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ACTIONS AGAINST ILLEGAL ISSUANCE OF PATENTS

Same; Same; Same; Same; The sale made by the


1. Reversion Suits grantee one month and eleven days from the
DIRECTOR OF LANDS V. CFI OF MISAMIS ORIENTAL issuance of the patent is null and void in violation of
Civil Law; Land Registration; An original certificate of section 118 of Commonwealth Act No. 141 as
title issued on September 20, 1976 cannot be amended by Commonwealth Act No. 456; The nullity
collaterally attacked in a petition for certiorari and of the sale of a portion of the lots, extended to the
prohibition filed on November 19, 1981 for nullity of entire lots.—In the case at bar, it is not disputed that
the proceedings in the land registration case and for the sale made by the grantee, Daniel Junco to private
cancellation of the certificate of title.—Original respondent, of the 7,500 square meters portion of
Certificate of Title No. 0662 was issued on September lots 4 and 5, was made barely one month and eleven
20, 1976; it cannot be collaterally attacked in a days from the issuance of the patent to him. The sale
petition filed on November 19, 1981. (See Magay vs. was, therefore, null and void and without effect
Estiandan, L 28975, Feb. 27, 1976, 69 SCRA 456.) because it was in violation of the above provision of
law.
Same; Same; Where the validity of an original
certificate of title has been previously and directly Same; Same; Same; Same; Same; The provision
raised in a civil case which is the proper action, the against alienation is mandatory and reconveyance of
resolution of the same by the Supreme Court is not the land to the state is proper although the property
proper; Reasons.—The issue in respect of the validity has already been brought under the operation of the
of OCT No. 0662 has been previously and directly Torrens System; The right of the government to bring
raised in Civil Case No. 7514 which is the proper an appropriate action for reconveyance is not barred
action. Resolution of the same issue in this Court will by the lapse of time; The statute of limitations does
displace a tribunal which can best ascertain the not run against the State.—The provision against
veracity of the factual allegations and which first alienation is mandatory. Thus, where a grantee is
acquired jurisdiction over an action which exclusively found not entitled to hold and possess in fee simple
pertains to it There should be no multiplicity of suits. the land, by reason of his having violated Section 118
Director of Lands vs. CFI of Misamis Oriental, Br. I, of the Public Land Law, the Court may properly order
135 SCRA 392, No. L-58823 March 18, 1985 its reconveyance to the grantor, although the
property has already been brought under the
operation of the Torrens System. And, this right of
SOLA V. CFI OF NEGROS ORIENTAL the government to bring an appropriate action for
Civil Law; Homestead; Land Registration; Sales; reconveyance (or reversion) is not barred by the
Prohibition against alienation of the land acquired by lapse of time; the Statute of Limitations does not run
a grantee of a homestead patent is to give him and against the State. Sala vs. CFI of Negros Oriental, Br.
his family the chance to preserve the land that the V, 184 SCRA 694, G.R. No. 47281 April 27, 1990
state had given him, purpose of.—As was held in
several cases, the prohibition has the avowed
TIPON V. IAC
purpose of giving the homesteader or patentee every
chance to preserve for himself and his family the land Civil Law; Land Titles; Public Lands; Laguna
that the State had gratuitously given him as a reward Settlement Project; Sale of public land within the
for his labor in cleaning and cultivating it. prohibited period of 10 years from issuance of
certificate of title, void; Awardee of government lot
Same; Same; Same; Prohibition to alienate the land had no intention of keeping the land for himself.—It
acquired thru a homestead patent for a period of five is difficult to understand why the courts which have
years commences to run from the date of issuance of dealt with this case failed to note how the parties so
the patent.—Prohibition to alienate commences to flagrantly violated and disregarded the conditions
run from the date the application is approved which imposed on the grant of the land to petitioner,
may be a date earlier than the date of issuance of the defeating with impunity the very objective sought to
patent. The period of five years within which the be accomplished by the government in its program of
alienation or encumbrance of a homestead is giving land to the landless. There is hardly any doubt
restricted, starts to be computed from the latter from the evidence on record that the petitioner had
date. no intention at all of keeping for himself and utilizing
the land which he acquired from the government, f or alleged misrepresentation of the applicant that he
even while the ink on the deed of sale in his favor had been occupying and cultivating the land are
was still wet, so to speak, he already took steps to sufficient grounds to nullify the patent and title under
transfer the land to the respondent. Section 91 of the Public Land Law.

Same; Same; Same; Same; Same; Indecent haste of Same; Same; Land Registration; Certificate of title;
awardee in disposing of the land and his despicable Void certificate of title may he cancelled; Title
attempts to make an exorbitant profit from the considered void when procured thru fraud; Rule that
transaction abhorred; Practice of some intended title is indefeasible; Exception; Registration not a
beneficiaries of the land distribution programs of the shield of fraud in securing title.—A certificate of title
government who are more interested in reselling the that is void may he ordered cancelled. And, a title will
land and making a quick profit from it, taken judicial be considered void if it is procured through fraud, as
notice of by the Supreme Court; Parties in case at bar when a person applies for registration of the land on
not allowed to own the property, which is reverted the claim that he has been occupying and cultivating
back to the Republic of the Philippines.—His indecent it. In the case of disposable public lands, failure on
haste in disposing of the land, followed by his the part of the grantee to comply with the conditions
despicable attempts to make an exorbitant profit imposed by law is a ground for holding such title void.
from the transaction only shows that he was unduly (Director of Lands vs. CA, 17 SCRA 71). The lapse of
taking advantage of the land distribution program of the one (1) year period within which a decree of title
the government and was interested only in making a may be reopened for fraud would not prevent the
killing for himself rather than in gratefully accepting cancellation thereof for to hold that a title may
the land from the government to improve his lot in become indefeasible by registration, even if such title
life and provide for himself and his family a brighter had been secured through fraud or in violation of the
future. The Court is not unaware of the practice of law would be the height of absurdity. Registration
some intended beneficiaries of the land distribution should not be a shield of fraud in securing title
programs of the government who are more (Republic vs. Animas, 56 SCRA 499).
interested in reselling the land and making a quick
profit from it. We cannot close our eyes to this Same; Same; Prescription; Might of reversion or
deplorable practice. We should not allow either party reconveyance of public land to the State not barred
in the present case to reap any benefit from the by prescription.—Thus, the right of reversion or
illegal transaction and make a mockery of the reconveyance to the state is not barred by
government's laudable program of providing land to prescription. (Republic vs. Ramona Ruiz, et al., 23
the landless and shelter to the homeless citizens of SCRA 348) Republic vs. Mina, 114 SCRA 945, No. L-
our country. x x x Judgment is rendered denying the 60685 June 29, 1982
reliefs prayed for by the petitioner and dismissing the
petition; annulling the transfer of the land in question
(Lot No. 386 of GSS-877) to petitioner and its REPUBLIC V. HEIRS OF LUISA ABRILLE
subsequent transfer to respondent Umiral P. Matic; Land registration; Increase in area of subdivision;
ordering the cancellation of Transfer Certificate of Necessity of land registration proceedings to bring
Title No. 53850 covering said land, issued by the increased area under operation and coverage of Land
Register of Deeds for the Province of Laguna, in the Registration Act.—The increased area, which is not a
name of respondent Umiral P. Matic; and directing registered land but formerly a river bed, is so big as
the said Register of Deeds to issue in lieu thereof a to give allowance for a mere mistake in area of the
Certificate of Title in the name of the Republic of the original registration of the tracts of land of the
Philippines. Tipon vs. Intermediate Appellate Court, appellant formerly belonging to and registered in the
148 SCRA 201, No. L-71645 February 27, 1987 name of their grandfather. In order to bring this
increase in area, which the parties admitted to have
been a former river bed of the Davao River, under the
REPUBLIC V. MINA operation and coverage of the Land Registration Law,
Administrative Law; Patents,; Misrepresentation of Act 496, proceedings in registrations of land title
an applicant for free patent that he had been should have been filed instead of an ordinary
occupying and cultivating the land applied for approval of subdivision plan.
sufficient grounds to nullify the patent and title.—The
2 . Cancellation Suits one’s possession is imprescriptible. Their undisturbed
possession for a number of years gave them a
AGNE V. DIRECTOR OF LANDS continuing right to seek the aid of a court of equity to
Land Registration; Torrens Title; Public Lands; determine the nature of the adverse claims of a third
Indefeasibility of a Torrens title issued pursuant to a party and the effect on her title. As held in Caragay-
patent may be invoked only when the land involved Layno vs. Court of Appeals, et al., an adverse claimant
originally formed part of the public domain, not when of a registered land, undisturbed in his possession
the land is of private ownership.—If the said thereof for a period of more than fifty years and not
averments are true, and the factual recitals thereon knowing that the land he actually occupied had been
have been admitted in the stipulation of facts registered in the name of another, is not precluded
hereinbefore quoted, then the land in question was from filing an action for reconveyance which, in
and is of private ownership and, therefore, beyond effect, seeks to quiet title to property as against the
the jurisdiction of the Director of Lands. The free registered owner who was relying upon a Torrens
patent and subsequent title issued pursuant thereto title which could have been fraudulently acquired. To
are null and void. The indefeasibility and such adverse claimant, the remedy of an action to
imprescriptibility of a Torrens title issued pursuant to quiet title is imprescriptible. In actions for
a patent may be invoked only when the land involved reconveyance of property predicated on the fact that
originally formed part of the public domain. If it was a the conveyance complained of was void ab initio, a
private land, the patent and certificate of title issued claim of prescription of the action would be
upon the patent are a nullity. unavailing.

Same; Same; The rule on incontrovertibility of a Same; Same; Same; Accretion; Riparian owner
certificate of title after one year from entry, not acquires automatic ownership of the abandoned bed
applicable when the ground for cancellation is the without need of any formal act of acquisition.—It is
nullity of the patent and the title issued pursuant thus clear under this provision that once the river bed
thereto.—The rule on the incontrovertibility of a has been abandoned, the riparian owners become
certificate of title upon the expiration of one year, the owners of the abandoned bed to the extent
after the entry of the decree, pursuant to the provided by this article. The acquisition of ownership
provisions of the Land Registration Act, does not is automatic. There need be no act on the part of the
apply where an action for the cancellation of a patent riparian owners to subject the accession to their
and a certificate of title issued pursuant thereto is ownership, as it is subject thereto ipso jure from the
instituted on the ground that they are null and void moment the mode of acquisition becomes evident,
because the Bureau of Lands had no jurisdiction to without the need of any formal act of acquisition.
issue them at all, the land in question having been Such abandoned river bed had fallen to the private
withdrawn from the public domain prior to the ownership of the owner of the riparian land even
subsequent award of the patent and the grant of a without any formal act of his will and any
certificate of title to another person. Such an action is unauthorized occupant thereof will be considered as
different from a review of the decree of title on the a trespasser. The right in re to the principal is likewise
ground of fraud. a right in re to the accessory, as it is a mode of
acquisition provided by law, as the result of the right
Same; Same; Property; Reconveyance; Prescription; of accretion. Since the accessory follows the nature
Actions for reconveyance, grounded on the nullity of of the principal, there need not be any tendency to
the conveyance of the subject property, are the thing or manifestation of the purpose to subject it
imprescriptible.—Although a period of one year has to our ownership, as it is subject thereto ipso jure
already expired from the time a certificate of title was from the moment the mode of acquisition becomes
issued pursuant to a public grant, said title does not evident.
become incontrovertible but is null and void if the
property covered thereby is originally of private Same; Same; Free Patents; Act 2874; Patent and
ownership, and an action to annul the same does not certificate of title issued by Director of Lands covering
prescribe. Moreover, since herein petitioners are in private lands, null and void.—Under the provisions of
possession of the land in dispute, an action to quiet Act No. 2874 pursuant to which the title of private
title is imprescriptible. Their action for reconveyance respondents’ predecessor in interest was issued, the
which, in effect, seeks to quiet title to property in President of the Philippines or his alter ego, the
Director of Lands, has no authority to grant a free defeated by the claim of a registered owner whose
patent for land that has ceased to be a public land title is defective from the beginning.
and has passed to private ownership, and a title so
issued is null and void. The nullity arises, not from the Same; Same; Laches; The registered owner’s long
fraud or deceit, but from the fact that the land is not inaction and inexcusable neglect converted their right
under the jurisdiction of the Bureau of Lands. The to recover possession, a stale demand.—Moreover,
jurisdiction of the Director of Lands is limited only to the failure of herein private respondents to assert
public lands and does not cover lands privately their claim over the disputed property for almost
owned. The purpose of the Legislature in adopting thirty 30 years constitute laches and bars an action to
the former Public Land Act, Act No. 2874, was and is recover the same. The registered owners’ right to
to limit its application to lands of the public domain, recover possession of the property and title thereto
and lands held in private ownership are not included from petitioners has, by long inaction or inexcusable
therein and are not affected in any manner neglect, been converted into a stale demand. Agne
whatsoever thereby. Land held in freehold or free vs. Director of Lands, 181 SCRA 793, G.R. No. 40399,
title, or of private ownership, constitute no part of G.R. No. 72255 February 6, 1990
the public domain and cannot possibly come within
the purview of said Act No. 2874, inasmuch as the
“subject” of such freehold or private land is not Agne 3. Action for Reconveyance
vs. Director of Lands, 181 SCRA 793, G.R. No. 40399,
OBANANA V. BONCAROS
G.R. No. 72255 February 6, 1990 embraced in any
Land Registration; Reconveyance; Public Lands;
manner in the title of the Act and the same are
Exhaustion of administrative remedies; Doctrine
excluded from the provisions or text thereof.
requiring prior exhaustion of administrative remedies
before recourse to courts, confined to public lands,
Same; Same; Land Registration Act and Cadastral Act
and is inapplicable to private lands; Action for
cannot give anybody a better title than what he
reconveyance, proper remedy of party injured by
lawfully has.—A free patent which purports to
fraudulent registration.—The doctrine requiring prior
convey land to which the Government did not have
exhaustion of administrative remedies before
any title at the time of its issuance does not vest any
recourse to Courts may be had is confined to public
title in the patentee as against the true owner. The
lands. It is inapplicable to private lands. A free patent
Court has previously held that the Land Registration
application having been granted in the case at bar
Act and the Cadastral Act do not give anybody who
and a corresponding certificate of title having been
resorts to the provisions thereof a better title than
issued, subject property ceased to be part of the
what he really and lawfully has. “x x x The Land
public domain and became private property over
Registration Act as well as the Cadastral Act protects
which the Director of Lands has neither control nor
only the holders of a title in good faith and does not
jurisdiction. The land covered thereby assumes the
permit its provisions to be used as a shield for the
character of registered property in accordance with
commission of fraud, or that one should enrich
the provisions of Section 122 of the Land Registration
himself at the expense of another (Gustilo vs.
