence of authority to the
Register of Deeds to make registration.
The act of registration shall be the
operative act to convey or affect the land
insofar as third persons are concerned, and
in all cases under this Decree, the
registration shall be made in the office of
the Register of Deeds for the province or
the city where the land lies. (Emphasis
provided.)
Section 52. Constructive notice upon
registration.Every conveyance, mortgage,
lease, lien, attachment, order, judgment,
instrument or entry affecting registered
land shall, if registered, filed or entered in
the office of the Register of Deeds for the
province or city where the land to which it
relates lies, be constructive notice to all
persons from the time of such registering,
filing or entering. (Emphasis provided.)
It is clear from these provisions that before a
purchaser of land causes the registration of the transfer of the
subject property in her favor, third persons, such as Arcalas,
cannot be bound thereby. Insofar as third persons are concerned,
what validly transfers or conveys a persons interest in real
property is the registration of the deed. As the deed of sale was
unrecorded, it operates merely as a contract between the parties,
namely Victoria Tolentino as seller and Pineda as buyer, which
may be enforceable against Victoria Tolentino through a separate
and independent action. On the other hand, Arcalass lien was
registered and annotated at the back of the title of the subject
property and accordingly amounted to a constructive notice
thereof to all persons, whether or not party to the original case
filed before the Quezon City RTC.
The doctrine is well settled that a levy on execution
duly registered takes preference over a prior unregistered
sale.[26] A registered lien is entitled to preferential
consideration.[27] In Valdevieso v. Damalerio,[28] the Court held
that a registered writ of attachment was a superior lien over that
on an unregistered deed of sale and explained the
reason therefor:
This is so because an attachment is a
proceeding in rem. It is against the
particular property, enforceable against the
whole world. The attaching creditor
acquires a specific lien on the attached
property which nothing can subsequently
destroy except the very dissolution of the
attachment or levy itself. Such a
proceeding, in effect, means that the
property attached is an indebted thing and
a virtual condemnation of it to pay the
owners debt. The lien continues until the
debt is paid, or sale is had under execution
 issued on the judgment, or until the
judgment is satisfied, or the attachment claim of ownership of the subject property, cannot be considered
discharged or vacated in some manner
provided by law. as equivalent to registration.

Thus, in the registry, the

attachment in favor of respondent
appeared in the nature of a real lien when IN VIEW OF THE FOREGOING, the instant Petition
petitioner had his purchase recorded. The
effect of the notation of said lien was to is DISMISSED and the assailed Decision of the Court of Appeals
subject and subordinate the right of
petitioner, as purchaser, to the lien. in C.A. G.R. CV No. 82872, promulgated on 25 January 2005,
Petitioner acquired ownership of the land
only from the date of the recording of his is AFFIRMED. The Order of Branch 27 of the Regional Trial Court
title in the register, and the right of
of Sta. Cruz, Laguna, directing the Register of Deeds of Laguna to
ownership which he inscribed was not
absolute but a limited right, subject to a
cancel the Notice of Adverse Claim inscribed at the back of TCT
prior registered lien of respondent, a right
which is preferred and superior to that of
No. T-52319 as Entry No. 324094 is SUSTAINED. No costs.
petitioner.

SO ORDERED.

Pineda also contends that her possession of the

subject property cures the defect caused by her failure to register

the subject property in her name. This contention is inaccurate as

well as inapplicable.

True, that notwithstanding the preference given to a

registered lien, this Court has made an exception in a case where

a party has actual knowledge of the claimants actual, open, and

notorious possession of the disputed propertyat the time the levy

or attachment was registered. In such situations, the actual notice

and knowledge of a prior unregistered interest, not the mere

possession of the disputed property, was held to be equivalent to

registration.[29]

