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G.R. No. 148225 March 3, 2010 CARMEN DEL PRADO, Petitioner, vs. SPOUSES ANTONIO L.

CABALLERO and LEONARDA CABALLERO, Respondents. DECISION NACHURA, J.: This is a petition for review on certiorari of the decision1 of the Court of Appeals (CA) dated September 26, 2000 and its resolution denying the motion for reconsideration thereof. The facts are as follows: In a judgment rendered on February 1, 1985 in Cadastral Case No. N-6 (LRC Rec. No. N-611), Judge Juan Y. Reyes of the Regional Trial Court (RTC) of Cebu City, Branch 14, adjudicated in favor of Spouses Antonio L. Caballero and Leonarda B. Caballero several parcels of land situated in Guba, Cebu City, one of which was Cadastral Lot No. 11909, the subject of this controversy.2 On May 21, 1987, Antonio Caballero moved for the issuance of the final decree of registration for their lots.3 Consequently, on May 25, 1987, the same court, through then Presiding Judge Renato C. Dacudao, ordered the National Land Titles and Deeds Registration Administration to issue the decree of registration and the corresponding titles of the lots in favor of the Caballeros. 4 On June 11, 1990, respondents sold to petitioner, Carmen del Prado, Lot No. 11909 on the basis of the tax declaration covering the property. The pertinent portion of the deed of sale reads as follows: That we, Spouses ANTONIO L. CABALLERO and LEONARDA B. CABALLERO, Filipinos, both of legal age and residents of Talamban, Cebu City, Philippines, for and in consideration of the sum of FORTY THOUSAND PESOS (P40,000.00), Philippine Currency, paid by CARMEN DEL PRADO, Filipino, of legal age, single and a resident of Sikatuna St., Cebu City, Philippines, the receipt of which is full is hereby acknowledged, do by these presents SELL, CEDE, TRANSFER, ASSIGN & CONVEY unto the said CARMEN DEL PRADO, her heirs, assigns and/or successors-in-interest, one (1) unregistered parcel of land, situated at Guba, Cebu City, Philippines, and more particularly described and bounded, as follows: "A parcel of land known as Cad. Lot No. 11909, bounded as follows: North : Lot 11903 East : Lot 11908 West : Lot 11910 South : Lot 11858 & 11912 containing an area of 4,000 square meters, more or less, covered by Tax Dec. No. 00787 of the Cebu City Assessors Office, Cebu City." of which parcel of land we are the absolute and lawful owners. Original Certificate of Title (OCT) No. 1305, covering Lot No. 11909, was issued only on November 15, 1990, and entered in the "Registration Book" of the City of Cebu on December 19, 1990.5 Therein, the technical description of Lot No. 11909 states that said lot measures about 14,457 square meters, more or less.6 On March 20, 1991, petitioner filed in the same cadastral proceedings a "Petition for Registration of Document Under Presidential Decree (P.D.) 1529"7 in order that a certificate of title be issued in her name, covering the whole Lot No. 11909. In the petition, petitioner alleged that the tenor of the instrument of sale indicated that the sale was for a lump sum or cuerpo cierto, in which case, the vendor was bound to deliver all that was included within said boundaries even when it exceeded the area specified in the contract. Respondents opposed, on the main ground that only 4,000 sq m of Lot No. 11909 was sold to petitioner. They claimed that the sale was not for a cuerpo cierto. They moved for the outright dismissal of the petition on grounds of prescription and lack of jurisdiction. After trial on the merits, the court found that petitioner had established a clear and positive right to Lot No. 11909. The intended sale between the parties was for a lump sum, since there was no evidence presented that the property was sold for a price per unit. It was apparent that the subject matter of the sale was the parcel of land, known as Cadastral Lot No. 11909, and not only a portion thereof.8 Thus, on August 2, 1993, the court a quo rendered its decision with the following dispositive portion: WHEREFORE, premises considered, the petition is hereby granted and judgment is hereby rendered in favor of herein petitioner. The Register of Deeds of the City of Cebu is hereby ordered and directed to effect the registration in his office of the Deed of Absolute Sale between Spouses Antonio Caballero and Leonarda Caballero and Petitioner, Carmen del Prado dated June 11, 1990 covering Lot No. 11909 after payment of all fees prescribed by law. Additionally, the Register of Deeds of the City of Cebu is hereby ordered to cancel Original Certificate No. 1305 in the name of Antonio Caballero and Leonarda Caballero and the Transfer Certificate of Title be issued in the name of Petitioner Carmen del Prado covering the entire parcel of land known as Cadastral Lot No. 11909. 9 An appeal was duly filed. On September 26, 2000, the CA promulgated the assailed decision, reversing and setting aside the decision of the RTC. The CA no longer touched on the character of the sale, because it found that petitioner availed herself of an improper remedy. The "petition for registration of document" is not one of the remedies provided under P.D. No. 1529, after the original registration has been effected. Thus, the CA ruled that the lower court committed an error when it assumed jurisdiction over the petition, which prayed for a remedy not sanctioned under the Property Registration Decree. Accordingly, the CA disposed, as follows: IN VIEW OF ALL THE FOREGOING, the appealed decision is REVERSED and SET ASIDE and a new one entered dismissing the petition for lack of jurisdiction. No pronouncement as to costs.10 Aggrieved, petitioner filed the instant petition, raising the following issues: I. WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ERROR IN MAKING FINDINGS OF FACT CONTRARY TO THAT OF THE TRIAL COURT[;] II. WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ERROR IN FAILING TO RULE THAT THE SALE OF THE LOT IS FOR A LUMP SUM OR CUERPO CIERTO[;] III. WHETHER OR NOT THE COURT A QUO HAS JURISDICTION OVER THE PETITION FOR REGISTRATION OF THE DEED OF ABSOLUTE SALE DATED 11 JUNE 1990 EXECUTED BETWEEN HEREIN PETITIONER AND RESPONDENTS[.]11 The core issue in this case is whether or not the sale of the land was for a lump sum or not. Petitioner asserts that the plain language of the Deed of Sale shows that it is a sale of a real estate for a lump sum, governed under Article 1542 of the Civil Code.12 In the contract, it was stated that the land contains an area of 4,000 sq m more or less, bounded on the North by Lot No. 11903, on the East by Lot No. 11908, on the South by Lot Nos. 11858 & 11912, and on the West by Lot No. 11910. When the OCT was issued, the area of Lot No. 11909 was declared to be 14,475 sq m, with an excess of 10,475 sq m. In accordance with Article 1542, respondents are, therefore, duty-bound to deliver the whole area within the boundaries stated, without any corresponding increase in the price. Thus, petitioner concludes that she is entitled to have the certificate of title, covering the whole Lot No. 11909, which was originally issued in the names of respondents, transferred to her name. We do not agree. In Esguerra v. Trinidad,13 the Court had occasion to discuss the matter of sales involving real estates. The Courts pronouncement is quite instructive: In sales involving real estate, the parties may choose between two types of pricing agreement: a unit price contract wherein the purchase price is determined by way of reference to a stated rate per unit area (e.g., P1,000 per square meter), or a lump sum contract which states a full purchase price for an immovable the area of which may be declared based on the estimate or where both the area and boundaries are stated (e.g., P1 million for 1,000 square meters, etc.). In Rudolf Lietz, Inc. v. Court of Appeals (478 SCRA 451), the Court discussed the distinction: "In a unit price contract, the statement of area of immovable is not conclusive and the price may be reduced or increased depending on the area actually delivered. If the vendor delivers less than the area agreed upon, the vendee may oblige the vendor to deliver all that may be stated in the contract or demand for the proportionate reduction of the purchase price if delivery is not possible. If the vendor delivers more than the area stated in the contract, the vendee has the option to accept only the amount agreed upon or to accept the whole area, provided he pays for the additional area at the contract rate. xxxx In the case where the area of an immovable is stated in the contract based on an estimate, the actual area delivered may not measure up exactly with the area stated in the contract. According to Article 1542 of the Civil Code, in the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be a greater or less areas or number than that stated in the contract. . . . xxxx Where both the area and the boundaries of the immovable are declared, the area covered within the boundaries of the immovable prevails over the stated area. In cases of conflict between areas and boundaries, it is the latter which should prevail. What really defines a piece of ground is not the area, calculated with more or less certainty, mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. In a contract of sale of land in a mass, it is well established that the specific boundaries stated in the contract must control over any statement with respect to the area contained within its boundaries. It is not of vital consequence that a deed or contract of sale of land should disclose the area with mathematical accuracy. It is sufficient if its extent is objectively indicated with sufficient precision to enable one to identify it. An error as to the superficial area is immaterial. Thus, the obligation of the vendor is to deliver everything within the boundaries, inasmuch as it is the entirety thereof that distinguishes the determinate object.14 The Court, however, clarified that the rule laid down in Article 1542 is not hard and fast and admits of an exception. It held: A caveat is in order, however. The use of "more or less" or similar words in designating quantity covers only a reasonable excess or deficiency. A vendee of land sold in gross or with the description "more or less" with reference to its area does not thereby ipso facto take all risk of quantity in the land.. Numerical data are not of course the sole gauge of unreasonableness of the excess or deficiency in area. Courts must consider a host of other factors. In one case (see Roble v. Arbasa, 414 Phil. 343 [2001]), the Court found substantial discrepancy in area due to contemporaneous circumstances. Citing change in the physical nature of the property, it was therein established that the excess area at the southern portion was a product of reclamation, which explained why the lands technical description in the deed of sale indicated the seashore as its southern boundary, hence, the inclusion of the reclaimed area was declared unreasonable.15 In the instant case, the deed of sale is not one of a unit price contract. The parties agreed on the purchase price of P40,000.00 for a predetermined area of 4,000 sq m, more or less, bounded on the North by Lot No. 11903, on the East by Lot No. 11908, on the South by Lot Nos. 11858 & 11912, and on the West by Lot No. 11910.

In a contract of sale of land in a mass, the specific boundaries stated in the contract must control over any other statement, with respect to the area contained within its boundaries.161avvphi1 Blacks Law Dictionary17 defines the phrase "more or less" to mean: About; substantially; or approximately; implying that both parties assume the risk of any ordinary discrepancy. The words are intended to cover slight or unimportant inaccuracies in quantity, Carter v. Finch, 186 Ark. 954, 57 S.W.2d 408; and are ordinarily to be interpreted as taking care of unsubstantial differences or differences of small importance compared to the whole number of items transferred. Clearly, the discrepancy of 10,475 sq m cannot be considered a slight difference in quantity. The difference in the area is obviously sizeable and too substantial to be overlooked. It is not a reasonable excess or deficiency that should be deemed included in the deed of sale. We take exception to the avowed rule that this Court is not a trier of facts. After an assiduous scrutiny of the records, we lend credence to respondents claim that they intended to sell only 4,000 sq m of the whole Lot No. 11909, contrary to the findings of the lower court. The records reveal that when the parties made an ocular inspection, petitioner specifically pointed to that portion of the lot, which she preferred to purchase, since there were mango trees planted and a deep well thereon. After the sale, respondents delivered and segregated the area of 4,000 sq m in favor of petitioner by fencing off the area of 10,475 sq m belonging to them.18 Contracts are the law between the contracting parties. Sale, by its very nature, is a consensual contract, because it is perfected by mere consent. The essential elements of a contract of sale are the following: (a) consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; (b) determinate subject matter; and (c) price certain in money or its equivalent. All these elements are present in the instant case.19 More importantly, we find no reversible error in the decision of the CA. Petitioners recourse, by filing the petition for registration in the same cadastral case, was improper. It is a fundamental principle in land registration that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. Such indefeasibility commences after one year from the date of entry of the decree of registration.20 Inasmuch as the petition for registration of document did not interrupt the running of the period to file the appropriate petition for review and considering that the prescribed one-year period had long since expired, the decree of registration, as well as the certificate of title issued in favor of respondents, had become incontrovertible.21 WHEREFORE, the petition is DENIED. SO ORDERED. G.R. No. 171531 January 30, 2009 GUARANTEED HOMES, INC., Petitioner, vs. HEIRS OF MARIA P. VALDEZ, DECISION Tinga, J.: This is a petition for review1 under Rule 45 of the Rules of Court of the Court of Appeals Decision dated 22 March 2005 2 and Resolution dated 9 February 20063 in CA-G.R. CV No. 67462. The Court of Appeals reversed the 12 November 1999 Order of the Regional Trial Court (RTC) of Olongapo City, Branch 73 4 which granted the motion to dismiss filed by Guaranteed Homes, Inc. (petitioner). The appellate court denied petitioners motion for reconsideration. The factual antecedents are as follows: Respondents, who are the descendants of Pablo Pascua (Pablo), filed a complaint seeking reconveyance of a parcel of land with an area of 23.7229 hectares situated in Cabitaugan, Subic, Zambales and covered by Original Certificate of Title (OCT) No. 404 in the name of Pablo. 5 In the alternative, the respondents prayed that damages be awarded in their favor.6 OCT No. 4047 was attached as one of the annexes of respondents complaint. It contained several annotations in the memorandum of encumbrances which showed that the property had already been sold by Pablo during his lifetime to Alejandria Marquinez and Restituto Morales. Respondents also attached copies of the following documents as integral parts of their complaint: Transfer Certificate of Title (TCT) No. T-8241,8 TCT No. T-8242,9TCT No. T-10863,10 the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales11 executed by Cipriano Pascua, Sr. (Cipriano), and the Deed of Sale with Mortgage12 between spouses Albino Rodolfo and Fabia Rodolfo (spouses Rodolfo) and petitioner. In their complaint,13 respondents alleged that Pablo died intestate sometime in June 1945 and was survived by his four children, one of whom was the deceased Cipriano.14 On 13 February 1967, Cipriano executed a document denominated as "Extrajudicial Settlement of a Sole Heir and Confirmation of Sales,"15 wherein he declared himself as the only heir of Pablo and confirmed the sales made by the decedent during his lifetime, including the alleged sale of the disputed property to spouses Rodolfo. Respondents likewise averred that on the following day 14 February 1967, TCT No. T-824116 was issued in the name of Cipriano "without OCT No. 404 having been cancelled."17 However, TCT No. T-8241 was not signed by the Register of Deeds. On the same day, TCT No. T-8242 was issued in the name of the spouses Rodolfo and TCT No. T-8241 was thereby cancelled.18 Subsequently, on 31 October 1969, the spouses Rodolfo sold the disputed property to petitioner by virtue of a Deed of Sale with Mortgage. Consequently, on 5 November 1969, TCT No. T-8242 was cancelled and TCT No. T-1086319 was issued in the name of petitioner.20 It was further averred in the complaint that Jorge Pascua, Sr., son of Cipriano, filed on 24 January 1997 a petition before the RTC of Olongapo City, Branch 75, for the issuance of a new owners duplicate of OCT No. 404, docketed as Other Case No. 04-0-97.21 The RTC denied the petition.22 The trial court held that petitioner was already the owner of the land, noting that the failure to annotate the subsequent transfer of the property to it at the back of OCT No. 404 did not affect its title to the property. Petitioner filed a motion to dismiss23 the complaint on the grounds that the action is barred by the Statute of Limitations, more than 28 years having elapsed from the issuance of TCT No. T-10863 up to the filing of the complaint, and that the complaint states no cause of action as it is an innocent purchaser for value, it having relied on the clean title of the spouses Rodolfo. Impleaded as defendants, the heirs of Cipriano filed an answer to the complaint in which they denied knowledge of the existence of the extrajudicial settlement allegedly executed by Cipriano and averred that the latter, during his lifetime, did not execute any document transferring ownership of the property. 24 The Register of Deeds and the National Treasurer filed, through the Office of the Solicitor General, an answer averring that the six (6)-year period fixed in Section 102 of Presidential Decree (P.D.) No. 1529 for the filing of an action against the Assurance Fund had long prescribed since the transfer of ownership over the property was registered through the issuance of TCT No. T-10863 in favor of petitioner as early as 1969. They also claimed that respondents have no cause of action against the Assurance Fund since they were not actually deprived of ownership over the property, as they could have recovered the property had it not been for their inaction for over 28 years.25 The RTC granted petitioners motion to dismiss.26 Noting that respondents had never claimed nor established that they have been in possession of the property and that they did not present any evidence to show that petitioner has not been in possession of the property either, the RTC applied the doctrine that an action to quiet title prescribes where the plaintiff is not in possession of the property. The trial court found that the complaint per its allegations presented a case of implied or constructive trust on the part of Cipriano who had inaccurately claimed to be the sole heir of Pablo in the deed of extrajudicial settlement of estate which led to the issuance of TCT No. T- 8241 in his favor. As the prescriptive period for reconveyance of a fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the title, the trial court held that the action for reconveyance had already prescribed with the lapse of more than 28 years from the issuance of TCT No. T-10863 on 5 November 1969 as of the filing of the complaint on 21 November 1997. The RTC added that it is an enshrined rule that even a registered owner of property may be barred from recovering possession of property by virtue of laches. The RTC further held that petitioner had the right to rely on TCT No. T- 8242 in the name of spouses Rodolfo. Petitioner is not obliged to go beyond the title considering that there were no circumstances surrounding the sale sufficient to put it into inquiry. Concerning the Assurance Fund, the RTC held that the claim against it had long prescribed since Section 102 of P.D. No. 1529 provides for a six-year period within which a plaintiff may file an action against the fund and in this case the period should be counted from the time of the issuance of the challenged TCT No. T-10863 on 5 November 1969 and thus expired in 1975. Undaunted, respondents appealed to the Court of Appeals.27 The Court of Appeals reversed the RTCs order.28 In ordering the reinstatement of the complaint, the appellate court ruled that the averments in respondents complaint before the RTC make out a case for quieting of title which has not prescribed. Respondents did not have to prove possession over the property since petitioner as the movant in a motion to dismiss hypothetically admitted the truth of the allegations in the complaint. The appellate court found that possession over the property was sufficiently alleged in the complaint which stated that "neither petitioner nor the Rodolfo spouses ever had possession of the disputed property" as "a number of the Pascua heirs either had been (still are) in actual, continuous and adverse possession thereof or had been enjoying (still are enjoying) the use thereof."29 By the same token, laches had not set in, the Court of Appeals added. The appellate court further held that the ruling of the RTC that petitioner is an innocent purchaser for value is contrary to the allegations in respondents complaint. Hence, the present petition for review. The sole issue before this Court revolves around the propriety of the RTCs granting of the motion to dismiss and conversely the tenability of the Court of Appeals reversal of the RTCs ruling. The petition is meritorious. It is well-settled that to sustain a dismissal on the ground that the complaint states no cause of action, the insufficiency of the cause of action must appear on the face of the complaint, and the test of the sufficiency of the facts alleged in the complaint to constitute a cause of action is whether or not, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the complaint. For the purpose, the motion to dismiss must hypothetically admit the truth of the facts alleged in the complaint.30 The admission, however, is limited only to all material and relevant facts which are well pleaded in the complaint.31 The factual allegations in respondents complaint should be considered in tandem with the statements and inscriptions on the documents attached to it as annexes or integral parts. In a number of cases, the Court held that in addition to the complaint, other pleadings submitted by the parties should be considered in deciding whether or not the complaint should be dismissed for lack of cause of action. 32 Likewise, other facts not alleged in the complaint may be considered where the

motion to dismiss was heard with the submission of evidence, or if documentary evidence admitted by stipulation discloses facts sufficient to defeat the claim.33 For while the court must accept as true all well pleaded facts in the complaint, the motion does not admit allegations of which the court will take judicial notice are not true, nor does the rule apply to legally impossible facts, nor to facts inadmissible in evidence, nor to facts which appear by record or document included in the pleadings to be unfounded.34 In the case at bar, the trial court conducted a hearing on the motion to dismiss. At the hearing, the parties presented documentary evidence. Among the documents marked and offered in evidence are the annexes of the complaint.35 Based on the standards set by this Court in relation to the factual allegations and documentary annexes of the complaint as well as the exhibits offered at the hearing of the motion to dismiss, the inescapable conclusion is that respondents complaint does not state a cause of action against petitioner. Firstly, the complaint does not allege any defect with TCT No. T-8242 in the name of the spouses Rodolfo, who were petitioners predecessors-in-interest, or any circumstance from which it could reasonably be inferred that petitioner had any actual knowledge of facts that would impel it to make further inquiry into the title of the spouses Rodolfo.36 It is basic that a person dealing with registered property need not go beyond, but only has to rely on, the title of his predecessor-in-interest. Since "the act of registration is the operative act to convey or affect the land insofar as third persons are concerned," it follows that where there is nothing in the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore farther than what the Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. If the rule were otherwise, the efficacy and conclusiveness of the certificate of title which the Torrens system seeks to insure would entirely be futile and nugatory. The public shall then be denied of its foremost motivation for respecting and observing the Torrens system of registration. In the end, the business community stands to be inconvenienced and prejudiced immeasurably.37 Contrary to the assertion of respondents, OCT No. 404 was expressly cancelled by TCT No. T-8241. The alleged non-signature by the Register of Deeds Soliman Achacoso, , does not affect the validity of TCT No. T-8241 since he signed TCT No. T- 8242 and issued both titles on the same day. There is a presumption of regularity in the performance of official duty. The presumption is further bolstered by the fact that TCT No. T-8241 was certified to be on file with the Registry of Deeds and registered in the name of Cipriano. It is enough that petitioner had examined the latest certificate of title which in this case was issued in the name of the immediate transferor, the spouses Rodolfo. The purchaser is not bound by the original certificate but only by the certificate of title of the person from whom he had purchased the property.38 Secondly, while the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales executed by Cipriano alone despite the existence of the other heirs of Pablo, is not binding on such other heirs, nevertheless, it has operative effect under Section 44 of the Property Registration Decree, which provides that: SEC. 44. Statutory Liens Affecting Title. Every registered owner receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land taking a certificate of title for value and in good faith, shall hold the same free from all encumbrances except those noted on said certificate and any of the following encumbrances which may be subsisting, namely: xxxx Even assuming arguendo that the extrajudicial settlement was a forgery, the Court still has to uphold the title of petitioner. The case law is that although generally a forged or fraudulent deed is a nullity and conveys no title, there are instances when such a fraudulent document may become the root of a valid title.39 And one such instance is where the certificate of title was already transferred from the name of the true owner to the forger, and while it remained that way, the land was subsequently sold to an innocent purchaser. For then, the vendee had the right to rely upon what appeared in the certificate.40 The Court cannot give credence to respondents claims that the Extrajudicial Settlement of a Sole Heir and Confirmation of Sales was not registered and that OCT No. 404 was not cancelled by the Register of Deeds. The Register of Deeds of Zambales certified that the extrajudicial settlement was recorded on 14 February 1967, per Entry No. 18590. This is in compliance with Section 56 of Act No. 496,41 the applicable law at the time of registration, which provides that: Sec. 56. Each register of deeds shall keep an entry book in which he shall enter in the order of their reception all deeds and other voluntary instruments, and all copies of writs and other process filed with him relating to registered land. He shall note in such book the year, month, day, hour, and minute of reception of all instruments, in the order in which they are received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument when made on the certificate of title to which it refers shall bear the same date. [Emphasis supplied] Registration in the public registry is notice to the whole world. Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall be, if registered, filed or entered in the Office of the Register of Deeds of the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering.42 Thirdly, respondents cannot make out a case for quieting of title since OCT No. 404 had already been cancelled. Respondents have no title to anchor their complaint on.43 Title to real property refers to that upon which ownership is based. It is the evidence of the right of the owner or the extent of his interest, by which means he can maintain control and, as a rule, assert right to exclusive possession and enjoyment of the property.44 Moreover, there is nothing in the complaint which specified that the respondents were in possession of the property. They merely alleged that the occupants or possessors are "others not defendant Spouses Rodolfo"45who could be anybody, and that the property is in actual possession of "a number of the Pascua heirs"46 who could either be the respondents or the heirs of Cipriano. The admission of the truth of material and relevant facts well pleaded does not extend to render a demurrer an admission of inferences or conclusions drawn therefrom, even if alleged in the pleading; nor mere inferences or conclusions from facts not stated; nor conclusions of law; nor matters of evidence; nor surplusage and irrelevant matters.47 The other heirs of Pablo should have filed an action for reconveyance based on implied or constructive trust within ten (10) years from the date of registration of the deed or the date of the issuance of the certificate of title over the property.48 The legal relationship between Cipriano and the other heirs of Pablo is governed by Article 1456 of the Civil Code which provides that if a property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. From the above discussion, there is no question that petitioner is an innocent purchaser for value; hence, no cause of action for cancellation of title will lie against it.49 The RTC was correct in granting petitioners motion to dismiss. Lastly, respondents claim against the Assurance Fund also cannot prosper. Section 101 of P.D. No. 1529 clearly provides that the Assurance Fund shall not be liable for any loss, damage or deprivation of any right or interest in land which may have been caused by a breach of trust, whether express, implied or constructive. Even assumingarguendo that they are entitled to claim against the Assurance Fund, the respondents claim has already prescribed since any action for compensation against the Assurance Fund must be brought within a period of six (6) years from the time the right to bring such action first occurred, which in this case was in 1967. WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. CV No. 67462 isREVERSED and SET ASIDE. The 12 November 1999 Order of the Regional Trial Court of Olongapo City, Branch 73 in Civil Case No. 432-097 is REINSTATED. SO ORDERED. G.R. No. 154270 March 9, 2010 TEOFISTO OO, PRECY O. NAMBATAC, VICTORIA O. MANUGAS and POLOR O. CONSOLACION, Petitioners, vs. VICENTE N. LIM, Respondent. DECISION BERSAMIN, J.: The subject of controversy is Lot No. 943 of the Balamban Cadastre in Cebu City, covered by Original Certificate of Title (OCT) No. RO-9969-(O-20449), over which the contending parties in this action for quieting of title, initiated by respondent Vicente N. Lim (Lim) in the Regional Trial Court (RTC) in Cebu City, assert exclusive ownership, to the exclusion of the other. In its decision dated July 30, 1996,1 the RTC favored Lim, and ordered the cancellation of OCT No. RO-9969-(O-20449) and the issuance of a new certificate of title in the name of Luisa Narvios-Lim (Luisa), Lims deceased mother and predecessor-in-interest. On appeal (CA-GR CV No. 57823), the Court of Appeals (CA) affirmed the RTC on January 28, 2002.2 It later denied the petitioners motion for reconsideration through the resolution dated June 17, 2002.3 Hence, this appeal via petition for review on certiorari. Antecedents On October 23, 1992, Lim filed in the RTC in Cebu City a petition for the reconstitution of the owners duplicate copy of OCT No. RO-9969-(O-20449), alleging that said OCT had been lost during World War II by his mother, Luisa;4 that Lot No. 943 of the Balamban Cadastre in Cebu City covered by said OCT had been sold in 1937 to Luisa by Spouses Diego Oo and Estefania Apas (Spouses Oo), the lots registered owners; and that although the deed evidencing the sale had been lost without being registered, Antonio Oo (Antonio), the only legitimate heir of Spouses Oo, had executed on April 23, 1961 in favor of Luisa a notarized document denominated asconfirmation of sale,5 which was duly filed in the Provincial Assessors Office of Cebu. Zosimo Oo and petitioner Teofisto Oo (Oos) opposed Lims petition, contending that they had the certificate of title in their possession as the successors-ininterest of Spouses Oo. On account of the Oos opposition, and upon order of the RTC, Lim converted the petition for reconstitution into a complaint for quieting of title, 6 averring additionally that he and his predecessor-in-interest had been in actual possession of the property since 1937, cultivating and developing it, enjoying its fruits, and paying the taxes corresponding to it. He prayed, inter alia, that the Oos be ordered to surrender the reconstituted owners duplicate copy of OCT No. RO-9969-(O20449), and that said OCT be cancelled and a new certificate of title be issued in the name of Luisa in lieu of said OCT. In their answer,7 the Oos claimed that their predecessors-in-interest, Spouses Oo, never sold Lot No. 943 to Luisa; and that the confirmation of sale purportedly executed by Antonio was fabricated, his signature thereon not being authentic. RTC Ruling On July 30, 1996, after trial, the RTC rendered its decision,8 viz:

WHEREFORE, premises considered, judgment is hereby rendered quieting plaintiff's title to Lot No. 943 of the Balamban (Cebu) Cadastre, and directing the Register of Deeds of Cebu (1) To register the aforestated April 23, 1961 Confirmation of Sale of Lot No. 943 of the Balamban, Cebu Cadastre by Antonio Oo in favor of Luisa Narvios-Lim; (2) To cancel the original certificate of title covering the said Lot No. 943 of the Balamban, Cebu Cadastre; and, (3) To issue in the name of Luisa Narvios-Lim, a new duplicate certificate of title No. RO-9969 (O-20449) of the Register of Deeds of Cebu, which shall contain a memorandum of the fact that it is issued in place of the lost duplicate certificate of title, and shall in all respects be entitled to like faith and credit as the original certificate, and shall be regarded as such for all purposes of this decree, pursuant to the last paragraph of Section 109, Presidential Decree No. 1529. Without special pronouncement as to costs. SO ORDERED.9 The RTC found that the Lims had been in peaceful possession of the land since 1937; that their possession had never been disturbed by the Oos, except on two occasions in 1993 when the Oos seized the harvested copra from the Lims caretaker; that the Lims had since declared the lot in their name for taxation purposes, and had paid the taxes corresponding to the lot; that the signature of Antonio on the confirmation of sale was genuine, thereby giving more weight to the testimony of the notary public who had notarized the document and affirmatively testified that Antonio and Luisa had both appeared before him to acknowledge the instrument as true than to the testimony of the expert witness who attested that Antonios signature was a forgery. CA Ruling On appeal, the Oos maintained that the confirmation of sale was spurious; that the property, being a titled one, could not be acquired by the Lims through prescription; that their (the Oos) action to claim the property could not be barred by laches; and that the action instituted by the Lims constituted a collateral attack against their registered title.1avvphi1 The CA affirmed the RTC, however, and found that Spouses Oo had sold Lot No. 943 to Luisa; and that such sale had been confirmed by their son Antonio. The CA ruled that the action for quieting of title was not a collateral, but a direct attack on the title; and that the Lims undisturbed possession had given them a continuing right to seek the aid of the courts to determine the nature of the adverse claim of a third party and its effect on their own title. Nonetheless, the CA corrected the RTC, by ordering that the Office of the Register of Deeds of Cebu City issue a new duplicate certificate of title in the name of Luisa, considering that the owners duplicate was still intact in the possession of the Oos. The decree of the CA decision was as follows: WHEREFORE, the appeal is DISMISSED for lack of merit. However, the dispositive portion of the decision appealed from is CORRECTED as follows: (1) Within five (5) days from finality of the decision, defendants-appellants are directed to present the owner's duplicate copy of OCT No. RO-9969 (O-20449) to the Register of Deeds who shall thereupon register the "Confirmation of Sale" of Lot No. 943, Balamban Cadastre, Cebu, executed on April 23, 1961 by Antonio Oo in favor of Luisa Narvios-Lim, and issue a new transfer certificate of title to and in the name of the latter upon cancellation of the outstanding original and owner's duplicate certificate of title. (2) In the event defendants-appellants neglect or refuse to present the owner's copy of the title to the Register of Deeds as herein directed, the said title, by force of this decision, shall be deemed annulled, and the Register of Deeds shall make a memorandum of such fact in the record and in the new transfer certificate of title to be issued to Luisa Narvios-Lim. (3) Defendants-appellants shall pay the costs. SO ORDERED.10 The CA denied the Oos motion for reconsideration11 on June 17, 2002.12 Hence, this appeal. Issues The petitioners raise the following issues: 1. Whether or not the validity of the OCT could be collaterally attacked through an ordinary civil action to quiet title; 2. Whether or not the ownership over registered land could be lost by prescription, laches, or adverse possession; 3. Whether or not there was a deed of sale executed by Spouses Oo in favor of Luisa and whether or not said deed was lost during World War II; 4. Whether or not the confirmation of sale executed by Antonio in favor of Luisa existed; and 5. Whether or not the signature purportedly of Antonio in that confirmation of sale was genuine. Ruling of the Court The petition has no merit. A. Action for cancellation of title is not an attack on the title The petitioners contend that this action for quieting of title should be disallowed because it constituted a collateral attack on OCT No. RO-9969-(O-20449), citing Section 48 of Presidential Decree No. 1529, viz: Section 48. Certificate not subject to collateral attack. A certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. The petitioners contention is not well taken. An action or proceeding is deemed an attack on a title when its objective is to nullify the title, thereby challenging the judgment pursuant to which the title was decreed.13 The attack is direct when the objective is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof.14 Quieting of title is a common law remedy for the removal of any cloud, doubt, or uncertainty affecting title to real property.15 Whenever there is a cloud on title to real property or any interest in real property by reason of any instrument, record, claim, encumbrance, or proceeding that is apparently valid or effective, but is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.16 In such action, the competent court is tasked to determine the respective rights of the complainant and the other claimants, not only to place things in their proper places, and to make the claimant, who has no rights to said immovable, respect and not disturb the one so entitled, but also for the benefit of both, so that whoever has the right will see every cloud of doubt over the property dissipated, and he can thereafter fearlessly introduce the improvements he may desire, as well as use, and even abuse the property as he deems fit.17 Lims complaint pertinently alleged: 18. If indeed, the genuine original of the Owner's Duplicate of the Reconstituted Original Certificate of Title No. RO-9699 (O-20449) for Lot 943, Balamban Cadastre xxx is in Defendant's (Oos) possession, then VNL submits the following PROPOSITIONS: xxx 18.2. Therefore, the Original of Owners Duplicate Certificate (which Respondents *Defendants Oos] claim in their Opposition is in their possession) must be surrendered to VNL upon order of this Court, after the Court shall have determined VNL's mother's acquisition of the attributes of ownership over said Lot 943, in this action, in accordance with Section 107, P.D. 1529, Property Registration Decree xxx xxx [t]hat OCT 20449 be cancelled and new title for Lot 943 be issued directly in favor of LUISA NARVIOS, to complete her title to said Lot;18 The averments readily show that the action was neither a direct nor a collateral attack on OCT No. RO-9969-(O-20449), for Lim was asserting only that the existing title registered in the name of the petitioners predecessors had become inoperative due to the conveyance in favor of Lims mother, and resultantly should be cancelled. Lim did not thereby assail the validity of OCT No. RO-9969-(O-20449), or challenge the judgment by which the title of the lot involved had been decreed. In other words, the action sought the removal of a cloud from Lims title, and the confirmation of Lims ownership over the disputed property as the successor-ininterest of Luisa. B. Prescription was not relevant The petitioners assert that the lot, being titled in the name of their predecessors-in-interest, could not be acquired by prescription or adverse possession. The assertion is unwarranted. Prescription, in general, is a mode of acquiring or losing ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law.19 However, prescription was not relevant to the determination of the dispute herein, considering that Lim did not base his right of ownership on an adverse possession over a certain period. He insisted herein, instead, that title to the land had been voluntarily transferred by the registered owners themselves to Luisa, his predecessor-in-interest. Lim showed that his mother had derived a just title to the property by virtue of sale; that from the time Luisa had acquired the property in 1937, she had taken over its possession in the concept of an owner, and had performed her obligation by paying real property taxes on the property, as evidenced by tax declarations issued in her name;20 and that in view of the delivery of the property, coupled with Luisas actual occupation of it, all that remained to be done was the issuance of a new transfer certificate of title in her name. C. Forgery, being a question of fact, could not be dealt with now The petitioners submit that Lims evidence did not preponderantly show that the ownership of the lot had been transferred to Luisa; and that both the trial and the appellate courts disregarded their showing that Antonios signature on the confirmation of sale was a forgery. Clearly, the petitioners hereby seek a review of the evaluation and appreciation of the evidence presented by the parties. The Court cannot anymore review the evaluation and appreciation of the evidence, because the Court is not a trier of facts. 21 Although this rule admits of certain exceptions, viz: (1) when the conclusion is a finding grounded entirely on speculation, surmises, or conjecture; (2) when the inference made is manifestly mistaken;

(3) where there is a grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings, went beyond the issues of the case, and the findings are contrary to the admissions of both appellant and appellee; (7) when the findings of the Court of Appeals are contrary to those of the trial court; (8) when the findings of fact are conclusions without specific evidence on which they are based; (9) when the facts set forth in the petition as well in the petitioners main and reply briefs are not disputed by the respondents; and, (10) when the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and are contradicted by the evidence on record,22 it does not appear now that any of the exceptions is present herein. We thus apply the rule without hesitation, and reject the appeal for that reason. It is emphasized, too, that the CA upheld the conclusion arrived at by the RTC that the signature of Antonio had not been simulated or forged. The CA ruled that the testimony of the notary public who had notarized the confirmation of sale to the effect that Antonio and Luisa had appeared before him prevailed over that of the petitioners expert witness. The concurrence of their conclusion on the genuineness of Antonios signature now binds the Court.23 In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. Preponderance of evidence is the weight, credit, and value of the aggregate evidence on either side, and is usually considered to be synonymous with the term greater weight of the evidence or greater weight of the credible evidence. Preponderance of evidence is a phrase that means, in the last analysis, probability of the truth.24 It is evidence that is more convincing to the court as worthy of belief than that which is offered in opposition thereto. Lim successfully discharged his burden of proof as the plaintiff. He established by preponderant evidence that he had a superior right and title to the property. In contrast, the petitioners did not present any proof of their better title other than their copy of the reconstituted certificate of title. Such proof was not enough, because the registration of a piece of land under the Torrens system did not create or vest title, such registration not being a mode of acquiring ownership. The petitioners need to be reminded that a certificate of title is merely an evidence of ownership or title over the particular property described therein. Its issuance in favor of a particular person does not foreclose the possibility that the real property may be co-owned with persons not named in the certificate, or that it may be held in trust for another person by the registered owner.25 WHEREFORE, the petition for review on certiorari is denied, and the decision dated January 28, 2002 is affirmed. The petitioners are ordered to pay the costs of suit. SO ORDERED. G.R. Nos. L-21703-04 August 31, 1966 MATEO H. REYES and JUAN H. REYES, petitioners and appellants, vs. MATEO RAVAL REYES, respondent and appellee. REYES, J.B.L., J.: Direct appeal on pure question of law from an order of the Court of First Instance of Ilocos Norte, in its Cadastral Cases Nos. 31, L. R. C. Rec. No. 1188, and 42, L. R. C. Rec. No. 1994, denying petitioners' motion to compel respondent to surrender their owners' duplicates of Original Certificates of Title Nos. 22161 and 8066, as well as from a subsequent order of the same court, refusing, upon petitioners' motion, to reconsider the first order of denial. The undisputed facts are: three brothers, Mateo H., Juan H., and Francisco H., all surnamed Reyes, are the registered owners of several parcels of land, to wit; Lots Nos. 15891, 15896, 15902 and 15912, of the Laoag (Ilocos Norte) Cadastre, embraced in and covered by Original Certificate of Title No. 22161, and also Lots Nos. 20481 and 20484, of the same cadastral survey, embraced in and covered by Original Certificate of Title No. 8066, both of the Registry of Deeds of Ilocos Norte. These titles were issued pursuant to a decree of registration, dated 31 May 1940. On 17 July 1962, petitioners Mateo H. Reyes and Juan H. Reyes filed, in the above stated cadastral cases, a motion for issuance of writs of possession over all the lots covered by both Certificates of Title above referred to. Respondent Mateo Raval Reyes opposed the motion, admitting that he is only in possession of the lots covered by Original Certificate of Title No. 22161, but denying that he possesses the lots covered by Original Certificate of Title No. 8066; however, he claimed that he has been in, and is entitled to, the possession thereof (i.e., Lots Nos. 20481 and 20484), having acquired by way of absolute sale (not recorded) from petitioners' brother, Francisco H. Reyes, the latter's undivided one-third (1/3) share, interest and participation to these disputed lots. After due hearing of this appellant, the court a quo issued, on 20 December 1962, the writ of possession with respect to Lot Nos. 15891 and 15896, which writ was, upon petitioners' motion for reconsideration, amended, on 7 January 1963, to include all the other lots covered by both titles. Respondent did not appeal from this order amending the writ of possession. Subsequently, petitioners in the above cadastral cases, as plaintiffs, commenced, on 15 January 1963, before the same court of first instance, an ordinary civil action seeking to recover the products of the disputed lots, or their value, and moral damages against respondent Mateo Raval Reyes, as defendant. This case was docketed as its Civil Case No. 3659. Defendant therein (now respondent M. Raval Reyes) answered the complaint and pleaded a counterclaim for partition of all the disputed lots, alleging the same ground he had heretofore raised in his answer and/or opposition to the motion for issuance of writ of possession, i.e., he is their (plaintiffs') co-owner, he having bought from plaintiffs' brother, Francisco H. Reyes, the latter's undivided one-third (1/3) share, interest and participation to these disputed lots. Pending trial on this ordinary civil case (No. 3659), petitioners presented, on 25 February 1963, in the cadastral cases aforementioned, a motion to compel respondent Mateo Raval Reyes to surrender and deliver to them the owners' duplicates of Original Certificates of Title Nos. 22161 and 8066. Respondent opposed this motion. The court a quo denied petitioners' motion, on the ground that the parcels of land covered by both titles are subjects of litigation in Civil Case No. 3659 and the same has not yet been decided on the merits by it. Petitioners subjected the foregoing order to a motion for reconsideration, but without success; hence, the present appeal. Petitioners-appellants dispute the above ruling of the trial court contending that, since the subject matter of Civil Case No. 3659 are not the lots covered by the titles in question but their products or value, and moral damages, these lots are not in litigation in this ordinary civil case; and that since respondent had already raised the issue of ownership and possession of these lots in his opposition to the (petitioners') motion for issuance of writ of possession and, despite this opposition, the court a quo granted the writ, without any appeal being taken, respondent is barred and estopped from raising the same issue in the ordinary civil case, under the principle ofres judicata.1wph1.t On the other hand, respondent-appellee maintains that, having pleaded a counterclaim for partition of the lots in question in said Civil Case No. 3659, the trial court correctly held that these lots are subjects of litigation in this ordinary civil case. He also maintains that petitioners not having impleaded their brother, Francisco H. Reyes, or his heirs, as parties in their motion for issuance of writ of execution, and because these heirs have not intervened in this particular incident, the writ of possession issued by the trial court is, at most, valid only with respect to their (petitioners) undivided two-thirds (2/3) share and participation in these disputed lots; hence, he concludes that he is not barred and estopped from raising the issue of ownership and possession of the undivided one-third (1/3) share and participation of petitioners' brother, Francisco H. Reyes, which share respondent allegedly bought from the latter. In their reply brief, petitioners-appellants refute the latter argument of respondent-appellee by showing that they had previously obtained special authority from the heirs of their deceased brother to represent them in the proceedings had in the court below. The sole issue to be resolved in the instant appeal is: who between petitioners-appellants or respondent-appellee has a better right to the possession or custody of the disputed owners' duplicates of certificates of title. While we agree with the court a quo that the disputed lots are subjects of litigation in Civil Case No. 3659, it appearing that respondent, as defendant therein, had presented a counterclaim for partition of the lots covered by the titles, we see no valid and plausible reason to justify, on this ground, the withholding from the registered owners, such as the petitioners-appellants herein, the custody and possession of the owners' duplicates of certificates of title. In a decided case, this Court has already held that the owner of the land in whose favor and in whose name said land is registered and inscribed in the certificate of title has a more preferential right to the possession of the owners' duplicate than one whose name does not appear in the certificate and has yet to establish his right to the possession thereto. Thus, this Court said:
Como acertadamente dijo el Juzgado, lo unico que se suscita es si Ana Umbao de Carpio tiene derecho a la possession del duplicado para el dueno del Certificado de Titulo Original No. 698, con preferencia a la opositoraapelante. A nuestro juicio, la solucion es clara e ineludible. Hallandose admitido que el decreto final que se dicto en el expediente catastral en 28 de mayo de 1936, en relacion con el lote No. 778, fue a favor de Ana Umbao y que el duplicado para el dueo del Certificado de Titulo Original No. 698 se expidio por el Registrador de Titulos a favor de la misma es obvious que quien tiene derecho a poseer el certificado de titulo es ella y no la apelante (art. 41 de la Ley No. 496, tal como ha sido reformado). Alega la apelante que ella tiene tanto derecho como la apelada a poseer el titulo porque el terreno a que se refiere es de la propiedad de las tres hermanas. La pretension no es meritoria Segun el articulo 41 de la Ley No. 496, conforme ha sido enmendado, el duplicado para el dueno debe expedirse por el Registrador a nombre de la persona a cuyo favor se ha decretado el terreno y dispone, ademas, que dicho duplicado debe entregarsele al dueo inscrito. Si la apelante cree que tiene derecho a participar en el lote No. 778, como coheredera, debe ejercitar una accion independiente, encaminada a obtener su participacion. (El Director de Terrenos contra Abacahin 72 Phil. 326).

It being undisputed that respondent had already availed of an independent civil action to recover his alleged co-owner's share in the disputed lots by filing a counterclaim for partition in said Civil Case No. 3659, his rights appear to be amply protected; and considering that he may also avail of, to better protect his rights thereto, the provision on notice of lis pendens under Section 24, Rule 14, of the Revised Rules of Court, for the purpose of recording the fact that the lots covered by the titles in question are litigated in said Civil Case No. 3659, we again see no justifiable reason for respondent to retain the custody of the owners' duplicates of certificates of titles. In view of the above considerations, we deem it unnecessary to pass on the merits of the second contention of petitioners-appellants. Wherefore, the orders appealed from should be, as they are hereby, reversed; and, in accordance with this opinion, respondent Mateo Raval Reyes is hereby ordered to deliver to petitioners the owners' duplicates of Original Certificates of Title No. 22161 and 8066. With costs against respondent-appellee, Mateo Raval Reyes. Concepcion, C.J., Barrera, Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ., concur. Regala, J., took no part.

G.R. No. L-57757 August 31, 1987 PHILIPPINE NATIONAL BANK, petitioner, vs. THE HONORABLE COURT OF APPEALS, PRAGMACIO VITUG AND MAXIMO VITUG, respondents. GANCAYCO, J.: Does the presumption of conjugality of properties acquired by the spouses during coverture provided for in Article 160 of the Civil Code apply to property covered by a Torrens certificate of title in the name of the widow? This is the issue posed in this petition to review on certiorari of the decision of the Court of Appeals in CA-G.R. No. 60903 which is an action for reconveyance and damages. * On November 28, 1952, Donata Montemayor, through her son, Salvador M. Vitug, mortgaged to the Philippine National Bank (PNB) several parcels of land covered by Transfer Certificate of Title (TCT) No. 2289 Pampanga to guarantee the loan granted by the PNB to Salvador Jaramilla and Pedro Bacani in the amount of P40,900.00 which was duly registered in the Office of the Register of Deeds of Pampanga. 1 On December 1, 1963, Donata Montemayor also mortgaged in favor of PNB certain properties covered by TCT Nos. 2887 and 2888-Pampanga to guarantee the payment of the loan account of her son Salvador Vitug in the amount of P35,200.00, which mortgage was duly registered in the Register of Deeds of Pampanga. 2 The above-mentioned Transfer Certificates of Titles covering said properties were all in the name of Donata Montemayor, of legal age, Filipino, widow and a resident of Lubao, Pampanga at the time they were mortgaged to PNB 3 and were free from all hens and encumbrances. 4 Salvador Vitug failed to pay his account so the bank foreclosed the mortgaged properties covered by TCT Nos. 2887 and 2888. They were sold at public auction on May 20, 1968 in which the PNB was the highest bidder. The titles thereto were thereafter consolidated in the name of PNB. Likewise, Salvador Jaramilla and Pedro Bacani failed to settle their accounts with the PNB so the latter foreclosed the properties covered by TCT No. 2889 which were sold at public auction and likewise PNB was the buyer thereof. On August 30, 1968, a certificate of sale was issued by the Register of Deeds covering said properties in favor of the PNB. When the title of the PNB was consolidated a new title was issued in its name. 5 On September 2, 1969, the PNB sold the properties covered by TCT Nos. 2887 and 2888 Pampanga to Jesus M. Vitug, Anunciacion V. de Guzman, Prudencia V. Fajardo, Salvador Vitug and Aurora V. Gutierrez in those names the corresponding titles were issued. 6 During the lifetime of Clodualdo Vitug he married two times. His first wife was Gervacia Flores with whom he had 3 children, namely, Victor, Lucina and Julio all surnamed Vitug. Victor now dead is survived by his 5 children: Leonardo, Juan, Candida Francisco and Donaciano, an surnamed Vitug. Juan Vitug is also dead and is survived by his only daughter Florencia Vitug. The second wife of Clodualdo Vitug was Donata Montemayor with whom he had 8 children, namely, Pragmacio, Maximo, Jesus, Salvador, Prudencio and Anunciacion, all surnamed Vitug, the late Enrique Vitug represented by his wife Natalia Laquian, and the late Francisco Vitug who is survived by 11 children, namely, Antonio, Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo, Benigno, Eligio Jesus and Luz. Clodualdo Vitug died intestate on May 20, 1929 so his estate was settled and distributed in Special Proceeding No. 422 in the Court of First Instance of Pampanga wherein Donata Montemayor was the Administratrix. 7 Meanwhile, on May 12,1958, Donata Montemayor executed a contract of lease of Lot No. 24, which is covered by TCT No. 2887-R in favor of her children Pragmacio and Maximo both surnamed Vitug. This lease was extended on August 31, 1963. By virtue of a general power of attorney executed by Donata Montemayor on Sept. 19, 1966 in favor of Pragmacio Vitug, the latter executed a contract of lease on Sept. 19, 1967 of the said lot in favor of Maximo Vitug. 8 On March 21, 1970 Pragmacio Vitug and Maximo Vitug filed an action for partition and reconveyance with damages in the Court of First Instance of Pampanga against Marcelo Mendiola, special administrator of the intestate estate of Donata Montemayor who died earlier, Jesus Vitug, Sr., Salvador, Natalia, Prudencia, Anunciacion, all surnamed Vitug, Antonio, Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo, Benigno, Eligio Jesus and Luz, all surnamed Fajardo and the PNB. The subject of the action is 30 parcels of land which they claim to be the conjugal property of the spouses Donata Montemayor and Clodualdo Vitug of which they claim a share of 2/11 of 1/2 thereof. They assailed the mortgage to the PNB and the public auction of the properties as null and void. They invoked the case of Vitug vs. Montemayor, L-5297 decided by this Court on Oct. 20, 1953 which is an action for partition and liquidation of the said 30 parcels of land wherein the properties were found to be conjugal in nature. In a decision of Sept. 15, 1975, the lower court dismissed the complaint with costs against the plaintiffs and ordered them to pay attorney's fees of P5,000.00 to the defendant's counsel. Plaintiffs then interposed an appeal to the Court of Appeals, wherein in due course a decision was rendered on May 20, 1981, the dispositive part of which reads as follows: WHEREFORE, in the light of the foregoing, the decision appealed from is hereby reversed and set aside, and another one entered in accordance with the tenor of the prayer of appellant's complaint with the modification that the sale at public auction of the 22 parcels be considered valid with respect to the 1/2 thereof. No costs. Hence the herein petition for certiorari filed by the PNB raising the following assignments of error: I THE RESPONDENT COURT OF APPEALS ERRED IN APPLYING TO THE CASE AT BAR THE RULING OF THIS HONORABLE SUPREME COURT IN FLORENCIA VITUG VS. DONATA MONTEMAYOR, ET AL., 91 PHIL. 286 (1953) BECAUSE: A. BETWEEN A PROVISION OF A SPECIAL LAW AND THE JUDICIAL INTERPRETATION AND/OR APPLICATION OF A PROVISION OF A GENERAL LAW, THE FORMER PREVAILS. B. THE DOCTRINE OF STARE DECISIS IS NOT A MECHANICAL FORMULA OF ADHERENCE. C. PNB WAS NOT A PARTY, AND HAD NO KNOWLEDGE OF THE ABOVECITED CASE. D. SIMILARLY, PRAGMACIO VITUG AND MAXIMO VITUG WERE NOT PARTIES IN SAID CASE. II THE RESPONDENT COURT OF APPEALS ERRED IN NOT RECOGNIZING THE CONCLUSIVENESS OF THE CERTIFICATE, OF TITLE, AS PROVIDED IN ACT 496, AS AMENDED (THE LAND REGISTRATION). III THE RESPONDENT COURT OF APPEALS ERRED IN IGNORING THE CONCLUSIVENESS OF OWNERSHIP OF DONATA MONTEMAYOR OVER THE PROPERTIES WHICH WERE REGISTERED EXCLUSIVELY IN HER NAME WHEN PRIVATE RESPONDENTS (PRAGMACIO VITUG AND MAXIMO VITUG), AS LESSEES, ENTERED INTO A CONTRACT OF LEASE WITH DONATA MONTEMAYOR AS THE OWNER-LESSOR. IV THE RESPONDENT COURT OF APPEALS ERRED IN CONCLUDING THAT PNB WAS A MORTGAGEE IN BAD FAITH. The petition is impressed with merit. When the subject properties were mortgaged to the PNB they were registered in the name of Donata Montemayor, widow. Relying on the torrens certificate of title covering said properties the mortgage loan applications of Donata were granted by the PNB and the mortgages were duly constituted and registered in the office of the Register of Deeds. In processing the loan applications of Donata Montemayor, the PNB had the right to rely on what appears in the certificates of title and no more. On its face the properties are owned by Donata Montemayor, a widow. The PNB had no reason to doubt nor question the status of said registered owner and her ownership thereof. Indeed, there are no liens and encumbrances covering the same. The well-known rule in this jurisdiction is that a person dealing with a registered land has a right to rely upon the face of the torrens certificate of title and to dispense with the need of inquiring further, except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man make such inquiry. 9 A torrens title concludes all controversy over ownership of the land covered by a final degree of registration. 10Once the title is registered the owner may rest assured without the necessity of stepping into the portals of the court or sitting in the mirador de su casa to avoid the possibility of losing his land. 11 Article 160 of the Civil Code provides as follows: Art. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife. The presumption applies to property acquired during the lifetime of the husband and wife. In this case, it appears on the face of the title that the properties were acquired by Donata Montemayor when she was already a widow. When the property is registered in the name of a spouse only and there is no showing as to when the property was acquired by said spouse, this is an indication that the property belongs exclusively to said spouse. 12 And this presumption under Article 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 are involved. 13 The PNB had a reason to rely on what appears on the certificates of title of the properties mortgaged. For all legal purposes, the PNB is a mortgagee in goodfaith for at the time the mortgages covering said properties were constituted the PNB was not aware to any flaw of the title of the mortgagor. 14 True it is that in the earlier cases decided by this Court, namely Vitug VS. Montemayor decided on May 15, 1952, which is an action for recovery of possession of a share in said parcels of land, 15 and in the subsequent action for partition between the same parties decided on Oct. 20, 1953, 16 this court found the 30 parcels of land in question to be conjugal in nature and awarded the corresponding share to the property of Florencia Vitug, an heir of the late Clodualdo Vitug from the first marriage. In said cases this Court affirmed the decision of the lower court. In the dispositive part of the decision of the trial court it made the observation that "but from the conduct of Clodualdo Vitug and Donata Montemayor during the existence of their marital life, the inference is clear that Clodualdo had the unequivocal intention of transmitting the full ownership of the 30 parcels of land to his wife Donata Montemayor, thus considering the 1/2 of the funds of the conjugal property so advanced for the purchase of said parcels of land as reimbursible to the estate of Clodualdo Vitug on his death. 17 That must be the reason why the property was registered in the name of Donata Montemayor as widow after the death of Clodualdo Vitug. 18 At any rate, although actions for recovery of real property and for partition are real actions, however, they are actions in personam that bind only the particular individuals who are parties thereto. 19 The PNB not being a party in said cases is not bound by the said decisions. Nor does it appear that the PNB was aware of the said decisions when it extended the above describe mortgage loans. Indeed, if the PNB knew of the conjugal nature of said properties it would not have approved the