Act and the remedy of the party who has been
Maravilla, 48 Phil. 838). The above-stated Acts do not
injured by fraudulent registration is an action for
give anybody, who resorts to the provisions thereof,
reconveyance. The relief that petitioners seek is the
a better title than he really and lawfully has. If he
enforcement of a constructive trust in order to obtain
happened to obtain it by mistake or to secure, to the
a judgment for reconveyance of the land, relying on
prejudice of his neighbor, more land than he really
Article 1456 of the Civil Code. Obañana vs. Boncaros,
owns, with or without bad faith on his part, the
128 SCRA 457, No. L-51921 March 29, 1984
certificate of title, which may have been issued to
him under the circumstances, may and should be
cancelled or corrected (Legarda and Prieto vs. D. CERTIFICATE OF TITLE
Saleeby, 31 Phil., 590). x x x.” We have, therefore, to
arrive at the unavoidable conclusion that the title of 1. Contents
herein petitioners over the land in dispute is superior
BENIN V. TUASON
to the title of the registered owner which is a total
Land registration; Amendment to application for
nullity. The long and continued possession of
registration need not be published anew if the
petitioners under a valid claim of title cannot be
amendment merely excludes portions covered by the
original application.—Under Section 23 of Act 496, Same; Error in the plans does not nullify the decree of
the registration court may allow, or order an registration.—We may further observe that
amendment of the application for registration when underlying the contention of plaintiffs is the idea that
it appears to the court that the amendment is errors in the plans nullify the decrees of registration.
necessary and proper. Under Section 24 of the same This is erroneous. It is the land and not the plan
act the court may at any time order an application to which is registered. Prior to the enactment of Act No.
be amended by striking out one or more parcels or by 1875, practically all plans for land registration were
severance of the application. The amendment may be defective especially in regard to errors of closures
made in the application or in the survey plan, or in and areas, but so far no such errors have been
both, since the application and the survey plan go permitted to affect the validity of the decrees. If the
together. If the amendment consists in the inclusion boundaries of the land registered can be determined,
in the application for registration of an area or parcel the technical description in the certificate of title may
of land not previously included in the original be corrected without cancelling the decree. Such
application, as published, a new publication of the corrections have been made in this case by approved
amended application must be made. But if the surveys which embrace all of the land here in
amendment consists in the exclusion of a portion of question. To nullify and cancel final decrees merely
the area covered by the original application and the by reason of faulty technical descriptions would lead
original plan as previously published, a new to chaos.
publication is not necessary. In the latter case, the
jurisdiction of the court over the remaining area is Same; Full transcription of the decree of registration
not affected by the failure of a new publication. in the Registration Book though made in a disorderly
manner is valid.—There is no showing that the
Same; Slight increase in area registered over the area manner of transcribing the decree, as it appears on
contained in the application is not fatal to the decree that photostat, was done for a fraudulent purpose, or
of registration.—We believe that this very slight was done in order to mislead. Considering that the
increase of 27.10 square meters would not justify the decree or registration is fully transcribed in the
conclusion of the lower court that "the amended Registration Book, and also copied in original
plan. . . included additional lands which were not Certificate of Title No. 735, the circumstance that the
originally included in Parcel 1 as published in the beginning of the technical descriptions is not found
Official Gazette." It being undisputed that Parcel 1 on the face, or on the first page, of Original
has an area of more than 8,798,600 square meters Certificate of Title No. 735 is not a ground to nullify
(or 879.86 hectares), We believe that this difference the said certificate of title. This defect should be
of 27.10 square meters, between the computation of considered as formal, and not substantial, defect.
the area when the original plan was made and the
computation of the area when the amended plan was Same; Purposes of the land Registration Law stated.
prepared, can not be considered substantial as would —The purposes of the Land Registration Law, in
affect the identity of Parcel 1. general, are: to ascertain once and for all the
absolute title over a given landed property; to make,
Same; Registration court has no jurisdiction only so far as it is possible, a certificate of title issued by
insofar as areas not covered by original application the court to the owner of the land absolute proof of
are added.—The settled rule, further, is that once the such title; to quiet title to land and to put a stop
registration court had acquired jurisdiction over a forever to any question of legality of title; and to
certain parcel, or parcels, of land in the registration decree that land title shall be final, irrevocable and
proceedings in virtue of the publication of the undisputable.
application, that jurisdiction attaches to the land or
lands mentioned and described in the application. If it Same; Remedies of party unlawfully deprived of
is later shown that the decree of registration had property thru fwndnh'nt registration.—It is settled
included land or lands not included in the original rule that a party seeking the reconveyance to him of
application as published, then the registration his land that he claims had been wrongly registered
proceedings and decree of registration must be in the name of another person must recognize the
declared null and void insofar—but only insofar—as validity of the certificate of title of the latter. It is also
the land not included in the publication is concerned. the rule that a reconveyance may only take place if
the land that is claimed to be wrongly registered is certificate of title in the name of J.M. Tuason & Co.,
still registered in the name of the person who Inc. and because they paid for the lots they certainly
procured the wrongful registration. No action for are purchasers in good faith and for value. The
reconveyance can take place as against a thirty party purchasers of these lots have built thereon
who had acquired title over the registered property residential houses, office buildings, shops, hospital,
in good faith and for value. And if no reconveyance even churches. But the lower court, disregarding
can be made, the value of the property registered these circumstances, declared null and void all
may be demanded only from the person (or persons) transfer certificates of title that emanated, or that
who procured the wrongful registration in his name. were derived, from Original Certificate of Title No.
735. This is a grave error committed by the lower
Same; Effects of in rem proceedings in land court. To give effect to the decision of said court is. to
registration.—The proceedings in LRC 7681 being in deprive persons of their property without due
rem, the decree of registration issued pursuant to the process of law. The decision of the lower court would
decision rendered in said registration case bound the set at naught the settled doctrine that the holder of a
lands covered by the decree and quieted title certificate of title who acquired the property covered
thereto, and is conclusive upon and against all by the title in good faith and for value can rest
persons, including the government and all the assured that his title is perfect and incontrovertible.
branches thereof, whether mentioned by name in the
application, notice or citation, or included in the Judgement; Res judicata; Elements of res judicata.—
general inscription "Two whom it may concern," and In order that the rule of res judicata may apply, the
such decree will not be opened by reason of the following requisites must be present: (a) the former
absence, infancy, or other disability of any person judgment must be final; (b) it must have been
affected thereby, nor by any proceedings in any court rendered by a court having jurisdiction of the subject-
for reversing judgment or decree. Such decree may matter and of the parties; (c) it must be a judgment
only be reopened if any person deprived of land or on the merits; and (d) there must be, between the
any estate or interest therein by decree or first and the second actions, identity of parties, of
registration obtained by fraud would file in the subject matter, and of cause of action (San Diego vs.
competent court of first instance a petition for review Cardona, 70 Phil. 281-283).
within one year after entry of decree, provided no
innocent purchaser for value had acquired an interest Same; Same; Instance where parties though not
on the land, and upon the expiration of said period of privies to the prior action are affected by the
one year, the decree, or the certificate of title issued judgment therein.—But granting that the plaintiffs-
pursuant to the decree, is incontrovertible (Sec. 38, appellants herein are not privies of the defendants
Act 496). Santiago in the former litigation over this same
property (S.C. G.R. No. L-5079), still the
Same; Mere possession cannot defeat title issued pronouncement of this Court, made in the former
under the Land Registration Act.—The possession by case, to the effect that the Spanish document (Annex
the appellees, either by themselves or through their A) issued in favor of Ynocencio Santiago (ancestor of
predecessors in interest, if there was such possession appellants herein) was neither a titulo de informacion
at all, would be unavailing against the holder of a posesoria nor a title by composicion con el estado.
Torrens certificate of title covering the parcels of and, therefore, vested no ownership over the land
lands now in question. From July 8, 1914, when therein described in favor of Ynocencio Santiago,
Original Certificate of Title No. 735 was issued, no holds and applies to herein appellants, since the
.possession by any person of any portion of the lands quality or the legal effect of the document does not
covered by said original certificate of title, or covered depend upon the persons who invoke it. Benin vs.
by a subsequent transfer certificate of title derived Tuason, 57 SCRA 531, No. L-26127, No. L-26128, No.
from said original certificate of title, could defeat the L-26129 June 28, 1974
title of the registered owner of the lands covered by
the certificate of title.
PONCE DE LEON V. REHABILITATION FINANCE CORP
Same; Titles of purchasers in good faith for value Civil Law; Mortgage; Presumption of regularity of
cannot be annulled without due hearing.—The mortgage deed.—The mere oral unsupported
buyers of the lots necessarily relied upon the testimony of an interested party is not sufficient to
overcome the legal presumption of the regularity of is a bank or a banking or credit institution, said
the mortgage deed, a contract celebrated with all the section 6 of Act No. 3135 being, in this respect,
legal requisites under the safeguard of a notarial inconsistent with the above-quoted portion of
certificate (Naval, et al. vs. Enriquez, 3 Phil. 670-672). section 78 of Rep. Act No. 337.
Such unsupported testimony of the interested party
is not that clear, strong and convincing evidence Statutory Construction; Special law prevails.—The
beyond mere preponderance of evidence, required to conflict between the two (2) laws (Act No. 3135 as
show the falsity or nullity of a notarial document. amended and Rep. Act No. 337) must be resolved in
(Sigue, et al. vs. Escaro, CA, 53 Q.C. 1161; Jocson vs. favor of Rep. Act No. 337, both as a special and as the
Ratacion, G.R. No. 41687; Palanca vs. Chillanchin vs. subsequent legislation.
Coquinco, G.R. No. L-1355; Robinson vs. Villafuerte,
18 Phil. 171). Negotiable Instruments Law; Promissory Notes; Time
for payment not indicated in promissory note.—
Remedial Law; Legal Redemption; Sheriff's Sale; Price When a promissory note expresses "no time for
in a sheriffs sale.—Where there is the right to payment," it is deemed "payable on demand."
redeem, inadequacy of price should not be material,
because the judgment debtor may re-acquire the Civil Law; Obligations and Contracts; Debtor cannot
property or else sell his right to redeem and thus avail of Art. 1174, Civil Code, in an obligation to pay.
recover any loss he claims to have suffered by reason —The debtor's obligation was merely generic,
of the price obtained at the execution sale. As the namely, to pay certain sums of money to the RFC. As
trial court had correctly observed: Mere inadequacy the trial judge had aptly put it: In the instant case,
of the price obtained at the sheriff's sale unless there was an obligation on the part of the debtor to
shocking to the conscience will not be sufficient to set pay his loan, independently of the purpose for which
aside the sale if there is no showing that, in the event the money loaned was intended to be used and this
of a regular sale, and, in forced sales, low prices are obligation to pay continues to subsist
usually offered. (I Moran's Rules of Court, pp. 834- notwithstanding the fact that it may have become
835). impossible for the debtor to use the money loaned
for the particular purpose that was intended (Milan
Same; Same; Redemption price where mortgagee is a vs. Rio y Olabarrieta, 45 Phil. 718). There is hence no
banking institution.—As set forth in its title, Act No. ground for declaring the amortizations due on the
3135 was promulgated "to regulate the sale of principal loan since October, 1952 as extinguished
property under special powers inserted in or annexed due to fortuitous event or to grant plaintiff a
to real estate mortgages." Section 6 thereof provided reasonable time to pay the due amortizations.
that in all cases of "extrajudicial sale x x x made under
the special power hereinbefore referred to, "the Land Registration Act; Original certificate of title does
property sold may be redeemed within" one year not establish time of acquisition.—The title to said
from and after the date of the sale x x x." Act No. property was not a transfer certificate of title, but an
4118 amended Act No. 3135 by merely adding original one, issued in accordance with a decree
thereto three (3) new sections. Upon the other hand, which, pursuant to law, merely confirms a pre-
Rep. Act No. 337, otherwise known as "The General existing title. Said original certificate of title does not
Banking Act," is entitled "An act Regulating Banks and establish, therefore, the time of acquisition of the
Banking Institutions and for other purposes." Section property of the registered owner thereof.
78 thereof limits the amount of the loans that may be
given by banks and banking or credit institutions on Civil Law; Conjugal Partnership; Proof of acquisition
the basis of the appraised value of the property given during marriage, a condition sine qua non.—Article
as security, as well as provides that, in the event of 160 of the Civil Code must be construed in relation to
foreclosure of a real estate mortgage to said banks or Articles 153 to 159 of the same Code, enumerating
institutions, the property sold may be redeemed "by the properties "acquired x x x during the marriage"
paying the amount fixed by the court in the order of that constitute the conjugal partnership.
execution," or the amount judicially adjudicated to Consequently therewith, the party who invokes this
the creditor bank. This provision had the effect of presumption must first prove that the property in
amending section 6 of Act No. 3135, insofar as the controversy was acquired during the marriage. In
redemption price is concerned, when the mortgagee other words, proof of acquisition during coverture is
a condition sine qua non for the operation of the assured without the necessity of stepping into the
presumption in favor of conjugal partnership. portals of the court or sitting in the mirador de su
casa to avoid the possibility of losing his land.
Same; Estoppel; Attempts to redeem constitute
implied admission of validity.—Defendants, by their Same; Same; Same; Property; Presumption of
repeated requests for time to redeem had impliedly conjugality, not a case of; When the property is
admitted—were estopped to question—the validity registered in the name of a spouse only and there is
and regularity of the sheriff's sale. (Tiaoqui vs. no showing as to when the property was acquired by
Chaves, L-10086, May 20, 1957, quoting from 59 said spouse, the property belongs exclusively to said
C.J.S. p. 1372). spouse; Presumption under Art 160 of the Civil Code
cannot prevail when the title is in the name of only
one spouse and the rights of innocent third parties
PNB V. CA are involved.—The presumption applies to property
Civil Law; Land Registration; Mortgage; The PNB had acquired during the lifetime of the husband and wife.
the right to rely on what appears in the certificate of In this case, it appears on the face of the title that the
title where on its face the properties are owned by properties were acquired by Donata Montemayor
the mortgagor, and there is no reason to doubt the when she was already a widow. When the property is
status of the registered owner and her ownership registered in the name of a spouse only and there is
thereof.—When the subject properties were no showing as to when the property was acquired by
mortgaged to the PNB they were registered in the said spouse, this is an indication that the property
name of Donata Montemayor, widow. Relying on the belongs exclusively to said spouse. And this
torrens certificate of title covering said properties the presumption under Article 160 of the Civil Code
mortgage loan applications of Donata were granted cannot prevail when the title is in the name of only
by the PNB and the mortgages were duly constituted one spouse and the rights of innocent third parties
and registered in the office of the Register of Deeds. are involved.
In processing the loan applications of Donata
Montemayor, the PNB had the right to rely on what Same; Same; Same; Same; PNB is a mortgagee in
appears in the certificates of title and no more. On its good faith as it was not aware that at the time the
face the properties are owned by Donata mortgages were constituted there was a flaw of the
Montemayor, a widow. The PNB had no reason to mortgagor's title.—The PNB had a reason to rely on
doubt nor question the status of said registered what appears on the certificates of title of the
owner and her ownership thereof. Indeed, there are properties mortgaged. For all legal purposes, the PNB
no liens and encumbrances covering the same. is a mortgagee in good faith for at the time the
mortgages covering said properties were constituted
Same; Same; Same; Same; Rule that a person dealing the PNB was not aware to any flaw of the title of the
with a registered land has a right to rely upon the mortgagor.
face of the Torrens certificates of title and to
dispense with the need of inquiring further; Same; Same; Same; Same; Parties; Although actions
Exception.—The well-known rule in this jurisdiction is for recovery of real property and for partition are real
that a person dealing with a registered land has a actions, they are actions in personam that bind only
right to rely upon the f ace of the torrens certificate the particular individuals who are parties thereto;
of title and to dispense with the need of inquiring PNB, not being a party to the cases earlier decided
further, except when the party concerned has actual nor aware of said decisions, it is not bound by said
knowledge of facts and circumstances that would decisions; PNB was a purchaser for value in good
impel a reasonably cautious man to make such faith, when the properties were sold at public
inquiry. auction.—At any rate, although actions for recovery
of real property and for partition are real actions,
Same; Same; Same; Same; Same; A Torrens title however, they are actions in personam that bind only
concludes all controversies over ownership of the the particular individuals who are parties thereto.
land covered by a final decree of registration.—A The PNB not being a party in said cases is not bound
torrens title concludes all controversy over ownership by the said decisions, Nor does it appear that the PNB
of the land covered by a final decree of registration. was aware of the said decisions when it extended the
Once the title is registered the owner may rest above described mortgage loans. Indeed, if the PNB
knew of the conjugal nature of said properties it specified in the certificate. The conveyance executed
would not have approved the mortgage applications in favor of a buyer or purchaser, or the so called
covering said properties of Donata Montemayor certificate of sale, is a conveyance of the ownership
without requiring the consent of all the other heirs or of the property, subject only to the resolutory
co-owners thereof. Moreover, when said properties condition that the sale may be cancelled if the price
were sold at public auction, the PNB was a purchaser agreed upon is not paid for in full. The purchaser
for value in good faith so its right thereto is beyond becomes the owner upon the issuance of the
question. certificate of sale in his favor subject only to the
cancellation thereof in case the price agreed upon is
Same; Same; Same; Same; Estoppel; Laches; not paid (Pugeda vs. Trias, No. L-16925, March 31,
Respondents are in estoppel when they never raised 1962, 4 SCRA 849).
the conjugal nature of the property nor took issue as
to the ownership of their mother; For failure of Same; Same; Same; Same; Approval by the Secretary
respondents to assert their rights over the property, of Agriculture is indispensable for the validity of the
respondents are guilty of laches.—Pragmacio and sale of such friar lands.—Upon the payment of the
Maximo Vitug are now estopped from questioning final installment together with all accrued interests,
the title of Donata Montemayor to the said the government shall then issue a final deed of
properties. They never raised the conjugal nature of conveyance in favor of the purchaser. However, the
the property nor took issue as to the ownership of sale of such friar lands shall be valid only if approved
their mother, Donata Montemayor, over the same. by the Secretary of Interior as provided in Act No.
Indeed private respondents were among the 1120. Later laws, however, required that the sale
defendants in said two cases wherein in their shall be approved by the Secretary of Agriculture and
answers to the complaint they asserted that the Commerce. In short, the approval by the Secretary of
properties in question are paraphernal properties Agriculture and Commerce is indispensable for the
belonging exclusively to Donata Montemayor and are validity of the sale.
not conjugal in nature. Thus they leased the
properties from their mother Donata Montemayor Land Registration; Certificate of Title; Registration
for many years knowing her to be the owner. They does not vest title, it is merely evidence of such title
were in possession of the property for a long time over a particular property.—The issuance of a
and they knew that the same were mortgaged by certificate of title in favor of Mabini Legaspi did not
their mother to the PNB and thereafter were sold at vest ownership upon her over the land nor did it
public auction, but they did not do anything. It is only validate the alleged purchase of the lot, which is null
after 17 years that they remembered to assert their and void. Time and again, it has been held that
rights. Certainly, they are guilty of laches. registration does not vest title. It is merely evidence
of such title over a particular property. Our land
registration laws do not give the holder any better
2. Probative Value title than that what he actally has (De Guzman, et al.
vs. Court of Appeals, G.R. L-46935, December 21,
SOLID STATE MULTI-PRODUCTS CORP V. CA
1987, 156 SCRA 701; Cruz vs. Cabana, No. 56232,
Land Titles and Deeds; Friar Lands Act; Bureau of
June 22, 1984, 129 SCRA 656).
