GUARANTEED HOMES, INC. v.

VALDEZ
G.R. No. 171531| 30 JANUARY 2009
HEIRS OF MARIA P. VALDEZ, (EMILIA V. YUMUL and VICTORIA V. MOLINO),
HEIRS OF SEVERINA P. TUGADE (ILUMINADA and LEONORA P. TUGADE),
HEIRS OF ETANG P. GATMIN (LUDIVINA G. DELA CRUZ by and through
GUARANTEED HOMES, INC. v.
ALFONSO G. DELA CRUZ, HILARIA G. COBERO and ALFREDO G. COBERO) and
SIONY G. TEPOL, by and through ELENA T. RIVAS and ELESIO TEPOL, JR., AS
HEIRS OF DECEDENT PABLO PASCUA
Petition for review on certiorari of CA decision and resolution.
Justice Tinga
FACTS: CA reversed the order of RTC-Olongapo, which granted the motion to dismiss filed by petitioner
Guaranteed Homes.

Respondents, descendants of Pablo Pascua, filed a complaint seeking reconveyance of a parcel of land in
Cabitaugan, Subic Zambales and covered by OCT No. 404 in the name of Pablo.

They are praying for damages.

From the annexes attached in the complaint, it was ascertained that the OCT contained several
annotations which showed that the property had been sold by Pablo to AlejandriaMarquinez and Resituto
Morales.

Also attached in the complaint, and averred by the respondents:

o Extrajudicial Settlement of a Sole Heir and Confirmation of Sales executed by Cipriano Pascua,
Sr., declaring himself as the only heir of Pablo and confirming the sales made by Pablo to
spouses Rodolfo;
o TCT Nos. T-8241 issued in the name of Cipriano without cancellation of OCT No. 404 & not
signed by Register of Deeds;
o TCT No. T-8242 issued in the name of spouses Rodolfo, which canceled T-8241;
o TCT No. T-10863 issued in the name of petitioner when spouses Rodolfo sold the property to
petitioner, which canceled T-8242;
o Deed of Sale with Mortgage between spouses Albino Rodolfo and Fabia Rodolfo and
Guaranteed Homes;

Jorge Pascua, Sr., son of Cipriano filed a petition with RTC-Olongapo for the issuance of a new owners
duplicate of OCT No. 404, which was denied. The trial court held that petitioner was already the owner of
the subject property, noting that the failure to annotate the subsequent property to it at the back of said
OCT did not affect its title to the property.

Petitioner filed a motion to dismiss the complaint on the following grounds:

o Action is barred by the Statute of Limitations (since more than 28 years have passed since the
issuance from T-10863 to the filing of the complaint);
o No cause of action, since petitioner is an innocent purchaser for value relying on the clean title
of spouses Rodolfo.

RTC granted the motion.

CA reversed and held that the respondents complaint for quieting of title had not yet prescribed.

Hence, this petition.

ISSUE: Whether petitioner is an innocent purchaser for value, i.e. there is no need to go beyond the registered title of
spouses Rodolfo.
HELD: Yes (there is no need for petitioner to go beyond the clean title presented to them).
Petition granted. CA decision reversed and set aside.
 RATIO: The Court held that it is basic that a person dealing with registered property need not go beyond, but only
has to rely on, the title of his predecessor-in-interest. Since the act of registration is the operative act to
convey or affect the land insofar as third persons are concerned, it follows that where there is nothing in
the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance
thereon, the purchaser is not required to explore farther than what the Torrens title upon its face indicates
in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto.

In the present case, it is enough that petitioner examined the latest certificate of title issued in the name
of spouses Rodolfo. The petitioner as purchaser is not bound by the original certificate but only by the
certificate of title of the person from whom he had purchased the property.

Furthermore, registration in the public registry is considered a notice to the whole world. Every
conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered
land shall be, if registered, filed or entered in the Office of the Register of Deeds of 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.

GOLLOY V. CA 173 SCRA 26 (1989)

FACTS: Petitioner Golloy has been, for more than 20 years, the registered owner and in possession
of a parcel of land covered by TCT 45764. The southwest boundary is owned by private
respondents covered by certificate of title 8565. Sometime in 1966, private respondents
subdivided their land among themselves and in the course of doing so, private respondents had
placed 2 monuments in the southwest portion of the petitioners land. As a result, petitioner Golloy
filed an action to quiet title (claim ownership over a real property) before the CFI Tarlac.

