LTD Cases 7 - Remedies

LTD, Remedies, Page 1
Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-40771 January 29, 1986
ANGELINA SAMSON, petitioner,
vs.
COURT OF APPEALS and HEIRS OF PRESBITERO VELASCO, respondents.
Fidel Manalo for petitioner.
Presbiterio J. Velasco, Jr. for respondents.
feb 16 1976
GUTIERREZ, JR., J:
This is a petition to review the decision of the Court of Appeals, now the Intermediate Appellate Court, which reversed and set aside the decision
of the Court of First Instance of Cavite in Land Registration Case No. TM-35.
Petitioner Angelina M. Samson filed an application for registration of title in the Court of First Instance of Cavite of three parcels of land all
located in Ternate, Cavite. These were (l) a parcel of land with an area of 605,936 square meters more or less located in Sitio Caynipa covered by
Plan PSU-199064 (Exhibit "K"); (2) a parcel of land with an area of 199,120 square meters more or less located in Barrio Cayugno-Paniman
covered by Plan PSU-202594 (Exhibit "G") and (3) a parcel of land with an area of 313,675 square meters more or less located in Barrio
Cayladme covered by Plan PSU 200554 (Exhibit "A").
The application for registration was premised on Section 48 of the Public Land Law, Commonwealth Act No. 141 as amended by Republic Act
1942, which entities a person to obtain a certificate of title if he and his predecessors-in- interest had been in open, continuous, exclusive and
notorious possession and occupation of agricultural lands of the public domain under a bona fide claim of acquisition or ownership for at least
thirty (30) years immediately preceding the filing of the application for confirmation of title, except when prevented by war or force majeure.
The applicant alleged that she and her predecessors-in-interest had occupied and possessed the properties openly, continuously, and in the
concept of the owner for more than 60 years prior to the filing of the application for registration.
With regard to the parcel of land covered by Plan PSU-200554 (Exhibit "A"), the petitioner stated that she bought the northern portion from
Melanio Martinez through a deed of sale executed on February 12, 1963 (Exhibit "P-1"). She claimed to have purchased the southern portion
from Hilarion Villacarlos and the latter's children as shown by a document entitled extra-judicial partition and sale executed on August 20,1963
(Exhibit "P").
With regard to the parcel of land covered by Plan PSU-202594 (Exhibit "G"), the petitioner alleged that she bought the northern portion from
Generoso Distor by virtue of a deed of absolute sale executed on February 25, 1963 (Exhibit "Q"), and the southern portion from Bonifacio
Tampis by virtue of a deed of absolute sale executed on October 1, 1963 (Exhibit "R").
No opposition was filed against the application for registration of the parcel of land covered by Plan PSU-199064 (Exhibit "K"). Hence, in a
partial decision dated July 9, 1964, the trial court, ordered the registration of this parcel of land in favor of the applicant.
The application for the registration of the two parcels covered by Plan PSU-200554 (Exhibit "A") and Plan PSU-202594 (Exhibit "G") was
opposed by the Director of Lands, Felicisima Rielo and Jaime T. Alberto. Of the three, only Rielo pursued her opposition. The Director of Lands
withdrew his opposition while Alberto did not present evidence in his favor.
Rielo died during the pendency of the proceedings. She was substituted by her sons, oppositors Presbitero R. Velasco and Pedro R. Velasco, to
whom the aforementioned parcels of land were adjudicated pursuant to an extra-judicial partition dated May 2, 1967 of the estate of their decease
parents Eustaquio Velasco and Felicisima Rielo.
The Velasco's claimed ownership over the two parcels of land on the basis of their alleged open and continuous possession in the concept of
owner for more than thirty (30) years. The two parcels are alleged to form part of a large parcel of land covered by Plan PSU-217187 (Exhibit
"I") consisting of six (6) lots with a combined area of 2,964,206 square meters located in the sitios of Paniman and Cayugno barrio of Sapang
Ternate, Cavite owned by the heirs of Eustaquio Velasco. They alleged that Lots 2 and 4 of Plan PSU-217187 correspond to the parcels of land
covered by Plan PSU-202594 (Exhibit "G") and Plan PSU-200554 (Exhibit "A") respectively.
After trial on the merits, the lower court ruled in favor of the applicant and the subject parcels of lands were ordered registered in her name.
The oppositors appealed the decision to the Court of Appeals. As earlier stated, the appellate court reversed and set aside the decision. The
dispositive portion of the decision reads:
WHEREFORE, the judgment appealed from is hereby reversed. In its place, another one is hereby rendered dismissing the
application for registration filed by applicant-appellee, and ordering the registration of the parcel of land known as Lot No.
4 in PSU-217187 in the name of Pedro R. Velasco, married, of legal age, a resident of Ternate, Cavite; and the parcel of
land known as Lot No. 2 in the same Plan PSU-217187 in the name of Presbitero R. Velasco, married, of legal age, a
resident of Ternate, Cavite, in accordance with the provisions of Section 48 of Commonwealth Act No. 141 as amended by
Republic Act No. 1942. The applicant-appellee shall pay the costs.
A motion for reconsideration filed by the applicant-appellee was denied by the appellate court. After her second motion for reconsideration was
denied, the applicant-appellee filed a motion for new trial based on newly discovered evidence. The motion was also denied for lack of merit.
Hence, this petition.
The issues raised by the petitioner are two-fold. The first issue is anchored on the appellate court's factual findings which the petitioner contends
are not supported by the evidence on record. This issue is anchored on the appellate court's having allegedly erred when it denied the motion for
new trial.
Considering that the factual findings of the appellate court are diametrically opposed to those of the trial court, we have scrutinized the bases of
the respondent court's factual findings and given extra careful review to the parties' allegations on appeal to determine if there is any merit in the
petitioner's contentions (Cruz v. Court of Appeals, 129 SCRA 222; Legaspi v. Court of Appeals, 69 SCRA 360; Tolentino v. De Jesus, 56 SCRA
167).
It is to be noted that the petitioner's alleged possession of the two subject parcels of land commenced only in 1963 and that she filed her
application for registration of title over the same in 1964. Under these circumstances, her right to register the subject parcels of land depends on
whether or not her predecessors-in-interest had occupied and possessed The same openly, continuously, and in the concept of owner within the
required thirty-year period prior to the time she filed the application for registration pursuant to Section 48 of the Public Land Act.
We find the petitioner's contention as regards the factual findings of the appellate court unfounded.
We agree with the appellate court's factual findings to the effect that not one of the petitioner's predecessors-in-interest was able to submit
convincing proof of actual, peaceful, and adverse possession in the concept of owner over the subject parcels of land sought to be registered
within the period contemplated by law. As the appellate court said:
Melanio Martinez declared that he possessed the land sold by him to the applicant only since 1936. When asked who was
in possession prior to 1936, he answered 'I do not know' (T.S.N., p. 8 August 11, 1970). Even if his possession since 1936
were tacked to that of the applicant, it did not amount to thirty (30) years prior to the filing of the application for
registration on May 7, 1964. Martinez even admitted that his possession was not continuous, he having left the property
during the Japanese time and returned to the same only in 1946 after the war. Moreover, he only visited the land about
three times a week in 1961 to 1964 to visit his cows, inasmuch as he was then the chief of police of Ternate, Cavite. ...
Melanio Martinez stated that he used the land merely as a pasturage of his cows which numbered four at that time. He did
not fence the land or construct an enclosure so as to indicate ownership of the portion claimed to be his own. He further
admitted that aside from himself, there were several other people who had their huts in the same area which he was using
as a grazing land for his cows (Tsn., p. 18, September 17, 1970). Although he claimed to be possessing the property since
1936, the earliest tax declaration that could be presented to show that it was declared for tax purposes in his name was only
for the year 1961 (Exhibit P-2).
The testimony of Hilarion Villacarlos is similarly sketchy and unreliable. lie claimed that the property he sold to the
applicant was inherited by him from his mother, but later declared that he bought the same (Tsn., p. 78, May 26, 1970). He
admitted that he started possessing the property only since 1945 (Ibid, p. 3) which is only about 19 years prior to the filing
of this application for registration. Although he claimed that he paid taxes on the land, he could not present any tax
declaration in his name nor any receipt of his payment of taxes. He stated that he had tenants but did not know their names.
...
xxx xxx xxx
The testimony of Generoso Distor as to his possession and ownership of the northern portion of the lot covered by PSU-
202594 sold by him to the applicant also fails to inspire belief. He claim to have possessed the land from the time he
bought it from a certain Rufino Tibayan in 1956 or 1957. He cannot remember the exact date of the sale nor produce the
alleged document of sale. He could not remember the notary public who notarized the same, nor the price he paid. He does
not know his immediate neighbors, except Tecla Tampis. He had not introduced any improvement on the land nor paid the
taxes on the same. The first time he declared it for tax purposes in his name was on February 5, 1963 or 20 days before he
sold the property to the applicant on February 25, 1963 pursuant to the deed of sale (Exhibit Q) While the property he
supposedly bought from Tibayan was only 4 hectares in area, the parcel of land he sold to the applicant pursuant to Exhibit
Q had an area of 14 hectares. . . .
The fourth predecessor-in-interest of the applicant, a certain Bonifacio Tampis, was not made to testify. According to the
Court a quo, the failure of Bonifacio Tampis to testify in his stead was because ho was insane at that time. . . .
xxx xxx xxx
. . . It is to be noted that the tax receipt, Exhibit S-4, in the name of Bonifacio Tampis shows that the tax was paid on June
25, 1962 not only for that particular year but for all the years starting 1953 to 1961. At the time the said taxes were paid,
the applicant had already been laying cassava over the property subject matter of the instant application for registration. It
had been testified to by oppositors' witness Gorgonio Velasco that the applicant manifested a claim of ownership over the
land in question since 1959. This assertion was not denied by the applicant, and is in fact sustained by the contents of Tax
Declaration No. 369 which the applicant secured in her name on July 6, 1964, but which she made to retroact starting with
the year 1961 exhibit S-1). On the face of the said tax declaration, it appears that the applicant declared in her name the
area of the lot shown in PSU-202594 consisting of 199,120 square meters. If the applicant wanted to make it appear that
she was already possessing the land shown in PSU-202594 since 1961, it is not understood why she had to purchase the
same property from Generoso Distor and Bonifacio Tampis in 1963. By said act, applicant showed not only lack of
sincerity of her claim of ownership over the property in question manifested since 1959, so much so she had to
acknowledge her own lack of basis to acquire said land on the ground of possession by purchasing the lands from the
supposed possessors of the same.
On the other hand, the factual findings of the appellate court that the respondents were able to submit competent evidence to show acts of
possession over the subject parcels of land since 1910 are convincing. The court stated:
Gorgonio Velasco, Benjamin Velasco and oppositor Pedro Velasco testified as to the possession by the Velascos of the parcel of land in question
by their deceased father Eustaquio Velasco and, after the latter's death in 1922, by their mother Felicisima Rielo. They declared that since the
time they came to the age of reason, they knew that the lands shown in PSU-217187 had been occupied by Eustaquio Velasco who planted the
same with mango trees and bamboos; that they had a Titulo de Possession Informatoria dated 1895 but said papers were burned during the war;
that although the land was declared as part of the military reservation by the Americans for military practices, their mother continued cultivating
and gathering fruits from the land with the consent of the military authorities; that nobody disturbed them in the possession of the land up to the
year 1959, when they learned that an adverse claim over the land was being manifested by a certain Samson; that they have been paying the land
taxes of the land in question; that the tax declarations corresponding to the period before the war were burned during the war; that Generoso
Distor and Hilarion Villacarlos had no properties in the vicinity; that Rufino Tibayan from whom Generoso Distor allegedly purchased the land
that he sold to the applicant did not own any property in that area and was merely a tenant of Gorgonio Velasco in Paniman; and that the overseer
of the land was a certain Miguel Macaraig who was succeeded in said position by his nephew, oppositors' witness Emiliano Macaraig.
xxx xxx xxx
. . . Even disregarding the testimonial evidence coming from the mouths of oppositor Pedro R. Velasco, his brothers Gorgonio and Benjamin and
their overseer Emiliano Macaraig, the documentary proofs presented by the oppositor show adequately the veracity of their claim of possession.
They presented tax receipts showing that, as early as 1910, their father Eustaquio Velasco had been paying taxes for lands located in Sapang,
Ternate (Exhibits 3, 3-A to 3-1). While the said tax receipts refer to lands located in Barrio Sapang, Ternate, it was explained that the properties
in question are actually located in Barrio Sapang, and that Cayladme and Cayugno-Paniman where the lands shown in PSU-200554 and PSU-
202594 are located according to the plans submitted by the applicant, are merely sitios of Barrio Sapang, as indicated in the oppositors' Plan'
PSU-217187, Exhibit 1. Applicant was not able to show that the said tax receipts refer to other parcels of land belonging to Eustaquio Velasco in
Ternate, Cavite.
The testimonies of the witnesses for the oppositor may not be disbelieved on the ground that they are more biased and interested, as compared
with the witnesses of the applicant. While Gorgonio and Benjamin Velasco are brothers of oppositors Presbiterio and Pedro Velasco and are
expected to testify favorably for the latter, the same thing may be said of applicant's witnesses Melanio Martinez, Hilarion Villacarlos and
Generoso Distor whose interest may be said to be more direct and personal, inasmuch as they were the ones who sold the lands which the
applicant is seeking to register in her name. The failure of the oppositors to reconstitute the tax declarations in their names until 1961 is similarly
true with the applicant and her predecessors-in-interest none of whose tax declarations and tax receipts covering the lands in question date earlier
than 1961. While Gorgonio Velasco might be unfamiliar with the land, he is not the oppositor herein, and the possession of the Velascos over the
property was not claimed to be by Gorgonio Velasco alone. With respect to the relative credibility of the witnesses for the oppositors and the
applicant based on their social standing and official positions, the witnesses of the oppositors do not suffer by the comparison. While it is true that
Melanio Martinez was at one time chief of police of Ternate, Gorgonio Velasco is the internal auditor of UP-Los Banos, while Benjamin Velasco
is a physician who was formerly the district health officer of Palawan. oppositor Pedro R. Velasco himself is the chief of the Bureau of Internal
Revenue office for the province of Cavite. Appellant's witness Generoso Distor, contrary to the finding of the trial Judge, was not the municipal
treasurer of Ternate, Cavite but only a son of Municipal Treasurer Alejandro Distor (Tsn., p. 13, July 7, 1970).
It is not true that the testimony of respondent Pedro Velasco concerning the tax receipts is hearsay, hazy vague and not worthy of evidence. It was
clearly shown that the questioned tax receipts beginning the year 1910 were actually issued for the payment of taxes on the lands in question.
Hence, on direct examination, Velasco stated.
xxx xxx xxx
Q Do you know if the said properties has been declared for taxation purposes?
A Well on my personal knowledge because my mother entrusted the bundles of document to me,
there were land taxes paid sometimes in 1903 up to 1923.
Q About the tax declaration, do you know if there is a tax declaration over the property in question?
A Yes sir, there are.
Q I am showing to you this declaration of Real Property No. 1608, will you please go over the same
and tell us what relation has this with the tax declaration you have mentioned a while ago?
A Yes, sir this is the Tax Declaration I was saying a while ago.
Q Do you have any tax declaration over the said lot before the war?
A Well I could not remember well because I was still a minor at that time, (Tsn., July 30, 1971, pp.
12-13)
xxx xxx xxx
Q You made mention of the giving by your mother of the tax receipts regarding the payment of taxes
over the lot in question. I am showing to you a bunch of tax receipts, will you please tell us what
relation have these tax receipts over the property in question?
A This Tax Receipt No. 4109383 is one of those given to me by my mother.
Q As well as these tax receipts Nos. 170413, 403389, 9406649, 7441543, 5047068, 3871908,
3133061, 1497755, 1436347, 3132598?
A These are the receipts which my mother gave me.
Q I observed in this receipt that there is mentioned of properties in Sapang Ternate, Cavite. Win you
please tell us what barrio covers this property which you said was owned by your father?
A All the properties are beyond the river except Barrio Bocana and Barrio Sapang up to the
boundary line of Batuhan, Margondon, Cavite. (Tsn., July 30, 1971, pp. 17-18)
xxx xxx xxx
Q I have observed Mr. Velasco in this Tax Receipt which you have Identified payment for the
properties located in Sapang, Ternate Cavite. Win you please ten that relation has this payment for
the Sabang in relation to this property which you said is also in the jurisdiction of Sapang, Ternate,
Cavite?
A According to my mother those are the payments made on this property located at Cayugno,
Ternate, Cavite.
Q Aside from this property in Cayugno, and Paniman which you said is in the jurisdiction of Barrio
Sapang, there are no other properties or do you know if your parents have another property in Barrio
Sapang?
A There no other property. (Tsn., July 30, 1971, pp. 24-26)
On cross-examination, Velasco reiterated his earlier testimony that the tax payment receipts pertain to the two subject parcels of land.
The appellate court's findings that the oppositors had a better right to the registration of the two subject parcels of land are based on substantial
evidence. It is obvious that the appellate court's findings are based not only on the tax receipts submitted by the oppositors but the oral
testimonies of the oppositors and their witnesses who testified on the open and continuous possession of the oppositors and their predecessor-in-
interest beginning the year 1910 to the present. We see no compelling reason to deviate from the nile that factual findings of the Court of Appeals
based on substantial evidence cannot be reviewed in a petition for review on certiorari (Montesa v. Court of Appeals 117 SCRA 700) and that the
Court of Appeals, as a rule, is the final arbiter on questions of facts. (Enriquez v. Court of Appeals, 104 SCRA 658). The contention of the
petitioner that the case at bar fails within the known and recognized exceptions to the general rule is not meritorious.
The tax receipts accompanied by actual and continuous possession of the subject parcels of land by the respondents and their parents before them
for more than thirty years qualify them to register title to the said subject parcels of land. We ruled in the case of Republic v. Court of
Appeals, (131 SCRA 533) that.
While it is true that by themselves tax receipts and declarations 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.
With regard to the petitioner's contention that the oppositors did not present documentary proof of ownership sufficient to warrant registration of
the subject parcels of land in their favor, we restate our ruling in the case of Zuniga v. Court of Appeals (95 SCRA 740) to wit:
The purpose of the applicant is to prove that he has an absolute or simple title over the property sought to be registered,
otherwise his application will be denied. An absolute oppositor claims a dominical right totally adverse to that of the
applicant. If successful, registration will be decreed in favor of the oppositor. As to whether or not private respondents have
absolute or fee simple title over the property sought to be registered necessarily requires a resolution of the question as to
whether or not the oppositors had a dominical right totally adverse to that of the applicants.
The respondents' documents were not only deemed sufficient by the appellate court for registration of title in their names but they are more
convincing proof than the exhibits adduced for the petitioner.
We also find no error in the appellate court's denying the petitioner's motion for new trial based on newly discovered evidence.
The newly discovered evidence sought to be presented by petitioner consist of two "ancient" documents and the testimonies of Rufino Tibayan,
Petronilo Gulpo, Segunda Fabis and Demetrio Zapanta. The "ancient" documents are: (1) Receipt No. 01436276 dated August 9, 1910 in the
name of Emiliana Villacarlos which shows that taxes were paid for 3 parcels of land in the amounts of P1.75, P4.00 and P l.66; and (2) Escritura
de Particion de Fincas Rusticas executed on April 20, 1920 by descendants of Luis Villacarlos. By themselves, the supposed newly discovered
evidence would not show that they refer to the land in question.
Section 1, Rule 53 of the Revised Rules of Court provides:
Section 1. Petition. — Before a final order or judgment rendered by the Court of Appeals becomes executory, a motion for
new trial may be filed on the ground of newly discovered evidence which could not have been discovered prior to the trial
in the court below by the exercise of due diligence and which is of such a character as would probably change the result.
The motion shall be accompanied by affidavits showing the facts constituting the gounds therefore and the newly
discovered evidence.
In the instant case, there is no showing that Rufino Tibayan, Petronilo Gulpo, Segunda Fabis and Demetrio Zapanta could not have been
discovered and produced during the trial. Hence their testimonies would not constitute newly discovered evidence.
The sincerity of the petitioner in producing the two documents after so long a time is doubtful, The case was filed on May 7, 1964 and had been
pending in court for 11 years before the petitioner discovered the said documents and filed the motion for new trial. In fact, it was only after the
denial of her second motion for reconsideration and the oral arguments held in the appellate court that she filed the said motion. The records do
not show that the petitioner could not have discovered the two documents prior to the trial by use of due diligence. Moreover, granting that the
two documents can be considered as newly discovered evidence, a new trial would only be useless and ineffective. There is no showing that these
documents would be sufficient proof to overthrow the appellate court's findings that Hilarion Villacarlos and his predecessors-in-interest did not
possess the disputed parcel of land for the required number of years to qualify the petitioner for a certificate of title pursuant to Section 48 of the
Public Land Law as amended. Mere tax declarations do not vest ownership of the property in the declarant (Province of Camarines Sur v.
Director of Lands, 64 Phil. 600, citing the earlier cases of Evangelista v. Tabayuyong, 7 Phil. 607; Casimiro v. Fernandez, 9 Phil. 567;
Elumbaring v. Elumbaring, 12 Phil. 384).
WHEREFORE, the instant petition is hereby DISMISSED for lack of merit. The appellate court's questioned decision is AFFIRMED.
SO ORDERED.
Teehankee, Melencio-Herrera, Plana and Patajo, JJ., concur.
De la Fuente, J., took no part.
G.R. No. L-45664
ROMERO, J.:
This is a petition for review on certiorari of the Decision of February 2, 1977 of the Court of Appeals affirming the Order of November 25, 1971
of the then Court of First Instance of Bulacan which denied the National Power Corporation's petition for the review of the decree of registration
previously issued by the said lower court.
On August 21, 1968[1] private respondent Alejandro Mamot filed with the then Court of First Instance of Bulacan at Malolos, [2] an application for
registration of title over six parcels of land or Lots Nos. 1, 2, 3, 4, 5 and 6 of Psu-162460-Amd. with a total area of 417,251 square meters
situated in San Mateo, Norzagaray Bulacan (Land Registration Case No. N-2581-M). Copies of the application were thereafter duly published
and posted in conspicuous places in the municipality. As no one opposed the application, on May 6, 1969, the court issued an order of general
default.[3]
Mamot then submitted his evidence ex-parte before the Deputy Clerk of Court who had been so commissioned by the lower court. On June 23,
1969, the same court promulgated a decision confirming the order of general default and ordering the registration of the six parcels of land in
favor of Mamot and the issuance of the corresponding decree of registration after the decision shall have become final. [4]
On the same date, however, one Pedro Sarmiento filed a motion praying that he be allowed to file an opposition to Mamot's application for
registration of title.[5] Mamot moved to strike the motion from the records. Later, Sarmiento filed a motion to set aside the order of general
default. Acting on these motions, the lower court issued the Order of September 23, 1969 granting Sarmiento ten days within which to file his
written opposition.[6] In the meantime, however, Mamot and Sarmiento tried to settle amicably the dispute between them. Their effort resulted in
the execution of a deed of sale involving Lot 4 in favor of Sarmiento. Accordingly, Sarmiento withdrew his opposition and moved that the
Decision of June 23, 1969 be amended by adjudicating Lot 4 to him. [7]
Thus, on November 13, 1969, the lower court rendered an amended decision awarding Lots Nos. 1, 2, 3, 5 and 6 to Mamot and Lot No. 4 to
Sarmiento.[8]
Mamot having moved for the issuance of a decree of registration, on December 17, 1969, the lower court issued an "Order for the Issuance of
Decree" directing the Commissioner of Land Registration "to comply with Section 41 of Act 496 as amended by Section 21 of Act
2347."[9] Thereafter, the Chief Surveyor and Chief of the Division of Original Registration, acting for the Commissioner, rendered a report stating
that "the platting of said Lots 1 to 6 of Psu-162460-Amd., on our Municipal Index Map, shows that they are inside Proclamation No. 599
(National Power Corporation)."[10]
The lower court then summoned the National Power Corporation (NPC for brevity) to a hearing on the report. Upon learning at the hearing that a
decision had been rendered in favor of Mamot, on February 25, 1970, the NPC filed a petition for relief from judgment. [11]The NPC alleged
therein that the hearing for the application for registration was conducted without proper notice having been given it; that Mamot committed
fraud in failing to allege in his application that the lots he applied for are covered by Proclamation No. 599, that the Angat access road traversed
the lots he applied for, and that NPC had rights and interests over the properties involved; that had Mamot not committed said fraudulent act, the
court would have discovered that he had no lawful rights over the property; and that it had good and strong evidence to counteract Mamot's claim.
Alleging that the NPC had no personality to file a petition for relief from judgment because an order of general default had been issued in the case
and that the decision of the lower court having become final and executory, what remained to be done was the ministerial act of the Land
Registration Commissioner to issue the decree of registration, Mamot moved to strike out the petition for relief from judgment.[12]
However, finding merit in the said petition, the lower court granted the prayer for relief from judgment in its Order of March 17, 1970 which also
lifted the general order of default and directed the NPC to file its opposition. [13] Consequently, the NPC filed its opposition, to the application for
registration alleging that neither the applicant nor his predecessors-in-interest possessed sufficient title over the parcels of land involved as they
had not acquired them either by composition title from the Spanish government or by possessory information title under the Royal Decree of
February 13, 1894; that neither Mamot nor his predecessors-in-interest had been in open, continuous, exclusive and notorious possession and
occupation of the land for at least thirty years immediately preceding the application, and that the parcels of land involved are within the Angat
Reservation pursuant to Presidential Proclamation No. 599 and as such, they are under the administration of the NPC. [14] The Solicitor General,
appearing for the Director of Lands, also filed an opposition to the application alleging basically the same grounds as the NPC. [15]
Mamot objected to these oppositions and moved for the reconsideration of the Order of March 17, 1970. Another claimant to the land, one Fabian
Castillo, filed a motion to lift the general order of default.
On February 3, 1971, the lower court issued an order denying Castillo's motion and dismissing the petition for relief from judgment filed by the
NPC.[16] The order is premised on the following:
"Movants Fabian Castillo, et al. may advance the argument that, at this stage, the judgment in this case is considered reopened because the Court
granted the petition for relief from judgment of oppositor National Power Corporation. It appears, however, that the Court was not aware yet of
any decree in the instant application when it granted the petition for relief of the National Power Corporation on March 17, 1970, for the decree in
this case was issued by the Land Registration Commission on May 7, 1970. The petition for relief from judgment is, therefore, also no longer
available at this stage. However, oppositor National Power Corporation may likewise resort to a petition for review which it can file within one
year from the issuance of the decree on the ground of actual fraud."
Heeding the court's advice, the NPC filed a petition for the review of the decree of registration. [17] Dated May 7, 1971, the petition reiterated the
NPC's allegations in its petition for relief from judgment charging Mamot with fraud. Mamot moved for the dismissal of the said petition.
On November 25, 1971, the lower court issued an Order denying NPC's petition for review of the decree of registration. [18] Pertinent portions of
the two-page Order states:
"Assuming that applicant Alejandro C. Mamot failed to notify the National Power Corporation of the filing of his application for original
registration of title to land, such failure or omission does not constitute actual fraud as contemplated under Act 496. Besides, it cannot be claimed
by the National Power Corporation that it was not notified of said application since there was proper publication.
As regards the claim of the National Power Corporation that the lots involved are covered by Proclamation No. 599 dated June 23, 1951, in its
favor, said proclamation expressly provides that the land described therein is withdrawn 'from sale of (sic) settlement and reserved for the Angat
River Project of the National Power Corporation under its administration, subject to private rights, if any there be x x x.' (Underscoring supplied)
It appearing that applicant Alejandro C. Mamot was in actual possession of the subject lots long before the Proclamation, his rights are respected
and recognized by the very proclamation, not to mention the fact that the National Power Corporation has instituted Civil Case No. 2526 before
Branch II of this Court, an action for eminent domain, against several persons occupying the area covered by the proclamation.
This Court also noted that the petition for review was filed after the lapse of one year from the issuance of the decree, and on this score alone, the
petition could be dismissed."
Its motion for reconsideration of the Order of November 25, 1971 having been denied, NPC appealed to the Court of Appeals. It assailed as
erroneous the trial court's holding that: (a) the registration of the parcels of land was not procured through fraud; (b) the decree of registration was
valid even if it was based on a decision which had been set aside, and (c) the parcels of land are registerable under Sec. 48(b) of Commonwealth
Act No. 141, as amended.
In its decision of February 2, 1977, the Court of Appeals[19] affirmed the decision of the lower court. Noting that the appeal was from the Order of
the trial court denying the NPC's petition for review of decree and not from the judgment decreeing the registration of the subject parcels of land
in favor of Mamot and Sarmiento, the Court of Appeals found it unnecessary to discuss the second and third assigned errors as "they do not relate
to the dismissal of the petition for review of decree."
Thus, the Court of Appeals ruled that actual fraud alone does not warrant the review of a decree of registration as it must be coupled with a
showing of the petitioner's dominical right over the subject properties. Emphasizing that Proclamation No. 599 is "not an absolute grant of
reservation" as it is subject to private rights, the Court of Appeals held that the NPC "failed to show its real dominical right over the subject lots"
and that, on such failure alone, the appeal could not succeed. The Court of Appeals added that the issue of actual fraud had become moot and
academic because "whether there is actual fraud or none, this Court cannot order the reopening of the final decree."
Dissatisfied, the NPC instituted the instant petition for review on certiorari based on the following grounds: (a) the Court of First Instance of
Bulacan as land registration court lacked jurisdiction to decree the registration of the six parcels of land as they are within the Angat River
Watershed Reservation reserved to the NPC by presidential proclamation; (b) the procurement of a decree over lands which are non-alienable is
equivalent to actual fraud in the procurement of a decree, and (c) the decree of registration based on a decision previously set aside by the court is
absolutely null and void.[20]
We opt to settle first the third ground for the petition, a procedural one, to facilitate the determination of the substantive issues raised herein.
Petitioner contends that since the decree of registration was issued on May 7, 1970 by the Land Registration Commission (LRC) after the
amended Decision of November 13, 1969 had been set aside by the allowance of its petition for relief from judgment by the lower court on March
17, 1970, the decree of registration was a complete nullity. Although this contention appears to be meritorious on its face, the circumstances of
the case point to a negative conclusion.
Rule 38, Sec. 7 of the Rules of Court provides that where a judgment is set aside or when a petition for relief from judgment is granted, the court
"shall proceed to hear and determine the case as if timely motion for a new trial had been granted therein." Thus, an order grantinga petition for
relief is interlocutory unlike an order denying such petition which is final and appealable.[21] When the LRC issued the decree of registration, the
decision directing such issuance had been set aside by virtue of the granting of the petition for relief from judgment. It should be recalled that
when a new trial is granted, "the original judgment shall be vacated, and the action shall stand for trial de novo."[22] Consequently, the instant case
reverted back to its status prior to the promulgation of the amended decision. It follows, therefore, that no valid decree of registration could have
sprung from the proceedings in the lower court because the situation became one where there was as yet no existing decision directing the
issuance of such decree.
However, when the lower court subsequently denied the same petition for relief from judgment, an action which was still well within its
discretion to take as no new judgment had as yet been rendered subsequent to the grant of said petition, the case returned to its status of being a
decided one. Was the denial based on a valid ground? According to the aforequoted portion of the February 3, 1971 Order, the, denial or
"dismissal" of the petition was based on the LRC's issuance of the May 7, 1970 decree of registration, which, to the mind of the court, terminated
the proceedings before it. While this may not be a valid ground as it only shows that the LRC issued the decree of registration because it had not
been notified of the Order granting the petition for relief from judgment, the denial nonetheless is proper: a close scrutiny of the records reveals
that the NPC's petition for relief from judgment should have been denied in the first instance.
The NPC raised therein the issue of lack of due process by its allegation that no proper notice about the registration proceedings had been given
it. Lack of personal notice in a registration proceeding to persons who may claim certain rights or interests in the property, however, cannot
vitiate or invalidate the decree or title issued therein because proceedings to register land under Act No. 496 are in rem and not in
personam.[23] Defendants by publication, including the Government and its branches and instrumentalities, are bound by a decree of registration
because all interested parties are considered as notified by the publication required by law.[24] Moreover, the NPC's contention that it had not been
given proper notice appears to be grounded on its stand that Mamot knew that the land he was trying to register was embraced by Proclamation
No. 599. This contention does not, however, substantiate the NPC's claim of lack of due process in view of the uncontroverted fact of publication
of Mamot's application for registration.
By alleging that Mamot committed fraud in failing to state in his application that the lots are covered by Proclamation No. 599 despite his
knowledge of NPC's rights and interests on the land, the NPC appears to have forgotten the established fact that Mamot had been in possession of
the property long before the issuance of Proclamation No. 599. In the absence of any evidence that the omission was deliberate, Mamot cannot be
faulted for his failure to allege in the complaint that the parcels of land are within the area covered by said proclamation. That Mamot was indeed
a prior possessor of the land is best shown by the fact that, as found by the trial court, the NPC even made Mamot one of the respondents in the
eminent domain case it had filed to pursue its purposes under said proclamation by constructing the Angat access road.
The bases for the NPC's petition for relief from judgment being unmeritorious, the lower court correctly denied it. However, by upholding the
lower court's second and belated action on the said petition, the Court does not stamp its approval on the manner by which the said petition was
handled. A thorough study of its grounds would have prevented the court's clearly flip-flopping stand on the matter, particularly because the
petition was one for relief from judgment. It bears stressing that a petition for relief from judgment, being an "act of grace," is not regarded with
favor and it should be availed of only in exceptional circumstances or when the demands of equity and justice should prompt the court to give the
petitioner a last chance to defend his right or to protect his interest.[25] The petitioner must satisfactorily show that he has faithfully and strictly
complied with the provisions of Rule 38.[26] Moreover, to obtain relief from judgment, it is necessary to determine not only the existence of any of
the grounds relied on, whether it be fraud, accident, mistake or excusable negligence, but also whether the petitioner has a good cause of
action.[27] In this case, the substantive issues raised by the NPC in its petition for relief from judgment are similar, if not identical to those raised
in its petition for review of the decree of registration, the denial of which is the very subject of the instant petition for review on certiorari. It is
proper, therefore, that they be discussed simultaneously.
Proclamation No. 599, which was issued by then President Carlos P. Garcia on June 23, 1959, provides:
"Upon the recommendation of the Secretary of Agriculture and Natural Resources and pursuant to the provisions of Section 83 of
Commonwealth Act No. 141, as amended, I, CARLOS P. GARCIA, President of the Philippines, do hereby withdraw from sale or settlement and
reserve for the Angat River Project of the National Power Corporation under its administration, subject to private rights, if any there be, a certain
parcel of the public domain situated partly in the municipality of Norzagaray, and partly in the municipality of San Jose, province of Bulacan,
Island of Luzon, and more particularly described as follows: x x x." (Underscoring supplied.)
As correctly interpreted by the Court of Appeals, this provision of the presidential proclamation does not bestow upon the NPC absolute
dominical or proprietary rights. The NPC's powers over the area designated as the Angat River reserve are "subject to private rights, if any there
be." This particular provision cannot but be interpreted to mean that the NPC's administrative jurisdiction over the area is delimited by
then existing private rights. Was the claim of Mamot "existing" at the time of the issuance of the proclamation? We quote from the
uncontroverted findings of the lower court in its November 13, 1969 decision:
"From the evidence presented, it appears that portions of the parcels of land which are sought to be registered were originally owned and
possessed publicly, peacefully, continuously and adversely by Domingo Mamot and Damasa Calubag, parents of the herein applicant, for more
than seven (7) years until the death of Domingo Mamot on July 22, 1924, whereupon his ownership and possession thereof was (sic) continued
by his wife, Damasa Calubag, and the herein applicant who immediately succeeded him; that Damasa Calubag and the herein applicant,
commonly possessed the portions of the subject parcels of land which were left by Domingo Mamot, peacefully, publicly and continuously,
adversely and in the concept of owners until January 23, 1944, when Damasa Calubag died and was immediately succeeded in the possession and
ownership thereof by the herein applicant who continued the possession of the same, peacefully, notoriously, publicly and uninterruptedly up to
the present and who executed an affidavit of adjudication of the property unto himself (Exhibit 'I'); that the other portion of said parcels of land
was acquired by the herein applicant thru cultivation and peaceful, adverse, open, and continuous possession thereof from 1928 to the present
which is now more than thirty (30) years; that there are some persons who tried to claim the subject parcels of land but they have never been in
possession of the same, and Isidro Ordoña, Pedro Sarmiento, Consolacion Duya and Simeon Patawaran were even named in the application and
were served with copies of the Notice of Initial Hearing (Exhibit 'A') by ordinary mail on January 9, 1969, by the Commissioner of Land
Registration (Exhibit 'B') but have not interposed any opposition to the present application with the exception of Pedro Sarmiento who, however,
later withdrew his opposition for Lot 4 of plan Psu-162460-Amd. which was being claimed by him (and) was conveyed to him by the applicant,
Alejandro Mamot, as evidenced by the Deed of Sale which was executed and entered into by applicant Alejandro Mamot and said Pedro
Sarmiento on September 25, 1969, and acknowledged on the same date before Nicasio Bartolome, a notary public of Norzagaray, Bulacan, and
registered in his notarial book as Document No. 644, Page No. 51, Book No. II and Series of 1969; that the subject parcel of land is not within
any military or naval reservation; and that the land tax for the current year has been paid (Exhibit 'J')."
With these factual findings, the lower court cannot be faulted for confirming Mamot's imperfect title because under Sec. 48(b) of Commonwealth
Act No. 141, as amended by Republic Act No. 1942,[28] proven occupation and cultivation for more than thirty (30) years by an applicant and by
his predecessors-in-interest, vest title on such applicant so as to segregate the land from the mass of public land. When the conditions set by law
are complied with, the possessor of the land, by operation of law, acquires a right to a grant, a government grant, without the necessity of a
certificate of title being issued. As such, the land ceases to be part of the public domain and goes beyond the authority of the Director of Lands to
dispose of. An application for confirmation of title, therefore, becomes a mere formality.[29]
The law, however, may not be applied in all cases. The circumstances of a particular case may require an applicant for confirmation of an
imperfect title under Sec. 48 of Commonwealth Act No. 141, to prove that the land involved no longer forms part of the inalienable public
domain.[30] Such is the case in this instant petition. The land sought to be confirmed as under the ownership of private respondent is within the
area covered by Proclamation No. 599 creating a reservation for the Angat River Project of the NPC. Mamot knew about the NPC's authority
over the area inasmuch as he had even been named a respondent in the eminent domain proceeding that the NPC had filed. While the filing of
such proceeding may be construed as a recognition on the part of the government that the land is indeed privately owned, the fact that the land is
part of the watershed area reserved for the Angat River Project should be the paramount consideration. As such, extreme caution should be
exercised in the determination of claims of ownership by private persons which the proclamation itself recognizes. All claimants must prove by
clear, positive and absolute evidence that they have complied with all the requirements of the law for confirmation of an imperfect title to the land
applied for.[31]
Hence, Mamot bears the burden of overcoming the presumption that the land still forms part of the nondisposable public domain. The
classification of public lands being an exclusive prerogative of the Executive Department,[32] presentation of evidence issued by the Director of
Lands that the land he sought to be confirmed as his has been classified as disposable for private ownership would have helped Mamot in
obtaining approval of his application. Since he failed to present such evidence, whatever possession he might have had, and however long, cannot
ripen into private ownership.[33]
This case has been pending for more than twenty-four years. To remand it below for a determination of the validity of NPC's claims under its
petition for review of decree would not serve any purpose except to further delay the resolution of the application for registration.[34]Moreover,
the peculiar circumstances attending this case demand its immediate resolution. As discussed above, the NPC has no vested absolute dominical
right over the whole area reserved for the Angat River Project. Its administrative authority over lands embraced by the proclamation is delimited
by vested private rights. On the other hand, Mamot had not satisfactorily proven his right to a confirmation of his imperfect title and to the
registration of the land in his name subject to the rights of Sarmiento who had acquired Lot 4 by virtue of a deed of sale. Nor had he presented
any proof that the said land has been declared disposable by the proper government authority. The land in question must, therefore, remain where
it can be of better use to the general public - as part of the inalienable public domain.
WHEREFORE, the decision appealed from is REVERSED AND SET ASIDE insofar as it affirms the order of the lower court allowing the
issuance of a decree of registration in favor of private respondent Alejandro Mamot. No costs.
SO ORDERED.
Gutierrez, Jr., (Chairman), Bidin, Davide, Jr., and Melo, JJ., concur.
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-33093 December 29, 1975

