G.R. No.

L-51450 February 10, 1989

SPOUSES VALENTIN SOLIVEL and PETRA MENTE, petitioners,
vs.
THE HONORABLE MARCELINO M. FRANCISCO, Presiding Judge, Court of First Instance of Davao del Sur, Branch VI, and
PAULINO CAGAS, respondents.
Jose B. Guyo for petitioners.
Douglas RA. Cagas for respondent Cagas.

NARVASA, J.:
At issue in this appeal by certiorari from an amended decision by the then Court of First Instance of Davao del Sur in its Civil Case
No. 824 is whether or not title to real property is passed to an innocent purchaser by a deed of sale in his favor executed in the
name of the owners by one falsely claiming to be said owners' duly appointed and authorized attorney-in-fact.
The petitioners and the private respondent are substantially in agreement concerning the facts as found by the Trial Court.
Petitioners, the spouses Valentin Solivel and Petra Mente (hereinafter called the Solivels), are an old couple residing in Davao City.
They are the registered owners, under Transfer Certificates of Title Nos. T-10985 and T-10986 of the Registry of Deeds of Davao
del Sur, of two parcels of land located in the Municipality of Digos in said Province with a combined area of twenty seven (27)
hectares, more or less. The portion covered by Transfer Certificate of Title No. T-10985 is the subject of this case. 1
On or about May 25, 1972, following a number of previous visits to said owners, Federico Tompong, a practicing lawyer, and Isaias
Ngoho obtained the former's agreement to sell their property to a certain Espinosa of Masbate for P60,000.00. Giving the Solivels a
partial payment of P10,000.00 allegedly coming from Espinosa,Tompong and Ngoho persuaded the Solivels to give them the
certificates of title to the property, for which they issued a receipt, and promised that the sale would be consummated and the
balance of P50,000.00 paid within six (6) months, failing which the partial payment would be forfeited in the Solivels' favor and their
certificates of title returned to them.
Tompong and Ngoho never returned to make good their promise. They could not in fact be located until some months later when
they were arrested by Philippine Constabulary on complaint of a certain Atty. Hilario Mapayo to whom, it appeared, they had sold a
portion of the Solivels' property. 2
Following their arrest, Tompong and Ngoho were confronted by Valentin Solivel and his son, Rafael, at the PC Headquarters in
Davao City. That confrontation brought to light the existence of the following documents purportedly executed by either or both of
the Solivels.
1) a deed of sale dated May 24, 1972 ratified by Tompong as notary public selling a 40,000 square-meter portion of the Solivels'
property to Atty. Hilario Mapayo for the price of P30,000.00 (Exhibit 1);
2) a power of attorney dated May 24, 1972, ratified also by Tompong as notary public, constituting Isaias Ngoho the attorney-in-fact
of Valentin Solivel to receive from Atty. Hilario Mapayo partial payment of P15,000.00 in two installments (Exhibit H );
3) a power of attorney dated September 7, 1972 ratified also by Tompong as notary public, authorizing Isaias Ngoho to sell the
Solivels' property in question as said owners' attorney-in-fact (Exhibit C);
The confrontation also uncovered the existence of other documents relating to the Solivels' property. One was a deed dated
September 8, 1972 acknowledged before Atty. Peregrino Andres of Davao City, with Tompong as one of the instrumental witnesses,
whereby Isaias Ngoho, as alleged attorney-in-fact of the Solivels, sold the property in question to Paulino Cagas for the price of
P19,000.00 (Exhibit C). Two others were receipts (Exhibits K and J) evidencing payment of the sums of P9,000.00 and P2,000.00
made by Atty. Mapayo to Ngoho in the presence of Tompong. A fourth document was an affidavit of non-tenancy executed by
Ngoho and sworn to before Atty. Peregrino Andres (Exhibit D). 3
Disclosed, too, was the fact that on the basis of the deed of sale executed in favor of Paulino Cagas by Ngoho as supposed
attorney-in-fact of the Solivels, said Cagas had obtained cancellation of Transfer Certificate of Title No. T-10985 of Davao del Sur in
the name of the Solivels and the issuance, in lieu thereof, of Transfer Certificate of Title No. T-6064 in his name. 4
Never having in fact executed the alleged sale of May 24, 1972 (Exhibit I), the power-of-attorney of the same date (Exhibit H) as well
as the power-of-attorney of September 7, 1972 (Exhibit C) on the strength of which Ngoho had sold their property to Cagas, the
Solivels procured inscription of an adverse claim on Cagas' Title No. 6064. They also filed criminal cases for falsification of public
documents against Tompong and Ngoho in the City Court of Davao City and the Court of First Instance of Davao del Sur, as well as
disbarment proceedings against Tompong in this Court. Finally, they instituted the case subject of the present appeal for annulment
of contract and damages against Tompong, Ngoho and Cagas. 5
Cagas and Tompong answered the Solivels' complaint; Ngoho did not. 6 Only Cagas, however, presented evidence in his defense,
and on his counterclaim for damages and attorney's fees. Cagas' evidence, to which the Trial Court accorded credence and which, it
appears, the Solivels do not contradict, is to the effect that he came to know about the property when a certain Mrs. Dumaquing
called upon him with a photocopy of its certificate of title and asked him if he was interested in buying it; that after visiting the
property and having seen its boundaries, he went to the Registry of Deeds of Davao del Sur and ascertained that it was
unencumbered; that later he met Tompong and Ngoho in the office of Atty. Peregrino Andres where the two showed him the owner's
copy of the certificate of title and the power of attorney authorizing Ngoho to sell the property; that after some haggling about the
price, he agreed to and did pay Ngoho P19,000.00 for the property and Ngoho signed together with Tompong (the latter as
instrumental witness) a deed of sale prepared by Atty. Andres; that he was able to register the deed of sale and obtain a certificate
of title in his name, after securing the approval of the Secretary of Agriculture and Natural Resources; and that he never knew that
the power-of-attorney exhibited to him was forged and had relied on the assurance of Atty. Andres that said document legally
empowered Ngoho to execute the sale in his favor. 7
The Trial Court found that the power-of-attorney (Exhibit C) ostensibly empowering Ngoho to sell the Solivels' property as said
owners' attorney-in-fact was a forgery — and thus, albeit not expressly but by necessary implication, that the deed of sale executed
by Ngoho in favor of Cagas on the strength of said instrument was also falsified — and that the Solivels' claims against Tompong