Lands; Sales; The certificate of sale issued by the
Bureau of Lands is a conveyance of the ownership of
Same; Same; Quieting of Title; Prescription; An
the property, subject only to the resolutory condition
adverse claimant of a registered land who is in
that the sale may be cancelled if the price agreed
possession thereof for a long period of time is not
upon is not paid for in full.—It is clear from the
barred from bringing an action for reconveyance
foregoing provisions that the friar lands were
which in effect seeks to quiet title to the property
purchased by the government for sale to actual
against a registered owner relying upon a Torrens
settlers and occupants at the time said lands are
title which was illegally or wrongfully acquired.—
acquired by the government. The Bureau of Lands
Although a period of one year has already expired
shall first issue a certificate stating therein that the
from the time the certificate of title was issued to
government has agreed to sell the land to such settler
Mabini Legaspi pursuant to the alleged sale from the
or occupant. The latter then shall accept the
government, said title does not become
certificate and agree to pay the purchase price so
incontrovertible but is null and void since the
fixed and in the installments and at the interest
acquisition of the property was in violation of law. the owner.
Further, the petitioner herein is in possession of the
land in dispute. Hence, its action to quiet title is Same; Same; Same; Same; Private respondent could
imprescriptible (Coronel vs. Intermediate Appellate validly file the complaint for the recovery of her late
Court, No. 70191, October 29, 1987, 155 SCRA 270). husband’s property without prejudice to the
In one case, this Court ruled that an adverse claimant successional rights of his other heirs.––As the
of a registered land who is in possession thereof for a surviving spouse of Roberto Sanchez, the private
long period of time is not barred from bringing an respondent could validly file the complaint for the
action for reconveyance which in effect seeks to quiet recovery of her late husband’s property, without
title to the property against a registered owner prejudice to the successional rights of his other heirs.
relying upon a Torrens title which was illegally or Parenthetically, (and curiously), although the
wrongfully acquired (Caragay-Layno vs. Court of supposed common-law wife and her illegitimate
Appeals, 133 SCRA 718). In actions for reconveyance children were never presented at the trial, their
of property predicated on the fact that the existence was readily accepted by the trial court on
conveyance complained of was void ab initio, a claim the basis alone of the petitioner’s unsupported
of prescription of the action would be unavailing statements.
(Corpus, et al. vs. Beltran, et al., 97 Phil. 722; Agne vs.
Director of Lands, G.R. L-40399, February 6, 1990; Same; Same; Prescription; Court find that the
181 SCRA 793). Being null and void, the sale made to applicable rule is not Article 1391 of the Civil Code
Mabini Legaspi and the subsequent titles issued but Article 1410; The action or defense for the
pursuant thereto produced no legal effects declaration of the inexistence of a contract does not
whatsoever. Quod nullum est, nullum producit pre-scribe.––Concerning the question of prescription,
effectum (Agne vs. Director of Lands, supra). There we find that the applicable rule is not Article 1391 of
being no title to the land that Mabini Legaspi the Civil Code but Article 1410. Article 1391 provides
acquired from the government, it follows that no title that the action for annulment of a contract prescribes
to the same land could be conveyed by the former to in four years in cases where the vice consists of
respondent Virata intimidation, violence, undue influence, mistake,
fraud or lack capacity. The deed of sale in question
does not suffer from any of these defects. The
VILLANUEVA V. CA supposed vendee’s signature having been proved to
Civil Law; Evidence; Marriage Contract; Presumption; be a forgery, the instrument is totally void or
A marriage contract renders unnecessary the inexistent as “absolutely simulated or fictitious”
presumption that “a man and a woman deporting under Article 1409 of the Civil Code. According to
themselves as husband and wife have entered into a Article 1410, “the action or defense for the
lawful contract of marriage”; The best documentary declaration of the inexistence of a contract does not
evidence of a marriage is the marriage contract prescribe.”
itself.––The Court notes at the outset that Catalina
Sanchez has proved her status as the widow of Same; Same; Same; Same; The Deed of Sale being a
Roberto Sanchez with her submission of the marriage forgery, it was totally void or inexistent and so could
contract denominated as Exhibit “A.” That evidence be challenged at any time, the action for its
rendered unnecessary the presumption that “a man nullification being imprescriptible.––Our own finding
and a woman deporting themselves as husband and is that the petitioners have not proved the validity
wife have entered into a lawful contract of marriage” and authenticity of the deed of sale or even the
and may also explain why Roberto Sanchez could not circumstances that supposedly led to its execution by
marry the woman by whom he supposedly had two the late Roberto Sanchez. On the contrary, we are
illegitimate children, assuming these persons did convinced from the testimonies of the handwriting
exist. It is strange that the trial court should reject experts that his signature had been forged on the
Exhibit “A” in favor of the Transfer Certificate of Title questioned document and that he had not conveyed
describing Roberto Sanchez as “single,” disregarding the subject land to the petitioners. The deed of sale
the elementary principle that the best documentary being a forgery, it was totally void or inexistent and
evidence of a marriage is the marriage contract itself. so could be challenged at any time, the action for its
A Torrens certificate is the best evidence of nullification being imprescriptible. The private
ownership of registered land, not of the civil status of respondent, as the widow of Roberto Sanchez, has
the capacity to sue for the recovery of the land in Inc. vs. State Investment House, Inc., 151 SCRA 630
question and is not estopped from doing so. [1987]). This case falls within the excepted cases
whereby the injunctive writ was unjustifiably
Remedial Law; Evidence; Expert Witnesses; It is worth dissolved.
noting that the competence of the two expert
witnesses was never assailed by the petitioners nor Land Registration; While land registration is a
was it questioned by the trial judge.––The trial judge proceeding in rem and binds the whole world, the
said the testimony of PC Examiner Salvador was not single possession of a certificate of title under the
reliable because her examination of the document torrens system does not necessarily make the holder
was “done under circumstance not so trustworthy a true owner of all the property described therein.—
before the action was instituted.” But he did not It is axiomatic in this jurisdiction that “while land
consider the fact that her findings were corroborated registration is a proceeding in rem and binds the
by NBI Examiner Torres, who conducted her own whole world, the simple possession of a certificate of
examination at the instance of the petitioners title under the Torrens Systems does not necessarily
themselves and after the action was instituted. It is make the holder a true owner of all the property
worth noting that the competence of the two expert described therein. If a person obtains a title under
witnesses was never assailed by the petitioners nor the Torrens system. which includes by mistake or
was it questioned by the trial judge. The petitioners oversight land which can no longer be registered
also did not present their own handwriting expert to under the system, he does not, by virtue of the said
refute the findings of the government handwriting certificate alone, become the owner of the lands
experts. illegally included.”

Same; Same; Same; Court is inclined to accept the Same; Same; In registration proceedings, a cadastral
findings of the handwriting experts.––The Court has court has no authority to award a property in favor of
itself examined the signatures of Roberto Sanchez in persons who have not put in any claims to it and have
the several instruments among the records of this never asserted any right of ownership thereon.—The
case, including those dating back to before 1968 and evidence shows that Free Patent No. 552571 issued
is inclined to accept the findings of the handwriting to the Bahans is erroneous as it embraced and
experts. Villanueva vs. Court of Appeals, 198 SCRA comprised in portions thereof lands which belong to
472, G.R. No. 84464 June 21, 1991 the Avilas. The subsequent registration of the portion
of land belonging to the Avilas by the Bahans could
not make the latter owners thereof. It has been held
AVILA V. TAPUCAR in registration proceedings, a cadastral court has no
Remedial Law; Jurisdiction; Object of a preliminary authority to award a property in favor of persons
injunction whether prohibitory or mandatory is to who have not put in any claims to it and have never
preserve the status quo until the merits of the case asserted any right of ownership thereon, and the
can be heard.—The sole object of a preliminary certificate of title issued under the circumstances to
injunction, whether prohibitory or mandatory, is to such persons would be declared null and void subject
preserve the status quo until the merits of the case to the right of innocent purchasers for value,
can be heard. The status quo is the last actual
peaceable uncontested status which preceded the Same; Same; Same; Registration not a mode of
controversy. It may only be resorted to by a litigant acquiring ownership but is merely evidence of such
for the preservation or protection of his rights or title over a particular property.—Re-gistration does
interests and for no other purpose during the not vest title. It is not a mode of acquiring ownership
pendency of the principal action. It should only be but is merely evidence of such title over a particular
granted if the party asking for it is clearly entitled property. It does not give the holder any better right
thereto. than what he actually has, especially if the
registration was done in bad faith. The effect is that it
Same; Same; Same; Grant or denial of an injunction is as if no registration was made at all. Avila vs.
rests upon the sound discretion of the Court.—The Tapucar, 201 SCRA 148, G.R. No. 45947 August 27,
rule is that the grant or denial of an injunction rests 1991
upon the sound discretion of the court, except on a
clear case of abuse (Belisle Investment & Finance Co.,
VDA. DE RECINTO V. INCIONG Land Registration Act; When an area is erroneously
included in a relocation survey and in the title
subsequently issued, the said inclusion is null and
void. The Land Registration Act and the Cadastral Act
cannot he mode a shield for fraud or for enriching a
person at the expense of another.—During the ocular
inspection conducted by the trial court it was found
out that the disputed portion of the land adjoining it
on the north (private respondent’s) are separated by
a long fence consisting of morado, madre cacao,
antipolo and other kinds of trees which could not be
less than 25 years old, with a single line of a rusty
barbed wire. Inside the disputed area were coconut
trees and other plants similar to those found in the
land of the petitioner but different from those
improvements in the land of the private respondent.
As found by the trial court the preponderance of
evidence shows that the area in question has been
erroneously included in the cadastral survey of Lot
No. 8151 and in the original certificate of title without
the knowledge of the parties concerned. As a result,
the same description in the original certificate of title
was carried over into the succeeding transfer
certificates of title of the subsequent owners
covering the same parcel of land. This is confirmed by
the fact that private respondent’s predecessors-in-
interest and later, private respondent himself, have
all along treated the area in question as belonging to
the petitioner. What seemed to have prompted
private respondent to get interested over the
disputed area was when he came to learn after the
relocation survey in 1961 that said disputed area was
included in his title. Obviously then, the inclusion of
said area in the title of Lot No. 8151 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 have never asserted any right of ownership
over it. The Land Registration Act as well as the
Cadastral Act protects only the holders of a title in
good faith and does not permit its provisions to be
used as a shield for the commission of fraud, or that
one should enrich himself at the expense of another.
Resort to the provisions of said Acts do not give one a
better title than he really and lawfully has. In the case
at bar, private respondent could not have acquired
an area more than what was actually conveyed to
him by Matias Amurao which extended only as far as
the dividing fence on the south thereof (Exhibit I).
The mere possession of a certificate of title under the
Torrens system does not necessarily make the
possessor a true owner of all the property described
therein for he does not by virtue of said certificate
alone become the owner of the land illegally
included. claiming to be the owner thereof may wait until his
possession is disturbed or his title is attacked before
Same; “Innocent purchaser for value” defined.—But taking steps to vindicate his right, the reason for the
was private respondent an innocent purchaser for rule being, that his undisturbed possession gives him
value? We can hardly consider private respondent a continuing right to seek the aid of a court of equity
one because at the time he purchased the land to ascertain and determine the nature of the adverse
covered by the certificate of title now in his hands he claim of a third party and its effect on his own title,
was aware that the disputed portion was not which right can be claimed only by one who is in
included in the area coveyed to him by Matias possession. No better situation can be conceived at
Amurao. This is clearly evident when he the moment for Us to apply this rule on equity than
acknowledged as the true boundary the one (Exhibit that of herein petitioners whose mother, Felipa Faja,
I) pointed to him by Matias Amurao between his land was in possession of the litigated property for no less
and the disputed portion by not raising any question than 30 years and was suddenly confronted with a
about it and not disturbing the possession of the claim that the land she had been occupying and
petitioner over the area in dispute for almost 15 cultivating all these years, was titled in the name of a
years. A purchaser in good faith is one who buys the third person.
property of another without notice that some other
person has a right to, or interest in, such property Same; Same; Same; The right to quiet title to
and pays a full and fair price for the same, at the time property and annul any certificate covering it accrues
of such purchase, or before he has notice of the claim only from the time the one in actual possession was
or interest of some other person in the property. made aware of a claim adverse to his own, and only
then may the prescriptive period commence to run
Same; Prescription; A person is not barred by against the actual possessor.—We hold that in such a
prescription from filing an action for reconveyance of situation the right to quiet title to the property, to
land erroneously included in the title of another.—As seek its reconveyance and annul any certificate of
to the claim of private respondent that petitioner’s title covering it, accrued only from the time the one
action for reconveyance of the land in the form of a in possession was made aware of a claim adverse to
counterclaim has long been barred by prescription, his own, and it is only then that the statutory period
suffice it to state that private respondent ever of prescription commences to run against such
claimed it after fifteen (15) years from the time he possessor.
acquired the land covered by his title, it was because
the same was erroneously included in his title. Judgments; Summary judgment; Summary judgment
Moreover, the defense of prescription interposed by may he rendered only when, except as to the amount
the private respondent cannot be entertained as it of damages, there is no genuine issue as to any
has been raised only for the first time in this instance. material fact, and that the moving party is entitled to
Vda. de Recinto vs. Inciong, 77 SCRA 196, No. L-26083 a judgment as a matter of law.—There are material
May 31, 1977 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
FAJA V. CA which are: (a) the circumstances which led to the
Prescription; Civil law; Quieting of title; Action to issuance in 1950 of Original Certificate of Title RO-
quiet title to property in actual possession of plaintiff 1496 a reconstituted title of a supposed Original
is imprescriptible.—It is an established rule that an Certificate of Title No. 23257 allegedly issued on
action to quiet title to property in the possession of a December 12, 1940, pursuant to a decree of
plaintiff is imprescriptible. registration No. 732588 dated Nov. 5, 1940, which
was claimed to have been lost; (b) explanation, if any,
Same; Same; Same; One in actual possession of for the inaction of the alleged registered owner
property may wait until his possession is disturbed Indalecio Frial and of his heirs for a period of 30 years
for the reason that his undisturbed possession gives to take possession of the land in question x x x; (c)
him a continuing right to seek the aid of a court of the claim of ownership and possession of Felipa Faja
equity to determine the nature of the adverse claim and her predecessor-in-interest which allegedly date
of a third party.—There is settled jurisprudence that as far back as 60 years prior to the filing of Frial’s
one who is in actual possession of a piece of land complaint in 1975 x x x. All these matters cannot
simply be summarily disposed of in favor of long elapsed, the original certificate of title issued in the
respondent Frial and adversely against petitioners name of petitioner’s predecessor-in-interest had
without evidence adduced on their conflicting claims. become indefeasible. The Transfer Certificate of Title
Faja vs. Court of Appeals, 75 SCRA 441, No. L-45045 derived therefrom is likewise unassailable, for under
February 28, 1977 Section 39 of Act 496, “every person receiving a
certificate of title in pursuance of a decree of
registration, and every subsequent purchaser of
3. Doctrines Affecting Title registered land who takes a certificate of title for value
a) Presumption of validity – presumed valid and devoid of in good faith shall hold the same be free of all
encumbrance except those noted on said certificate.”
flaws and regularly issued
Albienda vs. Court of Appeals, 135 SCRA 402, No. L-
ALBIENDA V. CA 61416 March 18, 1985
Land Registration Act; A Torrens Title can no longer be
corrected as to area description after the lapse of one
b) Free from liens – except those annotated and those
year from issuance of decree of registration and the
that need not be annotated
land has already been sold to a purchaser in good faith
even if area in the title does not correspond to survey NATIONAL GRAINS AUTHORITY V. IAC
return or file with the Bureau of Lands.—Section 38 of Land Titles; While the registration of the conditional
the Land Registration Act which is pertinent to the issue sale with right of repurchase may be binding on third
at hand is clear and unambiguous: “Every decree of persons, it is by provision of law “understood to be
registration shall bind the land, and quiet title thereto x without prejudice to third party who has the better
x x it shall be conclusive upon and against all persons x x right” (Sec. 194 of Administrative Code, as amended
x x whether mentioned by name in the application, by Act No. 3344.—It is axiomatic, that while the
notice, or citations, or included in the general registration of the conditional sale with right of
description ‘To All Whom It May Concern/ “It is a repurchase may be binding on third persons, it is by
settled doctrine that even when the decree of provision of law “understood to be without prejudice
registration has been obtained by fraud, the party to third party who has better right” (Section 194 of
defrauded has only one year from entry of the decree the Administrative Code, as amended by Act No.
to file a petition for review before a competent court, 3344).
and such petition can prosper only if no innocent
purchaser for value has acquired an interest in the land Same; Same; Proceedings for registration of title to
Said Section 38 categorically declares that “upon the land under the Torrens System is an action in rem,
expiration of the said term of one [1] year every decree hence, personal notice to all claimants of the res is
or certificate of title issued in accordance with this not necessary in order that the court may have
section shall be incontrovertible.” jurisdiction.—Time and time again, this Court has
ruled that the proceedings for the registration of title
Same; Same.—In the case at bar, it is undisputed that to land under the Torrens System is an action in rem,
the original certificate of title covering Lot 1550 was not inpersonam, hence, personal notice to all
issued on July 23, 1958 in favor of Enesaria Goma, the claimants of the res is not necessary in order that the
petitioner’s predecessor-ininterest. The fact that court may have jurisdiction to deal with and dispose
sometime in October 1958 Loida Baterbonia had of the res. Neither may lack of such personal notice
written the Director of Lands for a recomputation of the vitiate or invalidate the decree or title issued in a
area set forth in the certificate of the said land is of no registration proceeding, for the State, as sovereign
moment, for up until the sale of Lot 1550 to petitioner over the land situated within it, may provide for the
in 1972, no action had been brought before a court of adjudication of title in a proceeding in rem or one in
competent jurisdiction to correct the error, if indeed the nature of or akin a proceeding in rem which shall
there was such error. be binding upon all persons, known or unknown
(Moscoso vs. Court of Appeals, 128 SCRA 719 [1984],
Same; Same.—The instant action to correct the citing: City of Manila vs. Lack, et al., 19 Phil. 324, 337;
certificate of title in question was filed on July 13, 1977 Roxas vs. Enriquez, 29 Phil. 31; Director of Lands vs.
or about 19 years after the issuance of said certificate of Roman Catholic Archbishop of Manila, 41 Phil. 120;
title. Since the period allowed by law for setting aside Aguilar vs. Caogdan, 105 Phil. 661). It is thus evident
the decree of registration of a certificate of title had
that respondents’ right over the property was barred he may be compelled to transfer the land to the
by res judicata when the decree of registration was defrauded owner so long as the property has not
issued to spouses Vivas and Lizardo. It does not passed to the hands of an innocent purchaser for
matter that they may have had some right even the value (Angeles vs. Sania, 66 Phil. 444 [1938], italics
right of ownership, BEFORE the grant of the Torrens supplied).
