Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No.

136021 February 22, 2000

BENIGNA SECUYA, MIGUE SECUYA, MARCE INO SECUYA, CORA!ON SECUYA, RUFINA SECUYA, BERNAR"INO SECUYA, NATI#I"A" SECUYA, G ICERIA SECUYA a$% PURITA SECUYA, petitioners, vs. GERAR"A M. #"A. "E SE MA, respondent. PANGANIBAN, J.: In action for uietin! of title, the plaintiff "ust sho# not onl$ that there is a cloud or contrar$ interest over the sub%ect real propert$, but that the have a valid title to it. In the present case, the action "ust fail, because petitioners failed to sho# the re uisite title. The Case &efore us is a Petition for Revie# see'in! to set aside the (ul$ )*, +,,- Decision of the .ourt of /ppeals 0./1 in ./23.R. .V No. )-4-*,+ #hich affir"ed the %ud!"ent5 of the Re!ional Trial .ourt 0RT.1 of .ebu .it$. The ./ ruled6 7H8R89OR8, :there bein!; no error in the appealed decision, the sa"e is hereb$ /99IRM8D in toto.) The decretal portion of the trial court Decision reads as follo#s6 7H8R89OR8, in vie# of all the fore!oin! :evidence; and considerations, this court hereb$ finds the preponderance of evidence to be in favor of the defendant 3erarda Sel"a as %ud!"ent is rendered6 +. Dis"issin! this .o"plaint for <uietin! of title, .ancellation of .ertificate of Title of 3erarda vda. de Sel"a and da"a!es, 5. Orderin! the plaintiffs to vacate the pre"ises in uestion and turn over the possession of the sa"e to the defendant 3erarda Sel"a= ). Re uirin! the plaintiffs to pa$ defendant the su" of P5*,*** as "oral da"a!es, accordin! to /rt. 55+>, attorne$?s fees of P+4,***.**, liti!ation e@penses of P4,***.** pursuant to /rt. 55*- No. ++ and to pa$ the costs of this suit.1wphi1.nt

SO ORD8R8D.A Bi'e#ise challen!ed is the October +A, +,,- ./ Resolution #hich denied petitioners? Motion for Reconsideration.4 The Facts The present Petition is rooted in an action for uietin! of title filed before the RT. b$ &eni!na, Mi!uel, Marcelino, .oraCon, Rufina, &ernardino, Natividad, 3liceria and Purita D all surna"ed Secu$a D a!ainst 3erarda M. vda. de Sel"a. Petitioners asserted o#nership over the disputed parcel of land, alle!in! the follo#in! facts6 @@@ @@@ @@@