Private respondents filed a motion to dismiss with counterclaim, denying Golloys allegation and
maintained that they merely subdivided their own property and as such, Golloy had no cause of
action.

During the pre-trial both parties agreed that the question of the boundaries of their respective
properties could be resolved by appointing a surveyor to relocate the disputed area.

In May 1968, JovinoDauz, the surveyor of the Bureau of Lands, reported the following:
 1. Petitioners land is Lot A of the subdivision plan, Psd-1413, being a portion of the
land described in OCT 126 in the name of Augustin Golloy. The land under OCT 126 was
surveyed on Mar 1918 and subsequently titled in 1919

2. Private respondents land is Lot no. 1, 11-8218 in the name of Domingo Balanga,
which was surveyed on Mar 1913 and originally titled and registered on Mar 1918

3. There is overlapping on the boundaries which was due to the defect in the survey on
petitioners since it did not duly conform with the previously approved of survey of Lot 1,
11-3218 under OCT 8565

4. Private respondents land, TCT 8565, prevails over petitioners land since the former
was surveyed and titled ahead.

Trial court held in favor of private respondents. CA affirmed the same.

ISSUE: Between the two title holders, who is entitled to the land in question?

HELD: Petitioner Golloy is entitled to the disputed portion of land. It is undisputed that that
Balangas property was surveyed and titled earlier than Golloys. Having been surveyed and
thereafter registered, monuments were placed therein to indicate their respective boundaries. It is
hardly persuasive that the private respondents predecessor Balanga, believing that she has a
rightful claim to the overlapped portions, did not make any move to question the placement of the
monuments. She could have easily objected to the placement and point out that the placements
of the monuments excluded the overlapped portions from her property. However, no such
objections were made. As such, it may be construed that Balanga never believed that she has a
right and legal claim to the overlapped portion.

Considering that the petitioner and his predecessors have in continuous possession in the concept
of an owner, for almost 50 years (from 1919 when it was registered to 1966 when the dispute
ensued), the private respondents are guilty of laches.

Mere possession of certificate of title under Torrens System is not conclusive as to the
holders true ownership of all the property described therein for he does by virtue of
said c certificate alone become the owner of the land illegally included.
G.R. No. L-68291 March 6, 1991
ARCADIO, MELQUIADES, ABDULA, EUGENIO, APOLONIO, all surnamed YBAEZ, petitioners,
vs.
THE HONORABLE INTERMEDIATE APPELLATE COURT and VALENTIN O. OUANO, respondents,

Dominador F. Carillo for petitioners.

Pableo B. Baldoza for private respondent.

FERNAN, C.J.:

Facts:
Records show that private respondent Valentin Ouano, a claimant-occupant of Lot No. 986, Pls-599-D situated
at sitioBagsac, barrio of Manikling, Governor Generoso (now San Isidro), Davao del Norte, containing an area of
three (3) hectares, 48 ares and 78 centares which was surveyed on March 13, 1958as evidenced by the "Survey
Notification Card" issued in his name, a homestead application 1 with the Bureau of Lands. The said application
was approved in an order dated March 3, 1959 issued by the District Land Officerand by authority of the Director
of Lands.
Three (3) years thereafter,a "Notice of Intention to Make Final Proof was made by Valentin Ouano to establish
his claim to the lot applied for and to prove his residence and cultivation before Land Inspector.

On April 15, 1963, an "Original Certificate of Title No. P-15353" was issued to private respondent Valentin Ouano
over Homestead Patent No. 181261 which was transcribed in the "Registration Book" for the province of Davao
on October 28, 1963. 3