Title.
Same; Same; Same; Same; Principle that a petition for
Same; Same; Effect of issuance of certificate of title review will not prosper even if filed within one year
under Sec. 44 of P.D. 1529.—Thus, under Section 44 from the entry of the decree if the title has passed
of P.D. 1529, every registered owner receiving a into the hands of an innocent purchaser for value
certificate of title in pursuance of a decree of (P.D. 1529, Sec. 32); NGA, lawful owner of the
registration, and every subsequent purchaser of property in question by virtue of its indefeasible title;
registered land taking a certificate of title for value Case at Bar.—Under the circumstances, the Regional
and in good faith, shall hold the same free from all Trial Court could not have erred in ruling that
encumbrances except those noted on the certificate plaintiffs’ (private respondents herein) complaint
and any of the encumbrances which may be insofar as it prays that they be declared owners of
subsisting, and enumerated in the law. Under said the land in question can not prosper in view of the
provision, claims and liens of whatever character, doctrine of indefeasibility of title under the Torrens
except those mentioned by law as existing, against System, because it is an established principle that a
the land prior to the issuance of certificate of title, petition for review of the decree of registration will
are cut off by such certificate if not noted thereon, not prosper even if filed within one year from the
and the certificate so issued binds the whole world, entry of the decree if the title has passed into the
including the government (Aldecoa and Co. vs. hands of an innocent purchaser for value (Pres.
Warner Barns & Co., 30 Phil. 209 [1915]; Snyder vs. Decree No. 1529, Sec. 32). The setting aside of the
Fiscal of Cebu and Avila, 42 Phil. 766 [1922]). Under decree of registration issued in land registration
said ruling, if the purchaser is the only party who proceedings is operative only between the parties to
appears in the deeds and the registration of titles in the fraud and the parties defrauded and their privies,
the property registry, no one except such purchaser but not against acquirers in good faith and for value
may be deemed by law to be the owner of the and the successors in interest of the latter; as to them
properties in question (Ibid). Moreover, no title to the decree shall remain in full force and effect forever
registered land in derogation to that of the registered (Domingo vs. The Mayon Realty Corp., et al., 102 Phil.
owner shall be acquired by prescription or adverse 32 [1957]). Assuming, therefore, that there was fraud
possession (Umbay vs. Alecha, 135 SCRA 427 [1985]). committed by the sellers against the buyers in the
instant case, petitioner NGA who was not privy
Same; Same; Purpose of Torrens System; Indirect or therein cannot be made to suffer the consequences
collateral attack not allowed.—Thus, it has been thereof. As correctly declared by the trial court, the
invariably restated by this Court, that “The real National Grains Authority is the lawful owner of the
purpose of the Torrens System is to quiet title to land property in question by virtue of its indefeasible title.
and to stop forever any question as to its legality. National Grains Authority vs. Intermediate Appellate
‘Once a title is registered, the owner may rest secure, Court, 157 SCRA 380, No. L-68741 January 28, 1988
without the necessity of waiting in the portals of the
court, or sitting on the ‘mirador su casa,’ to avoid the
possibility of losing his land.’” An indirect or collateral PENULLAR V. PNB
attack on a Torrens Title is not allowed (Dominga vs. Pleadings and Practice; Judgment; Banks; The
Santos, 55 Phil. 361; Singian vs. Manila Railroad, 62 petitioner’s objection to the inclusion in the
Phil. 467). judgment below of the mortgage rights of the
Philippine National Bank on the ground that it was
Same; Same; Same; Exception where the person who not raised in the pleadings is incorrect.—Moreover,
obtains a certificate of title is guilty of fraud.—The respondent Philippine National Bank on the very
only exception to this rule is where a person obtains theory that it was a mortgagee in good faith filed a
a certificate of title to a land belonging to another Motion to Dismiss the case as against it. (Record on
and he has full knowledge of the rights of the true Appeal, pp. 31-34) And this motion was subject to
owner. He is then considered as guilty of fraud and another URGENT MOTION for Resolution filed by
respondent Philippine National Bank (Record on the loss.—If there be any doubt as to the correctness
Appeal, pp. 39-40). The same motion prompted the of this solution this court might as well invoke the
petitioner plaintiff in the trial court, to file an principle that where one of two innocent parties
Opposition thereto. (Record on Appeal, pp. 40-41) must have to suffer due to the act of a third person,
which in turn led the respondent Philippine National he whose negligence had caused the damage should
Bank to file a Reply to the Opposition. (Record on be made to bear the loss; in the present case if the
Appeal, pp. 48-50). In its appeal to the Court of heirs of Genoveva Miguel, that is to say herein
Appeals, the Philippine National Bank maintained its plaintiff had only been diligent, and had appealed
position that it was a mortgagee in good faith. Thus, from the decision in the registration case, no
in the third Assignment of Error of its brief filed certificate of Title would have been issued just like
before the appellate court, the Philippine National that in the name of the heirs of Genoveva Miguel and
Bank adequately discussed its being a mortgagee in no mortgage could have been constituted by them in
good faith. The first proposition is without merit. favor of Bank but as it is, said successors of Praxedes
Moya and Josefa Sison failed to do that, instead they
Banks; Land Registration; Mortgages; Where Torrens let the decision in the registration case gain the
Titles were issued as a result of regular land status of finality; allowed without prior protest, the
registration proceedings and were later given as certificate of title to be issued; did not even as early
security to a bank loan, the subsequent declaration of as possible, annotate an adverse claim on the titles;
said Torrens titles as null and void, does not authorize and they filed this case only several months
the cancellation of the mortgaged rights of the bank afterwards, it was their negligence that permitted
which acted in good faith.—In the instant case, the said adjudicatees in the said registration case to apply
Philippine National Bank relied on the Torrens titles for and secure mortgages from the Bank.
of the mortgagors which had been regularly issued.
The Torrens titles were the result of regular land Succession; Contracts; Land Registration; A successor-
registration proceedings duly registered with the in-interest is bound to recognize the liens and/or
Register of Deeds. There was nothing in the Torrens encumbrances attached to the land although not
titles which would excite suspicion that the same inscribed in the Torrens Title.—As suceessor-in-
were fraudulently processed by the mortgagors, interest, the petitioner did not only succeed to the
Applying, therefore, the principles enunciated in the rights and interests of her predecessor-in-interest but
afore-cited cases, the respondent Bank was not duty she was also bound to recognize the liens and/or
bound to further investigate the validity and/or encumbrances attached to the subject parcels of land
invalidity of the Torrens title. which by law are considered to be valid though not
inscribed in the Torrens title of that land. The
Same; Same; Same; Same.—The assertion that the petitioner cannot invoke her relationship with her
Philippine National Bank could not be an innocent predecessor when it is to her advantage and yet
mortgagee in good faith con sidering that the same disclaim the effects of said relationship on exactly the
parcel of land covered by the invalidated titles was same subject matter when it is to her disadvantage.
previously mortgaged by: first, Domingo Cayabyab, a This is the principle which the Court of Appeals took
predecessor-in-interest of the petitioner and second, into consideration when it ruled that the negligence
by the petitioner herself under Transfer Certificate of of petitioner’s predecessor-in-interest was binding
Title No. 8822 to the respondent Philippine National upon the petitioner herself notwithstanding her non-
Bank is not well-taken. An examination of the substitution as party to the subject land registration
technical descriptions of the parcels of land covered proceedings. Penullar vs. Philippine National Bank,
by the three subject Torrens titles shows that they 120 SCRA 171, No. L-32762 January 27, 1983
are different from each other and there is no way for
a reader to detect that the void Torrens titles covered
the same parcels of land in Transfer Certificate of c) Incontrovertible and indefeasible
Title No. 8822, previously mortgaged to the
BORNALES V. IAC
respondent Bank.
Civil Law; Sales; Fraud; Purchases in bad faith; Chain
of events reveals a clear scheme to dispossess the
Same; Same; Same; Damages; Equity; He whose
spouse of her share in the property.—There is no
negligence had enabled a third person to cause
merit to this allegation. The chain of events starting
damages shall, as between two innocent parties, bear
from the reconstitution of the original certificates of
title to the execution of the deed of absolute sale in ARGUELLES V. TIMBANCAYA
favor of the petitioners reveals a clear scheme to Land Registration; The one-year rule within which to
dispossess the private respondent of her share in the contest decree of registration does not apply to a
property subject of this controversy. case which involves not the validity of the original
certificate of title, but the annulment of a transfer
Same; Same; Same; Same; Fact alone that petitioners certificate of title.—The rule that a decree of
purchased the property with full knowledge of the registration once issued becomes final and
flaws and defect in the title of their vendors is incontrovertible one (1) year after its issuance is not
enough proof of their bad faith.—Thus, even without relevant to the case at bar. Appellee does not
the circumstances enumerated by the Court of question the validity of the Original Certificate of Title
Appeals to demonstrate the petitioners’ lack of good No. G-207 x x x. What appellee sought in the action
faith, the fact alone that they purchased the property for reconveyance was the annulment of Transfer
with full knowledge of the flaws and defect in the Certificate of Title No. 1053 which was issued to
title of their vendors is enough proof of their bad appellant long after the afore-mentioned Judgment
faith. In the case of Gatioan v. Gaffud [G.R. No. L- by compromise had been implemented by the
21953, March 28, 1979, 27 SCRA 706] this Court held parties, on the basis of his (appellant’s)
that one who purchases real property with misrepresentation in his affidavit filed with the
knowledge of a defect in the title of his vendor Register of Deeds of Palawan x x x. In the case at bar,
cannot claim that he acquired title thereto in good appellant having secured thru his misrepresentation a
faith as against the owner or of an interest therein. transfer certificate of title in his exclusive name
covering the whole property to the prejudice of
Same; Same; Same; Same; Petitioners knew and were appellee, the trial court did not commit any error in
parties to the fraud committed against respondent ordering the cancellation of the aforesaid title.
spouse; Petitioners cannot invoke the indefeasibility
of a certificate of title as they bought the registered
land from their vendors who procured title to the d) Registered land not subject to prescription
land by means of fraud.—The petitioners claim that
RIVERA V. CA
they were not aware of any defect in the title of their
Evidence; Land Titles; Ownership; Tax Declarations; A
vendors because the certificate of title in the name of
tax declaration, by itself, is not considered conclusive
their predecessors-in-interest which their lawyer
evidence of ownership.—Petitioner anchors her claim
examined contained nothing to put them on guard.
on the alleged titles of her predecessors-in-interest,
The fact however remains that the petitioners knew
i.e., that the land was initially sold by deceased
and were parties to the fraud committed against the
Gabalones spouses to Generoso Reyes, who sold it to
private respondent. Having bought the land
spouses Taiño and Leron, who later sold the same to
registered under the Torrens system from their
her. Petitioner also introduced in evidence two (2)
vendors who procured title thereto by means of
deeds of sale covering the subject lot: the first deed
fraud, petitioners cannot invoke the indefeasibility of
was executed between Reyes and the Taiño spouses,
a certificate of title against the private respondent to
the second deed was executed by the Taiño spouses
the extent of her interest therein. The Torrens system
in her favor. Significantly, the deed of sale supposedly
of land registration should not be used as a means to
made by the Gabalones spouses to Reyes was not
perpetrate fraud against the rightful owner of real
presented in the trial court. All that was introduced
property. Registration, to be effective, must be made
during the hearing to prove this vital fact was a tax
in good faith. [Palanca v. Director of Lands, 43 Phil.
declaration in the name of Generoso Reyes for the
149 (1922).] Thus, it is a settled rule that the defense
year 1948. The respondent court correctly found this
of indefeasibility of a certificate of title does not
proof inadequate. In a number of cases, we have
extend to a transferee who takes it with notice of the
ruled that a tax declaration, by itself, is not
flaws in his transferor’s title. If at all, the petitioners
considered conclusive evidence of ownership. Rivera
only acquire the right which their vendors then had.
vs. Court of Appeals, 244 SCRA 218, G.R. No. 107903
[Ramos, et al. v. Dueno, et al., 50 Phil. 786 (1927).]
May 22, 1995
Bornales vs. Intermediate Appellate Court, 166 SCRA
519, No. L-75336 October 18, 1988
Same; Same; Same; Prescription; Reconstitution of
Titles; Titled land cannot be acquired by prescription;
The fact that the title to the lot was lost does not possession; Prescription, unavailing not only against
mean that the lot ceased to be a registered land the registered owner but also against his hereditary
before the reconstitution of its title.—We also hold successors.—Section 46 of the Land Registration Law,
that the respondent court did not err in ruling that now section 47 of the Property Registration Decree
petitioner cannot invoke acquisitive prescription (PD No. 1529 effective June 11, 1978), provides that
considering that the subject land is titled land. “no title to registered land in derogation to that of
Petitioner contends that the subject land was not the registered owner shall be acquired by
covered by any title when Reyes acquired it in 1947 prescription or adverse possession” (Corporacion de
up to the time the petition for reconstitution was PP. Agustinos Recoletos vs. Crisostomo, 32 Phil. 427,
filed by private respondents in 1989. She submits 439; Estella vs. Register of Deeds of Rizal, 106 Phil.
that prior to the reconstitution of private 911, 914; Santiago vs. J.M. Tuason & Co., Inc., 110
respondents’ title, she could acquire it by Phil. 16, 22; Manila Electric Co. and Sheriff of Quezon
prescription. We reject this submission. The fact that City vs. Enriquez and Espinosa, 110 Phil. 499, 504).
the title to the lot was lost does not mean that the lot Prescription is unavailing not only against the
ceased to be a registered land before the registered owner but also against his hereditary
reconstitution of its title. successors because the latter merely step into the
shoes of the decedent by operation of law and are
Same; Same; Same; Same; Same; Words and Phrases; merely the continuation of the personality of their
“Reconstitution,” Explained.—Reconstitution is predecessor-in-interest (Barcelona vs. Barcelona, 100
simply the restoration of the instrument or title Phil. 251, 257).
allegedly lost or destroyed in its original form and
condition. Indeed, the order granting reconstitution Same; Same; Same; Real purpose of the Torrens
of title confirms the fact that the subject land has system.—As stated by Justice Johnson in the 1915
been previously registered and covered by a torrens case of Legarda vs. Saleeby, 31 Phil. 590 the real
title. As the subject land did not cease to be titled, it purpose of the Torrens system is to quiet title to land
cannot be acquired by acquisitive prescription. To and to stop forever any question as to its legality.
hold otherwise is to wreak havoc on the stability of “Once a title is registered, the owner may rest secure,
our torrens system. without the necessity of waiting in the portals of the
court, or sitting in the ‘mirador de su casa’, to avoid
Same; Same; Same; Words and Phrases; “Laches,” the possibility of losing his land.”
Defined.—Finally, the respondent court rightly
rejected petitioner’s invocation of the equitable Same; Same; Same; Registered lands not subject to
principle of laches. Laches has been defined as the prescription; Adverse, notorious and continuous
negligence or omission to assert a right within a possession under a claim of ownership for the period
reasonable time, warranting a presumption that the fixed by law ineffective against a Torrens title.—Thus,
party entitled to assert it either has abandoned it or a registered owner of land who lost possession
declined to assert it. Laches thus amounts to an thereof in 1925, when it was taken by the
implied waiver arising from knowledge of existing municipality of Pasay for road purposes, is not barred
conditions and an acquiescence in them. There is from recovering compensation for said land in 1958
nothing in the records proving that private or 33 years later. The reason is that registered land
respondents, despite discovery or knowledge of the are not sub ject to prescription. lt was an error to
successive transfer of their parents’ land, omitted to dismiss the landowner’s complaint on the ground of
assert their claim over it for an unreasonable length laches and prescription (Alfonso vs. Pasay City, 106
of time. In the absence of this proof, laches cannot be Phil. 1017; Herrera vs. Auditor General, 102 Phil.
applied against private respondents. Rivera vs. Court 875). Adverse, notorious and continuous possession
of Appeals, 244 SCRA 218, G.R. No. 107903 May 22, under a claim of ownership for the period fixed by
1995 law is ineffective against a Torrens title (Tuason vs.