SOLEDAD DE G. CRISOLO, IN HER BEHALF AND AS GUARDIAN OF NOEL CRISOLO, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and ALBERTA REINOSO, AS GUARDIAN OF PELAGIO REINOSO, respondents.
M. T. Macaraeg and D. C. Macaraeg for petitioner.
No appearance for respondents.
ESGUERRA, J.:
Petition for review on certiorari of the decision of the Court of Appeals in its CA-G.R. No. 38422-R, setting aside the order of the trial court of
May 13, 1966, denying the petition for review of private respondent Alberta Reinoso, as guardian of Pelagio Reinoso, in Land Registration Case
No. A-154, LRC Record No. N-23728, and ordering the remand of the case to the trial court (Court of First Instance of Pangasinan, Branch VII)
for further proceedings under Section 38 of Act No. 496.
The uncontroverted facts of the case as found by the Court of Appeals are, more or less, as follows:
On August 20, 1965, judgment was rendered by the Court of First Instance, Branch VII, of Pangasinan, ordering the
registration of Lots 1 and 2, Plan Psu-189357, Exhibit A, situated in the Poblacion of Mabini, Pangasinan, and more
particularly bounded and described in the technical descriptions (Exhibits B and B-1) in the name of applicant spouses,
Pedro C. Crisolo and Soledad de G. Crisolo. On September 20, 1965, the court ordered the issuance of the Decree,
followed three months later by writ of possession in favor of the spouses.
"On February 15, 1966, within one year from the issuance of the decree, Alberta Reinoso, as guardian of her brother Pelagio who was allegedly
confined in the National Psychopatic Hospital filed a Petition for Review under Section 38 of Act 496. Among the allegations of the petition are
the following:
4. That sometime in 1952, the applicants herein, Pedro Crisolo and Soledad de Guzman, taking advantage of the insanity
and incapacity of said Pelagio Reinoso by means of brazen and actual fraud induced and/or caused Pelagio Reinoso to sign
a Deed of Exchange whereby the above-described property was exchanged for defendants' property ... .
5. That in pursuance of the fraud attendant at the time said Deed of Exchange was executed, the applicants never delivered
the possession of the property described under par. 4 hereof to herein guardian not to any representatives of incompetent
Pelagio Reinoso;
6. That while Pelagio Reinoso was confined in the National Psychopatic Hospital, the applicants herein instituted a Land
Registration case numbered and docketed in this Honorable Court as LRC No. 154 and were able to obtain a decree
therefor, based on the fictitious and fraudulent Deed of Exchange referred to, a copy of which is hereto attached as Annex
"B" and also made integral part of this petition.
"Acting on the foregoing petition, the lower court, considering applicants' opposition and the respective memoranda of the contending parties,
issued the order of May 13, 1966, finding no merit in the petition for review and denying the same. From the adverse order of May 13, 1966,
Alberta Reinoso filed the instant appeal. In the meanwhile, the demolition of the house belonging to oppositor Alberta Reinoso on the land in
controversy was stayed until further orders in view of the instant appeal.
"In attacking the order of the lower court denying the petition for review of decree, appellant has ascribed four errors which may be boiled down
to the question of whether the lower court erred in denying the petition for reopening."
While the appeal was pending in the Court of Appeals, herein petitioner filed therein a Motion to Remand the Case to the Supreme Court,
claiming that the appeal involves purely question of law and, therefore, falls within the exclusive jurisdiction of the Supreme Court. (Annex "A",
Petition for Review on Writ of Certiorari, p. 1 of Rollo). The Court of Appeals, nevertheless, on November 11, 1970, rendered the decision now
subject of this instant petition for certiorari, the dispositive portion of which reads as follows:
WHEREFORE, the order dated May 13, 1966, is hereby set aside and the case remanded to the trial court for further
proceedings under Section 38 of Act No. 496. No pronouncement as to costs.
From the aforementioned decision, after a motion for reconsideration had been denied, herein petitioner interposed this appeal for review and
reversal thereof.
Petitioner herein ascribes four errors which, however, boil down to two (2) main issues, as follows:
I. Whether or not the appeal in question is within the jurisdiction of the respondent Court of Appeals; and
II. Whether or not an oppositor in a land registration case, after having abandoned his opposition thereto and a decision and
a decree had been issued in the case, is entitled to a reopening of the decree of registration by means of a petition for
review under Section 38 of Act 496.
The second issue is certainly the primordial question to be resolved in the instant petition for certiorari and on it hinges the determination of this
appeal.
Petitioner herein avers that during the hearing of the petition for review or reopening of the decree of registration no oral or documentary
evidence was presented by private respondent Reinoso to prove the grounds alleged by him in said petition; that no affidavit of merits was
submitted or attached to the petition for review; that no question of fact was decided by the lower court in its order of May 13, 1966, denying the
petition and which was the subject of appeal to the Court of Appeals; that the issues involved in the petition for review and/or to reopen are the
same legal issues involved in the instant appeal which are, (1) whether or not Pelagio Reinoso is entitled to a review or reopening of the decree of
registration, considering that he was a party oppositor in the original land registration case; (2) whether or not the intrinsic fraud alleged in the
petition for review is a good ground for the reopening of the decree of registration; (3) whether or not fraud which is merely alleged and not
proved, can be a valid ground for the reopening or review of a decree of registration (P. 8, Brief for the herein petitioner-appellant); and that the
aforestated issues involve purely questions of law and hence are within the exclusive appellate jurisdiction of the Supreme Court.
Petitioner contends that Pelagio Reinoso, the ward of respondent Alberta Reinoso, for whose benefit the petition for review and/or to reopen was
filed, announced his opposition during the initial hearing of the original land registration proceedings, duly assisted by his counsel, Atty. Orlando
Catalan, on September 2, 1963 and was given 15 days within which to formalize his opposition in writing (P. 1, Decision of the lower court dated
20 August, 1965, pp. 26-30, ROA); that Pelagio Reinoso failed to formalize in writing his announced opposition within the period given him by
the trial court and so his opposition was ordered dismissed; that private respondent was, therefore, afforded his day in court to prove his right to
the land subject of registration but forfeited the opportunity given him by sleeping on his rights; that the persons contemplated in Section 38 of
Act 496, who are entitled to a review of a decree of registration, are those who had no opportunity to be heard in the original land registration
case and/or had not been party oppositors therein; and that the private respondent should not be given another day in court for he had been so
afforded once but forfeited it through his own negligence.
Petitioner further maintains that the fraud alleged in the petition for review of the decree of registration, which allegedly consisted in the taking
advantage of the alleged insanity of Pelagio Reinoso by herein petitioner in securing the execution of the deed of exchange of properties by and
between the petitioner and the private respondent-ward, was not proved; that no iota of proof on this matter was ever presented by private
respondent; and that, consequently, in order that a decree of registration may be set aside and ordered reopened, the allegation of fraud must
firstly be duly established by proper evidence.
-I-
While it is true that the question as to whether any particular transaction shows fraud or not is a question of fact (Grey Alba, et al. vs. De la Cruz,
No. 5246, September 16, 1910, 17 Phil. 49, 58), yet the question raised on appeal, according to the very decision of the respondent Court of
Appeals itself, is "the question of whether the lower court erred in denying the petition for reopening" on the ground that the defense of fraud,
which consisted of the alleged nullity of the deed of exchange, was available to the private respondent during the proceedings in the original land
registration case, but was never availed of when he abandoned his opposition to the registration of the land involved. Under the circumstances of
the case the aforementioned question elevated to the Court of Appeals certainly involves purely a question of law and therefore beyond
jurisdiction of the Court of Appeals.
We have held in numerous cases that a question of law is one which does not call for an examination of the probative value of the evidence
presented by the parties-litigants. There is a question of law when the doubt or difference of opinion arises as to what is the law on a certain state
of facts. And, consequently, there is a question of fact when the doubt or difference arises as to the truth or the falsehood of the alleged facts.
(Ramos, et al. vs. Pepsi-Cola Bottling Co. of the P.I., et al., L-22533, February 9, 1967, 19 SCRA 289; Goduco vs. C.A., L-17647, February 28,
1964, 10 SCRA 275; Yupangco & Sons, Inc. vs. Commissioner of Customs, L-22259, January 19, 1966, 16 SCRA 1; Butuan Sawmill, Inc. vs.
C.A., L-20601, February 26, 1966, 16 SCRA, 277; Salazar vs. de Castrodes, et al., L-25949, May 22, 1969, 28 SCRA 299). The question raised
on appeal to the Court of Appeals being one of law, the same falls squarely within the exclusive appellate jurisdiction of this Court. The law on
this score is clear as provided in Section 17 of the Judiciary Act of 1948, to wit:
SEC. 17. Jurisdiction of the Supreme Court - ...
The Supreme Court shall have exclusive jurisdiction to review, revise, reverse, modify or affirm on appeal, certiorari or
writ of error, as the law or rules of court may provide, final judgments and decrees of inferior courts as herein provided, in
—
xxx xxx xxx
(6) All other cases in which only errors or questions of law are involved.
This Court has always been a stickler for consistency in the judicious application of the laws of the land and shall continue exerting its efforts
towards this end in order to attain maximum efficiency and decorum in all courts, which under the present Constitution, are now under the
administrative supervision and stewardship of this Court. What the Court of Appeals should have done was to certify the appeal to this Court for
final disposition on its merits. Its failure to do so is indeed unfortunate, to say the least, as further delay was incurred in the disposition of this
case.
-II-
On the primary question of whether or not an oppositor, after abandoning his opposition in a land registration case and after a decision had been
rendered and a decree of registration issued thereunder, is entitled to a reopening of the proceedings by means of a petition for review based on
fraud under Section 38 of Act 496, We are of the opinion that he is not so entitled.
The record shows that private respondent had been duly afforded the opportunity to object to, the registration and substantiate the same. The
decision of the lower court dated August 20, 1965, (pp. 26-30), ROA) categorically states:
Atty. Orlando Catalan, also appeared to announce the opposition of Pelagio Reinoso and his children, Alberta Reinoso and
Brigido Reinoso. This announced oppositions refer to both lots of the application. The oppositors were given 15 days to
submit their announced opposition in writing. The records show that the oppositors Alberta Reinoso and Brigido were the
only ones who have perfected their opposition. During the hearing on March 5, 1964, upon motion by the counsel for the
applicants, the announced opposition of the oppositors Pelagio Reinoso and his children were considered abandoned.
The person(s) contemplated under Section 38 of Act 496, to be entitled to a review of a decree of registration, are those who were fraudulently
deprived of their opportunity to be heard in the original registration case. Such is not the situation of the private respondents here. They were not
denied their day in court by fraud, which the law provides as the sole ground for reopening of the decree of registration. In fact they opposed the
registration but failed to substantiate their opposition. In Salomon, et al. vs. Bocauto, et al., No. 47900, March 15, 1941, 71 Phil. 363, 365, a
petition for review of a decree of registration was, among other grounds, properly denied for "both petitioners had notice of the original
registration proceedings, but failed to put up any claim and to show title in themselves."
Mere allegation of fraud is not enough. Specific, intentional acts to deceive and deprive another of his right, or in some manner injure him, must
be alleged and proved. There must be actual or positive fraud as distinguished from constructive fraud to entitle one to the reopening of a decree
of registration. And it must be extrinsic and not intrinsic fraud. (Grey Alba vs. De la Cruz, supra, 17 Phil. 49, 57). This is necessary to maintain
the stability of judicial decisions and save the precious time of the courts from being wasted by unnecessary proceedings. Otherwise, We will be
opening the floodgate of delay in the disposition of cases and thus contributing to the perennial problem of the clogging of court dockets. No
premium should be given to sheer negligence of parties, otherwise we will encourage delay in the administration of justice.
WHEREFORE, the decision of the Court of Appeals dated November 11, 1970, is reversed and set aside. The judgment of the trial court of May
13, 1966, denying the petition for review and/or to reopen decree of registration in Land Registration Case No. A-154, LRC Reg. No. 23728, is
hereby ordered reinstated and affirmed, without prejudice to whatever right, if any, that may still be availed of under existing law by the private
respondent.
Costs against private respondent.
SO ORDERED.
Makasiar, Muñoz Palma and Martin, JJ., concur.
Teehankee (Actg. Chairman), J., concurs in the result.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-55935 July 30, 1986
MARCOPPER MINING CORPORATION, petitioner,
vs.
MIGUEL GARCIA and HON. ROSALIO A. DE LEON, in his capacity as Presiding Judge of the Court of First Instance of
Marinduque, respondents.
Gozon, Puno, Elma, Berenguer & San Juan for petitioner.
Manuel S. Laurel for private respondent.
GUTIERREZ, JR., J.:

This is a petition for review of the order of the then Court of First Instance of Marinduque which dismissed the petitioner's complaint against the
private respondent for "Quieting of Title/Reconveyance and Damages" on the grounds of lack of cause of action and prescription. The petitioner
stated that it was raising pure questions of law.
On August 16, 1979, petitioner Marcopper Mining Corporation filed a complaint for quieting of title/reconveyance and damages against private
respondent Miguel Garcia praying that Garcia's Free Patent No. 542586 and Original Certificate of Title (OCT) No. P-2186 of the Register of
Deeds of Marinduque be declared null and void. It also asked that the Registrar of Deeds be directed to cancel the OCT and to issue a transfer
certificate of title in its favor, and that petitioner be declared to be the true, lawful, and exclusive owner of the land in question.
The petitioner alleged in its complaint that it is the owner and present possessor of the land in question, having acquired it in good faith and for
value on October 2, 1972 from Buenaventura Paez, that the latter, in turn, who had been in open, continuous, exclusive, adverse and notorious
possession, occupation, cultivation and enjoyment thereof since about 1921 until its sale to petitioner, inherited the land from his father Arcadio
Paez and had consistently declared it for taxation purposes in his name and religiously paid taxes to the government; and that private respondent,
through fraud, deceit, and misrepresentation, succeeded in misleading the Director of Lands to believe that it is still part of the public domain and
thus obtained the free patent and the corresponding OCT in his name.
The respondent alleged in his answer with counterclaim that he is the sole and exclusive owner of the land in question as the holder of a free
patent and for which a corresponding certificate of title was issued by the Registrar of Deeds of Marinduque on October 23, 1973, in his name;
that Paez never possessed nor occupied the land in question in the concept of owner but was just residing in a small portion of the land purely by
mere tolerance of the respondent and that therefore, petitioner's alleged purchase of the same from Paez is absolutely of no legal force and effect.
Respondent further alleged that Paez had executed an affidavit of quitclaim before the Inspector of the Bureau of Lands who was processing the
free pattent application, stating categorically that he had absolutely no claim nor interest in the land, thereby unconditionally admitting that
respondent is the sole and exclusive owner thereof and that since a free patent covering the said land had been approved and issued in the name of
respondent and the corresponding OCT issued on October 23, 1973, both had long become final and indefeasible, hence, no longer subject to any
question nor judicial scrutiny.
After the petitioner had filed its answer to the respondent's counterclaim, the latter filed a request for admission. The petitioner admitted the
following facts: 1) It was not able to file any opposition against the issuance of a Free Patent to the respondent because it had no notice of any
such application for free patent filed by respondent; 2) It did not file any action for cancellation or annulment of the free patent within one year
following its approval because it had no notice thereof but the petitioner filed an action for the annulment of the free patent upon its discovery in
1973; 3) Before the OCT was issued to the respondent, it was not able to file any opposition thereto because it had no notice of such application
by respondent; and 4) It did not file any action for the cancellation or annulment of the said certificate of title within one year following its
issuance because it had no knowledge of such issuance but it did file an action for the cancellation of such certificate of title upon its discovery in
1975.
On October 1, 1980, the respondent filed a motion to dismiss based on the following grounds: a) that the OCT of the respondent had already
become indefeasible and incontrovertible as per admission by the petitioner that said OCT over the land in question was issued on October 23,
1973; b) that petitioner's action for reconveyance has prescribed since the action should have been filed within four years from the issuance of the
OCT; c) that even if the action had not yet prescribed, the petitioner could not avail of the same since the land in question before the issuance of
the OCT is public and therefore, cannot be the subject of reconveyance; and d) that the petitioner is guilty of laches and inexcusable negligence in
not protecting and asserting its rights, if any, over the disputed land.
On November 28, 1980, the respondent Court issued the questioned order dismissing the petitioner's complaint as well as the respondent's
counterclaim. In said order, the respondent court, in part, ruled:
The court on its own has also found, from the complaint and subsequent pleadings of the parties, that indeed plaintiff and
its predecessor-in-interest absolutely did not take any legal step to assert and protect their rights over subject land before
the issuance of the patent and the corresponding certificate in the name of defendant; that plaintiff and/or its predecessor-
in-interest never filed an application for the acquisition of subject land under the Public Land Law; that plaintiff and its
said predecessor did not file any action for cancellation or annulment of defendant's patent and the corresponding
certificate of title within the one-year period allowed therefore, thereby causing them to become their indefeasible and
incontrovertible; that plaintiff and its said predecessor did not file any action for reconveyance before the four-year period
allowed therefor thereby causing the action to prescribe; that plaintiff did not pursue to completion the administrative case
involving subject land which it had already filed and commenced in the Bureau of Lands, thereby rendering it not
actionable by the court; that it took plaintiff many long years to finally file instant action but only after so much time has
come and gone that the action has vanished to inexorable prescription. The court finds that plaintiff and its predecessor-in-
interest were indeed guilty of laches in the assertion of their rights, if any, over subject land.
Against all the foregoing, plaintiff has put forth nothing but the lame and unsubstantial excuse that it was not notified of
defendant's application for the free patent as well as of the proceedings which transpired leading to the granting and
registration of the land in defendant's name. In point of fact, Marcopper was fully aware, and it knew, of steps being taken
by herein defendant to eventually obtain his patent and title thereon.
Plaintiff's claim of ownership over subject land, if any, has long been lost and forfeited by its own failure, along with its
predecessor-in-interest, to seasonably and diligently assert their rights, if any, over the same. It is axiomatic. No legal right
can ever stem from one's own gross indifference and inexcusable negligence.
The court therefore finds for defendant in an of the four grounds to dismiss as stated earlier.
WHEREFORE, premises considered, plaintiff's complaint as well as defendant's (the latter per Manifestation dated
October 24, 1980 of defendant) counterclaim are both DISMISSED, without pronouncement as to costs.
The issue as to the alleged incompetency of the defendant, which supposedly occurred after the filing of this case and
during its pendency, has now become moot and academic.
The petitioner appealed to this Court by way of certiorari from the above order, raising the following questions of law:
I
WHETHER OR NOT THE COMPLAINT, ASSUMING THAT THE ALLEGATIONS THEREIN ARE TRUE, STATES
A VALID CAUSE OF ACTION IN FAVOR OF PLAINTIFF AGAINST THE DEFENDANT.
II
WHETHER OR NOT POSSESSION FOR MORE THAN THIRTY YEARS HAS VESTED TITLE OVER THE LAND
ON THE PETITIONER AND/OR ITS PREDECESSOR-IN-INTEREST AS TO SEGREGATE THE LAND FROM THE
MASS OF PUBLIC LAND AND AS SUCH, IT IS NO LONGER DISPOSABLE UNDER THE PUBLIC LAND ACT BY
FREE PATENT SUCH THAT ANY FREE PATENT FRAUDULENTLY ISSUED TO PRIVATE RESPONDENT OVER
SUCH PRIVATE LAND IS NULL AND VOID.
III
WHETHER OR NOT THE ACTION FOR RECONVEYANCE AGAINST A TRUSTEE IN AN IMPLIED TRUST
PRESCRIBES IN TEN YEARS.
IV
WHETHER OR NOT THE DOCTRINE REQUIRING THAT ADMINISTRATIVE REMEDIES BE FIRST
EXHAUSTED BEFORE A RECOURSE TO THE COURTS OF JUSTICE MAY BE HAD AND THE LEGAL
PROVISION GIVING THE GOVERNMENT THE EXCLUSIVE AUTHORITY TO SEEK CANCELLATION OF A
TITLE ISSUED IN CONFORMITY WITH A HOMESTEAD PATENT AND REVERSION OF A LAND TO THE
PUBLIC DOMAIN ARE APPLICABLE ONLY TO LANDS OF THE PUBLIC DOMAIN WHICH HAVE BEEN
GRANTED BY VIRTUE OF SUCH PATENT IN PURSUANCE OF THE PUBLIC LAND ACT AND ARE NOT
APPLICABLE TO PRIVATE LANDS.
V
WHETHER OR NOT THE DEFENSE OF LACHES MAY BE VALIDLY INVOKED IN AN ACTION FOR
RECONVEYANCE WHERE THE ACTION HAS NOT YET PRESCRIBED.
In the first issue raised, the petitioner contends that it is a well-settled rule that when the motion to dismiss is based on the ground that the
complaint states no cause of action, no evidence may be allowed and the issue should only be determined in the light of the allegations of the
complaint. It argues that the motion hypothetically admits, for purposes of the motion itself the truth of the allegations of fact made in the
complaint, and that the judge may not inquire into the truth of the allegations, and find them to be false before a hearing is had on the merits of
the case. Therefore, assuming that the facts alleged in the complaint are true, this would mean that the land is private. The Director of Lands had
no authority to dispose of it and the court should have ordered the reconveyance of the title to the petitioner.
In the case of Tan v. Director of Forestry (125 SCRA 302, 315), we ruled on the implications of a motion to dismiss:
A perusal of the records of the case shows that petitioner-appellants contentions are untenable. As already observed, this
case was presented to the trial court upon a motion to dismiss for failure of the petition to state a claim upon which relief
could be granted (Rule 16 [g], Revised Rules of Court), on the ground that the timber license relied upon by the petitioner-
appellant in his petition was issued by the Director of Forestry without authority and is therefore void ab initio. This
motion supplanted, the general demurrer in an action at law and, as a rule admits, for the purpose of the motion, all facts
which are well pleaded. However, while the court must accept as true all well pleaded facts, the motion does not admit
allegations of which the court will take judicial notice are not true, nor does the rule apply to legally impossible facts, nor
to facts inadmissible in evidence, nor to facts which appear by record or document included in the pleadings to be
unfounded (Vol. 1, Moran's Comments on the Rules of Court, 1970 ed., p. 505, citing cases).
While the petitioner concludes in the complaint that the land being private, could not have been the subject of an application for free patent, the
petitioner based this conclusion from its allegation that "By itself and through its predecessors-in-interest, plaintiff has been in possession of
subject land for more than 30 years in the manner prescribed by law, and therefore, it is entitled pursuant to existing laws to have its ownership in
fee simple of the land confirmed or ratified." The petitioner thereby admitted that until such confirmation, the land remains public.
Furthermore, the petitioner also alleged that "Buenaventura Paez, was the rightful owner and that it was the latter and his successor-in-interest,
the herein plaintiff (petitioner), by virtue of the subsequent sale and transfer of the land to it, who had performed and/or possessed the conditions
required by the laws for the issuance of a free patent decree on the land." Thus, the trial court could not have sustained the petitioner's allegation
that the land was private even for the purpose of the motion to dismiss as this conclusion would be patently unfounded.
The petitioner also admitted in its complaint that a free patent in respondent's name had been issued for the land in question, after the latter had
succeeded in making the land inspector and/or functionaries of the Bureau of Lands and other government agencies believe, among others, that
respondent had performed or fulfilled the conditions prescribed under R.A. 782 and Com. Act 141, as amended, for entitlement to a free patent
title. It stated that as a consequence, a free patent was issued in favor of respondent on August 29, 1973 and the corresponding OCT on October
23, 1973. While petitioner alleged the above facts, it likewise admitted that it learned of the same only in 1975, after more than one year from the
issuance of the respondent's OCT; and that the complaint was filed only in 1979 which was clearly more than the four-year prescriptive period
from August 29, 1973 provided by law within which an action for reconveyance on the ground of fraud may be filed.
Although the petitioner pleaded the existence of an implied trust in its favor, all of its allegations only attempted to show fraud on the part of the
respondent. Thus, it is obvious that from the complaint itself, the prescriptive period which is applicable in the case is four years and not ten years
as the petitioner maintains.
Moreover, the rule on a motion to dismiss cited by the petitioner, while correct as a general rule is not without exceptions.
In the present case, before the trial court issued the questioned order dismissing petitioner's complaint, it had the opportunity to examine the
merits of the complaint, the answer with counterclaim, the petitioner's answer to the counterclaim and its answer to the request for admission. It
was but logical for said court to consider all of these pleadings in determining whether or not there was a sufficient cause of action in the
petitioner's complaint. The order of dismissal was in the nature of a summary judgment.
Again, in the case of Tan v. Director of Forestry, (supra), we ruled:
In Llanto v. Ali Dimaporo, et al. (16 SCRA 601, March 31, 1966), this Court, thru Justice Conrado V. Sanchez, held that
the trial court can properly dismiss a complaint on a motion to dismiss due to lack of cause of action even without a
hearing, by taking into consideration the discussion in said motion and the opposition thereto. ...
xxx xxx xxx
Furthermore, 'even if the complaint stated a valid cause of action, a motion to dismiss for insufficiency of cause of action
will be granted if documentary evidence admitted by stipulation disclosing facts sufficient to defeat the claim enabled the
court to go beyond disclosure in the complaint' (LOCALS No. 1470, No. 1469, and No. 1512 of the International
Longshoreman's Association v. Southern Pacific Co., 6 Fed. Rules Service, p. 107; U.S. Circuit Court of Appeals, Fifth
Circuit, Dec. 7, 1952; 131 F. 2d. 605). ...
Moreover, petitioner-appellant cannot invoke the rule that, when the ground for asking dismissal is that the complaint
states no cause of action, its sufficiency must be determined only from the allegations in the complaint. 'The rules of
procedure are not to be applied in a very rigid, technical sense; rules of procedure are used only to help secure substantial
justice. If a technical and rigid enforcement of the rules is made, their aim would be defeated. Where the rules are merely
secondary in importance are made to override the ends of justice; the technical rules had been misapplied to the prejudice
of the substantial right of a party, said rigid application cannot be countenanced.' (Vol. 1, Francisco, Civil Procedure, 2 ed.,
1973, p. 157, citing cases).
The trial court, therefore, did not err in considering, in addition to the complaint, other pleadings submitted by the parties in deciding whether or
not the complaint should be dismissed for lack of a cause of action.
The other issues raised y the petitioner deal with the propriety of the dismissal of the complaint.
In the second and fourth assignments of issues, the petitioner contends that proven possession for more than 30 years shall vest title over the land
on the possessor as to segregate it from the mass of public land such that it is no longer disposable under the Public Land Act by free patent. It
argues that since by itself and its predecessor-in-interest, it had possessed the land in dispute for more than 30 years, continuously, openly, and
without interference from anyone, the land has become private. Consequently, the free patent and the torrens title based upon the patent grant are
a nullity because the Director of Lands has no jurisdiction over private lands. Likewise, the doctrine of exhaustion of administrative remedies
which is applicable only to public lands cannot be invoked.
The contention are without merit.
As stated earlier, the petitioner in its complaint, impliedly admitted that the land is public when it alleged that the free patent should have been
issued to it by virtue of the allegedly more than 30 years possession by its predecessor-in-interest. Furthermore, the petitioner cannot argue that
the Director of Lands had no jurisdiction to issue the free patent to private respondent on the ground that the land was private. The mere
possession of the land for 30 years, assuming that Paez really possessed the land for this length of time, did not automatically divest the land of its
public character. As we have ruled in the case of Republic v. Iglesia Ni Cristo, (128 SCRA 44,47-48):
All that has been stated by this Court in the aforementioned cases in interpreting Section 48 (b) of the Public Land Law
(C.A. 141, as amended by R.A. 1942) applies with equal force in the instant case where the application for registration of
the herein parcel of land was, in essence, sought on the basis of the alleged open, continuous, exclusive and notorious
possession and occupation of the said land by respondent's predecessors-in-interest under a bona fide claim of acquisition
or ownership for at least thirty (30) years immediately preceding the filing of the application for registration on August 7,
1979.
Records reveal that no application for confirmation of incomplete or imperfect title had been filed by respondent's
predecessors-in-interest under Section 48 (b) of the Public Land Law. Under the law, the questioned land retains its public
character. The application for registration under Section 14 of the Property Registration Decree (P.D. 1529) which, among
others, recognizes possession of alienable lands of the public domain in the manner and for the length of time therein
required as basis for registration of title to the land, did not remove the land from the operational effect of Section 48 (b) of
the Public Land Law. It nevertheless strengthens the conclusion that the land never ceased to be part of the public domain.
...
Moreover, nowhere in the complaint nor in subsequent pleadings of the petitioner did it state that it ever applied for a free patent.
The lower court corrctly stated that as a mining corporation the petitioner could not legally obtain a free patent to the land. The petitioner denies
any knowledge as to whether Paez, from whom it bought the land, ever applied for a free patent or obtained one, notwithstanding its own
admission that before the alleged sale of the land to it by Paez, it verified from the Bureau of Lands office in Marinduque and Manila if said land
was subject to an application for free patent. The petitioner cannot maintain that Paez was the rightful owner of the land, much less the person
qualified for the issuance of a free patent for the latter did not do anything to secure a title or confirm an imperfect one, assuming that he was
entitled to the same.
At the very least, the petitioner should also have pursued its case in the administrative proceedings it commenced with the Bureau of Lands for
the cancellation of the respondent's patent if it really believed that the latter was guilty of fraud in the procurement of the patent and that the land
truthfully belonged to Paez, its predecessor-in-interest. The administrative case was filed before the filing of the complaint in these proceedings.
The petitioner failed to exhaust whatever administrative remedy was available to it at that time. It was, thus, forced to adopt the position that the
land was no longer part of the public domain over which the Director of Lands may exercise the authority to dispose of through a free patent.
We, therefore, hold that prior to the award of the free patent to the respondent, the land in dispute was part of the public domain and the Director
of Lands had the power to dispose of it in the manner provided by law to a qualified applicant, who in this case was ascertained to be the
respondent. Thus, the free patent issued in the respondent's favor and the corresponding OCT in his name are both valid and binding not only
against petitioner but against the whole world.
With regard to the third and fifth assignments of issues, the petitioner contends that since the title over the land was obtained by the private
respondent through fraud and by means of which a title was issued in his name, then the law creates what is called a "constructive trust" in its
favor as the defrauded party and grants it the right to vindicate the property. An action for reconveyance based on implied or constructive trust
prescribes in ten years. Therefore, the petitioner contends that its action has not yet prescribed since it filed the same in 1979, within the ten-year
prescriptive period reckon from October 23, 1973, the issuance of the decree of registration; and consequently, the doctrine of laches will not also
apply.
There is nothing in the records to support the contention of the petitioner that an implied or constructive trust was created in its favor.
An implied or constructive trust presupposes the existence of a defrauded party who is the rightful owner of the disputed property. In the case at
bar, aside from the fact that the petitioner and its predecessor-in-interest never applied for a free patent although the petitioner claims that it was
entitled to the same, it also did not allege the existence of any relationship, fiduciary or otherwise, with the respondent which may justify the
creation of an implied trust. The respondent, therefore, could not have committed fraud against the petitioner or its predecessor-in-interest.
Besides, the petitioner's failure to file any opposition to the registration of the land in the respondent's favor and its filing of an action for
reconveyance only after almost six years from the date of said registration cast doubt on the petitioner's right over the property. In the case
of Guerrero v. Court of Appeals (126 SCRA 109,118), we ruled:
It is well-settled that the negligence or omission to assert a right within a reasonable time warrants not only a presumption
that the party entitled to assert it either had abandoned it or declined to assert it (Heirs of Pedro Guminpin v. Court of
Appeals, 120 SCRA 687) but also casts doubt on the validity of the claim of ownership (Masagandanga v. Argamora, 109
SCRA 53). ...
There being no implied or constructive trust, the petitioner cannot invoke the ten-year prescriptive period within which to file an action for
reconveyance. Thus, even assuming that the respondent was indeed guilty of fraud in the procurement of the free patent and the corresponding
OCT in his name and that the petitioner is the one entitled to the issuance of a patent, then petitioner's action should have been filed within four
(4) years from the issuance of the respondent's OCT which was on October 23, 1973.
In this case, the petitioner filed the action only on August 16, 1979, after the lapse of almost six years. Clearly, the petitioner's action has
prescribed. Again, in the case of Guerrero v. Court of appeals, (supra, pp. 118-119), we ruled:
Furthermore, an action for reconveyance of real property resulting from fraud may be barred by the statute of limitations,
which requires that the action shall be filed within four (4) years from the discovery of the fraud (Balbin v. Medalla, 108
SCRA 666; Alarcon v. Bidin, 120 SCRA 390). Under the circumstances of this case, such discovery must be deemed to
have taken place when the respondent was issued Transfer Certificate of Title No. 608 on April 16, 1938 because the
registration of the deed of sale is considered a constructive notice to the whole world of its contents, and all interests, legal
and equitable, included therein. (Ramos v. Court of Appeals, 112 SCRA 542)....
The petitioner's delay in the filing of the action and its repeated failure to oppose the respondent's application both before the Bureau of Lands
and the Register of Deeds also lead us to no other conclusion but that it is guilty of laches in pursuing whatever right it might have had over the
land in dispute.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED for lack of merit. The questioned order of the lower court
is AFFIRMED. Costs against the petitioner.
SO ORDERED.
Feria (Chairman), Fernan, Alampay and Paras, JJ., concur.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-31189 March 31, 1987
MUNICIPALITY OF VICTORIAS, petitioner,
vs.
THE COURT OF APPEALS, NORMA LEUENBERGER and FRANCISCO SOLIVA, respondents.
Enrique I. Soriano, Jr. for private respondents.
PARAS, J.:
This is a Petition for Review on certiorari of the decision * of respondent Court of Appeals promulgated on September 29, 1969 in CA-G.R. No.
35036-R (Rollo, p. 11) setting aside the decision ** of the Court of First Intance of Negros Occidental, Branch I, dated September 24, 1964
which dismissed the complaint for recovery of possession in Civil Case No. 181-S and declared the cemetery site on Lot No. 76 in Victorias as
property of the municipality of Victorias (Record on Appeal, p. 9).
The dispositive portion of the questioned decision reads as follows:
IN VIEW OF THE FOREGOING, the judgment of the lower court is hereby set aside and another is hereby rendered:
(1) Ordering the defendant municipality and/or thru its appropriate officials to return and deliver the possession of the
portion of Lot 76 used as cemetery or burial site of the plaintiff-appellant.
(2) Ordering defendant municipality to pay the plaintiff-appellant the sum of P400.00 a year from 1963 until the possession
of said land is actually delivered.
Lot No. 76 containing an area of 208,157 sq. meters forms a part of Cadastral Lot No. 140 (Rollo, p. 11), a 27.2460 ha. sugar land located in Bo.
Madaniog, Victorias, Negros Occidental, in the name of the deceased Gonzalo Ditching under Tax Declaration No. 3429 of Negros Occidental
for the year 1941 (Exh. "3," Folder of Exhibits, p. 22). He was survived by his widow Simeona Jingeo Vda. de Ditching and a daughter, Isabel,
who died in 1928 (TSN, July 1, 1964, p. 7) leaving one off-spring, respondent Norma Leuenberger, who was then only six months old (TSN, July
1, 1964, p. 34).
Respondent Norma Leuenberger, married to Francisco Soliva, inherited the whole of Lot No. 140 from her grandmother, Simeona J. Vda. de
Ditching (not from her predeceased mother Isabel Ditching). In 1952, she donated a portion of Lot No. 140, about 3 ha., to the municipality for
the ground of a certain high school and had 4 ha. converted into a subdivision. (TSN, July 1, 1964, p. 24).
In 1963, she had the remaining 21 ha. or 208.157 sq. m. relocated by a surveyor upon request of lessee Ramon Jover who complained of being
prohibited by municipal officials from cultivating the land. It was then that she discovered that the parcel of land, more or less 4 ha. or 33,747
sq.m. used by Petitioner Municipality of Victorias, as a cemetery from 1934, is within her property which is now Identified as Lot 76 and covered
by TCT No. 34546 (TSN, July 1, 1964, pp. 7-9; Exh. "4," Folder of Exhibits, p. 23 and Exh. "A," Folder of Exhibits, p. 1).
On May 20, 1963, Respondent wrote the Mayor of Victorias regarding her discovery, demanding payment of past rentals and requesting delivery
of the area allegedly illegally occupied by Petitioner (Exh. "G, Folder of Exhibits, p. 15). When the Mayor replied that Petitioner bought the land
she asked to be shown the papers concerning the sale but was referred by the Mayor to the municipal treasurer who refused to show the same
(TSN, July 1, 1964, pp. 32-33).
On January 11, 1964, Respondents filed a complaint in the Court of First Instance of Negros Occidental, Branch 1, for recovery of possession of
the parcel of land occupied by the municipal cemetery (Record on Appeal, p. 1). In its answer, petitioner Municipality, by way of special defense,
alleged ownership of the lot, subject of the complaint, having bought it from Simeona Jingco Vda. de Ditching sometime in 1934 (Record on
Appeal, p. 7). The lower court decided in favor of the Municipality. On appeal Respondent appellate Court set aside the decision of the lower
court (Record on AppeaL p. 9); hence, this petition for review on certiorari.
This petition was filed with the Court on November 6, 1969 (Rollo, p. 2), the Record on Appeal on December 19, 1969 (Rollo, p. 80). On January
5, 1970, the Court gave due course to the petition (Rollo, p. 84).
The Brief for the Petitioner was filed on April 1, 1970 (Rollo, p. 88), the Brief for Respondents was filed on May 18, 1970 (Rollo, p. 92).
On July 8, 1970, the Court resolved to consider the case submitted for decision without Petitioner's Reply Brief, Petitioner having failed to file
the brief within the period which expired on June 10, 1970 (Rollo. p. 99).
On motion of counsel for the Respondents (Rollo, p. 104), the Court resolved on June 30, 1972 to allow respondent Francisco Soliva to continue
the appeal in behalf of the estate of respondent Norma Leuenberger who died on January 25, 1972, Respondent Francisco Soliva having been
appointed special administrator in Special Proceedings No. 84-V of the Court of First Instance of Negros Occidental (Rollo, p. 110).
In their brief, petitioner raised the following errors of respondent Court of Appeals: (Brief for the Petitioner, p. 1-3);
I.
The Honorable Court of Appeals erred in holding that respondents Norma Leuenberger and Francisco Soliva are the lawful
owners of the land in litigation as they are estopped from questioning the possession and ownership of herein petitioner
which dates back to more than 30 years.
II.
The Honorable Court of Appeals also erred in ordering the petition petitioner to deliver the possession of the land in
question to the respondents Nomia Leuenberger and Francisco Soliva, by holding that non-annotation on the Torrens
Certificate of Title could not affect the said land when the possession by the petitioner of the said land for over 30 years
and using it as a public cemetery for that length of time are sufficient proof of purchase and transfer of title and non-
annotation of the Certificate of Title did not render the sale ineffectual
III.
The Honorable Court of Appeals further erred in ordering the petitioner Municipality of Victories to pay the respondents
the sum of P400.00 a year from 1963 until possession is actually delivered because under the law, an owner of a piece of
land has no obligation to pay rentals as it owns and possesses the same.
There is merit in the petition.
It is undisputed that petitioner failed to present before the Court a Deed of Sale to prove its purchase of the land in question which is included in
the Transfer Certificate of Title No. T-34546 in the name of private respondent Norma Leuenberger.
The pivotal issue in this case is whether or not the secondary evidence presented by the petitioner municipality is sufficient to substantiate its
claim that it acquired the disputed land by means of a Deed of Sale.
Under the Best Evidence Rule when the original writing is lost or otherwise unavailable, the law in point provides:
Sec. 4. Secondary evidence when original is lost or destroyed. — When the original writing has been lost or destroyed, or
cannot be produced in court, upon proof of its execution and loss or destruction or unavailability, its contents may be
proved by a copy, or by a recital of its contents in some authentic document, or by the recollection of witnesses. (Rule 130,
Rules of Court).
In lieu of a Deed of Sale, petitioner presented a certificate issued by the Archives Division of the Bureau of Records Management in Manila, of a
page of the 1934 Notarial Register of Vicente D. Aragon with the following entries:
Nature of Instrument — Compra venta 2 porciones Terrenos: Lotes Nos. 140-A y 140-B, Victorias, Neg. Occidental pago
por esso despues aprobacion Jusgado la Instance, Neg. Occidental causa civil 5116 Vendedora: — Simeona Jingco Vda. de
Ditching . . . administradora Abint. G. Ditching
Comprador: — Municipio Victorias, Neg. Occidental . . . . por su Pres.Mpal Vicente B. Arnaes
Valor: — P750.00 ...
Vease copia correspondiente.
Names of-persons Executing/ Acknowledging:
Simeona Vda. de Ditching