After 19 years of possession, cultivation and income derived from coconuts planted on Lot No. 986, private
respondent Valentin Ouano was interrupted in his peaceful occupation thereof when a certain ArcadioYbanez
and his sons, Melquiades, Abdula, Eugenia Numeriano, Apolonio and Victoriano, forcibly and unlawfully entered
the land armed with spears, canes and bolos.
Because of the unwarranted refusal of ArcadioYbanez, et al. to vacate the premises since the time he was
dispossessed in 1975, private respondent Valentin Ouano fileda complaint for recovery of possession, damages
and attorney's fees before the then Court of First Instance (now RTC) of Davao Oriental. Seeking to enjoin the
Ybanezes from further the coconuts therefrom and restore to him the peaceful possession and occupation of the
premises. In his complaint, Valentin Ouano, then plaintiff therein, alleged that he has been in lawful and peaceful
possession since 1956to which an Original Certificate of Title No. P-(l5353)-P-3932 was issued in his name; that
petitioners, then defendants therein, unlawfully entered his land on January 4, 1975 and started cultivating and
gathering the coconuts, bananas and other fruits therein, thereby illegally depriving him of the possession and
enjoyment of the fruits of the premises.
Petitioners, on the other hand, alleged that plaintiff Valentin Ouano, now private respondent, has never been in
possession of any portion of Lot No. 986 as the same has been continously occupied and possessed by
petitioners since 1930 in the concept of owner and have introduced valuable improvements thereon such as
coconuts and houses; that Lot No. 986 was the subject matter of administrative proceedings before the Bureau
of Lands in Mati, Davao Oriental which was consequently decided in their favor by the Director of Lands on the
finding that Valentin Ouano has never resided in the land; that it was declared by the Director of Lands that the
homestead patent issued to private respondent Valentin Ouano was improperly and erroneously issued, since on
the basis of their investigation and relocation survey, the actual occupation and cultivation was made by
petitioner ArcadioYbaez and his children, consisting of 9.6 hectares which cover the whole of Lot No. 986 and
portions of Lot Nos. 987, 988 and 989; that based on the ocular inspection conducted, it was established that
Valentin Ouano did not have a house on the land and cannot locate the boundaries of his titled land for he never
resided therein.
The trial court, after hearing, rendered its decision 6 in favor of private respondent.

Petitioners appealed to the Intermediate Appellate Court.

The Intermediate Appellate Court, First Civil Cases Division promulgated a decision, 8 affirming the decision of
the trial court, with modification.
Hence the instant recourse by petitioners.
Issue:
WON Valentine Ouano is the rightful owner of the questioned parcel of land.
Held:
Affirmative;
The public land certificate of title issued to private respondent attained the status of indefeasibility one (1) year
after the issuance of patent on April 15, 1963, hence, it is no longer open to review on the ground of actual fraud.
Consequently, the filing of the protest before the Bureau of Lands against the Homestead Application of private
respondent on January 3, 1975, or 12 years after, can no longer re-open or revise the public land certificate of
title on the ground of actual fraud. No reasonable and plausible excuse has been shown for such an unusual
delay. The law serves those who are vigilant and diligent and not those who sleep when the law requires them to
act.
The trial court merely applied the rule and jurisprudence that a person whose property has been wrongly or
erroneously registered in another's name is not to set aside the decree, but, respecting the decree as
incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice for
reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for damages. 18
The prescriptive period for the reconveyance of fraudulently registered real property is ten (10) years reckoned
from the date of the issuance of the certificate of title. 19
private respondent Ouano has a better right of possession over Lot No. 986 than petitioners who claimed to own
and possess a total of 12 hectares of land including that of Lot No. 986. Records indicate that petitioners have
not taken any positive step to legitimize before the Bureau of Lands their self-serving claim of possession and
cultivation of a total of 12 hectares of public agricultural land by either applying for homestead settlement, sale
patent, lease, or confirmation of imperfect or incomplete title by judicial legalization under Section 48(b) of the
Public Land Law, as amended by R.A. No. 1942 and P.D. 1073, or by administrative legalization (free patent)
under Section 11 of Public Land Law, as amended.1wphi1 What was clearly shown during the trial of the case
was that petitioners wrested control and possession of Lot No. 986 on January 4, 1975, or one (1) day after they
filed their belated protest on January 3, 1975 before the Bureau of Lands against the homestead application of
private respondent, thus casting serious doubt on their claim of prior possession and productive cultivation.
WHEREFORE, the petition is DENIED for lack of merit.

The certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose
name appears therein. After the expiration of the one (1) year period from the issuance of the decree of
registration upon which it is based, it becomes incontrovertible. 12 The settled rule is that a decree of registration
and the certificate of title issued pursuant thereto may be attacked on the ground of actual fraud within one (1)
year from the date of its entry and such an attack must be direct and not by a collateral proceeding. 13 The
validity of the certificate of title in this regard can be threshed out only in an action expressly filed for the
purpose. 14

There is no specific provision in the Public Land Law (C.A. No. 141, as amended) or the Land Registration Act
(Act 496), now P.D. 1529, fixing the one (1) year period within which the public land patent is open to review on
the ground of actual fraud as in Section 38 of the Land Registration Act, now Section 32 of P.D. 1529, and
clothing a public land patent certificate of title with indefeasibility. Nevertheless, the pertinent pronouncements in
the aforecited cases clearly reveal that Section 38 of the Land Registration Act, now Section 32 of P.D. 1529 was
applied by implication by this Court to the patent issued by the Director of Lands duly approved by the Secretary
of Natural Resources, under the signature of the President of the Philippines in accordance with law. The date of
issuance of the patent, therefore, corresponds to the date of the issuance of the decree in ordinary registration
cases because the decree finally awards the land applied for registration to the party entitled to it, and the patent
issued by the Director of Lands equally and finally grants, awards, and conveys the land applied for to the
applicant.
If the title to the land grant in favor of the homesteader would be subjected to inquiry, contest and decision after it
has been given by the Government thru the process of proceedings in accordance with the Public Land Law,
there would arise uncertainty, confusion and suspicion on the government's system of distributing public
agricultural lands pursuant to the "Land for the Landless" policy of the State.
G.R. No. 185091, August 08, 2010
R E P U B L I C O F T H E
P H I L I P P I N E S , REPRESENTED BY THE
DEPARTMENT OF EDUCATION DIVISION OF LIPA C I T Y
( F O R PA N I N S I N G I N P R I M A R Y S C H O O L ) ,
PETITIONER, VS. PRIMO M E N D O Z A
A N D M A R I A L U C E R O ,
RESPONDENTS.
Facts:
Paninsingin Primary School (PPS) is a public school operated by petitioner Republic of
the Philippines (the Republic) through the Department of Education. PPS has been using
1,149 square meters of land in Lipa City, Batangas since 1957 for its school. But the
property, a portion of Lots 1923 and 1925, were registered in the name of respondents
Primo and Maria Mendoza (the Mendozas) under Transfer Certificate of Title (TCT) T-
11410.On March 27, 1962 the Mendozas caused Lots 1923 and 1925 to be consolidated
and subdivided into four lots. As a result of subdivision, the Register of Deeds partially
cancelled TCT T-11410 and issued new titles for Lots 1 and 3 in favor of Dimayuga and
Ronquillo, respectively. Lot 2 remained in the name of the Mendozas but no new title
was issued in the name of the City Government of Lipa for Lot 4.

Meantime, PPS remained in possession of the property. The Republic claimed that,
while no title was issued in the name of the City Government of Lipa, the Mendozas had
relinquished to it their right over the school lot as evidenced by the consolidation and
subdivision plan. Further, the property had long been tax-declared in the name of the
City G o v e r n m e n t a n d P P S b u i l t s i g n i f i c a n t ,
p e r m a n e n t improvements on the same. These improvements had also been tax-
declared. The Mendozas claim, on the other hand, that although PPS sought permission
from them to use the property as a school site, they never relinquished their right to it.
They allowed PPS to occupy the property since they had no need for it at that time.
Thus, it has remained registered in their name under the original title, TCT T-11410,
which had only been partially cancelled. O n N o v e m b e r 6 , 1 9 9 8 t h e
M e n d o z a s w r o t e P P S , demanding that it vacate the disputed property.

When PPS declined to do so, on January 12, 1999 the Mendozas filed a complaint with
the Municipal Trial Court in Cities (MTCC) of Lipa City against PPS for unlawful
detainer with application for temporary restraining order and writ of preliminary
injunction.On June 27, 2006 the RTC found in favor of the Mendozas

and ordered PPS to vacate the property. It held that the Mendozas had the better right of
possession since they were its registered owners. PPS, on the other hand, could not
produce any document to prove the transfer of ownership of the land in its favor.

PPS moved for reconsideration, but the RTC denied it. In a decision dated February 26,
2008, the CA affirmed the RTC decision.
Upholding the Torrens system, it emphasized the indefeasibility of the Mendozas'
registered title and the imprescriptible nature of their right to eject any person occupying
the property. The CA held that, this being the case, the Republic's possession of the
property through PPS should be deemed merely a tolerated one that could not ripen into
ownership.