Bolaños, 95 Phil. 106; 111; Vda. de Recinto vs.
Inciong, L-26083, May 31, 1977, 77 SCRA 196; J.M.
UMBAY V. ALECHA Tuason & Co., Inc. vs. Court of Appeals, L-23480,
Civil Law; Land Titles; Prescription; No title to September 11, 1979, 93 SCRA 146).
registered land in derogation to that of the registered
owner shall be acquired by prescription or adverse Same; Same; Same; Laches, not a case of; Action to
recover possession of land cannot be barred by Jimenez was concerned.—Even assuming that
laches or delay where the parties became aware of Melecia Cayabyab was born out of the common-law-
the encroachment on their land after they hired a relationship between her mother (Maria Cayabyab)
surveyor; Laches presupposes waiver of one’s right.— and Carlos Jimenez, she could not even be considered
In this case, the petitioners’ action to recover the 500 an acknowledged natural child because Carlos
square meters cannot be barred by the equitable Jimenez was then legally married to Susana Abalos
defense of laches or delay because they became and therefore not qualified to marry Maria Cayabyab
aware of the encroachment only after they hired a and consequently Melecia Cayabyab was an
surveyor in 1963 to ascertain the true area and illegitimate spurious child and not entitled to any
boundaries of Lot No. 5280. Laches presupposes successional rights in so far as the estate of Carlos
waiver of one’s right. There was no waiver in this Jimenez was concerned.
case, The petitioners, poor, ignorant rustics, never
intended to renounce their right to the 500 square Same; Same; Same; Laches; An equitable doctrine;
meters. Umbay vs. Alecha, 135 SCRA 427, No. L- Case at bar.—In this instance, again We rule for the
67284 March 18, 1985 petitioner. There is no absolute rule as to what
constitutes laches or staleness of demand; each case
is to be determined according to its particular
JIMENEZ V. FERNANDEZ circumstances. The question of laches is addressed to
Succession; Rights to the succession are transmitted the sound discretion of the court and since laches is
from the moment of the death of the decedent.—It is an equitable doctrine, its application is controlled by
well-settled in this jurisdiction that the rights to the equitable considerations. It cannot be worked to
succession are transmitted from the moment of the defeat justice or to perpetrate fraud and injustice. It
death of the decedent (Art. 777, Civil Code). would be rank injustice and patently inequitous to
Moreover, Art. 2263 of the Civil Code provides as deprive the lawful heirs of their rightful inheritance.
follows: “Rights to the inheritance of a person who
died with or without a will, before the effectivity of Same; Same; Same; Land Registration; The right of
this Code, shall be governed by the Civil Code of appellee to file an action to recover possession based
1889, by other previous laws, and by the Rules of on its Torrens Title is imprescriptible and not barred
Court x x x.” (Rollo, p. 17.) Thus, since Carlos Jimenez, under the doctrine of laches.—After all, the professed
owner of one-half pro-indiviso portion of that parcel objective of Act No. 496, otherwise known as the
of land then covered by Original Certificate of Title Land Registration Act or the law which established
No. 50933, died on July 9, 1936 (Exhibit “F”) way the Torrens System of Land Registration in the
before the effectivity of the Civil Code of the Philippines is that the stability of the land-holding
Philippines, the successional rights pertaining to his system in the Philippines depends on the confidence
estate must be determined in accordance with the of the people in the titles covering the properties.
Civil Code of 1889. And to this end, this Court has invariably upheld the
indefeasibility of the Torrens Title and in, among
Same; Same; Requirements to be an heir under the others, J.M. Tuason and Co., Inc. v. Macalindong (6
Rules of Civil Code of 1889.—Citing the case of Cid v. SCRA 938), held that “the right of the appellee to file
Burnaman (24 SCRA 434) wherein this Court an action to recover possession based on its Torrens
categorically held that: “To be an heir under the rules Title is imprescriptible and not barred under the
of Civil Code of 1889 (which was the law in force doctrine of laches.” Jimenez vs. Fernandez, 184 SCRA
when Carlos Jimenez died and which should be the 190, G.R. No. 46364 April 6, 1990
governing law in so far as the right to inherit from his
estate was concerned), a child must be either a child
legitimate, legitimated, or adopted, or else an SOTTO V. TEVES
acknowledged natural child—for illegitimate not Civil Law; Reconveyance; Trusts; Legal effect of
natural are disqualified to inherit.” (Civil Code of agreement to preserve the properties in co-
1889, Art. 807, 935) ownership was to create an express trust among the
heirs as co-owners of the properties; Co-ownership as
Same; Same; Same; Melecia Cayabyab was an a trust, concept of; Nature of relationship among the
illegitimate spurious child and not entitled to any co-owners in co-ownership.—Petitioner’s contention
successional rights in so far as the estate of Carlos is without merit. It may be true that the heirs of
Florentino Rallos intended and desired to keep the ownership, and that in regard to them each one of
properties in co-ownership pro-indiviso when they the heirs shall be a trustee for the others.” In the
signed the Mocion filed in their behalf by Atty. second place the oral testimony of Pilar Teves simply
Filemon Sotto in the probate proceedings to affirmed the existence of such trust relation; it gave
terminate the same but the legal effect of said proof that the heirs desired to continue the express
agreement to preserve the properties in co- trust and co-ownership over the five lots. It was not
ownership as expressed in writing and embodied in necessary that the heirs create a new agreement of
the Mocion was to create a form of an express trust co-ownership over the said properties. They merely
among themselves as co-owners of the properties. In reiterated their written agreement made in 1913 that
the case of Castrillo, et al. vs. Court of Appeals, et al., the five parcels would be preserved in co-ownership
10 SCRA 549, the Supreme Court, speaking thru Chief but made provisions for their administration,
Justice Makalintal, said that “co-ownership is a form collection of rentals and final disposition upon the
of trust and every co-owner is a trustee for the death of Carmen Rallos. There is therefore, no
other.” In co-ownership, the relationship of each co- violation of Art. 1443, N.C.C. which provides that “no
owner to the other co-owners is fiduciary in character express trust concerning an immovable or any
and attribute. Whether established of law or by interest therein may be proved by parol evidence,” as
agreement of the co-owners, the property or thing the same is not applicable herein.
held pro-indiviso is impressed with a fiducial nature
that each co-owner becomes a trustee for the benefit Same; Same; Same; Land Registration; In trusteeship,
of his co-owners and he may not do any act legal title to property appears in the name of a
prejudicial to the interest of his co-owners. trustee, while equitable title remains with the cestui
que trust; Registration of property cannot be relief
Same; Same; Same; No form required for the creation upon where express trust exists; Will and last
of an express trust; How express trust created.— testament of deceased conveying properties to
Under the law on Trusts, it is not necessary, as another should not prejudice cestui que trust and
petitioner insists, that the document expressly state recipient deemed to have received the properties for
and provide for the express trust, for no particular the benefit of the cestui que trust.—A fiduciary
words are required for the creation of an express relationship may exist even if the title to the property
trust, it being sufficient that a trust is clearly subject to the trust appears in the name of the
intended. (Art. 1444, N.C.C.). An express trust is trustee alone, because in cases of trusteeship, the
created by the direct and positive acts of the parties, legal title usually appears in the name of the trustee,
by some writing or deed or will or by words while the equitable title remains with the cestui que
evidencing an intention to create a trust. trust. (Palma vs. Cristobal, 77 Phil. 712). True it is that
Torrens titles were issued in the name of Carmen
Same; Same; Same; Proof of existence of express Rallos, but the principle holds that a trustee who
trust; Express trust relating to immovables cannot be takes a Torrens title in his name cannot repudiate the
proved by parol evidence.—We reject petitioner’s trust by relying on the registration, which is one of
contention as baseless. In the first place, the the well-known limitations upon the finality of a
respondent Court did not find that an express trust decree of title. Neither can the will executed by
existed by the use of parol evidence. Actually, the Carmen Rallos deprive the private respondents of
Court, on this point said: “On the basis of undisputed their ownership over the five parcels of land. These
facts, we held in our decision that the heirs of lots were trust properties; Carmen Rallos was holding
Florentino Rallos, by manifesting to the probate court them in trust for her sister Concepcion Rallos and the
that it was their desire to preserve and maintain the latter’s children. Not being the absolute owner
co-ownership over the inherited properties, thereby thereof, Carmen Rallos could not legally convey their
intended and created, by direct positive acts, an ownership by including them in their will. To all
express trust among themselves. (pp. 19, 24, intents and purposes, the will and last testament of
Decision). It is our view that this holding should be Carmen Rallos was merely a vehicle of an existing
maintained because it is in conformity with the trust and therefore, Atty. Filemon Sotto must be
evidence and the law.” In a later portion of the deemed to have received the properties not for
Resolution appealed from, the Court said: “As early as himself but for the benefit of the cestui que trust.
in 1913, the Rallos heirs had already agreed expressly And as a trustee of these trust properties, Atty. Sotto
and in writing that the five parcels shall remain in co- never alienated or disposed any of these properties
during his lifetime, thereby recognizing his position as delay in seeking to enforce a right constitutes laches,
trustee and that he held them for the benefit and the existence of a confidential relationship between
interest of the cestui que trust. the parties is an important circumstance for
consideration, a delay under such circumstances not
Same; Same; Same; Same; Certificate of title cannot being so strictly regarded as where the parties are
be used to defeat right and cause of action of the strangers to each other. The doctrine of laches is not
cestui que trust; Registration of lots in favor of strictly applied between near relatives, and the fact
another and their subsequent fraudulent transfers that the parties are connected by ties of blood or
not considered acts of repudiation of express trust.— marriage tends to excuse an otherwise unreasonable
In the light of the above doctrinal rulings, We rule delay. The claim that the heirs of Concepcion Rallos
that the registration of the lots in the names of are guilty of laches and are estopped from claiming
Carmen Rallos and her mother Maria Fadulion Vda. the properties deserves scant consideration, for in
de Rallos and their subsequent transfers and fiduciary relationship, the beneficiaries have the right
consolidation to Carmen Rallos’ name alone in a to relay on the trust and confidence reposed in the
manner shown to be fictitious, fraudulent and trustee. In the case at bar, there being no effective
secretive, thereby keeping the Cestuis que trust in repudiation of the express trust created by and
the dark did not constitute acts of repudiation of the among the Rallos heirs, the defense of laches invoked
express trust. Such registrations were ineffective and by petitioner is unavailing. (Buencamino, et al. vs.
not binding upon the cestui que trust. We are Matias, et al., 16 SCRA 849; Julio vs. Dalandan, et al.,
persuaded and convinced that the circumstances G.R. No. L-19012, October 30, 1967). Moreover under
required by said decisions are not present in the case the facts established and showing the complete
at bar. dominance of Atty. Sotto over the heirs and
descendants of the Rallos family, the confidential
Same; Same; Same; Laches and estoppel, concepts of. relationship between the parties connected by ties of
—Laches has been defined as the failure or neglect, marriage and the reliance of the heirs with complete
for an unreasonable and unexplained length of time, and absolute confidence in their uncle-in-law, Atty.
to do that which by exercising due diligence, could or Sotto, who, however, kept the hears in total
should have been done earlier; it is negligence or ignorance and suppressed from them the real truth
omission to assert a right within a reasonable time, regarding said properties that they were already
warranting a presumption that the party entitled to registered in Atty. Sotto’s name as finally revealed to
assert it either has abandoned it or declined to assert them by Cesar Sotto, the nephew and protegee of
it. (Tijam, et al. v. Sibonghanoy, et al., No. L-21450, Atty. Sotto and were in danger of being lost to total
April 15, 1968, 23 SCRA 29, 35). The defense of laches strangers, the doctrine of laches is not strictly
is an equitable one and does not concern itself with applicable.
the character of the defendant’s title, but only with
whether or not by reason of the plaintiffs long Same; Same; Same; Same; Question of laches
inaction or inexcusable neglect he should be barred addressed to sound discretion of court; Laches is an
from asserting his claim at all. Estoppel, on the other equitable doctrine and cannot be invoked to defeat
hand, rests on this rule: whenever a party has, by his justice.—We are satisfied that respondents, upon
declaration, act or omission, intentionally and discovery of the fraudulent transfers, fictitious sales
deliberately led the other to believe a particular thing and concealed deeds relating to the trust properties
true, and to act, upon such belief, he cannot, in any which were revealed to them by Cesar Sotto, the very
litigation arising out of such declaration, act, or nephew and protegee of Atty. Filemon Sotto and
omission, be permitted to falsify it.” (De Castro vs. guardian appointed over the latter’s estate, promptly
Ginete, L-30058, March 28, 1969, 27 SCRA 623). and seasonably filed the present action for
Estoppel has its origin in equity and being based on reconveyance. There is no absolute rule as to what
moral and natural justice, finds applicability whatever constitutes laches or staleness of demand; each case
and whenever the special circumstances of a case so is to be determined according to its particular
demand. circumstances. The question of laches is addressed to
the sound discretion of the court and since laches is
Same; Same; Same; Cases where defense of laches an equitable doctrine, its application is controlled by
proves unavailing; Laches not strictly applied equitable considerations. It cannot be invoked to
between near-relatives.—In determining whether a defeat justice or to perpetrate fraud and injustice. It
would be rank injustice and patently iniquitous to Court of Appeals are conclusive; Questions of
deprive the lawful heirs of their rightful inheritance. credibility and appreciation of evidence within the
domain of Court of Appeals not reviewable by the
Same; Same; Same; Remedial Law; Findings and Supreme Court; Exception to finality of findings of
conclusions of Court of Appeals that the husband- fact by Court of Appeals.—As We have heretofore
family lawyer is a constructive trustee are final and stressed, the findings of fact of the Court of Appeals
conclusive upon the Supreme Court; Reasons.— are conclusive. Likewise, question of credibility is left
Secondly, it is also not quite correct for petitioner to to the Court of Appeals, (De Garcia vs. Court of
claim that the respondent Court ruled that Don Appeals, 37 SCRA 129). Appreciation of evidence is
Filemon Sotto became a co-trustee by virtue of his within the domain of the Court of Appeals because its
subsequent marriage to Carmen Rallos. The truth of findings of facts are not reviewable by the Supreme
the matter is that, according to the Court, Atty. Sotto Court. (Talosig vs. Vda. de Nieba, 43 SCRA 472;
became a constructive trustee not only by reason of Tiongco vs. de la Merced, 58 SCRA 89). The Supreme
his marriage to Carmen Rallos but also on account of Court will not review findings of facts of the Court of
his prestige and tremendous social and political Appeals. On appeal from a decision of the Court of
influence, also because Atty. Sotto enjoyed and Appeals, the findings of fact made in said decision are
exercised a personal domestic, social, political and final, except: (1) When the conclusion is a finding
moral ascendancy and superiority over his wife, over grounded entirely on speculations, surmises or
Maria Fadullon. Concepcion Rallos and the latter’s conjectures; (2) When the inference is manifestly
children, besides being the protector of the rights mistaken, absurd or impossible; (3) When there was a
and interest of the Rallos family acting like a pater grave abuse of discretion; (4) When the judgment is
familias attending to their financial and medical based on a misapprehension of facts; (5) When the
needs, as well as the family lawyer. We are in full findings of fact are conflicting; (6) When the Court of
accord with these findings and conclusion of the Appeals, in making its findings, went beyond the
respondent Court as the same are final, conclusive issues of the case and the same is contrary to the
and binding upon Us, there being no exceptional admissions of both appellant and appellee. (Napolis
circumstances or reasons to review or revise the vs. Court of Appeals, 43 SCRA 301). In the case at bar,
same. Sotto vs. Teves, 86 SCRA 154, No. L-38018 We are convinced and satisfied that the above
October 31, 1978 exceptions do not obtain. Sotto vs. Teves, 86 SCRA
154, No. L-38018 October 31, 1978
Same; Same; Same; Same; Same; Court findings and
rulings which are based on human experience,
customs and traditions should be given credence; HEIRS OF BATIONG-LACAMEN V. HEIRS OF LARUAN
Contrary to morals for parents to deprive their Sale; Conveyances and encumbrances of realty by
children of what lawfully belongs to them.—We illiterate non-Christians not valid without the
uphold the stand of the respondent Court of Appeals, approval of the Director of the Bureau of Non-
Special Division of Five in giving credence and belief Christian Tribes.—The Public Land Act, as amended,
to respondents’ claim of partition as testified to by provides that conveyances and encumbrances made
Pilar Teves, one of the private respondents, because by illiterate non-Christians shall not be valid unless
the Court’s findings and its ruling is based on the duly approved by the Director of the Bureau of Non-
grounds of human experience, the ordinary course of Christian Tribes. Any violation of the injunction
things and our own native customs, culture and results in the nullity and avoidance of the transaction.
tradition to revere the memory of our ancestor by Thus, jurisprudence decrees that non-approved
keeping intact the estate in inheritance as long as conveyances encumbrances of realty by illiterate
possible, and to help one’s brothers and sisters to non-Christians are not valid, i.e., not binding or
benefit from the sweat and toil of our parents, rather obligatory.
than dispossess them or given the inheritance away
to perfect strangers, strangers to family ties and filial Laches; Laches defined and explained; Basis of.
affection. It is unconscionable and contrary to morals —“Laches” has been defined as “such neglect or
that a parent should deprive his children of what omission to assert a right, taken in conjunction with
lawfully belongs to them. lapse of time and other circumstances causing
prejudice to an adverse party, as will operate as a bar
Same; Same; Same; Same; Same; Findings of facts of in equity.” It is a delay in the assertion of a right
“which works disadvantage to another” because of Same; Laches extend to heirs.—Laches extends to
the “inequity founded on some change in the heirs since they stand in privity with their
condition or relations of the property or parties.” It is predecessor-in-interest. Heirs of Batiog Lacamen vs.
based on public policy which, for the peace of Heirs of Laruan, 65 SCRA 605, No. L-27088 July 31,
society, ordains that relief will be denied to a Sale; 1975
Conveyances and encumbrances of realty by illiterate
non-Christians not valid without the approval of the
Director of the Bureau of Non-Christian Tribes.—The e) Collateral attack
Public Land Act, as amended, provides that
WINDOWS AND ORPHANS ASSN INC V. CA
conveyances and encumbrances made by illiterate
Remedial Law; Evidence; Evidence adduced by private
non-Christians shall not be valid unless duly approved
respondent to prove the contents of Decree No. 1425
by the Director of the Bureau of Non-Christian Tribes.
and admitted by respondent court is merely secondary.