Adm. Abint actuacion especial No. 5116
Jusgado la Instance Neg. Occidental
Vendedora
Vicente B. Arnaes
Pres. Municipal. Victorias
Comprador
Witnesses to the Signatures:
Esteban Jalandoni
Gregorio Elizalde
Date: Month
9 Julio 1934
Fees: P2.00
Cedulas:
Exenta por susexo
F1027880 Enero 26/34 Victories, Neg. Occidental
Remarks.
En Victorias, Neg. Occidental
Los annexes A. y B. estan unidos
solamente en el original de la
escritura.
Respondent Court of Appeals was of the view (Rollo, p. 16) that a mere entry in the notarial register of a notary public of an alleged sale cannot
prove that a particular piece of land was sold by one person to another, one of the important requirements being the indication of the area and the
technical description of the land being sold. In the present case, since no deed of sale could be produced, there is no way of telling what particular
portion of the property was sold to defendant municipality and how big was the sale of the land conveyed to the defendant municipality.
It will be observed that the entries in the notarial register clearly show: (a) the nature of the instrument. — a deed of sale; (b) the subject of the
sale — two parcels of land, Lot Nos. 140-A and 140-B; (c) the parties of the contract — the vendor Simeona J. Vda. de Ditching in her capacity
as Administrator in Civil Case No. 5116 of the Court of First Instance of Negros Occidental and the vendee, Vicente B. Ananosa, Municipal
Mayor of Victorias; (d) the consideration P750.00; (e) the names of the witnesses Esteban Jalandoni and Gregoria Elizado; and the date of the
sale on July 9, 1934.
It is beyond question that the foregoing certificate is an authentic document clearly corroborated and supported by: (a) the testimony of the
municipal councilor of Victorias, Ricardo Suarez, (Original TSN Hearing of September 14, 1964, pp. 1222) who negotiated the sale; (b) the
testimony of Emilio Cuesta, (Original TSN Hearing of September 14, 1964, pp. 2238) the municipal treasurer of said municipality, since 1932 up
to the date of trial on September 14, 1964, who personally paid the amount of P750.00 to Felipe Leuenberger as consideration of the Contract of
Sale; (c) Certificate of Settlement (Original Exhibits, p. 20) "as evidence of said payment;" (d) Tax Declaration No. 429 (Ibid., p. 22) which was
cancelled and was substituted by Tax Declaration No. 3600 covering the portion of the property unsold (Decision, CFI, Neg. Occidental Orig.
Record on Appeal, p. 6) and (e) Tax Declaration No. 3601 (Ibid, p. 23) in the name of the Municipal Government of Victorias covering the
portion occupied as cemetery.
Tax Declaration No. 3601 shows on its face the boundaries as follows:
North — NE — Lot No. 140-C of the Subdivision
South — SW — Lot No. 140-C of the Subdivision
West — NW — Lots Nos. 140-C & 140-B of the Subdivision.
The area is 33,747 sq.m.
At the back Exh. 4-A, the sale of a portion of the lot to the Municipality of Victorias was clearly explained as follows:
Note: The whole Lot No. 140, belongs to Norma Leuenberger as evidenced by a Transfer of Cert. of Title No. 18672.
Portion of this Lot, (30,000 sq.m. was sold to Municipality of Victories for Cemetery Site as evidenced by a Deed of Sale
executed by Simeona Jingco Vda. de Ditching in favor of the aforesaid Municipality and ratified by Notary Public Mr.
Vicente Aragon under Doc. No. 132; Page No. 2; Book No. 10, Series of 1934.
At the lowest portion under Memoranda it was explained that —
The area under this declaration includes 3,746 sq. meters donated by Mrs. Simeona Jingco Vda. de Ditching and used as
road leading to the cemetery. " (EXIL 4; Original Exhibits, p. 23).
The above-mentioned testimonies and documentary evidence sufficiently Identify the land sold by the predecessors-in-interest of private
respondent. To insist on the technical description of the land in dispute would be to sacrifice substance to form which would undoubtedly result in
manifest injustice to the petitioner.
Moreover, it is expressly provided by law that the thing sold shall be understood as delivered, when it is placed in the control and possession of
the vendee. (Civil Code Art. 1497). Where there is no express provision that title shall not pass until payment of the price, and the thing gold has
been delivered, title passes from the moment the thing sold is placed in the possession and control of the buyer. (Kuenzle & Streiff vs. Watson &
Co., 13 PhiL 26 [1909]). Delivery produces its natural effects in law, the principal and most important of which being the conveyance of
ownership, without prejudice to the right of the vendor to payment of the price. (Ocejo, Perez & Co. vs. International Banking Corp., 37 PhiL 631
[1918]).
Similarly, when the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the
object of the contract, if from the deed, the contrary does not appear or cannot be clearly inferred. (Civil Code Art. 1498). The execution of the
public instrument operates as a formal or symbolic delivery of the property sold and authorizes the buyer to use the document as proof of
ownership. (Florendo v. Foz, 20 PhiL 388 [1911]).
In the case at bar it is undisputed that petitioner had been in open, public, adverse and continuous possession of the land for a period of more than
thirty years. In fact, according to the municipal treasurer there are over 1000 graves in the cemetery. (Decision, Court of Appeals, Rollo, pp. 11-
22).
As correctly observed by Justice Magno S. Gatmaitan in his dissenting opinion (Rollo, pp. 23-28) in the decision of this case by the Court of
Appeals, the evidence establishes without debate that the property was originally registered in 1916. Plaintiff was born only in 1928 and cannot
possibly be the registered owner of the original lot 140 at the time. Indeed, according to her own evidence, (Exhibit A; Original Record pp. 13)
she became the registered owner only in 1963. Likewise, it is undisputed that in the intestate estate of Gonzalo Ditching, the grandfather of
private respondent Norma Leunberger, it was her grandmother, Simeona, the surviving spouse of Gonzalo who was named judicial
administratrix. According to Norma's own testimony, Isabel her mother, died in 1928 (TSN Aug. 12, 1964, p. 34) while Simeona the grandmother
died in 1942. (Ibid.) Therefore, as of 1934 when a document of sale was executed by Simeona in favor of the municipality of Victories as
indubitably shown in the notarial register (Exhibit 5.A) in question, Simeona was still the administratrix of the properties left by her husband,
Gonzalo and of their conjugal partnership. Consequently, she is the only person who could legally dispose of by sale this particular four- hectare
portion of Lot 140. And so it is, that in 1934, Simeona Ditching in her capacity as judicial administratrix made and executed the document
described in the Report as Lots 140-A and 140-B, showing clearly that they are portions of the original big Lot 140. As this conveyance was
executed by the judicial administratrix, unquestionably the party authorized to dispose of the same, the presumption must be that she did so upon
proper authority of the Court of First Instance.
As to the description of the property sold, the fact that a notarial report shows that they are portions of Lot 140 and the property in question
occupied by the public cemetery is admittedly a portion of said lot in the absence of evidence that there were other portions of Lot 140 ceded unto
the petitioner municipality, the inevitable conclusion is that the sale executed in the Notarial Register refers to the disputed lot.
Unfortunately, the purchaser Municipality of Victorias failed to register said Deed of Sale; hence, when Simeona Jingco Vda. de Ditching died,
her grand-daughter, respondent Norma Leuenberger claimed to have inherited the land in dispute and succeeded in registering said land under the
Torrens system. Said land is now covered by Transfer Certificate of Title No. T-34036 (Exhibit A, supra) issued by the Register of Deeds of -
Negros Occidental on March 11, 1963 in the name of Norma Leuenberger, married to Francisco Soliva, containing an area of 208,157 square
meters. As registered owner, she is unquestionably entitled to the protection afforded to a holder of a Torrens Title.
Admittedly, it is well-settled that under the Torrens System "Every person receiving a certificate of title in pursuance of a decree of registration, .
. . shall hold the same free of all encumbrance except those noted on said certificate ... " (Sec. 39, Act 496; now Sec. 43, PD 1529).
In the instant case, however, respondent Norma Leuenberger admitted that she inherited the land covered by Transfer Certificate of Title No. T-
34036 from her grandmother, who had already sold the land to the petitioner in 1934; hence, she merely stepped into the shoes of her
grandmother and she cannot claim a better right than her predecessor-in-interest. When she applied for registration of the disputed land, she had
no legal right to do so as she had no ownership of the land since land registration is not a mode of acquiring ownership but only of confirming
ownership of the land. (Grande, et al. vs. Court of Appeals, et al., 115 Phil. 521.)"The Torrens System was not established as a means for the
acquisition of title to private land, ..." It is intended merely to confirm and register the title which one may already have on the land. Where the
applicant possesses no title or ownership over the parcel of land, he cannot acquire one under the Torrens system of Registration. (Torela, et al.,
vs. Torela, et al., L-27843, October 11, 1979).
While an inherently defective Torrens title may not ordinarily be cancelled even after proof of its defect, the law nevertheless safeguards the
rightful party's interest in the titled land from fraud and improper use of technicalities by snowing such party, in appropriate cases, to judicially
seek reconveyance to him of whatever he has been deprived of as long as the land has not been transferred or conveyed to a purchaser in good
faith. (Pedro Pascua, et al., vs. Mariano Gopuyoc et al., L-23197, May 31, 1977.)
The Civil Code provides:
Art. 1456. If the property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the person from whom the property comes.
Thus, it has been held that where the land is decreed in the name of a person through fraud or mistake, such person is by operation of law
considered a trustee of an implied trust for the benefit of the persons from whom the property comes. The beneficiary shag have the right t•
enforce the trust, notwithstanding the irrevocability of the Torrens title and the trustee and his successors-in-interest are bound to execute the deed
of reconveyance. (Pacheco vs. Arro, 85 Phil. 505; Escobar vs. Locsin, 74 Phil. 86).
As the land in dispute is held by private respondents in trust for the Municipality of Victorias, it is logical to conclude that the latter can neither be
deprived of its possession nor be made to pay rentals thereof. Private respondent is in equity bound to reconvey the subject land to the cestui que
trust the Municipality of Victorias. The Torrens system was never calculated to foment betrayal in the performance of a trust. (Escobar vs.
Locsin, 74 Phil. 86).
For a more expeditious disposition of the case at bar, Rule 39 of the Rules of Court provides:
SEC. 10. Judgment for Specific acts; vesting title. — ... If real or personal property is within the Philippines, the court in
lieu of directing a conveyance thereof may enter judgment divesting the title of any party and vesting it in others and such
judgment shall have the force and effect of a conveyance executed in due form of law.
Finally, the conclusions and findings of fact by the trial court are entitled to great weight on appeal and should not be disturbed unless for strong
and cogent reasons because the trial court is in a better position to examine real evidence, as well as to observe the demeanor of the witnesses
while testifying in the case. (Chase v. Buencamino, Sr., 136 SCRA 365 [1985]).
PREMISES CONSIDERED, the judgment of the respondent appellate court is hereby SET ASIDE and the decision of the Court of First Instance
of Negros Occidental, Branch I-Silay City in Civil Case No. 181-S declaring the cemetery site (Exh. E-2) on Lot No. 76 in Victories as the
property of the municipality of Victorias, is hereby REINSTATED. Additionally, We hereby order (a) the petitioner to have the disputed land
segregated by a licensed surveyor from the rest of Lot No. 76 described in Transfer Certificate of Title No. T-34036 and to have the
corresponding subdivision plan, duly approved by the Land Registration Commission, submitted to the court of origin for approval; (b) the
private respondents Norma Leuenberger and Francisco Soliva to be divested of their title to the disputed land under Rule 39, Sec. 10, Rules of
Court; and (c) the Register of Deeds of Negros Occidental to cancel Transfer Certificate of Title No. 34036 and issue, in lieu thereof, one title in
the name of the Municipality of Victories for the disputed land and another title in the names of the private respondents Norma Leuenberger and
Francisco Soliva for the rest of Lot No. 76. Without costs.
SO ORDERED.
Fernan (Chairman), Gutierrez, Jr., Padilla, Bidin, and Cortes, JJ., concur.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-67583 July 31, 1987
BASILISA S. ESCONDE, petitioner,
vs.
HON. SAMILO N. BARLONGAY and RAMON V. DELFIN, respondents.
PARAS, J.:
This is a petition for review on certiorari of the April 16, 1984 Order of the Regional Trial Court of Valenzuela, Bulacan, Branch CLXXII,
dismissing petitioner's complaint.
The facts admitted by the parties are the following:
Private respondent Ramon V. Delfin is the applicant in the "Application for Registration of Title" dated April 14, 1969, docketed as LRC Case
No. 710-V at the then Court of First Instance of Bulacan, Branch III, Valenzuela, Metro Manila (now RTC, NCJR, Branch 171, Valenzuela). The
land subject of the Application, Reconveyance and the present petition is one and the same parcel of land containing an area of 2,273 sq. m. The
application was granted in a "Decision" dated December 8, 1969, and private respondent received copy thereof on the same date. Said parcel of
land is now covered by OCT No.-05002 issued on January 23, 1971 by the Register of Deeds of Bulacan. On February 13, 1978 said private
respondent Ramon V. Delfin as applicant in the LRC Case filed his "Petition for Writ of Possession" against the spouses Francisco and Basilisa
Esconde (Brief for Petitioner, pp. 6-7, Rollo, p. 120).
On March 6, 1978, Judge Crispin V. Bautista issued an Order denying for lack of merit the opposition filed by the Esconde spouses to the petition
for Writ of Possession.
On September 26, 1978, Judge Avelino M. Constantino, who took over the same branch presided over by Judge Bautista, issued an Order for a
writ of possession against the said spouses.
Petitioner filed with the same court a Petition to quash the Writ of Possession to which an Opposition was filed by the private respondent
(Comment, Rollo, pp. 88-90).
On October 6, 1978, herein petitioner filed with the then Court of First Instance of Bulacan, 5th Judicial District, Branch VIII (now RTC, NCJR,
Branch 172, Valenzuela, Bulacan) a complaint for reconveyance, against the herein private respondent, docketed therein as Civil Case No. 721-
V-78 (Record, pp. 24-28).
On October 14, 1978, petitioner filed an Amended Complaint with prayer for stay of execution of judgment in LRC Case No. V-710 (Ibid., p. 29-
33).
Private respondent, in a Motion to Dismiss dated December 26, 1978, moved for the dismissal of the case on the grounds, among others, that (1)
the cause of action, if any, is barred by res judicata; (2) the complaint fails to state sufficient cause or causes of action for reconveyance; and (3)
the plaintiff is barred by prescription or laches from filing the case (Ibid, pp. 34-39).
On January 15, 1979, petitioner filed a Rejoinder to Motion to Dismiss and Motion for Leave of Court to Amend Complaint to Include Plaintiff's
Husband as Party-Plaintiff (Ibid, pp, 40-44). On the same date, the Amended Complaint was filed (Ibid, pp. 45-50).
Private respondent filed a Reply to Rejoinder (Opposition) to Motion to dismiss with Opposition to the Motion For Leave of Court to Amend
Complaint, dated January 18, 1979 (Ibid, pp. 51-54).
On June 5, 1979, Judge Constantino denied Petition to Quash Writ of Possession (Rollo, p. 108). The Sheriff then delivered possession to the
private respondent, but then petitioner re-entered the premises and took possession thereof, hence private respondent filed a Motion for an Alias
Writ of Possession on March 2, 1983.
On March 4, 1983, an order directed the issuance of an alias writ of possession.
On March 29, 1983, the Sheriff turned over possession of the premises to the representative of the private respondent. This notwithstanding,
when private respondent went to the premises, he was barred by the petitioner from entering the property. Consequently, private respondent asked
for a writ of demolition for the removal of any construction of the Esconde family on the premises and to cite petitioner Basilisa Esconde for
contempt of court.
On November 17, 1983, private respondent moved for a second alias writ of possession in view of the failure of the petitioner to turn over
possession of the premises to private respondent and the same was granted in the Order of November 21, 1983.
Petitioner then filed with Judge Avelino M. Constantino of the Regional Trial Court of Bulacan a Motion to Quash and/or to Hold in Abeyance
Execution of Second Alias Writ of Possession on the ground that they have filed a civil action for reconveyance.
On February 1, 1984, petitioner filed a Motion to Expedite Resolution of Pending Incidents and Motion For Issuance of Restraining Order and/or
Preliminary Injunction (Ibid, pp. 5759).
On February 13, 1984, private respondent filed a Manifestation With Opposition to Motion for Issuance of Restraining Order and/or Preliminary
Injunction (Ibid, pp. 60-62).
Respondent Judge, in an Order dated April 16, 1984 (Ibid, pp. 63-64), dismissed the complaint for reconveyance on the grounds: (1) that
plaintiff's cause of action is barred by res judicata and (2) that the Motion to Admit Amended Complaint and for Issuance of Restraining Order
and/or Preliminary Injunction is not proper as it seeks to enjoin the enforcement of a writ of possession issued by another branch of this Court
which is not allowed. Hence, the instant petition (Ibid, pp. 10-23).
The Second Division, in a Resolution dated August 29, 1984, resolved to require the respondents to comment (Ibid, p. 75).
On October 20, 1984, respondents, in compliance with the above-mentioned Resolution, filed their Comment (Ibid, pp. 87-101).
In a Resolution dated December 3, 1984, the Second Division resolved to give due course to the petition; and to consider respondents' comment
to the petition as an answer (Ibid, p. 110).
In a letter dated January 21, 1985, counsel for the petitioner was required to file petitioner's brief (Ibid, p. 112). In compliance therewith, said
brief was filed on March 23, 1985 (Ibid., p. 120).
On April 1, 1985, petitioner filed a Motion to Include Additional Party-Respondent and Motion for the Issuance of Preliminary Injunction,
praying, among others, that the Sheriff be included as additional party-respondent (Ibid, pp. 122-126).
The Second Division, in a Resolution dated April 17, 1985, resolved to require the respondents to comment on the motion by counsel for the
petitioner to include an additional party-respondent and the motion for the issuance of a preliminary injunction (Ibid., p. 141).
On May 7, 1985, respondents filed their Opposition to Motion to Include Additional Party-Respondent and Motion for the Issuance of
Preliminary Injunction (Ibid., pp. 142-146).
On June 21, 1985, Brief for the Respondents was filed (Ibid, p. 148).
The Second Division, in a Resolution dated November 11, 1985, resolved to consider the case submitted for deliberation (Ibid., p. 158).
On November 26, 1985, petitioner filed a Motion for Immediate Resolution of her motion of April 1, 1985-motion to include the Sheriff as party-
respondent and for the issuance of a preliminary injunction (Ibid., pp. 159-162). This motion of petitioner, in a Resolution dated December 11,
1985, was noted by said Division (Ibid., p. 165).
On February 1, 1986, petitioner filed an Urgent Motion, praying, among others, for the inclusion of the Sheriff as party-respondent, and
thereafter, for an injunction directing the Sheriff to restore the peaceful possession of the land to petitioner (Ibid., pp. 166-171).
The Second Division, in a Resolution dated February 17, 1986, resolved to issue a temporary restraining order directing the Sheriff and private
respondent to refrain from enforcing and/or carrying out the Third Alias Writ of Possession (Ibid, p. 176).
On March 4, 1986, petitioner filed a Motion to Amend Resolution and Temporary Restraining. Order both dated February 17, 1986, either
nullifying the Third Alias Writ of Possession served or in the alternative to issue a mandatory injunction (Ibid, pp. 179-183). This motion was
denied by the Division in a Resolution dated May 21, 1986 (Ibid, p. 185).
The issues in this case are —
1. WHETHER OR NOT PETITIONER'S CAUSE OF ACTION IS BARRED BY RES JUDICATA; and
2. WHETHER OR NOT PETITIONER'S MOTION TO ADMIT AMENDED COMPLAINT AND FOR ISSUANCE OF
RESTRAINING ORDER AND/OR PRELIMINARY INJUNCTION IS PROPER.
The petition is devoid of merit.
Land registration proceedings in this case commenced on April 14, 1969 and decision thereon was rendered on December 8, 1969. Hence, the law
in force at the time was Act 496, P.D. 1529 (otherwise known as Property Registration Decree) having taken effect only on Jan. 23, 1979.1 The
pertinent provisions of said Act 496 read:
SEC. 34. Any person claiming an interest, whether named in the notice or not, may appear and file an answer on or before the return
day or within such further time as may be allowed by the court. The answer shall state all the objections to the application, and shall
set forth the interest claimed by the party filing the same and apply for the remedy desired, and shall be signed and sworn to by him or
by some person in his behalf. (As amended by Sec. 1, Act No. 3621).
SEC. 35. If no person appears and answers within the time allowed, the court may at once upon motion of the applicant, no reason to
the contrary appearing, order a general default to be recorded and the application to be taken for confessed. By the description in the
notice, "To all whom it may concern," an the world are made parties defendant and shall be concluded by the default and order. After
such default and order, the court may enter a decree confirming the title of the applicant and ordering registration of the same. (As
amended by Sec. 8, Act No. 1699).
On the other hand, under Rule 18 of the Rules of Court, the effect of such order is as follows:
SEC. 2. Effect of order of default. — Except as provided in section 9 of Rule 13, a party declared in default shall not be entitled to
notice or subsequent proceedings, nor to take part in the trial.
Petitioner's claim that she came to know of the land registration case only upon receipt of a Petition for Writ of Possession is completely rebutted
by private respondent's evidence. In the notice of Initial Hearing (Rollo, p. 148-a) she is one of those cited to appear; in the Survey Notification
Letter (Rollo, p. 148-c) her husband was notified of the scheduled survey of the land as indicated by his signature opposite his name and in the
Surveyor's Certificate (Rollo, p. 148-b) her husband was reported one of the adjoining owners present. There is no question that notice to her
husband is notice to her under the law, her husband being the administrator of the conjugal partnership (Art. 165, Civil Code). Otherwise stated,
there was no concealment on the part of private respondent. In fact, the records show that private respondent stated in his application for
registration of title that a portion of the land was being occupied by petitioner sometime in September 1967, by breaking the stone wall fence
without his knowledge and consent (Application for Registration of Title; Rollo, p. 102). However, petitioner and her husband, despite the chance
given them to be heard in the land registration proceedings, opted not to appear.
Thus, as aptly stated by respondent Judge, "A land registration proceedings which is in rem, is valid and conclusive against the whole world. The
failure of the plaintiff and her husband, despite the notice of the publication and posting by the sheriff of the notice of hearing, to oppose the
defendant's application for registration will bar her from filing this action." (Order, dated April 16, 1984; Civil Case No. 721-V-78; Rollo, p. 64).
Under Section 38 of Act 496 ... Every decree of registration shall bind the land, and quiet title thereto ... . It shall be conclusive upon and against
all persons, including the Insular Government and all the branches thereof, whether mentioned by name in the application, notice or citation or
included in the general description "To all whom it may concern." That under said section, this decree became conclusive after one year from the
date of the entry, is not disputed (Severino v. Severino, 44 Phil. 354 [1923]). On the contrary, this Court has invariably ruled that "Land
Registration is a proceeding in rem, and binds all persons known and unknown." (Moscoso v. C.A., 128 SCRA 70 [1984]). It is a settled doctrine
that when a decree of registration has been obtained by fraud, the party defrauded has only one year from entry of the decree to file a petition for
review before a competent court, provided that the land has not been transferred to an innocent purchaser for value. Said Section 38 categorically
declares that "upon the expiration of the said term of one (1) year, every decree or certificate of title issued in accordance with this section shall
be incontrovertible (Albienda v. C.A., 135 SCRA 406-407 [1985]).
Hence, it was established that when no answer in writing nor any opposition is made to an application for registration of property in Court, all the
allegations contained in the application shall be held as confessed by reason of the absence of denial on the part of the opponent. A person who
has not challenged an application for registration of land even if the appeal afterwards interposed is based on the right of dominion over the same
land, cannot allege damage or error against the judgment ordering the registration inasmuch as he did not allege or pretend to have any right to
such land (Cabanas v. Director of Lands, 10 Phil. 393).
In the same manner, it has been held that a claimant having failed to present his answer or objection to the registration of a parcel of land under
the Torrens System or to question the validity of such registration within a period of one year after the certificate of title had been issued, had
forever lost his right in said land even granting that he had any right therein (De los Reyes v. Paterno, 34 Phil. 420).
However, an action for reconveyance is a legal and equitable remedy granted to the rightful owner of land which has been wrongfully or
erroneously registered in the name of another for the purpose of compelling the latter to transfer or reconvey the land to him (Bilog, "Remedies
Available to Aggrieved Parties As a Consequence of Registration Under the Torrens System"; Property Registration 1979; pp. 122-123). The
prevailing rule in this jurisdiction does not bar a landowner whose property was wrongfully or erroneously registered under the Torrens System
from bringing an action, after one year from the issuance of the decree, for the reconveyance of the property in question. Such an action does not
aim or purport to re-open the registration proceeding and set aside the decree of registration, but only to show that the person who secured the
registration of the questioned property is not the real owner thereof (Rodriguez v. Toreno, 79 SCRA 357 [1977]). An ordinary civil action for
reconveyance does not seek to set aside the decree but respecting the decree as incontrovertible and no longer open to review, seeks to transfer or
reconvey the land from the registered owner to the rightful owner (Director of Lands, et al. v. Register of Deeds, et al., 92 Phil. 827
[1953]).lawph!l
Under the circumstances in the case at bar, it is apparent that reconveyance is not the proper remedy. As earlier stated, there was no proof of
irregularity in the issuance of title, nor in the proceedings incident thereto, nor was it established that fraud had indeed intervened in the issuance
of said title, and the period of one year within which intrinsic fraud could be claimed had long expired. Under similar conditions, the Court ruled
that the land should be adjudicated to the registered owner (Paterno, et al. v. Salud, 118 Phil. 933-934 [1963]). Even more implicitly this Court
held in Rural Bank of Paranaque, Inc. v. Remolado (135 SCRA 412 [1985]) that: "Justice is done according to law. As a rule, equity follows the
law. There may be a moral obligation, often regarded as an equitable consideration (meaning compassion), but if there is no enforceable legal
duty, the action must fail although the disadvantaged party deserves commiseration or sympathy."
Moreover, petitioner's action for reconveyance had already prescribed. An action for reconveyance of real property on the ground of fraud must
be filed within four (4) years from the discovery of the fraud. Such discovery is deemed to have taken place from the issuance of an original
certificate of title (Balbin v. Medalla, 108 SCRA 666; and Alarcon v. Bidin, 120 SCRA 390).
The first issue being without merit and the second issue being a mere incident thereto, there appears to be no necessity to discuss the latter.
PREMISES CONSIDERED, the instant petition is hereby DENIED and the assailed Order of the Regional Trial Court of Valenzuela, Bulacan is
hereby AFFIRMED.
SO ORDERED.
Yap, Melencio-Herrera, Padilla and Sarmiento, JJ., concur.
Quiz until reconstitution

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-49250 December 21, 1987
CRESENCIA ALMARZA, petitioner,
vs.
ASUNCION ARGUELLES, GILDA ARGUELLES, GIL PANCRUDO, BALBINA PANCRUDO and HON. JUDGE MIDPANTAO L.
ADIL, respondents.
FERNAN, J.:
From the decision dated June 2, 1978 rendered by the then Court of First Instance of Iloilo, Branch II in Civil Case No. 11051 entitled, "Asuncion
Arguelles, et al., Plaintiffs, versus Cresencia Almarza, Defendant", petitioner came directly to this Court on a lone question of law:
May the possessor en concepto de dueno of a parcel of land, after the lapse of more than ten years from the issuance of a
Torrens Certificate of Title to another person ask the latter to reconvey the land?
It was established that Lot No. 5815 of the Cabatuan Cadastre, situated in the Barrio of Sulanga Municipality of Cabatuan, Iloilo, originally
belonged to private respondents' predecessor-in-interest, Romualdo Grana. In 1929, he sold a portion thereof consisting of 7,300 square meters,
more or less, to petitioner and her husband, the late Leon Almarza. After the sale, said portion was physically segregated from the whole lot and
was taken possession of by petitioner and her husband, who since then had been in continuous, peaceful, open and adverse possession thereof,
cultivating and gathering the produce thereof and declaring the same in their names for taxation purposes.
The document evidencing the sale in favor of petitioner and her husband was lost during the war, but sometime thereafter, the late Laura
Pancrudo, mother of private respondents Asuncion and Gilda Arguelles, executed an affidavit acknowledging the sale of said portion to petitioner
and her husband. On the basis of said affidavit and after actual inspection of the lot, the Provincial Assessor issued a new tax declaration, Tax
Declaration No. 456 beginning in the year 1945 to Leon Almarza, annotating at the back thereof the aforementioned affidavit of the late Laura
Pancrudo. The tax declaration, covering the 7,300 sq.m. portion of Lot No. 5815 sold to petitioner and her husband was designated as Lot No.
5815-B. On the other hand, a new tax declaration, Tax Declaration No. 3909 was issued by the Provincial Assessor in the name of Romualdo
Grana for the remaining portion of Lot No. 5815, described therein as Lot No. 5815-A.
Sometime prior to July, 1950, Josefa Malote, mother of private respondents Gil and Balbina Pancrudo, filed for and in behalf of her children and
the late Laura Pancrudo an answer in Cadastral Case No. 78, G.L.R.O. Record No. 1321. In support of her claim over Lot No. 5815, she
presented in evidence Tax Declaration No. 3909 covering only a portion thereof designated therein as Lot No. 5815-A and a land tax receipt
dated March 30, 1950 showing payment of the real estate tax for a portion only of Lot No. 5815 known and described in the Tax Declaration as
Lot No. 5815-A.
On July 25, 1950, the cadastral court declared Gil and Balbina Pancrudo owner of one-half undivided share of Lot No. 5815 and the late Laura
Pancrudo as owner of the other undivided half share. Pursuant to a decree of title, Original Certificate of Title No. 0-134, covering the entire Lot
5815 was issued in the name of said adjudicatees on May 29, 1951.
On November 1, 1951, Laura Pancrudo died, leaving private respondents Asuncion Arguelles and Gilda Arguelles as her only children and legal
successors-in-interest.
On April 20, 1977, private respondents Asuncion and Gilda Arguelles and Gil and Balbina Pancrudo instituted before the then Court of First
Instance of Iloilo Civil Case No. 11051 against petitioner for recovery of the 7,300 sq.m. portion of Lot No. 5815 in her possession and for
damages. Basis of the action was OCT No. 0-134 issued on May 29, 1951. Petitioner, in turn, interposed a counterclaim for reconveyance of the
disputed portion of Lot No. 5815 in her favor.
After trial, the lower court rendered judgment on June 2, 1978 in favor of private respondents, ordering petitioner to vacate the portion of Lot No.
5815 subject of the controversy and to deliver the same to private respondents, as well as to pay the costs of suit. Petitioner's counterclaim was
dismissed for the reason that although a constructive or implied trust was constituted in favor of petitioner when the disputed portion was
included in the certificate of title issued to private respondents, petitioner's action for reconveyance had prescribed more than ten years having
elapsed from the issuance of said certificate of title.
We reverse. As between the conclusion reached by the trial court that petitioner's action for reconveyance has prescribed and petitioner's own
contention that it has not, We find that the factual backdrop of the case at bar provides tenable reasons for sustaining the latter's position.
First. It is not disputed that petitioner has been in possession as owner of the disputed portion of Lot No. 5815 since 1929 by reason of a sale in
her and her husband's favor by the original owner thereof, Romualdo Grana, predecessor-in-interest of private respondents. Said sale was even
acknowledged by Laura Pancrudo, mother of private respondents Asuncion and Gilda Arguelles, in an affidavit annotated at the back of Tax
Declaration No. 456. From that time on, petitioner and/or her husband cultivated the land, gathered the produce thereof, declared the same in her
and/or her husband's name for taxation purposes and accordingly paid the realty taxes due thereon. In Caragay-Layno v. Court of Appeals, 133
SCRA 718, citing Sapto, et al. v. Fabiana, 103 Phil. 683 and Faja v. Court of Appeals, 75 SCRA 441, cases with similar factual backgrounds as
the instant case, We held that prescription cannot be invoked in an action for reconveyance, which is, in effect, an action to quiet title against the
plaintiff therein who is in possession of the land in question. The reason, We explained, is "that as lawful possessor and owner of the Disputed
Portion, her cause of action for reconveyance which, in effect, seeks to quiet title to property in one's possession is imprescriptible. Her
undisturbed possession over a period of fifty-two [52] years (48 years in this case) gave her a continuing right to seek the aid of a Court of equity
to determine the nature of the adverse claim of a third party and the effect on her title."
We further stated that if ever prescription may be invoked, it may be said to have commenced to run only from the time the possessor was made
aware of a claim adverse to his own. In the case at bar, petitioner was made aware of such adverse claim only upon service on her of the
summons in Civil Case No. 11051. As her action for reconveyance, or to quiet title was contained in her counterclaim, the same cannot be said to
have already prescribed.
Second. The evidence submitted by Josefa Malote during the Cadastral hearing consisted of tax declaration No. 3909 covering only a portion of
Lot No. 5815 designated as Lot No. 5815-A and land tax receipt dated March 30, 1950 showing payment of real estate tax for a portion only of
Lot No. 5815, designated as Lot No. 5815-A in said tax declaration No. 3909. In so doing, she laid claim only to said portion of Lot No. 5815 and
did not assert ownership over the disputed portion, known as Lot No. 5815-B. This being the case, the inclusion of the disputed portion in OCT
No. 0-134 is "void and of no effect for a land registration court has no jurisdiction to decree a lot to persons who have put no claim in it and who
never asserted any right of ownership over it." 1 "The remedy of the landowner whose property has been wrongfully or erroneously registered in
another's name is, after one year from date of the decree, 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." 2 Petitioner availed herself of this remedy seasonably.
Third. Private respondents obtained OCT No. 0-134 on May 29,1951. Their action was instituted only on April 20, 1977, or after a lapse of
twenty-six [26] years. The neglect or failure of private respondents to assert their alleged right under the certificate of title for such unreasonable
length of time makes them guilty of laches.' They should now be held either to have abandoned or waived whatever right they may have under
said certificate of title.
Fourth. As correctly analyzed by the trial court:
Apparently, the plaintiff [private respondents] are seeking to recover the 7,300 square meters land in question because it is
included in their title. They have not rebutted the [defendant's petitioner] evidence to the effect that they bought the area in
dispute from its primitive owner, Romualdo Grana, in 1929 and the said sale was confirmed by the late Laura Pancrudo
after World War II. Plaintiffs likewise have not disputed that the defendant and her late husband have been in continuous,
public, and peaceful possession of the premises since 1929 until the filing of this case.
It seems that the plaintiffs solely anchor their right over the disputed premises on the strength of their title over Lot 5815
which includes the area in dispute and the fact that they acquired said title in a cadastral proceedings in 1950 which was a
pro g in rem. 3
On this premise, to adjudge private respondents owner of the disputed portion of Lot No. 5815 on the basis merely of its having been erroneously
included in their certificate of title would indeed be "a sad day for the law" for then. We shall be 4 attaching full faith and credence to a Torrens
certificate of title" "oblivious to the demands of justice" and anchoring our decision "solely on a narrow and literal reading of a statutory
prescription, devoid of any shadow of moral right. 5 Furthermore, We shall be putting a premium on land-grabbing and transgressing the broader
principle in human relations that no person shall unjustly enrich himself at the expense of another.
WHEREFORE, the judgment under review is hereby REVERSED and SET ASIDE and another one entered ordering private respondents to
cause the segregation of the disputed portion of 7,300 square meters forming part of Lot No. 5815 of the Cabatuan Cadastre, Cadastral Case No.
78, G.L.R.O. Record No. 1321, presently occupied by petitioner and to reconvey the same to said petitioner. After the segregation shall have been
accomplished, the Register of Deeds of Iloilo is hereby ordered to cancel OCT No. 0-134 in the names of Balbina, Gil and Laura, all surnamed
Pancrudo, and thereafter to issue a new certificate of title covering said 7,300 square meter portion in favor of petitioner and another certificate of
title in favor of private respondents covering the remaining portion of Lot No. 5815. No costs.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.
SECOND DIVISION
RICHARD B. LOPEZ, in his G.R. No. 157784