mortgage applications covering said properties of Donata Montemayor without requiring the consent of all the other heirs or co-owners thereof. Moreover, when said properties were sold at public auction, the PNB was a purchaser for value in good faith. So its right thereto is beyond question. 20 Pragmacio and Maximo Vitug are now estopped from questioning the title of Donata Montemayor to the said properties. They never raised the conjugal nature of the property nor took issue as to the ownership of their mother, Donata Montemayor, over the same. Indeed private respondents were among the defendants in said two cases wherein in their answers to the complaint they asserted that the properties in question are paraphernal properties belonging exclusively to Donata Montemayor and are not conjugal in nature. 21 Thus they leased the properties from their mother Donata Montemayor for many years knowing her to be the owner. They were in possession of the property for a long time and they knew that the same were mortgaged by their mother to the PNB and thereafter were sold at public auction, but they did not do anything. 22 It is only after 17 years that they remembered to assert their rights. Certainly, they are guilty of laches. 23 Moreover, as correctly held by the lower court. Pragmacio and Maximo Vitug as occupants and lessees of the property in question cannot now dispute the ownership of their mother over the same who was their lessor. 24 WHEREFORE, the subject decision of the respondent Court of Appeals is hereby REVERSED and set aside and another decision is hereby rendered DISMISSING the complaint and ordering private respondents to pay attomey's fees and expenses of litigation to petitioner PNB in the amount of P20,000.00 and the costs of the suit. SO ORDERED. [G.R. No. L-7644. November 27, 1956.] HENRY LITAM, ETC., ET AL., Plaintiffs-Appellants, vs. REMEDIOS R. ESPIRITU, as guardian of the incompetent MARCOSA RIVERA, and ARMINIO RIVERA, Defendants-Appellees. DECISION CONCEPCION, J.: This is an appeal from a decision of the Court of First Instance of Rizal in the above entitled case, which were jointly tried. On May 21, 1952, Gregorio Dy Tam instituted Special Proceeding No. 1537 of said court, entitled In the matter of the Intestate Estate of the Deceased Rafael Litam. The petition therein filed, dated April 24, 1952, states that Petitioner is the son of Rafael Litam, who died in Manila on January 10, 1951; chan roblesvirtualawlibrarythat the deceased was survived by:chanroblesvirtuallawlibrary Li Hong Hap 40 years Li Ho 37 years Gregorio Dy Tam 33 years Henry Litam alias Dy Bun Pho 29 years Beatriz Lee Tam alias Lee Giak Ian 27 years Elisa Lee Tam alias Lee Giok Bee 25 years William Litam alias Li Bun Hua 23 years Luis Litam alias Li Bun Lin 22 years that the foregoing children of the decedent by a marriage celebrated in China in 1911 with Sia Khin, now deceased; chan roblesvirtualawlibrarythat after the death of Rafael Litam, Petitioner and his co-heirs came to know that the decedent had, during the subsistence of said marriage with Sia Khin, contracted in 1922 in the Philippines cralaw another marriage with Marcosa Rivera, Filipino citizen; chan roblesvirtualawlibrarythat the decedent left as his property among others, his onehalf (1/2) share valued at P65,000 in the purported conjugal properties between him and Marcosa Rivera, which cralaw partnership consisted of the following real property acquired during the marriage between him and Marcosa Rivera, to wit:chanroblesvirtuallawlibrary (1) Three (3) parcels of land covered by Transfer Certificate of Title No. 1228 of the Registry of Deeds of the province of Pampanga:chanroblesvirtuallawlibrary (2) One (1) parcel of land covered by Transfer Certificate of Title No. 26011 of the Registry of Deeds of the province of Bulacan. and that the decedent had left neither a will nor debt. Petitioner prayed, therefore, that, after appropriate proceedings, letters of administration be issued to Marcosa Rivera, the surviving spouse of the decedent. Soon thereafter, Marcosa Rivera filed a counter- petition:chanroblesvirtuallawlibrary (1) substantially denying the alleged marriage of the decedent to Sia Khin, as well as the alleged filiation of the persons named in the petition; chan roblesvirtualawlibrary(2) asserting that the properties described herein are her paraphernal properties, and that the decedent had left unpaid debts, and certain properties in Bulan and Casiguran, Sorsogon, and in Virac, Catanduanes, apart from shares of stock in a private corporation known by the name of Litam Co., Inc.; chan roblesvirtualawlibraryand (3) praying that her nephew, Arminio Rivera, be appointed administrator of the intestate estate of the deceased. In due course, the court granted this petition and letters of administration were issued to Arminio Rivera, who assumed his duties as such, and, later, submitted an inventory of the alleged estate of Rafael Litam. Inasmuch as said inventory did not include the properties mentioned in the petition, dated April 24, 1952, of Gregorio Dy Tam, the latter filed, on November 29, 1952, a motion for the removal of Rivera as administrator of the aforementioned estate. This led to a number of incidents hinging on the question whether said properties belong in common to the decedent and Marcosa Rivera or to the latter exclusively. Meanwhile, Remedios R. Espiritu was appointed, in Special Proceeding No. 1709 of the Court of First Instance of Rizal, guardian of Marcosa Rivera, who had been declared incompetent. Thereafter, or on April 20, 1953, Gregorio Dy Tam and his alleged brothers and sisters aforementioned, filed the complaint in Civil Case No. 2071 of the same court, against Remedios R. Espiritu, as guardian of Marcosa Rivera, and Arminio Rivera. In said complaint,Plaintiffs therein reproduced substantially the allegations made in the aforementioned petition of Gregorio Dy Tam dated April 24. 1952, except that the properties acquired during the existence of marriage between Rafael Litam and Marcosa Rivera and/or with their joint efforts during the time that they lived as husband and wife were said to be more than those specified in said petition, namely:chanroblesvirtuallawlibrary (1) 3 parcels of land situated in the Municipality of Macabebe, Province of Pampanga, covered by Transfer Certificate of Title No. 1228 of the Registry of Deeds for the Province of Pampanga, issued on July 29, 1947; (2) 2 Parcels of land, together with all buildings and improvements thereon except those expressly noted in the title as belonging to other persons, situated in the Municipality of Navotas, Province of Rizal, covered by Transfer Certificate of Title No. 35836 of the Registry of Deeds for the Province of Rizal, issued on October 4, 1938; (3) 1 parcel of land situated in the Municipality of Malabon, Province of Rizal, covered by Transfer Certificate of Title No. 23248 of the Registry of Deeds for the Province of Rizal, issued on June 12, 1933; (4) 1 parcel of land situated in Barrio of Kay-Badia, Municipality of Obando, Province of Bulacan, covered by Transfer Certificate of Title No. 21809 of the Registry of Deeds for the Province of Bulacan, issued on May 25, 1939; (5) 1 parcel of land (plan psu-93067, swo-16049) situated in Barrio of Quibadia, Municipality of Obando, Province of Bulacan, covered by Transfer Certificate of Title No. 26011 of the Registry of Deeds for the Province of Bulacan, issued on April 9, 1943; Other properties are located in Bataan province. All properties total an assessed value of approximately P150,000.00. In said complaint, Plaintiffs prayed that the judgment be rendered:chanroblesvirtuallawlibrary (1) declaring the aforesaid properties as belonging to the conjugal partnership or tenancy in common which existed between the deceased Rafael Litam and the incompetent Marcosa Rivera; (2) ordering the Defendants to deliver the aforesaid properties to the administration of the estate of the deceased Rafael Litam (Rule 75, section 2, Rules of Court); (3) ordering the said Defendants further to render an accounting of the fruits they collected from the aforesaid properties and to deliver the same to the administration of the estate of the deceased Rafael Litam; (4) ordering the said Defendants to pay the administration of the estate of the deceased Rafael Litam damages in double the value of the fruits mentioned in the preceding paragraph which they embezzled; chan roblesvirtualawlibraryand (5) ordering the Defendants to pay the costs. The Plaintiffs further pray for such other remedy as the Court may deem just and equitable in the premises. In her answer to the complaint, Marcosa Rivera reiterated, in effect, the allegations in her counter-petition, dated July 12, 1952, in Special Proceeding No. 1537, and set up some affirmative and special defenses, as well as a counter-claim for attorneys fees and damages in the aggregate sum of P110,000.00. Owning to the identity of the issue raised in said Civil Case No. 2071 and in the aforementioned incidents in Special Proceeding No. 1537, both were jointly heard. Later on, the court rendered a decision. (1) Dismissing Civil Case No. 2071, with costs against the Plaintiffs; (2) Sentencing the Plaintiff in Civil Case No. 2071, under the Defendants counterclaim, to pay jointly and severally each of the Defendants the sum of P5,000.00 as actual damages and P25,000.00 as moral damages; (3) Declaring that the properties in question, namely:chanroblesvirtuallawlibrary the fishponds, consisting of three parcels, situated in Macabebe, Pampanga, with Transfer certificate of Title No. 1228 of the land records of Pampanga, one-half undivided portion of the fishponds, consisting of two parcels, situated in Navotas, Rizal, covered by Transfer Certificate of Title No. 35836, the parcel of land with the improvements thereon situated in Malabon, Rizal, covered by Transfer Certificate of Title No. 23248, both of the land records of Rizal, and the fishponds, consisting of two parcels, situated in Obando, Bulacan, covered by Transfer Certificates of Title Nos. 21809 and 26011, both of the land records of Bulacan, are the exclusive, separate and paraphernal properties of Marcosa Rivera; chan roblesvirtualawlibraryand (4) Declaring that the Plaintiffs in Civil Case No. 2071 (who are the same persons alleged to be children of Rafael Litam in the petition, dated April 24, 1952, filed by the Petitioner in Sp. Proc. No. 1537) are not the children of the deceased Rafael Litam, and that his only heir is his surviving wife, Marcosa Rivera. The two (2) Cases are now before us on appeal taken by the Petitioner in Special Proceeding No. 1537 and the Plaintiffs in Civil Case No. 2071. The issues for determination are:chanroblesvirtuallawlibrary (1) AreAppellants the legitimate children of Rafael Litam? (2) Is Marcosa Rivera the exclusive owner of the properties in question, or do the same constitute a common property of her and the decedent? The first issue hinges on whether Rafael Litam and Sia Khin were married in 1911, and whether Rafael Litam is the father of Appellants herein. In this connection, the lower court had the following to say:chanroblesvirtuallawlibrary

cralaw the evidence weikhs very heavily in favor of the theory of the Defendants in Civil Case No. 2071 to the effect that the said deceased Rafael Litam was not married to Sia Khin and thatPlaintiffs, are not the children of the said decedent. The Plaintiffs in Civil Case No. 2071 and the Petitioner in Sp. Proc. No. 1537 have utterly failed to prove their alleged status as children of Rafael Litam by a marriage with Sia Khin. It appears from the evidence presented by the Defendants in civil Case No. 2071 and the administrator and the counter-Petitioner in Sp. Proc. No. 1537 that there was no such marriage between the deceased Rafael Litam and Sia Khin and that the Plaintiffs named in Civil Case No. 2071 are not children of said deceased. The various official and public documents executed by Rafael Litam himself convincingly show that he had not contracted any marriage with any person other than Marcosa Rivera, and that he had no child. In the marriage certificate, (Exhibit 55) it was clearly stated that he was single when he married Marcosa Rivera on June 10, 1922. In the sworn application for alien certificate of registration dated July 7, 1950 (Exhibit 1), Rafael Litam unequivocably declared under oath that he had no child. In the several other documents executed by him and presented in evidence, (Exhibits 19, 21, 22, 23, 46 and 46-A) Rafael Litam had consistently referred to Marcosa Rivera alone as his wife; chan roblesvirtualawlibraryhe had never mentioned of Sia Khin as his wife, or of his alleged children. The witnesses presented by the Defendants in Civil Case No. 2071 and the administrator and counter Petitioner in Sp. Proc. No. 1537 positively testified to the effect that they know that Rafael Litam did not have any child, nor was he married with Sia Khin. An impartial and disinterested witness, Felipe Cruz, likewise testified that he has known Rafael Litam even before his marriage with Marcosa Rivera and that said Rafael Litam did not have any child. On the other hand, the Plaintiffs in Civil Case No. 2071 and the Petitioner in Sp. Proc. No. 1537 presented in support of their theory the testimony of their lone witness, Luis Litam, and certain documentary evidence. It is noteworthy that the said Plaintiffs and said Petitioner did not present in evidence the marriage certificate of Rafael Litam and Sia Khin, which in the opinion of the Court, is the competent and best evidence of the alleged marriage between them. No explanation has been given for the non-presentation of said marriage certificate, nor has there been any showing of its loss. Neither have said Plaintiffs and said Petitionerpresented any competent secondary evidence of the supposed marriage. The testimony of the lone witness, Luis Litam, cannot be given any credence and value at all. His testimony is mostly hearsay, as according to him, he was merely informed by Rafael Litam of the latters supposed marriage with Sia Khin. His testimony is uncorroborated. The court noticed that the said witness was only 22 years old when he testified, and it appears in the petition filed by the Petitioner in Sp. Proc. No. 1537 that said witness is the youngest of all the alleged eight children of Rafael Litam. The Court is at a loss to understand why one or some of the older alleged children of Rafael Litam were not presented as witnesses in view of the unreliable testimony of Luis Litam, and considering that older persons are better qualified to testify on the matters sought to be proved which allegedly happened a long time ago. The birth certificate presented by the Plaintiff in Civil Case No. 2071 and Petitioner in Sp. Proc. No. 1537 cannot be given even little consideration, because the name of the father of the children appearing therein is not Rafael Litam, but different persons. It is very significant to note that the names of the father of the persons appearing in said birth certificates are Dy Tham, Li Tam, Lee Tham, Rafael Dy Tam, and that said persons were born in different places, some in Amoy, China, another Fukien, China, and the other in Limtao, China. It also appears in said birth certificates that the childrens mothers named therein are different, some being Sia Khim, others Sia Quien, the other Sia Khun, and still another Sia Kian. These documents do not establish the identity of the deceased Rafael Litam and the persons named therein as father. Besides, it does not appear in the said certificates of birth that Rafael Litam had in any manner intervened in the preparation and filing thereof. The other documentary evidence presented by the said Plaintiffs and Petitioner are entirely immaterial and highly insufficient to prove the alleged marriage between the deceased Rafael Litam and Sia Khin and the alleged statue of the Plaintiffs as children of said decedent. It is, therefore, the finding of this Court that the Plaintiffs named in Civil Case No. 2071 are not heirs of the said decedent, his only heir being his surviving wife, Marcosa Rivera. (Emphasis ours.) The findings of fact thus made in the decision appealed from are borne out by the records and the conclusion drawn from said facts is, to our mind, substantially correct. Appellants evidence on this point consists of the testimony of Appellant Li Bun Lin, who said that he is, also known as Luis Litam; chan roblesvirtualawlibrarythat his co-Appellants are his brothers and sisters; chan roblesvirtualawlibrarythat their parents are the decedent and Sia Khin, who were married in China in 1911; chan roblesvirtualawlibraryand that Sia Khin died in Manila during the Japanese occupation. He likewise, identified several pictures, marked Exhibits I to S, which were claimed to be family portraits, but the lower court rejected their admission in evidence. Although we agree with herein Appellantsthat this was an error, it is clear to us that said pictures and the testimony of Luis Litam, as well as the other evidence adverted to in the above-quoted portion of the decision appealed from, are far from sufficient to outweigh, or even offset, the evidence in favor of theAppellees. It should be noted that the decedent had admittedly married Marcosa Rivera in 1922. In the very petition of Appellant Gregorio Dy Tam, in Special Proceeding No. 1537, dated April 24, 1952, he alleged that Marcosa Rivera is the surviving spouse of the decedent. In their complaint in Civil Case No. 2071, Appellants specifically admitted and averred the existence of the marriage between said Rafael Litam and Marcosa Rivera which would have been void ab initio, and, hence, inexistent legally, if Appellants pretense were true or they believed it to be so and that they had lived as husband and wife. Again, although Gregorio Dy Tam, asserted, in his aforementioned petition, that he and his co-heirs came to know about the marriage of the decedent and Marcosa Rivera after the death of Rafael Litam, the very testimony of Li Bun Lin, as witness for the Appellants, show, beyond doubt, that said Appellants knew, during the lifetime of Rafael Litam that he and Marcosa Rivera were living in Malabon, Rizal, openly and publicly, as husband and wife, and regarded her as his lawful wife. Indeed, in the course of his testimony, said Li Bun Lin alluded to her as his mother. In other words, aside from the circumstance that the wedding and marital life of Marcosa Rivera and Rafael Litam is undisputed, it is, also, an established fact that they had the general reputation of being legally married and were so regarded by the community and byAppellants herein, during the lifetime of Rafael Litam. Upon the other hand, Appellants maintain, in effect, that Rafael Litam was guilty of the crime of bigamy; chan roblesvirtualawlibrarythat he had, likewise, willfully and maliciously falsified public and official documents; chan roblesvirtualawlibraryand that, although Appellants and Sia Khin were living in Manila and Marcosa Rivera whom Appellants knew resided only a few kilometers away, in Malabon, Rizal where Rafael Litam returned daily, after attending to his business in Manila, the decedent had succeeded, for about thirty (30) years, in keeping each party in complete ignorance of the nature of his alleged relations with the other. Apart from the highly improbable nature of the last part of Appellants pretense, it is obvious that the same cannot be sustained unless the evidence in support thereof is of the strongest possible kind, not only because it entails the commission by Rafael Litam of grave criminal offenses which are derogatory to his honor, but, also, because death has sealed his lips, thus depriving him of the most effective means of defense. The proof for Appellants herein does not satisfy such requirement. As regards the title to the properties in dispute, the evidence thereon was analyzed by the lower court in the following language:chanroblesvirtuallawlibrary It has been established by the evidence that the properties in question were bought by Marcosa Rivera with her separate and exclusive money. The fishponds situated in Obando, Bulacan, covered by Transfer Certificate of Title Nos. 21809 and 26011, the one-half (1/2) undivided portion of the fishponds situated in Navotas, Rizal with Transfer Certificate of Title No. 35836, and the property situated in Hulong-Duhat, Malabon, Rizal, with Transfer Certificate of Title No. 23248 were all purchased by Marcosa Rivera with the money she earned and accumulated while she was still single; chan roblesvirtualawlibrarywhile the fishponds situated in Macabebe, Pampanga with Transfer Certificate of Title No. 1228 were purchased by her with the money she inherited from her late sister, Rafaela Rivera and with the money she received from the proceeds of the sale of the pieces of jewelry she inherited from her father Eduardo Rivera and her sister Rafaela Rivera. The properties in question, having been bought by Marcosa Rivera, although during her marriage with Rafael Litam, with her exclusive and separate money, said properties are undeniably her paraphernal properties. (Art. 1396, Spanish Civil Code, which is the same as Art. 148 of the Civil Code of the Phil.) Great importance should be given to the documentary evidence, vis:chanroblesvirtuallawlibrary Exhibits 21, 22, 23, 19, 46 and 46-A, presented by the Defendants, in Civil Case No. 2071 and the administrator and counter- Petitioner in Sp. Proc. No. 1537, which prove beyond peradventure of any doubt that the properties in question are the paraphernal properties of Marcosa Rivera. In Exhibit 21, Rafael Litam unequivocably declared under his oath that the money paid by Marcosa Rivera for the fishponds in Obando, Bulacan was her exclusive and separate money which was earned by her while she was still single. In Exhibits 22 and 23, both dated June 16, 1947, same Rafael Litam, also under oath, acknowledge the fact that the sums of P13,000.00 and P10,000.00 loaned by Marcosa Rivera to the spouses Catalino Pascual and Juliana Pascual, and to Juliana Pascual, respectively, are the separate and exclusive money of Marcosa Rivera, in which money Rafael Litam had no interest whatsoever. In Exhibit 19, same Rafael Litam acknowledged the fact that he had obtained, before the outbreak of the second world war, from Marcosa Rivera the sum of P135,000.00 which belongs exclusively to the latter, and that after the liberation, or more specifically, on January 4, 1946, he stole from Marcosa Rivera the further sum of P62,000.00, also belonging exclusively to the latter, which amounts, totalling P197,000.00, exclusive of interests, have not, according to the evidence, been paid to her up to the present. In Exhibits 46 and 46-A, it was acknowledged by Rafael Litam that he had not given any money to his wife, Marcosa Rivera, and that they have actually adopted a system of separation of property, each of them not having any interest or participation whatsoever in the property of the other. These declarations and admission of fact made by Rafael Litam against his interest are binding upon him, his heirs and successors in interests and third persons as well. (Secs. 7 & 29, Rule 123, Rules of Court). The finding of this Court that the properties in question are paraphernal properties of Marcosa Rivera, having been bought by her with her separate and exclusive money, is further strengthened by the fact that, as it is clearly disclosed by the evidence when Marcosa Rivera married Rafael Litam in 1922, she was already rich, she having already earned and saved money as consignataria while she was still single. It also appears that she was born of a rich family, her father, Eduardo Rivera, being the owner of fishponds, commercial and residential lands and buildings, (Exhibits 5 to 18, inclusive), with an assessed value of around P150,000.00 (Exhibits 25 and 42, inclusive), now worth approximately a million pesos, and most of which properties as may be seen from the certificates of title were acquired by him way back in the years 1916 and 1919. When Eduardo Rivera died on February 5, 1942, his cash and jewelry were inherited by his eldest daughter, Rafaela Rivera, and when the latter died single on July 2, 1943, Marcosa Rivera inherited her cash amounting to P150,000.00, Philippine currency, and and her pieces of jewelry. It is with this amount and with the proceeds of the sale of some of said pieces of jewelry that Marcosa Rivera purchased the fishponds in question, situated in Macabebe, Pampanga. On the other hand, it appears from the evidence that when Rafael Litam was on June 10, 1922, married to Marcosa Rivera, he was poor. He had to borrow from Marcosa Rivera, the sum of P135,000.00 belonging exclusively to her before the outbreak of the war, and to steal from her further sum of P62,000.00 after the liberation (Exhibit 10). The said amounts totalling P197,000.00, exclusive of the stipulated interests, according to the evidence, have not been paid to Marcosa Rivera up to the present. Rafael Litam did not contribute any amount of money or labor to the properties in question, as he and Marcosa Rivera maintained an absolute separation of property (Exhibits 46 and 46-A). Besides, during his lifetime he used to go his office in Manila everyday.