-. The parcel of land sub%ect of this case is a PORTION of Bot 4E>, of the Talisa$2Min!lanilla 9riar Bands 8state, referred to and covered :o;n Pa!e 5>,, 9riar Bands Sale .ertificate Re!ister of the &ureau of Bands 08@h. FGF1. The propert$ #as ori!inall$ sold, and the coverin! patent issued, to Ma@i"a .aballero Vda. de .ariHo 08@hs. FG2+F= FG251. Bot 4E>, has an area of +5,>4* s uare "eters, "ore or less= ,. Durin! the lifeti"e of Ma@i"a .aballero, vendee and patentee of Bot 4E>,, she entered into that /3R88M8NT O9 P/RTITION dated (anuar$ 4, +,)- #ith Paciencia Sabellona, #hereb$ the for"er bound herself and parted :#ith; one2 third 0+I)1 portion of Bot 4E>, in favor of the latter 08@h. FDF1. /"on! others it #as stipulated in said a!ree"ent of partition that the said portion of one2third so ceded #ill be located ad%oinin! the "unicipal road 0par. 4. 8@h FDF1= +*. Paciencia Sabellona too' possession and occupation of that one2third portion of Bot 4E>, ad%udicated to her. Bater, she sold the three thousand s uare "eter portion thereof to Dal"acio Secu$a on October 5*, +,4), for a consideration of ON8 THOJS/ND 8I3HT HJNDR8D 9I9TK P8SOS 0P+,-4*.**1, b$ "eans of a private docu"ent #hich #as lost 0p. -, tsn., -I-I-,2.alCada1. Such sale #as ad"itted and confir"ed b$ Ra"on Sabellona, onl$ heir of Paciencia Sabellona, per that instru"ent deno"inated .ON9IRM/TION O9 S/B8 O9 JNDIVID8D SH/R8S, dated Septe"ber 5-, +,>E08@h. F&F1= ++. Ra"on Sabellona #as the onl$ :or; sole voluntar$ heir of Paciencia Sabellona, per that G/T/PJS/N N3/ G/&JT2ON J3 P/NJ3ON NI P/.I8N.I/ S/&8BBON/ 0Bast 7ill and Testa"ent of Paciencia Sabellona1, dated (ul$ ,, +,4A, e@ecuted and ac'no#led!ed before Notar$ Public Teodoro P. Villar"ina 08@h. F.F1. Pursuant to such #ill, Ra"on Sabellona inherited all the properties left b$ Paciencia Sabellona= +5. /fter the purchase :b$; Dal"acio Secu$a, predecessor2in interest of plaintiffs of the propert$ in liti!ation on October 5*, +,4), Dal"acio, to!ether #ith his

brothers and sisters D he bein! sin!le D too' ph$sical possession of the land and cultivated the sa"e. In +,E>, 8dilberto Superales "arried Rufina Secu$a, niece of Dal"acio Secu$a. 7ith the per"ission and tolerance of the Secu$as, 8dilberto Superales constructed his house on the lot in uestion in (anuar$ +,>A and lived thereon continuousl$ up to the present 0p. -., tsn >I54I-- D Daclan1. Said house is inside Bot 4E>,2.2+52&, alon! lines +-2+,25* of said lot, per .ertification dated /u!ust +*, +,-4, b$ 3eodetic 8n!ineer .elestino R. OroCco 08@h. F9F1= +). Dal"acio Secu$a died on Nove"ber 5*, +,E+. Thus his heirs D brothers, sisters, nephe#s and nieces D are the plaintiffs in .ivil .ase No. .8&2A5A> and no# the petitioners= +A. In +,>5, defendant2respondent 3erarda Sel"a bou!ht a +,*** s uare2"eter portion of Bot 4E>,, evidenced b$ 8@hibit FPF. Then on 9ebruar$ +,, +,>4, she bou!ht the bi!!er bul' of Bot 4E>,, consistin! of ,,)*5 s uare "eters, evidenced b$ that deed of absolute sale, "ar'ed as 8@hibit F4F. The land in uestion, a ),***2s uare "eter portion of Bot 4E>,, is e"braced and included #ithin the boundar$ of the later ac uisition b$ respondent Sel"a= +4. Defendant2respondent 3erarda Sel"a lod!ed a co"plaint, and had the plaintiffs2petitioners su""oned, before the &aran!a$ .aptain of the place, and in the confrontation and conciliation proceedin!s at the Bupon! Ta!apa$apa, defendant2respondent Sel"a #as assertin! o#nership over the land inherited b$ plaintiffs2petitioners fro" Dal"acio Secu$a of #hich the$ had lon! been in possession . . . in concept of o#ner. Such clai" of defendant2respondent Sel"a is a cloud on the title of plaintiffs2petitioners, hence, their co"plaint 0/nne@ F.F1.E Respondent Sel"a?s version of the facts, on the other hand, #as su""ariCed b$ the appellate court as follo#s6 She is the re!istered o#ner of Bot 4E>,2.2+5* consistin! of ,,)*5 s uare "eters as evidenced b$ T.T No. T2)4E>- 08@hibit FEF, Record, p. )5A1, havin! bou!ht the sa"e so"eti"e in 9ebruar$ +,>4 fro" .esaria .aballero as evidenced b$ a notariCed Deed of Sale 08@hibit F4F, Record, p. )5)1 and ha:ve; been in possession of the sa"e since then. .esaria .aballero #as the #ido# of Silvestre /ro, re!istered o#ner of the "other lot, Bot. No. 4E>, #ith an area of +5,>4* s uare "eters of the Talisa$2Min!lanilla 9riar Bands 8state, as sho#n b$ Transfer .ertificate of Title No. A>45 08@hibit F+*F, Record, p. )A*1. Jpon Silvestre /ro?s de"ise, his heirs e@ecuted an F8@tra%udicial Partition and Deed of /bsolute SaleF 08@hibit F++F, Record, p. )A+1 #herein one2half plus one2fifth of Bot No. 4E>, #as ad%udicated to the #ido#, .esaria .aballero, fro" #ho" defendant2appellee derives her title.> The CA Ruling