Capacity as Trustee of the Trust
Estate of the late Juliana Lopez-
Manzano, Present:
Petitioner,
QUISUMBING, J.,
Chairperson,
CARPIO MORALES,
- versus - TINGA,
VELASCO, JR., and
COURT OF APPEALS, BRION, JJ.
CORAZON LOPEZ, FERNANDO
LOPEZ, ROBERTO LOPEZ, represented
by LUZVIMINDA LOPEZ, MARIA Promulgated:
ROLINDA MANZANO, MARIA
ROSARIO MANZANO SANTOS,
JOSE MANZANO, JR., NARCISO
MANZANO (all represented by December 16, 2008
Attorney-in-fact, MODESTO RUBIO),
MARIA CRISTINA MANZANO RUBIO,
IRENE MONZON and ELENA MANZANO,
Respondents.
x--------------------------------------------------------------------------------x
DECISION
TINGA, J.:
This is a petition for review on certiorari [1]under Rule 45 of the 1997 Rules of Civil Procedure, assailing the Decision [2] and Resolution[3] of the
Court of Appeals in CA-G.R. CV No. 34086. The Court of Appeals decision affirmed the summary judgment of the Regional Trial Court (RTC),
Branch 10, Balayan, Batangas, dismissing petitioners action for reconveyance on the ground of prescription.
The instant petition stemmed from an action for reconveyance instituted by petitioner Richard B. Lopez in his capacity as trustee of the
estate of the late Juliana Lopez Manzano (Juliana) to recover from respondents several large tracts of lands allegedly belonging to the trust estate
of Juliana.
The decedent, Juliana, was married to Jose Lopez Manzano (Jose). Their union did not bear any children. Juliana was the owner of
several properties, among them, the properties subject of this dispute. The disputed properties totaling more than 1,500 hectares consist of six
parcels of land, which are all located in Batangas. They were the exclusive paraphernal properties of Juliana together with a parcel of land situated
in Mindoro known as Abra de Ilog and a fractional interest in a residential land on Antorcha St., Balayan, Batangas.
On 23 March 1968, Juliana executed a notarial will,[4] whereby she expressed that she wished to constitute a trust fund for
her paraphernal properties, denominated as Fideicomiso de Juliana Lopez Manzano (Fideicomiso), to be administered by her husband. If her
husband were to die or renounce the obligation, her nephew, Enrique Lopez, was to become administrator and executor of the Fideicomiso. Two-
thirds (2/3) of the income from rentals over these properties were to answer for the education of deserving but needy honor students, while one-
third 1/3 was to shoulder the expenses and fees of the administrator. As to her conjugal properties, Juliana bequeathed the portion that she could
legally dispose to her husband, and after his death, said properties were to pass to her biznietos or great grandchildren.
Juliana initiated the probate of her will five (5) days after its execution, but she died on 12 August 1968, before the petition for probate could be
heard. The petition was pursued instead in Special Proceedings (S.P.) No. 706 by her husband, Jose, who was the designated executor in the will.
On 7 October 1968, the Court of First Instance, Branch 3, Balayan, Batangas, acting as probate court, admitted the will to probate and issued the
letters testamentary to Jose. Jose then submitted an inventory of Julianas real and personal properties with their appraised values, which was
approved by the probate court.
Thereafter, Jose filed a Report dated 16 August 1969, which included a proposed project of partition. In the report, Jose explained that as the only
compulsory heir of Juliana, he was entitled by operation of law to one-half (1/2) of Julianas paraphernal properties as his legitime, while the other
one-half (1/2) was to be constituted into the Fideicomiso. At the same time, Jose alleged that he and Juliana had outstanding debts
totaling P816,000.00 excluding interests, and that these debts were secured by real estate mortgages. He noted that if these debts were liquidated,
the residuary estate available for distribution would, value-wise, be very small.
From these premises, Jose proceeded to offer a project of partition. The relevant portion pertaining to the Fideicomiso stated, thus:
PROJECT OF PARTITION
14. Pursuant to the terms of the Will, one-half (1/2) of the following properties, which are not burdened with any obligation,
shall be constituted into the Fidei-comiso de Juliana Lopez Manzano and delivered to Jose Lopez Manzano as trustee
thereof:
Location Title No. Area (Sq. M.) Improvements
Abra de Ilog, TCT - 540 2,940,000 pasture, etc.

Mindoro
Antorcha St. TCT 1217-A 13,040 residential

Balayan, Batangas (1/6 thereof)
and all those properties to be inherited by the decedent, by intestacy, from her sister, Clemencia Lopez y Castelo.
15. The other half (1/2) of the aforesaid properties is adjudicated to Jose Lopez Manzano as heir.
Then, Jose listed those properties which he alleged were registered in both his and Julianas names, totaling 13 parcels in all. The disputed properties
consisting of six (6) parcels, all located in Balayan, Batangas, were included in said list. These properties, as described in the project of partition,
are as follows:
Pantay, Calaca, 91,283 coconuts

Batangas
Mataywanak, OCT-29[6]94 485,486 sugar

Tuy, Batangas
Patugo, Balayan, OCT-2807 16,757,615 coconut,

Batangas sugar, citrus,
pasteur
Cagayan, Balayan, TCT-1220 411,331 sugar

Batangas
Pook, Baayan TCT-1281 135,922 sugar

Batangas
Bolbok, Balayan, TCT-18845 444,998 sugar

Batangas
Calzada, Balayan, TCT 1978 2,312 sugar
Batangas
Gumamela, Balayan, TCT-2575 829
Batangas
Bombon, Balayan, 4,532
Batangas
Paraaque, Rizal TCT-282340 800 residential
Paraaque, Rizal TCT-11577 800 residential
Modesto St., Manila TCT-52212 137.8 residential
and the existing sugar quota in the name of the deceased with the Central Azucarera Don Pedro at Nasugbo.
16. The remaining shall likewise go to Jose Lopez Manzano, with the condition to be annotated on the titles thereof, that
upon his death, the same shall pass on to Corazon Lopez, Ferdinand Lopez, and Roberto Lopez:
Dalig, Balayan, TCT-10080 482,872 sugar

Batangas
San Juan, Rizal TCT-53690 523 residential
On 25 August 1969, the probate court issued an order approving the project of partition. As to the properties to be constituted into the Fideicomiso,
the probate court ordered that the certificates of title thereto be cancelled, and, in lieu thereof, new certificates be issued in favor of Jose as trustee
of the Fideicomiso covering one-half (1/2) of the properties listed under paragraph 14 of the project of partition; and regarding the other half, to be
registered in the name of Jose as heir of Juliana. The properties which Jose had alleged as registered in his and Julianas names, including the
disputed lots, were adjudicated to Jose as heir, subject to the condition that Jose would settle the obligations charged on these properties. The
probate court, thus, directed that new certificates of title be issued in favor of Jose as the registered owner thereof in its Order dated 15 September
1969. On even date, the certificates of title of the disputed properties were issued in the name of Jose.
The Fideicomiso was constituted in S.P No. 706 encompassing one-half (1/2) of the Abra de Ilog lot on Mindoro, the 1/6 portion of the lot
in Antorcha St. in Balayan, Batangasand all other properties inherited ab intestato by Juliana from her sister, Clemencia, in accordance with the
order of the probate court in S.P. No. 706. The disputed lands were excluded from the trust.
Jose died on 22 July 1980, leaving a holographic will disposing of the disputed properties to respondents. The will was allowed probate
on 20 December 1983 in S.P. No. 2675 before the RTC of Pasay City. Pursuant to Joses will, the RTC ordered on 20 December 1983 the transfer
of the disputed properties to the respondents as the heirs of Jose. Consequently, the certificates of title of the disputed properties were cancelled
and new ones issued in the names of respondents.
Petitioners father, Enrique Lopez, also assumed the trusteeship of Julianas estate. On 30 August 1984, the RTC of Batangas, Branch 9
appointed petitioner as trustee of Julianas estate in S.P. No. 706. On 11 December 1984, petitioner instituted an action for reconveyance of parcels
of land with sum of money before the RTC of Balayan, Batangasagainst respondents. The complaint[5] essentially alleged that Jose was able to
register in his name the disputed properties, which were the paraphernal properties of Juliana, either during their conjugal union or in the course of
the performance of his duties as executor of the testate estate of Juliana and that upon the death of Jose, the disputed properties were included in
the inventory as if they formed part of Joses estate when in fact Jose was holding them only in trust for the trust estate of Juliana.
Respondents Maria Rolinda Manzano, Maria Rosario Santos, Jose Manzano, Jr., Narciso Manzano, Maria Cristina Manzano Rubio and
Irene Monzon filed a joint answer[6] with counterclaim for damages. Respondents Corazon, Fernando and Roberto, all surnamed Lopez, who were
minors at that time and represented by their mother, filed a motion to dismiss,[7] the resolution of which was deferred until trial on the merits. The
RTC scheduled several pre-trial conferences and ordered the parties to submit pre-trial briefs and copies of the exhibits.
On 10 September 1990, the RTC rendered a summary judgment,[8] dismissing the action on the ground of prescription of action. The RTC also
denied respondents motion to set date of hearing on the counterclaim.
Both petitioner and respondents elevated the matter to the Court of Appeals. On 18 October 2002, the Court of Appeals rendered the assailed
decision denying the appeals filed by both petitioner and respondents. The Court of Appeals also denied petitioners motion for reconsideration for
lack of merit in its Resolution dated 3 April 2003.
Hence, the instant petition attributing the following errors to the Court of Appeals:
I. THE COURT OF APPEALS CONCLUSION THAT PETITIONERS ACTION FOR [RECONVEYANCE]

HAS PRESCRIBED TAKING AS BASIS SEPTEMBER 15, 1969 WHEN THE PROPERTIES IN DISPUTE WERE
TRANSFERRED TO THE NAME OF THE LATE JOSE LOPEZ MANZANO IN RELATION TO DECEMBER 12,
1984 WHEN THE ACTION FOR RECONVEYANCE WAS FILED IS ERRONEOUS.
II. THE RESPONDENT COURT OF APPEALS CONCLUSION IN FINDING THAT THE FIDUCIARY
RELATION ASSUMED BY THE LATE JOSE LOPEZ MANZANO, AS TRUSTEE, PURSUANT TO THE LAST WILL
AND TESTAMENT OF JULIANA LOPEZ MANZANO WAS IMPLIED TRUST, INSTEAD OF EXPRESS TRUST IS
EQUALLY ERRONEOUS.
None of the respondents filed a comment on the petition. The counsel for respondents Corazon, Fernando and Roberto, all surnamed Lopez,
explained that he learned that respondents had migrated to the United States only when the case was pending before the Court of Appeals.[9] Counsel
for the rest of the respondents likewise manifested that the failure by said respondents to contact or communicate with him possibly signified their
lack of interest in the case.[10] In a Resolution dated 19 September 2005, the Court dispensed with the filing of a comment and considered the case
submitted for decision.[11]
The core issue of the instant petition hinges on whether petitioners action for reconveyance has prescribed. The resolution of this issue calls for a
determination of whether an implied trust was constituted over the disputed properties when Jose, the trustee, registered them in his name.
Petitioner insists that an express trust was constituted over the disputed properties; thus the registration of the disputed properties in the
name of Jose as trustee cannot give rise to prescription of action to prevent the recovery of the disputed properties by the beneficiary against the
trustee.
Evidently, Julianas testamentary intent was to constitute an express trust over her paraphernal properties which was carried out when
the Fideicomiso was established in S.P. No. 706.[12] However, the disputed properties were expressly excluded from the Fideicomiso. The probate
court adjudicated the disputed properties to Jose as the sole heir of Juliana. If a mistake was made in excluding the disputed properties from
the Fideicomiso and adjudicating the same to Jose as sole heir, the mistake was not rectified as no party appeared to oppose or appeal the exclusion
of the disputed properties from the Fideicomiso. Moreover, the exclusion of the disputed properties from the Fideicomiso bore the approval of the
probate court. The issuance of the probate courts order adjudicating the disputed properties to Jose as the sole heir of Juliana enjoys the presumption
of regularity.[13]
On the premise that the disputed properties were the paraphernal properties of Juliana which should have been included in
the Fideicomiso, their registration in the name of Jose would be erroneous and Joses possession would be that of a trustee in an implied trust.
Implied trusts are those which, without being expressed, are deducible from the nature of the transaction as matters of intent or which
are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the parties. [14]
The provision on implied trust governing the factual milieu of this case is provided in Article 1456 of the Civil Code, which states:
ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee
of an implied trust for the benefit of the person from whom the property comes.
In Aznar Brothers Realty Company v. Aying,[15] the Court differentiated two kinds of implied trusts, to wit:
x x x In turn, implied trusts are either resulting or constructive trusts. These two are differentiated from each other
as follows:
Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the
equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature of
circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title
but is obligated in equity to hold his legal title for the benefit of another. On the other hand, constructive trusts are created
by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise contrary to
intention against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought
not, in equity and good conscience, to hold.[16]
A resulting trust is presumed to have been contemplated by the parties, the intention as to which is to be found in the nature of their
transaction but not expressed in the deed itself.[17] Specific examples of resulting trusts may be found in the Civil Code, particularly Arts.
1448,[18] 1449,[19] 1451,[20] 1452[21] and 1453.[22]
A constructive trust is created, not by any word evincing a direct intention to create a trust, but by operation of law in order to satisfy
the demands of justice and to prevent unjust enrichment.[23] It is raised by equity in respect of property, which has been acquired by fraud, or where
although acquired originally without fraud, it is against equity that it should be retained by the person holding it.[24] Constructive trusts are illustrated
in Arts. 1450,[25] 1454,[26] 1455[27] and 1456.[28]
The disputed properties were excluded from the Fideicomiso at the outset. Jose registered the disputed properties in his name partly as
his conjugal share and partly as his inheritance from his wife Juliana, which is the complete reverse of the claim of the petitioner, as the new trustee,
that the properties are intended for the beneficiaries of the Fideicomiso. Furthermore, the exclusion of the disputed properties from
the Fideicomiso was approved by the probate court and, subsequently, by the trial court having jurisdiction over the Fideicomiso. The registration
of the disputed properties in the name of Jose was actually pursuant to a court order. The apparent mistake in the adjudication of the disputed
properties to Jose created a mere implied trust of the constructive variety in favor of the beneficiaries of the Fideicomiso.
Now that it is established that only a constructive trust was constituted over the disputed properties, may prescription for the recovery
of the properties supervene?
Petitioner asserts that, if at all, prescription should be reckoned only when respondents caused the registration of the disputed properties
in their names on 13 April 1984and not on 15 September 1969, when Jose registered the same in his name pursuant to the probate courts order
adjudicating the disputed properties to him as the sole heir of Juliana. Petitioner adds, proceeding on the premise that the prescriptive period should
be counted from the repudiation of the trust, Jose had not performed any act indicative of his repudiation of the trust or otherwise declared an
adverse claim over the disputed properties.
The argument is tenuous.
The right to seek reconveyance based on an implied or constructive trust is not absolute. It is subject to extinctive prescription.[29] An
action for reconveyance based on implied or constructive trust prescribes in 10 years. This period is reckoned from the date of the issuance of the
original certificate of title or transfer certificate of title. Since such issuance operates as a constructive notice to the whole world, the discovery of
the fraud is deemed to have taken place at that time.[30]
In the instant case, the ten-year prescriptive period to recover the disputed property must be counted from its registration in the name of
Jose on 15 September 1969, when petitioner was charged with constructive notice that Jose adjudicated the disputed properties to himself as the
sole heir of Juana and not as trustee of the Fideicomiso.
It should be pointed out also that Jose had already indicated at the outset that the disputed properties did not form part of
the Fideicomiso contrary to petitioners claim that no overt acts of repudiation may be attributed to Jose. It may not be amiss to state that in the
project of partition submitted to the probate court, Jose had indicated that the disputed properties were conjugal in nature and, thus, excluded from
Julianas Fideicomiso. This act is clearly tantamount to repudiating the trust, at which point the period for prescription is reckoned.
In any case, the rule that a trustee cannot acquire by prescription ownership over property entrusted to him until and unless he repudiates
the trust applies only to express trusts and resulting implied trusts. However, in constructive implied trusts, prescription may supervene even if the
trustee does not repudiate the relationship. Necessarily, repudiation of said trust is not a condition precedent to the running of the prescriptive
period.[31] Thus, for the purpose of counting the ten-year prescriptive period for the action to enforce the constructive trust, the reckoning point is
deemed to be on 15 September 1969 when Jose registered the disputed properties in his name.
WHEREFORE, the instant petition for review on certiorari is DENIED and the decision and resolution of the Court of Appeals in CA-
G.R. CV No. 34086 are AFFIRMED. Costs against petitioner.
SO ORDERED.
SECOND DIVISION
HEIRS OF TRANQUILINO LABISTE G.R. No. 162033

(also known as Tranquilino Laviste)
represented by: (1) GERARDO LABISTE,
representing the Heirs of Gregorio Labiste; Present:
(2) OBDULLIA LABISTE GABUAN,
representing the heirs of Juan Labiste; QUISUMBING, J.,
(3) VICTORIA G. CHIONG, representing Chairperson,
the Heirs of Eulalia Labiste; (4) APOLINARIA CARPIO MORALES,
LABISTE YLAYA, representing the TINGA,
Heirs of Nicolasa Labiste; (5) DEMOSTHENES VELASCO, JR., and
LABISTE, representing the Heirs of Gervacio BRION, JJ.
Labiste; (6) ALEJANDRA LABISTE;
representing the Heirs of SINFROCIO
LABISTE, and (7) CLOTILDE LABISTE CARTA,
representing the Heirs of Andres Labiste,
Petitioners,
- versus
HEIRS OF JOSE LABISTE, survived by his Promulgated:

children, (1) ZACARIAS LABISTE, deceased
and survived by his children, namely: CRESENCIA
LABISTE and EUFRONIO LABISTE; (2) May 8, 2009
BERNARDINO LABISTE, deceased and survived
by his children, namely: POLICARPIO LABISTE,
BONIFACIO LABISTE, FELIX LABISTE,
GABINA LABISTE, CAYETANA LABISTE and
ISABEL LABISTE; (3) LUCIA LABISTE,
deceased and survived by her children, namely:
ISAAC LABISTE, GENARO LABISTE,
BRAULIA LABISTE, BRAULIO LABISTE,
ASUNCION LABISTE, ALFONSO LABISTE
and CLAUDIA LABISTE; (4) EPIFANIO
LABISTE and CLAUDIA LABISTE;
deceased and survived by his children,
namely SILVESTRE LABISTE,
PAULA LABISTE and GERARDA LABISTE;
(5) ANA LABISTE, deceased and survived by her
children, namely: MAXIMO LABISTE, MOISES
LABISTE, GERVACIO LABISTE, SATURNINA
LABISTE and QUIRINO LABISTE; (6) SEVERO
LABISTE, deceased and survived by his children,
Namely: FELIX LABISTE, RUFINA
LABISTE, SIMPLICIO LABISTE,
VICENTE LABISTE and PATRICIO
LABISTE,
Respondents.
x-------------------------------------------------------------------------------------x
DECISION
TINGA, J.:
This is a petition for review[1] under Rule 45 of the Rules of Court of the Court of Appeals Decision dated 30 June 2003[2] in CA-G.R. CV No.
65829. reversing the decision of the Regional Trial Court (RTC) of Cebu City, Branch 9. The appellate court denied petitioners [3] motion for
reconsideration in a Resolution dated 15 January 2004.
The factual antecedents are as follows:
On 29 September 1919, the late Epifanio Labiste (Epifanio), on his own and on behalf of his brothers and sisters who were the heirs of
Jose Labiste (Jose), purchased from the Bureau of Lands Lot No. 1054 of the Banilad Friar Lands Estate, with an area of 13,308 square meters,
located at Guadalupe, Cebu City for P36.00.[4] Subsequently, on 9 June 1924, then Bureau of Lands Director Jorge B. Vargas executed Deed of
Conveyance No. 12536 selling and ceding Lot No. 1054 to Epifanio and his brothers and sisters who were the heirs of Jose.[5]
After full payment of the purchase price but prior to the issuance of the deed of conveyance, Epifanio executed an Affidavit[6] (Affidavit
of Epifanio) in Spanish on 10 July 1923 affirming that he, as one of the heirs of Jose, and his uncle and petitioners predecessor-in-interest,
Tranquilino Labiste (Tranquilino), then co-owned Lot No. 1054 because the money that was paid to the government came from the two of them.
Tranquilino and the heirs of Jose continued to hold the property jointly.
Sometime in 1928, the Register of Deeds of Cebu City issued Original Certificate of Title No. 3878 for Lot No. 1054. On 2 May 1928,
Engineer Espiritu Bunagan (Engr. Bunagan), Deputy Public Land Surveyor, subdivided Lot No. 1054 into two lots: Lot No. 1054-A with an area
of 6,664 square meters for Tranquilino and Lot No. 1054-B with an area of 6,664 square meters for Epifanio. The subdivision plan prepared by
Engr. Bunagan was approved by Jose P. Dans, Acting Director of Lands on 28 October 1928.[7]
Subsequently, on 18 October 1939, the heirs of Tranquilino[8] purchased the one-half (1/2) interest of the heirs of Jose[9] over Lot No.
1054 for P300.00, as evidenced by the Calig-onan sa Panagpalit[10] executed by the parties in the Visayan dialect. The heirs of Tranquilino
immediately took possession of the entire lot.
When World War II broke out, the heirs of Tranquilino fled Cebu City and when they came back they found their homes and possessions
destroyed. The records in the Office of the Register of Deeds, Office of the City Assessor and other government offices were also destroyed during
the war. Squatters have practically overrun the entire property, such that neither petitioners nor respondents possess it.
In October 1993, petitioners learned that one of the respondents, [11] Asuncion Labiste, had filed on 17 September 1993 a petition for
reconstitution of title over Lot No. 1054. Petitioners opposed the petition at first but by a compromise agreement between the parties dated 25
March 1994, petitioners withdrew their opposition to expedite the reconstitution process. Under the compromise agreement, petitioners were to be
given time to file a complaint so that the issues could be litigated in an ordinary action and the reconstituted title was to be deposited with the Clerk
of Court for a period of sixty (60) days to allow petitioners to file an action for reconveyance and to annotate a notice of lis pendens. The Register
of Deeds of Cebu City issued the reconstituted title, TCT No. RT-7853,[12] in the name of Epifanio Labiste, married to Tomasa Mabitad, his brothers
and sisters, heirs of Jose Labiste on 14 December 1994. However, respondents did not honor the compromise agreement.
Petitioners filed a complaint[13] for annulment of title seeking the reconveyance of property and damages on 13 January 1995, docketed
as Civil Case No. CEB-16943, with the RTC of Cebu City. Respondents claimed that the Affidavit of Epifanio and the Calig-onan sa
Panagpalit were forgeries and that petitioners action had long prescribed or barred by laches. [14]
The RTC in a Decision dated 23 August 1999[15] ruled in favor of petitioners. After evaluating the documents presented by petitioners,
the RTC found that they are genuine and authentic as ancient documents and that they are valid and enforceable. [16] Moreover, it held that the action
had not prescribed as the complaint was filed about a year after the reconstitution of the title by respondents. The judicial reconstitution was even
opposed by petitioners until a compromise agreement was reached by the parties and approved by the RTC which ordered the reconstitution. The
RTC further held that the reconstituted title did not give any more right to respondents than what their predecessors-in-interest actually had as it is
limited to the reconstitution of the certificate as it stood at the time of its loss or destruction.[17]
On appeal, the Court of Appeals, while affirming petitioners right to the property, nevertheless reversed the RTCs decision on the ground
of prescription and laches. It affirmed the RTCs findings that the Affidavit and the Calig-onan sa Panagpalit are genuine and authentic, and that
the same are valid and enforceable documents.[18] Citing Article 1144 of the Civil Code, it held that petitioners cause of action had prescribed for
the action must be brought within ten (10) years from the time the right of action accrues upon the written contract which in this case was when
petitioners predecessors-in-interest lost possession over the property after World War II. Also, the lapse of time to file the action constitutes neglect
on petitioners part so the principle of laches is applicable.[19]
Hence, the present petition.
The genuineness and authenticity of the Affidavit of Epifanio and the Calig-onan sa Panagpalit are beyond cavil. As we have ruled in
a litany of cases, resort to judicial review of the decisions of the Court of Appeals under Rule 45 is confined only to errors of law.[20] The findings
of fact by the lower court are conclusive absent any palpable error or arbitrariness. [21] The Court finds no reason to depart from this principle.
Moreover, it is a long settled doctrine that findings of fact of the trial court, when affirmed by the Court of Appeals, are binding upon the Court. It
is not the function of the Supreme Court to weigh anew the evidence already passed upon by the Court of Appeals for these are deemed final and
conclusive and may not be reviewed on appeal.[22]
The sole issue that the Court has to resolve is whether or not petitioners cause of action has prescribed.
The Court of Appeals erred in applying the rules on prescription and the principle of laches because what is involved in the present case
is an express trust.
Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in another. It is a fiduciary relationship that
obliges the trustee to deal with the property for the benefit of the beneficiary. [23] Trust relations between parties may either be express or implied.
An express trust is created by the intention of the trustor or of the parties. An implied trust comes into being by operation of law.[24]
Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly or
impliedly evincing an intention to create a trust.[25] Under Article 1444 of the Civil Code, "[n]o particular words are required for the creation of an
express trust, it being sufficient that a trust is clearly intended." The Affidavit of Epifanio is in the nature of a trust agreement. Epifanio affirmed
that the lot brought in his name was co-owned by him, as one of the heirs of Jose, and his uncle Tranquilino. And by agreement, each of them has
been in possession of half of the property. Their arrangement was corroborated by the subdivision plan prepared by Engr. Bunagan and approved
by Jose P. Dans, Acting Director of Lands.
As such, prescription and laches will run only from the time the express trust is repudiated. The Court has held that for acquisitive
prescription to bar the action of the beneficiary against the trustee in an express trust for the recovery of the property held in trust 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 conclusive. [26] Respondents cannot rely on the fact that
the Torrens title was issued in the name of Epifanio and the other heirs of Jose. It has been held that a trustee who obtains a Torrens title over
property held in trust by him for another cannot repudiate the trust by relying on the registration.[27] The rule requires a clear repudiation of the trust
duly communicated to the beneficiary. The only act that can be construed as repudiation was when respondents filed the petition for reconstitution
in October 1993. And since petitioners filed their complaint in January 1995, their cause of action has not yet prescribed, laches cannot be attributed
to them.
It is hornbook doctrine that laches is a creation of equity and its application is controlled by equitable considerations. Laches cannot be used to
defeat justice or perpetrate fraud and injustice.[28] Neither should its application be used to prevent the rightful owners of a property from
recovering what has been fraudulently registered in the name of another. [29] The equitable remedy of laches is, therefore, unavailing in this case.
However, to recover the other half of the property covered by the private Calig-onan sa Panagpalit and to have it registered on the title
of the property, petitioners should have filed an action to compel[30] respondents, as heirs of the sellers in the contract, [31] to execute a public deed
of sale. A conveyance of land made in a private document does not affect its validity. Article 1358,like its forerunner Article 1280 of the Civil Code
of Spain, does not require the accomplishment of the acts or
contracts in a public instrument in order to validate the act or contract but only to insure its efficacy, [32] so that after the existence of said contract
has been admitted, the party bound may be compelled to execute the proper document. [33] But even assuming that such action was filed by
petitioners, the same had already prescribed.
It is settled that only laws existing at the time of the execution of a contract are applicable thereto and not later statutes, unless the latter
are specifically intended to have retroactive effect.[34] Consequently, it is the Old Code of Civil Procedure (Act No. 190) which applies in this case
since the Calig-onan sa Panagpalit was executed on 18 October 1939 while the New Civil Code took effect only on 30 August 1950. And section
43 of Act No. 190, like its counterpart Article 1144 of the New Civil Code, provides that action upon a written contract must be filed within ten
years.[35]
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated 30 June 2003 in CA-G.R. CV No.
65829 is REVERSED and SET ASIDE and the Decision of the Regional Trial Court of Cebu City, Branch 9 dated 23 August 1999 is
REINSTATED with MODIFICATION in petitioners are hereby DECLARED the absolute owners of one-half of Lot No. 1054 or Lot No. 1054-
A under TCT No. RT-7853.The Register of Deeds of Cebu City is hereby ORDERED to CANCEL TCT No. RT-7853 in part and issue a new
Transfer Certificate of Title to petitioners, heirs of Tranquilino Labiste, covering Lot No. 1054-A. No costs.
SO ORDERED.
DANTE O. TINGA
Associate Justice

Supreme Court
Manila
THIRD DIVISION
SPOUSES SOFRONIO SANTOS and NATIVIDAD G.R. No. 151016

SANTOS, FROILAN SANTOS, CECILIA M. MACASPAC, and
R TRANSPORT CORPORATION,
Petitioners,
Present:
- versus - YNARES-SANTIAGO, J.,

Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
HEIRS OF DOMINGA LUSTRE, namely TARCISIO NACHURA, and
MANIQUIZ, TERESITA BURGOS, FLORITA M. REYES and REYES, JJ.
LERMIE MANIQUIZ,
Respondents.
Promulgated:
August 6, 2008
x-----------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
This petition for review seeks the reversal of the Court of Appeals (CA) Decision [1] dated August 23, 2001, and Resolution
dated December 10, 2001, which denied petitioners Motion to Dismiss Civil Case No. 2115, an action for Annulment of Transfer Certificate of
Title and Deed of Absolute Sale.
The facts, as borne by the records, are as follows:
Dominga Lustre, who died on October 15, 1989, owned a residential lot which is located in San Antonio, Nueva Ecija, with an area of
390 square meters, and covered by Transfer Certificate of Title (TCT) No. NT-50384. On September 20, 1974, Dominga Lustre mortgaged the lot
to spouses Sofronio and Natividad Santos (spouses Santos) for P38,000.00.[2]
On May 16, 1976, Dominga Lustre sold the property to Natividad M. Santos for P15,000.00 through a Deed of Absolute Sale.[3] The
mortgage appears to have been canceled on March 20, 1976.[4] The cancellation of the mortgage and the sale of the property were both inscribed at
the back of TCT No. NT-50384 on April 17, 1984.
As a result of the sale, TCT No. NT-50384 was canceled and TCT No. NT-183029 was issued in the name of the
spouses Santos. Subsequently, the latter executed a Deed of Sale transferring the property to their son, Froilan M. Santos (petitioner). By virtue of
this deed, TCT No. NT-183029 was canceled and TCT No. 193973[5] issued in the name of Froilan Santos.
On April 14, 1994, Cecilia Macaspac (also a petitioner) and Tarcisio Maniquiz, both heirs of Dominga Lustre, filed with the Regional
Trial Court (RTC) of Gapan, Nueva Ecija, a Complaint for Declaration of the Inexistence of Contract, Annulment of Title, Reconveyance and
Damages[6] against Froilan M. Santos. That case was docketed as Civil Case No. 1330. Later, the plaintiffs sought the amendment of the complaint
to include Eusebio Maniquiz as plaintiff and to include a certification against forum shopping. However, the records in this case are bereft of any
information as to whether the same was allowed by the trial court.[7] We note, however, that only Cecilia Macaspac executed a Verification and
Certification against Forum Shopping[8] in that case.
According to the Amended Complaint in Civil Case No. 1330, plaintiffs Cecilia and Tarcisio are the legitimate children, while Eusebio
is the spouse of Dominga Lustre, who allegedly left them the subject property when she died on October 15, 1989. They averred that the sale of the
property to Natividad Santos was simulated, spurious or fake, and that they discovered that spouses Santos transferred the property to Froilan Santos
when the latter filed an ejectment suit against them. Thereafter, Froilan Santos, through fraud and deceit, succeeded in transferring the property. On
the mistaken belief that the sale between Dominga Lustre and Natividad Santos occurred on April 17, 1984, plaintiffs prayed that the trial court
issue judgment
1. Ordering the inexistence of sale dated April 17, 1984 between Dominga Lustre and Natividad Santos and
subsequent thereto;
2. Ordering the cancellation of TCT No. NT-193973 in favor of defendant and reconvey the same to the plaintiff;
3. Ordering the defendant to pay plaintiffs the sum of P20,000.00 as attorneys fee, P20,000.00 as moral
damages; P20,000.00 as litigation expenses; P20,000.00 as exemplary damages;
4. Ordering defendant to pay the cost of the suit;
5. General relief[s] are likewise prayed for in the premises. (Emphasis ours.)[9]
On September 12, 1994, the RTC, Branch 87, to which Civil Case No. 1330 was raffled, ordered the records of the case to be referred
to the municipal trial court for adjudication on the ground that the assessed value of the subject property was below the amount within its
jurisdiction.[10]
On May 14, 1999, while Civil Case No. 1330 was still pending, Dominga Lustres other heirs, namely, Eusebio Maniquiz, Teresita
Burgos, Tarcisio Maniquiz, Florita M. Reyes and Lermie Maniquiz filed a Complaint for Annulment of Transfer Certificate of Title and Deed of
Absolute Sale[11] against spouses Sofronio and Natividad Santos, Froilan Santos, Cecilia M. Macaspac, R Transport Corporation, and the Register
of Deeds of Cabanatuan City, with the same RTC. Cecilia Macaspac, plaintiff in Civil Case No. 1330, was impleaded as defendant because she
refused to join the other heirs as plaintiffs. The case was docketed as Civil Case No. 2115 and was raffled to Branch 34.
The complaint alleged that the spouses Santos simulated the Deed of Sale dated May 16, 1976 by forging Dominga Lustres signature;
that thereafter, the spouses Santossimulated another Deed of Sale transferring the property to Froilan Santos, which led to the issuance of TCT No.
193973 in his name; that this title became the basis of Froilans ejectment suit against them; and that R Transport Corporation (also a petitioner),
was claiming that it bought the property from Froilan but there was no evidence to prove such claim. According to the plaintiffs (herein respondents),
they had been residing in the property since birth and the house standing on the lot was built by their ancestors. They posited that the transferees of
the property could not be considered as buyers in good faith. The complaint prayed that judgment be rendered:
a. Annulling and declaring null and void the Deed of Absolute Sale, Annex C hereof; that between spouses Santos and
their son Froilan; and that purportedly between defendant Froilan and defendant corporation;
b. Annulling and declaring null and void Transfer Certificate of Title No. NT-183029 appearing to be in the name of
defendant spouses; TCT No. NT-193973 in the name of defendant Froilan M. Santos and Transfer Certificate of Title,
if any, in the name of defendant corporation;
c. Reinstating Transfer Certificate of Title No. NT-50384 in the name of Dominga Lustre and directing the Register of
Deeds to do so or to issue [a] new one in the name of the deceased Dominga Lustre and canceling all titles mentioned
in the immediately preceding paragraph which [were] made to cancel Lustres title;
d. Ordering defendants, jointly and severally, to pay plaintiffs the following:
1.) Moral damages of P200,000.00;