and Ngoho had been sufficiently established. 8
However, said Court also held that Cagas was an innocent purchaser for value, decided that he had acquired valid title to the
property in question by virtue of the sale, Exhibit C, and was entitled to its possession and enjoyment, and gave the Solivels only the
sop of an award against the elusive defendants Tompong and Ngoho of the price paid by Cagas for the property (P19,000.00) plus
interest, and of damages, including attorney's fees, in the amount of P8,500.00. 9
As was to be expected, said judgment did not satisfy the Solivels, who now claim that it was legal error for the Trial Court to uphold
the validity of Cagas' title as against theirs, the former being founded upon forged documents.
The Trial Court anchors its questioned ruling on the first proviso of the second paragraph of Section 55, Act No. 496, reproduced
almost verbatim in Section 53 of Presidential Decree No. 1529 (The Property Registration Decree), which recognizes and protects
the rights of an innocent holder for value of a certificate of title in cases of registration procured by fraud, and on this Court's ruling in
Blondeau vs. Nano. 10 In Blondeau, the principle underlying the proviso — that a forged transfer may become the root of a valid title
in a bona fide purchaser — was invoked to sustain foreclosure of a real estate mortgage under a deed which, though allegedly
forged, had nonetheless been duly registered because one of two joint owners had given the other, supposedly the author of the
forgery, not only his power-of-attorney but also possession of the title papers. Said the Court in that case:
The Torrens system is intended for the registration of title, rather than the muniments of title. It represents a departure from the
orthodox principles of property law. Under the common law, if the pretended signature of the mortgagor is a forgery, the instrument
is invalid for every purpose and will pass no title or rights to anyone, unless the spurious document is ratified and accepted by the
mortgagor. The Torrens Act on the contrary permits a forged transfer, when duly entered in the registry, to become the root of a
valid title in a bona fide purchaser. The act erects a safeguard against a forged transfer being registered, by the requirement that no
transfer shall be registered unless the owner's certificate was produced along with the instrument of transfer. An executed transfer of
registered lands placed by the registered owner thereof in the hands of another operates as a representation to a third party that the
holder of the transfer is authorized to deal with the lands. (53 C.J. 1141, 1142; Act No. 496, as amended, secs. 47, 51, 55).
xxx xxx xxx
... in its final analysis, this is a case of a mortgagee relying upon a Torrens Title, and loaning money in all good faith on the basis of
the title standing in the name of the mortgagors only thereafter to discover one defendant to be an alleged forger and the other
defendant, if not a party to the conspiracy, at least having by his negligence or acquiescence made it possible for the fraud to
transpire. Giving to the facts the most favorable interpretation for Vallejo, yet, as announced by the Unites States Supreme Court,
the maxim is, as between two innocent persons, in this case, Angela Blondeau and Jose Vallejo, the one who made it possible by
his act of confidence must bear the loss, in this case Jose Vallejo. ... 11
The Trial Court professes to see Blondeau as "very much in point in the determination of this suit." It does not so appear to this
Court. In the first place, as correctly stated in the later case of De Lara vs. Ayroso, 12 it was found as a fact in Blondeau that the
mortgage in question had not been forged, and this, in addition to the circumstance that the registered owner had by his negligence
or acquiescence, if not actual connivance, made possible the commission of the fraud. Thus, in Ayroso, this Court annulled a
mortgage executed by an impostor who had unauthorizedly gained possession of the certificate of title thru the owner's daughter
and forged said owner's name to the deed of mortgage which was subsequently registered. In so doing, the Court found more
applicable the case of Ch. Veloso vs. La Urbana and Del Mar, 13 which also voided a mortgage of real property owned by plaintiff
Veloso constituted by her brother-in-law, the defendant Del Mar, using two powers-of-attorney to which he had forged the signatures
of said plaintiff and her husband, and which mortgage was later registered with the aid of the certificate of title that had come into
Del Mar's possession by unknown means. In Ayroso the Court also rejected the defendants' contention that the La Urbana doctrine
had been overruled by Blondeau, 14 pointing out that the former was still good precedent, having been quoted with approval in
Lopez vs. Seva 15 which was decided after Blondeau.
Even more in point and decisive of the issue here raised, however, is the much later case of Joaquin vs. Madrid, 16 where the
spouses Abundio Madrid and Rosalinda Yu, owners of a residential lot in Makati, seeking a building construction loan from the then
Rehabilitation Finance Corporation, entrusted their certificate of title for surrender to the RFC to Rosalinda's godmother, a certain
Carmencita de Jesus, who had offered to expedite the approval of the loan. Later having obtained a loan from another source, the
spouses decided to withdraw the application they had filed with the RFC and asked Carmencita to retrieve their title and return it to
them. Carmencita failed to do so, giving the excuse that the employee in charge of keeping the title was on leave. It turned out,
however, that through the machinations of Carmencita, the property had been mortgaged to Constancio Joaquin in a deed signed
by two persons posing as the owners and that after said deed had been registered, the amount for which the mortgage was
constituted had been given to the person who had passed herself off as Rosalinda Yu. Constancio Joaquin admitted that the
spouses Madrid and Yu were in fact not the persons who had signed the deed of mortgage. Based on these facts, the Court issued
the following ruling, which definitively deals with the question at issue here in all its aspects:
In the first assignment of error, it is argued that since par. 2 of Sec. 55 of the Land Registration Act expressly provided that "in all
cases of registration by fraud the owner may pursue all his legal and equitable remedies against the parties to the fraud, without
prejudice to the rights of any innocent holder for value of a certificate of title," the second proviso in the same section "that a