Issue:
Whether or not the CA erred in holding that the Mendozas were entitled to evict the
Republic from the subject property that it had used for a public school.

Rulings:
A decree of registration is conclusive upon all persons, including the Government of the
Republic and all its branches, whether or not mentioned by name in the application for
registration or its notice.indeed, title to the land, once registered, is imprescriptible.

No one may acquire it from the registered owner by adverse, open, and notorious
possession.

Thus, to a registered owner under the Torrens system, the right to recover possession of
the r e g i s t e r e d p r o p e r t y i s e q u a l l y i m p r e s c r i p t i b l e
s i n c e possession is a mere consequence of ownership. That the City Government of
Lipa tax-declared the property and its improvements in its name cannot defeat the
Mendozas' title. This Court has allowed tax declarations to stand as proof of ownership
only in the absence of a certificate of title.Otherwise, they have little evidentiary weight
as proof of ownership. The CA erred, however, in ordering the eviction of PPS from the
property that it had held as government school site for more than 50 years. The evidence
on record shows that the Mendozas intended to cede the property to the City
Government of Lipa permanently. In fact, they allowed the city to declare the property in
its name for tax purposes. And when they sought in 1962 to have the bigger lot
subdivided into four, the Mendozas earmarked Lot 4, containing 1,149 square meters,
for the City Government of Lipa. Under the circumstances, it may be assumed that the
Mendozas agreed to transfer ownership of the land to the government, whether to the
City Government of Lipa or to the Republic, way back but never got around to do so and
the Republic itself altogether forgot about it. Consequently, the Republic should be
deemed entitled to possession pending the Mendozas' formal transfer of ownership to it
upon payment of just compensation. The Court holds that, where the owner agrees
voluntarily to the taking of his property by the government for public use, he thereby
waives his right to the institution of a formal expropriation proceeding covering such
property. Further, as the Court also held in
 Eusebio v. Luis, the failure for a long time of the owner to question the lack of
expropriation proceedings covering a property that the government had taken constitutes
a waiver of his right to gain back possession. The Mendozas' remedy is an action for the
payment of just compensation, not ejectment.

AGRICULTURAL CREDIT COOPERATIVE ASSOCIATION OF

HINIGARAN, movant-appellee, vs. ESTANISLAO YULO YUSAY, ET AL.,
oppositors-appellants. G.R. No. L-13313 April 28, 1960
This is an appeal from an order of the Court of First Instance of Negros Occidental, Hon. Jose S.
de la Cruz, presiding the Register of Deeds of Negros Occidental to register a mortgage executed
by Rafael Yulo in favor of the movant covering Lot No. 855, Pontevedra Cadastre, covered by
Original Certificate of Title No. 4979.

The records disclose that on July 20, 1952, Rafaela Yulo executed in favor of the movant a
mortgage for P33,626.29, due from her, her mother, sisters, brothers, and others, which amount
she assumed to pay to the movant. A motion was presented to the court by the movant
demanding the surrender of the owner's duplicate certificate of title that he may annotate said
mortgage at the back of the certificate. Estanislao Yusay, a part owner of the lot, opposed the
petition on the ground that he is owner of a part of the property in question; that the granting of the
motion would operate to his prejudice, as he has not participated in the mortgage cited in the
motion; that Rafaela Yulo is dead; that the motion is not verified and movant's rights have lapsed
by prescription. Finally it is argued that his opposition raises a controversial matter which the court
has no jurisdiction to pass upon. Margarita, Maria, Elena and Pilar, all surnamed Yulo, joined the
oppositor Estanislao Yusay, raising the same objections interposed by Yusay.

The existence of the mortgage is not disputed, and neither is the fact that the mortgagor Rafaela
Yulo is part owner of Lot No. 855 of the Cadastral Survey of Pontevedra. The oppositors do not
dispute that she is such a part owner, and their main objection to the petition is that as part
owners of the property, the annotation of the mortgage on the common title will affect their rights.

The court held that even if the ownership of the deceased Rafaela Yulo over the portion of the lot
in question and the validity of the mortgage are disputed, such invalidity of the mortgage is no
proof of the non-existence of the mortgage nor a ground for objecting to its registration, citing the
case of Register of Deeds of Manila vs. Maxima Tinoco Vda. de Cruz, et, al., 95 Phil., 818; 53 Off.
Gaz., 2804.