2.) Exemplary damages of P100,000.00;
3.) Attorneys fee of P50,000.00, plus cost of suit.
[12]
Plaintiffs further pray for such other affirmative reliefs as are deemed just and equitable in the premises.
Alleging that the plaintiffs right of action for annulment of the Deed of Sale and TCT Nos. 183029 and 193973 had long prescribed and
was barred by laches, petitioners filed a Motion to Dismiss Civil Case No. 2115. [13] They later filed an Omnibus/Supplemental Motion to Dismiss
on the ground of litis pendentia.[14]
On January 11, 2000, the RTC denied the Motion to Dismiss as well as the Supplemental Motion to Dismiss for lack of merit. [15] On April
5, 2000, the RTC denied the Joint Motion for Reconsideration filed by petitioners. [16]
They then filed a petition for certiorari with the Court of Appeals (CA), assailing the denial of their motion to dismiss. On August 23,
2001, the CA dismissed the petition for lack of merit based on its finding that the RTC did not commit grave abuse of discretion in denying the
motion to dismiss.[17] On December 10, 2001, the CA denied petitioners motion for reconsideration. [18]
In the assailed decision, the CA pronounced that the respondents were not guilty of forum shopping. There was no identity of parties
because Cecilia Macaspac, who was a plaintiff in Civil Case No. 1330, was a defendant in Civil Case No. 2115; and there was only one defendant
in Civil Case No. 1330, while there were several additional defendants in Civil Case No. 2115. Moreover, the reliefs demanded in the two cases
differed. In Civil Case No. 1330, plaintiffs were seeking the declaration of the inexistence of a sale dated April 17, 1984, cancellation of Froilan
M. Santos certificate of title, and the reconveyance of the property to plaintiffs. On the other hand, plaintiffs in Civil Case No. 2115 were praying
for the annulment of the Deed of Absolute Sale dated May 16, 1976, cancellation of TCT No. NT-183029 and the succeeding TCTs, and
reinstatement of TCT No. NT-50384 in the name of Dominga Lustre.[19]
On the issue of prescription and laches, the CA declared that an action for the declaration of the inexistence of a contract does not
prescribe, and laches could not have set in since there was no unreasonable delay in the filing of the case. [20]
In this petition for review, the sole issue submitted for resolution is whether the RTC committed grave abuse of discretion in not
dismissing the case based on forum shopping and prescription or laches.[21]
The petition has no merit. The RTC did not commit grave abuse of discretion in denying petitioners motion to dismiss.
Forum shopping exists when the elements of litis pendentia are present or when a final judgment in one case will amount to res
judicata in the other.[22] Among its elements are identity of the parties, identity of the subject matter and identity of the causes of action in the two
cases.[23]
The dispute in this case centers on whether there exist identity of causes of action and identity of parties between Civil Case No. 1330
and Civil Case No. 2115.
Concededly, the causes of action in Civil Case No. 1330 and Civil Case No. 2115 are identical. There is identity of causes of action if
the same evidence needed in the first case will sustain the second action, and this principle applies even if the reliefs sought in the two cases are
different.[24] Without a doubt, the same evidence will be necessary to sustain the causes of action in these two cases which are substantially based
on the same series of transactions. In fact, similar reliefs are prayed for in the two cases. Both complaints ultimately seek the cancellation of the
title of the alleged transferees and the recovery of the subject property.
Despite this similarity, however, we hold that respondents are not guilty of forum shopping because the element of identity of parties is
not present.
In insisting that the parties are identical, petitioners stress that all the plaintiffs are heirs of Dominga Lustre, while the defendants are
past and present holders of the certificates of title covering the subject property. They argue that Cecilia Macaspacs being a defendant in the second
case does not change whatever interest she has in the former case, considering that she is an indispensable party in both cases. They posit that
additional parties will not prevent the application of the rule on res judicata.[25]
While we agree with the CA that there is no identity of parties in the two cases, we do not agree with the rationale behind its
conclusion. To recall, the CA ratiocinated that there was no identity of parties because Cecilia Macaspac, while a plaintiff in Civil Case No. 1330,
is a defendant in Civil Case No. 2115, and there are several additional defendants in Civil Case No. 2115.
The CA appears to have overlooked the principle that what is required is only substantial, and not absolute, identity of parties. There is
substantial identity of parties when there is a community of interest between a party in the first case and a party in the second case, even if the latter
was not impleaded in the first case.[26] Moreover, the fact that the positions of the parties are reversed, i.e., the plaintiffs in the first case are the
defendants in the second case, or vice versa, does not negate the identity of parties for purposes of determining whether the case is dismissible on
the ground of litis pendentia.[27]
Following these legal principles, it appears that there is identity of parties in the two cases. However, a closer look at the facts and a
deeper understanding of pertinent jurisprudence will lead to a different conclusion: there is actually no identity of parties because the plaintiff in
Civil Case No. 1330 does not, in fact, share a common interest with the plaintiffs in Civil Case No. 2115.
As pointed out by petitioners, plaintiffs in both cases are the heirs of Dominga Lustre; they are therefore co-owners of the
property. However, the fact of being a co-owner does not necessarily mean that a plaintiff is acting for the benefit of the co-ownership when he
files an action respecting the co-owned property. Co-owners are not parties inter sein relation to the property owned in common. The test is whether
the additional party, the co-owner in this case, acts in the same capacity or is in privity with the parties in the former action. [28]
Notably, plaintiff Cecilia Macaspac in Civil Case No. 1330 filed the complaint seeking the reconveyance of the property to her, and not
to Dominga Lustre or her heirs. This is a clear act of repudiation of the co-ownership which would negate a conclusion that she acted in privity
with the other heirs or that she filed the complaint in behalf of the co-ownership. In contrast, respondents were evidently acting for the benefit of
the co-ownership when they filed the complaint in Civil Case No. 2115 wherein they prayed that TCT No. NT-50384 in the name of Dominga
Lustre be reinstated, or a new certificate of title be issued in her name.
The petitioners and respondents have squabbled over whether the additional parties in the second case are indispensable or necessary
parties on the assumption that the proper characterization of the parties will have a bearing on the determination of the existence of identity of
parties. In support of their position, the petitioners cite Juan v. Go Cotay[29] when they theorize that there is still identity of parties although in the
second action there is one party who was not joined in the former action, if it appears that such party is not a necessary party either in the first or
in the second action.[30]
We note, however, that the party who was not impleaded in Go Cotay was, technically speaking, a necessary party (as opposed to an
indispensable party as defined under the Rules of Court), being the plaintiffs wife who also had an interest in the case. Possibly, and, indeed, it
seems probable that the petitioners may not have used the term necessary party in the strict legal sense. They could really have been referring to an
indispensable party. In challenging petitioners allegation, respondents obviously understood the statement as referring to an indispensable
party. They were, therefore, quick to point out that the additional plaintiffs in Civil Case No. 2115 are indispensable parties, being co-owners of
the property.[31]
By this debate, the parties have only muddled the issue. The determination of whether there is identity of parties rests on the commonality
of the parties interest, regardless of whether they are indispensable parties or not. The issue of whether the additional parties are indispensable
parties or not acquires real significance only when considering the validity of the judgment that will be rendered in the earlier case. This is so,
because if the additional parties are indispensable parties, then no valid judgment can be rendered against them in the earlier case in which they did
not participate, and this will foreclose the application of res judicata which requires the existence of a final judgment.
Without question, a co-owner may bring an action to recover the co-owned property without the necessity of joining all the other co-
owners as co-plaintiffs because the suit is deemed to be instituted for the benefit of all. In such case, the other heirs are merely necessary parties.
Parenthetically, the inclusion among the defendants of Cecilia Macaspac, who refused to join the other heirs as plaintiffs in Civil Case No. 2115,
was not actually necessary.
However, if the action is for the benefit of the plaintiff alone, as in Civil Case No. 1330, the action will not prosper unless he impleads
the other co-owners who are indispensable parties.[32] The absence of an indispensable party renders all subsequent actions of the court null and
void for want of authority to act, not only as to the absent parties but even as to those present.[33] The trial court does not acquire jurisdiction over
the indispensable parties who are not impleaded in the case, and judgment thereon cannot be valid and binding against them. A decision that is null
and void for want of jurisdiction on the part of the trial court is not a decision in contemplation of law; hence, it can never become final and
executory.[34]
Worth mentioning is the doctrine that any adverse ruling in the earlier case will not, in any way, prejudice the heirs who did not join,
even if such case was actually filed in behalf of all the co-owners. In fact, if an action for recovery of property is dismissed, a subsequent action by
a co-heir who did not join the earlier case should not be barred by prior judgment.[35] Any judgment of the court in favor of the co-owner will benefit
the others, but if the judgment is adverse, the same cannot prejudice the rights of the unimpleaded co-owners.[36]
Applying these principles to the instant case, we rule that there is no identity of parties and thus, the second action is not barred by litis
pendentia.
On the issue of prescription and laches, we fully agree with the CA. The action for reconveyance on the ground that the certificate of
title was obtained by means of a fictitious deed of sale is virtually an action for the declaration of its nullity, which does not prescribe.[37] Moreover,
a person acquiring property through fraud becomes, by operation of law, a trustee of an implied trust for the benefit of the real owner of the
property. An action for reconveyance based on an implied trust prescribes in ten years. And in such case, the prescriptive period applies only if
there is an actual need to reconvey the property as when the plaintiff is not in possession of the property. Otherwise, if plaintiff is in possession of
the property, prescription does not commence to run against him. Thus, when an action for reconveyance is nonetheless filed, it would be in the
nature of a suit for quieting of title, an action that is imprescriptible.[38]
It follows then that the respondents present action should not be barred by laches. Laches is a doctrine in equity, which may be used
only in the absence of, and never against, statutory law. Obviously, it cannot be set up to resist the enforcement of an imprescriptible legal right. [39]
Finally, it is true that an action for reconveyance will not prosper when the property sought to be reconveyed is in the hands of an
innocent purchaser for value. In this case, however, the protection of the rights of any alleged innocent purchaser is a matter that should be threshed
out in the main case and not in these proceedings.
WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated August 23, 2001, and Resolution
dated December 10, 2001, are AFFIRMED.
SO ORDERED.
SECOND DIVISION
NATIVIDAD BAUTISTA-BORJA, G.R. No. 136197

Petitioner,
Present:
- versus - QUISUMBING, J., Chairperson,

CARPIO MORALES,
TINGA,
ILUMINADA BAUTISTA, AUREA BAUTISTA-RUIZ, NACHURA,** and
CLARITA BAUTISTA, FLORENTINO BAUTISTA, BRION, JJ.
DIOSDADO BAUTISTA, FRANCISCO BAUTISTA II,
FRANCISCO BAUTISTA III, DANILO BAUTISTA,
LUZVIMINDA BAUTISTA, ARTURO BAUTISTA, LUZ
BAUTISTA and PAULINO BAUTISTA,
Respondents.
Promulgated:
December 10, 2008
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO MORALES, J.:

The spouses Pablo Bautista (Pablo) and Segundina Tadiaman Bautista (spouses Bautista) died intestate in July 1980 and April 1990,
respectively. Pablo was the registered owner of several agricultural lands situated in Ramon, Isabela totaling around 30 hectares and in Llanera,
Nueva Ecija
totalling 17 hectares. They had five children, namely: respondents Iluminada and Aurea, Francisco (who died in 1981), Simplicio (who died in
1986), and Natividad (petitioner).
Francisco was survived by six children, namely: respondents Clarita, Florentino, Diosdado, Francisco II, and Francisco III, and the now
deceased Arsenio, all surnamed Bautista.
Simplicio was survived by five children, namely: respondents Danilo, Lorna, Luzviminda, Luz, and Paulino, all surnamed Bautista.
By petitioners claim, respondents, through fraud and deception, convinced her to take possession and cultivate the above-stated parcels
of land which would eventually be partitioned; and that unknown to her, however, the titles to the lands were cancelled by virtue of Deeds of Sale
purportedly executed on different dates by her parents in favor of her siblings Simplicio and Francisco, a fact which she came to know about only
in 1994.
Petitioner thus filed on June 9, 1994 a complaint[1] before the Regional Trial Court (RTC) of Santiago City, Isabela, docketed as Civil
Case No. 2084 for Annulment of the Deeds of Sale and/or Partition of Properties alleging, inter alia:
xxxx
13. That the aforesaid deeds of sales are either forgeries or falsifications or are all fictitious documents, v[oi]d
and ineffectual conferring no valid and legal right to the transferees for the reason that at the time of their alleged executions
the vendors were almost totally bereft of understanding, reason and perception and especially in the case of Pablo Bautista,
was so gravely ill, seriously bedridden that he could not have gone and appeared before the Notary Public for the execution
of the questionable documents and/or could not have understood the significance and legal effect of the same;
14. That there was totally no consideration which passed between the defendants and the alleged vendors during and at the
time of the execution of the several deeds of sales which were all done to prejudice and deprived the plaintiff of her lawful
share in the inheritance of the properties left by their deceased parents; (Underscoring supplied)
x x x x[2]
Petitioner accordingly prayed as follows:
1. Ordering the partition of the properties of spouses Pablo Bautista and Segundina Tadiaman Bautista;
2. Declaring as null and void and without any force and effect the deed of sales and/or other documents executed to cancel
and effect the transfer of the properties of Pablo Bautista and his wife to the defendants;
x x x x[3] (Underscoring supplied)
By Order of September 27, 1994, Branch 35 of the Santiago RTC, acting on the Motion to Dismiss [4] filed by respondents which was
anchored on lack of cause of action, prescription and laches, dismissed the complaint. It held that petitioners complaint, though denominated as one
for annulment of sale, was in fact based on an obligation conferred by law, specifically an implied trust, hence, pursuant to Articles 1456 [5] and
1144[6] of the Civil Code, it had prescribed, the same having been filed 20 years after the implied trust commenced.
In another vein, the trial court held that petitioners cause of action had prescribed as actions for reconveyance based on implied
trust prescribe in 10 years, and that laches had set in.
Petitioner elevated the case to the Court of Appeals, contending that the nature of her complaint was one for annulment of void contracts,
hence, imprescriptible; that laches does not apply, following Palmera v. Civil Service Commission[7] which held that x x x where a defendant or
those claiming under him recognized or directly or impliedly acknowledged the existence of the right asserted by a plaintiff, such recognition may
be invoked as a valid excuse for plaintiffs delay in seeking to enforce such right; that, contrary to the trial courts ruling, her cause of action had not
prescribed, as an action to compel the trustee to convey the property registered in his name for the benefit of the cestui que trust does not prescribe;
and that the prescriptive period commences to run only when the trustee repudiates the trust through unequivocal acts made known to the cestui
que trust --- an element not satisfactorily shown in the instant case.
By Decision of October 30, 1998,[8] the appellate court affirmed the trial courts ruling, citing Salvatierra v. Court of Appeals[9] which
held that an action for reconveyance of registered land based on implied trust, prescribes in ten (10) years even if the decree of registration is no
longer open to review.
The appellate court went on to hold that petitioner was guilty of laches, and assuming that the transfer of the properties in favor of
respondents was procured through fraud, still, her action should have been filed within four years from the discovery of the fraud.
Hence, this petition, petitioner insisting that since her cause of action is for annulment or declaration of inexistent contracts, the
provisions on void contracts, specifically Arts. 1390[10] and 1391[11] of the Civil Code, apply, hence, her cause of action had not prescribed, for
under Article 1410 of the Civil Code, the action or defense for the declaration of the inexistence of a contract does not prescribe.
Further, petitioner contends that even if there be implied trust, her cause of action has not prescribed because it is anchored on the
annulment of a void or inexistent contract. Corollarily, she argues that if at all, a resulting trust and not a constructive trust was established in the
case at bar, considering that she only gave her consent to respondents upon their representation that they were going to take possession and cultivate
the properties with the understanding that they would later partition them among the legal heirs. She thus contends that the rule on imprescriptibility
of actions to recover property held in trust apply to resulting trusts, as in this case, so long as the trustee has not repudiated the trust.
Petitioner furthermore alleges that the continued assurances of respondents that partition proceedings were just dragging on, despite
their having already transferred the titles in their names, is a clear indication that they have not repudiated the resulting trust, the requisites for
which, as enunciated in Huang v. Court of Appeals,[12] not having been met. And she maintains that while the registration of land under
the Torrens system operates as a constructive notice to the whole world, it cannot be construed as being equivalent to a notice of repudiation, for
the same cannot be used as a shield for fraud.
On laches, petitioner cites Palmera v. CSC[13] holding that laches will not be taken against a plaintiff where the defendant is shown to
have promised from time to time to grant the relief sought.
Finally, in support of her contention that her parents never executed the questioned Deed of Sale, petitioner submitted, for the Courts
consideration, the Affidavits[14] of her sisters, herein respondents Iluminada and Aurea, averring that, inter alia, during their lifetime, their parents
could not have sold the properties to their brothers Simplicio and Francisco and signed the deeds because they were illiterate; that they did not
engage the services of Atty. Edmar Cabucana, respondents counsel, to represent them in the case for they had no objection to the legal claim of
their sister-herein petitioner Natividad.
From the earlier quoted-allegations in petitioners complaint, it is clear that her action is one for declaration of the nullity of the Deeds
of Sale which she claims to be either falsified ─ because at the time of the execution thereof, Pablo was already gravely ill and bedridden, hence he
could not have gone and appeared before the Notary Public, much less understood the significance and legal deeds ─ and/or because there was no
consideration therefor. Clearly, following Article 1410 of the Civil Code, petitioners action is imprescriptible.
But even if petitioners complaint were to be taken as one for reconveyance, given that it is based on an alleged void contract, it is just
the same as imprescriptible.
xxxx
Thus, if the trial court finds that the deed of sale is void, then the action for the
declaration of the contracts nullity is imprescriptible. Indeed, the Court has held in a number of
cases that an action for reconveyance of property based on a void contract does not
prescribe. However, if the trial court finds that the deed of sale is merely voidable, then the
action would have already prescribed.[15] (Emphasis and underscoring supplied)
At all events, since the complaint on its face does not indicate that the action has prescribed, Pineda v. Heirs of Eliseo
Guevara[16] instructs:
An allegation of prescription can effectively be used in a motion to dismiss only when the complaint on its
face shows that indeed the action has already prescribed. Otherwise, the issue of prescription is one involving evidentiary
matters requiring a full-blown trial on the merits and cannot be determined in a mere motion to dismiss. (Emphasis and
underscoring supplied)
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated October 30, 1998 affirming the Order
dated September 27, 1994 of the Regional Trial Court, Branch 35, Santiago City, Isabela, dismissing Civil Case No. 2084
is REVERSED and SET ASIDE. The case is REMANDED to the trial court which is DIRECTED to REINSTATE petitioners complaint to its
docket and conduct appropriate proceedings thereon with dispatch.
SO ORDERED.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 94114 June 19, 1991
FELICISIMA PINO, petitioner,
vs.
COURT OF APPEALS, DEMETRIA GAFFUD, ROMUALDO GAFFUD, ADOLFO GAFFUD & RAYMUNDO
GAFFUD, respondents.
Ramon A. Barcelona for petitioner.
Eligio A. Labog for private respondents.
PARAS, J.:
The decision of respondent Court of Appeals in CA-G.R. CV No. 21457 which affirmed in toto, the decision of the Regional Trial
Court of Echague, Isabela, Branch 24 in Civil Case No. 24-0190, the dispositive portion of which latter decision reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Declaring the Deed of Absolute Sale made by Rafaela Donato Vda. de Gaffud in favor of the defendant on June 10,
1970 over Lot 6-B of the subdivision plan (LRC) Psd-68395 being a portion of Lot 6 of the Echague Cadastre LRC Cad.
Rec. No. 1063, containing an area of 11,095 square meters, more or less, null and void insofar as the shares of Cicero
Gaffud and Raymundo Gaffud are concerned, which is one-half-thereof, or approximately 5,547.5 square meters, more or
less;
2. Ordering the cancellation of TCT No. 49380 in the name of the defendant;
3. Ordering the defendant to reconvey one-half of the property subject of this proceeding to the plaintiffs within ten (10)
days from finality of this Decision, failing which the same shall be done at the cost of the defendant by the Clerk of Court
and such act, when so done, shall have like effect as if done by her;
4. Ordering the defendant to pay the plaintiffs P5,000.00 by way of attorney's fees.
No costs.
SO ORDERED. (pp. 20-21, Rollo)
is now being assailed in the instant petition for certiorari upon the ground —
THAT RESPONDENT COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OF
JURISDICTION PETITION —
I
WHEN IT ERRED IN CONCLUDING THAT THE PETITIONER IS NOT AN INNOCENT PURCHASER OF THE SUBJECT
PROPERTY;
II
WHEN IT ERRED IN CONCLUDING THAT PRESCRIPTION WOULD NOT LIE TO BAR PRIVATE RESPONDENTS'
ACTION; and
III
WHEN IT ERRED IN NOT DECLARING AS VALID THE TRANSFER OF THE SUBJECT PROPERTY FROM THE
ORIGINAL REGISTERED OWNERS TO RAFAELA DONATO;
The pertinent background facts as found by the trial court and adopted by the respondent Court of Appeals in its now assailed
decision are the following:
The property subject of the controversy is a parcel of land situated in Echague, Isabela, identified as Lot 6-B of the Subdivision Plan
(LRC) Psd-68395, being a portion of Lot 6 containing an area of 11,095 square meters, more or less.
Lot 6 has an area of 12,799 square meters, more or less. It was acquired in 1924 by the spouses Juan Gaffud and Rafaela Donato.
Juan Gaffud died in 1936. On January 11, 1938, Lot 6 was originally registered in the Registration Book of the Office of the Register
of Deeds of Isabela, under Original Certificate of Title No. 4340 pursuant to Decree No. 650247 issued under L.R.C. Cadastral
Record No. 1063 in the names of Rafaela Donato, Raymundo Gaffud and Cicero Gaffud (Raymundo and Cicero are the sons of the
spouses) as co-owners thereof in fee simple subject to such of the incumbrances mentioned in Section 39 of said act and to Section
4, Rule 74, Rules of Court. The said lot was sold to Rafaela Donato through a Deed of Transfer which cancelled O.C.T. No. 4340
and in lieu thereof T.C.T. No. T-30407 was issued in the name of Rafaela Donato.
On February 25, 1967, Rafaela Donato sold a portion of said Lot 6, consisting of 1,704 sq. m., more or less in favor of Fortunato
Pascua. The aforesaid sale caused the subdivision of the said Lot 6 into Lot 6-A containing an area of 1,704 sq. m., more or less,
and Lot 6-B containing an area of 11,095 sq. m., more or less, under Subdivision Plan (LRC) Psd-68395.
Upon registration of said sale in favor of Fortunato Pascua, Transfer Certificate of Title No. T-30407 was cancelled, and in lieu
thereof, Transfer Certificate of Title No. T-32683 was issued in the name of Rafaela Donato on March 2, 1967 covering the land
designated as Lot 6-B of the subdivision Plan (LRC) Psd-68395, being a portion of Lot 6 of the Echague Cadastre, LRC Cad. Rec.
No. 1063, containing an area of 11,095 sq.m., more or less, which is the subject land. (RTC Decision dated November 15, 1988, p.
310 Record).
On June 10, 1970 Rafaela Donato sold to petitioner Felicisima Pino said Lot 6-B in consideration of P10,000.00 as evidenced by the
Deed of Absolute Sale she executed in favor of petitioner Felicisima Pino which was notarized by her lawyer, Atty. Concepcion
Tagudin (Exh. 1).
Rafaela Donato undertook to register the Deed of Absolute Sale with the Register of Deeds of Isabela and on July 13, 1970 the sale
was inscribed therein under Entry No. 9286 and Transfer Certificate of Title No. T-49380 was issued in the name of Felicisima Pino.
On September 30, 1980, Cicero Gaffud died survived by his wife Demetria Gaffud and sons Romualdo Gaffud and Adolfo Gaffud
who are the private respondents herein.
On March 9, 1982, private respondents filed a complaint for nullity of sale and reconveyance against petitioner — Felicisima Pino.
Incidentally, the sale of the other portion (Lot A) of the same lot to Fortunato Pascua is not assailed by private respondents.
During the pendency of the case before the trial court, Rafaela Donato (who was not a party to the case) died on November her 26,
1982.
On November 5, 1988, the trial court rendered its decision (the dispositive portion of which was earlier quoted in this decision) which
was affirmed on appeal by the Court of Appellant in its now assailed decision, the pertinent portion of which reads:
The defense of an innocent purchaser for value would be of no help to appellant in the absence of the document on
extrajudicial partition indicating that the conjugal property has been adjudicated to Rafaela Donato Vda. de Gaffud and
which would be the source of her authority in transferring the subject property to defendant. The sensible thing to do by
any prudent person is to examine not only the certificate of title of said property but also all the factual circumstances
necessary for him to determine if there are any flaw in vendor's capacity to transfer the land.
Nor would prescription of action lie. An ordinary action for reconveyance based on fraud prescribes in four (4) years
(Lanera v. Lopos, 106 Phil. 70). Appellant was a party to the alleged fraudulent transfer of the subject property,
consequently, appellees have four (4) years to file an action to annul the deed of sale from the discovery of the fraudulent
act. In the case at bar, appellees learned about the fraud on July 6, 1981 when they received a letter from the appellant
(Exhibit D). The filing, therefore, of the complaint on March 9, 1982 (p. 1. Rec.) was within the prescriptive period. (pp. 62-
63, Rollo)
In elevating the judgment of the respondent Court of Appeals to Us for review petitioner prays that the appealed decision be
reversed and another one entered declaring as valid (1) the sale of the subject property executed on June 10, 1970 in favor of
petitioner Felicisima Pino by Rafaela Donato Vda. de Gaffud and (2) the Transfer Certificate of Title No. T-49380 issued in the name
of petitioner by the Register of Deeds of Isabela on July 13, 1970 upon the grounds —
(a) that private respondents has (sic) no cause of action against petitioner because she is an innocent purchaser for value
of the subject property;
(b) that the action of private respondents was already barred by prescription when it was filed; and
(c) that the transfer of the subject property from the original registered owners to Rafaela Donato was valid. (pp. 61-
62, Rollo)
The rule applicable to this controversy is well-settled. Where the certificate of title is in the name of the vendor when the land is sold,
the vendee for value has the right to rely on what appears on the certificate of title. In the absence of anything to excite or arouse
suspicion, said vendee is under no obligation to look beyond the certificate and investigate the title of the vendor appearing on the
face of said certificate. The rationale for the rule is stated thus:
The main purpose of the Torrens' System is to avoid possible conflicts of title to real estate and to facilitate transactions
relative thereto by giving the public the right to rely upon the face of a Torrens Certificate of Title and to dispense with the
need of inquiring further, except when the party concerned had actual knowledge of facts and circumstances that should
impel a reasonably cautious man to make such further inquiry. (Pascua v. Capuyoc, 77 SCRA 78) Thus, where innocent
third persons relying on the correctness of the certificate thus issued, acquire tights over the property, the court cannot
disregard such rights. (Director of Land v. Abache, et al., 73 Phil. 606)
In the case at bar, the evidence on record discloses that when petitioner purchased the subject property on June 10, 1970, the title
thereto (TCT No. T-32683) was in the name of her vendor Rafaela Donato alone. The said TCT No. T-32683 was shown to
petitioner which shows on its face the following:
is registered in accordance with the provisions of the Land Registration Act in the name of —
RAFAELA DONATO, Filipino, of legal age, widow and with residence and postal address at Centro, Echague, Isabela,
Philippines as owner thereof in fee simple, subject to such of the encumbrances mentioned in Section 39 of said Act as
may be subsisting, and to Section 4, Rule 74, of the Rules of Court. (Ex. A, p. 169, Record)
The lien imposed by Section 4, Rule 74, Rules of Court appears as cancelled on April 8, 1969 under the following entry:
Entry No. 2090 –– Petition for cancellation of Sec. 4 Rule 74 of the
D-340; P-75-1 Rules of Court executed by Rafaela D.Vda. de
B-4; S-1969 Gaffud. Hence, by virtue of which the lien appea-
R.M. Angubong, ring on the face of this title is now cancelled.
Notary Public
Date of Instrument — March 11, 1969
Date of Inscription — April 2, 1969
Time: 12:30 p.m.
(Sgd.) ANASTACIO J. PASCUA
ANASTACIO J. PASCUA
Deputy Register of Deeds V
(Emphasis supplied) (p. 15, Rollo)
Petitioner was advised by her lawyers that she could proceed to buy the property because the same was registered in the name of
the vendor. Thus, on pp. 13 & 14 of the Transcript of Stenographic Notes of the hearing of December 12, 1986, petitioner testified
as follows:
Atty. Mallabo:
Q Before you brought this property madam witness, were you shown a copy of the title of Rafaela Donato vda. de Gaffud
on the property?
A Yes, sir, she showed me the title. And I saw that the title was in her name.
Q When the offer was made to you and the title was shown to you, do you remember if you have done anything?
A Yes, sir, before I bought the property, I showed the documents she bought to me to our lawyer, Custodia Villalva and
Concepcion Tagudin.
Q Why did you show them the title Madam witness?
A To be sure that the title does not have any encumbrance and because I do not know anything about legal matters.
Q What did they advise you?
A Yes, Okey, I can proceed in buying the property, the title was registered in her name, it was her personal property. (pp.
15-16, Rollo)
In the case of Maguiling v. Umadhay, (33 SCRA 99, 103) this Court held:
However, while the Umadhay spouses cannot rely on the title, the same not being in the name of their grantor, respondent
Crisanta S. Gumban stands on a different footing altogether. At the time she purchased the land the title thereto was
already in the name of her vendors (T.C.T, 15522). She had the right to rely on what appeared on the face of said title.
There is nothing in the record to indicate that she knew of any unregistered claims to or equities in the land pertaining to
other persons, such as that of herein petitioner, or of any other circumstances which should put her on guard and cause
her to inquire behind the certificate. According to the Court of Appeals she took all the necessary precautions to ascertain
the true ownership of the property, having engaged the services of a lawyer for the specific purpose and, it was only after
said counsel had assured her that everything was in order did she make the final arrangements to purchase the property.
The appellate court's conclusion that respondent Crisanta S. Gumban was a purchaser in good faith and for value is
correct, and the title she has thereof acquired is good and indefeasible.
Petitioner paid the sum of P10,000,00 in consideration of the sale which is fair and reasonable considering that in 1967 Fortunato
Pascua paid the sum of P390.00 for the portion of the land consisting of 1,704 square meters. (Exhs. 1 and 5)
The court a quo, however, ruled and this was sustained by respondent Court of Appeals that petitioner was not an innocent
purchaser.
The defense of an innocent purchaser for value could be of no help to appellant in the absence of the document on extra-
judicial partition indicating that the conjugal property has been adjudicated to Rafaela Donato Vda. de Gaffud and which
would be the source of her authority in transferring the subject property to defendant. The sensible thing to do by any
prudent person is to examine not only the certificate of title of said property but also all the factual circumstances
necessary for him to determine if there are any flaws in vendor's capacity to transfer the land. (p. 10, Rollo)
We do not find any evidence in the record that would sustain such a finding. The extra-judicial partition adverted to in said ruling was
executed by the heirs of Juan Gaffud prior to, and as the basis for, the issuance of the Original Certificate of Title No. 4340 in the
names of the heirs of Juan Gaffud, as testified to by witness Demetria Gaffud in this wise:
Q Were you able to read the title that was kept by your brother in law?
A Yes, sir.
Q Who was the registered owner?
A Rafaela Donato, Raymundo Gaffud and Cicero Gaffud, co-owner.
Q In other words, the title you read appears that the owners were Raymundo, Cicero and Rafaela?
A Yes, sir.
Q Do you know what a title is ?
A Yes, it is thick.
Q You said that the property was bought by Juan Gaffud and Rafaela Gaffud, how come that there is no name Juan
Gaffud in the title?
A Because he was already dead when I got married.
Q Do you have a knowledge how the title come to have the name of Raymundo, Rafaela and Cicero?
A Yes, sir. (p. 66, Rollo)
The extra-judicial settlement, upon which was based the lien imposed by Section 4, Rule 74, Rules of Court, was executed after the
death of Juan Gaffud in 1936 but before the issuance of the original title on January 11, 1938 so that the title would be issued in the
names of the heirs of Juan Gaffud, namely: Rafaela Donato, Raymundo Gaffud and Cicero Gaffud.
This conclusion is supported (a) by the fact that the subject property was registered only on January 11, 1938, which is around two
(2) years after the death of Juan Gaffud in 1936, and therefore the title could not have been issued in the name of Juan Gaffud; (b)
by the fact that the lien imposed by Section 4, Rule 74, Rules of Court was inscribed on the face of the title itself and was not
entered on the Memorandum of Encumbrances as were done with the mortgages and their releases which were inscribed under
their Entry Numbers on the page for Memorandum of Encumbrances and (c) by the fact that the Original Certificate of Title was
issued in the names of the heirs of Juan Gaffud.
The extra-judicial settlement, therefore, has no bearing on whether or not there was fraud in the transfer of the subject property to
Rafaela Donato.
On the other hand, it was a Deed of Transfer which transferred the subject property from the original owners to Rafaela Donato as
stated in Exhibit 3 which is the petition to cancel the conditions imposed by Section 4, Rule 74, Rules of Court, to wit:
That since the time of the execution of the Deed of transfer from the original owners to herein petitioner in 1967, and also
since the time of the registration of the said transfer at Register of Deeds of Isabela — last March 2, 1967, — more than
two (2) years have already elapsed;
That from the time of the Deed of Transfer and within the period of two years thereafter, NO CLAIM WHATSOEVER has
been filed against the herein petitioner with respect to the property thus sold to her . (p. 67, Rollo)
Even granting that the extra-judicial settlement was the document which transferred the subject property from the original owners to
Rafaela Donato the non-production thereof (private respondents should have presented it, not petitioner) does not prove that there
was fraud committed in its execution and neither does it prove that petitioner was a party thereto. There was no allegation, and
much less any evidence, that the transfer of the subject property from the original owners to Rafaela Donato was fraudulent.
What private respondents allege as fraudulent was the extra-judicial settlement of the estate of Juan Gaffud. But it has been shown
that this settlement was not the basis of the transfer of the subject property to Rafaela Donato, petitioner's vendor.
That petitioner is an innocent purchaser for value is within the scope of established jurisprudence.
The decision of the lower court would set at naught the settled doctrine that the holder of a certificate of title who acquired
the property covered by the title in good faith and for value can rest assured that his title is perfect and incontrovertible.
(Benin v. Tuason, 57 SCRA 531, 581)
xxx xxx xxx
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 (Ariola v. Gomez dela Serna, 14 Phil. 627). Good
faith, while it is always presumed in the absence of proof to the contrary, requires a well-founded belief that the person
from whom title was received by himself the owner of the land, with the right to convey it (Santiago v. Cruz, 19 Phil. 148).
There is good faith where there is an honest intention to abstain from taking any unconscientious advantage from another
(Fule v. 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 (petitioner in this case), in
good faith relied on the certificate of title in the name of Fe S. Duran (Rafaela Donato in this case) and . . . "even on the
supposition that the sale was void, the general rules 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. (Duran v. Intermediate Appellate Court, 138 SCRA
489, 494).
xxx xxx xxx
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 . . . (Duran v. Intermediate Appellate Court, 138 SCRA 489, 494-495). (pp. 68-70, Rollo)
In the case of Centeno v. Court of Appeals (139 SCRA 545, 555) the same rule was observed by this Court when it ruled —
. . . Well settled is the rule that all persons dealing with property covered by torrens certificate of title are not required to go
beyond what appears on the face of the title. When 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 or any hidden defect or inchoate right that may subsequently defeat his right
thereto. (William Anderson v. Garcia, 64 Phil. 506; Fule v. Legare, 7 SCRA 351). (p. 71, Rollo)
Petitioner being an innocent purchaser for value, private respondents will have no cause of action against her. "The issue alone that
petitioner is a purchase in good faith and for value sufficiently constitutes a bar to the complaint of private respondents . . ."(Medina
v. Chanco, 117 SCRA 201, 205).
If an action for reconveyance based on constructive trust cannot reach an innocent purchaser for value, the remedy of the
defrauded party is to bring an action for damages against those who caused the fraud or were instrumental in depriving him of the
property. And it is now well-settled that such action prescribes in ten years from the issuance of the Torrens Title over the property.
(Armerol v. Bagumbaran, 154 SCRA 396, 407; Caro v. Court of Appeals, 180 SCRA 401, 407; Walstron v. Mapa, Jr., 181 SCRA
431, 442).
Transfer Certificate of Title No. T-32683 was issued in the name of Rafaela Donato on March 2, 1967. The present action for
reconveyance was filed only on March 9, 1982. Clearly then, the action has already prescribed because it was filed fifteen (15)
years after the issuance of TCT No. T-32683. Even if the period were to be reckoned from the registration of the deed of absolute
sale in favor of petitioner on July 13, 1970, which is also the date of the issuance of Transfer Certificate of Title No. T-49380 in the
name of petitioner, the action of private respondents had already prescribed because a period of eleven (11) years, seven (7)
months and twenty-six (26) days has elapsed from July 13, 1910 to March 9, 1982.
WHEREFORE, the petition is GRANTED; the assailed decision of the Court of Appeals is REVERSED and SET ASIDE and another
one rendered dismissing Civil Case No. Br. V-756, of the Regional Trial Court, Branch 24, Echague, Isabela.
SO ORDERED.
Melencio-Herrera, Padilla and Regalado, JJ., concur.