Another circumstance which clearly proves that the properties in question belong exclusively to Marcosa Rivera is the established fact that before she became incompetent sometime in the early part of the year, 1953, she had been administering said properties, to the exclusion of Rafael Litam. In fact, as may be seen from the very documentary evidence (Exhibit EE, same as Nxh. 50) presented by the Plaintiffs in Civil Case No. 2071 themselves and Petitioner in Sp. Proc. No. 1537, she alone leased the properties in question, situated in Macabebe, Pampanga, and the corresponding lease contract, dated July 13, 1948 was signed by her as lessor and by Rafael Suarez, Jr. as lessees. Furthermore, the properties in question have been declared in the name of Marcosa Rivera alone, and she alone pays the real estate taxes due thereon. (Exhibits 43, 44 & 45.) Further strong proofs that the properties in question are the paraphernal properties of Marcosa Rivera, are the very Torrens Titles covering said properties. All the said properties are registered in the name of Marcosa Rivera, married to Rafael Litam. This circumstance indicates that the properties in question belong to the registered owner, Marcosa Rivera, as her paraphernal properties, for if they were conjugal, the titles covering the same should have been issued in the names of Rafael Litam and Marcosa Rivera. The words married to Rafael Litam written after the name of Marcosa Rivera, in each of the above mentioned titles are merely descriptive of the civil status of Marcosa Rivera, the registered owner of the properties covered by said titles. On the other hand, the evidence presented by the Plaintiffs in Civil Case No. 2071 andPetitioner in Sp. Proc. No. 1537 in support of their contention that the properties in question are conjugal is, in the mind of the Court, very weak, unreliable, and mostly incompetent, and cannot overcome the clear, convincing and almost conclusive proofs presented by the opposite party. Scant or no consideration at all could be given by the Court to the immaterial, incompetent and unbelievable testimonies of the witnesses presented by the said Plaintiffsand Petitioners. The disputable presumption of law that the properties acquired during the marriage are conjugal properties, upon which legal presumption said Plaintiffs and Petitionermainly rely has been decisively overcome by the overwhelming preponderance of evidence adduced in these cases that the properties in question are the paraphernal properties of Marcosa Rivera. (Emphasis ours.) Appellants counsel assail the decision appealed from upon the ground that the lower court had been partial to the Appellees and had not accorded to the Appellants a fair and just hearing. As above pointed out, His Honor the trial Judge could have been, and should have been, more liberal in the reception of evidence. Appellants witnesses (Li Bun Lin, Dominador Gadi, Benigno Musni and Rafael B. Suarez) should have been allowed to testify on the alleged title of Rafael Litam to certain properties and on his alleged reasons for the language used in the public and official documents relied upon by the Appellees. However, it is apparent to us that said evidence cannot affect the decision in these cases. The evidenciary value of the testimony of said witnesses would have depended mainly upon their individual appraisal of certain facts, upon their respective inferences therefrom and their biases or view points, and upon a number of other factors affecting their credibility. At best, said testimony could not possibly prevail over the repeated admissions made by the decedent against his own interest in Exhibits 19, 21, 22, 23, 46 and 46-A (adverted to in the abovequoted portion of the decision appealed from), which admissions are corroborated by the fact that the deceased father of Marcosa Rivera was well to do; chan roblesvirtualawlibrarythat aside from her share in his estate, she had, likewise, inherited from a sister who died single and without issue; chan roblesvirtualawlibrarythat the lands in dispute were registered, and some were, also, leased, in her name, instead of hers and that of the decedent; chan roblesvirtualawlibraryand that the latter lived in her house in Malabon, Rizal. Appellants contend that the transactions covered by said Exhibits 19, 21 to 23 and 46 and 46-A, as well as by the other deeds referred to in the decision appealed from, were caused to be made in the name of Marcosa Rivera, to the exclusion of her husband, in order to evade the constitutional provision disqualifying foreigners from the acquisition of private agricultural lands, except by succession. Apart from being based, solely, upon a surmise, without any evidentiary support, this pretense is refuted by the fact that said residential property in Hulong-Duhat, Malabon, Rizal, was acquired on April 12, 1933, or prior to the adoption of our Constitution (see Exhibits Z and AA). Her transactions subsequently thereto, merely followed, therefore, the pattern of her activities before the drafting of said fundamental law. This notwithstanding, we do not believe that Appellants should be sentenced to pay damages. The petition of Gregorio Dy Tam in Special Proceeding No. 1537 and the complaint in Civil Case No. 2071 contain nothing derogatory to the good name or reputation of the herein Appellees. On the contrary, it may be surmised from said pleadings that Marcosa Rivera had no knowledge of the alleged previous marriage of the decedent to Sia Khin. Moreover, the records do not show that Appellants have acted in bad faith. Likewise, we are of the opinion that the lower court should not have declared, in the decision appealed from, that Marcosa Rivera is the only heir of the decedent, for such declaration is improper in Civil Case No. 2071, it being within the exclusive competence of the court in Special Proceeding No. 1537, in which it is not as yet, in issue, and, will not be, ordinarily, in issue until the presentation of the project of partition. Wherefore, with the elimination of the award for damages in favor of the herein Appellees, and of said declaration of heirship, the decision appealed from is hereby affirmed in all other respects, with costs against the Appellants. It is SO ORDERED. Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Ange G.R. No. 185091 August 8, 2010 REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE DEPARTMENT OF EDUCATION DIVISION OF LIPA CITY (FOR PANINSINGIN PRIMARY SCHOOL), Petitioner, vs. PRIMO MENDOZA and MARIA LUCERO, Respondents. DECISION ABAD, J.: This case is about the propriety of filing an ejectment suit against the Government for its failure to acquire ownership of a privately owned property that it had long used as a school site and to pay just compensation for it. The Facts and the Case Paninsingin Primary School (PPS) is a public school operated by petitioner Republic of the Philippines (the Republic) through the Department of Education. PPS has been using 1,149 square meters of land in Lipa City, Batangas since 1957 for its school. But the property, a portion of Lots 1923 and 1925, were registered in the name of respondents Primo and Maria Mendoza (the Mendozas) under Transfer Certificate of Title (TCT) T-11410.1 On March 27, 1962 the Mendozas caused Lots 1923 and 1925 to be consolidated and subdivided into four lots, as follows: Lot 1 292 square meters in favor of Claudia Dimayuga Lot 2 292 square meters in favor of the Mendozas Lot 3 543 square meters in favor of Gervacio Ronquillo; and Lot 4 1,149 square meters in favor of the City Government of Lipa2 As a result of subdivision, the Register of Deeds partially cancelled TCT T-11410 and issued new titles for Lots 1 and 3 in favor of Dimayuga and Ronquillo, respectively. Lot 2 remained in the name of the Mendozas but no new title was issued in the name of the City Government of Lipa for Lot 4.3 Meantime, PPS remained in possession of the property. The Republic claimed that, while no title was issued in the name of the City Government of Lipa, the Mendozas had relinquished to it their right over the school lot as evidenced by the consolidation and subdivision plan. Further, the property had long been tax-declared in the name of the City Government and PPS built significant, permanent improvements on the same. These improvements had also been tax-declared.4 The Mendozas claim, on the other hand, that although PPS sought permission from them to use the property as a school site, they never relinquished their right to it. They allowed PPS to occupy the property since they had no need for it at that time. Thus, it has remained registered in their name under the original title, TCT T11410, which had only been partially cancelled. On November 6, 1998 the Mendozas wrote PPS, demanding that it vacate the disputed property.5 When PPS declined to do so, on January 12, 1999 the Mendozas filed a complaint with the Municipal Trial Court in Cities (MTCC) of Lipa City in Civil Case 0002-99 against PPS for unlawful detainer with application for temporary restraining order and writ of preliminary injunction.6 On July 13, 1999 the MTCC rendered a decision, dismissing the complaint on ground of the Republics immunity from suit. 7 The Mendozas appealed to the Regional Trial Court (RTC) of Lipa City which ruled that the Republics consent was not necessary since the action before the MTCC was not against it.8 In light of the RTCs decision, the Mendozas filed with the MTCC a motion to render judgment in the case before it. 9 The MTCC denied the motion, however, saying that jurisdiction over the case had passed to the RTC upon appeal.10 Later, the RTC remanded the case back to the MTCC,11 which then dismissed the case for insufficiency of evidence.12 Consequently, the Mendozas once again appealed to the RTC in Civil Case 2001-0236. On June 27, 2006 the RTC found in favor of the Mendozas and ordered PPS to vacate the property. It held that the Mendozas had the better right of possession since they were its registered owners. PPS, on the other hand, could not produce any document to prove the transfer of ownership of the land in its favor. 13 PPS moved for reconsideration, but the RTC denied it. The Republic, through the Office of the Solicitor General (OSG), appealed the RTC decision to the Court of Appeals (CA) in CA-G.R. SP 96604 on the grounds that: (1) the Mendozas were barred by laches from recovering possession of the school lot; (2) sufficient evidence showed that the Mendozas relinquished ownership of the subject lot to the City Government of Lipa City for use as school; and (3) Lot 4, Pcs-5019 has long been declared in the name of the City Government since 1957 for taxation purposes.14 In a decision dated February 26, 2008, the CA affirmed the RTC decision.15 Upholding the Torrens system, it emphasized the indefeasibility of the Mendozas registered title and the imprescriptible nature of their right to eject any person occupying the property. The CA held that, this being the case, the Republics possession of the property through PPS should be deemed merely a tolerated one that could not ripen into ownership. The CA also rejected the Republics claim of ownership since it presented no documentary evidence to prove the transfer of the property in favor of the government. Moreover, even assuming that the Mendozas relinquished their right to the property in 1957 in the governments favor, the latter never took steps to have the title to the property issued in its name or have its right as owner annotated on the Mendozas title. The CA held that, by its omissions, the Republic may be held in estoppel to claim that the Mendozas were barred by laches from bringing its action. With the denial of its motion for reconsideration, the Republic has taken recourse to this Court via petition for review on certiorari under Rule 45. The Issue Presented

The issue in this case is whether or not the CA erred in holding that the Mendozas were entitled to evict the Republic from the subject property that it had used for a public school. The Courts Ruling A decree of registration is conclusive upon all persons, including the Government of the Republic and all its branches, whether or not mentioned by name in the application for registration or its notice.16 Indeed, title to the land, once registered, is imprescriptible.17 No one may acquire it from the registered owner by adverse, open, and notorious possession.18 Thus, to a registered owner under the Torrens system, the right to recover possession of the registered property is equally imprescriptible since possession is a mere consequence of ownership. Here, the existence and genuineness of the Mendozas title over the property has not been disputed. While the consolidation and subdivision plan of Lots 1923 and 1925 shows that a 1,149 square meter lot had been designated to the City Government, the Republic itself admits that no new title was issued to it or to any of its subdivisions for the portion that PPS had been occupying since 1957.19 That the City Government of Lipa tax-declared the property and its improvements in its name cannot defeat the Mendozas title. This Court has allowed tax declarations to stand as proof of ownership only in the absence of a certificate of title.20 Otherwise, they have little evidentiary weight as proof of ownership.21 The CA erred, however, in ordering the eviction of PPS from the property that it had held as government school site for more than 50 years. The evidence on record shows that the Mendozas intended to cede the property to the City Government of Lipa permanently. In fact, they allowed the city to declare the property in its name for tax purposes. And when they sought in 1962 to have the bigger lot subdivided into four, the Mendozas earmarked Lot 4, containing 1,149 square meters, for the City Government of Lipa. Under the circumstances, it may be assumed that the Mendozas agreed to transfer ownership of the land to the government, whether to the City Government of Lipa or to the Republic, way back but never got around to do so and the Republic itself altogether forgot about it. Consequently, the Republic should be deemed entitled to possession pending the Mendozas formal transfer of ownership to it upon payment of just compensation. The Court holds that, where the owner agrees voluntarily to the taking of his property by the government for public use, he thereby waives his right to the institution of a formal expropriation proceeding covering such property. Further, as the Court also held in Eusebio v. Luis,22 the failure for a long time of the owner to question the lack of expropriation proceedings covering a property that the government had taken constitutes a waiver of his right to gain back possession. The Mendozas remedy is an action for the payment of just compensation, not ejectment.1avvphi1 In Republic of the Philippines v. Court of Appeals,23 the Court affirmed the RTCs power to award just compensation even in the absence of a proper expropriation proceeding. It held that the RTC can determine just compensation based on the evidence presented before it in an ordinary civil action for recovery of possession of property or its value and damages. As to the time when just compensation should be fixed, it is settled that where property was taken without the benefit of expropriation proceedings and its owner filed an action for recovery of possession before the commencement of expropriation proceedings, it is the value of the property at the time of taking that is controlling.24 Since the MTCC did not have jurisdiction either to evict the Republic from the land it had taken for public use or to hear and adjudicate the Mendozas right to just compensation for it, the CA should have ordered the complaint for unlawful detainer dismissed without prejudice to their filing a proper action for recovery of such compensation. WHEREFORE, the Court partially GRANTS the petition, REVERSES the February 26, 2008 decision and the October 20, 2008 resolution of the Court of Appeals in CAG.R. 96604, and ORDERS the dismissal of respondents Primo and Maria Mendozas action for eviction before the Municipal Trial Court in Cities of Lipa City in Civil Case 0002-99 without prejudice to their filing an action for payment of just compensation against the Republic of the Philippines or, when appropriate, against the City of Lipa. SO ORDERED. G.R. No. 167232 July 31, 2009 D.B.T. MAR-BAY CONSTRUCTION, INCORPORATED, Petitioner, vs. RICAREDO PANES, ANGELITO PANES, SALVADOR CEA, ABOGADO MAUTIN, DONARDO PACLIBAR, ZOSIMO PERALTA and HILARION MANONGDO, Respondents. DECISION NACHURA, J.: Before this Court is a Petition1 for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, assailing the Court of Appeals (CA) Decision 2 dated October 25, 2004 which reversed and set aside the Order3 of the Regional Trial Court (RTC) of Quezon City, Branch 216, dated November 8, 2001. The Facts Subject of this controversy is a parcel of land identified as Lot Plan Psu-123169,4 containing an area of Two Hundred Forty Thousand, One Hundred Forty-Six (240,146) square meters, and situated at Barangay (Brgy.) Pasong Putik, Novaliches, Quezon City (subject property). The property is included in Transfer Certificate of Title (TCT) No. 200519,5 entered on July 19, 1974 and issued in favor of B.C. Regalado & Co. (B.C. Regalado). It was conveyed by B.C. Regalado to petitioner D.B.T. Mar-Bay Construction, Inc. (DBT) through a dacion en pago6 for services rendered by the latter to the former. On June 24, 1992, respondents Ricaredo P. Panes (Ricaredo), his son Angelito P. Panes (Angelito), Salvador Cea, Abogado Mautin, Donardo Paclibar, Zosimo P. Peralta, and Hilarion Manongdo (herein collectively referred to as respondents) filed a Complaint7 for "Quieting of Title with Cancellation of TCT No. 200519 and all Titles derived thereat (sic), Damages, with Petition for the Issuance of Injunction with Prayer for the Issuance of Restraining Order Ex-Parte, Etc." against B.C. Regalado, Mar-Bay Realty, Inc., Spouses Gereno Brioso and Criselda M. Brioso, Spouses Ciriaco and Nellie Mariano, Avelino C. Perdido and Florentina Allado, Eufrocina A. Maborang and Fe Maborang, Spouses Jaime and Rosario Tabangcura, Spouses Oscar Ikalina and the Register of Deeds (RD) of Quezon City. Subsequently, respondents filed an Amended Complaint8 and a Second Amended Complaint9particularly impleading DBT as one of the defendants. In the Complaints, Ricaredo alleged that he is the lawful owner and claimant of the subject property which he had declared for taxation purposes in his name, and assessed in the amount of P2,602,190.00 by the City Assessor of Quezon City as of the year 1985. Respondents alleged that per Certification10 of the Department of Environment and Natural Resources (DENR) National Capital Region (NCR) dated May 7, 1992, Lot Plan Psu-123169 was verified to be correct and on file in said office, and approved on July 23, 1948. Respondents also claimed that Ricaredo, his immediate family members, and the other respondents had been, and still are, in actual possession of the portions of the subject property, and their possession preceded the Second World War. To perfect his title in accordance with Act No. 496 (The Land Registration Act) as amended by Presidential Decree (P.D.) No. 1529 (The Property Registration Decree), Ricaredo filed with the RTC of Quezon City, Branch 82 a case docketed as LRC Case No. Q-91011, with LRC Rec. No. N-62563.11 Respondents averred that in the process of complying with the publication requirements for the Notice of Initial Hearing with the Land Registration Authority (LRA), it was discovered by the Mapping Services of the LRA that there existed an overlapping of portions of the land subject of Ricaredos application, with the subdivision plan of B.C. Regalado. The said portion had, by then, already been conveyed by B.C. Regalado to DBT. Ricaredo asseverated that upon verification with the LRA, he found that the subdivision plan of B.C. Regalado was deliberately drawn to cover portions of the subject property. Respondents claimed that the title used by B.C. Regalado in the preparation of the subdivision plan did not actually cover the subject property. They asserted that from the records of B.C. Regalado, they gathered that TCT Nos. 211081, 12 21109513 and 211132,14 which allegedly included portions of the subject property, were derived from TCT No. 200519. However, TCT No. 200519 only covered Lot 503 of the Tala Estate with an area of Twenty-Two Thousand Six Hundred Fifteen (22,615) square meters, and was different from those mentioned in TCT Nos. 211081, 211095 and 211132. According to respondents, an examination of TCT No. 200519 would show that it was derived from TCT Nos. 14814,1514827,16 1481517 and T-28. In essence, respondents alleged that B.C. Regalado and DBT used the derivative titles which covered properties located far from Pasong Putik, Novaliches, Quezon City where the subject property is located, and B.C. Regalado and DBT then offered the same for sale to the public. Respondents thus submitted that B.C Regalado and DBT through their deliberate scheme, in collusion with others, used (LRC) Pcs-18345 as shown in the consolidation-subdivision plan to include the subject property covered by Lot Plan Psu-123169. In his Answer18 dated July 24, 1992, the RD of Quezon City interposed the defense that at the time of registration, he found all documents to be in order. Subsequently, on December 5, 1994, in his Motion19 for Leave to Admit Amended Answer, with the Amended Answer attached, he admitted that he committed a grave mistake when he earlier said that TCT No. 200519 covered only one lot, i.e. Lot 503. He averred that upon careful examination, he discovered that TCT No. 200519 is composed of 17 pages, and actually covered 54 lots, namely: Lots 503, 506, 507, 508, 509, 582, 586, 655, 659, 686, 434, 495, 497, 299, 498, 499, 500, 501, 502, 493, 692, 776, 496, 785, 777, 786, 780, 783, 505, 654, 660, 661, 663, 664, 665, 668, 693, 694, 713, 716, 781, 779, 784, 782, 787, 893, 1115, 1114, 778, 669 and 788, all of the Tala Estate. Other lots included therein are Lot 890-B of Psd 36854, Lot 2 of (LRC) Pcs 12892 and Lot 3 of (LRC) Pcs 12892. Thus, respondents' allegation that Lots 661, 664, 665, 693 and 694 of the Tala Estate were not included in TCT No. 200519 was not true. On December 28, 1993, then defendants Spouses Jaime and Rosario Tabangcura (Spouses Tabangcura) filed their Answer 20 with Counterclaim, claiming that they were buyers in good faith and for value when they bought a house and lot covered by TCT No. 211095 from B.C. Regalado, the latter being a subdivision developer and registered owner thereof, on June 30, 1986. When respondent Abogado Mautin entered and occupied the property, Spouses Tabangcura filed a case for Recovery of Property before the RTC, Quezon City, Branch 97 which rendered a decision21 in their favor. On its part, DBT, traversing the complaint, alleged that it is the legitimate owner and occupant of the subject property pursuant to a dacion en pago executed by B.C. Regalado in the formers favor; that respondents were not real parties-in-interests because Ricaredo was a mere claimant whose rights over the property had yet to be determined by the RTC where he filed his application for registration; that the other respondents did not allege matters or invoke rights which would entitle them to the relief prayed for in their complaint; that the complaint was premature; and that the action inflicted a chilling effect on the lot buyers of DBT.22 The RTC's Rulings On June 15, 2000, the RTC through Judge Marciano I. Bacalla (Judge Bacalla), rendered a Decision23 in favor of the respondents. The RTC held that the testimony of Ricaredo that he occupied the subject property since 1936 when he was only 16 years old had not been rebutted; that Ricaredo's occupation and cultivation of the subject property for more than thirty (30) years in the concept of an owner vested in him equitable ownership over the same by virtue of an approved plan, Psu

123169; that the subject property was declared under the name of Ricaredo for taxation purposes;24 and that the subject property per survey should not have been included in TCT No. 200519, registered in the name of B.C. Regalado and ceded to DBT. The RTC further held that Spouses Tabangcura failed to present satisfactory evidence to prove their claim. Thus, the RTC disposed of the case in this wise: WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered declaring Certificate of Title No. 200519 and all titles derived thereat as null and void insofar as the same embrace the land covered by Plan PSU-123169 with an area of 240,146 square meters in the name of Ricaredo Panes; ordering defendant DBT Marbay Realty, Inc. to pay plaintiff Ricaredo Panes the sum of TWENTY THOUSAND (P20,000) pesos as attorneys fees plus costs of suit. SO ORDERED. On September 12, 2000, DBT filed a Motion25 for Reconsideration, based on the grounds of prescription and laches. DBT also disputed Ricaredos claim of open, adverse, and continuous possession of the subject property for more than thirty (30) years, and asserted that the subject property could not be acquired by prescription or adverse possession because it is covered by TCT No. 200519. While the said Motion for Reconsideration was pending, Judge Bacalla passed away. Meanwhile, on January 2, 2001, a Motion26 for Intervention and a Complaint in Intervention were filed by Atty. Andres B. Pulumbarit (Atty. Pulumbarit), representing the Don Pedro/Don Jose de Ocampo Estate. The intervenor alleged that the subject property formed part of the vast tract of land with an area of 117,000 hectares, covered by Original Certificate of Title (OCT) No. 779 issued by the Honorable Norberto Romualdez on March 14, 1913 under Decree No. 10139, which belongs to the Estate of Don Pedro/Don Jose de Ocampo. Thus, the Complaint27 in Intervention prayed that the RTCs Decision be reconsidered; that the legitimacy and superiority of OCT 779 be upheld; and that the subject property be declared as belonging to the Estate of Don Pedro/Don Jose de Ocampo. In its Order28 dated March 13, 2001, the RTC, through Acting Judge Modesto C. Juanson (Judge Juanson), denied Atty. Pulumbarits Motion for Intervention because a judgment had already been rendered pursuant to Section 2,29 Rule 19 of the 1997 Rules of Civil Procedure. On April 10, 2001, the RTC issued an Order30 stating that there appeared to be a need for a clarificatory hearing before it could act on DBT's Motion for Reconsideration. Thus, a hearing was held on May 17, 2001. Thereafter, supplemental memoranda were required of the parties. 31 Both parties complied.32 However, having found that the original copy of TCT No. 200519 was not submitted to it for comparison with the photocopy thereof on file, the RTC directed DBT to present the original or certified true copy of the TCT on August 21, 2001. 33 Respondents moved to reconsider the said directive34 but the same was denied.35 DBT, on the other hand, manifested that a copy of TCT No. 200519, consisting of 17 pages, had already been admitted in evidence; and that because of the fire in the Office of the RD in Quezon City sometime in 1988, DBT, despite diligent effort, could not secure an original or certified true copy of said TCT. Instead, DBT submitted a certified true copy of Consolidated Subdivision Plan Pcs 18345.36 On November 8, 2001, the RTC, through Judge Juanson, issued an Order37 reversing the earlier RTC Decision and dismissing the Complaint for lack of merit. The RTC held that prescription does not run against registered land; hence, a title once registered cannot be defeated even by adverse, open or notorious possession. Moreover, the RTC opined that even if the subject property could be acquired by prescription, respondents' action was already barred by prescription and/or laches because they never asserted their rights when B.C. Regalado registered the subject property in 1974; and later developed, subdivided and sold the same to individual lot buyers. On December 18, 2001, respondents filed a Motion for Reconsideration38 which the RTC denied in its Order39dated June 17, 2002. Aggrieved, respondents appealed to the CA.40 The CA's Ruling On October 25, 2004, the CA reversed and set aside the RTC Orders dated November 8, 2001 and June 17, 2002 and reinstated the RTC Decision dated June 15, 2000. The CA held that the properties described and included in TCT No. 200519 are located in San Francisco del Monte, San Juan del Monte, Rizal and Cubao, Quezon City while the subject property is located in Brgy. Pasong Putik, Novaliches, Quezon City. Furthermore, the CA held that Engr. Vertudazo's testimony that there is a gap of around 1,250 meters between Lot 503 and Psu 123169 was not disproved or refuted. The CA found that Judge Juanson committed a procedural infraction when he entertained issues and admitted evidence presented by DBT in its Motion for Reconsideration which were never raised in the pleadings and proceedings prior to the rendition of the RTC Decision. The CA opined that DBT's claims of laches and prescription clearly appeared to be an afterthought. Lastly, the CA held that DBT's Motion for Reconsideration was not based on grounds enumerated in the Rules of Procedure.41 Petitioner filed a Motion for Reconsideration,42 which was, however, denied by the CA in its Resolution43 dated February 22, 2005. Hence, this Petition. The Issues Petitioner raises the following as grounds for this Petition: I. PETITIONER'S FAILURE TO ALLEGE PRESCRIPTION IN ITS ANSWER IS NOT A WAIVER OF SUCH DEFENSE. II. IT IS NOT ERRONEOUS TO REQUIRE THE PRODUCTION OF A CERTIFIED TRUE COPY OF TCT NO. 200519 AFTER THE DECISION ON THE MERITS HAS BEEN RENDERED BUT BEFORE IT BECAME FINAL. III. A REGISTERED LAND CAN NOT BE ACQUIRED BY ACQUISITIVE PRESCRIPTION. IV. THE TESTIMONY OF ENGR. VERTUDAZO ON THE BASIS OF THE TECHNICAL DESCRIPTION OF LOT 503 IN AN INCOMPLETE DOCUMENT IS UNRELIABLE. V. MR. PANES HAS NEVER BEEN IN OPEN, ADVERSE AND CONTINUOUS POSSESSION OF THE SUBJECT PROPERTY FOR MORE THAN THIRTY (30) YEARS.44 Distilled from the petition and the responsive pleadings, and culled from the arguments of the parties, the issues may be reduced to two questions, namely: 1) Did the RTC err in upholding DBT's defenses of prescription and laches as raised in the latter's Motion for Reconsideration? 2) Which between DBT and the respondents have a better right over the subject property? Our Ruling We answer the first question in the affirmative. It is true that in Dino v. Court of Appeals45 we ruled: (T)rial courts have authority and discretion to dismiss an action on the ground of prescription when the parties' pleadings or other facts on record show it to be indeed time-barred; (Francisco v. Robles, Feb. 15, 1954; Sison v. McQuaid, 50 O.G. 97; Bambao v. Lednicky, Jan. 28, 1961; Cordova v. Cordova, Jan. 14, 1958; Convets, Inc. v. NDC, Feb. 28, 1958; 32 SCRA 529; Sinaon v. Sorongan, 136 SCRA 408); and it may do so on the basis of a motion to dismiss (Sec. 1, [f] Rule 16, Rules of Court), or an answer which sets up such ground as an affirmative defense (Sec. 5, Rule 16), or even if the ground is alleged after judgment on the merits, as in a motion for reconsideration (Ferrer v. Ericta, 84 SCRA 705); or even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings (Garcia v. Mathis, 100 SCRA 250; PNB v. Pacific Commission House, 27 SCRA 766; Chua Lamco v. Dioso, et al., 97 Phil. 821); or where a defendant has been declared in default (PNB v. Perez; 16 SCRA 270). What is essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period be otherwise sufficiently and satisfactorily apparent on the record; either in the averments of the plaintiff's complaint, or otherwise established by the evidence. (Emphasis supplied) Indeed, one of the inherent powers of courts is to amend and control its processes so as to make them conformable to law and justice. This includes the right to reverse itself, especially when in its opinion it has committed an error or mistake in judgment, and adherence to its decision would cause injustice.46 Thus, the RTC in its Order dated November 8, 2001 could validly entertain the defenses of prescription and laches in DBT's motion for reconsideration. However, the conclusion reached by the RTC in its assailed Order was erroneous. The RTC failed to consider that the action filed before it was not simply for reconveyance but an action for quieting of title which is imprescriptible. Verily, an action for reconveyance can be barred by prescription. When an action for reconveyance is based on fraud, it must be filed within four (4) years from discovery of the fraud, and such discovery is deemed to have taken place from the issuance of the original certificate of title. On the other hand, an action for reconveyance based on an implied or constructive trust prescribes in ten (10) years from the date of the issuance of the original certificate of title or transfer certificate of title. The rule is that the registration of an instrument in the Office of the RD constitutes constructive notice to the whole world and therefore the discovery of the fraud is deemed to have taken place at the time of registration.47lavvphil However, the prescriptive period applies only if there is an actual need to reconvey the property as when the plaintiff is not in possession of the property. If the plaintiff, as the real owner of the property also remains in possession of the property, the prescriptive period to recover title and possession of the property does not run against him. In such a case, an action for reconveyance, if nonetheless filed, would be in the nature of a suit for quieting of title, an action that is imprescriptible.48 Thus, in Vda. de Gualberto v. Go,49 this Court held: [A]n action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property, but this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, as the defendants are in the instant case, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. Insofar as Ricaredo and his son, Angelito, are concerned, they established in their testimonies that, for some time, they possessed the subject property and that Angelito bought a house within the subject property in 1987.50Thus, the respondents are proper parties to bring an action for quieting of title because persons having legal, as well as equitable, title to or interest in a real property may bring such action, and "title" here does not necessarily denote a certificate of title issued in favor of the person filing the suit.51