Any violation of the injunction results in the nullity
—Undoubtedly, the evidence (i.e., plan submitted by
and avoidance of the transaction. Thus, jurisprudence
respondent Ortigas, testimony of its surveyor and OCT
decrees that non-approved conveyances
351) adduced by private respondent to prove the
encumbrances of realty by illiterate non-Christians
contents of Decree 1425 and admitted by respondent
are not valid, i.e., not binding or obligatory.
court is merely secondary and should not have been
admitted in the first place.
Laches; Laches defined and explained; Basis of.
—“Laches” has been defined as “such neglect or
Same; Same; Requisites to justify admission of
omission to assert a right, taken in conjunction with
secondary evidence.—Before secondary evidence may
lapse of time and other circumstances causing
be admitted, there must be 1) proof of the execution of
prejudice to an adverse party, as will operate as a bar
the original writing and 2) that it has been lost or
in equity.” It is a delay in the assertion of a right
destroyed or cannot be produced in court or that it is in
“which works disadvantage to another” because of
the possession of the adverse party who has failed to
the “inequity founded on some change in the
produce it after reasonable notice.
condition or relations of the property or parties.” It is
based on public policy which, for the peace of
Same; Same; A ground for dismissal based on disputed
society, ordains that relief will be denied to a stale
facts not proper in a motion to dismiss.—In the case at
demand which otherwise could be a valid claim.
bar, it appears that the parties have yet to fully present
their respective evidence in support of their claims
Same; Laches differentiated from prescription.—
before the trial court, As a matter of fact, the trial court
Laches is different from and applies independently of
had set the case for hearing on the merits in its order
prescription. While prescription is concerned with the
dated May 19, 1989. What is more, the case involves a
fact of delay, laches is concerned with the effect of
vast tract of land consisting of 156 hectares, separately
delay. Prescription is a matter of time; laches is
situated in two outlaying localities (i.e., Quezon City and
principally a question of inequity of permitting a claim
Sta. Ana, Manila). The resolution of this controversy
to be enforced, this inequity being founded on some
calls for a full-blown trial on the merits if only to afford
change in the condition of the property or the
the contending parties their respective days in court.
relation of the parties. Prescription is statutory;
Further, a ground for dismissal based on disputed facts,
laches is not. Laches applies in equity, whereas
as in this case, is not proper in a motion to dismiss.
prescription applies at law. Prescription is based on a
fixed time, laches is not.
Same; Same; Same; Order denying a motion to dismiss
merely interlocutory.—Besides, an order denying a
Same; Loss of right to recover possession of property
motion to dismiss is merely interlocutory and, unless it
by reason of ladies.—While a person may not acquire
constitutes clearly a grave abuse of discretion or was
title to the registered property through continuous
issued without or in excess of jurisdiction, the error, if
adverse possession, in derogation of the title of the
any, should be corrected by appeal in due time, after
original registered owner, the heir of the latter,
trial and judgment on the merits and not by the
however, may lose his right to recover back the
extraordinary writ of prohibition.
possession of such property and the title thereto, by
reason of laches.
Same; Same; Same; Same; Interlocutory orders cannot
be decided by the appellate court until the lower court
shall have decided the merit of the case.—Furthermore, Association, Inc. vs. Court of Appeals, 201 SCRA 165,
on grounds of pre-maturity, interlocutory orders cannot G.R. No. 91797 August 28, 1991
be decided by the appellate courts until the lower court
shall have decided the merit of the case.
CIMAFRANCA V. IAC
Land Registration; Land Titles; A certificate of title CivilLaw; Property; Land Titles; Action for reconveyance
cannot be altered, amended or cancelled except in a of real property on ground of fraud must be filed within
direct proceeding in accordance with law.—Respondent 4 years from discovery of the fraud; When discovery
court committed a procedural lapse in correcting the deemed to have taken place.—An action for
alleged error in the questioned TCTs. A certificate of reconveyance of real property on the ground of fraud
title cannot be altered, amended or cancelled except in must be filed within four (4) years from the discovery of
a direct proceeding in accordance with law (Sec. 48, PD the fraud. Such discovery is deemed to have taken place
1529; Natalia Realty Corp. v. Vallez, 173 SCRA 534 from the issuance of the certificates of title (Baldin v.
[1989]; Legarda v. Saleeby, 31 Phil. 590 [1915]). Also, no Medalla, 108 SCRA 666). Respondents had only four
correction of certificate of title shall be made except by years from October, 1958 or until 1962 to bring this
order of the court in a petition filed for the purpose and action, which respondents failed to do.
entitled in the original case in which the decree of
registration was entered (Sec. 112, Act 496; now Sec. Same; Same; Same; Laches, elements of.—For laches to
108, PD 1529). While the law fixes no prescriptive attach, the following elements must be present: (1)
period therefor, the court, however, is not authorized Conduct on the part of the defendant or one under
to alter or correct the certificate of title if it would mean whom he claims, giving rise to the situation of which
the reopening of the decree of registration beyond the complaint is made and for which the complainant seeks
period allowed by law. remedy; (2) Delay in asserting the complainant’s right,
the complainant having had knowledge or notice of the
Same; Same; Same; Rule that a land registration court defendant’s conduct and having been afforded an
has no jurisdiction over parcels of land already covered opportunity to institute a suit; (3) Lack of knowledge or
by certificate of Title applies only where there exists no notice on the part of the defendant that the
serious controversy as to the certificate’s authenticity complainant would assert the right on which he bases
vis-a-vis the land covered therein.—While it may be his suit; and (4) Injury or prejudice to the defendant in
true, as respondent Ortigas argues, that a land the event relief is accorded to the complainant, or the
registration court has no jurisdiction over parcels of suit is not held to be barred (De Lucas v. Gamponia, 100
land already covered by a certificate of title, it is Phil. 277; Abraham v. Recto-Kasten, 4 SCRA 298; Nielson
nevertheless true that the aforesaid rule only applies & Co., Inc. v. Lepanto Consolidated Mining Corp., 18
where there exists no serious controversy as to the SCRA 1040; San Miguel Corporation v. Cruz, 31 SCRA
certificate’s authenticity vis-a-vis the land covered 819; Yusingco v. Ong Hing Lian, 42 SCRA 589; Perez v.
therein. Ong Chua, 116 SCRA 732; Rafols v. Barba, 119 SCRA
146; Chacon Enterprises v. Court of Appeals,
Same; Same; Simple possession of a certificate of title 124SCRA784).
under the Torrens System does not make the possessor
the true owner of all the property described therein.— Same; Same; Same; Same; Remedial Law; Special
The trial court cannot be faulted for not having granted Proceedings;Partition; Estoppel by laches, arises from
respondent Ortigas’ motion to dismiss simply because negligence or omission to assert a right within a
the TCTs relied upon by the latter do not accurately reasonable time.—Respondents have not taken any
reflect their supposed origin. Thus, in Ledesma v. step to have the deed of extrajudicial partition
Municipality of Iloilo (49 Phil. 769 [1969]) this Court corrected, if it is true as they claim it is, that what had
held that the “simple possession of a certificate of title, been sold to their father is 3/4 share of Lot 86 instead
under the Torrens System, does not make the possessor of 1/4 share. It is now both too late and bereft of basis
the true owner of all the property described therein. If a to ask for the cancellation of TCT No. T-4569. Inaction
person obtains a title, under the Torrens System, which and neglect of a party to assert a right can convert a
includes by mistake or oversight land which cannot be valid claim into a stale demand (Perez v. OngChua, 116
registered under the Torrens System, he does not, by SCRA 732 [1982]). An estoppel by laches arises from the
virtue of said certificate alone, become the owner of negligence or omission to assert a right within a
the lands illegally included. Widows and Orphans reasonable time, warranting a presumption that the
party entitled to assert it either has abandoned it or 611, No. L-68687 January 31, 1987
declined to assert it (Municipality of Carcar v. CFI of
Cebu, Barile Branch, 119 SCRA 392 [1982]; Gumpin v.
Court of Appeals, 120 SCRA 687 [1983]; Guerrero v. NATALIA REALTY CORP V.
Court of Appeals, 126 SCRA 109 [1983]; De Castro v. Remedial Law; Judgment; A summary judgment is
Tan, 129 SCRA 85 [1984]; Medija v. Patcho, 132 SCRA proper only if there is no genuine issue as to the
540 [1984]; Burgos v. Chief of Staff of the Phil., 133 existence of any material fact. ___ It is settled that a
SCRA 800 [1984]; Corro v. Lising, 137 SCRA 541 [1985]; summary judgment under Rule 34 of the Rules of Court
Tejido v. Zamacoma, 138 SCRA 78 [1985]). is proper only if there is no genuine issue as to the
existence of any material fact. It is intended to expedite
Same; Same; Same; Prescription; Registered lands, not or promptly dispose of cases where the facts appear
subject to prescription; Adverse, notorious and undisputed and certain from the pleadings, depositions,
continuous possession under a claim of ownership admissions and affidavits on record.
ineffective against a Torrens title; Exceptions.—
Unfortunately, as things turned out, the lower court Same; Same; Same; Rendition of the questioned
found petitioners guilty of laches as respondents had summary judgment by the trial court is proper and
already been in possession of 3/4 portion of the lot for valid. ___ We are consequently, convinced that the
the last fifty-four (54) years before they filed their rendition of the questioned summary judgment by the
complaint in 1971 (Rollo, p. 80) which conclusion was trial court is proper and valid. Tested against the
sustained by respondent Appellate Court (Rollo, p. 46). statutory and jurisprudential rules above stated, the
Such conclusion is untenable even for the sake of very allegations of the defendants prove that no valid
argument for Lot 86 is registered land and registered issue has ever been tendered by them. They relied
lands are not subject to prescription. Adverse, notorious mainly on two points, the alleged invalidity of the title
and continuous possession under a claim of ownership of the plaintiff and their supposed acquisition of the
for the period fixed by law is ineffective against a properties by adverse possession. Defendants’ theses
Torrens Title (Bolanos v. J.M. Tuason & Co., Inc., 37 are obviously puerile but they are entitled to the
SCRA 223 [1971]; Republic v. Lichauco, 46 SCRA 305 benefit of clarification.
[1972]; Spouses Co v. Serafin, 121 SCRA 61 [1982];
Mendiola v. Court of Appeals, 106 SCRA 130 [1981]; Land Registration; Certificates of Title issued in the
Umbay v. Alecha, 135 SCRA 427 [1985]). Unless there name of the plaintiff in accordance with the Land
are intervening rights of third persons which may be af Registration Act (Act No. 496) is indefeasible after the
fected or prejudiced by a decision directing the return expiration of one year from the entry of the decree of
of the lot to petitioners, the equitable defense of laches registration. ___ We note with approval the lower
will not apply as against the registered owners (Urbano court’s patient explanation that, inter alia, the
v. Concepcion, 94 SCRA 212 [1979]). certificates of title issued in the name of the plaintiff in
accordance with the Land Registration Act (Act No. 496)
Same; Same; Same; Same; Same; A Torrens title cannot is indefeasible after the expiration of one year from the
be attacked collaterally; Efficacy and integrity of the entry of the decree of registration. Under Section 38
Torrens system, how protected.—In fact, petitioners’ thereof, a petition for review of the decree must be
claim that it is private respondents themselves who are presented within one year after its entry as described
in estoppel or are barred by prescription and laches and defined in Section 40 of the same. After the lapse of
from questioning the validity and binding effect of TCT one year, the decree of registration becomes
No. 4569 (Rollo, p. 17) is well taken under the incontrovertible, and is binding upon and conclusive
circumstances considering particularly the time that has against all persons whether or not they were notified of
elapsed since the issuance of the pertinent Torrens or participated in the registration proceedings. The
Title. Besides, a Torrens title cannot be attached certificates of title of appellee corporation were issued
collaterally. The issue on its validity can be raised only in more than thirty years ago: Title No. 31527 was issued
an action expressly instituted for that purpose (Magay on September 11, 1953, while Title No. 31528 (now N-
v. Estiandan, 69 SCRA 456 [1976]; Barrios v. Court of 67845) was issued on February 19, 1952.
Appeals, 78 SCRA 427 [1977]). The efficacy and integrity
of the Torrens System must be protected (Director of Same; Same; A certificate of title cannot be subject to
Lands v. Court of Appeals, 102 SCRA 130 [1981]). collateral attack and can be altered, modified or
Cimafranca vs. Intermediate Appellate Court, 147 SCRA cancelled only in a direct proceeding in accordance with
law. ___ Even assuming arguendo that said titles may disfunctional because of the presence of third parties is
still be challenged, the present case does not provide untenable. Contracts are respected as the law between
the vehicle for that remedy since the judicial action the contracting parties (Mercantile Ins. Co, Inc. v. Felipe
required is a direct, and not a collateral, attack. In fact, Ysmael, Jr. & Co., Inc., 169 SCRA 66 [1989]). As such, the
under the existing law, Section 48 of the Property parties are thereby expected to abide with good faith in
Registration Decree expressly provides that a certificate their contractual commitments (Quillan v. CA, 169 SCRA
of title cannot be subject to collateral attack and can be 279 [1989]). Toyota is therefore bound to respect the
altered, modified or cancelled only in a direct provisions of the contract it entered into with APT.
proceeding in accordance with law. Toyota filed an action for reformation of its contract
with APT, the purpose of which is to look into the real
Same; Same; Same; Prescription; Act No. 496 provides intentions/agreement of the parties to the contract and
that no title to registered land in derogation of that of to determine if there was really a mistake in the
the registered owner shall be acquired by adverse designation of the boundaries of the property as alleged
possession. ___ Appellants’ claim of acquisitive by Toyota. Such questions can only be answered by the
prescription is likewise baseless. Under Article 1126 of parties to the contract themselves. This is a controversy
the Civil Code, prescription of ownership of lands which clearly arose from the contract entered into by
registered under the Land Registration Act shall be APT and Toyota. Inasmuch as this concerns more
governed by special laws. Correlatively, Act No. 496 importantly the parties APT and Toyota themselves, the
provides that no title to registered land in derogation of arbitration committee is therefore the proper and
that of the registered owner shall be acquired by convenient forum to settle the matter as clearly
adverse possession. Consequently, proof of possession provided in the deed of sale.
by the defendants is both immaterial and
inconsequential. Natalia Realty Corporation vs. Vallez, Land Titles; Certificate of title cannot be attacked
173 SCRA 534, G.R. Nos. 78290-94 May 23, 1989 collaterally.—But the more apparent reason which
warrants the dismissal of the action as against Sun
Valley is the fact that the complaint for reformation
TOYOTA MOTOR PHILIPPINES CORP V. CA amounts to a collateral attack on Sun Valley’s title,
Civil Procedure; Action for reformation of instruments; contrary to the finding of the Court of Appeals’ 11th
Necessary parties.—American jurisprudence from Division. It is undisputed that Sun Valley has a Torrens
where provisions on reformation of instruments were title registered in its name by virtue of its purchase of
taken discloses that suits to reform written instruments the land from APT. Toyota contends that the 723 square
are subject to the general rule in equity that all persons meters strip of land which it understood to be included
interested in the subject matter of the litigation, in its purchase from APT was erroneously included in
whether it is a legal or an equitable interest should be Sun Valley’s title. This is the reason why reformation
made parties, so that the court may settle all of their was sought to correct the mistake. Well-settled is the
rights at once and thus prevent the necessity of a rule that a certificate of title can not be altered,
multiplicity of suits (Bevis Construction Co. v. Grace [Fla modified, or cancelled except in a direct proceeding in
App] 115 So 2d 84; Green v. Stone, 54 N.J.E. 387, 34 A accordance with law. (Section 48, P.D. No. 1529)
1099). As a general rule, therefore, all persons to be
affected by the proposed reformation must be made Provisional Remedies; Preliminary injunction;
parties. (American Fidelity & Casualty Co. v. Elder, 189 Complainant must make out at least a prima facie
Ga 229, 5 SE 2d 668; Kemp v. Funderburk, 224 NC 353, showing of a right to the final relief.—In actions
30 SE 2d 155). In an action to reform a deed, all parties involving realty, preliminary injunction will lie only after
claiming an interest in the land or any part thereof the plaintiff has fully established his title or right
purportedly conveyed by the instrument sought to be thereto by a proper action for the purpose. To authorize
reformed, and whose interests will be affected by the a temporary injunction, the complainant must make out
reformation of the instrument are necessary parties to at least a prima facie showing of a right to the final
the action. (Kemp v. Funderburk, 224 NC 353, 30 SE 2d relief. Preliminary injunction will not issue to protect a
155) right not in esse (Buayan Cattle Co. Inc. v. Quintillan,
128 SCRA 286-287 [1984]; Ortigas & Company, Limited
Contracts; Arbitration Clause; Law between contracting Partnership v. Ruiz, 148 SCRA 326 [1987]). Two
parties; Intention determined by parties themselves.— requisites are necessary if a preliminary injunction is to
The contention that the arbitration clause has become issue, namely, the existence of the right to be
protected, and the facts against which the injunction is comprehensive and harmonious system, the cardinal
to be directed, are violative of said right. In particular, features of which are indefeasibility of title and the
for a writ of preliminary injunction to issue, the intervention of the State as a prerequisite to the
existence of the right and the violation must appear in creation and transfer of titles and interest, with the
the allegations of the complaint and an injunction is resultant increase in the use of land as a business asset
proper also when the plaintiff appears to be entitled to by reason of the greater certainty and security of title. It
the relief demanded in his complaint. Furthermore, the does not create a title nor vest one. It simply confirms a
complaint for injunctive relief must be construed strictly title already created and already vested, rendering it
against the pleader (Ortigas & Company, Limited forever indefeasible. . .