registration procured by the presentation of a forged deed shall be null and void" should be overlooked. There is no merit in this
argument, which would have the effect of deleting the last proviso. This last proviso is a limitation of the first part of par. 2 in the
sense that in order that the holder of a certificate for value issued by virtue of the registration of a voluntary instrument may be
considered a holder in good faith for value, the instrument registered should not be forged. When the instrument presented is
forged, even if accompanied by the owner's duplicate certificate of title, the registered owner does not thereby lose his title, and
neither does the assignee in the forged deed acquire any right or title to the property.
In the second assignment of error, it is further argued that as the petitioner is an innocent purchaser for value, he should be
protected as against the registered owner because the latter can secure reparation from the assurance fund. The fact is, however,
that petitioner herein is not the innocent purchaser for value protected by law. The innocent purchaser 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, as the law
expressly states. Such is not the situation of the petitioner, who has been the victim of impostors pretending to be the registered
owners but who are not said owners.
The next assignment of error is predicated on the assumption that both the petitioner and the respondents are guilty of negligence.
The giving of the certificate of title to Carmencita de Jesus is in itself no act of negligence on the part of respondents; it was perfectly
a legitimate act. Delay in demanding the certificate of title is no act of neglect either, as respondents have not executed any deed or
document authorizing Carmencita de Jesus to execute deeds for and on their behalf. It was petitioner who was negligent, he did not
take enough care to see to it that the persons who executed the deed of mortgage are the real registered owners of the property.
The argument raised by petitioner's counsel that in case of negligence on the part of both the one who committed a breach of faith is
responsible, is not applicable. Petitioner alone is guilty of neglect, so he must suffer from it. 17
The doctrine, it may be added, finds affirmation in the fairly recent case of Duran vs. Intermediate Appellate Court, 18 which rests on
the same principles but reached a different result because of a crucial difference in the factual situation. In that case, a mother
allegedly forged her daughter's signature to a deed of sale in her (the mother's) favor of the former's properties, obtained registered
titles in her name, and thereafter mortgaged the properties to the private respondents. Upon her failure to redeem the mortgage, the
mortgagees foreclosed and purchased the properties at the ensuing sheriffs auction sale. This Court ruled that the mortgage was
valid with respect to the mortgagees because at the time of its constitution title to the property was already in the name of the party
who had executed the mortgage (the mother):
... But even if the signatures (of the petitioner to the deed of sale in favor of her mother) were a forgery, and the sale would be
regarded as void, still it is Our opinion that the Deed of Mortgage is VALID, with respect to the mortgagees, the defendants-
appellants. While it is true that under Art. 2085 of the Civil Code, it is essential that the mortgagor be the absolute owner of the
property mortgaged, and while as between the daughter and the mother, it was the daughter who still owned the lots, STILL insofar
as innocent third persons are concerned, the owner was already the mother (Fe S. Duran) inasmuch as she had already become
the registered owner (Transfer Certificates of Title Nos. 2418 and 2419). The mortgagee had the right to rely upon what appeared in
the certificate of title, and did not have to inquire further. If the rule were otherwise, the efficacy and conclusiveness of Torrens
Certificate of Titles would be futile and nugatory. Thus the rule is simple: the fraudulent and forged document of sale may become
the root of a valid title if the certificate has already been transferred from the name of the true owner to the name indicated by the
forger (See De la Cruz v. Fabie, 35 Phil. 144; Blondeau, et al. v. Nano, et al., 61 Phil. 625; Fule et al. v. Legare et al., 7 SCRA 35 1;
see also Sec. 55 of Act No. 496, the Land Registration Act). The fact that at the time of the foreclosure sale proceedings (1970-
1972) the mortgagees may have already known of the plaintiffs' claim is immaterial. What is important is that at the time the
mortgage was executed, the mortgagees in good faith actually believed Fe S. Duran to be the owner, as evidenced by the
registration of the property in the name of said Fe S. Duran (pp. 146147, Rollo). 19
It is obvious that the last-cited case was decided differently only because unlike Joaquin vs. Madrid and the other cases earlier
referred to, it involved a situation where title to the property had already been registered in favor of a person other than the true
owner before being conveyed or mortgaged to the party claiming the rights of an innocent transferee.
WHEREFORE, finding merit in the appeal, the Court REVERSES and VACATES the Amended Decision of the Trial Court insofar as
it divests the petitioners Valentin Solivel and Petra Mente of the ownership of the property in question and MODIFIES it insofar as it
orders the defendants Federico Tompong and Isaias Ngoho to pay said petitioners P19,000.00, plus interests from August 13, 1974,
said defendants being ordered to pay such amount instead to private respondent Paulino Cagas. The deed of sale of September 8,
1972 executed by Isaias Ngoho as purported attorney-in-fact of the petitioners in favor of Paulino Cagas is declared null and void,
and Transfer Certificate of Title No. T-6064 of the Registry of Deeds of Davao del Sur in the name of Cagas by virtue of said deed is
cancelled. Paulino Cagas is ordered to reconvey to the petitioners by registrable deed the property covered by said certificate of
title. The reckless and bare-faced deceits practiced by defendants Federico Tompong and Isaias Ngoho on the petitioners and the
private respondent are clearly evincive of extreme bad faith, intent to defraud and criminal propensities which, in the mind of the
Court, the Trial Court's award of damages is inadequate either to punish or to discourage. Accordingly, the Amended Decision is
further MODIFIED as to said award by sentencing defendants Federico Tompong and Isaias Ngoho jointly and severally to pay: (a)
the petitioners P10,000.00 as moral damages, P10,000.00 as exemplary damages and P10,000.00 as attorney's fees; (b)
respondent Paulino Cagas the further sum of P10,000.00 as exemplary damages; and (c) the costs.