Although prescription and laches are distinct concepts, we have held, nonetheless, that in some instances, the doctrine of laches is inapplicable where the action was filed within the prescriptive period provided by law. Therefore, laches will not apply to this case, because respondents' possession of the subject property has rendered their right to bring an action for quieting of title imprescriptible and, hence, not barred by laches. Moreover, since laches is a creation of equity, acts or conduct alleged to constitute the same must be intentional and unequivocal so as to avoid injustice. Laches will operate not really to penalize neglect or sleeping on one's rights, but rather to avoid recognizing a right when to do so would result in a clearly inequitable situation. 52 Albeit the conclusion of the RTC in its Order dated November 8, 2001, which dismissed respondents' complaint on grounds of prescription and laches, may have been erroneous, we, nevertheless, resolve the second question in favor of DBT. It is a well-entrenched rule in this jurisdiction that no title to registered land in derogation of the rights of the registered owner shall be acquired by prescription or adverse possession.53 Article 112654 of the Civil Code in connection with Section 4655 of Act No. 496 (The Land Registration Act), as amended by Section 4756 of P.D. No. 1529 (The Property Registration Decree), clearly supports this rule. Prescription is unavailing not only against the registered owner but also against his hereditary successors. Possession is a mere consequence of ownership where land has been registered under the Torrens system, the efficacy and integrity of which must be protected. Prescription is rightly regarded as a statute of repose whose objective is to suppress fraudulent and stale claims from springing up at great distances of time and surprising the parties or their representatives when the facts have become obscure from the lapse of time or the defective memory or death or removal of witnesses.57 Thus, respondents' claim of acquisitive prescription over the subject property is baseless. Under Article 1126 of the Civil Code, acquisitive prescription of ownership of lands registered under the Land Registration Act shall be governed by special laws. Correlatively, Act No. 496, as amended by PD No. 1529, provides that no title to registered land in derogation of that of the registered owner shall be acquired by adverse possession. Consequently, in the instant case, proof of possession by the respondents is immaterial and inconsequential.58 Moreover, it may be stressed that there was no ample proof that DBT participated in the alleged fraud. While factual issues are admittedly not within the province of this Court, as it is not a trier of facts and is not required to re-examine or contrast the oral and documentary evidence anew, we have the authority to review and, in proper cases, reverse the factual findings of lower courts when the findings of fact of the trial court are in conflict with those of the appellate court. 59 In this regard, we reviewed the records of this case and found no clear evidence that DBT participated in the fraudulent scheme. In Republic v. Court of Appeals,60 this Court gave due importance to the fact that the private respondent therein did not participate in the fraud averred. We accord the same benefit to DBT in this case. To add, DBT is an innocent purchaser for value and good faith which, through a dacion en pago duly entered into with B.C. Regalado, acquired ownership over the subject property, and whose rights must be protected under Section 3261 of P.D. No. 1529. Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation. It is a special mode of payment where the debtor offers another thing to the creditor, who accepts it as an equivalent of the payment of an outstanding debt. In its modern concept, what actually takes place in dacion en pago is an objective novation of the obligation where the thing offered as an accepted equivalent of the performance of an obligation is considered as the object of the contract of sale, while the debt is considered as the purchase price.62 It must also be noted that portions of the subject property had already been sold to third persons who, like DBT, are innocent purchasers in good faith and for value, relying on the certificates of title shown to them, and who had no knowledge of any defect in the title of the vendor, or of facts sufficient to induce a reasonably prudent man to inquire into the status of the subject property.63 To disregard these circumstances simply on the basis of alleged continuous and adverse possession of respondents would not only be inimical to the rights of the aforementioned titleholders, but would ultimately wreak havoc on the stability of the Torrens system of registration. A final note. While the Torrens system is not a mode of acquiring title, but merely a system of registration of titles to lands, justice and equity demand that the titleholder should not be made to bear the unfavorable effect of the mistake or negligence of the State's agents, in the absence of proof of his complicity in a fraud or of manifest damage to third persons. The real purpose of the Torrens system is to quiet title to land and put a stop forever to any question as to the legality of the title, except claims that were noted in the certificate at the time of the registration or that may arise subsequent thereto. Otherwise, the integrity of the Torrens system would forever be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily presumed to have regularly performed their duties.64 Thus, where innocent third persons, relying on the correctness of the certificate of title thus issued, acquire rights over the property, the court cannot disregard those rights and order the cancellation of the certificate. The effect of such outright cancellation will be to impair public confidence in the certificate of title. The sanctity of the Torrens system must be preserved; otherwise, everyone dealing with the property registered under the system will have to inquire in every instance on whether the title had been regularly or irregularly issued, contrary to the evident purpose of the law. Every person dealing with the registered land may safely rely on the correctness of the certificate of title issued therefor, and the law will in no way oblige him to go behind the certificate to determine the condition of the property.65 WHEREFORE, the instant Petition is GRANTED and the assailed Court of Appeals Decision dated October 25, 2004 is hereby REVERSED and SET ASIDE. A new judgment is hereby entered DISMISSING the Complaint filed by the respondents for lack of merit. SO ORDERED. G.R. No. 156357 February 18, 2005 ENGR. GABRIEL V. LEYSON, DR. JOSEFINA L. POBLETE, FE LEYSON QUA, CARIDAD V. LEYSON and ESPERANZA V. LEYSON, petitioners, vs. NACIANSINO BONTUYAN and MAURECIA B. BONTUYAN, respondents. DECISION CALLEJO, SR., J.: This is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA), as well as its Resolution in CA-G.R. CV No. 64471 denying the motion for reconsideration of the said decision. The Antecedents Calixto Gabud was the owner of a parcel of land located in Barangay Adlawon, Mabolo, Cebu City, which was declared for taxation purposes under Tax Declaration (T.D.) No. 03276-R in 19452 with the following boundaries: North Calixto Gabud East Marcelo Cosido South Pedro Bontuyan West Asuncion Adulfo.3 Because of the construction of a provincial road, the property was divided into two parcels of land covered by T.D. No. 03276-R and T.D. No. 01979-R. On February 14, 1948, Gabud executed a Deed of Absolute Sale4 over the property covered by T.D. No. 03276-R, as well as the other lot covered by T.D. No. 01979-R, in favor of Protacio Tabal, married to Leodegaria Bontuyan. On the basis of the said deed, T.D. No. 03276-R was cancelled by T.D. No. 13615-R in the name of Protacio Tabal effective 1949.5 On January 5, 1959, Tabal executed a Deed of Sale6over the property covered by T.D. No. 13615-R in favor of Simeon Noval, married to Vivencia Bontuyan, daughter of Gregorio Bontuyan, for P800.00. T.D. No. 13615-R was cancelled by T.D. No. 100356 in the names of the spouses Noval.7 Gregorio Bontuyan received a copy of the said tax declaration in behalf of the spouses Noval.8The latter tax declaration was then cancelled by T.D. No. 008876 under the same names effective 1967.9 Subsequently, the property was surveyed by Cadastral Land Surveyor Mauro U. Gabriel on January 22, 1964. The plan survey was approved on September 30, 1966.10 The property covered by T.D. No. 008876 was identified as Lot No. 17150 of Cebu Cadastre No. 12, while the property covered by T.D. No. 01979-R was identified as Lot No. 13272. On May 22, 1968, the spouses Noval executed a Deed of Absolute Sale11 over the two lots covered by T.D. No. 008876 in favor of Lourdes V. Leyson for P4,000.00. Lourdes Leyson took possession of the property and had it fenced. Despite the said sale, T.D. No. 008876 was cancelled by T.D. No. 21267 effective 1974.12Thereafter, T.D. No. 21267 was cancelled by T.D. No. 2382113 which, in turn, was cancelled by T.D. No. 01-17455 effective 1980.14 In 1989, the latter was cancelled by a new tax declaration, T.D. No. 01-001-00646. All these tax declarations were in the names of the spouses Noval.15 Meanwhile, Lourdes Leyson paid for the realty taxes over the property. However, the tax declaration issued thereon continued to be under the names of the spouses Noval.16 Despite his knowledge that the property had been purchased by his son-in-law and daughter, the spouses Noval, Gregorio Bontuyan, who was then 91 years old, filed an application with the Bureau of Lands for a free patent over Lot No. 17150 on December 4, 1968. He alleged therein that the property was public land and was neither claimed nor occupied by any person,17 and that he first entered upon and began cultivating the same in 1918. Thus, on November 19, 1971, Free Patent No. 510463 was issued over Lot No. 17150 in his favor, on the basis of which Original Certificate of Title (OCT) No. 0-1619 was issued to and under his name on March 21, 1974.18 Another parcel of land, Lot No. 13272, was also registered under the name of Gregorio Bontuyan under OCT No. 0-1618. He then declared Lot No. 17150 for taxation purposes under T.D. No. 13596 effective 1974.19 On February 20, 1976, Gregorio Bontuyan executed a Deed of Absolute Sale20 over Lot No. 17150 in favor of his son, Naciansino Bontuyan. On April 28, 1980, Gregorio Bontuyan, then 103 years old, executed another Deed of Absolute Sale21 over Lot Nos. 13272 and 17150, covered by OCT No. 0-1618 and OCT No. 0-1619, respectively, in favor of Naciansino Bontuyan for P3,000.00. On the basis of the said deed, OCT No. 0-1619 was cancelled by TCT No. 1392 in the name of Naciansino Bontuyan on December 2, 1980.22 Gregorio Bontuyan died intestate on April 12, 1981.23 On March 30, 1981, the spouses Bontuyan executed a Real Estate Mortgage over Lot No. 17150 covered by OCT No. 0-1619 in favor of the Development Bank of the Philippines (DBP) as security for a loan of P11,200.00.24Naciansino Bontuyan had earlier executed an affidavit that the property was not tenanted. Shortly thereafter, the spouses Bontuyan left the Philippines and resided in the United States. Meanwhile, Lourdes Leyson died intestate. The spouses Bontuyan returned to the Philippines in 1988 to redeem the property from DBP only to discover that there were tenants living on the property installed by Engineer Gabriel Leyson, one of the late Lourdes Leysons children. Despite being informed that the said spouses owned the property, the tenants refused to vacate the same. The tenants also refused to deliver to the spouses the produce from the property. The spouses Bontuyan redeemed the property from DBP on September 22, 1989.

On February 12, 1993, Jose Bontuyan, Nieves Atilano, Pacifico Bontuyan, Vivencia Noval and Naciansino Bontuyan, the surviving heirs of Gregorio Bontuyan, executed an Extrajudicial Settlement25 of the latters estate and adjudicated Lot No. 13272 in favor of Naciansino. Based on the said deed, T.D. No. 01-001-00877 was issued to and under the name of Naciansino over the said property starting 1994. On June 24, 1993, Naciansino Bontuyan, through counsel, wrote Engr. Gabriel Leyson, demanding that he be furnished with all the documents evidencing his ownership over the two lots, Lots Nos. 17150 and 13272.26 Engr. Leyson ignored the letter. The spouses Bontuyan, thereafter, filed a complaint against Engr. Leyson in the Regional Trial Court (RTC) of Cebu City for quieting of title and damages. They alleged that they were the lawful owners of the two lots and when they discovered, upon their return from the United States, that the property was occupied and cultivated by the tenants of Engr. Leyson, they demanded the production of documents evidencing the latters ownership of the property, which was ignored. The spouses Bontuyan prayed that, after due proceedings, judgment be rendered in their favor, thus: WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court to render judgment against the defendant and in favor of the plaintiffs, to wit: (a) Confirming the ownership of the plaintiffs on the lots in question; (b) Ordering defendant to pay the plaintiffs the amount of Twenty Thousand Pesos (P20,000.00) as the share of the plaintiffs of the produce of the lots in question; (c) Ordering defendant to pay plaintiffs the sum of P50,000.00 as reimbursement of attorneys fees and the further sum of P500.00 as appearance fee every time the case is called for trial; (d) Ordering the defendant to pay plaintiffs the sum of P50,000.00 as moral damages and exemplary damages may be fixed by the court; (e) Ordering defendant to pay plaintiffs the sum of P5,000.00 as actual expenses for the preparation and filing of the complaint; (f) Ordering defendant to pay the costs; and (g) Granting to plaintiffs such other reliefs and remedies just and equitable in the premises.27 In his answer to the complaint, Engr. Leyson averred, by way of affirmative defenses, that the two lots were but portions of a parcel of land owned by Calixto Gabud, covered by T.D. No. 03276-R, and was subdivided into two parcels of land because of the construction of a provincial road on the property; Gabud later sold the two lots to Protacio Tabal, who sold the same to Simeon Noval, married to Vivencia Bontuyan, one of the children of Gregorio Bontuyan; Simeon Noval later sold the property to Lourdes Leyson on May 22, 1968 who, forthwith, took possession thereof as owner; and Gregorio Bontuyan was issued a free patent over the property through fraud. Engr. Leyson concluded that the said patent, as well as OCT No. 0-1619 and TCT No. 1392, were null and void and that the plaintiffs acquired no title over the property. Engr. Leyson interposed a counterclaim against the spouses Bontuyan and repleaded as an integral part thereof all the material allegations in his affirmative defense. He prayed that, after due proceedings, judgment be rendered in his favor, thus: a) Dismissing Plaintiffs complaint for failure to include indispensable parties; b) Declaring the Defendant and his four (4) sisters, namely, Dr. Josefina L. Poblete, Mrs. Fe L. Qua, Esperanza Leyson and Caridad Leyson as the true and legal owners and possessors of the parcels of land in issue; c) Declaring OCT No. 0-1619 in the name of Gregorio Bontuyan and TCT No. 1392 in the name of Naciansino Bontuyan null and void and to order the Register of Deeds to cancel the same and issue new ones in favor of the Defendant Gabriel V. Leyson and his four (4) sisters, namely: Dr. Josefina L. Poblete, Mrs. Fe L. Qua, Esperanza V. Leyson and Caridad V. Leyson; d) And on the Counterclaim, to order Plaintiffs to pay the Defendant the following sums: d-1) P50,000.00 as attorneys fees and appearance fee of P1,000.00 per hearing; d-2) P500,000.00 as moral damages; d-3) P20,000.00 as exemplary damages; d-4) P10,000.00 as expenses of litigation. Defendant further prays for such other reliefs just and equitable in the premises.28 In due course, the other children of Lourdes Leyson, namely, Dr. Josefina L. Poblete, Fe Leyson Qua, Caridad V. Leyson and Esperanza V. Leyson, were allowed to intervene as defendants. They filed their answer-in-intervention wherein they adopted, in their counterclaim, paragraphs 7 to 26 of the answer of their brother, Engr. Leyson, the original defendant. They prayed that, after due hearing, judgment be rendered in their favor as follows: Wherefore, this Honorable Court is prayed to render judgment in favor of the Defendant and the Defendants-in-Intervention and against the Plaintiffs as follows: a) Promissory Plaintiffs complaint for failure to include indispensable parties and for lack of cause of action; b) Declaring the Defendant and his four (4) sisters, namely: Dr. Josefina L. Poblete; Mrs. Fe L. Qua, Esperanza Leyson and Caridad Leyson as the true and legal owners and possessors of the parcels of land in issue; c) Declaring OCT No. 0-1619 in the name of Gregorio Bontuyan and TCT No. 1392 in the name of Naciansino Bontuyan null and void and to order the Register of Deeds to cancel the same and issue new ones in favor of the Defendant Gabriel V. Leyson and his four (4) sisters, namely: Dr. Josefina L. Poblete, Mrs. Fe L. Qua, Esperanza V. Leyson and Caridad V. Leyson; d) On the Counterclaim, Plaintiffs should pay the Defendants the following sums: d-1) P50,000.00 as attorneys fees and appearance fee of P1,000.00 per hearing; d-2) P500,000.00 as moral damages to each Intervenor; d-3) P50,000.00 as exemplary damages; d-4) P15,000.00 as expenses of litigation. Defendant further prays for such other reliefs just and equitable in the premises.29 In their reply, the spouses Bontuyan averred that the counterclaim of the defendants for the nullity of TCT No. 1392 and the reconveyance of the property was barred by laches and prescription. On January 21, 1999, the trial court rendered judgment in favor of the Leyson heirs and against the spouses Bontuyan. The fallo of the decision reads: WHEREFORE, foregoing considered judgment is hereby rendered dismissing plaintiffs complaint for dearth of evidence declaring the defendant and the intervenors as the true and legal owners and possessors of the subject parcels of land; declaring OCT No. 0-1619 in the name of Gregorio Bontuyan and TCT No. 1392 in the name of Naciansino Bontuyan null and void; ordering the Register of Deeds to cancel OCT No. 0-1619 and TCT No. 1392 and issue new ones in favor of defendant Gabriel Leyson and intervenors Josefina Poblete, Fe Qua, Esperanza Leyson and Caridad Leyson; ordering plaintiff to pay defendant and intervenors the following: a) P50,000.00 attorneys fees; b) 1,000.00 per appearance; c) 100,000.00 moral damages for defendant and intervenors; d) 10,000.00 exemplary damages; and e) 10,000.00 litigation expenses. SO ORDERED.30 The trial court held that Simeon Noval had sold the lots to Lourdes Leyson on May 22, 1968, who thus acquired title over the property. The spouses Bontuyan appealed the decision to the CA which affirmed, with modification, the decision of the RTC. The appellate court held that the Leyson heirs were the owners of Lot No. 13273, while the spouses Bontuyan were the owners of Lot No. 17150. The CA ruled that the answer of the Leyson heirs to the complaint constituted a collateral attack of OCT No. 0-1619 which was proscribed by law. The Leyson heirs filed a motion for reconsideration of the decision insofar as Lot No. 17150 was concerned, contending that their counterclaim for the nullification of OCT No. 0-1619 contained in their answer constituted a direct attack on the said title. The CA denied the motion. The Leyson heirs then filed a petition for review with this Court and made the following assignments of error: First Assignment of Error THE HONORABLE COURT OF APPEALS COMMITTED ERROR WHEN IT RULED THAT THE NULLITY OR THE VALIDITY OF OCT NO. 0-1619 CANNOT BE RULED UPON IN THESE PROCEEDINGS BROUGHT BY THE RESPONDENTS FOR THE QUIETING OF THEIR TITLE. Second Assignment of Error THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT PETITIONERS ANSWER WITH COUNTERCLAIM, PRAYING FOR THE CANCELLATION OF PLAINTIFFS TORRENS CERTIFICATE IS A MERE COLLATERAL ATTACK ON THE TITLE. 31 Third Assignment of Error THE APPELLATE COURT GRAVELY ERRED WHEN IT MODIFIED THE DECISION OF THE REGIONAL TRIAL COURT DATED JANUARY 21, 1999 BY RULING THAT PETITIONERS ARE DECLARED THE OWNERS OF LOT 13273 BUT RESPONDENTS ARE DECLARED THE OWNERS OF LOT 17150 UNDER OCT NO. 0-1619 AND PRESENTLY COVERED BY TCT NO. 1392 IN THE NAME OF NACIANSINO BONTUYAN, DESPITE THE APPELLATE COURTS AFFIRMING THE FINDINGS OF THE TRIAL COURT THAT FRAUD WAS COMMITTED BY GREGORIO BONTUYAN (RESPONDENTS PREDECESSOR-IN-INTEREST) IN ACQUIRING TITLE OVER THE SUBJECT PROPERTIES.32 Fourth Assignment of Error THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT RECONVEYANCE OF TITLE OF LOT 17150 COVERED BY OCT NO. 0-1619 AND PRESENTLY COVERED BY TCT NO. 1392, IN FAVOR OF PETITIONERS HAD PRESCRIBED.33 Fifth Assignment of Error THE APPELLATE COURT GRAVELY ERRED IN NOT GRANTING ATTORNEYS FEES AND APPEARANCE FEES DESPITE RESPONDENTS FRAUD IN ACQUIRING TITLE OVER THE SUBJECT PROPERTIES.34 On the first two assignments of errors, the petitioners aver that the counterclaim in their answer to the complaint constituted a direct attack of the validity of OCT No. 0-1619. They maintain that the appellate courts reliance on the ruling of this Court in Cimafrancia v. Intermediate Appellate Court35 was misplaced. They assert that what is controlling is the ruling in Pro Line Sports Center, Inc. v. Court of Appeals36 wherein this Court held that the counterclaim of the petitioners therein