Partnership v. Ruiz, supra) Toyota Motor Philippines
Corp. vs. Court of Appeals, 216 SCRA 236, G.R. No. Same; Tax Declarations; Although tax declarations or
102881 December 7, 1992 realty tax payments of property are not conclusive
evidence of ownership, nevertheless, they are good
indicia of possession in the concept of owner for no one
DEVELOPMENT BANK OF THE PHILIPPINES V. CA in his right mind would be paying taxes for a property
Land Registration; A decree of registration cuts off or that is not in his actual or at least constructive
extinguishes a right acquired by a person when such possession.—In the present case, private respondent
right refers to a lien or encumbrance on the land—not has been in actual, open, peaceful and continuous
to the right of ownership thereof—which was not possession of the property since 1950. This fact was
annotated on the certificate of title issued thereon.— corroborated by the testimony of Eleuterio Cambangay
Petitioner would thus insist that, by virtue of the decree who personally knew that Ulpiano Mumar transferred
of registration, Jose Alvarez and those claiming title the land covered by Tax Declaration No. 3840 in favor of
from him (i.e., the spouses Beduya) acquired ownership private respondent in 1950. Private respondent’s claim
of the 19.4 hectares of land, despite the fact that they based on actual occupation of the land is bolstered by
neither possessed nor occupied these lands. This view is Tax Declaration Nos. R-1475, R-799 and D-2247 which
mistaken. A consideration of the cases shows that a were issued in his name in 1950, 1961 and 1974,
decree of registration cut off or extinguished a right respectively. Together with his actual possession of the
acquired by a person when such right refers to a lien or land, these tax declarations constitute strong evidence
encumbrance on the land—not to the right of of ownership of the land occupied by him. As we said in
ownership thereof—which was not annotated on the the case of Republic vs. Court of Appeals: Although tax
certificate of title issued thereon. Development Bank of declarations or realty tax payments of property are not
the Philippines vs. Court of Appeals, 331 SCRA 267, G.R. conclusive evidence of ownership, nevertheless, they
No. 129471 April 28, 2000 are good indicia of possession in the concept of owner
for no one in his right mind would be paying taxes for a
Same; Registration has never been a mode of acquiring property that is not in his actual or at least constructive
ownership over immovable property—it does not possession. They constitute at least proof that the
create title nor vest one but it simply confirms a title holder has a claim of title over the property. The
already created and already vested, rendering it forever voluntary declaration of a piece of property for taxation
indefeasible.—But to make this principle applicable to a purposes manifests not only one’s sincere and honest
situation wherein title acquired by a person through desire to obtain title to the property and announces his
acquisitive prescription would be considered cut off and adverse claim against the State and all other interested
extinguished by a decree of registration would run parties, but also the intention to contribute needed
counter to established jurisprudence before and after revenues to the Government. Such an act strengthens
the ruling in Benin. Indeed, registration has never been one’s bona fide claim of acquisition of ownership.
a mode of acquiring ownership over immovable
property. As early as 1911, in the case of City of Manila Same; Prescription; An uninterrupted adverse
v. Lack, the Court already ruled on the purpose of possession of land for more than 30 years could only
registration of lands, viz.: The Court of Land Registration ripen into ownership of the land through acquisitive
was created for a single purpose. The Act is entitled “An prescription which is a mode of acquiring ownership
Act to provide for the adjudication and registration of and other real rights over immovable property.—It was
titles to lands in the Philippine Islands.” The sole established that private respondent, having been in
purpose of the Legislature in its creation was to bring possession of the land since 1950, was the owner of the
the land titles of the Philippine Islands under one property when it was registered by Jose Alvarez in 1969,
his possession tacked to that of his predecessor-in- proper remedy in this case.
interest, Ulpiano Mumar, which dates back to 1917.
Clearly, more than 30 years had elapsed before a Same; Same; Same; Prescription; Generally, an action
decree of registration was issued in favor of Jose for reconveyance based on an implied or constructive
Alvarez. This uninterrupted adverse possession of the trust prescribes in 10 years from the date of issuance of
land for more than 30 years could only ripen into the decree of registration except when the plaintiff is in
ownership of the land through acquisitive prescription actual possession of the land.—Generally, an action for
which is a mode of acquiring ownership and other real reconveyance based on an implied or constructive trust,
rights over immovable property. Prescription requires such as the instant case, prescribes in 10 years from the
public, peaceful, uninterrupted and adverse possession date of issuance of decree of registration. However, this
of the property in the concept of an owner for ten (10) rule does not apply when the plaintiff is in actual
years, in case the possession is in good faith and with a possession of the land. Thus, it has been held: . . . [A]n
just title. Such prescription is called ordinary action for reconveyance of a parcel of land based on
prescription, as distinguished from extraordinary implied or constructive trust prescribes in ten years, the
prescription which requires possession for 30 years in point of reference being the date of registration of the
case possession is without just title or is not in good deed or the date of the issuance of the certificate of
faith. title over the property, but this rule applies only when
the plaintiff or the person enforcing the trust is not in
Same; If a person obtains a title under the Torrens possession of the property, since if a person claiming to
system, which includes by mistake or oversight land be the owner thereof is in actual possession of the
which can no longer be registered under the system, he property, as the defendants are in the instant case, the
does not, by virtue of the said certificate alone, become right to seek reconveyance, which in effect seeks to
the owner of the lands illegally included.—In contrast to quiet title to the property, does not prescribe. The
private respondent, it has been shown that neither Jose reason for this is that one who is in actual possession of
Alvarez nor the spouses Beduya were at any time in a piece of land claiming to be the owner thereof may
possession of the property in question. In fact, despite wait until his possession is disturbed or his title is
knowledge by Gaudencio Beduya that private attacked before taking steps to vindicate his right, the
respondent occupied this 19.4 hectares included in the reason for the rule being, that his undisturbed
area covered by TCT No. 10101, he never instituted any possession gives him a continuing right to seek the aid
action to eject or recover possession from the latter. of a court of equity to ascertain and determine the
Hence, it can be concluded that neither Jose Alvarez nor nature of the adverse claim of a third party and its
the spouses Beduya ever exercised any right of effect on his own title, which right can be claimed only
ownership over the land. The fact of registra- tion in by one who is in possession
their favor never vested in them the ownership of the
land in dispute. “If a person obtains a title under the Same; Same; Same; Counterclaims; Pleadings and
Torrens system, which includes by mistake or oversight Practice; The act of the defendant in an action for
land which can no longer be registered under the recovery of possession of land of filing a counterclaim
system, he does not, by virtue of the said certificate claiming ownership over the land and seeking damages
alone, become the owner of the lands illegally is not tantamount to a collateral attack on the
included.” indefeasibility of Torrens title; A counterclaim is
considered a complaint, only this time, it is the original
Same; Actions; Reconveyance; Land erroneously defendant who becomes the plaintiffit stands on the
included in the certificate of title of another must be same footing and is to be tested by the same rules as if
reconveyed in favor of the true and actual owner it were an independent action.—Nor is there any
thereof, reconveyance being clearly the proper remedy. obstacle to the determination of the validity of TCT No.
—Considering the circumstances pertaining in this case, 10101. It is true that the indefeasibility of Torrens titles
therefore, we hold that ownership of the 19.4 hectares cannot be collaterally attacked. In the instant case, the
of land presently occupied by private respondent was original complaint is for recovery of possession filed by
already vested in him and that its inclusion in OCT No. petitioner against private respondent, not an original
546 and, subsequently, in TCT No. 10101, was action filed by the latter to question the validity of TCT
erroneous. Accordingly, the land in question must be No. 10101 on which petitioner bases its right. To rule on
reconveyed in favor of private respondent, the true and the issue of validity in a case for recovery of possession
actual owner thereof, reconveyance being clearly the is tantamount to a collateral attack. However, it should
not be overlooked that private respondent filed a practice for banks, before approving a loan, to send
counterclaim against petitioner, claiming ownership representatives to the premises of the land offered as
over the land and seeking damages. Hence, we could collateral and to investigate who are the real owners
rule on the question of the validity of TCT No. 10101 for thereof. Banks, their business being impressed with
the counterclaim can be considered a direct attack on public interest, are expected to exercise more care and
the same. “A counterclaim is considered a complaint, prudence than private individuals in their dealings, even
only this time, it is the original defendant who becomes those involving registered lands.
the plaintiff. . . . It stands on the same footing and is to
be tested by the same rules as if it were an independent Land Titles; Innocent Purchaser for Value; A person who
action.” In an analogous case, we ruled on the validity deliberately ignores a significant fact which would
of a certificate of title despite the fact that the original create suspicion in an otkerwise reasonable man is not
action instituted before the lower court was a case for an innocent purchaser for value.—Two circumstances
recovery of possession. The Court reasoned that since negate petitioner’s claim that it was an innocent
all the facts of the case are before it, to direct the party purchaser for value when it bought the land in question,
to institute cancellation proceedings would be including the portion occupied by private respondent:
needlessly circuitous and would unnecessarily delay the (1) petitioner was already informed by Gaudencio
termination of the controversy which has already Beduya that private respondent occupied a portion of
dragged on for 20 years. the property covered by TCT No. 10101; and (2)
petitioner’s representative conducted an investigation
Actions; Reconveyance; It is a condition sine qua non of the property in 1979 to ascertain whether the land
for an action for reconveyance to prosper that the mortgaged by private respondent was included in TCT
property should not have passed to the hands of an No. 10101, In other words, petitioner was already
innocent purchaser for value.—Succinctly put, §38 aware that a person other than the registered owner
provides that a certificate of title is conclusive and was in actual possession of the land when it bought the
binding upon the whole world. Consequently, a buyer same at the foreclosure sale. A person who deliberately
need not look behind the certificate of title in order to ignores a significant fact which would create suspicion
determine who is the actual owner of the land. in an otherwise reasonable man is not an innocent
However, this is subject to the right of a person purchaser for value. “It is a well-settled rule that a
deprived of land through fraud to bring an action for purchaser cannot close his eyes to facts which should
reconveyance, provided that it does not prejudice the put a reasonable man upon his guard, and then claim
rights of an innocent purchaser for value and in good that he acted in good faith under the belief that there
faith. “It is a condition sine qua non for an action for was no defect in the title of the vendor.”
reconveyance to prosper that the property should not
have passed to the hands of an innocent purchaser for Same; Where the land sold is in the possession of a
value.” person other than the vendor, the purchaser is required
to go beyond the certificates of title and make inquiries
Banks and Banking; Judicial Notice; Mortgage; While an concerning the rights of the actual possessor.—
innocent mortgagee is not expected to conduct an Petitioner deliberately disregarded both the fact that
exhaustive investigation on the history of the private respondent already occupied the property and
mortgagor’s title, in the case of a banking institution, a that he was claiming ownership over the same. It
mortgagee must exercise due diligence before entering cannot feign ignorance of private respondent’s claim to
into said contract; Judicial notice is taken of the the land since the latter mortgaged the same land to
standard practice for banks, before approving a loan, to petitioner as security for the loan he contracted in 1978
send representatives to the premises of the land on the strength of the tax declarations issued under his
offered as collateral and to investigate who are the real name. Instead of inquiring into private respondent’s
owners thereof.—The evidence before us, however, occupation over the land, petitioner simply proceeded
indicates that petitioner is not a mortgagee in good with the foreclosure sale, pretending that no doubts
faith. To be sure, an innocent mortgagee is not surround the ownership of the land covered by TCT No.
expected to conduct an exhaustive investigation on the 10101. Considering these circumstances, petitioner
history of the mortgagor’s title. Nonetheless, especially cannot be deemed an innocent mortgagee/purchaser
in the case of a banking institution, a mortgagee must for value. As we ruled: ‘The failure of appellees to take
exercise due diligence before entering into said the ordinary precautions which a prudent man would
contract. Judicial notice is taken of the standard have taken under the circumstances, specially in buying
a piece of land in the actual, visible and public land registration cases, as in ordinary actions, is
possession of another person, other than the vendor, acquired upon the filing in court of the application for
constitutes gross negligence amounting to bad faith. In registration, and is retained up to the end of the
this connection, it has been held that where, as in this litigation. The issuance of a decree of registration is but
case, the land sold is in the possession of a person other a step in the entire land registration process; and as
than the vendor, the purchaser is required to go beyond such, does not constitute a separate proceeding.
the certificates of title and ma[k]e inquiries concerning
the rights of the actual possessor. Same; Same; Reconstitution: Act 3110 was enacted to
aid and benefit litigants so that when records are lost at
Estoppel in Pais; Words and Phrases; Estoppel in pais any stage of judicial proceedings. they may reconstitute
arises when one, by his acts, representations or lost records and continue the case at the stage where
admissions, or by his own silence when he ought to the records were destroyed—The ruling in Nacua is
speak out, intentionally or through culpable negligence, more in keeping with the spirit and intention of the
induces another to believe certain facts to exist and reconstitution law. As stated therein, "Act 3110 was not
such other rightfully relies and acts on such belief, so promulgated to penalize people for failure to observe
that he will be prejudiced if the former is permitted to or invoke its provisions. It contains no penal sanction. It
deny the existence of such facts.—As to the question of was enacted rather to aid and benefit litigants, so that
estoppel, we do not find petitioner to be estopped from when court records are destroyed at any stage of
questioning private respondent’s title. “Estoppel in pais judicial proceedings, instead of instituting a new case
arises when one, by his acts, representations or and starting all over again, they may reconstitute the
admissions, or by his own silence when he ought to records lost and continue the case. If they fail to ask for
speak out, intentionally or through culpable negligence, reconstitution, the worst that can happen to R them is
induces another to believe certain facts to exist and that they lose the advantages provided by the
such other rightfully relies and acts on such belief, so reconstitution law" (e.g. having the case at the stage
that he will be prejudiced if the former is permitted to when the records were destroyed). Applying the
deny the existence of such facts.” In the case at bar, doctrine in the Nacua decision to LRC Case No. 657, the
upon learning that the land occupied by private parties thereto did not have to commence a new action
respondent was also covered by TCT No. 10101, but only had to go back to the preceding stage where
petitioner immediately demanded full payment of the records are available. The land registration case itself
loan and thereafter cancelled the mortgage contract, a remained pending and the Court of First Instance of
fact that is admitted by private respondent himself. Rizal continued to have jurisdiction over it.
Indeed, nothing in record indicates that peti tioner
impliedly acquiesced to the validity of private Same; Same; An innocent purchaser for value is one
respondent’s title when it found out that the latter was who bought the property relying on the certificate of
occupying a portion of the land covered by TCT No. title of the registered owner without notice that some
10101. Development Bank of the Philippines vs. Court other person has a right to or interest in such property
of Appeals, 331 SCRA 267, G.R. No. 129471 April 28, and pays a full price for the same.—Carpo bought the
2000 disputed property from the Baltazars, the original
registered owners, by virtue of a deed executed before
Iluminada Figueroa, Notary Public of Manila dated
Not collateral attack October 9,1970, However, it was only later, on October
13, 1970, that the decree of registration in favor of the
REALTY SALES ENTERPRISES V. IAC
Baltazars was transcribed in the Registration Book for
Land Registration; Torrens System; Jurisdiction;
the Province of Rizal and that an Original Certificate of
Jurisdiction over all application for registration of land
Title was issued. It was on the same day, October 13,
titles is conferred upon the Courts of First Instance of
1970, that the deed evidencing the sale between the
the province where land is situated and is acquired
Baltazars and Carpo was inscribed in the Registry of
upon the filing of the application and is retained up to
Property, and the Original Certificate of Title was
the end of the litigation.—Under Act No. 496, Land
cancelled as Transfer Certificate of Title No. 303961 in
Registration Act, (1902) as amended by Act No. 2347
the name of Carpo was issued. (Exhibit 12, Rollo, pp.