In affir"in! the trial court?s rulin!, the appellate court debun'ed petitioners? clai" of o#nership of the land and upheld Respondent Sel"a?s title thereto. It held that respondent?s title can be traced to a valid T.T. On the other hand, it ruled that petitioners anchor their clai" on an F/!ree"ent of PartitionF #hich is void for bein! violative of the Public Band /ct. The ./ noted that the said la# prohibited the alienation or encu"brance of land ac uired under a free patent or ho"estead patent, for a period of five $ears fro" the issuance of the said patent. Hence, this Petition.The Issues In their Me"orandu", petitioners ur!e the .ourt to resolve the follo#in! uestions6 +. 7hether or not there #as a valid transfer or conve$ance of one2third 0+I)1 portion of Bot 4E>, b$ Ma@i"a .aballero in favor of Paciencia Sabellona, b$ virtue of :the; /!ree"ent of Partition dated (anuar$ 4, +,)-:=; and 5. 7hether or not the trial court, as #ell as the court, co""itted !rave abuse of discretion a"ountin! to lac' of %urisdiction in not "a'in! a findin! that respondent 3erarda M. vda. de Sel"a :#as; a bu$er in bad faith #ith respect to the land, #hich is a portion of Bot 4E>,., 9or a clearer understandin! of the above "atters, #e #ill divide the issues into three6 first, the i"plications of the /!ree"ent of Partition= second, the validit$ of the Deed of .onfir"ation of Sale e@ecuted in favor of the petitioners= and third, the validit$ of private respondent?s title. The Court's Ruling The Petition fails to sho# an$ reversible error in the assailed Decision. Preliminar !atter6 The Action for "uieting of Title In an action to uiet title, the plaintiffs or co"plainants "ust de"onstrate a le!al or an e uitable title to, or an interest in, the sub%ect real propert$. +* Bi'e#ise, the$ "ust sho# that the deed, clai", encu"brance or proceedin! that purportedl$ casts a cloud on their title is in fact invalid or inoperative despite its prima facie appearance of validit$ or le!al efficac$.++ This point is clear fro" /rticle A>E of the .ivil .ode, #hich reads6 7henever there is cloud on title to real propert$ or an$ interest therein, b$ reason of an$ instru"ent, record, clai", encu"brance or proceedin! #hich is apparentl$ valid or effective but is in truth and in fact invalid, ineffective, voidable or unenforceable, and "a$ be pre%udicial to said title, an action "a$ be brou!ht to re"ove such cloud or to uiet title.