constituted a direct attack on a certificate of title. The petitioners, likewise, cited Section 55 of Act No. 496, as amended, to buttress their stance. They plead that their answer to the complaint should be liberally construed so as to afford them substantial justice. On the other hand, the respondents assert that the decision of the CA is correct. They claim that Lot No. 17150 was still public land when Lourdes Leyson purchased the same from Simeon Noval, and that the property became private land only when Free Patent No. 510463 was issued to and under the name of Gregorio Bontuyan. We agree with the contention of the petitioners that the CA erred in not nullifying OCT No. 0-1619 and TCT No. 1392 and ordering the respondents to reconvey the property covered by the said title to the petitioners. The respondents, as plaintiffs in the court a quo, were burdened to prove their claim in their complaint that Gregorio Bontuyan was the owner of Lot No. 17150 and that they acquired the property in good faith and for valuable consideration from him.37 However, the respondents failed to discharge this burden. The evidence on record shows that Calixto Gabud sold the property to Protacio Tabal on February 14, 1948,38 and that the latter sold the property to Simeon Noval on January 5, 1959.39 Simeon Noval then sold the property to Lourdes Leyson on May 22, 1968. 40 The respondents failed to adduce any evidence to prove that Lourdes Leyson, or even Simeon Noval, sold the property to Gregorio Bontuyan, or to any of the respondents for that matter. Since Gregorio Bontuyan was not the owner of the property, he could not have sold the same to his son Naciansino Bontuyan and the latters wife, the respondents herein. As the Latin adage goes: NEMO DAT QUOD NON HABET. Gregorio Bontuyan could not feign ignorance of Simeon Novals ownership of the property, considering that the latter was his son-in-law, and that he (Gregorio Bontuyan) was the one who received the owners copy of T.D. No. 100356 covering the property under the name of Simeon Noval. 41 At the dorsal portion of the said tax declaration, there was even an annotation that the property was transferred to Simeon Noval as shown by the deed of sale executed before Notary Public Gregorio A. Uriarte who notarized the deed of sale over the property executed by Protacio Tabal in favor of Simeon Noval on January 5, 1959.42 We note that the respondents failed to adduce in evidence any receipts of real property tax payments made on the property under their names, which would have fortified their claim that they were the owners of the property. We agree with the findings of the CA, thus: This case involves two parcels of land Lot 17150 and Lot 13273. Lot 17150 is registered under the Torrens System under the names of plaintiffs-appellants, while Lot 13273 remained to be unregistered. In this case, records show that defendant-appellee and intervenors-appellees are the true owners of the subject lots. They have in their favor tax receipts covering the subject lots issued since 1945. While, indeed, tax receipts and declarations are not incontrovertible evidence of ownership, such, however, if accompanied with open, adverse, continuous possession in the concept of an owner, as in this case, constitute evidence of great weight that person under whose name the real taxes were declared has a claim of right over the land. Further, defendant-appellee and intervenors-appellees presented before the trial court the Deed of Absolute Sale dated February 14, 1948, executed by Calixto Gabud, conveying the subject lots in favor of Protacio Tabal. The deed is a notarial document. Likewise presented is the Deed of Absolute Sale of the subject lots dated January 5, 1959, executed by Protacio Tabal in favor of spouses Simeon Noval and Vivencia Bontuyan. The document is, likewise, a notarial document. Defendant-appellee and intervenors-appellees also presented the Deed of Absolute Sale of the subject lots dated May 22, 1968, executed by spouses Simeon Noval and Vivencia Bontuyan in favor of Lourdes Leyson. The deed is a notarial document. A notarial document is evidence of the facts in clear, unequivocal manner therein expressed. It has in its favor the presumption of regularity. It is admissible in evidence without necessity of preliminary proof as to its authenticity and due execution. There exist (sic) no trace of irregularity in the transfers of ownership from the original owner, Calixto Gabud, to defendant-appellee and intervenors-appellees. Plaintiffs-appellants, on the other hand, offered no convincing evidence as to how their predecessor-in-interest, Gregorio Bontuyan, acquired the subject lots. Plaintiffs-appellants presented only the Free Patent and OCT No. 0-1619, covering Lot No. 17150, issued in the name of Gregorio Bontuyan. As to Lot No. 13273, We find no sufficient reason why defendant-appellee and intervenors-appellees should be disturbed in their ownership and possession of the same.43 As copiously shown by the record, Gregorio Bontuyan filed his application for a free patent with the Bureau of Lands on December 4, 1968 in gross bad faith, thereby defrauding Lourdes Leyson of the said property through deceit. Gregorio Bontuyan falsely declared in the said application: (a) that he entered upon and cultivated the property since 1918 and that the property was not claimed or occupied by any person; and (b) that Lot No. 17150 was located in Sirao, Cebu City, when, in fact, the property was located in Adlawon, Cebu City. Lourdes Leyson was not notified of the said application and failed to file any opposition thereto. Gregorio Bontuyan was then able to secure Free Patent No. 510463 on November 19, 1971 and OCT No. 0-1619 on March 21, 1974. It appears in the said title that the propertys location was indicated as "Sirao, Cebu City."44 Indeed, the CA declared that Gregorio Bontuyan had acquired title to the property through fraud: However, as to Lot No. 17150, We find that despite the fraud committed by Gregorio Bontuyan (plaintiffs-appellants predecessor-in-interest) in acquiring his title over the said lot, ownership over the said lot should be adjudged in favor of plaintiffs-appellants. Records, indeed, show that, at the time when Gregorio Bontuyan applied for Free Patent, Gregorio Bontuyan was living with his daughter, Vivencia Bontuyan (defendant-appellees predecessor-in-interest). Thus, Gregorio Bontuyan must have known that at the time when he applied for free patent on December 1968, the subject lots were already sold on May 1968 by his daughter Vivencia Bontuyan in favor of Lourdes Leyson, predecessor-in-interest of defendants-appellees. Moreover, records further show that Gregorio Bontuyan sold twice Lot [No.] 17150 to plaintiffs-appellants. The first was in 1976 and the other was in 1980. Plaintiffsappellants offered no reasonable explanation why Gregorio Bontuyan have (sic) to sell twice Lot No. 17150 in favor of plaintiffs-appellants. As found by the trial court, these are badges of bad faith which affect the validity of the title of Gregorio Bontuyan over the subject lots. We are aware that the torrens system does not create or vest title. It only confirms and records title already existing and vested. It does not protect a usurper from the true owner. It cannot be a shield for the commission of fraud. It does not permit one to enrich himself at the expense of another. Where one does not have any rightful claim over a real property, the torrens system of registration can confirm or record nothing.45 The findings of the CA affirmed the findings of the trial court in its decision, thus: After having thoroughly analyzed the records and the evidences adduced during the trial of this case, this Court is convinced and sincerely believes that the lots in question were originally owned by Calixto Gabud as evidenced by T.D. [No.] 03276R marked as Exh. "1." In 1945, this consisted of only one lot in Adlawon, Cebu City, as there was no provincial road yet. However in 1948, the said parcel of land was divided into two because a provincial road was constructed passing through it. Hence, T.D. [No.] 03276R and T.D. [No.] 01979-R were issued to Calixto Gabud. On February 16, 1948, Calixto Gabud sold the said parcels of land to spouses Protacio Tabal and Ludegaria (sic) Bontuyan as evidenced by an Absolute Deed of Sale, Exh. "2." On January 5, 1959, spouses Protacio Tabal and Ludegaria (sic) Bontuyan, in turn, sold the same parcels of land to spouses Simeon Noval and Vivencia Bontuyan as evidenced by a Deed of Sale, Exh. "4." It is noteworthy to mention at this point in time that Vivencia Bontuyan is one of the daughters of Gregorio Bontuyan, the father of herein plaintiff Naciansino Bontuyan. In May 1968, spouses Simeon Noval and Vivencia Bontuyan sold the subject parcels of land to Lourdes vs. (sic) Leyson, the mother of herein defendant as evidenced by a Deed of Sale marked as Exh. "6." It is quite perplexing for the court to imagine that Gregorio Bontuyan, father of herein plaintiff, who was then residing with spouses Simeon Noval and Vivencia Bontuyan at 179 C San Jose dela Montaa, Mabolo, Cebu City, as reflected in his application for Free Patent (Exhs. "8" & "26") dated December 4, 1968 was unaware of the sale of the subject parcels of land made by his daughter Vivencia Bontuyan and spouse Simeon Noval to Lourdes Leyson. It is evident that, after the sale from spouses Noval to Lourdes Leyson in May 1968, Gregorio Bontuyan applied for Free Patent for the same parcels of land in December 1968 claiming to have cultivated the land since 1918, stating therein the location as Sirao and not Adlawon which is the true and correct location. Sirao and Adlawon are two different barangays which are not even adjacent to each other. In fact, as borne out by Exh. "25," it is separated by Barangay Guba. In 1974, Free Patent No. 510463 and OCT# 0-1619 was issued to Gregorio Bontuyan covering subject property, the location of which is in Barangay Sirao in consonance to his application. Gregorio Bontuyans application for Free Patent over subject parcels of land had raised in the mind of this Court reasonable badges of bad faith on his part as the subject parcels of land were already sold by his daughter Vivencia Bontuyan and spouse Simeon Noval to Lourdes Leyson. Another badge of bad faith is raised in the mind of this Court when he (Gregorio) sold the subject parcels of land twice to his son Naciansino Bontuyan in 1976 and 1980, respectively, wherein both Deeds of Sale were notarized by different Notary Publics, (Exhs. "10" & "16").46 Considering that Lourdes Leyson was in actual possession of the property, the respondents cannot, likewise, claim that they were in good faith when Gregorio Bontuyan allegedly sold the property to them on April 28, 1980.1awphi1.nt Anent the third and fourth assignments of error, we do not agree with the ruling of the CA that the petitioners failed to directly attack the validity of OCT No. 0-1619. The CA failed to consider the fact that, in their respective answers to the complaint, the petitioners inserted therein a counterclaim wherein they repleaded all the material allegations in their affirmative defenses, that Gregorio Bontuyan secured OCT No. 0-1619 through fraud and deceit and prayed for the nullification thereof. While Section 47 of Act No. 496 provides that a certificate of title shall not be subject to collateral attack, the rule is that an action is an attack on a title if its object is to nullify the same, and thus challenge the proceeding pursuant to which the title was decreed.l^vvphi1.net The attack is considered direct when the object of an action is to annul or set aside such proceeding, or enjoin its enforcement. On the other hand, an attack is indirect or collateral when, in an action to obtain a different relief, an attack on the proceeding is nevertheless made as an incident thereof.47 Such action to attack a certificate of title may be an original action or a counterclaim in which a certificate of title is assailed as void. A counterclaim is considered a new suit in which the defendant is the plaintiff and the plaintiff in the complaint becomes the defendant. It stands on the same footing and is to be tested by the same rules as if it were an independent action. 48 Furthermore, since all the essential facts of the case for the determination of the titles validity are now before the Court, to require the party to institute cancellation proceedings would be pointlessly circuitous and against the best interest of justice.49 The CA, likewise, erred in holding that the action of the petitioners to assail OCT No. 0-1619 and TCT No. 1392 and for the reconveyance of the property covered by the said title had already prescribed when they filed their answer to the complaint. Case law has it that an action for reconveyance prescribes in ten years, the point of reference being the date of registration of the deed or the date of issuance of the certificate of title over the property. In an action for reconveyance, the decree of registration is highly regarded as incontrovertible. What is sought instead is the transfer of the property or its title, which has been wrongfully or erroneously registered in another persons name, to its rightful or legal owner, or to one who has a better right.50

However, in a series of cases, this Court declared that an action for reconveyance based on fraud is imprescriptible where the plaintiff is in possession of the property subject of the acts. In Vda. de Cabrera v. Court of Appeals,51 the Court held: ... [A]n action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property, but this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, as the defendants are in the instant case, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. Similarly, in the case of David v. Malay,52 the same pronouncement was reiterated by the Court: ... There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of the court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession. No better situation can be conceived at the moment for Us to apply this rule on equity than that of herein petitioners whose ... possession of the litigated property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these years, was titled in the name of a third person. We hold that in such a situation the right to quiet title to the property, to seek its reconveyance and annul any certificate of title covering it, accrued only from the time the one in possession was made aware of a claim adverse to his own, and it is only then that the statutory period of prescription commences to run against such possessor.1awphi1.nt The paramount reason for this exception is based on the theory that registration proceedings could not be used as a shield for fraud.53 Moreover, to hold otherwise would be to put premium on land-grabbing and transgressing the broader principle in human relations that no person shall unjustly enrich himself at the expense of another.54 In the present case, Lourdes Leyson and, after her death, the petitioners, had been in actual possession of the property. The petitioners were still in possession of the property when they filed their answers to the complaint which contained their counterclaims for the nullification of OCT No. 0-1619 and TCT No. 1392, and for the consequent reconveyance of the property to them. The reconveyance is just and proper in order to put a stop to the unendurable anomaly that the patentees should have a Torrens title for the land which they and their predecessors never possessed and which has been possessed by another in the concept of an owner.55 On the fifth assignment of error, we rule for the petitioners. The award of attorneys and appearance fees is better left to the sound discretion of the trial court, and if such discretion is well exercised, as in this case, it will not be disturbed on appeal. 56 With the trial and the appellate courts findings that the respondents were in bad faith, there is sufficient basis to award attorneys and appearance fees to the petitioners. Had it not been for the filing of a baseless suit by the respondents against the petitioners, the latter would not have sought the services of counsel to defend their interests and represent them in this case.1awphi1.nt IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision of the Court of Appeals declaring the respondents the owners of Lot No. 17150 covered by OCT No. 0-1619 and TCT No. 1392; and setting aside the award of attorneys fees in favor of the petitioners by the Regional Trial Court are REVERSED AND SETASIDE. The Court hereby AFFIRMS the ownership of the petitioners of Lot No. 17150. OCT No. 0-1619 and TCT No. 1392 covering the said lot are hereby nullified. The Register of Deeds is ORDERED to cancel TCT No. 1392 and to issue another title over the property in favor of the petitioners as co-owners thereof. The trial courts award ofP50,000.00 for attorneys fees to the petitioners is AFFIRMED. No pronouncement as to costs. SO ORDERED. CARRAN VS. COURT OF APPEALS AUSTRIA-MARTINEZ, J .: On September 16, 1992, private respondents-spouses Salcedo R. Cosme and Nora Linda S. Cosme filed a complaint (accion reivindicatoria) with damages against Dionisio Caraan in the RTC. Therein, it was alleged that: herein private respondents are the registered owners of the real property located at No. 65 Commodore St., Veterans Subdivision,Barangay Holy Spirit, Quezon City under Transfer Certificate of Title (TCT) No. 214949; they had been paying realty taxes on the property from 1969 to 1993; sometime in March 1991, they discovered that the land was being occupied by petitioner who had built his residential house thereon; such occupancy by petitioner was effected through fraud, strategy and stealth without private respondents' knowledge and consent; demands to vacate, both oral and written, were made upon petitioner, the last written demand having been received by petitioner on August 7, 1992, but said demands went unheeded; thus, private respondents prayed that judgment be rendered ordering petitioner and all persons holding title under him to vacate the subject premises and deliver possession thereof to private respondents; pay private respondents the amount of P54,000.00 by way of reasonable compensation for the use and occupancy of the premises, P50,000.00 as moral damages, and P50,000.00 as attorney's fees. In his Answer with Counterclaim, petitioner alleged that he had acquired the land in question through extra-ordinary prescription of thirty years of continuous, public, open and uninterrupted possession; private respondents' title was one of the numerous titles derived from TCT No. 3548 in the name of Eustacio Morales and Vicente Villar doing business under the style of Vilma Malolos Subdivision, which was in turn derived from TCT No. 33531 which came from TCT No. 26285 and derived from (OCT) No. 614; and OCT No. 614 had been declared null and void by the RTC, Quezon City (Branch 83). [2] After trial on the merits, the RTC rendered its Decision dated August 9, 1995, the dispositive portion of which reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs [herein private respondents], whereby defendant [herein petitioner] is ordered to: (a) Vacate the premises concerned and to deliver and surrender the possession of the same to the plaintiff; (b) To pay plaintiffs the sum of P54,000.00 as reasonable compensation for the use and occupancy of the premises subject matter of the above-entitled case; (c) Pay the plaintiffs the sum P30,000.00 as moral damages; (d) Pay the plaintiffs the sum of P20,000.00 as attorney's fees and to pay the cost of the suit. [3] Herein petitioner Dionisio Caraan then appealed the RTC judgment to the CA. On October 29, 1999, the CA promulgated its Decision ruling thus: Absent any countervailing factum probandum adduced by the defendant-appellant [herein petitioner], the indefeasibility of the Torrens title under their [herein private respondents' ] names buttresses the presumption ad homini that they have a better right of ownership over the land. ' The defendant-appellant [herein petitioner] cannot seek refuge on his contention that he is a holder of a residential permit allegedly issued by the Bureau of Forest Development. Within the aegis of Section 3 (ff) of Presidential Decree No. 705, otherwise known as the Revised Forestry Code, a '[p]ermit is a short-term privilege or authority granted by the State to a person to utilize any limited forest resources or undertake a limited activity within any forest land without any right to occupation and possession therein. ' Neither is the defendant-appellant a possessor in the concept of an owner, which fact is a conditio sine qua non in order to be entitled to ownership through acquisitive prescription. mere possession with a juridical title, e.g., as a usufructuary, a trustee, a lessee, an agent or a pledgee, not being in the concept of owner, cannot ripen into ownership by acquisitive prescription, unless the juridical relation is first expressly repudiated and such repudiation has been communicated to the other party. [4] The appellate court then affirmed the RTC judgment ordering petitioner Dionisio Caraan to vacate subject premises and to deliver and surrender possession thereof to herein private respondents. The CA, however, deleted the sums for compensatory and moral damages and attorney's fees awarded by the RTC in favor of private respondents. No motion for reconsideration of the CA Decision was filed. In the meantime, petitioner Dionisio Caraan died and his surviving heirs filed with this Court a petition for review oncertiorari with motion that said heirs be substituted as petitioners in this case. Petitioners insist that private respondents' TCT No. 214949 is a derivative of OCT No. 614 and TCT No. 3548 which had been declared spurious and null and void; Dionisio Caraan has a better right of possession because he had been in open, public, adverse, continuous, and uninterrupted possession in the concept of owner of subject land for more than thirty years; and the subject land is part of a large tract of public land not yet classified for alienation to private ownership.

On the other hand, private respondents argue that a certificate of title cannot be collaterally attacked, thus, TCT No. 214949 is valid and existing and conclusive evidence of ownership unless it becomes subject of a direct attack through a proceeding for cancellation of title. The Court finds the present petition bereft of merit. In Eduarte vs. Court of Appeals, [5] the Court reiterated the hornbook principle that 'a certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein. [6] Private respondents having presented TCT No. RT-71061, which is the reconstituted title of TCT No. 214949, they have thus proven their allegation of ownership over the subject property. The burden of proof then shifted to petitioners who must establish by preponderance of evidence their allegation that they have a better right over the subject property. Petitioners attack the validity of private respondents' certificate of title, alleging that TCT No. 214949 is spurious as it was derived from OCT No. 614 which had allegedly been declared null and void pursuant to the Partial Decision on Defaulted Private Respondents dated March 21, 1988 issued in Civil Case No. Q-35672, entitledTeofilo M. Gariando, et al. vs. Gregorio Dizon, et al. Petitioners further point out that the subject land could not have been titled in favor of private respondents as said land is within the unclassified public forest land of Quezon City and not subject to disposition under the Public Land Law, per Certification dated April 16, 1985 issued by the Bureau of Forest Development. Petitioners further argue that they have a better right to subject property, as they had been in possession thereof in open, public, adverse, continuous, and uninterrupted possession in the concept of owner of subject land for more than thirty years. It should be borne in mind, however, that Section 48, Presidential Decree No. 1529 (P.D. No. 1529), provides that 'a certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. Petitioners' defense takes the form of a collateral attack on private respondents' certificate of title. In Mallilin, Jr. vs. Castillo, [7] the Court defined a collateral attack on the title in this wise: When is an action an attack on a title? It is when the object of the action or proceeding is to nullify the title, and thus challenge the judgment pursuant to which the title was decreed. The attack is direct when the object of an action or proceeding is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof. [8]

In the present case, the attack on the title is definitely merely collateral as the relief being sought by private respondents in their action was recovery of possession. The attack on the validity of private respondents' certificate of title was merely raised as a defense in petitioners' Answer filed with the trial court. 'In Ybaez vs. Intermediate Appellate Court, [9] the Court categorically ruled that:

It was erroneous for petitioners to question the Torrens Original Certificate of Title issued to private respondent over Lot No. 986 in Civil Case No. 671, an ordinary civil action for recovery of possession filed by the registered owner of the said lot, by invoking as affirmative defense in their answer the Order of the Bureau of Lands, dated July 19, 1978, issued pursuant to the investigatory power of the Director of Lands under Section 91 of Public Land Law (C.A. 141 as amended).Such a defense partakes of the nature of a collateral attack against a certificate of title brought under the operation of the Torrens system of registration pursuant to Section 122 of the Land Registration Act, now Section 103 of P.D. 1259. The case law on the matter does not allow collateral attack on the Torrens certificate of title on the ground of actual fraud. The rule now finds expression in section 48 of P.D. 1529 otherwise known as the Property Registration Decree. [10] (Emphasis supplied)

The Court cannot, therefore, resolve the issue of the alleged invalidity of private respondents' certificate of title in the present action for recovery of possession. Even petitioners' claim that subject property could not have been titled in favor of private respondents because the same has not yet been classified for alienation for private ownership, cannot be given consideration because, as clearly stated in Apostol vs. Court of Appeals, '[t]he issue of the validity of the title of respondents can only be assailed in an action expressly instituted for that purpose. [11] Petitioners' asseveration that TCT No. RT-71061 (214949) should not have been admitted into evidence because private respondents merely presented the photocopy thereof is also unmeritorious. Private respondents presented the original of TCT No. RT-71061 (214949) in open court during the hearing held on April 13, 1994. The pertinent portions of the transcript of stenographic notes of said hearing are reproduced hereunder: Atty. Mazo: Your Honor, we are presenting in evidence this Transfer Certificate of Title No. RT-71061 (214949) as Exhibit A. The purpose of which, Your Honor, is to show that the property subject matter of this case is registered in the name of the herein plaintiff spouses Salcedo R. Cosme and Nora Linda S. Cosme. And in that regard, Your Honor, may we invite Counsel to stipulate that this is a Xerox copy and that we request to be marked as Exhibit A is a faithful reproduction of the original. If Counsel will stipulate, this will be the one to be submitted in evidence. Atty. Moya: This is a faithful reproduction, Your Honor. (Emphasis supplied) Furthermore, no objection was raised by counsel for petitioners in their written opposition/comment to private respondents' offer of evidence [12] regarding the fact that what was marked and submitted to the court was the photocopy. In Blas vs. Angeles-Hutalla, [13] the Court held thus: The established doctrine is that when a party failed to interpose a timely objection to evidence at the time they were offered in evidence, such objection shall be considered as waived. In Tison v. Court of Appeals, the Supreme Court set out the applicable principle in the following terms: [F]or while the documentary evidence submitted by petitioners do not strictly conform to the rules on their admissibility, we are, however, of the considered opinion that the same may be admitted by reason of private respondent's failure to interpose any timely objection thereto at the time they were being offered in evidence. It is elementary that an objection shall be made at the time when an alleged inadmissible document is offered in evidence, otherwise, the objection shall be treated as waived, since the right to object is merely a privilege which the party may waive. As explained in Abrenica vs. Gonda, et al., it has been repeatedly laid down as a rule of evidence that a protest or objection against the admission of any evidence must be made at the proper time, otherwise, it will be deemed to have been waived. The proper time is when from the question addressed to the witness, or from the answer thereto, or from the presentation of the proof, the inadmissibility of the evidence is, or may be inferred. Thus, a failure to except to the evidence because it does not conform with the statute is a waiver of the provisions of the law. [14] ' Hence, considering the fact that counsel for petitioners admitted that the photocopy of TCT No. RT-71061 (214949) is a faithful reproduction of the original thereof, stipulated with private respondents' counsel that what will be marked and submitted to the trial court as Exhibit A is the photocopy, and the lack of objection on such ground which is then deemed a waiver thereof, the admission into evidence of the photocopy of TCT No. RT-71061 was absolutely correct. Moreover, although the reconstituted title of TCT No. 214949 does show on its face that it was derived from OCT No. 614, [15] both the trial and appellate courts are correct in saying that petitioners' assertion that OCT No. 614 had been declared null and void is misleading. The RTC of Quezon City, Branch 83 issued a Partial Decision on Defaulted Private Respondents [16] dated March 21, 1988 in Civil Case No. Q-35672 which declared OCT No. 614 and subsequent TCTs issued therefrom, 'with the exception of those titles belonging to the non-defaulted respondents, [17] null and void. However, the defaulted private respondents in Civil Case No. Q-35672 filed a case for annulment of said partial judgment. The CA granted the petition for annulment of partial judgment in Civil Case No. Q-35672. The case was elevated via a petition for review on certiorari assailing the CA decision and on January 19, 2001, this Court promulgated a Decision in Pinlac vs. Court of Appeals, [18] docketed as G.R. No. 91486, affirming the CA Decision setting aside and annulling said partial decision on the ground of the trial court's lack of jurisdiction over the persons of respondents in said case. Petitioners have not been able to present any proof that, indeed, OCT No. 614 had been declared null and void by final judgment. Hence, petitioners' claim that private respondents' certificate of title is spurious deserves no consideration whatsoever. Private respondents' certificate of title must be deemed valid and existing, as it cannot be assailed through a collateral attack in the present action. Consequently, petitioners' defense that they have a better right over the subject land because they had been in open, public, adverse, continuous, and uninterrupted possession in the concept of owner for more than 30 years must be struck down. Section 47 of P.D. No. 1529 provides that '[n]o title to registered land in derogation of

the title of the registered owner shall be acquired by prescription or adverse possession. The ruling in Ragudo vs. Fabella Estate Tenants Association, Inc., [19] is exactly in point, to wit:

In a long line of cases, we have consistently ruled that lands covered by a title cannot be acquired by prescription or adverse possession. So it is that in Natalia Realty Corporation vs. Vallez, et al., we held that a claim of acquisitive prescription is baseless when the land involved is a registered land because of Article 1126 of the Civil Code in relation to Act 496 (now, Section 47 of Presidential Decree No. 1529): Appellants' claim of acquisitive prescription is likewise baseless. Under Article 1126 of the Civil Code, prescription of ownership of lands registered under the Land Registration Act shall be governed by special laws. Correlatively, Act No. 496 provides that no title to registered land in derogation of that of the registered owner shall be acquired by adverse possession. Consequently, proof of possession by the defendants is both immaterial and inconsequential. (Emphasis supplied)