(1914), jurisdiction over all applications for registration
270-273.) Thus, at the time of sale, there was as yet no
of title to land was conferred upon the Courts of First
Torrens title which Carpo could have relied upon so that
Instance of the respective provinces in which the land
he may qualify as an innocent purchaser for value. Not
sought to be registered is situated. Jurisdiction over
being a purchaser for value and in good faith, he is in no facts, it is evident that the private respondents never
better position than his predecessors-in-interest. sold their 1/3 share over Lot No. 1950-A of the Naic
Estate; that what their co-owners sold to Ignacio
Same; Same; In successive registrations where more Manalo was their 2/3 share of the same lot; and that
than one certificate is issued in respect of a particular Ignacio Manalo sold only the 2/3 share to third-party
estate or interest in land, the person claiming under the defendant Mariano Manalo, the predecessor-in-interest
prior certificate is entitted to the estate or interest—ln of petitioner Rodolfo Coronel. Consequently, there was
this jurisdiction, it is settled that "(t)he general rule is a mistake when Transfer Certificate of Title No. 41175
that in the case of two certificates of title, purporting to was issued to Mariano Manalo covering the whole area
include the same land, the earlier in date prevails . . . . of Lot No. 1950-A. Unfortunately, Mariano Manalo who
In successive registrations, where more than one was included as third-party defendant as well as the
certificate is issued in respect of a particular estate or subject of a cross-claim filed by the other third-party
interest in land, the person claiming under the prior defendants, and who could have shed light on this
certificate is entitled to the estate or interest; and that controversy was at the time residing abroad and was
person is deemed to hold under the prior certificate not served with the third party complaint.
who is the holder of, or whose claim is derived directly
or indirectly from the person who was the holder of the Same; Same; Prescription; As lawful possessors and
earlier certificate issued in respect thereof . ,.. ." owners of the lot, their cause of action falls within the
(Legarda and Prieto v. Saleeby, 31 Phil. 590 [1915] at rule that an action to quiet title to property in one’s
595-596; Garcia v. CA, Nos. L-48971 and 49011, January possession is imprescriptible; Respondents1
22, 1980, 95 SCRA 380.) TCT No. 20408, derived from undisturbed possession over 25 years gave them a
OCT 1609, is therefore superior to TCT No. 303961, continuing right to seek the aid of a court of equity to
derived from OCT 8629. determine the nature of the adverse claim of a third
party and the effect of his own title; Statutory period of
Same; Same; Actions; Suits to quiet title are not prescription may have commenced when respondents
technically suits in rem nor in personam but were made aware of a claim adverse to them.—The
characterized as quasi-in-rem and is conclusive only counterclaim of the private respondents which was in
between the parties.—ln this connection, it must be effect a reconveyance to them of their 1/3 undivided
emphasized that the action filed by Carpo against Realty share over Lot No. 1950-A has not prescribed. As lawful
is in the nature of an action to remove clouds from title possessors and owners of the lot in question their cause
to real property. By asserting its own title to the of action falls within the settled jurisprudence that an
property in question and asking that Carpo's title be action to quiet title to property in one’s possession is
declared null and void instead, and by filing the imprescriptible. Their undisturbed possession over a
thirdparty complaint against QCDFC, Realty was period of more than 25 years gave them a continuing
similarly asking the court to remove clouds from its own right to seek the aid of a court of equity to determine
title. Actions of such nature are governed by Articles the nature of the adverse claim of a third party and the
476 to 481, Quieting of Title, Civil Code (Republic Act effect of his own title. If at all, the private respondents’
No, 386), and Rule 64. Declaratory Relief and Similar right to quiet title, to seek reconveyance and to annul
Remedies, Rules of Court. Suits to quiet title are not Transfer Certificate of Title No. T-75543 accrued only in
technically suits in rem, nor are they, strictly speaking, 1975 when they were made aware of a claim adverse to
in personam, but being against the person in respect of their own. It was only at that time that the statutory
the res, these proceedings are characterized as quasi in period of prescription may be said to have commenced
rem. (McDaniel v. McElvy, 108 So. 820 [1926].) The to run against them. (Sapto, et al. v. Fabiana, 103 Phil.
judgment in such proceedings is conclusive only 683, Faja v. Court of Appeals, 75 SCRA 441; Caragay-
between the parties. (Sandejas v, Robles, 81 Phil. 421 Layno v. Court of Appeals, 133 SCRA 718).
[1948]). Realty Sales Enterprise, Inc. vs. Intermediate
Appellate Court, 154 SCRA 328, No. L-67451 September Same; Same; Laches; Concept and nature of laches;
28, 1987 Private respondents have always been in peaceful
possession of 1/3 portion of the subject lot, exercising
ownership for more than 25 years, disrupted only in
CORONEL V. IAC 1975 when the petitioner tried to remove them from
Civil Law; Land Titles; Mistake in issuance of title to the the lot, which they immediately resisted.—In the same
whole area of the lot; Case at bar.—Considering these manner, there is no bar based on laches to assert their
right over 1/3 of the disputed property. “Laches has of registration would certainly be impaired if it could be
been defined as the failure or neglect, for an utilized to perpetrate fraud and chicanery. If it were
unreasonable and unexplained length of time, to do thus, then no stigma would attach to a claim based
that which by exercising due diligence could or should solely on a narrow and literal reading of a statutory
have been done earlier; it is negligence or omission to prescription, devoid of any shadow of moral right. That
assert a right within a reasonable time, warranting a is not the juridical norm as recognized by this Court.
presumption that the party entitled to assert it either Deceit Is not to be countenanced; duplicity is not to be
has abandoned it or declined to assert it.” (Tejido v. rewarded. Witness the favor with which jurisprudence
Zamacoma, 138 SCRA 78, citing Tijam, et al. v. has looked on the action for reconveyance as well as
Sibonghanoy, et al., 23 SCRA 29, Sotto v. Teves, 86 SCRA the recognition of the constructive trust. There is thus
154) The facts of the case show that the private the stress of rectitude.’ (Ibid., p. 39).” (Monticines v.
respondents have always been in peaceful possession Court of Appeals, 53 SCRA 14, 21; Italics supplied).
of the 1/3 portion of the subject lot, exercising
ownership thereto for more than 25 years disrupted Same; Same; Same; Same; Simple possession of a
only in 1975, when the petitioner tried to remove them certificate of title under the Torrens system does not
by virtue of his torrens title covering the entire Lot make the possessor a true owner of all the property
1950-A of the Naic Estate. It was only at this point that described therein.—“x x x The simple possession of a
private respondents knew about the supposed sale of certificate of title, under the Torrens System, does not
their 1/3 portion of Lot 1950-A of the Naic Estate and necessarily make the possessor a true owner of all the
they immediately resisted. property described therein. If a person obtains a title,
under the Torrens system, which includes by mistake or
Same; Same; Mistaken inclusion of 1/3 portion of the oversight land which cannot be registered under the
certificate of title; Equitable considerations applied; Torrens systems, he does not, by virtue of said
Fraud not countenanced; Torrens system of registration certificate alone, become the owner of the lands
could not be utilized to perpetrate fraud.—This illegally included. (Ledesma v. Municipality of Iloilo, 49
notwithstanding, we cannot close our eyes to the fact Phil. 769, 773, citing Legarda and Prieto v. Saleeby, 31
that neither the private respondents nor their co- Phil. 590; see also Caragay-Layno v. Court of Appeals,
owners of the subject parcel of land sold the former’s supra).” Coronel vs. Intermediate Appellate Court, 155
share of the lot. Furthermore, even Ignacio Manalo to SCRA 270, No. L-70191 October 29, 1987
whom the third-party defendants sold their share
resold only the 2/3 shares to Mariano Manalo, the
successor-in-interest of the petitioner. Whether or not f) Mirror Doctrine
there was fraud or just a mistake or oversight of an
LOCSIN V. HIZON
employee of the Register of Deeds of Cavite is not clear
Remedial Law; Civil Procedure; Appeals; Petition for
from the records. The point is that the 1/3 undivided
Review on Certiorari; As a general rule, only questions
portion of the private respondents over Lot No. 1950-A
of law may be raised in a petition for review on
was mistakenly included in the transfer certificate of
certiorari; This rule, however, admits of exceptions. For
title of Mariano Manalo. We apply equitable
one, the findings of fact of the Court of Appeals (CA) will
considerations: “Nor does the mere fact that
not bind the parties in cases where the inference made
respondent-appellee Marcelo Coral could show a
on the evidence is mistaken.—As a general rule, only
certificate of Torrens Title in his favor conclude the
questions of law may be raised in a petition for review
matter, the question of fraud having been seasonably
on certiorari. This Court is not a trier of facts; and in the
raised and the remedy of reconveyance sought. Only
exercise of the power of review, we do not normally
recently, in Philippine Commercial and Industrial Bank v.
undertake the reexamination of the evidence presented
Villalva, (L-28194, November 24, 1972, 48 SCRA 31) this
by the contending parties during the trial of the case.
Court had occasion to state: ‘There is, however, a
This rule, however, admits of exceptions. For one, the
countervailing doctrine, certainly not of lesser weight,
findings of fact of the CA will not bind the parties in
that mitigates the harshness of the iron-clad application
cases where the inference made on the evidence is
of the principle attaching full faith and credit to a
mistaken, as here.
Torrens certificate. It is inspired by the highest concept
of what is fair and what is equitable. It would be a sad
Civil Law; Sales; Innocent Purchaser for Value; Words
day for the law if it were to be oblivious to the demands
and Phrases; An innocent purchaser for value is one
of justice. The acceptance accorded the Torrens system
who buys the property of another without notice that
some other person has a right to or interest in it, and favor of the person whose name appears therein.—It is
who pays a full and fair price at the time of the well-settled that “a certificate of title serves as evidence
purchase or before receiving any notice of another of an indefeasible and incontrovertible title to the
person’s claim.—An innocent purchaser for value is one property in favor of the person whose name appears
who buys the property of another without notice that therein. The real purpose of the Torrens system of land
some other person has a right to or interest in it, and registration is to quiet title to land and put a stop
who pays a full and fair price at the time of the forever to any question as to the legality of the title.”
purchase or before receiving any notice of another
person’s claim. As such, a defective title –– or one the Same; Same; Torrens System; The Torrens system was
procurement of which is tainted with fraud and intended to guarantee the integrity and conclusiveness
misrepresentation –– may be the source of a of the certificate of registration, but the system cannot
completely legal and valid title, provided that the buyer be used for the perpetration of fraud against the real
is an innocent third person who, in good faith, relied on owner of the registered land.—The Torrens system was
the correctness of the certificate of title, or an innocent intended to guarantee the integrity and conclusiveness
purchaser for value. of the certificate of registration, but the system cannot
be used for the perpetration of fraud against the real
Same; Same; Same; Mirror Doctrine; The mirror owner of the registered land. The system merely
doctrine echoes the doctrinal rule that every person confirms ownership and does not create it. It cannot be
dealing with registered land may safely rely on the used to divest lawful owners of their title for the
correctness of the certificate of title issued therefor and purpose of transferring it to another one who has not
is in no way obliged to go beyond the certificate to acquired it by any of the modes allowed or recognized
determine the condition of the property.— by law. Thus, the Torrens system cannot be used to
Complementing this is the mirror doctrine which echoes protect a usurper from the true owner or to shield the
the doctrinal rule that every person dealing with commission of fraud or to enrich oneself at the expense
registered land may safely rely on the correctness of the of another.
certificate of title issued therefor and is in no way
obliged to go beyond the certificate to determine the Same; Same; It is well-established in our laws and
condition of the property. The recognized exceptions to jurisprudence that a person who is dealing with a
this rule are stated as follows: [A] person dealing with registered parcel of land need not go beyond the face
registered land has a right to rely on the Torrens of the title; Exceptions.—It is well-established in our
certificate of title and to dispense with the need of laws and jurisprudence that a person who is dealing
inquiring further except when the party has actual with a registered parcel of land need not go beyond the
knowledge of facts and circumstances that would impel face of the title. A person is only charged with notice of
a reasonably cautious man to make such inquiry or the burdens and claims that are annotated on the title.
when the purchaser has knowledge of a defect or the This rule, however, admits of exceptions, which we
lack of title in his vendor or of sufficient facts to induce explained in Clemente v. Razo, 452 SCRA 769 (2005):
a reasonably prudent man to inquire into the status of Any buyer or mortgagee of realty covered by a Torrens
the title of the property in litigation. The presence of certificate of title, in the absence of any suspicion, is not
anything which excites or arouses suspicion should then obligated to look beyond the certificate to investigate
prompt the vendee to look beyond the certificate and the titles of the seller appearing on the face of the
investigate the title of the vendor appearing on the face certificate. And, he is charged with notice only of such
of said certificate. One who falls within the exception burdens and claims as are annotated on the title. We do
can neither be denominated an innocent purchaser for acknowledge that the rule thus enunciated is not cast in
value nor a purchaser in good faith and, hence, does stone. For, indeed, there are exceptions thereto. Thus,
not merit the protection of the law. Locsin vs. Hizon, in Sandoval vs. Court of Appeals, 260 SCRA 283 (1996),
735 SCRA 547, G.R. No. 204369 September 17, 2014 we made clear the following: The aforesaid principle
admits of an unchallenged exception: that a person
dealing with registered land has a right to rely on the
g) Forged document as a root of a valid title Torrens certificate of title and to dispense with the
need of inquiring further except when the party has
SPS. PERALTA V. HEIRS OF BERNARDINA ABALON
actual knowledge of facts and circumstances that would
Civil Law; Land Titles; Certificate of Title; It is well-
impel a reasonably cautious man to make
settled that a certificate of title serves as evidence of an
indefeasible and incontrovertible title to the property in
479 Rules of Court “petitions for review on certiorari shall
such inquiry or when the purchaser has knowledge of a raise only questions of law which must be distinctly set
defect or the lack of title in his vendor or of sufficient forth.”—We have no reason to disturb this factual
facts to induce a reasonably prudent man to inquire finding of the CA because it is supported by the
into the status of the title of the property in litigation. evidence on record. Spouses Peralta filed a Petition for
The presence of anything which excites or arouses Review on Certiorari under Rule 45, which allows only
suspicion should then prompt the vendee to look questions of law to be raised. It is a settled rule that
beyond the certificate and investigate the title of the questions of fact are not reviewable in this kind of
vendor appearing on the face of said certificate. One appeal. Under Rule 45, Section 1, “petitions for review
who falls within the exception can neither be on certiorari shall raise only questions of law which
denominated an innocent purchaser for value nor a must be distinctly set forth.” A question of fact arises
purchaser in good faith; and hence does not merit the when there is “as to the truth or falsehood of facts or
protection of the law. when there is a need to calibrate the whole evidence
considering mainly the credibility of the witnesses, the
Same; Sales; Innocent Purchaser for Value; Words and existence and relevancy of specific surrounding
Phrases; Jurisprudence has defined an innocent circumstances, as well as their relation to each other
purchaser for value as one who buys the property of and to the whole, and the probability of the situation.”
another without notice that some other person has a It is further pointed out that “the determination of
right to or interest therein and who then pays a full and whether one is a buyer in good faith is a factual issue,
fair price for it at the time of the purchase or before which generally is outside the province of this Court to
receiving a notice of the claim or interest of some other determine in a petition for review.”
persons in the property.—Jurisprudence has defined an
innocent purchaser for value as one who buys the Civil Law; Donations; Donation Mortis Causa; A
property of another without notice that some other donation mortis causa is invalid in the absence of a will.
person has a right to or interest therein and who then —Under Article 975 of the Civil Code, siblings Mansueto
pays a full and fair price for it at the time of the and Amelia Abalon are the legal heirs of Bernardina, the
purchase or before receiving a notice of the claim or latter having had no issue during her marriage. As such,
interest of some other persons in the property. Buyers they succeeded to her estate when she passed away.
in good faith buy a property with the belief that the While we agree with the CA that the donation mortis
person from whom they receive the thing is the owner causa was invalid in the absence of a will, it erred in
who can convey title to the property. Such buyers do concluding that the heirs acquired the subject property
not close their eyes to facts that should put a through ordinary acquisitive prescription. The subject
reasonable person on guard and still claim that they are parcel of land is a titled property; thus, acquisitive
acting in good faith. prescription is not applicable. Upon the death of
Bernardina, Mansueto and Amelia, being her legal heirs,
Same; Same; Same; Land Registration; The established acquired the subject property by virtue of succession,
rule is that a forged deed is generally null and cannot and not by ordinary acquisitive prescription. 
convey title, the exception thereto, pursuant to Section
55 of the Land Registration Act (LRA), denotes the
registration of titles from the forger to the innocent
purchaser for value.—The established rule is that a
forged deed is generally null and cannot convey title,
the exception thereto, pursuant to Section 55 of the
Land Registration Act, denotes the registration of titles
from the forger to the innocent purchaser for value.
Thus, the qualifying point here is that there must be a
complete chain of registered titles. This means that all
the transfers starting from the original rightful owner to
the innocent holder for value — and that includes the
transfer to the forger — must be duly registered, and
the title must be properly issued to the transferee.
Remedial Law; Civil Procedure; Appeals; Petition for
Review on Certiorari; Under Rule 45, Section 1, of the