SO ORDERED.

G.R. No. L-64159 September 10, 1985

CIRCE S. DURAN and ANTERO S. GASPAR, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, ERLINDA B. MARCELO TIANGCO and RESTITUTO TIANGCO, respondents.

RELOVA, J.:
The respondent then Court of Appeals rendered judgment, modifying the decision of the then Court of First Instance of Rizal, which
reads as follows:
(1) the complaint of the plaintiffs (herein petitioners) is hereby DISMISSED;
(2) the defendants-appellants spouses Erlinda B. Marcelo Tiangco and Restituto Tiangco (herein private respondents) are hereby
declared the lawful owners of the two (2) parcels of land and all the improvements thereon including the 12-door apartment thereon
described in the complaint, in the counterclaim, in the cross-claim, and in the Sheriff's Certificate of Sale;
(3) the plaintiffs-appellants and the defendant-appellee Fe S. Duran are hereby ordered to deliver to (the Tiangcos) the two parcels of
land and all the improvements thereon including the 12-door apartment thereon, subject matter of the complaint, counterclaim, and
cross-claim, and in the Sheriff's Certificate of Sale;
(4) the plaintiffs-appellants and the defendant-appellee Fe S. Duran are hereby ordered to pay solidarily to the Tiangcos the sum of
Two Thousand Four Hundred Pesos (P2,400) a month from May 16, 1972 until delivery of possession of the properties in question to
said Tiangco spouses, representing rentals collected by plaintiffs-appellants and defendant- appellee Fe S. Duran;
(5) the plaintiffs-appellants and defendant-appellee Fe S. Duran are hereby ordered to pay solidarily to the spouses Tiangco the sum
of Twenty Thousand Pesos (P20,000) as damages for attorney's fees, and the sum of Twenty-Five Thousand Pesos (P25,000) for
moral damages, and the costs. (pp. 149-150, Rollo)
The antecedent facts showed that petitioner Circe S. Duran owned two (2) parcels of land (Lots 5 and 6, Block A, Psd 32780) covered
by Transfer Certificate of Title No. 1647 of the Register of Deeds of Caloocan City which she had purchased from the Moja Estate.
She left the Philippines in June 1954 and returned in May 1966.
On May 13, 1963, a Deed of Sale of the two lots mentioned above was made in favor of Circe's mother, Fe S. Duran who, on December
3, 1965, mortgaged the same property to private respondent Erlinda B. Marcelo-Tiangco. When petitioner Circe S. Duran came to
know about the mortgage made by her mother, she wrote the Register of Deeds of Caloocan City informing the latter that she had not
given her mother any authority to sell or mortgage any of her properties in the Philippines. Failing to get an answer from the registrar,
she returned to the Philippines. Meanwhile, when her mother, Fe S. Duran, failed to redeem the mortgage properties, foreclosure
proceedings were initiated by private respondent Erlinda B. Marcelo Tiangco and, ultimately, the sale by the sheriff and the issuance
of Certificate of Sale in favor of the latter.
Petitioner Circe S. Duran claims that the Deed of Sale in favor of her mother Fe S. Duran is a forgery, saying that at the time of its
execution in 1963 she was in the United States. On the other hand, the adverse party alleges that the signatures of Circe S. Duran in
the said Deed are genuine and, consequently, the mortgage made by Fe S. Duran in favor of private respondent is valid.
With respect to the issue as to whether the signature of petitioner Circe S. Duran in the Deed of Sale is a forgery or not, respondent
appellate court held the same to be genuine because there is the presumption of regularity in the case of a public document and "the
fact that Circe has not been able to satisfactorily prove that she was in the United States at the time the deed was executed in 1963.
Her return in 1966 does not prove she was not here also in 1963, and that she did not leave shortly after 1963. She should have
presented her old passport, not her new one. But even if the signatures were a forgery, and the sale would be regarded as void, still
it is Our opinion that the Deed of Mortgage is VALID, with respect to the mortgagees, the defendants-appellants. While it is true that
under Art. 2085 of the Civil Code, it is essential that the mortgagor be the absolute owner of the property mortgaged, and while as
between the daughter and the mother, it was the daughter who still owned the lots, STILL insofar as innocent third persons are
concerned the owner was already the mother (Fe S. Duran) inasmuch as she had already become the registered owner (Transfer
Certificates of Title Nos. 2418 and 2419). The mortgagee had the right to rely upon what appeared in the certificate of title, and did
not have to inquire further. If the rule were otherwise, the efficacy and conclusiveness of Torrens Certificate of Titles would be futile