/n action "a$ also be brou!ht to prevent a cloud fro" bein! cast upon title to real propert$ or an$ interest therein. In the case at bar, petitioners alle!e that T.T No. 4E>,2.2+5*, issued in the na"e of Private Respondent Sel"a, is a cloud on their title as o#ners and possessors of the sub%ect propert$, #hich is a ),*** Ds uare2"eter portion of Bot No. 4E>,2.2+5* covered b$ the T.T. &ut the underl$in! uestion is, do petitioners have the re uisite title that #ould enable the" to avail the"selves of the re"ed$ of uietin! of titleL Petitioners anchor their clai" of o#nership on t#o docu"ents6 the /!ree"ent of Partition e@ecuted b$ Ma@i"a .aballero and Paciencia Sabellona and the Deed of .onfir"ation of Sale e@ecuted b$ Ra"on Sabellona. 7e #ill no# e@a"ine these t#o docu"ents. First Issue6 The Real #ature of the FAgreement of PartitionF The dul$ notariCed /!ree"ent of Partition dated (anuar$ 4, +,)-= is #orded as follo#s6 /3R88M8NT O9 P/RTITION I, M/MIM/ ./&/BB8RO, 9ilipina, of le!al a!e, "arried to Rafael .ariHo, no# residin! and #ith postal address in the Municipalit$ of Du"a!uete, Oriental Ne!ros, depose the follo#in! and sa$6 +. That I a" the applicant of vacant lot No. 4E>, of the Talisa$2Min!lanilla 8state and the said application has alread$ been indorsed b$ the District Band Officer, Talisa$, .ebu, for private sale in "$ favor= 5. That the said Bot 4E>, #as for"erl$ re!istered in the na"e of 9eli@ /bad $ .aballero and the sale certificate of #hich has alread$ been cancelled b$ the Hon. Secretar$ of /!riculture and .o""erce= ). That for and in representation of "$ brother, Buis .aballero, #ho is no# the actual occupant of said lot I dee" it #ise to have the said lot paid b$ "e, as Buis .aballero has no "eans o:r; an$ #a$ to pa$ the !overn"ent= A. That as soon as the application is approved b$ the Director of Bands, Manila, in "$ favor, I hereb$ bind "$self to transfer the one2third 0lI)1 portion of the above "entioned lot in favor of "$ aunt, Paciencia Sabellana $ .aballero, of le!al a!e, sin!le, residin! and #ith postal address in Tun!'op, Min!lanilla, .ebu. Said portion of one2third 0+I)1 #ill be subdivided after the approval of said application and the sa"e #ill be paid b$ her to the !overn"ent :for; the correspondin! portion.

4. That the said portion of one2third 0+I)1 #ill be located ad%oinin! the "unicipal road= E. I, Paciencia Sabellana $ .aballero, hereb$ accept and ta'e the portion herein ad%udicated to "e b$ Mrs. Ma@i"a .aballero of Bot No. 4E>, Talisa$2 Min!lanilla 8state and #ill pa$ the correspondin! portion to the !overn"ent after the subdivision of the sa"e= IN 7ITN8SS 7H8R8O9, #e have hereunto set our hands this 4th da$ of (anuar$, +,--, at Talisa$, .ebu.F+5 The Agreement$ An %&press Trust' #ot a Partition Not#ithstandin! its purported no"enclature, this /!ree"ent is not one of partition, because there #as no propert$ to partition and the parties #ere not co2o#ners. Rather, it is in the nature of a trust a!ree"ent. Trust is the ri!ht to the beneficial en%o$"ent of propert$, the le!al title to #hich is vested in another. It is a fiduciar$ relationship that obli!es the trustee to deal #ith the propert$ for the benefit of the beneficiar$.+) Trust relations bet#een parties "a$ either be e@press or i"plied. /n e@press trust is created b$ the intention of the trustor or of the parties. /n i"plied trust co"es into bein! b$ operation of la#.+A The present /!ree"ent of Partition involves an e@press trust. Jnder /rticle +AAA of the .ivil .ode, F:n;o particular #ords are re uired for the creation of an e@press trust, it bein! sufficient that a trust is clearl$ intended.F That Ma@i"a .aballero bound herself to !ive one third of Bot No. 4E5, to Paciencia Sabellona upon the approval of the for"er?s application is clear fro" the ter"s of the /!ree"ent. Bi'e#ise, it is evident that Paciencia ac uiesced to the covenant and is thus bound to fulfill her obli!ation therein. /s a result of the /!ree"ent, Ma@i"a .aballero held the portion specified therein as belon!in! to Paciencia Sabellona #hen the application #as eventuall$ approved and a sale certificate #as issued in her na"e.+4 Thus, she should have transferred the sa"e to the latter, but she never did so durin! her lifeti"e. Instead, her heirs sold the entire Bot No. 4E>, to Silvestre /ro in +,44. 9ro" +,4A #hen the sale certificate #as issued until +,-4 #hen petitioners filed their .o"plaint, Paciencia and her successors2in2interest did not do an$thin! to enforce their proprietar$ ri!hts over the disputed propert$ or to consolidate their o#nership over the sa"e. In fact, the$ did not even re!ister the said /!ree"ent #ith the Re!istr$ of Propert$ or pa$ the re uisite land ta@es. 7hile petitioners had been doin! nothin!, the disputed propert$, as part of Bot No. 4E>,, had been the sub%ect of several sales transactions+E and covered b$ several transfer certificates of title. The Repudiation of the %&press Trust