In his Brief before this Court, counsel for appellants argue that the mortgage sought to be
registered was not recorded before the closing of the intestate proceedings of the deceased
mortgagor, but was so recorded only four months after the termination of said proceedings, so that
the claim of movant has been reduced to the character of a mere money claim, not a mortgage,
hence the mortgage may not be registered. In the first place, as the judge below correctly ruled,
the proceeding to register the mortgage does not purport to determine the supposed invalidity of
the mortgage or its effect. Registration is a mere ministerial act by which a deed, contract or
instrument is sought to be inscribed in the records of the Office of the Register of Deeds and
annotated at the back of the certificate of title covering the land subject of the deed, contract or
instrument.

The registration of a lease or mortgage, or the entry of a memorial of a lease or mortgage on the
register, is not a declaration by the state that such an instrument is a valid and subsisting interest
in land; it is merely a declaration that the record of the title appears to be burdened with the lease
or mortgage described, according to the priority set forth in the certificate.

The mere fact that a lease or mortgage was registered does not stop any party to it from setting
up that it now has no force or effect. (Niblack, pp. 134-135, quoted in Francisco Land Registration
Act, l950 ed., p. 348.)
The court below, in ordering the registration and annotation of the mortgage, did not pass on its
invalidity or effect. As the mortgage is admittedly an act of the registered owner, all that the judge
below did and could do, as a registration court, is to order its registration and annotation on the
certificate of title covering the land mortgaged. By said order the court did not pass upon the effect
or validity of the mortgage these can only be determined in an ordinary case before the courts,
not before a court acting merely as a registration court, which did not have the jurisdiction to pass
upon the alleged effect or validity.
Wherefore, the order appealed from is hereby affirmed, with costs against oppositors-appellants.
So ordered.

Fernandez v. CA, 189 SCRA 780 (1990)

FACTS: Spouses Florentino and Vivencia Fernandez together with Spouses Zenaida and Justiniano
Fernandez purchased in common a parcel of land in Quezon City. It was purchased for P15,500, and
that Spouses Florentino and Vivencia advanced P5,500 covering the down payment. A deed of
conditional sale was executed by the vendor in favor of the two couples.

However, when the seller executed the Deed of Absolute Sale, only the names of the spouses Zenaida
and Justiniano appear in the document and did not include the names of the other couple who
immediately confronted Zenaida and Justiniano. Zenaida couple responded by executing an affidavit
acknowledging the sale to Florentino and Vivencia Fernandez of a portion of the subject parcel of land
consisting of 110 square meters and the receipt of the consideration therefor in the amount of
P5,500.00. The couples built a duplex building on the subject land. Also, Justiniano and Zenaida
caused the issuance of a certificate of title only in their names.

Sometime in 1976, when Zenaida and her husband filed a petition for voluntary dissolution of their
conjugal partnership, and the couple prayed for judicial approval of their compromise agreement
wherein Justiniano waived all his rights to the conjugal properties including the subject parcel of land.
Zenaida demanded that petitioners (Florentino and Vivencia) vacate the premises of the lot awarded to
her. On June 9, 1981, petitioners-spouses Florentino and Vivencia filed an action to quiet title and
damages against Zenaida Fernandez only, who was then already estranged from her husband
Justiniano.

ISSUE: Can Florentino and Vivencia be considered as the owner of subject parcel of land even though
it was registered in the name of Zenaida and Justiniano only?

HELD: Yes. There is sufficient evidence on record - the due execution and authenticity of both the
Deed of Conditional Sale and Affidavit were never denied by private respondent, to prove that
petitioners and spouses Justiniano and Zenaida Fernandez purchased in common the lot subject of this
case and that it was the parties' intention to become owners of specific portions thereof.

Section 50 of Act No. 496 (now Sec. 51 of P.D. 1529), provides that the registration of the deed is the
operative act to bind or affect the land insofar as third persons are concerned. But where the party has
knowledge of a prior existing interest which is unregistered at the time he acquired a right to the same
land, his knowledge of that prior unregistered interest has the effect of registration as to him. The
torrens system cannot be used as a shield for the commission of fraud. As far as private respondent
Zenaida Angeles and her husband Justiniano are concerned, the non-registration of the affidavit
admitting their sale of a portion of 110 square meters of the subject land to petitioners cannot be
invoked as a defense because knowledge of an unregistered sale is equivalent to registration.