and nugatory. Thus the rule is simple: the fraudulent and forged document of sale may become the root of a valid title if the certificate
has already been transferred from the name of the true owner to the name indicated by the forger (See De la Cruz v. Fable, 35 Phil.
144; Blondeau et al. v. Nano et al., 61 Phil. 625; Fule et al. v. Legare et al., 7 SCRA 351; see also Sec. 55 of Act No. 496, the Land
Registration Act). The fact that at the time of the foreclosure sale proceedings (1970-72) the mortgagees may have already known of
the plaintiffs' claim is immaterial. What is important is that at the time the mortgage was executed, the mortgagees in good faith actually
believed Fe S. Duran to be the owner, as evidenced by the registration of the property in the name of said Fe S. Duran (pp. 146-147,
Rollo)."
In elevating the judgment of the respondent appellate court to Us for review, petitioners discussed questions of law which, in effect
and substance, raised only one issue and that is whether private respondent Erlinda B. Marcelo-Tiangco was a buyer in good faith
and for value.
Guided by previous decisions of this Court, good faith consists in the possessor's belief that the person from whom he received the
thing was the owner of the same and could convey his title (Arriola vs. Gomez dela Serna, 14 Phil. 627). Good faith, while it is always
to be presumed in the absence of proof to the contrary, requires a well-founded belief that the person from whom title was received
was himself the owner of the land, with the right to convey it (Santiago vs. Cruz, 19 Phil. 148). There is good faith where there is an
honest intention to abstain from taking any unconscientious advantage from another (Fule vs. Legare, 7 SCRA 351). Otherwise stated,
good faith is the opposite of fraud and it refers to the state of mind which is manifested by the acts of the individual concerned. In the
case at bar, private respondents, in good faith relied on the certificate of title in the name of Fe S. Duran and as aptly stated by
respondent appellate court "[e]ven on the supposition that the sale was void, the general rule that the direct result of a previous illegal
contract cannot be valid (on the theory that the spring cannot rise higher than its source) cannot apply here for We are confronted with
the functionings of the Torrens System of Registration. The doctrine to follow is simple enough: a fraudulent or forged document of
sale may become the ROOT of a valid title if the certificate of title has already been transferred from the name of the true owner to
the name of the forger or the name indicated by the forger." (p. 147, Rollo)
Thus, where innocent third persons relying on the correctness of the certificate of title issued, acquire rights over the property, the
court cannot disregard such rights and order the total cancellation of the certificate for that would impair public confidence in the
certificate of title; otherwise everyone dealing with property registered under the torrens system would have to inquire in every instance
as to whether the title had been regularly or irregularly issued by the court. Indeed, this is contrary to the evident purpose of the law.
Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will
in no way oblige him to go behind the certificate to determine the condition of the property. Stated differently, an innocent purchaser
for value relying on a torrens title issued is protected. A mortgagee has the right to rely on what appears in the certificate of title and,
in the absence of anything to excite suspicion, he is under no obligation to look beyond the certificate and investigate the title of the
mortgagor appearing on the face of said certificate.
Likewise, We take note of the finding and observation of respondent appellate court in that petitioners were guilty of estoppel by laches
"in not bringing the case to court within a reasonable period. Antero Gaspar, husband of Circe, was in the Philippines in 1964 to
construct the apartment on the disputed lots. This was testified to by Circe herself (tsn., p. 41, Nov. 27, 1973). In the process of
construction, specifically in the matter of obtaining a building permit, he could have discovered that the deed of sale sought to be set
aside had been executed on May 13, 1963 (the building permit needed an application by the apparent owner of the land, namely,
Circe's mother, Fe S. Duran). And then again both plaintiffs could have intervened in the foreclosure suit but they did not. They kept
silent until almost the last moment when they finally decided, shortly before the sheriff's sale, to file a third-party claim. Clearly, the
plaintiffs can be faulted for their estoppel by laches." (p. 148, Rollo)
IN VIEW OF THE FOREGOING, We find the petition without merit and hereby AFFIRMED in toto the decision of respondent appellate
court promulgated on August 12, 1981.