Lamentably, in this case, Pineda did not even allege,

much less prove, that Arcalas had actual knowledge of her claim

of ownership and possession of the property at the time the levy

was registered. The records fail to show that Arcalas knew of

Pinedas claim of ownership and possession prior to Pinedas filing

of her third party claim before the Quezon City RTC. Hence, the

mere possession of the subject property by Pineda, absent any

proof that Arcalas had knowledge of her possession and adverse


[G.R. No. 133303. February 17, 2005]
BERNARDO VALDEVIESO, petitioner, vs. CANDELARIO
DAMALERIO AND AUREA C.
DAMALERIO, respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review under Rule 45 of
the Rules of Court, seeking to set aside the 25 September 1997
Decision and the 10 February 1998 Resolution of the Court of
Appeals in CA-G.R. SP No. 43082 entitled, Candelario Damalerio
and Aurea Damalerio v. Honorable Antonio S. Alano, et al.[1]
There is no dispute as to the following facts:
On 05 December 1995, Bernardo Valdevieso (petitioner)
bought from spouses Lorenzo and Elenita Uy a parcel of land
consisting of 10,000 square meters, more or less, located at Bo.
Tambler, General Santos City, and covered by Transfer Certificate
of Title (TCT) No. T-30586.[2]
The deed of sale was not registered, nor was the title of the
land transferred to petitioner.[3]
On 07 December 1995, the said property was immediately
declared by petitioner for taxation purposes as Tax Declaration
No. l6205 with the City Assessors Office.[4]
It came to pass that on 19 April 1996, spouses Candelario
and Aurea Damalerio (respondents) filed with the Regional Trial
Court (RTC) of General Santos City, a complaint for a sum of
money against spouses Lorenzo and Elenita Uy docketed as Civil
Case No. 5748 with application for the issuance of a Writ of
Preliminary Attachment.[5]
On 23 April 1996, the trial court issued a Writ of
Preliminary Attachment by virtue of which the property, then still
in the name of Lorenzo Uy but which had already been sold to
petitioner, was levied. The levy was duly recorded in the Register
of Deeds of General Santos City and annotated upon TCT No. T-
30586.[6]
On 06 June 1996, TCT No. T-30586 in the name of Lorenzo
Uy was cancelled and, in lieu thereof, TCT No. T-74439 was issued
in the name of petitioner.[7] This new TCT carried with it the
attachment in favor of respondents.
On 14 August 1996, petitioner filed a third-party claim in
Civil Case No. 5748 to discharge or annul the attachment levied
on the property covered by TCT No. T-74439 on the ground that
the said property belongs to him and no longer to Lorenzo and
Elenita Uy.[8]
In a resolution dated 21 October 1996, the trial court ruled
for the petitioner.[9] Citing Manliguez v. Court of
Appeals[10] and Santos v. Bayhon,[11] it held that the levy of the
property by virtue of attachment is lawful only when the levied
property indubitably belongs to the defendant. Applying the
rulings in the cited cases, it opined that although defendant
Lorenzo Uy remained the registered owner of the property
attached, yet the fact was that he was no longer the owner
thereof as it was already sold earlier to petitioner, hence, the writ
of attachment was unlawful.
Respondents sought reconsideration thereof which was
denied by the trial court in a resolution dated 03 January 1997.[12]
From the unfavorable resolution of the trial court in the
third-party claim, respondents appealed to the Court of Appeals.
The appellate court reversed the resolution and by judgment
promulgated on 25 September 1997, it declared that an
attachment or levy of execution, though posterior to the sale, but
if registered before the sale is registered, takes precedence over
the sale.[13] The writ of attachment in favor of the respondents,
being recorded ahead of the sale to petitioner, will therefore take
precedence.
Petitioner moved for reconsideration but this was denied
by the Court of Appeals in its Resolution of 10 February 1998.[14]
Hence, this Petition for Review on Certiorari.
The sole issue in this case is whether or not a registered
writ of attachment on the land is a superior lien over that of an
earlier unregistered deed of sale.
Petitioner maintains that he has a superior right over the
questioned property because when the same was attached on 23
April 1996, this property was no longer owned by spouses Uy
against whom attachment was issued as it was already sold to
petitioner on 05 December 1995. The ownership thereof was
already transferred to petitioner pursuant to Article 1477[15] in
relation to Article 1498[16] of the Civil Code.
Dismissing the allegation that he slept on his rights by not
immediately registering at least an adverse claim based on his
deed of sale, petitioner avers that he promptly worked out for the
transfer of registration in his name. The slight delay in the
registration, he claims was not due to his fault but attributable to
the process involved in the registration of property such as the
issuance of the Department of Agrarian Reform clearance which
was effected only after compliance with several requirements.
Considering the peculiar facts and circumstances obtaining
in this case, petitioner submits it would be in accord with justice
and equity to declare him as having a superior right to the
disputed property than the respondents.
Respondents maintain the contrary view. They aver that
registration of a deed of sale is the operative act which binds the
land and creates a lien thereon. Before the registration of the
deed, the property is not bound insofar as third persons are
concerned. Since the writ of attachment in favor of respondents
was registered earlier than the deed of sale to petitioner,
respondents were of the belief that their registered writ of
attachment on the subject property enjoys preference and
priority over petitioners earlier unregistered deed of sale over the
same property. They also contend that Articles 1477 and 1498 of
the Civil Code as cited by petitioner are not applicable to the case
because said provisions apply only as between the parties to the
deed of sale. These provisions do not apply to, nor bind, third
parties, like respondents, because what affects or binds third
parties is the registration of the instrument in the Register of
Deeds. Furthermore, respondents argue that petitioner cannot
invoke equity in his favor unless the following conditions are met:
(a) the absence of specific provision of a law on the matter; and
(b) if the person who invokes it is not guilty of delay. Both
conditions have not been met, however, since there is a law on
the subject matter, i.e., Section 51 of Presidential Decree No.
1529, and that petitioner allegedly slept on his rights by not
immediately registering an adverse claim based on his deed of
sale.
We agree with the respondents.
The law applicable to the facts of this case is Section 51 of
P.D. No. 1529. Said Section provides:
Sec. 51. Conveyance and other dealings by registered owner. - An
owner of registered land may convey, mortgage, lease, charge, or
otherwise deal with the same in accordance with existing laws. He
may use such forms of deeds, mortgages, leases or other
voluntary instruments as are sufficient in law. But no deed,
mortgage, lease, or other voluntary instrument, except a will
purporting to convey or affect registered land, shall take effect as
a conveyance or bind the land, but shall operate only as a contract
between the parties and as evidence of authority to the Register
of Deeds to make registration.
The act of registration shall be the operative act to convey or
affect the land insofar as third persons are concerned, and in all
cases under this Decree, the registration shall be made in the
office of the Register of Deeds for the province or city where the
land lies.
proceeding, in effect, means that the property attached is an
indebted thing and a virtual condemnation of it to pay the owners
debt.[21] The lien continues until the debt is paid, or sale is had
under execution issued on the judgment, or until the judgment is
satisfied, or the attachment discharged or vacated in some
manner provided by law.
Thus, in the registry, the attachment in favor of
respondents appeared in the nature of a real lien when petitioner
had his purchase recorded. The effect of the notation of said lien
was to subject and subordinate the right of petitioner, as
purchaser, to the lien. Petitioner acquired ownership of the land
only from the date of the recording of his title in the register, and
the right of ownership which he inscribed was not absolute but a
limited right, subject to a prior registered lien of respondents, a
right which is preferred and superior to that of petitioner.[22]
Anent petitioners reliance on the rulings laid down
in Manliguez v. Court of Appeals and Santos v. Bayhon, we find
the same to be misplaced. These cases did not deal at all with the
dilemma at hand, i.e. the question of whether or not a registered
writ of attachment on land is superior to that of an earlier
unregistered deed of sale. In Santos, what was involved were
machinery and pieces of equipment which were executed upon
pursuant to the favorable ruling of the National Labor Relations
Commission. A third party claimed that the machinery were
already sold to her, but it does not appear in the facts of the case
if such sale was ever registered. Manliguez is similar to Santos,
except that the former involved buildings and improvements on a
piece of land. To stress, in both cited cases, the registration of the
sale, if any, of the subject properties was never in issue.