Sarmiento, J., is on leave.
Supreme Court
Manila
THIRD DIVISION
NATIVIDAD FIGURACION, G.R. NO. 155688

FILMA F. RABOR and CATHERINE
MANALASTAS,
Petitioners,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
SPOUSES CRESENCIANO and

AMELITA LIBI, Promulgated:
Respondents. November 28, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
AUSTRIA-MARTINEZ, J.:
By way of a Petition for Review on Certiorari under Rule 45 of the Rules of Court, Natividad Figuracion, Filma Rabor and
Catherine Manalastas (petitioners) assail the March 20, 2002 Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 68799, affirming the
February 23, 2000 Decision[2] of the Regional Trial Court (Branch 22), Cebu City (RTC) in Civil Case No. CEB-21193; and CA
Resolution[3] dated August 20, 2002.
The facts are of record.

Galileo Figuracion was the owner of Lot No. 899-D-2 situated in Cebu City.[4] Sometime in 1948, the Cebu City government (Cebu City)
expropriated Lot No. 899-D-2, consisting of 474 sq. m. and turned the same into a portion of N. Escario Street,[5] connecting
the Capitol Building to Gorordo Avenue and U.P. Junior College. Cebu City paid P23,700.00 for Lot No. 899-D-2[6] and was issued TCT No.
49454.[7]
In Resolution No. 330,[8] dated March 20, 1989, the Cebu City Sangguniang Panlungsod approved the reconveyance to Isagani Figuracion,
successor-in-interest of Galileo Figuracion, of an unused portion of Lot No. 899-D-2, designated as Lot No. 899-D-2-A (subject lot), consisting
of 84 sq. m. On the basis thereof, Cebu City Mayor Tomas Osmena (Mayor Osmena) executed in favor of Isagani Figuracion a deed of
sale[9] dated April 12, 1989 over the subject lot for the price of P40,000.00. TCT No. 49454 in the name of Cebu City was canceled,[10] and in lieu
thereof, TCT No. 113746[11] was issued in the name of Isagani Figuracion, and TCT No. 113747, in the name of Cebu City,[12]over the remaining
portion of Lot No. 899-D-2.
Upon resurvey over two years later, it was ascertained that the subject lot actually measures 130 sq. m. [13] Accordingly,
the Sangguniang Panlungsod of Cebu City amended Resolution No. 330 by issuing Resolution No. 2345,[14] approving the reconveyance of 130 sq.
m. of Lot No. 899-D-2, and Mayor Osmena executed in favor of IsaganiFiguracion an amended deed of sale dated January 24, 1992 over said
portion for P65,000.00.[15] TCT No. 113746 and TCT No. 113747 were canceled, and in lieu thereof, TCT No. 122369 [16] was issued on September
30, 1992 to Isagani Figuracion.
It appearing that herein respondents had been using the subject lot, and refused to vacate it despite demand, petitioners, as successors-in-interest
of Isagani Figuracion, filed against respondents a complaint for unlawful detainer, docketed as Civil Case No. R-34287 in the Municipal Trial Court
(MTC), Branch 2, Cebu City.
The MTC rendered a decision on June 26, 1995, declaring petitioners entitled to possession of the subject lot and ordering respondents to remove
the fence they had constructed.[17]
The MTC decision was affirmed by the RTC (Branch 19), Cebu City in its January 15, 1996 Decision[18] in Civil Case No. CEB-1778, which, in
turn, was upheld by the CA in its April 30, 1996 Decision[19] in CA-G.R. SP No. 39631.
Undaunted, respondents filed against petitioners a complaint for easement, docketed in the RTC as Civil Case No. CEB21193, praying that they
(respondents) be granted a right of way over the subject lot.[20] However, respondents twice amended their complaint[21] to implead Cebu City, and
shifted to a different cause of action -- that is, from one for the establishment of an easement of right of way over the subject lot to one for the
annulment of a) Resolutions No. 330 and No. 2345, b) the January 24, 1992 deed of sale in favor of Isagani Figuracion, and c) TCT No.
122309, and the payment of damages.
In its Answer,[22] Cebu City defended the reconveyance to Isagani Figuracion of the subject lot considering that it was not utilized in the
construction of N. Escario Street and had long been vacant.
Petitioners filed their own Answer,[23] pointing out that the complaint in Civil Case No. CEB-21193 is barred by the June 26, 1995 MTC decision
in Civil Case No. R-34287, as affirmed by the RTC and CA. They also challenged respondents legal standing to question
the Sangguniang Panlungsod resolutions.
After trial, the RTC in Civil Case No. CEB-21193 rendered the following decision:
WHEREFORE, in view of all foregoing, judgment is hereby rendered declaring resolution Nos. 330 and 2345 of
the Sangguniang Panlungsod ng Cebu, Deed of Sale, Amended Deed of Sale, and TCT No. 122309 as null and void.
SO ORDERED.[24]
It does not appear in the records that Cebu City appealed. Respondents also did not appeal from the denial of their claim for damages, attorneys
fees and costs.
Only petitioners appealed to the CA which, in its March 20, 2002 Decision, affirmed the RTC decision.[25]
The CA also denied petitioners motion for reconsideration.
And so, petitioners recourse to this Court on the following grounds:
I. The honorable Court of Appeals erred in not ruling that the present complaint is barred by res judicata or conclusiveness
of judgment in Civil Case No. R-34287 and that the respondents are guilty of forum shopping;
II. The honorable Court of Appeals erred in declaring resolution nos. 330 and 2345, the deed of sale and the amended deed
of sale and TCT No. 122309 as null and void;
III. The honorable Court of Appeals erred in not ruling that respondents do not have the legal capacity to sue;
IV. The honorable court of appeals erred in not ruling that the present action is barred by laches and prescription;
V. The honorable Court of Appeals erred in not awarding damages in favor of petitioners as prayed for in their
counterclaim.[26]
The Court grants the petition. The Second Amended Complaint in Civil Case No. CEB-21193 should have been dismissed by the trial court.
The third issue on the legal standing of respondents to institute Civil Case No. CEB-21193 is primordial.
On that issue, the RTC held:
Private defendants [petitioners herein] further claim that as private citizens and as ordinary taxpayers, the plaintiffs
[respondents herein] have no legal capacity to question the reconveyance of Lot No. 899-D-2 [sic] by defendants City
of Cebu to the private defendants.
This is not so. In the case of Dacanay v. Asistio, Jr., et al., 208 SCRA 404, it was categorically ruled by the Supreme Court
that:
WHEREFORE, it having been established that the petitioner and the general public have a legal right
to the relief demanded and that the public respondents have the corresponding duty, arising from public
office, to clear the city streets and restore them to their specific public purpose (Enriquez vs. Bidin, 47
SCRA 183; City of Manila vs. Garcia et al., 19 SCRA 413 citing Unson vs. Lacson, 100 Phil. 695),
the respondents City Mayor and City Engineer of Caloocan City or their successors in office are
hereby ordered to immediately enforce and implement the decision in Civil Case No. C-1292 declaring
that Heroes del '96, V. Gozon, and Gonzales Streets are public streets for public use, and they are
ordered to remove or demolish, or cause to be removed or demolished, the market stalls occupying
said city streets with utmost dispatch within thirty (30) days from notice of this decision. This decision
is immediately executory.[27]
The CA agreed:
In accordance with the abovementioned concepts, Spouses Libi cannot be considered not to have the legal capacity to sue
for lack of interest, being real parties in interest of the property subject of litigation. Indeed, Spouses Libi stand to be benefited
or injured by the judgment in the case at bar considering that the 130-square meter portion appropriated
to Isagani Figuracion is necessary for their (Spouses Libis) ingress [from] and egress to Escario Street.[28]
Both courts are mistaken. They approached the issue from the wrong perspective, in the process losing sight of three important facts:
First, based on their second amended complaint, what respondents seek is the annulment of TCT No. 122309, Resolutions No. 330 and 2345, as
well as the deed of sale and amended deed of sale of the subject lot between Cebu City and petitioners.
Second, while respondents are seeking the cancellation of TCT No. 122309, they are not themselves claiming title to or right of possession of the
subject lot. It must be emphasized that in their second amended complaint, they even abandoned their demand for a right of way over the property.
Finally, the subject lot was part of Lot No. 899-D-2 which Cebu City expropriated for the construction of a city street.
From the foregoing facts, it is readily apparent that respondents were not the real-parties-in-interest to institute Civil Case No. CEB-21193
for annulment of TCT No. 122309.
In a case for annulment of title, the plaintiff must allege two essential facts: (1) that plaintiff was the owner of the land, and (2) that the defendant
illegally dispossessed the plaintiff of the property. Absent either of these allegations, the plaintiff is considered not the proper party to cause the
cancellation of the title of the defendant.[29]
In their second amended complaint, respondents as plaintiffs unequivocally alleged:
5. That when the plaintiff [respondents herein] bought lot no. 899-D-1, they did so in the belief that they had an outlet
to Escario Street through lot no. 899-D-2 owned by defendant City of Cebu and covered by T.C.T. No. 49454 which is a road
lot as shown by the following annotation on said title xxx.
6. Lot No. 899-D-2 being a road lot, cannot be the subject of sale, as it is outside the commerce of man xxx. [30]
In their prayer, respondents sought neither ownership nor possession of the subject lot but only cancellation of the private title of petitioners over
the property on the ground that this is part of a public road.[31]
Clearly, respondents have no interest in the title or possession of Lot No. 899-D-2-A. The situation would have been different had respondents
maintained their demand for a right of way over the property. But as the records disclose, they abandoned this demand. Respondents, therefore, are
not at all the proper parties to file for annulment of petitioners' title.
Moreover, in essence and effect, Civil Case No. CEB-21193 is actually for reversion of the subject lot, as a portion of Lot No. 899-D-2, to the
public domain.
Reversion is a proceeding by which the State seeks the return of lands of the public domain or the improvements thereon through the cancellation
of private title erroneously or fraudulently issued over it.[32] The one crucial element which sets it apart from all other actions involving possession
or title to property is the positive averment in the complaint of state ownership of the property in dispute.[33]
In a similar situation in East Asia Traders, Inc. v. Republic of the Philippines,[34] we held:
We reviewed very carefully respondents allegations in its complaint. In a nutshell, respondent alleged that the defendants
(herein petitioner and its predecessors-in-interest) procured their lot [which] is inalienable because the DENR investigation
disclosed that it was intended by the government for the construction of a national road; that defendants titles are null and
void and should be cancelled and, therefore, Lot 4355 should be reverted to the State. These allegations are sufficient to
constitute a cause of action for reversion. (Emphasis supplied)
Even the decisions of the RTC and the CA were ultimately for reversion of the subject lot to the dominion of Cebu City. In declaring null and void
Resolutions No. 330 and No. 2345 of the Sangguniang Panlungsod of Cebu, the deed of sale, the amended deed of sale, and TCT No. 122309
issued in the name of petitioners, both courts virtually restored to Cebu City title over the subject lot; only, they omitted ordering the reinstatement
of TCT No. 49454 in the name of Cebu City. Furthermore, in not granting the claim of respondents for payment of damages for the alleged
demolition of their structures on the subject lot, the lower courts did not recognize the right of respondents to erect and maintain structures on said
property.
The cause of action involved in Civil Case No. CEB-21193 being, in reality, one for reversion of public land, respondents cannot be considered the
proper parties therein
In VSC Commercial Enterprises, Inc. v. Court of Appeals,[35] the Court had occasion to identify the real party in interest in an action for reversion:
Under Rule 3, Section 2 of the Revised Rules of Court, a real party in interest is defined as the party who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Interest within the meaning of
the rule means material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest
in the question involved, or a mere incidental interest. The interest of the party must also be personal and not one based
on a desire to vindicate the constitutional right of some third and unrelated party. Real interest, on the other hand, means
a present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate, or consequential
interest.
In the case at bar, the private respondents are mere lessees of the property in question. As such, they have no present
substantial and personal interest with respect to issues involving ownership of the disputed property. The only interest they
have, in the event that petitioners title over the subject property is cancelled and ownership reverts to the State, is the hope
that they become qualified buyers of the subject parcel of land. Undoubtedly, such interest is a mere expectancy. Even the
private respondents themselves claim that in case of reversion of ownership to the State, they only have pre-emptive rights
to buy the subject property; that their real interest over the said property is contingent upon the governments consideration
of their application as buyers of the same. It is settled that a suit filed by a person who is not a party in interest must be
dismissed.[36] (Emphasis supplied)
The Court stressed in VSC that real interest means a substantial interest; as distinguished from mere expectancy, or a future, contingent, subordinate,
or consequential interest.[37]
Applied to the present case, herein respondents are not even lessees of the subject lot; they do not claim to have been occupying the property in any
capacity. Their sole interest is in the use of the property as access to Escario Street. Such interest is merely tangential to any issue regarding the
ownership and possession of the property; hence, it is not sufficient to vest in respondents legal standing to sue for reversion of the property. If at
all, their cause of action is only for an easement of right of way over it. This was what they initially sought when they filed their original complaint.
Unfortunately, they abandoned such cause of action when they failed to allege the same in their Second Amended Complaint. Under Section 8,
Rule 10, Rules of Court, an amended complaint supersedes an original one. The original complaint is deemed withdrawn and no longer considered
part of the record.[38]
Respondents having no real interest in the subject lot under their Second Amended Complaint, they have no legal personality to file the action for
reversion of public land.[39] It is not merely a rule of procedure but a requirement of law that reversion be instituted in the name of the Republic of
the Philippines. Section 101 of the Public Land Act is categorical:
Section 101. 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
[now Republic] of the Philippines.
In fine, the RTC acted without jurisdiction when it entertained the Second Amended Complaint of respondents even when the latter was not a real
party-in-interest. The February 23, 2000 Decision rendered by the RTC was an utter nullity, without legal effect or binding force whatsoever, even
upon defendant Cebu City which does not appear on record to have appealed from it. [40]
But then, it would be all too pointless to merely set aside all the proceedings in this case to make way for the proper filing of a case for reversion -
- such recourse will only throw the parties back to a state of limbo, their resources exhausted in litigations and counter-litigations; and worse, keep
the subject lot mired in controversy, utterly useless to the parties for another number of years.
Considering that all the pleadings and records are with the Court, it is urgent that we settle here and now the question on the validity of
the reconveyance of the subject lot by Cebu City to petitioners.
Lot No. 899-D-2-A, being part of Lot No. 899-D, which was expropriated by Cebu City for the construction of N. Escario Street, is property of the
public domain, the reconveyance of which is subject to strict legal requirements.
Foremost among the requirements is that the public property sought to be reconveyed be alienable.
As a general rule, local roads used for public service are considered public property under the absolute control of Congress; hence, local governments
have no authority to control or regulate their use.[41] However, under Section 10, Chapter II of the Local Government Code, [42] Congress delegated
to political subdivisions some control of local roads, viz.:
Section 21. Closure and Opening of Roads. (a) A local government unit may, pursuant to an ordinance, permanently or
temporarily close or open any local road, alley, park, or square falling within its jurisdiction: Provided, however, That in case
of permanent closure, such ordinance must be approved by at least two-thirds (2/3) of all the members of the Sanggunian,
and when necessary, an adequate substitute for the public facility that is subject to closure is provided.
(b) No such way or place or any part thereof shall be permanently closed without making provisions for the maintenance of
public safety therein. A property thus permanently withdrawn from public use may be used or conveyed for any purpose for
which other real property belonging to the local government unit concerned may be lawfully used or conveyed: Provided,
however, That no freedom park shall be closed permanently without provision for its transfer or relocation to a new site.
Moreover, through the Revised Charter of Cebu City (Republic Act No. 3857),[43] Congress specifically delegated to said political subdivision the
following authority to regulate its city streets:
Section 31. Legislative powers. Any provision of law and executive orders to the contrary notwithstanding, the City Council
shall have the following legislative powers:
(34) To provide for the laying out, construction, improvement and maintenance, including lighting, cleaning, and sprinkling
of streets, avenues, boulevards, alleys, sidewalks, wharves, piers, parks, cemeteries, and other public places, and to regulate
the use thereof; to provide for the construction and maintenance and regulate the use of bridges, viaducts and culverts; to
close any city road, street, alley, boulevard, avenue, park or square. Property thus withdrawn from public servitude may be
used or conveyed for any purpose for which other real property belonging to the city may be lawfully used or
conveyed.(Emphasis supplied).
The other requirement for a valid reconveyance is that it be established that the former owner or his successors-in-interest, petitioners in this case,
have the right to repurchase said property. As we explained in Fery v. Municipality of Cabanatuan:[44]
The question presented by the petitioner and demurrer is this: When private land is expropriated for a particular public use,
and that particular public use is abandoned, does the land so expropriated return to its former owner?
The answer to that question depends upon the character of the title acquired by the expropriator, whether it be the State, a
province, a municipality, or a corporation which has the right to acquire property under the power of eminent domain. If, for
example, land is expropriated for a particular purpose, with the condition that when that purpose is ended or abandoned
the property shall return to its former owner, then, of course, when the purpose is terminated or abandoned the former
owner reacquires the property so expropriated. If, for example, land is expropriated for a public street and the expropriation
is granted upon condition that the city can only use it for a public street, then, of course, when the city abandons its use as a
public street, it returns to the former owner, unless there is some statutory provisions to the contrary. Many other similar
examples might be given. If, upon the contrary, however, the decree of expropriation gives to the entity a fee simple title,
then, of course, the land becomes the absolute property of the expropriator, whether it be the State, a province, or
municipality, and in that case the non-user does not have the effect of defeating the title acquired by the expropriation
proceedings. (10 R.C.L., 240, sec. 202; 20 C.J., 1234, secs. 593-599, and numerous cases cited; Reichling vs.Covington
Lumber Co., 57 Wash., 225; 135 Am. St. Rep., 976; McConlihay vs. Wright, 121 U.S., 201.) (Emphasis supplied.)
The enunciated rule in Fery is still controlling to this day.
However, in Moreno v. Mactan-Cebu International Airport Authority,[45] we clarified that where there is preponderant evidence of the existence of
a right to repurchase, the former owner of an expropriated property is entitled to exercise such option once the public purpose for which the local
government initially intended the expropriated property is abandoned or not pursued.
Further elucidating on the right of the former owner to repurchase the expropriated property, we held in Mactan-Cebu International Airport
Authority v. Court of Appeals,[46]Reyes v. National Housing Authority[47] and Air Transportation Office v. Gopuco, Jr.,[48] that where there is
insufficient evidence that the former owners of expropriated properties were granted the right to repurchase the same, the latter may not insist on
recovering their properties even when the public purpose for which said properties were expropriated is abandoned.
It should be emphasized that in all the foregoing four cases, the government contested the right of the former owners to repurchase the expropriated
properties; and the former owners utterly failed to prove, by preponderant evidence, the existence of the right to repurchase said properties.
In the present case, there exists no doubt that Cebu City repudiated its right to use the subject lot for other public purpose; and instead,
recognized the right of the former owner or his successor-in-interest to repurchase the same.
In exercise of its discretion to declare a city street or part thereof abandoned, the Cebu City council unanimously issued Resolutions No. 330 and No.
2345, declaring the subject lot vacant and available for conveyance. Respondents themselves acknowledge that the subject lot was not included in
the construction of Escario Street.
The wisdom and intent of these Resolutions cannot be gainsaid. Through the Resolutions, Cebu City ineluctably recognized the right of petitioners,
as successors-in-interest of the former owner, to repurchase the subject lot. The Resolutions, issued by the city government in exercise of its regular
and official functions, constitute clear and positive evidence of the intention of Cebu City to return or reconvey to the former owner or his successor-
in-interest, by way of sale, the portion of the expropriated property that is no longer needed for the purpose for which it was intended.
All said, respondents not only lacked the legal personality to institute Civil Case No. CEB-21193; they also have no legal basis to challenge
the reconveyance of Lot No. 899-D-2-A by Cebu City to petitioners for Resolutions No. 330 and 2345 of the Sangguniang Panlungsod of Cebu, the
deed of sale and amended deed of sale between Cebu City and petitioners, and TCT No. 122309 which were all validly issued in favor of respondents.
With the foregoing disquisition, we dispense with the discussion of the remaining issues raised by petitioners.
WHEREFORE, the petition is GRANTED. The March 20, 2002 Decision and August 20, 2002 Resolution of the Court of Appeals, as well as
the February 23, 2000 Decision of the Regional Trial Court, are ANNULLED and SET ASIDE. The complaint in Civil Case No. CEB-21193
is DISMISSED.
Costs against respondents.

SO ORDERED.
IRST DIVISION
[G.R. No. 143281. August 3, 2000]
SPOUSES FRANCISCO and AMPARO DE GUZMAN, JR., petitioners, vs. THE NATIONAL TREASURER OF THE REPUBLIC
OF THE PHILIPPINES and THE REGISTER OF DEEDS OF MARIKINA CITY, respondents.
RESOLUTION
KAPUNAN, J.:
Petitioners De Guzman spouses seek the reversal of the decision of the Court of Appeals holding that the Assurance Fund
established under the Property Registration Decree is not liable for the losses allegedly sustained by petitioners.
The facts that led to the present proceedings are succinctly set forth by the Court of Appeals as follows:
On 01 July 1985, Urlan Milambiling and Asuncion Velarde purchased a parcel of land situated in Antipolo, Rizal from Sta. Lucia
Realty and Development, Inc. Although they were already civilly married, Asuncion used her maiden name in the Deed of Sale
because, being conservative, she did not want to use her married name until she was married in church.
After their church wedding on 05 July 1985, Urlan and Asuncion Milambiling left for Europe on their honeymoon and from there, they
proceeded to Saudi Arabia where they were working as accountant and nurse, respectively.
Before leaving for abroad, the spouses Milambiling entrusted the Deed of Sale of the parcel of land they bought from Sta. Lucia
Realty and the corresponding Certificate of Title still in the name of Sta. Lucia Realty to a long-time friend and one of their principal
wedding sponsors, Marilyn Belgica, who volunteered to register the sale and transfer the title in their names.
Later, the spouses Milambiling learned from Belgica through an overseas telephone call that a transfer certificate of title of the said
parcel of land had already been issued in their names.Belgica committed to the Milambiling spouses that she will personally deliver
the title to them in Saudi Arabia. Sometime in May 1986, Belgica arrived in Saudi Arabia but the title was not with her. Belgica said
that she left it in their house in the Philippines and forgot to bring it with her.
Urlan Milambiling was angry and immediately called up his relatives in the Philippines and asked them to find out from the Office of
the Register of Deeds of Rizal what happened to their title. He was informed that the Certificate of Title covering the said parcel of
land had indeed been transferred in their names but was subsequently cancelled and title transferred in the names of x x x the
spouses De Guzman.
Milambiling was also told about the circumstances that led to the cancellation of their title. It appears that while the spouses
Milambiling were in Saudi Arabia, a couple identifying themselves as the spouses Urlan and Asuncion Milambiling went to the house
of a certain Natividad Javiniar, a real estate broker, inquiring if the latter could find a buyer for their lot located in Vermont
Subdivision, Antipolo, Rizal. Javiniar accompanied the said couple to the house of [the] spouses De Guzman. Having somehow
obtained possession of the owners duplicate copy of the certificate of title in the name of the spouses Milambiling, the impostor-
couple were able to convince the de Guzmans to buy the property. On 20 November 1985, the impostor-couple, posing as the
spouses Milambiling, executed a Deed of Absolute Sale in favor of [the] spouses de Guzman who paid the stipulated purchase price
of P99,200.00. On 30 April 1986, [the De Guzmans] registered the said sale with the Register of Deeds of Marikina who cancelled
the certificate of title in the name of the Milambilings and issued TCT No. N-117249 in the names of [the] De Guzman[s].
Upon learning of the above, Urlan Milambiling quickly returned to the Philippines. On 24 July 1986, the spouses Milambiling filed an
action against [the spouses De Guzman] before the Regional Trial Court of Antipolo, Rizal, Branch 73, for declaration of nullity of
sale and title with damages.
xxx
[The] spouses De Guzman appealed the decision of the trial court to the Court of Appeals. On 18 July 1991, [the Court of Appeals]
rendered its decision affirming the decision of the court a quo.
[The] spouses De Guzman then went to the Supreme Court on a petition for review on certiorari. On 01 July 1992, the High Tribunal
issued a resolution denying the petition on the ground that no reversible error was committed by the Court of Appeals.
On 11 February 1993, [the] spouses De Guzman filed [an] action for damages against the Assurance Fund before the Regional
Trial Court of Pasig, Branch 153[,] [impleading the National Treasurer of the Republic of the Philippines and the Register of Deeds of
Marikina City.][1]
On January 20, 1995, the RTC rendered its decision finding in favor of the De Guzman spouses, thus:
IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the plaintiffs and against the defendants adjudging the
Assurance Fund liable to the amount actually paid by the plaintiffs which is in the amount of P99,200.00 and ordering the
defendants Treasurer and/or Registrar to pay or cause the payment of the said amount to herein plaintiffs.
SO ORDERED.[2]
The National Treasurer and the Marikina Registrar of Deeds appealed from the above decision. The Court of Appeals found
merit in the appeal and reversed the decision of the RTC.
We affirm the decision of the Court of Appeals.
Section 95 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides:
SEC. 95. Action for compensation from funds. A person who, without negligence on his part, sustains loss or damage, or is deprived
of land or any estate or interest therein in consequence of the bringing of the land under the operation of the Torrens system or
arising after original registration of land, through fraud or in consequence of any error, omission, mistake or misdescription in any
certificate of title or in any entry or memorandum in the registration book, and who by the provisions of this Decree is barred or
otherwise precluded under the provision of any law from bringing an action for the recovery of such land or the estate or interest
therein, may bring an action in any court of competent jurisdiction for the recovery of damage to be paid out of the Assurance Fund.
The precursor of Section 95, Section 101 of the Land Registration Act (Act No. 496), similarly states:
SEC. 101. Any person who without negligence on his part sustains loss or damage through any omission, mistake or misfeasance
of the clerk, or register of deeds, or of any examiner of titles, or of any deputy or clerk of the register of deeds in the performance of
their respective duties under the provisions of this Act, and any person who is wrongfully deprived of any land or any interest
therein, without negligence on his part, through the bringing of the same under the provisions of this Act or by the registration of any
other persons as owner of such land, or by any mistake, omission, or misdescription in any certificate or owners duplicate, or in any
entry or memorandum in the register or other official book, or by any cancellation, and who by the provisions of this Act is barred or
in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the same, may bring in
any court of competent jurisdiction an action against the Treasurer of the Philippine Archipelago for the recovery of damages to be
paid out of the Assurance Fund.
It may be discerned from the foregoing provisions that the persons who may recover from the Assurance Fund are:
1) Any person who sustains loss or damage under the following conditions:
a) that there was no negligence on his part; and
b) that the loss or damage sustained was through any omission, mistake or malfeasance of the court personnel, or the
Registrar of Deeds, his deputy, or other employees of the Registry in the performance of their respective duties under
the provisions of the Land Registration Act, now, the Property Registration Decree; or
2) Any person who has been deprived of any land or interest therein under the following conditions:
a) that there was no negligence on his part;
b) that he was deprived as a consequence of the bringing of his land or interest therein under the provisions of the Property
Registration Decree; or by the registration by any other person as owner of such land; or by mistake, omission or
misdescription in any certificate of owners duplicate, or in any entry or memorandum in the register or other official
book or by any cancellation; and
c) that he is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim
upon the same.[3]
The Court of Appeals correctly held that petitioners circumstances do not fall under the first case. Petitioners have not alleged
that the loss or damage they sustained was through any omission, mistake or malfeasance of the court personnel, or the Registrar of
Deeds, his deputy, or other employees of the Registry in the performance of their respective duties. Moreover, petitioners were
negligent in not ascertaining whether the impostors who executed a deed of sale in their (petitioner's) favor were really the owners of
the property.[4]
Nor does petitioners situation fall under the second case. They were not deprived of their land as a consequence of the bringing
of [the] land or interest therein under the provisions of the Property Registration Decree. Neither was the deprivation due to the
registration by any other person as owner of such land, or by mistake, omission or misdescription in any certificate or owners duplicate,
or in any entry or memorandum in the register or other official book or by any cancellation.
Petitioners' claim is not supported by the purpose for which the Assurance Fund was established. The Assurance Fund is
intended to relieve innocent persons from the harshness of the doctrine that a certificate is conclusive evidence of an indefeasible title
to land.[5] Petitioners did not suffer any prejudice because of the operation of this doctrine. On the contrary, petitioners sought to avail
of the benefits of the Torrens System by registering the property in their name. Unfortunately for petitioners, the original owners were
able to judicially recover the property from them. That petitioners eventually lost the property to the original owners, however, does
not entitle them to compensation under the Assurance Fund. While we commiserate with petitioners, who appear to be victims of
unscrupulous scoundrels, we cannot sanction compensation that is not within the law's contemplation. As we said in Treasurer of the
Philippines vs. Court of Appeals,[6] the Government is not an insurer of the unwary citizens property against the chicanery of
scoundrels. Petitioners recourse is not against the Assurance Fund, as the Court of Appeals pointed out, but against the rogues who
duped them.
ACCORDINGLY, the petition is DENIED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-45045 February 28, 1977
FELIPA FAJA substituted by: NEMESIO GARDOSE, ANICIA GARDOSE and EUFROSINO GARDOSE, petitioners,
vs.
HON. COURT OF APPEALS, HON. TOMAS R. LEONIDAS, JUDGE OF THE COURT OF FIRST INSTANCE OF CAPIZ,
BRANCH III, and LEVINE FRIAL, respondents.
Medardo A. Claro for petitioners.
Larry B. Datiles for private respondent.
MUÑOZ PALMA, J.:

The summary judgment rendered by Judge Tomas R. Leonides of the Court of First Instance of Capiz, in Civil Case No. M-355,
entitled Levine Frial, plaintiff versus Felipa Faja, defendant", and affirmed by respondent Court of Appeals, is sought to be set aside
in this Petition for having been rendered in gross violation of law resulting in a deprivation of petitioners' right to due process.
We find this Petition meritorious under the rule that summary judgment may be rendered only when, except as to the amount of
damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law,
which is not the situation between the parties in this case. 1
Levine Frial filed with the Court of First Instance of Capiz, Branch 111, situated in Mambusao, Capiz, a complaint docketed as Civil
Case No. M-355 for "Recovery of Possession and Damages" of a parcel of land situated in Barrio San Agustin, Dumalag, Capiz,
with an area of 235,854 square meters more or less, covered by Original Certificate of Title No. RO-1496 in the name of Indalecio
Frial, father of Levine Frial. The complaint alleged that since 1945 up to the present (the complaint is dated April 15, 1975) the
defendant Felipa Faja had been illegally possessing and occupying the above-mentioned property without the knowledge and
consent of the registered owner, Indalecio Frial now deceased, nor of his heirs, one of whom is Levine Frial; that when plaintiff Frial
came to know that Felipa Faja was occupying the property the former immediately demanded its return but Faja refused, hence, the
complaint for recovery of possession of the land in question and the unearned income from the land during the period of not less
than 30 years amounting to around P150,000.00. 2
Defendant Felipa Faja in her Answer specifically denied under oath the allegations in the complaint as to the ownership of plaintiff
Frial, and by way of special and affirmative defenses claimed: that she is the lawful owner and in actual possession of the property
which is Identical to Lot No. 4010 of the Cadastral Survey of Dumalag, Capiz, which she inherited from her father, Marcelino Faja,
who died in 1925, the latter in turn having inherited the same property from his father, Antonio Faja, who died in 1915; that she and
her predecessors-in-interest have been in possession of the property publicly, peacefully, continuously, and adversely, in the
concept of owners, for more than 60 years, the property having been declared for taxation purposes in the name of Marcelino Faja
under Tax Declaration No. 4807, revised under Tax Declaration No. 5523 in the year 1921, and presently in the name of Felipa Faja
under Tax Declaration No. 5523 and for which the land taxes have been paid since the time Felipa Faja's predecessors have been
in possession; that Felipa Faja is actually living on the land in question, and that the same is planted with coconut trees, mangoes,
bananas, santol, buri while around 8 hectares are devoted to rice and corn that neither plaintiff Levine Frial nor his father Indalecio
Frial ever lived on or possessed said property "even for a single moment", and any Certificate of Title secured by Indalecio Frial was
obtained through fraud, deceit, and misrepresentation, the latter not being the owner thereof and not having occupied or possessed
the property in concept of owner; that as her counterclaim, defendant Faja prays that she be declared the lawful owner of the
property, that plaintiff Frial be directed to reconvey the property to her in the sense that the Certificate of Title covering said property
be cancelled and, in lieu thereof, a Transfer Certificate of Title be issued in her favor. 3
In his Reply to Felipa Faja's, plaintiff Levine Frial denied that the Certificate of Title of Indalecio Frial was secured through fraud and
misrepresentation, and alleged that Faja's right to question the validity of the Title had prescribed. 4
After all responsive pleadings were filed, the case was called for a pre-trial conference during which Judge Leonides directed the
parties to submit memoranda on the question of whether or not a summary judgment may be promulgated. 5
In his Memorandum filed with the trial court, plaintiff Levine Frial sustained the view that a summary judgment may properly be
issued on the basis of the pleadings inasmuch as the only issues to be resolved were:
(a) Can a registered owner of a piece of land who has acquired title thereto for almost 35 years still recover
possession thereof from actual occupants who claim long and continuous possession of the same property but
without title?
(b) Is reconveyance of a titled property still legally possible, considering that a period of more than 10 years had
elapsed since the issuance of the decree of registration? (p. 36, rollo)
On the other hand, Felipa Faja in her Memorandum averred that the petition for a summary judgment should be denied as there was
a genuine controversy between the parties which required a trial on the merits and that the alleged prescription of her counterclaim
for reconveyance cannot be the subject of a summary judgment, aside from the fact that her cause of action for the reconveyance to
her of the property arose only from the moment she was served copy of the complaint which was in 1975, consequently, her
counterclaim was filed well within the statutory period. 6
In an order dated December 3, 1975, the trial Judge sustained Levine Frial's submission stating:
It appearing from the complaint and the answer, as well as the annexes, thereto, and the written arguments of
the parties, that there is no genuine issue as to material fact, except as to the amount of (images, it is ordered
that a summary judgment be as it is hereby entered in favor of the plaintiff, and this case is set for trial on the
sole issue of damages on December 22,1975, at 8:00 on the morning.
SO ORDERED. (p. 45, Ibid.)
A motion for reconsideration was filed with the trial court 7 but the same was denied for lack of merit in all order dated February 9,
8
1976.
Because Felipa Faja died on November 25, 1975, her children, all surnamed Gardose, in substitution for their deceased mother,
filed with the Court of Appeals a Petition for certiorari (CA-G.R. No. SP-05151- R) and prayed that the aforequoted order for
summary judgment be set aside. Respondent Appellate Court through its Eighth Division dismissed the Petition holding that " ... a
summary judgment is proper as there is no genuine issue as to any material fact", reasoning that inasmuch as the disputed property
is covered by an Original Certificate of Title, any action to annul that title on the ground of fraud prescribes after the lapse of 10
years from the issuance of the title and therefore the counterclaim for reconveyance pleaded in the answer of Felipa Faja cannot be
sustained. 9
We do not agree with respondent Court for the following reasons:
(1) The counterclaim of Felipe Faja for reconveyance to her of the litigated property has not prescribed. It is an established rule that
an action to quiet title to property in the possession of plaintiff is inprescriptible. 10 Inasmuch as it is alleged in paragraph 3 of Frial's
complaint, that Felipa Faja has been in possession of the property since 1945 up the present or for a period of 30 years, her cause
of action for reconveyance, which in effect seeks to quiet her title to the property, falls within that rule. If at all, the period of
prescription began to run against Felipa Faja only from the time she was served with copy of the complaint in 1975 giving her notice
that the property she was occupying was titled in the name of Indalecio Frial. 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 the
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. 11 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 right to quiet title to the property, to seek its
reconveyance and annul any certificate of title covering it, accrued only from the time the one in possession was made aware of a
claim adverse to his own and it is only then that the statutory period of prescription commences to run against such possessor.
(2) The existence of a Certificate of Title in the name of respondent Frial's father is not conclusive on the question of ownership of
the land in controversy, because the validity of such a certificate is put in issue by allegations of fraud and misrepresentation by the
defendant below, Felipa Faja. Petitioners herein correctly invoked in their Petition for certiorari filed before respondent tribunal, what
this Court stated in Monticines, et al. vs. Court of Appeals, et al., September 4, 1973, 53 SCRA 14, through Justice Enrique M.
Fernando, to wit:
Nor does the mere fact that respondent-appellee Marcelo Coral could show a certificate of Torrens Title in his
favor conclude the matter, the question of fraud having been, reasonably raised and the sought. Only recently,
in Philippine Commercial and lndustrial Bank v. Villalva, (L-28194, November 24, 1972, 48 SCRA 31) this Court
had occasion to state: 'There is, however, a countervailing doctrine, certainly not of lesser weight, that mitigates
the harshness of the iron-clad application of the principle attaching full faith and credit to a Torrens certificate. It
is inspired by the highest concept of what is fair and what is equitable. It would be a sad day for the law if it
were to be oblivious to the demands of justice. The acceptance accorded the Torrens system of registration
would be impaired if it could be utilized to perpetrate fraud and chicanery. If it were thus, then no stigma would
attach to a claim based solely on a narrow and literal reading of a statutory prescription, devoid of any shadow
of moral right. That is not the juridical norm as recognized by this Court. Deceit is not to be countenanced;
duplicity is not to be rewarded Witness the favor with which jurisprudence has looked on the action for
reconveyance as well as the recognition of the constructive trust. There is thus the stress on (Emphasis Ours) 12
It is regrettable to say the least that the above pronouncements of this Court failed to impress respondent tribunal with the merits of
petitioners' case.
(3) There are material facts to be inquired into and resolved on the basis of evidence adduced by the parties which will determine
the legal precepts to be applied, among which are: (a) the circumstances which led to the issuance in 1950 of Original Certificate of
Title RO-1496, a reconstituted title of a supposed Original Certificate of Title No. 23257 allegedly issued on December 12, 1940,
pursuant to a decree of registration No. 732588 dated November 5, 1940, which was claimed to have been lost; (b) explanation, if
any, for the inaction of the alleged i registered owner Indalecio Frial and of his heirs for a period of 30 years to take possession of
the land in question thereby permitting Felipa Faja to cultivate and receive for herself the income from the produce of the land which
as estimated by now respondent Frial amounted to around P150,000.00 for the entire period; and (c) the claim of ownership and
possession of Felipa Faja and her predecessors-in- interest which allegedly date as far back as 60 years prior to the filing of Frial's
complaint in 1975, and her assertions of fraud and misrepresentation committed by Indalecio Frial in registering the property in his
name. All these matters cannot simply be summarily disposed of in favor of respondent Frial and adversely against petitioners
without evidence adduced on their conflicting claims. 13
In conclusion, We state that while this Court desires to give full encouragement to trial courts to take advantage of and apply the
provisions of the Rules of Court on summary judgment as valuable aids to an expeditious disposition of cases, We cannot but
reiterate what was said and held in Constantino Hon. Estenzo, et al., L-40403, July 31, 1975, and reiterated in Auman, et al., vs.
Hon. Estenzo, et al., L- 40500, February 27, 1976, to wit:
... The demands of a fair, impartial, and wise administration of justice call for a faithful adherence to legal
precepts on procedure which ensure to litigants the opportunity to present their evidence and secure a ruling on
all the issues presented in the respective pleadings. "Shortcuts" in judicial processes are to be avoided where
they impede rather than promote a judicious dispensation of justice.
Again, in Gregorio Lorenzo and Felisa Lavilla vs. The Hon. Numeriano G. Estenzo, et al., L43306, October 29, 1976, this Court set
aside a summary judgment rendered by respondent Judge Estenzo of the Court of First Instance of Iloilo, reiterating the rule that
summary judgment can only be entertained where there are no questions of fact in issue or where the material allegations of the
pleadings are not disputed. 14
IN VIEW OF THE FOREGOING, the appealed decision of the Court of Appeals and the disputed Order of the trial court rendering
summary judgment in favor of respondent Levine Frial are hereby set aside, and the Presiding Judge of Branch III, Court of First
Instance of Capiz, is directed to proceed with the trial on the merits of Civil Case No. M-355. With costs against private respondent
Levine Frial.
So Ordered.
Makasiar, Concepcion Jr., and Martin, JJ., concur.
G.R. No. 156380 September 8, 2004