SO ORDERED.

[G.R. No. L-8278. April 30, 1955.]

DAWALING SUMAIL, Petitioner, v. HONORABLE JUDGE OF THE COURT OF FIRST INSTANCE OF

COTABATO, THE DIRECTOR OF LANDS and MELQUIADES GEPULIANO, Respondents.

Melecio M. Lobinco for Petitioner.

Jose A. Cusi for respondent Director of Lands.

Sucaldito, Cartagena & Narajos for respondent Melquiades Gepuliano.

SYLLABUS

1. PUBLIC LANDS; ALIENATION OF PUBLIC LANDS REQUISITES BEFORE TITLE ISSUES. — Under section 122 of the
Land Registration Act, when any public lands are alienated, the same shall be brought forthwith under the
operation of the said Act and shall become registered lands and that the instrument of conveyance in the form of a
Patent, before its delivery to the grantee shall be filed with the Register of Deeds for registration, and that once
registered therein a certificate of title shall be issued as in other cases of registered land.

2. ID. : ID.; ID.; LAND CEASED TO BE PART OF PUBLIC DOMAIN AFTER TITLE IS ISSUED; DIRECTOR OF LAND
LOSES JURISDICTION. — After a free patent application is granted and the corresponding certificate of title is
issued, the land ceased to be part of the public domain and became private property over which the Director of
Lands had neither control nor jurisdiction.

3. ID.; ID.; ID.; REVIEW OF PUBLIC LAND GRANT ON GROUND OF FRAUD; PERIOD OF ONE YEAR TO RECKON
FROM DATE OF ISSUANCE OF PATENT. — Assuming that in bringing public land grants under the Land Registration
Law, there is a period of one year for review in cases of fraud, the date of the issuance of the patent might be
regarded to correspond 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. In the present case, the
petition for review of the public land grant on the ground of fraud was filed almost three years after the issuance of
the free patent. It is, therefore, clear that the trial court no longer had jurisdiction to entertain the complaint.

4. ID.; REVERSION; WHO MAY INSTITUTE ACTION FOR REVERSION. — Under section 101 of the Public Land Act
only the Solicitor General or his representative is authorized to file reversion proceedings.

DECISION

MONTEMAYOR, J.:

The land involved in the present case of certiorari is lot No. 3633 of the cadastral survey of Dulawan, Cotabato. The
facts of the case as may be gathered from the pleadings are as follows. Before the court where cadastral
proceedings were had over the cadastre of Dulawan, Cotabato, three separate applicants claimed lot No. 3633 as
their private property. The Bureau of Lands and Melquiades Gepuliano claimed it as public land. On June 9, 1941,
said lot was declared public land by the cadastral court.