As to petitioners invocation of equity, we cannot, at this

It is to be noted that though the subject land was deeded
instance, yield to such principle in the presence of a law clearly
to petitioner as early as 05 December 1995, it was not until 06
applicable to the case. We reiterate that this Court, while aware
June 1996 that the conveyance was registered, and, during that
of its equity jurisdiction, is first and foremost, a court of
interregnum, the land was subjected to a levy on attachment. It
law.[23] While equity might tilt on the side of one party, the same
should also be observed that, at the time of the attachment of the
cannot be enforced so as to overrule positive provisions of law in
property on 23 April 1996, the spouses Uy were still the registered
favor of the other.[24] Equity cannot supplant or contravene the
owners of said property. Under the cited law, the execution of the
law.[25] The rule must stand no matter how harsh it may
deed of sale in favor of petitioner was not enough as a succeeding
seem. Dura lex sed lex.
step had to be taken, which was the registration of the sale from
the spouses Uy to him. Insofar as third persons are concerned, WHEREFORE, the appealed Decision of the Court of
what validly transfers or conveys a persons interest in real Appeals in CA-G.R. SP No. 43082 dated 25 September 1997, and
property is the registration of the deed. Thus, when petitioner its Resolution dated 10 February 1998, are hereby AFFIRMED. No
bought the property on 05 December 1995, it was, at that point, costs.
no more than a private transaction between him and the spouses
Uy. It needed to be registered before it could bind third parties, SO ORDERED.
including respondents. When the registration finally took place on
06 June 1996, it was already too late because, by then, the levy in
favor of respondents, pursuant to the preliminary attachment
ordered by the General Santos City RTC, had already been
annotated on the title.

The settled rule is that levy on attachment, duly registered,

takes preference over a prior unregistered sale.[17] This result is a
necessary consequence of the fact that the property involved was
duly covered by the Torrens system which works under the
fundamental principle that registration is the operative act which
gives validity to the transfer or creates a lien upon the land.[18]

The preference created by the levy on attachment is not

diminished even by the subsequent registration of the prior sale.
This is so because an attachment is a proceeding in rem.[19] It is
against the particular property, enforceable against the whole
world. The attaching creditor acquires a specific lien on the
attached property which nothing can subsequently destroy except
the very dissolution of the attachment or levy itself.[20] Such a