DOMINGO A. CAÑERO, petitioner,
vs.
UNIVERSITY OF THE PHILIPPINES, respondent.
DECISION
PUNO, J.:
Before us is the petition for certiorari filed by DOMINGO A. CAÑERO against the UNIVERSITY OF THE PHILIPPINES (hereinafter,
referred to as "UP," for brevity), assailing the Decision1 and Resolution2 of the Court of Appeals, which, on December 14, 2001,
reversed and set aside the decision of the lower court and dismissed petitioner’s Complaint for Quieting of Title and Cancellation of
Entry in the Tax Declaration.3
The facts show that on December 26, 1991, petitioner and his spouse Juanita L. Cañero filed a petition for reconstitution of title of a
lot in Barangay Culiat, Tandang Sora, Quezon City. The petition alleged that the lot had been registered by the Register of Deeds of
Quezon City in the name of the spouses Cañero, as evidenced by Transfer Certificate of Title (TCT) No. 240042. Allegedly,
however, the original copy of TCT No. 240042, in the custody of the Register of Deeds of Quezon City, was burned when the
Quezon City Hall was razed by a fire on June 11, 1998.4 The spouses had declared the lot for taxation purposes 5 in the year 1992.
The spouses prayed that the reconstitution should be based on their owner’s duplicate copy and other pertinent documents in their
possession.
The petition was assigned to Branch 82 of the Regional Trial Court (RTC) of Quezon City, presided by Judge Salvador C. Ceguera.
On January 9, 1992, the trial court issued an order,6 notifying all persons who had an interest in the property to file their claims or
objections thereto. The order stated:
Let a copy of this ORDER/NOTICE be published once a week for two (2) consecutive weeks in the Official Gazette and
that the same be also posted in the main entrance of the City Hall of Quezon City, the Bulletin Boards of this Court, the
Sheriff’s Office of Quezon City and at the Barangay Hall of the Barangay where the property subject of this petition is
situated, all at the expense of the herein petitioners. Similarly, let copies of the said Order together with the petition be
furnished to all government agencies concerned, such other interested parties, the petitioners and/or counsel for their
reference, information and guidance.7
Hence, the trial court: 1) served copies of the Order to various government agencies, among which were the Land Registration
Authority,8 the Land Management Bureau,9 the Register of Deeds of Quezon City,10 the Solicitor General,11 and the Office of the City
Prosecutor;12 2) caused the publication of the Order in the Official Gazette on 10 February 1992 and on 17 February 1992; 13 and 3)
posted copies of the Order at the entrance of the Quezon City Hall, at the bulletin boards of the Quezon City Regional Trial Court,
and at the Culiat Barangay Hall.14 Despite the notices, no opposition was filed against the petition. On April 1, 1992, it issued the
Order15 granting the petition for reconstitution and the Register of Deeds issued TCT No. RT-57204(240042) in favor of the Cañero
spouses.
Sometime later, petitioner received information that respondent UP had claimed title and secured a tax declaration in its name for
the said lot. Moreover, Tax Declaration No. C-128-00026, issued by the City Assessor of Quezon City in the name of petitioner
carried an annotation that the lot appeared to duplicate the property of respondent UP under Tax Declaration No. B-128-00238.
On September 6, 1994, petitioner filed an action16 to quiet the title of the said lot with the RTC of Quezon City against UP and the
City Assessor of Quezon City. Petitioner relied on his reconstituted title. He averred that even before the title was issued in his and
his wife’s name, his father had been in open, continuous and uninterrupted possession of the lot. He alleged that his "designated
caretakers" occupy the lot at present. Petitioner contended that UP has no legal title or claim over the lot since it failed to raise
objections during the reconstitution proceedings. Thus, petitioner prayed to: 1) deny any claim which respondent UP may have over
his lot; 2) cancel any land title which respondent UP has for the property; and 3) cancel the annotation in Tax Declaration No. C-
128-00026 stating that his lot appears to duplicate respondent UP’s property covered under Tax Declaration No. B-128-00238.
On September 28, 1994, defendant CITY ASSESSOR OF QUEZON CITY (City Assessor for brevity) filed its answer 17 explaining its
annotation on petitioner’s Tax Declaration No. C-128-00026. The City Assessor alleged that on March 19, 1994, Cañero presented
his owner’s duplicate copy of TCT No. 240042 to declare his property for tax purposes. When the property was plotted on the tax
map, it appeared to overlap and duplicate a portion of the property owned by respondent UP. 18 UP had declared the said property
for tax purposes many years earlier, the latest declaration of which was in 1985, under Tax Declaration No. B-128-00238, with
property Index No. 15-2094, under TCT No. 192689, dated August 15, 1973. In contrast, Cañero’s property was declared for tax
purposes for the first time only on 19 March 1992. Prior to this date, the City Assessor had no knowledge of the existence of TCT
No. 240042. Thus, the City Assessor issued Tax Declaration No. C-128-00026, with the annotation that for taxation purposes,
Canero’s property appeared to duplicate UP’s property. Moreover, on May 5, 1994, the City Assessor was furnished a copy of a
letter by UP, addressed to the General Manager of the National Housing Authority, that UP owns the entirety of its campus,
including the lot of Cañero.
For its part, respondent UP filed a Motion to Dismiss, alleging that it had been in open, continuous and uninterrupted possession of
the said lot from the year 1914.19 Tracing its origin, it alleged that the government owned several parcels of land amounting to some
4,930,981.3 square meters in Diliman, Quezon City, under TCT No. 36048, which was derived from Original Certificate of Title No.
730, issued in 1914. On March 1, 1949, the Republic of the Philippines, through President Elpidio Quirino, sold these lots to UP.
Thereafter, TCT No. 36048 was cancelled, and in lieu thereof, TCT No. 9462 was issued in the name of UP. TCT No. 9462 was
later subdivided into five (5) titles, among which is TCT No. 192689, that covers the lot being claimed by petitioner Cañero. UP
owns or maintains several buildings in the area, among them, the PHILCOA Wet Market, the Asian Institute of Tourism, the
Philippine Social Sciences Building, the National Hydraulic Center, the UP Sewage Treatment Plant, the Petron Gas
Station, the U.P. Arboretum, the Campus Landscaping Office, the Philippine Atomic Energy Commission Building, and the
INNOTECH Building. Respondent UP averred that petitioner was never in possession of the lot, and his cause of action, whether
for quieting of title or annulment of title, has already prescribed. Petitioner opposed UP’s Motion to Dismiss. Finally, UP assailed the
validity of the reconstitution proceedings on the ground that a jurisdictional requirement prescribed under Republic Act (R.A.) No. 26,
was not complied with as the trial court failed to notify it and the other owners of properties adjoining the lot about the same.
Midstream, petitioner filed an "Urgent Motion To Amend Complaint Or To Consolidate This Case With Other Cases Which Have
Raised The Issue Of Ownership Over The Same Property In Question Here." 20 Petitioner alleged that he learned of the pendency of
a case before Branch 84, Quezon City RTC, captioned Civil Case Q-92-11187 (Felix Rodeo, et al. vs. Jorge Chin and Renato B.
Mallari) and of Land Registration Commission (LRC) Case No. Q-5910 (92) (In Re: Petition for Reconstitution of Original Certificate
of Title No. 192689; University of the Philippines, petitioner), pending before Quezon City RTC, Branch 105. Petitioner stated that
these two cases "purport to determine the ownership of the property which is the subject of the quieting of title petition
here."21 Petitioner sought to amend his complaint to include the parties in the aforementioned cases as defendants in the
proceedings to quiet title.
UP filed its Opposition to petitioner’s Urgent Motion to Amend Complaint or to Consolidate with other cases. 22 It alleged that it had
not yet received a copy of the purported Amended Complaint, in violation of Section 3 of Rule 10 of the Revised Rules of Court. It
stated that Civil Case No. Q-92-11187 is an action for the cancellation/nullification of the title of Messrs. Chin and Mallari. UP was
not impleaded as a party and could not be bound by any decision rendered therein. On the other hand, on June 17, 1994, in LRC
Case No. Q-5910 (92), the RTC already granted UP’s petition for reconstitution, after denying petitioner’s Motion to Intervene on the
ground that the issue of ownership is not involved in reconstitution proceedings. Finally, UP claimed that there was no common
question of law or fact among Civil Case No. Q-92-11187, LRC Case No. Q-5910 (92), and the case for quieting of title. It was
pointed out that petitioner’s Urgent Motion merely showed that he does not even know the exact location and metes and bounds of
the property he claims to own.
Petitioner filed a Manifestation23 with the lower court, averring that Quezon City RTC Branch 85 has issued a judgment in Civil Case
Q-93-18569 (Maria Destura vs. Jorge Chin, et al.).24 The judgment ordered the reinstatement of TCT No. 36048 in the names of
Spouses Antonio Pael and Andrea Alcantara and Crisanto Pael. Petitioner averred that the judgment covered their lot.25
Petitioner’s case for quieting of title was off-loaded to Branch 222 of the RTC of Quezon City. The records do not show whether the
Urgent Motion to Amend the Complaint or Consolidate the Cases was resolved by either of the two lower courts which, exercised
jurisdiction over the case.
The presentation of evidence on the Motion to Dismiss commenced on October 6, 1995. UP presented the testimonies of the
following witnesses: 1) Constantino Rosas, the City Assessor of Quezon City; 2) Mr. Nestor Dagaraga, Chief of the Tax Mapping
Division of the City Assessor’s Office of Quezon City;26 3) Engineer Ernesto Erive, Chief of Surveys Division of the Lands
Management Sector, Department of Environment and Natural Resources, National Capital Region; and 4) Engineer Privadi J.G.
Dalire, Chief of the Geodetic Surveys Division of the Land Management Bureau.
On August 15, 1997, petitioner started the presentation of his evidence. Petitioner called as his witness, Atty. Liwliwa H. Bucu, the
present Branch Clerk of Court of Quezon City RTC, Branch 82, the court which took cognizance of petitioner’s reconstitution
proceedings.
Both parties presented voluminous documentary evidence.
Thereafter, the trial court denied respondent’s Motion to Dismiss. It held that:
a) UP’s claim that the action to quiet title was in actuality a petition to annul UP’s title, is unsupported by evidence;
b) Prescription cannot bar petitioner’s action to quiet title as Cañero is in possession of the land through the presence
therein of "designated caretakers";
c) Since both UP and petitioner submit they are in possession of the land, a full blown trial on the merits is necessary to
enable both parties to substantiate their claims;
d) The trial court believes it can render judgment in accordance with petitioner’s prayer as he cannot be deemed to be
without sufficient cause of action; and
e) The presumption of regularity in the performance of official function of the trial court which granted the reconstitution
proceedings still remains, because UP has not adduced sufficient evidence, either in a proceeding to annul the said
judgment or in an answer as a special or affirmative defense.
Respondent UP’s Motion for Reconsideration was denied, hence, it elevated the order to the Court of Appeals via a petition for
certiorari under Rule 65 of the Revised Rules of Court, alleging grave abuse of discretion amounting to lack of jurisdiction on the
part of the trial court. It raised the following issues:
I. WHETHER OR NOT RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION IN HOLDING THAT THE
COMPLAINT FOR QUIETING OF TITLE IS NOT A COLLATERAL ATTACK ON THE UNIVERSITY’S TITLE.
II. WHETHER OR NOT RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION IN HOLDING THAT THE
PROCEEDINGS IN CIVIL CASE NO. Q-91-5467 WERE VALID DESPITE LACK OF NOTICE TO THE UNIVERSITY, AN
INDISPENSABLE JURISDICTIONAL REQUIREMENT.27
The Court of Appeals found in favor of respondent UP. The dispositive portion of its Decision states:
WHEREFORE, premises considered, the Orders dated April 23, 1998 and September 15, 1998 of the respondent Judge
are hereby REVERSED and SET ASIDE, and respondent Domingo A. Cañero’s complaint for "Quieting of Title and
cancellation of Entry in the Tax Declaration" is hereby DISMISSED. 28
On January 2, 2004, petitioner filed his Motion for Reconsideration of the Court of Appeals’ decision. UP filed its Opposition. The
Special Former Third Division of the Court of Appeals denied petitioner’s Motion.
On January 8, 2003, petitioner raised the matter to this Court through an ordinary appeal. Petitioner posted the following issues:
I. Whether or not the reversal and/or nullification by the Honorable Court of Appeals of the April 23, 1998 and September
15, 1998 orders of the Honorable Regional Trial Court of Quezon City-Branch 222, which denied Respondent’s motion to
dismiss the complaint in Civil Case No. Q-94-21587, is/are in accord with law and/or with the applicable decisions of this
Most Honorable Court.
II. Whether or not the Honorable Court of Appeals deprived the Petitioner of his constitutional and statutory right to due
process in oreversing and/or nullifying the April 23, 1998 and September 15, 1998 orders of the Honorable Regional Trial
Court of Quezon City-Branch 222, which denied Respondent’s motion to dismiss the complaint in Civil Case No. Q-94-
21587.29
In a Manifestation which he filed with the trial court, petitioner declared that the lot here in dispute is the same property as the lot in
Civil Case No. Q-93-18569.30 The said case was raised to the Court of Appeals, and later to the Supreme Court as Heirs of Pael vs.
Court of Appeals.31
We rule that the lot subject of the case at bar belongs to respondent UP. In numerous earlier jurisprudence, we have held that this
subject lot is part of the mass of land owned by respondent UP under TCT No. 9462. The most recent case, Heirs of Pael vs.
Court of Appeals, cannot be more categorical. There, we stated:
The disputed property, however, is part of the UP Diliman Campus, covered by TCT No. 9462. It was established, after
the survey conducted by the Department of Environment and Natural Resources, National Capital Region (DENR-NCR)
that the property claimed by Chin and Mallari overlaps the property covered by UP's title. x x x
It is judicial notice that the legitimacy of UP's title has been settled in several other cases decided by this Court. The case of
Tiburcio, et al. vs. People's Homesite & Housing Corp. (PHHC), et al. (106 Phil. 477 [1959]) was an action for reconveyance of a
430-hectare lot in Quezon City, filed by the heirs of Eladio Tiburcio against PHHC and UP. A portion of the disputed land was
covered by TCT No. 1356 registered in the name of PHHC and another portion was covered by TCT No. 9462 registered in the
name of UP. Affirming the validity of TCT No. 1356 and TCT No. 9462, this Court ruled:
. . . the land in question has been placed under the operation of the Torrens system since 1914 when it has been
originally registered in the name of defendant's predecessor-in-interest. It further appears that sometime in 1955
defendant People's Homesite & Housing Corporation acquired from the original owner a parcel of land embracing
practically all of plaintiff's property for which Transfer Certificate of Title No. 1356 was issued in its favor, while defendant
University of the Philippines likewise acquired from the same owner another portion of land which embraces the
remainder of the property for which Transfer Certificate of Title No. 9462 was issued in its favor. It is, therefore, clear that
the land in question has been registered in the name of defendant's predecessor-in-interest since 1914 under the Torrens
system and that notwithstanding what they now claim that the original title lacked the essential requirements prescribed by
law for their validity, they have never taken any step to nullify said title until 1957 when they instituted the present action.
In other words, they allowed a period of 43 years before they woke up to invoke what they claim to be erroneous when the
court decreed in 1914 the registration of the land in the name of defendants' predecessor-in-interest. Evidently, this
cannot be done for under our law and jurisprudence, a decree of registration can only be set aside within one year after
entry on the ground of fraud provided no innocent purchaser for value has acquired the property.
Thus, this Court held that the decree of registration in the name of the predecessor-in-interest of PHHC and UP, as well
as the titles issued pursuant thereto have become incontrovertible.
This Court again affirmed the validity and indefeasibility of UP's title in the case of Galvez vs. Tuason (10 SCRA 344
[1964]). where Maximo Galvez and the heirs of Eladio Tiburcio sought the recovery of a parcel of land in Quezon City
registered under the names of Mariano Severo, Maria Teresa Eriberta, Juan Jose, Demetrio Asuncion, Augusto Huberto,
all surnamed Tuason y de la Paz, UP, and PHHC. This is the same land subject of the controversy in Tiburcio vs. PHHC .
This Court held in Galvez that the question of ownership of the disputed land has been thrice settled definitely and
conclusively by the courts: first, in the proceedings for the registration of the property in the name of the Tuasons; second,
in the application filed by Marcelino Tiburcio with the Court of First Instance of Rizal for registration of the disputed
property in his name which was dismissed by said court; and third, in the action for reconveyance filed by the heirs of
Eladio Tiburcio against PHHC and UP which was also dismissed by the court, which dismissal was affirmed by this Court
in Tiburcio vs. PHHC. We held that the issue of ownership of the property was already beyond review.
The rulings in Tiburcio vs. PHHC and Galvez vs. Tuason were reiterated by this Court in PHHC vs. Mencias (20 SCRA
1031 [1967]) and Varsity Hills vs. Mariano (163 SCRA 132 [1988]).
xxx
Finally, it should be emphasized that this Court’s Decision in Tiburcio, et al. vs. PHHC, as well as in the subsequent cases
upholding the validity and indefeasibility of the certificate of title covering the UP Diliman Campus, precludes the courts
from looking anew into the validity of UP's title. Thus, the appellate court's discourse in the case at bar as regards the
origin of UP's certificate of title, whether it came from OCT 730 or OCT 735 is intolerable, to say the least. The rule is that
material facts or questions which were in issue in a former action and were there admitted or judicially determined are
conclusively settled by a judgment rendered therein and that such facts or questions become res judicata and may not
again be litigated in a subsequent action between the same parties or their privies, regardless of the form the issue may
take in the subsequent action, whether the subsequent action involves the same or a different form of proceedings, or
whether the second action is upon the same or a different cause of action, subject matter, claim or demand, as the earlier
action. In such cases, it is also immaterial that the two actions are based on different grounds, or tried on different
theories, or instituted for different purposes, and seek different reliefs. By the same token, whatever is once irrevocably
established as the controlling legal principle or decision continues to be the law of the case between the same parties in
the same case, whether correct on general principles or not, so long as the facts on which such decision was predicated
continue to be the facts of the case before the court. (J.C. Lopez & Associates, Inc. vs. Commission on Audit, 364 SCRA
472 [2001], citing Veloso, Jr. vs. Court of Appeals, 261 SCRA 196 [1996].)
Our decision in the Heirs of Pael vs. Court of Appeals and petitioner’s admission that his lot is the same as the lot in the said case
completely negate petitioner’s cause of action. Hoist with his own petard, petitioner Cañero is bound by res judicata.
Petitioner avers that by filing a Motion to Dismiss based on the ground of lack of cause of action, respondent UP admitted as facts
all his allegations therein. Thus, the trial court did not err in ruling that he had sufficient cause of action.
We do not agree. We rule that the appellate court is correct in holding that the trial court should have dismissed the complaint to
quiet title. Petitioner’s reconstituted title is his basis for filing the action to quiet title against respondent UP. The reconstituted title
and the proceedings from which it hailed from are, however, void.
R.A. No. 26 provides for a special procedure for the reconstitution of Torrens certificates of title that are missing but not fictitious
titles or titles which are existing. It is an absolute absurdity to reconstitute existing certificates of title that are on file and available in
the registry of deeds.32 If we were to sustain petitioner’s stance, the establishment of the Torrens system of land titling would be for
naught, as cases dealing with claims of ownership of registered land would be teeming like worms coming out of the woodwork. It is
self-evident that the trial court’s judgment could not be sustained. When a judgment is void for lack of jurisdiction and its nullity is
shown by virtue of its own recitals, it may be said to be a lawless thing, which can be treated as an outlaw and slain at sight, or
ignored wherever and whenever it exhibits its head.33 The appellate court acted in accordance with law when it granted
respondent’s Motion to Dismiss and set aside petitioner’s title.
We further note that even if the subject lot had not already been registered in the name of respondent UP, still the reconstitution
proceedings are void for lack of notice to adjoining property owners. We quote Sections 12 and 13 of Republic Act No. 26 (An Act
Providing A Special Procedure For The Reconstitution Of Torrens Certificate Of Title Lost Or Destroyed), viz:
Sec. 12. Petitions for reconstitution from sources enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and/or 3(f)
of this Act, shall be filed with the proper Court of First Instance, by the registered owner, his assigns, or any person having
an interest in the property. The petition shall state or contain, among other things, the following: (a) that the owner's
duplicate of the certificate of title had been lost or destroyed; (b) that no co-owner's, mortgagee's or lessee's duplicate had
been issued, or, if any had been issued, the same had been lost or destroyed; (c) the location, area and boundaries of the
property; (d) the nature and description of the buildings or improvements, if any, which do not belong to the owner of the
land, and the names and addresses of the owners of such buildings or improvements; (e) the names and addresses of the
occupants or persons in possession of the property, of the owners of the adjoining properties and of all persons who may
have any interest in the property; (f) a detailed description of the encumbrances, if any, affecting the property; and (g) a
statement that no deeds or other instruments affecting the property have been presented for registration, or, if there be
any, the registration thereof has not been accomplished, as yet. All the documents, or authenticated copies thereof, to be
introduced in evidence in support [of] the petition for reconstitution shall be attached thereto and filed with the
same; Provided, That in case the reconstitution is to be made exclusively from sources enumerated in section 2(f) or 3(f)
of this Act, the petition shall be further accompanied with a plan and technical description of the property duly approved by
the Commissioner of Land Registration, or with a certified copy of the description taken from a prior certificate of title
covering the same property.
Sec. 13. The Court shall cause a notice of the petition, filed under the preceding section, to be published at the expense
of the petitioner, twice in successive issues of the Official Gazette, and to be posted on the main entrance of the provincial
building and of the municipal building of the municipality or city in which the land is situated at least thirty days prior to the
date of hearing. The court shall likewise cause a copy of the notice to be sent, by registered mail or otherwise, at the
expense of the petitioner, to every person named therein whose address is known, at least thirty days prior to the date of
hearing. Said notice shall state, among other things, the number of the lost or destroyed certificate of title, if known, the
name of the registered owner, the names of the occupants or persons in possession of the property, the owners of the
adjoining properties and all other interested parties, the location, area and boundaries of the property, and the date on
which all persons having any interest therein must appear and file their claim or objections to the petition. The petitioner
shall, at the hearing, submit proof of the publication, posting and service of the notice as directed by the court. (Emphases
ours.)
Judicial reconstitution of title partakes of a land registration proceeding. Thus, notice of the proceedings must be given in the
manner set forth by the letter of the law.34 A cursory perusal of the petition for reconstitution35 filed by petitioner, clearly reveals that
the adjoining property owners were never mentioned and, hence, not notified. Upon cross-examination by counsel for respondent
UP, Atty. Liwliwa Bucu, the clerk of court of Branch 82, declared36 that aside from the notices sent to the concerned government
agencies, the publication in the Official Gazette and the posting of the Order in several conspicuous public places, no other notice
was sent by the trial court to any party. Respondent UP owns the entirety of the land surrounding the lot in issue; yet it was not
notified of the reconstitution proceedings. It is hoary doctrine that defects in the notices required under the law to be sent to
interested parties, deprive the court of jurisdiction. As early as the case of Manila Railroad Company vs. Moya,37 we had already
ruled that if no notice of the date of hearing of a reconstitution case is served on a possessor or one having interest in the property
involved, he is deprived of his day in court and the order of reconstitution is null and void, even if, otherwise, the said order should
have been final and executory.
We explained the rationale of this rule in the case of Director of Lands vs. Court of Appeals,38 viz:
x x x (S)aid defects have not invested the Court with the authority or jurisdiction to proceed with the case because the
manner or mode of obtaining jurisdiction as prescribed by the statute which is mandatory has not been strictly followed,
thereby rendering all proceedings utterly null and void. We hold that the mere Notice that "all interested parties are hereby
cited to appear and show cause if any they have why said petition should not be granted" is not sufficient for the law must
be interpreted strictly; it must be applied rigorously, with exactness and precision. x x x
The rule We have stated and quoted from Manila Railroad Company vs. Hon. Jose M. Moya, et al., supra is rightly so because one
who seeks the reconstitution of his title to property is duty-bound to know who are the occupants, possessors thereof, or persons
having an interest in the property involved, specially where the property is so [v]ast and situated in a suitable residential and
commercial location, where buildings and improvements have been or are being constructed openly and publicly.
Particularly apt to the case at bar is the ruling of this Court in Alabang Development Corporation vs. Valenzuela:39
Upon examination of the subject petition for reconstitution, the Court notes that some essential data required in section 12
and section 13 of Republic Act 26 have been omitted: the nature and description of the buildings or improvements, which
do not belong to the owner of the land, and the names and addresses of the owners of such buildings or improvements,
and the names and addresses of the occupants or persons in possession of the property, of the owners of the adjoining
properties and of all persons who may have any interest in the property. Neither do these data appear in the Notice of
Hearing, such that no adjoining owner, occupant or possessor was ever served a copy thereof by registered mail or
otherwise.
xxx
And since the above data do not appear in the Amended Petition, the same data do not also appear in the Notice of
Hearing of the petition published in the Official Gazette. Patently, the provisions of Section 12 which enumerates
mandatorily the contents of the Petition for Reconstitution and Section 13 which similarly require the contents of the
Notice have not been complied with. In view of these multiple omissions which constitute non-compliance with the above-
cited sections of the Act, We rule that said defects have not invested the Court with the authority or jurisdiction to proceed
with the case because the manner or mode of obtaining jurisdiction as prescribed by the statute which is mandatory has
not been strictly followed, thereby rendering all proceedings utterly null and void. We hold that the mere Notice that "all
interested parties are hereby cited to appear and show cause if any they have why said petition should not be granted" is
not sufficient for the law must be interpreted strictly; it must be applied rigorously, with exactness and precision.
In sum, RTC, Branch 82 never acquired jurisdiction over the reconstitution proceedings because it failed to notify the
respondent, an adjoining property owner. Its judgment must perforce be declared void. A void judgment is not entitled to
the respect accorded to a valid judgment, but may be entirely disregarded or declared inoperative by any tribunal in which
effect is sought to be given to it. It has no legal or binding effect or efficacy for any purpose or at any place. It cannot
affect, impair or create rights. It is not entitled to enforcement and is, ordinarily, no protection to those who seek to
enforce. In other words, a void judgment is regarded as a nullity, and the situation is the same as it would be if there was
no judgment. It, accordingly, leaves the parties litigants in the same position they were in, before the trial. 40
Moreover, even if the validity of petitioner’s title to the lot had been sustained, it cannot be overlooked that petitioner had registered
his title 18 years after respondent UP. The established rule unbent by the passage of time is that where there are two certificates of
title purporting to cover the same land, the person claiming under the certificate earlier registered is the rightful owner of the lot in
dispute.41 UP’s title is earlier and should be upheld.
The appellate court also correctly ruled that petitioner’s action to quiet title had likewise prescribed. Petitioner tried to avoid the bar
of prescription by averring that his "designated caretakers" had been occupying the lot at his behest. From the inception of
petitioner’s action to quiet title in 1991 until the filing of his petition for certiorari before us in 2003, neither hide nor hair of petitioner’s
"designated caretakers" was ever seen or mentioned in any pleading filed before this Court or before the lower courts. Even when
faced with the threat of dismissal of his action, petitioner still maintained the anonymity of his "designated caretakers." His posture
leads us to no other conclusion but that these "designated caretakers" do not exist and are merely part of the myth he propagated to
substantiate his claim of ownership of the lot. In contrast, respondent UP was able to prove that it was in possession of the lot by
showing the existence therein of buildings and structures it had erected, and which it controls and maintains. Both parties were
given more than ample opportunity to substantiate their claims during the hearing of respondent’s Motion to Dismiss.
Petitioner asserts that he was deprived of his constitutional right to due process as his title was nullified by the appellate court on
grounds not raised in the respondent’s petition for certiorari. He avers that he should have been afforded the opportunity to establish
his title in a full-blown trial based on the merits.
We are not impressed. The appellate court found that the reconstitution proceedings were void as the lot was already registered
earlier in the name of respondent. Further, it found that notice to adjoining property owners was not given by the trial court. For this
reason, it never acquired jurisdiction over the quieting of title case and all the proceedings granting the petition for reconstitution are
null and void.42 As a rule, the findings of fact of the Court of Appeals are final and conclusive and cannot be reviewed on appeal by
this Court.43 As there is no patent error in the appreciation of the facts by the appellate court, we sustain its judgment.
Respondent UP had correctly availed of the remedy of certiorari when it assailed the interlocutory order of the trial court to the
appellate court. While in the regular course of appeal, the interlocutory acts of the court may be assigned as errors, such remedy
may not necessarily be adequate as it can be availed of only in the future and prejudice may have been caused in the interim, hence
certiorari is permitted to be availed of.44 In the case at bar, grave and irrepareable damage will accrue to respondent UP had it
waited to avail of the remedy of appeal. Moreover, further trial on the merits would have been a wasteful occupation of the lower
court’s time and resources.
The trial court erred when it stated that petitioner should not be bound by the Court’s judgments in earlier jurisprudence where we
affirmed the validity of the title of respondent UP, as he was not a party to any of these previous cases. 45 All the foregoing cases,
akin to petitioner’s complaint, deal with the same parcel of land or pieces thereof of the same large mass covered by a single
certificate of title, registered under the name of respondent UP. If we were to sustain the trial court’s stance that in order to be bound
by such jurisprudence, one must be a party to each of the cases aforementioned, our dockets would be clogged ad infinitum with
complaints filed left and right by unscrupulous land grabbers nipping any piece they can get from the lands of respondent. Certainly,
such interpretation of the applicability of res judicata is intolerable for it will defeat the indefeasibility of respondent UP’s title.
Petitioner, just like any other litigant, is bound by our judgment that UP holds title to the lot.
We strongly admonish courts and unscrupulous lawyers to stop entertaining spurious cases seeking further to assail
respondent UP’s title. These cases open the dissolute avenues of graft to unscrupulous land-grabbers who prey like
vultures upon the campus of respondent UP. By such actions, they wittingly or unwittingly aid the hucksters who want to
earn a quick buck by misleading the gullible to buy the Philippine counterpart of the proverbial London Bridge. It is well
past time for courts and lawyers to cease wasting their time and resources on these worthless causes and take judicial
notice of the fact that respondent UP’s title had already been validated countless times by this Court. Any ruling deviating
from such doctrine is to be viewed as a deliberate intent to sabotage the rule of law and will no longer be countenanced.
IN VIEW WHEREOF, the judgment of the Court of Appeals is affirmed. The petition for certiorari is dismissed. Treble costs against
the petitioner.
SO ORDERED.
Austria-Martinez*, Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.
SECOND DIVISION
[G.R. No. 142810. August 18, 2005]
DOLORES A. CABELLO and TEOFILO ABELLANOSA, petitioners, vs. THE REPUBLIC OF THE PHILIPPINES, respondent.
DECISION
TINGA, J.:
This Petition[1] dated April 12, 2000 assails the Decision[2] dated November 17, 1999 and Resolution[3] dated April 5, 2000 of the
Court of Appeals, respectively reversing the trial courts Decision[4] ordering the reconstitution of a certificate of title and denying
petitioners motion for reconsideration.
The facts are straightforward.
In a Petition[5] dated January 20, 1996, Dolores A. Cabello and Teofilo Abellanosa sought the reconstitution of an unknown
Original Certificate of Title covering Lot No. 4504 of the Cadastral Survey of Cebu pursuant to Decree of Registration No. 335316.
Petitioners alleged therein that an original certificate of title over the property was issued by the Registry of Deeds of Cebu City in the
names of Basilio and Roberto Abellanosa. However, the original certificate of title on file with the Registry of Deeds and the owners
duplicate certificate of title in the possession of the registered owners were lost during World War II. Further, the petition was allegedly
filed pursuant to Sec. 2(d) in relation to Sec. 12 of Republic Act No. 26 (RA 26), which dispenses with the requirement of submission
of the tracing cloth/blue print plan and technical description.
Attached to the petition are a certified photocopy of Decree of Registration No. 335316 issued by the Land Registration
Commission; a certification issued by the Registry of Deeds of Cebu City to the effect that its records do not show that a certificate of
title has been issued over Lot No. 4504; and Tax Declaration No. 20335 in the name of co-owner Basilio Abellanosa.
After due proceedings, the trial court rendered a Decision[6] dated August 28, 1996, ordering the Registry of Deeds of Cebu City
to reconstitute the original certificate of title for Lot No. 4504 in the names of Basilio Abellanosa, married to Severina Bacalso, and
Roberto Abellanosa, married to Apolonia Nacua, based on Decree of Registration No. 335316.
The Republic, represented by the Office of the Solicitor General (OSG), appealed the Decision, contending that the certification
issued by the Registry of Deeds of Cebu City puts in doubt whether an original certificate of title covering Lot No. 4504 was previously
issued in the names of petitioners predecessors-in-interest. Assuming that a certificate of title was so issued, the petition should have
been accompanied by a plan and technical description of the property duly approved by the Chief of the General Land Registration
Office or a certified copy of the description taken from a prior certificate of title covering the property since it was based on Sec. 2(f)
or 3(f) of RA 26.[7]
The appellate court reversed the trial courts findings, ruling that the documents presented by petitioners in support of their
petition for reconstitution fall under Sec. 2(f) of RA 26 since the decree of registration does not establish by any reasonable measure
the existence of an earlier certificate of title over the property concerned. Hence, petitioners should have produced a duly approved
plan and technical description as mandated under Sec. 12 of RA 26.
The Court of Appeals denied petitioners motion for reconsideration.
Petitioners are now before this Court averring that the petition for reconstitution was based on Sec. 2(d) of RA 26. Under this
section of the law, an authenticated copy of the decree of registration or patent pursuant to which the original certificate of title was
issued is sufficient to support a petition for reconstitution. The plan and technical description are therefore no longer required.
The appellate court also allegedly erred in finding that the decree of registration petitioners presented does not establish the
existence of an earlier certificate of title.
The OSG filed its Comment[8] dated August 22, 2000, arguing that RA 26 presupposes that a title was previously issued by the
Registry of Deeds in the name of the applicant which was subsequently lost or destroyed. In this case, the certification issued by the
Registry of Deeds shows that said office did not issue a certificate of title covering Lot No. 4504. Even assuming that such a certificate
of title was issued, the OSG avers that petitioners should have presented an authenticated copy of the decree of registration and not
a mere certified photocopy. Moreover, they should have accompanied the petition with a plan and technical description of the property
duly approved by the Land Registration Authority or with a certified true copy of the description taken from a prior certificate of title
covering the same property pursuant to Sec. 12 of RA 26.
In their Reply[9] dated October 9, 2003, petitioners maintain that the certification issued by the Registry of Deeds was so worded
because both the original and the duplicate certificate of title were lost and/or destroyed during World War II. Moreover, the decree of
registration they presented is according to them an authenticated copy admissible under the Rules of Court. They also aver that RA
26 does not require the presentation of the plan and technical description of the property if the basis for the petition for reconstitution
is, as in this case, Sec. 2(d) thereof.
We deny the petition.
Republic Act No. 26, entitled An Act Providing a Special Procedure for the Reconstitution of Torrens Certificates of Title Lost or
Destroyed, approved on September 25, 1946, lays down the procedure by which previously issued but lost or destroyed certificates
of title may be reconstituted. As the title of the law suggests, it presupposes that the property whose title is sought to be reconstituted
has already been brought under the provisions of the Torrens System, Act 496. [10]
Republic Act No. 26 confers jurisdiction or authority on the Court of First Instance (now the Regional Trial Court) to hear and
decide petitions for judicial reconstitution. It provides the special requirements and procedure that must be followed before the court
can properly act, assume and acquire jurisdiction or authority over the petition and grant the reconstitution prayed for. The petition for
reconstitution must allege certain specific jurisdictional facts, the notice of hearing must be published in the Official Gazette and posted
in particular places and the same sent or notified to specified persons. [11] Sections 12 and 13 of RA 26 set forth the contents of the
petition and lay down the procedure to be followed therefor, as follows:
SECTION 12. Petitions for reconstitution from sources enumerated in sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e) and/or 3(f) of this Act, shall
be filed with the proper Court of First Instance, by the registered owner, his assigns, or any person having an interest in the property. The petition
shall state or contain, among other things, the following: (a) that the owner's duplicate of the certificate of title had been lost or destroyed; (b) that
no co-owner's, mortgagee's, or lessee's duplicate had been issued, or, if any had been issued, the same had been lost or destroyed; (c) the location,
area and boundaries of the property; (d) the nature and description of the buildings or improvements, if any, which do not belong to the owner of
the land, and the names and addresses of the owners of such buildings or improvements; (e) the names and addresses of the occupants or persons
in possession of the property, of the owners of the adjoining properties and all persons who may have any interest in the property; (f) a detailed
description of the encumbrances, if any, affecting the property; and (g) a statement that no deeds or other instruments affecting the property have
been presented for registration, or, if there be any, the registration thereof has not been accomplished, as yet. All the documents, or authenticated
copies thereof, to be introduced in evidence in support of the petition for reconstitution shall be attached thereto and filed with the
same: Provided, That in case the reconstitution is to be made exclusively from sources enumerated in section 2(f) of 3(f) of this Act, the
petition shall be further accompanied with a plan and technical description of the property duly approved by the Chief of the General
Land Registration Office, or with a certified copy of the description taken from a prior certificate of title covering the same
property. [Emphasis supplied.]
SECTION 13. The court shall cause a notice of the petition, filed under the preceding section, to be published, at the expense of the petitioner,
twice in successive issues of the Official Gazette, and to be posted on the main entrance of the provincial building and of the municipal building
of the municipality or city in which the land is situated, at least thirty days prior to the date of hearing. The court shall likewise cause a copy of
the notice to be sent, by registered mail or otherwise, at the expense of the petitioner, to every person named therein whose address is known, at
least thirty days prior to the date of hearing. Said notice shall state, among other things, the number of the lost or destroyed certificate of title, if
known, the name of the registered owner, the names of the occupants or persons in possession of the property, the owners of the adjoining
properties and all other interested parties, the location, area and boundaries of the property, and the date on which all persons having any interest
therein must appear and file their claim or objections to the petition. The petitioner shall, at the hearing, submit proof of the publication, posting
and service of the notice as directed by the court.
The documentary requirements and procedure are mandatory and must be strictly complied with before the court can act on a petition
for reconstitution and grant the remedy sought. Otherwise, the proceedings will be utterly void.[12]
In this case, there appears to be no question as regards compliance with the procedural requirements of RA 26. Rather, the
controversy lies in the documentary basis for the reconstitution.
According to petitioners, the petition lodged before the trial court is anchored on Sec. 2(d) of RA 26, which provides that an
original certificate of title may be reconstituted from an authenticated copy of the decree of registration pursuant to which an original
certificate of title was issued. On the other hand, the OSG considered the petition to have been filed under Sec. 2(f) of the law.
Sec. 2 is quoted hereunder in full for comparative reference:
SECTION 2. Original certificates of title shall be reconstituted from such of the sources hereunder enumerated as may be available, in the
following order:
a) The owners duplicate certificate of title;
b) The co-owners, mortgagees, or lessees duplicate of the certificate of title;
c) A certified copy of the title previously issued by the register of deeds or by a legal custodian thereof;
d) An authenticated copy of the decree of registration or patent, as the case may be, pursuant to which the original certificate of title was
issued;
e) A document, on file in the registry of deeds by which the property, the description of which is given in said document, is mortgaged, leased or
encumbered, or an authenticated copy of said document showing that its original had been registered; and
f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting the lost or destroyed
certificate of title. [Emphasis supplied.]
As can be seen from the foregoing text in relation to Sec. 12 of RA 26, in case the reconstitution is to be made exclusively from
sources enumerated in Sec. 2(f), the petition shall be further accompanied by a plan and technical description of the property duly
approved by the Chief of the General Land Registration Office, or with a certified copy of the description taken from a prior certificate
of title covering the same property. This requirement does not exist if the source of the reconstitution is Sec. 2(d), although as worded,
it must be shown that an original certificate of title was indeed issued pursuant to the very decree of registration presented as basis
for reconstitution.
In this case, petitioners attached to their petition for reconstitution a certified photocopy of the decree of registration pursuant to
which an original certificate of title was allegedly issued by the Registry of Deeds covering the property. They also presented a witness
who testified that he had actually seen a copy of the propertys original certificate of title.[13]
The trial court, after evaluating the documentary and testimonial evidence, was convinced that the property is covered by an
original certificate of title, the original and owners copies of which were lost, and accordingly ordered the reconstitution of the original
certificate of title.
The propriety of the reconstitution ordered by the trial court in light of the certification issued by the Registry of Deeds [T]hat
records in this office do not show that a certificate of title has been issued to Lot No./s 4504, is now at issue. The OSG insists that the
petition for reconstitution should have been considered by the trial court as filed under Sec. 2(f) of RA 26, in accordance with which
the plan and technical description of the property should have also been presented, because the question of whether an original
certificate of title was issued pursuant to the decree of registration was put in doubt by the certification issued by the Registry of Deeds.
We cannot give primacy to the findings of the trial court over the categorical certification by the Registry of Deeds that its records
do not show that a certificate or title was issued over the property. Indeed, this certification presents a powerfully cogent reason for
the denial of the petition for reconstitution anchored as it was on Sec. 2(d) above-quoted. The trial court should have been more
circumspect in ordering reconstitution based on this section considering that the only evidence upon which it based its finding that an
original certificate of title had been issued pursuant to the decree of registration adduced by petitioners was the testimony of two
witnesses, one of whom is petitioner herein.[14]
Notably, only Felipe Abangan was able to positively testify that he had seen the original certificate of title of the property.
Petitioner Dolores Cabello merely testified to the effect that Basilio Abellanosa kept the original certificate of title but that she did not
know where it was.[15]
In sum, the evidence presented by petitioners does not establish that an original certificate of title over the property was earlier
issued. Hence, the reconstitution ordered by the trial court was improper. The petition should have been filed under Sec. 2(f) of RA
26, in which case, it should have been accompanied by a duly approved plan and technical description of the property in accordance
with Sec. 12 of the law.
WHEREFORE, the Petition is hereby DENIED. The Decision of the Court of Appeals is AFFIRMED. Costs against petitioners.
SO ORDERED.
EN BANC
[G. R. No. 130876. January 31, 2002]
FRANCISCO M. ALONSO, substituted by his heirs, petitioners, vs. CEBU COUNTRY CLUB, INC., respondent.
DECISION
PARDO, J.:
The Case
The case is an appeal via certiorari from a decision of the Court of Appeals [1] affirming in toto that of the Regional Trial Court,
Branch 8, Cebu City,[2] declaring that the title to the contested Lot No. 727, Banilad Friar Lands Estate, Cebu City, was validly re-
constituted in the name of the Cebu Country Club, Inc. and ordering petitioners to pay attorneys fees of P400,000.00, and litigation
expenses of P51,000.00, and costs.
In an appeal via certiorari, petitioners may raise only questions of law, which shall be distinctly set forth. [3] The jurisdiction of the
Supreme Court in cases brought before it from the Court of Appeals is limited to the review of errors of law and not to analyze or weigh
the evidence all over again, as its findings of facts are deemed final and conclusive.[4]
In this appeal, petitioners raise five (5) issues, all of which involve questions of fact that have been resolved by the trial court
and the Court of Appeals in favor of the Cebu Country Club, Inc.
The Facts
The facts, as found by the Court of Appeals, are as follows:

(1) Petitioner Francisco M. Alonso, who died pendente lite and substituted by his legal heirs, a lawyer by profession, the only
son and sole heir of the late Tomas N. Alonso and Asuncion Medalle, who died on June 16, 1962 and August 18, 1963, respectively
(Exhibits P and P-1). Cebu Country Club, Inc. is a non-stock, non-profit corporation duly organized and existing under Philippine Laws
the purpose of which is to cater to the recreation and leisure of its members.
(2) Sometime in 1992, petitioner discovered documents and records Friar Lands Sale Certificate Register/Installment Record
Certificate No. 734, Sales Certificate No. 734 and Assignment of Sales Certificate (Exhs. A, J and K) showing that his father acquired
Lot No. 727 of the Banilad Friar Lands Estate from the Government of the Philippine Islands in or about the year 1911 in accordance
with the Friar Lands Act (Act No. 1120). The documents show that one Leoncio Alburo, the original vendee of Lot No. 727, assigned
his sales certificate to petitioners father on December 18, 1911, who completed the required installment payments thereon under Act
No. 1120 and was consequently issued Patent No. 14353 on March 24, 1926. On March 27, 1926, the Director of Lands, acting for
and in behalf of the government, executed a final deed of sale in favor of petitioners father Tomas N. Alonso (Exh. C). It appears,
however, that the deed was not registered with the Register of Deeds because of lack of technical requirements, among them the
approval of the deed of sale by the Secretary of Agriculture and Natural Resources, as required by law.
(3) Upon investigation of the status of the land, petitioner found out from the office of the Registrar of Deeds of Cebu City that
title to Lot No. 727 of the Banilad Friar Lands Estate had been administratively reconstituted from the owners duplicate on July 26,
1948 under Transfer Certificate of Title (TCT) No. RT-1310 (T-11351) in the name of United Service Country Club, Inc., predecessor
of Cebu Country Club, Inc. On March 8, 1960, upon order of the Court of First Instance, the name of the registered owner in TCT No.
RT-1310 (T-11531) was changed to Cebu Country Club, Inc. Moreover, the TCT provides that the reconstituted title was a transfer
from TCT No. 1021 (Exh. D and sub-markings).
(4) At present, TCT No. RT-1310 (T-11351) has been partially cancelled when Lot No. 727 was subdivided in accordance with
the Memorandum of Agreement entered into by Cebu Country Club, Inc. and Susana Ingles Marquiso and Simeon Ingles, Jr. by virtue
of the ruling of the Court of Appeals in the case of Heirs of Ramon Cabrera and Graciano Ingles v. Cebu Country Club, Inc. [5] and
affirmed by the Supreme Court in G. R. No. 60392, per resolution dated August 29, 1983. Lot 727-D-2 covered by TCT No. 94905
remains registered in the name of Cebu Country Club, Inc. (Exh. D-2).
(5) In the firm belief that petitioners father is still the rightful owner of Lot No. 727 of the Banilad Friar Lands Estate since there
are no records showing that he ever sold or conveyed the disputed property to anyone, on July 7, 1992, petitioner made a formal
demand upon Cebu Country Club, Inc. to restore to him the ownership and possession of said lot within fifteen (15)days from receipt
thereof. He indicated that his claim was analogous to that of the heirs of the late Ramon Cabrera and Graciano Ingles which was
upheld by the Court of Appeals (Exh. H). Cebu Country Club, Inc., however, denied petitioners claim and refused to deliver possession
to him.
(6) Left with no other recourse, on September 25, 1992, petitioner filed with the Regional Trial Court, Cebu City, [6] a complaint
for declaration of nullity and non existence of deed/title, cancellation of certificates of title and recovery of property against defendant
Cebu Country Club, Inc.[7] He alleged that the Cebu Country Club, Inc. fraudulently and illegally managed to secure in its name the
administrative reconstitution of TCT No. RT-13 10 (T-11351) despite the absence of any transaction of specific land dealing that would
show how Lot No. 727 had come to pass to Cebu Country Club, Inc.; that TCT No. 11351 which is the source title of TCT No. RT-
1310 (T-11351) does not pertain to Lot No. 727; that the reconstituted title which was issued on July 26, 1948, did not contain the
technical description of the registered land which was inserted only on March 8, 1960, twenty-eight (28) years after the issuance of
TCT No. RT-1310 (T-11351), hence, Cebu Country Club, Inc.s title is null and void. Petitioner thus prayed for the cancellation of TCT
No. RT-1310 (T-11351) and the issuance of another title in his name as the sole heir of Tomas Alonso, for Cebu Country Club, Inc. to
deliver possession of the property to petitioner, and render an accounting of the fruits and income of the land. Petitioner likewise
prayed for the sum of P100,000.00 by way of attorneys fees plus P500.00 per hearing as appearance fee, and P10,000.00 as
reasonable litigation expenses.
(7) On November 5, 1992, Cebu Country Club, Inc. filed with the trial court its answer with counterclaim. It alleged that petitioner
had no cause of action against Cebu Country Club, Inc. since the same had prescribed and was barred by laches, Cebu Country
Club, Inc. having been in possession of the land since 1935 until the present in the concept of an owner, openly, publicly, peacefully,
exclusively, adversely, continuously, paying regularly the real estate taxes thereon; that Cebu Country Club, Inc. acquired the lot in
good faith and for value; that it caused the administrative reconstitution of Lot No. 727 in 1948 from the owners duplicate, the original
of TCT No. 11351 having been lost or destroyed during the war, pursuant to Republic Act No. 26, its implementing Circular, GLRO
Circular No. 17[8] and Circular No. 6 of the General Land Registration Office;[9] that unlike Cebu Country Club, Inc., petitioners father
never had any registered title under the Land Registration Act No. 496 nor did he pay the necessary taxes on Lot No. 727 during his
lifetime; that petitioners father knew that the United Service Country Club, Inc., predecessor of Cebu Country Club, Inc. was occupying
Lot No. 727 as owner; that petitioners father never reconstituted his alleged title to Lot No. 727 but did so over Lot No. 810 of the
Banilad Friar Lands Estate, a lot adjacent to the disputed property, in 1946; that petitioner himself lived in Cebu City, a few kilometers
away from the land in litigation; that petitioners father or petitioner himself, both of whom are lawyers and the former a congressman
as well, for more than sixty (60) years, never made any demand on Cebu Country Club, Inc. for the recovery of the property knowing
fully well that said land was owned and utilized by Cebu Country Club, Inc. as its main golf course. By way of counterclaim, Cebu
Country Club, Inc. prayed for the award of attorneys fees in the amount of P900,000.00 and litigation expenses of P100,000.00, moral
damages of P500,000.00 and exemplary damages of P2,000,000.00.[10]
(8) In the course of the trial, Cebu Country Club, Inc. to disprove petitioners allegation that its title, TCT No. RT-1310 (T-11351),
was obtained illegally and fraudulently, submitted the deposition of an expert witness, Atty. Benjamin Bustos, Chief of the
Reconstitution Division, Land Registration Authority, Central Office, Metro Manila (Exh. 8). He testified that pursuant to GLRO Circular
No. 17 dated February 19, 1947 and Circular No. 6 (RD-3) dated August 5, 1946 (Exhs 2 and 3), titles issued before the inauguration
of the Republic of the Philippines were numbered consecutively, and titles issued after the inauguration of the Republic were likewise
numbered consecutively, starting with the number one (1). Eventually, therefore, the title numbers issued before the inauguration
would be duplicated by the title numbers issued after the inauguration of the Republic.[11]
(9) On May 7, 1993, the trial court rendered a decision, the dispositive portion of which reads:
THE FOREGOING CONSIDERED, judgment is hereby rendered in favor of the defendant and against the plaintiff: declaring the contested
property or Lot 727 as legally belonging to the defendant; directing the plaintiff to pay attorney' fee of P400,000.00; and litigation expenses of
P51,000.00; and finally, with costs against the plaintiff.
SO ORDERED.
Cebu City, May 7, 1993.
(s/t) BERNARDO LL. SALAS
Judge[12]
(10) In due time, both parties appealed to the Court of Appeals.[13]

After proceedings on appeal, on March 31, 1997, the Court of Appeals promulgated a decision, the dispositive portion of which
reads:
WHEREFORE, IN VIEW OF THE FOREGOING, the appeals interposed by both parties are hereby DENIED, and the lower courts Decision
dated May 7, 1993 is AFFIRMED in toto. No pronouncement as to costs.
SO ORDERED.[14]
On April 30, 1997, petitioner filed a motion for reconsideration; however, on October 2, 1997, the Court of Appeals denied the
motion.[15]
Hence, this appeal.[16]
On October 24, 2000, we required the Solicitor General to file comment on the issue of the validity of the re-constituted title in
dispute.[17]
On November 8, 2000, the Solicitor General submitted a comment stating that on the basis of information received from the
Land Registration Authority (LRA) and the Land Management Bureau (LMB), the Cebu Country Club, Inc. had been occupying the
disputed property even before the Second World War and developed it into a golf course and must have acquired the property in a
proper and valid manner.[18] Nonetheless, the Solicitor General emphasized that the Cebu Country Clubs certificate of title is a
reconstituted title. A reconstituted title does not confirm or adjudicate ownership of land covered by lost or destroyed title.[19] And the
Governments right to file reversion proceedings cannot be barred by prescription that does not run against the State. [20]
The Issues
Petitioners raise the following issues:
1. Whether the Court of Appeals erred in affirming the validity of TCT No. RT-1310 (T-11351).
2. Whether the Court of Appeals erred in sustaining respondents claim of ownership over Lot No. 727;
3. Whether the Court of Appeals erred in holding that the present action is barred by prescription and/or by laches;
4. Whether the Court of Appeals erred in not applying the doctrine of stare decisis;
5. Whether the Court of Appeals erred in sustaining the trial courts award for damages in the form of attorneys fees and
litigation expenses.[21]
We resolve the issues in seriatim.

First Issue: Validity of Cebu Country Club, Inc.s Title
The first issue is whether the Court of Appeals lawfully adjudged the validity of the administrative reconstitution of the title of
Cebu Country Club, Inc. over the OCT of the Government of the Philippine Islands and Sales Patent No. 14353 on Lot No. 727 in the
name of Tomas N. Alonso.
The issue is factual, which, as aforesaid, cannot be reviewed in this appeal. Nevertheless, petitioners assail the validity of the
administrative reconstitution of Cebu Country Club, Inc.s title No. RT-1310 (T-11351) on three (3) grounds:
1. Its source title bears the same number as another title which refers to another parcel of land;
2. There is no recorded transaction of the land from Tomas Alonso in favor of Cebu Country Club, Inc.; and
3. The technical description was not transcribed in the title within two (2) years from the date of its reconstitution.
None of the grounds has any basis or merit.

On the question that TCT No. RT-1310 (T-11351) bears the same number as another title to another land, we agree with the
Court of Appeals that there is nothing fraudulent with the fact that Cebu Country Club, Inc.s reconstituted title bears the same number
as the title of another parcel of land. This came about because under General Land Registration Office (GLRO) Circular No. 17, dated
February 19, 1947, and Republic Act No. 26 and Circular No. 6, RD 3, dated August 5, 1946, which were in force at the time the title
was reconstituted on July 26, 1948, the titles issued before the inauguration of the Philippine Republic were numbered consecutively
and the titles issued after the inauguration were numbered also consecutively starting with No. 1, so that eventually, the titles issued
before the inauguration were duplicated by titles issued after the inauguration of the Philippine Republic. This was testified to by Atty.
Benjamin Bustos, Chief of the Reconstitution Division, Land Registration Authority, Central Office, Metro Manila, and by Atty. Dindo
Nuez, Deputy Register of Deeds of Cebu City, who declared that several titles in the record of the Register of Deeds which were
reconstituted after the inauguration of the Philippine Republic had the same numbers as the titles issued before the Second World
War, due to the operation of the circulars referred to.
Said the Court of Appeals:
As a third argument, plaintiff avers that the lower court erred in declaring defendant as the owner of Lot 727 when it has a void title because it
was fraudulently acquired. Specifically, plaintiff points out that on the face of defendants administratively reconstituted title- TCT No. RT-1310
(T-11351), it would appear that its source title is TCT No. 11351. Going over the said title further, it can be gleaned that the parent title of TCT
No. 11351 is TCT No. 1021. However, plaintiff claims that defendant failed to present said source titles. It appears likewise that the Register of
Deeds of Cebu City does not have a copy thereof.
On the other hand, plaintiff presented TCT No. 11351 issued on June 18, 1954 in the name of Pacita Raffinan covering Lot 925 of the Cadastral
Survey of Cebu with an area of 310 square meters, more or less, (Exh. L) and TCT No. 1021 issued on July 12, 1947 in the name of Rosario
Rubio covering Lot No. 51-D of the subdivision plan being a portion of Lot No. 576 of the Banilad Friar lands Estate with an area of 230 sq. m.,
more or less (Exh. E). In his motion for new trial, he likewise presented as one of his newly discovered evidence a copy of TCT No. RT-1325 (T-
1021) (Annex B, Motion for New Trial, p. 60, Rollo) whose source title was presumably TCT No. 1021, which apparently is the parent title of
defendants TCT. Said TCT No. RT-1325 (T-1021) was administratively reconstituted on July 27, 1948 and covers Lot No. 1314 of the Cadastral
Survey of Cebu with an area of 110 sq. m., more or less, and registered in the name of Spouses Andres Borres and Emiliana Enriquez. As stated
in TCT No. RT-1325 (T-1021), its parent title, TCT No. 1021, was entered in the record book on May 17, 1939.
Plaintiff concludes then that considering that TCT Nos. 11351 and 1021 as well as RT-1325 (T-1021), which were purportedly the parent titles of
TCT No. RT-1310 (T-11351), do not cover Lot. 727, defendants TCT was void having been obtained from a spurious or non-existent source
(Citing the case of Ramon Cabrera, et. al., vs. Cebu Country Club, Inc. CA-G.R. No. 65559-R, Exh. F).
That there seems to be no record on file of the existence of either TCT No. 11351 or 1021 covering Lot 727 of the Banilad Friar Lands Estate
containing an area of 377,622 sq. m., does not invalidate defendants title. As defendant counters, which was corroborated by Atty. Dindo Nuez,
Deputy Register of Deeds for Cebu City, copies of these titles were lost and could not be found despite diligent search thereof.
Moreover, the absence of said titles and the existence of TCT Nos. 11351 and 1021, which do not cover Lot 727, do not render TCT No. RT-
1310 (T-11351) invalid in the light of Circular No. 6 Exh. 3) re: numbering of certificates of title, entries in the day book and registration books,
and GLRO Circular No. 17 (Exh. 2) the rules and regulations governing the reconstitution of lost or destroyed certificates of title. [22]
Petitioners next argue that the reconstituted title of Cebu Country Club, Inc. had no lawful source to speak of; it was reconstituted
through extrinsic and intrinsic fraud in the absence of a deed of conveyance in its favor. In truth, however, reconstitution was based
on the owners duplicate of the title, hence, there was no need for the covering deed of sale or other modes of conveyance. Cebu
Country Club, Inc. was admittedly in possession of the land since long before the Second World War, or since 1931. In fact, the original
title (TCT No. 11351) was issued to the United Service Country Club, Inc. on November 19, 1931 as a transfer from Transfer Certificate
of Title No. 1021 (Exh. D-6). More importantly, Cebu Country Club, Inc. paid the realty taxes on the land even before the war, and tax
declarations covering the property showed the number of the TCT of the land. Cebu Country Club, Inc. produced receipts showing
real estate tax payments since 1949 (Exhs. 27 to 100-B). On the other hand, petitioner failed to produce a single receipt of real estate
tax payment ever made by his father since the sales patent was issued to his father on March 24, 1926. Worse, admittedly petitioner
could not show any torrens title ever issued to Tomas N. Alonso, because, as said, the deed of sale executed on March 27, 1926 by
the Director of Lands was not approved by the Secretary of Agriculture and Natural Resources and could not be registered. Under the
law, it is the act of registration of the deed of conveyance that serves as the operative act to convey the land registered under the
Torrens system. The act of registration creates constructive notice to the whole world of the fact of such conveyance.[23] On this point,
petitioner alleges that Cebu Country Club, Inc. obtained its title by fraud in connivance with personnel of the Register of Deeds in 1941
or in 1948, when the title was administratively reconstituted. Imputations of fraud must be proved by clear and convincing
evidence.[24] Petitioner failed to adduce evidence of fraud. In an action for re-conveyance based on fraud, he who charges fraud must
prove such fraud in obtaining a title. In this jurisdiction, fraud is never presumed.[25] The strongest suspicion cannot sway judgment or
overcome the presumption of regularity. The sea of suspicion has no shore, and the court that embarks upon it is without rudder or
compass.[26] Worse, the imputation of fraud was so tardily brought, some forty-four (44) years or sixty-one (61) years after its supposed
occurrence, that is, from the administrative reconstitution of title on July 26, 1948, or from the issuance of the original title on November
19, 1931, that verification is rendered extremely difficult, if not impossible, especially due to the supervening event of the second world
war during which practically all public records were lost or destroyed, or no longer available.
Petitioners next question the lack of technical description inscribed in the reconstituted title in Cebu Country Club, Inc.s name.
This is not a bar to reconstitution of the title nor will it affect the validity of the reconstituted title. A registered owner is given two (2)
years to file a plan of such land with the Chief of the General Land Registration Office. [27] The two-year period is directory, not
jurisdictional. In other words, the failure to submit the technical description within two (2) years would not invalidate the title. At most,
the failure to file such technical description within the two-year period would bar a transfer of the title to a third party in a voluntary
transaction.
Second Issue: Whether Francisco Alonso is owner of the land
The second issue is whether the Court of Appeals erred in ruling that the Cebu Country Club, Inc. is owner of Lot No. 727.
Admittedly, neither petitioners nor their predecessor had any title to the land in question. The most that petitioners could claim
was that the Director of Lands issued a sales patent in the name of Tomas N. Alonso. The sales patent, however, and even the
corresponding deed of sale were not registered with the Register of Deeds and no title was ever issued in the name of the latter. This
is because there were basic requirements not complied with, the most important of which was that the deed of sale executed by the
Director of Lands was not approved by the Secretary of Agriculture and Natural Resources. Hence, the deed of sale was
void.[28] Approval by the Secretary of Agriculture and Commerce is indispensable for the validity of the sale. [29] Moreover, Cebu Country
Club, Inc. was in possession of the land since 1931, and had been paying the real estate taxes thereon based on tax declarations in
its name with the title number indicated thereon. Tax receipts and declarations of ownership for taxation purposes are strong evidence
of ownership.[30] This Court has ruled that although tax declarations or realty tax payments are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in the concept of owner for no one in his right mind will be paying taxes for a property
that is not in his actual or constructive possession.[31]
Notwithstanding this fatal defect, the Court of Appeals ruled that there was substantial compliance with the requirement of Act
No. 1120 to validly convey title to said lot to Tomas N. Alonso.[32]
On this point, the Court of Appeals erred.
Under Act No. 1120, which governs the administration and disposition of friar lands, the purchase by an actual and bona fide
settler or occupant of any portion of friar land shall be agreed upon between the purchaser and the Director of Lands, subject to the
approval of the Secretary of Agriculture and Natural Resources (mutatis mutandis).[33]
In his Memorandum filed on May 25, 2001, the Solicitor General submitted to this Court certified copies of Sale Certificate No.
734, in favor of Leoncio Alburo, and Assignment of Sale Certificate No. 734, in favor of Tomas N. Alonso. Conspicuously, both
instruments do not bear the signature of the Director of Lands and the Secretary of the Interior. They also do not bear the approval of
the Secretary of Agriculture and Natural Resources.
Only recently, in Jesus P. Liao v. Court of Appeals,[34] the Court has ruled categorically that approval by the Secretary of
Agriculture and Commerce of the sale of friar lands is indispensable for its validity, hence, the absence of such approval made the
sale null and void ab-initio.[35] Necessarily, there can be no valid titles issued on the basis of such sale or
assignment.[36] Consequently, petitioner Franciscos father did not have any registerable title to the land in question. Having none, he
could not transmit anything to his sole heir, petitioner Francisco Alonso or the latters heirs.
In a vain attempt at showing that he had succeeded to the estate of his father, on May 4, 1991, petitioner Francisco Alonso
executed an affidavit adjudicating the entire estate to himself (Exh. Q), duly published in a newspaper of general circulation in the
province and city of Cebu (Exh. Q-1). Such affidavit of self-adjudication is inoperative, if not void, not only because there was nothing
to adjudicate, but equally important because petitioner Francisco did not show proof of payment of the estate tax and submit a
certificate of clearance from the Commissioner of Internal Revenue. [37] Obviously, petitioner Francisco has not paid the estate taxes.
Consequently, we rule that neither Tomas N. Alonso nor his son Francisco M. Alonso or the latters heirs are the lawful owners
of Lot No. 727 in dispute. Neither has the respondent Cebu Country Club, Inc. been able to establish a clear title over the contested
estate. The reconstitution of a title is simply the re-issuance of a lost duplicate certificate of title in its original form and condition. It
does not determine or resolve the ownership of the land covered by the lost or destroyed title. A reconstituted title, like the original
certificate of title, by itself does not vest ownership of the land or estate covered thereby. [38]
Third Issue: Action has prescribed or is barred by laches
The third issue is whether petitioners action for re-conveyance has prescribed or is barred by laches.
An action based on implied or constructed trust prescribes in ten (10) years... from the time of its creation or upon the alleged
fraudulent registration of the property.[39] Petitioner Franciscos action in the court below was basically one of re-conveyance. It was
filed on September 25, 1992, sixty-one (61) years after the title was issued on November 19, 1931, and forty-four (44) years after its
reconstitution on July 26, 1948. Thus, the failure of petitioner Francisco and his father to assert ownership of the land for over sixty
(60) years during which the Cebu Country Club, Inc. was in possession is simply contrary to their claim of ownership. [40] Petitioner
Franciscos and his fathers long inaction or passivity in asserting their rights over disputed property will preclude them from recovering
the same.[41]
Aside from the fact that, as herein-above stated, neither petitioner Francisco nor his father held a valid title over the land, and
that there was no showing that his father owned the land at the time of his demise so as to bequeath the same to petitioner Francisco
as his sole heir, by now, the rule is firmly settled that an action for re-conveyance based on fraud must be filed within ten (10) years
from discovery of the fraud which as to titled lands referred to the registration of the title with the register of deeds.[42] An action for re-
conveyance is a legal remedy granted to a landowner whose property has been wrongfully or erroneously registered in anothers
name, but then the action must be filed within ten years from the issuance of the title since such issuance operates as a constructive
notice.[43] In addition, the action is barred by laches because of the long delay before the filing of the case. [44]
Fourth Issue: No stare decisis
The next issue is whether the Court of Appeals erred in not ruling that the decision in Ramon Cabrera-Graciano Ingles vs. Cebu
Country Club, Inc., CA-G. R. No. 65559-R, October 31, 1981, was binding on respondent Cebu Country Club, Inc. as to the land in
question.
Petitioners assert that as the Court of Appeals annulled Cebu Country Club, Inc.s title in the Cabrera-Ingles case, so too must
the title in this case be declared void. In the first place, there is no identity of parties; secondly, neither the titles to nor the parcels of
land involved are the same. Consequently, the doctrine of res-judicata does not apply.[45] Momentarily casting aside the doctrine of res-
judicata, there is an important moiety in the Cabrera-Ingles case. There, the Director of Lands, after the administrative reconstitution
of the title, issued a directive to the Register of Deeds to register the lot in question in favor of Graciano Ingles. [46] This superseded
the administrative reconstitution, rendering allegations of fraud irrelevant. Here, the Director of Lands did not issue a directive to
register the land in favor of Tomas N. Alonso. And worse, the sales patent and corresponding deed of sale executed in 1926 are now
stale.[47]
Petitioners further contend that the Supreme Courts minute resolution refusing to review that decision is equivalent to a judgment
on the merits. The minute resolution may amount to a final action on the case but it is not a precedent. [48] It can not bind non-parties
to the action. To restate, the rule is that: (1) a judgment in rem is binding upon the whole world, such as a judgment in a land registration
case or probate of a will; (2) a judgment in personam is binding upon the parties and their successors in interest but not upon
strangers.[49] A judgment directing a party to deliver possession of a property to another is in personam; it is binding only against
the parties and their successors in interest by title subsequent to the commencement of the action. [50] Suits to quiet title are not
technically suits in rem, nor are they, strictly speaking, in personam, but being against the person in respect of the res, these
proceedings are characterized as quasi in rem. The judgment in such proceedings is conclusive only between the parties.[51] In
this case, the action below is basically one for declaration of nullity of title and recovery of ownership of real property, or re-conveyance.
An action to recover a parcel of land is a real action but it is an action in personam, for it binds a particular individual only although it
concerns the right to a tangible thing.[52] Any judgment therein is binding only upon the parties properly impleaded. [53]
What is more, the doctrine of stare decisis notwithstanding, the Court has abandoned or overruled precedents whenever it
realized that the Court erred in the prior decisions. After all, more important than anything else is that this Court should be right.[54]
Fifth Issue: Award of attorneys fees
The final issue raised is whether or not the Court of Appeals erred in awarding in favor of the Cebu Country Club, Inc. attorneys
fees of P400,000.00 as damages and P51,000.00 as litigation expenses. [55]
An award of attorneys fees and expenses of litigation is proper under the circumstances provided for in Article 2208 of the Civil
Code, one of which is when the court deems it just and equitable that attorneys fees and expenses of litigation should be
recovered[56] and when the civil action or proceeding is clearly unfounded and where defendant acted in gross and evident bad
faith.[57] The award of attorneys fees as damages is the exception rather than the rule; it is not to be given to the defendant every time
the latter prevails. The right to litigate is so precious that a penalty should not be charged on those who may exercise it erroneously,
unless, of course such party acted in bad faith. [58] In this case, however, we would rather not award attorneys fees and expenses of
litigation in the absence of showing of gross and evident bad faith in filing the action. [59]
The Judgment
WHEREFORE, we DENY the petition for review. However, we SET ASIDE the decision of the Court of Appeals [60] and that of
the Regional Trial Court, Cebu City, Branch 08.[61]
IN LIEU THEREOF, we DISMISS the complaint and counterclaim of the parties in Civil Case No. CEB 12926 of the trial court.
We declare that Lot No. 727 D-2 of the Banilad Friar Lands Estate covered by Original Certificate of Title Nos. 251, 232, and 253
legally belongs to the Government of the Philippines.
No costs.
SO ORDERED.

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Republic of the Philippines

G.R. No. L-33093 December 29, 1975

GUTIERREZ, JR., J.:

Simeona Vda. de Ditching

Republic of the Philippines

Republic of the Philippines

RICHARD B. LOPEZ, in his G.R. No. 157784

Location Title No. Area (Sq. M.) Improvements

Abra de Ilog, TCT - 540 2,940,000 pasture, etc.

Antorcha St. TCT 1217-A 13,040 residential

Pantay, Calaca, 91,283 coconuts

Mataywanak, OCT-29[6]94 485,486 sugar

Patugo, Balayan, OCT-2807 16,757,615 coconut,

Cagayan, Balayan, TCT-1220 411,331 sugar

Pook, Baayan TCT-1281 135,922 sugar

Bolbok, Balayan, TCT-18845 444,998 sugar

Location Title No. Area (Sq. M.) Improvements

Dalig, Balayan, TCT-10080 482,872 sugar

I. THE COURT OF APPEALS CONCLUSION THAT PETITIONERS ACTION FOR [RECONVEYANCE]

The argument is tenuous.

HEIRS OF TRANQUILINO LABISTE G.R. No. 162033

HEIRS OF JOSE LABISTE, survived by his Promulgated:

The factual antecedents are as follows:

Hence, the present petition.

Republic of the Philippines

SPOUSES SOFRONIO SANTOS and NATIVIDAD G.R. No. 151016

- versus - YNARES-SANTIAGO, J.,

The facts, as borne by the records, are as follows:

4. Ordering defendant to pay the cost of the suit;

d. Ordering defendants, jointly and severally, to pay plaintiffs the following:

1.) Moral damages of P200,000.00;

NATIVIDAD BAUTISTA-BORJA, G.R. No. 136197

- versus - QUISUMBING, J., Chairperson,

CARPIO MORALES, J.:

Petitioner accordingly prayed as follows:

x x x x[3] (Underscoring supplied)

Republic of the Philippines

Melencio-Herrera, Padilla and Regalado, JJ., concur.

NATIVIDAD FIGURACION, G.R. NO. 155688

SPOUSES CRESENCIANO and

The facts are of record.

The CA also denied petitioners motion for reconsideration.

And so, petitioners recourse to this Court on the following grounds:

On that issue, the RTC held:

In their second amended complaint, respondents as plaintiffs unequivocally alleged:

The enunciated rule in Fery is still controlling to this day.

Costs against respondents.

MUÑOZ PALMA, J.:

G.R. No. 156380 September 8, 2004

[G.R. No. 142810. August 18, 2005]

[G. R. No. 130876. January 31, 2002]

The facts, as found by the Court of Appeals, are as follows:

(10) In due time, both parties appealed to the Court of Appeals.[13]

Petitioners raise the following issues:

We resolve the issues in seriatim.

None of the grounds has any basis or merit.

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