On January 5, 1940, herein respondent Gepuliano had filed a free patent application for said lot No. 3633. His
application was approved on August 10, 1943 and Free Patent No. V-459 was finally issued to him on September
26, 1949, which Patent was registered in the office of the Register of Deeds in June, 1960, which office thereafter
issued to him Original Certificate of Title V-23.

On June 3, 1952, Gepuliano filed Civil Case No. 413 in the Court of First Instance of Cotabato against petitioner
Dawaling Sumail, alleging among other things that he was the owner of the lot in question by virtue of a Free
Patent and an Original Certificate of Title; that he had been in possession of the land since 1939 continuously,
publicly, and adversely up to June, 1949, when Sumail by means of force, threats and intimidation entered the
parcel and divested him of possession; that several demands had been made for the surrender of the possession of
the land which demands defendant had rejected. The complaint prayed that the defendant be ordered to vacate the
premises and to pay damages and costs.

On June 21, 1952, defendant Sumail answered the complaint alleging that he and his predecessor-in-interest had
been in continuous possession of the land since shortly before the end of the Spanish regime, and that the
Certificate of Title of Gepuliano had been obtained fraudulently, and he asked that the complaint be dismissed, with
costs. On July 27, 1952, and said to be intended as counter-complaint to Civil Case No. 413, Sumail, defendant in
said case, filed Civil Case No. 420 in the same court against Gepuliano and the Director of Lands for the purpose of
cancelling Certificate of Title V-23 covering lot 3633, alleging that Gepuliano thru fraud and misrepresentation had
filed with the Bureau of Lands a falsified application for free patent for the lot, stating in his application that the
parcel was not occupied or claimed by any other person and that he had entered upon it and introduced
improvements thereon, when as a matter of fact, said applicant Gepuliano had never occupied the land nor
introduced improvements thereon, and that it was he (Sumail) who had been in possession since shortly before the
end of the Spanish regime; and that the Director of Lands through mistake or inadvertence had approved the
application and later issued Free Patent V-459 by virtue of which Certificate of Title V-23 was issued in the name of
Gepuliano. Sumail asked that the original certificate of title be cancelled; that the Director of Lands give due course
to Sumail’s free patent application over said parcel and that Gepuliano pay damages, including attorney’s fees.

Answering the complaint in Civil Case No. 420 the Director of Lands stated that lot No. 3633 had been declared
public land by the Court of First Instance of Cotabato that Gepuliano had filed a free patent application for it, which
application was given due course and later approved and still later the corresponding Patent was issued on the
basis of which Original Certificate of Title V-23 was issued in the name of Gepuliano. The Director of Lands asked
that the complaint be dismissed as to him.

Gepuliano also answered the complaint of Sumail, claiming that the latter took possession of the lot only in July,
1949 and he prayed that the complaint be also dismissed as against him.

By agreement of the parties the two civil cases, Nos. 413 and 420 were ordered to be tried jointly. When called for
joint hearing on March 25, 1954, the Director of Lands filed a motion to dismiss Civil Case No. 420 on the ground
that the court had no jurisdiction over the subject matter of the complaint; that the complaint of Sumail was
premature and that he (Sumail) had no legal personality to institute the action. The Director of Lands contended
that the complaint of Sumail called for the cancellation of a free patent issued by the Director of Lands over a
parcel of public land and that the court had no jurisdiction over the subject matter because under the Public Land
Act, the Director of Lands had executive control over the concession or disposition of the lands of the public
domain, and that his findings as to questions of fact shall be conclusive when approved by the Secretary of the
Department; that Sumail had filed a protest against the free patent application of Gepuliano and the issuance of
the patent to him, and that said protest had been ordered investigated by the corresponding District Land Officers
who had not yet filed his report, and that until said report is filed and the Director of Lands has made a decision on
the protest and until Sumail, if dissatisfied with the said decision has exhausted his remedy such as appeal to the
Secretary of the Department, it was premature for him to file an action in court; that under the Public Land Act
only the Solicitor-General or his representative is authorized to file reversion proceedings and that consequently,
Sumail had no personality to file the said action which would, if successful, result in the reversion of the parcel in
question to the public domain; and that even if such reversion took place, Sumail would not get the land any way
because it would still remain for the Director of Lands to determine who of the public land applicants is entitled to
the same.

Acting upon this motion to dismiss in Civil Case No. 420, the Court of First Instance of Cotabato issued an order on
May 26, 1954, stating that lot No. 3633 was public land; that it was applied for free patent by defendant Gepuliano
and the corresponding Patent had been issued to him; that it does not appear from the complaint of Sumail that he
had exhausted all the remedies available to him such as an appeal to the Secretary of the Department, and that
the courts will not interfere with the administration by the Bureau of Lands of the public domain, and that
consequently, the complaint should be dismissed, as in fact it was ordered dismissed. Sumail moved for the
reconsideration of the order of dismissal. By order of July 27, 1954 said motion for reconsideration was denied. To
annul the order of dismissal as well as the order denying the motion to reconsider the said order, the present
petition for certiorari was filed.