7hile no ti"e li"it is i"posed for the enforce"ent of ri!hts under e@press trusts,+> prescription "a$, ho#ever, bar a beneficiar$?s action for recover$, if a repudiation of the trust is proven b$ clear and convincin! evidence and "ade 'no#n to the beneficiar$. +There #as a repudiation of the e@press trust #hen the heirs of Ma@i"a .aballero failed to deliver or transfer the propert$ to Paciencia Sabellona, and instead sold the sa"e to a third person not priv$ to the /!ree"ent. In the "e"orandu" of incu"brances of T.T No. )*->+, issued in the na"e of Ma@i"a, there #as no notation of the /!ree"ent bet#een her and Paciencia. 8 uall$ i"portant, the /!ree"ent #as not re!istered= thus, it could not bind third persons. Neither #as there an$ alle!ation that Silvestre /ro, #ho purchased the propert$ fro" Ma@i"a?s heirs, 'ne# of it. .onse uentl$, the subse uent sales transactions involvin! the land in dispute and the titles coverin! it "ust be upheld, in the absence of proof that the said transactions #ere fraudulent and irre!ular. (econd Issue6 The Purported (ale to )almacio (ecu a 8ven !rantin! that the e@press trust subsists, petitioners have not proven that the$ are the ri!htful successors2in2interest of Paciencia Sabellona. The A*sence of the Purported )eed of (ale Petitioners insist that Paciencia sold the disputed propert$ to Dal"acio Secu$a on October 5*, +,4), and that the sale #as e"bodied in a private docu"ent. Ho#ever, such docu"ent, #hich #ould have been the best evidence of the transaction, #as never presented in court, alle!edl$ because it had been lost. 7hile a sale of a piece of land appearin! in a private deed is bindin! bet#een the parties, it cannot be considered bindin! on third persons, if it is not e"bodied in a public instru"ent and recorded in the Re!istr$ of Propert$.5* Moreover, #hile petitioners could not present the purported deed evidencin! the transaction bet#een Paciencia Sabellona and Dal"acio Secu$a, petitioners? i""ediate predecessor2in2interest, private respondent in contrast has the necessar$ docu"ents to support her clai" to the disputed propert$. The "uestiona*le +alue of the )eed %&ecuted * Ramon (a*ellona To prove the alle!ed sale of the disputed propert$ to Dal"acio, petitioners instead presented the testi"on$ of Mi!uel Secu$a, one of the petitioners= and a Deed5+ confir"in! the sale e@ecuted b$ Ra"on Sabellona, Paciencia?s alle!ed heir. The testi"on$ of Mi!uel #as a bare assertion that the sale had indeed ta'en place and that the docu"ent evidencin! it had been destro$ed. 7hile the Deed e@ecuted b$ Ra"on ratified the transaction, its probative value is doubtful. His status as heir of Paciencia #as not