We agree with the Director of Lands and the trial court that the latter had no jurisdiction to entertain Civil Case No.
420 which was filed for the purpose of cancelling the Patent issued by the Director of Lands on lot No. 3633 and
also for the cancellation of the Original Certificate of Title V-23 issued to Gepuliano on the basis of his free patent.
Under section 122 of Act No. 496 known as the Land Registration Act, when any public lands in the Philippines are
alienated, granted, or conveyed to persons or public or private corporations, the same shall be brought forthwith
under the operation of the said Act and shall become registered lands and that the instrument of conveyance in the
form of a Patent, before its delivery to the grantee shall be filed with the Register of Deeds for registration, and
that once registered therein a certificate of title shall be issued as in other cases of registered land. That is the
reason why an original certificate of title was issued to Gepuliano sometime in 1950 on the basis of his free patent
issued in 1949.

In ordinary registration proceedings involving private lands, courts may reopen proceedings already closed by final
decision or decree, only when application for review is filed by the party aggrieved within one year from the
issuance of the decree of registration. Here, there was no decree of registration because instead of an application
for registration under the Land Registration Act Gepuliano applied for free patent under the Public Land Act.
Assuming that even in bringing public land grants under the Land Registration Law, there is a period of one year
for review in cases of fraud, how shall that period of one year be computed? For all practical purposes we might
regard the date of the issuance of the patent as corresponding 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. The purpose and effect of both decree and patent is the same. Now, further assuming that Civil Case
No. 420 of the Court of First Instance of Cotabato filed by Sumail was intended as a petition for review of the public
land grant and conveyance to Gepuliano, on the ground of fraud, was it filed within the period of one year? The
answer is in the negative. As already stated, free patent No. V-459 was issued in the name of Gepuliano on
September 26, 1949, while Civil Case No. 420 was filed in court only on July 21, 1952, or almost three years after
the issuance of the free patent. It is, therefore, clear that the trial court no longer had jurisdiction to entertain the
complaint in Civil Case No. 420 for the reasons already stated, but not as contended by the Director of Lands that
it involved public land, over which he had exclusive and executive control, because once the patent was granted
and the corresponding certificate of title was issued, the land ceased to be part of the public domain and became
private property over which the Director of Lands has neither control nor jurisdiction.

But even if we regard the action of Sumail in Civil Case No. 420, as an action for reversion to the Government of
the lot in litigation, under the provisions of sections 91 and 124 of the Public Land Act, which provide for the
annullment of patents and titles previously issued, and the reversion of the lands covered by them to the state,
may he bring said action? Section 101 of the same Act, says no. We reproduce said section:jgc:chanrobles.com.ph

"All actions for the reversion to the Government of lands of the public domain or improvements thereon shall be
instituted by the Solicitor General or the officer acting in his stead, in the proper courts, in the name of the
Commonwealth (Republic) of the Philippines."cralaw virtua1aw library

Under section 101 above reproduced, only the Solicitor General or the officer acting in his stead may bring the
action for reversion. Consequently, Sumail may not bring such action or any action which would have the effect of
cancelling a free patent and the corresponding certificate of title issued on the basis thereof, with the result that
the land covered thereby will again form part of the public domain. Furthermore, there is another reason for
withholding legal personality from Sumail. He does not claim the land to be his private property. In fact, by his
application for a free patent, he had formally acknowledged and recognized the land to be a part of the public
domain; this, aside from the declaration made by the cadastral court that lot 3633 was public land. Consequently,
even if the parcel were declared reverted to the public domain, Sumail does not automatically become owner
thereof. He is a mere public land applicant like others who might apply for the same.

It may not be out of place to state here that the claim of Sumail that he and his predecessor-in-interest had been
in possession of the lot since shortly before the end of the Spanish regime, would appear to be unfounded.
According to the allegations in the answer of respondent Gepuliano, not denied by Sumail, before the cadastral
court of Cotabato Sumail never claimed lot 3633 despite the fact that he must have been aware of the cadastral
survey thereof and the legal notices issued before hearing. As already stated, the only claimants of said lot before
said cadastral court were Kalid Dadika, Aurelio Tangente and Hadji Datu Samama Ampatuan who claimed it as
their private property, while the Director of Lands and Gepuliano claimed it as a public land. This must have been
between 1940 and 1941 because it was on June 9, 1941 that the cadastral court declared said lot public land. And,
as already stated, Gepuliano had filed his free patent application as early as January 8, 1940, and claimed that he
had occupied it since March, 1939.

In view of the foregoing, finding no error or abuse of excess of jurisdiction by the respondent Judge of the lower
court in issuing the order of dismissal as well as the order denying the motion for reconsideration thereof, the
present petition for certiorari is hereby denied, with costs.