affir"ativel$ established. Moreover, he #as not presented in court and #as thus not uiCCed on his 'no#led!e D or lac' thereof D of the +,4) transaction. Petitioners' Failure to %&ercise ,wners' Rights to the Propert Petitioners insist that the$ had been occup$in! the disputed propert$ for fort$2seven $ears before the$ filed their .o"plaint for uietin! of title. Ho#ever, there is no proof that the$ had e@ercised their ri!hts and duties as o#ners of the sa"e. The$ ar!ue that the$ had been !atherin! the fruits of such propert$= $et, it #ould see" that the$ had been re"iss in their dut$ to pa$ the land ta@es. If petitioners reall$ believed that the$ o#ned the propert$, the$ have should have been "ore vi!ilant in protectin! their ri!hts thereto. /s noted earlier, the$ did nothin! to enforce #hatever proprietar$ ri!hts the$ had over the disputed parcel of land. Third Issue6 The +alidit of Pri-ate Respondent's Title Petitioners debun' Private Respondent Sel"a?s title to the disputed propert$, alle!in! that she #as a#are of their possession of the disputed properties. Thus, the$ insist that she could not be re!arded as a purchaser in !ood faith #ho is entitled to the protection of the Torrens s$ste". Indeed, a part$ #ho has actual 'no#led!e of facts and circu"stances that #ould "ove a reasonabl$ cautious "an to "a'e an in uir$ #ill not be protected b$ the Torrens s$ste". In (ando-al -. Court of Appeals,55 #e held6 It is settled doctrine that one #ho deals #ith propert$ re!istered under the Torrens s$ste" need not !o be$ond the sa"e, but onl$ has to rel$ on the title. He is char!ed #ith notice onl$ of such burdens and clai"s as are annotated on the title. The aforesaid principle ad"its of an unchallen!ed e@ception6 that a person dealin! #ith re!istered land has a ri!ht to rel$ on the Torrens certificate of title and to dispense #ithout the need of in uirin! further e@cept #hen the part$ has actual 'no#led!e of facts and circu"stances that #ould i"pel a reasonabl$ cautious "an to "a'e such in uir$, or #hen the purchaser has 'no#led!e of a defect or the lac' of title in his vendor or of sufficient facts to induce a reasonabl$ prudent "an to in uire into the status of title of the propert$ in liti!ation. The presence of an$thin! #hich e@cites or arouses suspicion should then pro"pt the vendee to loo' be$ond the certificate and investi!ate the title of the vendor appearin! on the face of the certificate. One #ho falls #ithin the e@ception can neither be deno"inated an innocent purchaser for value purchaser in !ood faith= and hence does not "erit the protection of the la#.

3rantin! arguendo that private respondent 'ne# that petitioners, throu!h Superales and his fa"il$, #ere actuall$ occup$in! the disputed lot, #e "ust stress that the vendor, .esaria .aballero, assured her that petitioners #ere %ust tenants on the said lot. Private respondent cannot be faulted for believin! this representation, considerin! that petitioners? clai" #as not noted in the certificate of the title coverin! Bot No. 4E>,. Moreover, the lot, includin! the disputed portion, had been the sub%ect of several sales transactions. The title thereto had been transferred several ti"es, #ithout an$ protestation or co"plaint fro" the petitioners. In an$ case, private respondent?s title is a"pl$ supported b$ clear evidence, #hile petitioners? clai" is barren of proof. .learl$, petitioners do not have the re uisite title to pursue an action for uietin! of title.1wphi1.nt 7H8R89OR8, the Petition is hereb$ D8NI8D and the assailed Decision /99IRM8D. .osts a!ainst petitioners. SO ORD8R8D. !elo' +itug' Purisima and .on/aga0Re es' 11.' concur.