Therefore, as emphasized in the above quoted ruling, petitioners' allegations of uninterrupted possession for 30 years cannot prevail over private respondents' certificate of title, which is the best proof of ownership. As the Court stated in Apostol vs. Court of Appeals, et al., [20] the registered owners are entitled to the possession of the property covered by the said title from the time such title was issued in their favor. Preponderance of evidence being in favor of private respondents, there can be no other conclusion but that private respondents, being the registered owners of subject property, should be placed in possession thereof. WHEREFORE, the petition is DENIED for lack of merit. The Decision of the Court of Appeals dated October 29, 1999 is hereby AFFIRMED. SO ORDERED. G.R. No. 83141 September 21, 1990 SPOUSES FLORENTINO L. FERNANDEZ AND VIVENCIA B. FERNANDEZ, petitioners, vs. HON. COURT OF APPEALS AND ZENAIDA ANGELES FERNANDEZ, respondents. MEDIALDEA, J.: This is a petition for review of the decision of the Court of Appeals in CA-G.R. CV No. 05191 which modified the decision of the Regional Trial Court, Branch 95, Quezon City in Civil Case No. Q-32843 ordering private respondent Zenaida Angeles-Fernandez to execute a deed of conveyance over 1/3 portion or 110 square meters of the lot subject of the action. The facts of the case are as follows: On November 28, 1966, petitioners-spouses Florentino and Vivencia Fernandez and private respondent Zenaida Angeles-Fernandez and the latter's husband Justiniano Fernandez purchased in common a parcel of land with an area of 310 square meters Identified as Lot 13, Block 19, Pagasa Subdivision, Quezon City. The parcel of land was purchased for P15,500.00. Spouses Florentino and Vivencia Fernandez advanced the downpayment of P5,500.00 to the vendors-spouses Santos and Matilde de Torres. A Deed of Conditional Sale (Exhibit "B") was executed by the spouses de Torres in favor of the two Fernandez couples. On February 24, 1967, the vendors Torres executed a Deed of Absolute Sale in favor of spouses Zenaida and Justiniano Fernandez only. When petitioners learned that the Absolute Deed of Sale did not include their names as vendees they confronted Zenaida and Justiniano Fernandez. Thus, on April 24, 1967, Zenaida and Justiniano Fernandez executed an affidavit (Exhibit "D") in which they acknowledged the sale to petitioners Florentino and Vivencia Fernandez of a portion of the subject parcel of land consisting of 110 square meters and the receipt of the consideration therefor in the amount of P5,500.00. When private respondent Zenaida Angeles-Fernandez planned to build a house on the lot, she was informed by the City Engineer of Quezon City that the area in Pagasa is classified under the zoning ordinance as R-2 or residential 2, wherein the minimum requirement for a family house is 240 square meters and therefore, no two (2) separate and independent family houses can be built on the 310 square meter lot. She also found out that the Register of Deeds will not issue a separate title for only 110 square meters (p. 4, C.A. Decision; p. 36, Rollo). Thus, a duplex building was constructed on the subject land, one unit known as No. 216-A Road I, Pag-asa, Quezon City which was occupied by petitioners Florentino and Vivencia and the other unit known as No. 216, Pag-asa, Quezon City which was occupied by the spouses Zenaida and Justiniano. On January 26, 1970, Zenaida and Justiniano caused the issuance of a certificate of title (TCT No. 149347) only in their names (p. 47, Rollo). On February 26, 1976, private respondent Zenaida Fernandez and her husband Justiniano Fernandez filed a petition for voluntary dissolution of their conjugal partnership before the Juvenile and Domestic Relations Court, Quezon City. In the petition, the couple prayed for judicial approval of their compromise agreement wherein Justiniano waived all his rights to the conjugal properties including the subject parcel of land. Pursuant to the compromise agreement, the Juvenile and Domestic Relations Court awarded the parcel of land subject of the instant case to private respondent Zenaida Angeles-Fernandez on December 13, 1976. In a letter dated October 22, 1977, private respondent demanded that petitioners vacate the premises of the lot awarded to her. On June 9, 1981, petitioners' spouses Florentino and Vivencia filed an action to quiet title and damages against Zenaida Fernandez only, who was then already estranged from her husband Justiniano. In another letter dated June 21, 1981, Zenaida reiterated her demand that petitioners vacate the premises of the lot awarded to her, which lot was also the subject matter of the complaint for quieting of title filed by petitioners. After trial, a decision (pp. 43-45, Rollo) was rendered on July 23, 1984 wherein the trial court made the following findings and conclusions: 1. The genuineness and/or due execution of the Deed of Conditional Sale dated November 28, 1966 (Exhibit 'B' & Exhibit '2') and Affidavit dated April 24, 1967 (Exhibit 'D' & Exhibit '4'), were admitted by defendant Zenaida Angeles-Fernandez. Likewise, the voluntariness of the execution thereof, including their contents, were not seriously controverted by defendant Zenaida Angeles- Fernandez. Said documents, therefore, should be taken against her for as ruled by the higher court; a man's acts, conduct, and declarations wherever made, if voluntary, are admissible against him, for the reason that it is fair to presume that they correspond with the truth, and it is his fault if they do not. (US vs. Ching Po, 23 Phil. 578, 583); 2. The claim of defendant Zenaida Angeles-Fernandez to the effect that the P5,500.00 used as down payment for the purchase price in the total amount of P15,500.00 mentioned in the Deed of Conditional Sale dated November 28, 1966 (Exhibit 'B' & Exhibit '2'), was merely a loan, and that she and her husband Justiniano E. Fernandez have already paid the same almost three-fold to plaintiffs, cannot be considered there being no concrete proof on record to substantiate the same. The Court noted, however, that no further amount, aside from the P5,500.00 were paid by the plaintiffs for the purchase of Lot 13, Block N-19 of Pag-asa Subdivision. By mathematical computations, said amount was short for the amount they should pay for the 1/2 portion of the purchased lot, and they should be required to reimburse defendant Zenaida Angeles- Fernandez; 3. Likewise, the verbal claim of the defendant Zenaida Angeles- Fernandez that she and her husband Justiniano B. Fernandez executed the Affidavit dated April 24, 1967 (Exhibit 'D' & Exhibit '4') as security or assurance to plaintiffs' non-eviction from the premises they are co-occupying and/or payment of the alleged loan, appears gratuitous and illogical, and cannot be given weight more than their admission (Exhibit 'B' & Exhibit '4'), while admission is against interest. 4. The fact that the names of plaintiffs no longer appear as co-vendees in the Deed of Absolute Sale dated February 24,1967 (Exhibit 'C', & Exhibit '3'), and to the title to Lot 13, Block N-1 9 of the Pagasa Subdivision, Quezon City Exhibit 'A' & Exhibit '1'), as of not moment (sic) and inconsequential to their right or ownership over the 1/2 portion of the lot, the same having been sufficiently established by the Deed of Conditional Sale dated November 28, 1966 (Exhibit 'B' and Exhibit '2'); the Affidavit dated April 24,1967 (Exhibit 'D' & Exhibit '4'); and the proof on record showing that defendant Zenaida Angeles-Fernandez collected taxes due on the subject lot for the year 1974, 1975,1976 and 1977 (Exhibit 'H'). (pp. 50-51, Rollo) Anent the ownership of the duplex house, the trial court concluded that although the petitioners advanced the sum of P l,258.00 (Exhibit "K" and "K-1") for the unit occupied by them, said amount is not sufficient to construct one unit of the duplex building. The trial court disposed of the case as follows: All told, this Court finds plaintiffs spouses Florentino L. Fernandez and Vivencia B. Fernandez, owner of 1/2 portion or the area of 113 square meters of the Lot 13, Block N-19 of Pag-asa Subdivision, Quezon City, subject to reimbursement of the sum of P 2,250.00, representing the difference of the total amount they ought to pay for the purchase price thereof, to defendant Zenaida Angeles-Fernandez, plus legal interest thereon from February 24, 1967 until fully paid; and defendant Zenaida Angeles-Fernandez owner of the other one-half or 113 square meters of the aforesaid lot, together with both units of the duplex house existing thereon, subject to the provision of Article 448 of the Civil Code. WHEREFORE, decision is hereby rendered: l. ORDERING defendant Zenaida Angeles-Fernandez to execute a deed of conveyance over 1/2 portion of 13 square meters of Lot 13, Block N-19 of Pag-asa Subdivision, covered by Transfer Certificate of Title No. 149347 of the Register of Deeds of Quezon City, in favor of plaintiffs, spouses Florentino L. Fernandez and Vivencia B. Fernandez, upon the latter's payment of P 2,225.00 plus legal interest thereon counted from February 24, 1967, until fully paid. 2. The portion of the duplex building resting on the portion of the lot to be reconveyed to the plaintiffs, spouses Florentino L. Fernandez and Vivencia B. Fernandez, shall remain under the ownership of defendant Zenaida Angeles-Fernandez, subject to the provision of Article 448 of the Civil Code. xxx (pp. 53-54, Rollo). Petitioners filed a motion to reconsider the decision insofar as the area awarded them was concerned and the amount spent by them for the construction of the duplex house. On November 15, 1984, an order (pp. 55-56,Rollo) was issued by the trial court amending the July 23, 1984 decision, thus: WHEREFORE, 1) The dispositive portion of the decision dated July 23, 1984, is hereby amended as follows: 'l. ORDERING defendant Zenaida Angeles-Fernandez to execute a deed of conveyance over 1/3 portion or 110 square meters of Lot 13, Block N-19 of the Pag-asa Subdivision, covered by Transfer Certificate of Title No.

149347 of the Register of Deeds of Quezon City, in favor of plaintiffs, spouses Florentino L. Fernandez and Vivencia B. Fernandez, upon the latter's payment of P 2,225 plus legal interest thereon counted from February 24, 1967, until fully paid.' 2) Denying all other matters raised in the motion for reconsideration and opposition thereto. SO ORDERED. (pp. 55-56, Rollo) While the order amended the area of the land to be awarded to the petitioners from 1/2 to 1/3, it failed to delete the portion ordering petitioners to pay private respondent the amount of P 2,225, as originally ordered in the July 23, 1984 decision. Not satisfied with the trial court's decision and the order amending said decision, both the petitioners and the private respondent appealed to respondent Court of Appeals. In a decision (pp. 33-40, Rollo) promulgated on January 26, 1988, respondent appellate court made a different conclusion and modified the decision of the trial court: The main basis of the trial court in concluding that the plaintiffs are entitled to 1/2 and later to 1/3 portion of the lot and house in Pag-asa are the deed of conditional sale (Exh. B and 2) and the affidavit executed by Justiniano Fernandez (Exh. D). It appears, however, that the effect of said documents have been modified by later events. The first is the absolute deed of sale of the house and lot in question and the subsequent issuance of the title thereof only in the name of Justiniano Fernandez and his wife (Exh. C and 3 and Exh. A and 1). Thereafter, Transfer Certificate of Title No. 149347 in the name of the spouses Justiniano E. Fernandez and Zenaida A. Fernandez was issued by the Register of Deeds of Quezon City on January 26, 1970 (Exh. A). If, indeed, the herein plaintiffs were entitled to 1/2 of the said property, they should have taken steps to include their names in the said title or at least had it annotated on said title. A Certificate of Title issued a party accumulates all the ultimate facts with respect to a particular piece of registered land in one single document, making out a precise and correct statement to the exact status of the fee simple title which the owner has in fact. Once issued, the certificate is the evidence of the title which the owner has (Legarda vs. Saleeby, 31 Phil. 590). A torrens title concludes all controversy over ownership of land covered by final decree of registration, and title by adverse possession cannot be acquired against the registered owner (Sec. 46, Act 496; J.M. Tuason and Co. vs. Vibat, L-28884, May 29,1963,8 SCRA 54; Espiritu vs. Sison, CA 51612-R, Feb. 14,1979). What militates more against the claim of ownership of a portion of the property in question by the plaintiffs is the fact that as a result of marriage settlement between Justiniano Fernandez and his wife Zenaida, the whole property was adjudicated to Zenaida. The settlement was approved by the Juvenile and Domestic Relations Court. The herein plaintiffs were supposed to know about said marriage settlement of property. Here is a situation where Zenaida was in fact abandoned by her husband Justiniano, who is a nephew of plaintiff Florentino Fernandez. The plaintiffs should have intervened in said case by filing their claims on the property that was to be granted to Zenaida alone in the marriage settlement. Indeed, it would be less than fair for the herein plaintiffs to demand their alleged share against Zenaida alone after their nephew agreed to grant said property to his wife whom he abandoned. Lastly, the cause of action of the plaintiffs had already prescribed. As already stated, the Transfer Certificate of Title was issued in the name of the spouses Justiniano and Zenaida Fernandez in 1970. From said date, Justiniano and his wife exercised acts of absolute ownership by mortgaging the property. The instant action to claim ownership of the portion of the land was filed on July 9, 1981. With these findings, We find no merit in the contention of plaintiffs-appellants that they are entitled to damages and attorney's fees. WHEREFORE, the decision appealed from is hereby MODIFIED by declaring the defendant Zenaida Fernandez as the sole owner of the property in question covered by Transfer Certificate of Title No. 14934, Registry of Deeds of Quezon City. In fairness to the plaintiffs, however, defendant Zenaida Fernandez is ordered to return to the plaintiffs the amount of P5,500.00 plus interest at the legal rate from November 28, 1966 until full payment thereof. SO ORDERED. (pp. 39-40, Rollo) Petitioners' motion for reconsideration of the decision of the Court of Appeals was denied on April 22, 1988 (p. 42,Rollo). On June 15, 1988, petitioners filed the instant petition for review. They contend that respondent appellate court erred in not declaring them part owners of the lot in question despite the fact that it is not disputed that petitioners and defendant Zenaida Fernandez with her husband Justiniano Fernandez entered into an agreement with the vendors-spouses Santos and Matilde de Torres that the subject land would be purchased by them in common. While, as a rule, this Court is bound by the findings of the Court of Appeals in matters of fact, that rule is subject to well-settled exceptions, amongst them: (1) when the same are grounded entirely on speculation, surmise, and conjecture; (2) the inference made is manifestly mistaken; (3)...; (4) its judgment is based on a misapprehension of facts; (5) it went beyond the issues of the case and its findings contravene admissions of the parties; (6) its findings of fact are contrary to those of the trial court; (7) the same are conclusions without citation of specific evidence; (8) ...; and (9) when the findings of fact of the Court of Appeals are not supported by the evidence or contradicted in fact by the evidence on record (Teodoro v. Court of Appeals, L-31471, November 12, 1987). In the instant case, there is a disparity in the factual findings and conclusions of the respondent appellate court and the trial court. On the basis of the evidence presented and in view of the accepted rule that "the judge who tries a case in the court below, has vastly superior advantage for the ascertainment of truth and the detection of falsehood over an appellate court of review (Roque v. Buan, L-22459, October 31, 1967, 21 SCRA 642), the findings of the trial court must be upheld. We agree with petitioners' contention that respondent court erred in not declaring them as part owners of the subject property. There is sufficient evidence on record to prove that petitioners and spouses Justiniano and Zenaida Fernandez purchased in common the lot subject of this case and that it was the parties' intention to become owners of specific portions thereof. The purchase of the property by the two Fernandez couples was evidenced by a Deed of Conditional Sale (Exhibit "B" and Exhibit "2") executed by the previous owners Spouses Santos and Matilde de Torres in favor of the petitioners and the Spouses Zenaida and Justiniano Fernandez. Respondent appellate court concluded that the effect of the Deed of Conditional Sale was modified by later events specifically, the execution of a deed of Absolute Sale in favor of Justiniano Fernandez and private respondent Zenaida Fernandez only. However, respondent appellate court lost sight of the fact that upon petitioners' knowledge that the Deed of Absolute Sale was executed in favor of Justiniano and Zenaida Fernandez only, the petitioners confronted the latter spouses which led to the execution by the latter on April 24,1967 of an affidavit (Exhibit 'D') acknowledging petitioners' purchase of 110 square meters of the subject lot and the receipt of the consideration therefor for P5,500.00. The due execution and authenticity of both the Deed of Conditional Sale and Affidavit were never denied by private respondent. Having recognized the sale and the receipt of the consideration in the affidavit, private respondent is now estopped from going against such declaration. It is noted that subsequent to the execution of the affidavit, a duplex house was constructed on the lot where one unit was occupied by private respondent Zenaida and her husband Justiniano and the other unit by the petitioners. The expenses for the construction of the duplex were advanced by the spouses Zenaida and Justiniano, but they demanded reimbursement of the expenses they advanced for the portion belonging to petitioners. Exhibit "I" and Exhibit "J" reveal that on November 10, 1969, Justiniano demanded from the petitioners payment of their share of the materials used in the construction of their portion of the duplex house amounting to P 2,607.70 (p. 44, Rollo) and the taxes due from them for the house and lot. On March 8, 1977, petitioners paid for their share of the realty taxes for the year 1974,1975,1976 and 1977 in the total amount of P 894.36 to private respondent Zenaida (Exhibit "H"). For the expenses in the construction of the portion of the duplex possessed by petitioners, they gave P1,258.10 to Justiniano who issued a receipt therefor (Exhibit "K" and "K-1") Petitioners promised to liquidate the balance in installment at the rate of P 300.00 a month. The trial court concluded that the amount of P l,258.10 advanced by petitioners was not sufficient to construct their portion of the duplex house and that no evidence was presented to prove that petitioners paid for the balance. From this findings, it erroneously concluded that the entire duplex house belongs to private respondent Zenaida Angeles-Fernandez. It should be noted that Justiniano Fernandez admitted in Exhibits "I" and "J" petitioner's ownership of the portion of the duplex house now occupied by them. It may be that the amount of P1,258.10 paid by petitioner Florentino Fernandez to Justiniano Fernandez was not sufficient to construct their portion of the duplex house but such insufficiency cannot be made the basis for divesting them of their ownership. Respondent court's conclusion that petitioners were not part owners of subject land relied much on the existence of Transfer Certificate of Title No. 149347 issued in the name of Spouses Justiniano and Zenaida Fernandez only. It further concluded that if, indeed, petitioners were entitled to 1/2 of the property, they should have taken steps to include their names in the title. Section 50 of Act No. 496 (now Sec. 51 of P.D. 1529), provides that the registration of the deed is the operative act to bind or affect the land insofar as third persons are concerned. But where the party has knowledge of a prior existing interest which is unregistered at the time he acquired a right to the same land, his knowledge of that prior unregistered interest has the effect of registration as to him. The torrens system cannot be used as a shield for the commission of fraud (Gustillo v. Maravilla, 48 Phil. 442). As far as private respondent Zenaida Angeles and her husband Justiniano are concerned, the non-registration of the affidavit admitting their sale of a portion of 110 square meters of the subject land to petitioners cannot be invoked as a defense because (K)nowledge of an unregistered sale is equivalent to registration (Winkleman v. Veluz, 43 Phil. 604). The respondent appellate court also erred in ruling that the cause of action of petitioners had already prescribed in view of the issuance in 1970 of a certificate of title in the name of the Spouses Justiniano and Zenaida Fernandez. As already stated, the issuance of a certificate of title in the name appearing therein does not preclude petitioners from asserting their right of ownership over the land in question. Time and again it has been ruled that the torrens system should not be used as a shield to protect fraud. Moreover, prescription cannot be considered against petitioners who had been in possession of subject premises from the time it was purchased from the de Torres spouses in 1967 and continue to possess the same under claim of ownership. There is no sufficient basis for the respondent court to conclude that spouses Zenaida and Justiniano were possessing the entire property adversely against petitioners. At most, the first time that respondent Zenaida Fernandez claimed adverse possession of the entire premises was when she demanded from petitioners the possession of the unit possessed by them in a letter dated October 22, 1977 (Exhibit "F") emboldened by a decision of the Juvenile and Domestic Relations Court awarding the premises to her. The decision of private respondent to claim total ownership of the premises was in fact, pursued only half-heartedly by her because the second time that she demanded possession of the premises was four (4) years after or on June 21, 1981, after an action to quiet title was filed by petitioners on June 9,1981. In Almanza v. Arguelles, L-49250, December 21, 1987, We held that, "prescription cannot be invoked in an action for reconveyance, which is, in effect an action to quiet title against the plaintiff therein who is in possession of the land in question. As lawful possessor and owner of the disputed portion, her cause of action for reconveyance which, in effect, seeks to quiet title to property in one's possession is imprescriptible (also cited in Caragay-Layno v. Court of Appeals, 133 SCRA 718, citing Sapto et al. v. Fabiana, 103 Phil. 683 and Faja v. C.A., 75 SCRA 441). The reason, we explained in Bucton v. Gabar, L-36359, January 31, 1974, 55 SCRA 499, is: ... that while the owner in fee continues liable to an action, proceeding, or suit upon the adverse claim, he has a continuing right to the aid of a court of equity to ascertain and determine the nature of such claim and its effect on his title, or to assert any superior equity in his favor. He may wait until his possession is disturbed

or his title is attacked before taking steps to vindicate his right. But the rule that the statute of limitations is not available as a defense of an action to remove a cloud from title can only be invoked by a complainant when he is in possession. .... (44 Am. Jur., p. 47) The judgment in the petition for dissolution of the conjugal partnership filed with the Juvenile and Domestic Relations Court of private respondent Zenaida AngelesFernandez and her husband Justiniano where the property in question was awarded to Zenaida cannot bind the petitioners who were not parties thereto. The failure of petitioners to intervene in the said proceedings for dissolution of conjugal partnership is not fatal. Petitioners may file their claim of ownership over the one-third portion of the property in question separately which they did when they brought the complaint for quieting of title before the trial court. As already stated, the affidavit executed by Justiniano Fernandez and private respondent Zenaida Angeles Fernandez acknowledged the sale of one-third (1/3) portion of the subject land to petitioners-spouses Florentino and Vivencia Fernandez and the receipt by the former of the amount of P5,500.00 as consideration thereof. However, the trial court in awarding the said one-third portion to petitioners also ordered the payment by them of P 2,225.00 to private respondent Zenaida Angeles-Fernandez, oblivious of the fact that only 1/3 and not one half (1/2) pertain to petitioners and that the P5,500.00 advanced by petitioners at the time the subject property was purchased from the de Torres spouses was sufficient payment for the 1/3 portion awarded to them. ACCORDINGLY, the petition is GRANTED. The decision of respondent appellate court is REVERSED. Judgment is hereby rendered declaring petitioners owners of 1) one-third (1/3) or 110 square meters of Lot 13, Block N-19 of Pag-asa Subdivision, presently occupied by them, covered by TCT No. 149347 of the Register of Deeds of Quezon City; and 2) the portion of the duplex house occupied by them after payment of the balance of P l,349.70 advanced by the husband of private respondent Zenaida Fernandez for the construction thereof, with interest at the legal rate from November 1969 until fully paid. SO ORDERED. G.R. No. 154409 June 21, 2004 Spouses NOEL and JULIE ABRIGO, petitioners, vs. ROMANA DE VERA, respondent. DECISION PANGANIBAN, J.: Between two buyers of the same immovable property registered under the Torrens system, the law gives ownership priority to (1) the first registrant in good faith; (2) then, the first possessor in good faith; and (3) finally, the buyer who in good faith presents the oldest title. This provision, however, does not apply if the property is not registered under the Torrens system. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to set aside the March 21, 2002 Amended Decision2 and the July 22, 2002 Resolution3 of the Court of Appeals (CA) in CA-GR CV No. 62391. The Amended Decision disposed as follows: "WHEREFORE, the dispositive part of the original D E C I S I O N of this case, promulgated on November 19, 2001, is SET ASIDE and another one is entered AFFIRMING in part and REVERSING in part the judgment appealed from, as follows: "1. Declaring [Respondent] Romana de Vera the rightful owner and with better right to possess the property in question, being an innocent purchaser for value therefor; "2. Declaring Gloria Villafania [liable] to pay the following to [Respondent] Romana de Vera and to [Petitioner-]Spouses [Noel and Julie] Abrigo, to wit: As to [Respondent] Romana de Vera: 1. P300,000.00 plus 6% per annum as actual damages; 2. P50,000.00 as moral damages; 3. P50,000.00 as exemplary damages; 4. P30,000.00 as attorneys fees; and 5. Cost of suit. As to [Petitioner-]Spouses [Noel and Julie] Abrigo: 1. P50,000.00 as moral damages; 2. P50,000.00 as exemplary damages; 3. P30,000.00 as attorneys fees; 4. Cost of suit."4 The assailed Resolution denied reconsideration. The Facts Quoting the trial court, the CA narrated the facts as follows: "As culled from the records, the following are the pertinent antecedents amply summarized by the trial court: On May 27, 1993, Gloria Villafania sold a house and lot located at Banaoang, Mangaldan, Pangasinan and covered by Tax Declaration No. 1406 to Rosenda TignoSalazar and Rosita Cave-Go. The said sale became a subject of a suit for annulment of documents between the vendor and the vendees. On December 7, 1993, the Regional Trial Court, Branch 40 of Dagupan City rendered judgment approving the Compromise Agreement submitted by the parties. In the said Decision, Gloria Villafania was given one year from the date of the Compromise Agreement to buy back the house and lot, and failure to do so would mean that the previous sale in favor of Rosenda Tigno-Salazar and Rosita Cave-Go shall remain valid and binding and the plaintiff shall voluntarily vacate the premises without need of any demand. Gloria Villafania failed to buy back the house and lot, so the [vendees] declared the lot in their name. Unknown, however to Rosenda Tigno-Salazar and Rosita Cave-Go, Gloria Villafania obtained a free patent over the parcel of land involved [on March 15, 1988 as evidenced by OCT No. P-30522]. The said free patent was later on cancelled by TCT No. 212598 on April 11, 1996. On October 16, 1997, Rosenda Tigno-Salazar and Rosita Cave-Go, sold the house and lot to the herein [Petitioner-Spouses Noel and Julie Abrigo]. On October 23, 1997, Gloria Villafania sold the same house and lot to Romana de Vera x x x. Romana de Vera registered the sale and as a consequence, TCT No. 22515 was issued in her name. On November 12, 1997, Romana de Vera filed an action for Forcible Entry and Damages against [Spouses Noel and Julie Abrigo] before the Municipal Trial Court of Mangaldan, Pangasinan docketed as Civil Case No. 1452. On February 25, 1998, the parties therein submitted a Motion for Dismissal in view of their agreement in the instant case that neither of them can physically take possession of the property in question until the instant case is terminated. Hence the ejectment case was dismissed.5 "Thus, on November 21, 1997, [petitioners] filed the instant case [with the Regional Trial Court of Dagupan City] for the annulment of documents, injunction, preliminary injunction, restraining order and damages [against respondent and Gloria Villafania]. "After the trial on the merits, the lower court rendered the assailed Decision dated January 4, 1999, awarding the properties to [petitioners] as well as damages. Moreover, x x x Gloria Villafania was ordered to pay *petitioners and private respondent+ damages and attorneys fees. "Not contented with the assailed Decision, both parties [appealed to the CA]."6 Ruling of the Court of Appeals In its original Decision promulgated on November 19, 2001, the CA held that a void title could not give rise to a valid one and hence dismissed the appeal of Private Respondent Romana de Vera.7 Since Gloria Villafania had already transferred ownership to Rosenda Tigno-Salazar and Rosita Cave-Go, the subsequent sale to De Vera was deemed void. The CA also dismissed the appeal of Petitioner-Spouses Abrigo and found no sufficient basis to award them moral and exemplary damages and attorneys fees. On reconsideration, the CA issued its March 21, 2002 Amended Decision, finding Respondent De Vera to be a purchaser in good faith and for value. The appellate court ruled that she had relied in good faith on the Torrens title of her vendor and must thus be protected.8 Hence, this Petition.9 Issues Petitioners raise for our consideration the issues below: "1. Whether or not the deed of sale executed by Gloria Villafania in favor of [R]espondent Romana de Vera is valid. "2. Whether or not the [R]espondent Romana de Vera is a purchaser for value in good faith. "3. Who between the petitioners and respondent has a better title over the property in question."10 In the main, the issues boil down to who between petitioner-spouses and respondent has a better right to the property. The Courts Ruling The Petition is bereft of merit. Main Issue: Better Right over the Property Petitioners contend that Gloria Villafania could not have transferred the property to Respondent De Vera because it no longer belonged to her.11 They further claim that the sale could not be validated, since respondent was not a purchaser in good faith and for value.12 Law on Double Sale The present case involves what in legal contemplation was a double sale. On May 27, 1993, Gloria Villafania first sold the disputed property to Rosenda Tigno-Salazar and Rosita Cave-Go, from whom petitioners, in turn, derived their right. Subsequently, on October 23, 1997, a second sale was executed by Villafania with Respondent Romana de Vera. Article 1544 of the Civil Code states the law on double sale thus: "Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.

"Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. "Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith." Otherwise stated, the law provides that a double sale of immovables transfers ownership to (1) the first registrant in good faith; (2) then, the first possessor in good faith; and (3) finally, the buyer who in good faith presents the oldest title. 13 There is no ambiguity in the application of this law with respect to lands registered under the Torrens system. This principle is in full accord with Section 51 of PD 152914 which provides that no deed, mortgage, lease or other voluntary instrument -- except a will -- purporting to convey or affect registered land shall take effect as a conveyance or bind the land until its registration.15 Thus, if the sale is not registered, it is binding only between the seller and the buyer but it does not affect innocent third persons.16 In the instant case, both Petitioners Abrigo and respondent registered the sale of the property. Since neither petitioners nor their predecessors (Tigno-Salazar and Cave-Go) knew that the property was covered by the Torrens system, they registered their respective sales under Act 3344. 17 For her part, respondent registered the transaction under the Torrens system18 because, during the sale, Villafania had presented the transfer certificate of title (TCT) covering the property.19 Respondent De Vera contends that her registration under the Torrens system should prevail over that of petitioners who recorded theirs under Act 3344. De Vera relies on the following insight of Justice Edgardo L. Paras: "x x x If the land is registered under the Land Registration Act (and has therefore a Torrens Title), and it is sold but the subsequent sale is registered not under the Land Registration Act but under Act 3344, as amended, such sale is not considered REGISTERED, as the term is used under Art. 1544 x x x."20 We agree with respondent. It is undisputed that Villafania had been issued a free patent registered as Original Certificate of Title (OCT) No. P-30522.21 The OCT was later cancelled by Transfer Certificate of Title (TCT) No. 212598, also in Villafanias name. 22 As a consequence of the sale, TCT No. 212598 was subsequently cancelled and TCT No. 22515 thereafter issued to respondent. Soriano v. Heirs of Magali23 held that registration must be done in the proper registry in order to bind the land. Since the property in dispute in the present case was already registered under the Torrens system, petitioners registration of the sale under Act 3344 was not effective for purposes of Article 1544 of the Civil Code. More recently, in Naawan Community Rural Bank v. Court of Appeals,24 the Court upheld the right of a party who had registered the sale of land under the Property Registration Decree, as opposed to another who had registered a deed of final conveyance under Act 3344. In that case, the "priority in time" principle was not applied, because the land was already covered by the Torrens system at the time the conveyance was registered under Act 3344. For the same reason, inasmuch as the registration of the sale to Respondent De Vera under the Torrens system was done in good faith, this sale must be upheld over the sale registered under Act 3344 to Petitioner-Spouses Abrigo. Radiowealth Finance Co. v. Palileo25 explained the difference in the rules of registration under Act 3344 and those under the Torrens system in this wise: "Under Act No. 3344, registration of instruments affecting unregistered lands is without prejudice to a third party with a better right. The aforequoted phrase has been held by this Court to mean that the mere registration of a sale in ones favor does not give him any right over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded. "The case of Carumba vs. Court of Appeals26 is a case in point. It was held therein that Article 1544 of the Civil Code has no application to land not registered under Act No. 496. Like in the case at bar, Carumba dealt with a double sale of the same unregistered land. The first sale was made by the original owners and was unrecorded while the second was an execution sale that resulted from a complaint for a sum of money filed against the said original owners. Applying [Section 33], Rule 39 of the Revised Rules of Court,27 this Court held that Article 1544 of the Civil Code cannot be invoked to benefit the purchaser at the execution sale though the latter was a buyer in good faith and even if this second sale was registered. It was explained that this is because the purchaser of unregistered land at a sheriffs execution sale only steps into the shoes of the judgment debtor, and merely acquires the latters interest in the property sold as of the time the property was levied upon. "Applying this principle, x x x the execution sale of unregistered land in favor of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time of the said execution sale."28 Petitioners cannot validly argue that they were fraudulently misled into believing that the property was unregistered. A Torrens title, once registered, serves as a notice to the whole world.29 All persons must take notice, and no one can plead ignorance of the registration.30 Good-Faith Requirement We have consistently held that Article 1544 requires the second buyer to acquire the immovable in good faith and to register it in good faith.31 Mere registration of title is not enough; good faith must concur with the registration.32We explained the rationale in Uraca v. Court of Appeals,33 which we quote: "Under the foregoing, the prior registration of the disputed property by the second buyer does not by itself confer ownership or a better right over the property. Article 1544 requires that such registration must be coupled with good faith. Jurisprudence teaches us that (t)he governing principle is primus tempore, potior jure (first in time, stronger in right). Knowledge gained by the first buyer of the second sale cannot defeat the first buyers rights except where the second buyer registers in good faith the second sale ahead of the first, as provided by the Civil Code. Such knowledge of the first buyer does not bar her from availing of her rights under the law, among them, to register first her purchase as against the second buyer. But inconverso, knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register the second sale, since such knowledge taints his prior registration with bad faith. This is the price exacted by Article 1544 of the Civil Code for the second buyer being able to displace the first buyer; that before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e. in ignorance of the first sale and of the first buyers rights) ---- from the time of acquisition until the title is transferred to him by registration, or failing registration, by delivery of possession."34 (Italics supplied) Equally important, under Section 44 of PD 1529, every registered owner receiving a certificate of title pursuant to a decree of registration, and every subsequent purchaser of registered land taking such certificate for value and in good faith shall hold the same free from all encumbrances, except those noted and enumerated in the certificate.35 Thus, a person dealing with registered land is not required to go behind the registry to determine the condition of the property, since such condition is noted on the face of the register or certificate of title.36 Following this principle, this Court has consistently held as regards registered land that a purchaser in good faith acquires a good title as against all the transferees thereof whose rights are not recorded in the Registry of Deeds at the time of the sale.37 Citing Santiago v. Court of Appeals,38 petitioners contend that their prior registration under Act 3344 is constructive notice to respondent and negates her good faith at the time she registered the sale. Santiago affirmed the following commentary of Justice Jose C. Vitug: "The governing principle is prius tempore, potior jure (first in time, stronger in right). Knowledge by the first buyer of the second sale cannot defeat the first buyer's rights except when the second buyer first registers in good faith the second sale (Olivares vs. Gonzales, 159 SCRA 33). Conversely, knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register, since such knowledge taints his registration with bad faith (see also Astorga vs. Court of Appeals, G.R. No 58530, 26 December 1984) In Cruz vs. Cabana (G.R. No. 56232, 22 June 1984; 129 SCRA 656), it was held that it is essential, to merit the protection of Art. 1544, second paragraph, that the second realty buyer must act in good faith in registering his deed of sale (citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs. CA, G.R. 95843, 02 September 1992). xxx xxx xxx "Registration of the second buyer under Act 3344, providing for the registration of all instruments on land neither covered by the Spanish Mortgage Law nor the Torrens System (Act 496), cannot improve his standing since Act 3344 itself expresses that registration thereunder would not prejudice prior rights in good faith (see Carumba vs. Court of Appeals, 31 SCRA 558). Registration, however, by the first buyer under Act 3344 can have the effect of constructive notice to the second buyer that can defeat his right as such buyer in good faith (see Arts. 708-709, Civil Code; see also Revilla vs. Galindez, 107 Phil. 480; Taguba vs. Peralta, 132 SCRA 700). Art. 1544 has been held to be inapplicable to execution sales of unregistered land, since the purchaser merely steps into the shoes of the debtor and acquires the latter's interest as of the time the property is sold (Carumba vs. Court of Appeals, 31 SCRA 558; see alsoFabian vs. Smith, Bell & Co., 8 Phil. 496) or when there is only one sale (Remalante vs. Tibe, 158 SCRA 138)."39 (Emphasis supplied) Santiago was subsequently applied in Bayoca v. Nogales,40 which held: "Verily, there is absence of prior registration in good faith by petitioners of the second sale in their favor. As stated in the Santiago case, registration by the first buyer under Act No. 3344 can have the effect of constructive notice to the second buyer that can defeat his right as such buyer. On account of the undisputed fact of registration under Act No. 3344 by [the first buyers], necessarily, there is absent good faith in the registration of the sale by the [second buyers] for which they had been issued certificates of title in their names. x x x."41 Santiago and Bayoca are not in point. In Santiago, the first buyers registered the sale under the Torrens system, as can be inferred from the issuance of the TCT in their names.42 There was no registration under Act 3344. InBayoca, when the first buyer registered the sale under Act 3344, the property was still unregistered land.43 Such registration was therefore considered effectual. Furthermore, Revilla and Taguba, which are cited in Santiago, are not on all fours with the present case. In Revilla, the first buyer did not register the sale.44 In Taguba, registration was not an issue.45 As can be gathered from the foregoing, constructive notice to the second buyer through registration under Act 3344 does not apply if the property is registered under the Torrens system, as in this case. We quote below the additional commentary of Justice Vitug, which was omitted in Santiago. This omission was evidently the reason why petitioner misunderstood the context of the citation therein: "The registration contemplated under Art. 1544 has been held to refer to registration under Act 496 Land Registration Act (now PD 1529) which considers the act of registration as the operative act that binds the land (see Mediante vs. Rosabal, 1 O.G. [12] 900, Garcia vs. Rosabal, 73 Phil 694). On lands covered by the Torrens System, the purchaser acquires such rights and interest as they appear in the certificate of title, unaffected by any prior lien or encumbrance not noted therein. The purchaser is not required to explore farther than what the Torrens title, upon its face, indicates. The only exception is where the purchaser has actual knowledge of a flaw or defect in the title of the seller or of such liens or encumbrances which, as to him, is equivalent to registration (see Sec. 39, Act 496; Bernales vs. IAC, G.R. 75336, 18 October 1988;Hernandez vs. Sales, 69 Phil 744; Tajonera vs. Court of Appeals, L-26677, 27 March 1981),"46 Respondent in Good Faith

The Court of Appeals examined the facts to determine whether respondent was an innocent purchaser for value. 47 After its factual findings revealed that Respondent De Vera was in good faith, it explained thus: "x x x. Gloria Villafania, *Respondent+ De Veras vendor, appears to be the registered owner. The subject land was, and still is, registered in the name of Gloria Villafania. There is nothing in her certificate of title and in the circumstances of the transaction or sale which warrant [Respondent] De Vera in supposing that she need[ed] to look beyond the title. She had no notice of the earlier sale of the land to [petitioners]. She ascertained and verified that her vendor was the sole owner and in possession of the subject property by examining her vendors title in the Registry of Deeds and actually going to the premises. There is no evidence in the record showing that when she bought the land on October 23, 1997, she knew or had the slightest notice that the same was under litigation in Civil Case No. D-10638 of the Regional Trial Court of Dagupan City, Branch 40, between Gloria Villafania and [Petitioners] Abrigo. She was not even a party to said case. In sum, she testified clearly and positively, without any contrary evidence presented by the [petitioners], that she did not know anything about the earlier sale and claim of the spouses Abrigo, until after she had bought the same, and only then when she bought the same, and only then when she brought an ejectment case with the x x x Municipal Court of Mangaldan, known as Civil Case No. 1452. To the [Respondent] De Vera, the only legal truth upon which she had to rely was that the land is registered in the name of Gloria Villafania, her vendor, and that her title under the law, is absolute and indefeasible. x x x."48 We find no reason to disturb these findings, which petitioners have not rebutted. Spouses Abrigo base their position only on the general averment that respondent should have been more vigilant prior to consummating the sale. They argue that had she inspected the property, she would have found petitioners to be in possession.49 This argument is contradicted, however, by the spouses own admission that the parents and the sister of Villafania were still the actual occupants in October 1997, when Respondent De Vera purchased the property.50The family members may reasonably be assumed to be Villafanias agents, who had not been shown to have notified respondent of the first sale when she conducted an ocular inspection. Thus, good faith on respondents part stands. WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioners. SO ORDERED. G.R. No. 124242 January 21, 2005 SAN LORENZO DEVELOPMENT CORPORATION, petitioner, vs. COURT OF APPEALS, PABLO S. BABASANTA, SPS. MIGUEL LU and PACITA ZAVALLA LU, respondents. DECISION TINGA, J.: From a coaptation of the records of this case, it appears that respondents Miguel Lu and Pacita Zavalla, (hereinafter, the Spouses Lu) owned two (2) parcels of land situated in Sta. Rosa, Laguna covered by TCT No. T-39022 and TCT No. T-39023 both measuring 15,808 square meters or a total of 3.1616 hectares. On 20 August 1986, the Spouses Lu purportedly sold the two parcels of land to respondent Pablo Babasanta, (hereinafter, Babasanta) for the price of fifteen pesos (P15.00) per square meter. Babasanta made a downpayment of fifty thousand pesos (P50,000.00) as evidenced by a memorandum receipt issued by Pacita Lu of the same date. Several other payments totaling two hundred thousand pesos (P200,000.00) were made by Babasanta. Sometime in May 1989, Babasanta wrote a letter to Pacita Lu to demand the execution of a final deed of sale in his favor so that he could effect full payment of the purchase price. In the same letter, Babasanta notified the spouses about having received information that the spouses sold the same property to another without his knowledge and consent. He demanded that the second sale be cancelled and that a final deed of sale be issued in his favor. In response, Pacita Lu wrote a letter to Babasanta wherein she acknowledged having agreed to sell the property to him at fifteen pesos (P15.00) per square meter. She, however, reminded Babasanta that when the balance of the purchase price became due, he requested for a reduction of the price and when she refused, Babasanta backed out of the sale. Pacita added that she returned the sum of fifty thousand pesos (P50,000.00) to Babasanta through Eugenio Oya. On 2 June 1989, respondent Babasanta, as plaintiff, filed before the Regional Trial Court (RTC), Branch 31, of San Pedro, Laguna, a Complaint for Specific Performance and Damages1 against his co-respondents herein, the Spouses Lu. Babasanta alleged that the lands covered by TCT No. T- 39022 and T-39023 had been sold to him by the spouses at fifteen pesos (P15.00) per square meter. Despite his repeated demands for the execution of a final deed of sale in his favor, respondents allegedly refused. In their Answer,2 the Spouses Lu alleged that Pacita Lu obtained loans from Babasanta and when the total advances of Pacita reached fifty thousand pesos (P50,000.00), the latter and Babasanta, without the knowledge and consent of Miguel Lu, had verbally agreed to transform the transaction into a contract to sell the two parcels of land to Babasanta with the fifty thousand pesos (P50,000.00) to be considered as the downpayment for the property and the balance to be paid on or before 31 December 1987. Respondents Lu added that as of November 1987, total payments made by Babasanta amounted to only two hundred thousand pesos (P200,000.00) and the latter allegedly failed to pay the balance of two hundred sixty thousand pesos (P260,000.00) despite repeated demands. Babasanta had purportedly asked Pacita for a reduction of the price from fifteen pesos (P15.00) to twelve pesos (P12.00) per square meter and when the Spouses Lu refused to grant Babasantas request, the latter rescinded the contract to sell and declared that the original loan transaction just be carried out in that the spouses would be indebted to him in the amount of two hundred thousand pesos (P200,000.00). Accordingly, on 6 July 1989, they purchased Interbank Managers Check No. 05020269 in the amount of two hundred thousand pesos (P200,000.00) in the name of Babasanta to show that she was able and willing to pay the balance of her loan obligation. Babasanta later filed an Amended Complaint dated 17 January 19903 wherein he prayed for the issuance of a writ of preliminary injunction with temporary restraining order and the inclusion of the Register of Deeds of Calamba, Laguna as party defendant. He contended that the issuance of a preliminary injunction was necessary to restrain the transfer or conveyance by the Spouses Lu of the subject property to other persons. The Spouses Lu filed their Opposition4 to the amended complaint contending that it raised new matters which seriously affect their substantive rights under the original complaint. However, the trial court in its Order dated 17 January 19905 admitted the amended complaint. On 19 January 1990, herein petitioner San Lorenzo Development Corporation (SLDC) filed a Motion for Intervention6 before the trial court. SLDC alleged that it had legal interest in the subject matter under litigation because on 3 May 1989, the two parcels of land involved, namely Lot 1764-A and 1764-B, had been sold to it in a Deed of Absolute Sale with Mortgage.7 It alleged that it was a buyer in good faith and for value and therefore it had a better right over the property in litigation. In his Opposition to SLDCs motion for intervention,8 respondent Babasanta demurred and argued that the latter had no legal interest in the case because the two parcels of land involved herein had already been conveyed to him by the Spouses Lu and hence, the vendors were without legal capacity to transfer or dispose of the two parcels of land to the intervenor. Meanwhile, the trial court in its Order dated 21 March 1990 allowed SLDC to intervene. SLDC filed its Complaint-in-Intervention on 19 April 1990.9 Respondent Babasantas motion for the issuance of a preliminary injunction was likewise granted by the trial court in its Order dated 11 January 199110 conditioned upon his filing of a bond in the amount of fifty thousand pesos (P50,000.00). SLDC in its Complaint-in-Intervention alleged that on 11 February 1989, the Spouses Lu executed in its favor anOption to Buy the lots subject of the complaint. Accordingly, it paid an option money in the amount of three hundred sixteen thousand one hundred sixty pesos (P316,160.00) out of the total consideration for the purchase of the two lots of one million two hundred sixty-four thousand six hundred forty pesos (P1,264,640.00). After the Spouses Lu received a total amount of six hundred thirty-two thousand three hundred twenty pesos (P632,320.00) they executed on 3 May 1989 a Deed of Absolute Sale with Mortgage in its favor. SLDC added that the certificates of title over the property were delivered to it by the spouses clean and free from any adverse claims and/or notice of lis pendens. SLDC further alleged that it only learned of the filing of the complaint sometime in the early part of January 1990 which prompted it to file the motion to intervene without delay. Claiming that it was a buyer in good faith, SLDC argued that it had no obligation to look beyond the titles submitted to it by the Spouses Lu particularly because Babasantas claims were not annotated on the certificates of title at the time the lands were sold to it. After a protracted trial, the RTC rendered its Decision on 30 July 1993 upholding the sale of the property to SLDC. It ordered the Spouses Lu to pay Babasanta the sum of two hundred thousand pesos (P200,000.00) with legal interest plus the further sum of fifty thousand pesos (P50,000.00) as and for attorneys fees. On the complaint-in-intervention, the trial court ordered the Register of Deeds of Laguna, Calamba Branch to cancel the notice of lis pendens annotated on the original of the TCT No. T-39022 (T-7218) and No. T-39023 (T-7219). Applying Article 1544 of the Civil Code, the trial court ruled that since both Babasanta and SLDC did not register the respective sales in their favor, ownership of the property should pertain to the buyer who first acquired possession of the property. The trial court equated the execution of a public instrument in favor of SLDC as sufficient delivery of the property to the latter. It concluded that symbolic possession could be considered to have been first transferred to SLDC and consequently ownership of the property pertained to SLDC who purchased the property in good faith. Respondent Babasanta appealed the trial courts decision to the Court of Appeals alleging in the main that the trial court erred in concluding that SLDC is a purchaser in good faith and in upholding the validity of the sale made by the Spouses Lu in favor of SLDC. Respondent spouses likewise filed an appeal to the Court of Appeals. They contended that the trial court erred in failing to consider that the contract to sell between them and Babasanta had been novated when the latter abandoned the verbal contract of sale and declared that the original loan transaction just be carried out. The Spouses Lu argued that since the properties involved were conjugal, the trial court should have declared the verbal contract to sell between Pacita Lu and Pablo Babasanta null and void ab initio for lack of knowledge and consent of Miguel Lu. They further averred that the trial court erred in not dismissing the complaint filed by Babasanta; in awarding damages in his favor and in refusing to grant the reliefs prayed for in their answer. On 4 October 1995, the Court of Appeals rendered its Decision11 which set aside the judgment of the trial court. It declared that the sale between Babasanta and the Spouses Lu was valid and subsisting and ordered the spouses to execute the necessary deed of conveyance in favor of Babasanta, and the latter to pay the balance of the purchase price in the amount of two hundred sixty thousand pesos (P260,000.00). The appellate court ruled that the Absolute Deed of Sale with Mortgage in favor of SLDC was null and void on the ground that SLDC was a purchaser in bad faith. The Spouses Lu were further ordered to return all payments made by SLDC with legal interest and to pay attorneys fees to Babasanta. SLDC and the Spouses Lu filed separate motions for reconsideration with the appellate court.12 However, in aManifestation dated 20 December 1995,13 the Spouses Lu informed the appellate court that they are no longer contesting the decision dated 4 October 1995.

In its Resolution dated 11 March 1996,14 the appellate court considered as withdrawn the motion for reconsideration filed by the Spouses Lu in view of their manifestation of 20 December 1995. The appellate court denied SLDCs motion for reconsideration on the ground that no new or substantial arguments were raised therein which would warrant modification or reversal of the courts decision dated 4 October 1995. Hence, this petition. SLDC assigns the following errors allegedly committed by the appellate court: THE COURT OF APPEALS ERRED IN HOLDING THAT SAN LORENZO WAS NOT A BUYER IN GOOD FAITH BECAUSE WHEN THE SELLER PACITA ZAVALLA LU OBTAINED FROM IT THE CASH ADVANCE OF P200,000.00, SAN LORENZO WAS PUT ON INQUIRY OF A PRIOR TRANSACTION ON THE PROPERTY. THE COURT OF APPEALS ERRED IN FAILING TO APPRECIATE THE ESTABLISHED FACT THAT THE ALLEGED FIRST BUYER, RESPONDENT BABASANTA, WAS NOT IN POSSESSION OF THE DISPUTED PROPERTY WHEN SAN LORENZO BOUGHT AND TOOK POSSESSION OF THE PROPERTY AND NO ADVERSE CLAIM, LIEN, ENCUMBRANCE OR LIS PENDENS WAS ANNOTATED ON THE TITLES. THE COURT OF APPEALS ERRED IN FAILING TO APPRECIATE THE FACT THAT RESPONDENT BABASANTA HAS SUBMITTED NO EVIDENCE SHOWING THAT SAN LORENZO WAS AWARE OF HIS RIGHTS OR INTERESTS IN THE DISPUTED PROPERTY. THE COURT OF APPEALS ERRED IN HOLDING THAT NOTWITHSTANDING ITS FULL CONCURRENCE ON THE FINDINGS OF FACT OF THE TRIAL COURT, IT REVERSED AND SET ASIDE THE DECISION OF THE TRIAL COURT UPHOLDING THE TITLE OF SAN LORENZO AS A BUYER AND FIRST POSSESSOR IN GOOD FAITH. 15 SLDC contended that the appellate court erred in concluding that it had prior notice of Babasantas claim over the property merely on the basis of its having advanced the amount of two hundred thousand pesos (P200,000.00) to Pacita Lu upon the latters representation that she needed the money to pay her obligation to Babasanta. It argued that it had no reason to suspect that Pacita was not telling the truth that the money would be used to pay her indebtedness to Babasanta. At any rate, SLDC averred that the amount of two hundred thousand pesos (P200,000.00) which it advanced to Pacita Lu would be deducted from the balance of the purchase price still due from it and should not be construed as notice of the prior sale of the land to Babasanta. It added that at no instance did Pacita Lu inform it that the lands had been previously sold to Babasanta. Moreover, SLDC stressed that after the execution of the sale in its favor it immediately took possession of the property and asserted its rights as new owner as opposed to Babasanta who has never exercised acts of ownership. Since the titles bore no adverse claim, encumbrance, or lien at the time it was sold to it, SLDC argued that it had every reason to rely on the correctness of the certificate of title and it was not obliged to go beyond the certificate to determine the condition of the property. Invoking the presumption of good faith, it added that the burden rests on Babasanta to prove that it was aware of the prior sale to him but the latter failed to do so. SLDC pointed out that the notice of lis pendens was annotated only on 2 June 1989 long after the sale of the property to it was consummated on 3 May 1989.1awphi1.nt Meanwhile, in an Urgent Ex-Parte Manifestation dated 27 August 1999, the Spouses Lu informed the Court that due to financial constraints they have no more interest to pursue their rights in the instant case and submit themselves to the decision of the Court of Appeals. 16 On the other hand, respondent Babasanta argued that SLDC could not have acquired ownership of the property because it failed to comply with the requirement of registration of the sale in good faith. He emphasized that at the time SLDC registered the sale in its favor on 30 June 1990, there was already a notice of lis pendens annotated on the titles of the property made as early as 2 June 1989. Hence, petitioners registration of the sale did not confer upon it any right. Babasanta further asserted that petitioners bad faith in the acquisition of the property is evident from the fact that it failed to make necessary inquiry regarding the purpose of the issuance of the two hundred thousand pesos (P200,000.00) managers check in his favor. The core issue presented for resolution in the instant petition is who between SLDC and Babasanta has a better right over the two parcels of land subject of the instant case in view of the successive transactions executed by the Spouses Lu. To prove the perfection of the contract of sale in his favor, Babasanta presented a document signed by Pacita Lu acknowledging receipt of the sum of fifty thousand pesos (P50,000.00) as partial payment for 3.6 hectares of farm lot situated at Barangay Pulong, Sta. Cruz, Sta. Rosa, Laguna. 17 While the receipt signed by Pacita did not mention the price for which the property was being sold, this deficiency was supplied by Pacita Lus letter dated 29 May 1989 18 wherein she admitted that she agreed to sell the 3.6 hectares of land to Babasanta for fifteen pesos (P15.00) per square meter. An analysis of the facts obtaining in this case, as well as the evidence presented by the parties, irresistibly leads to the conclusion that the agreement between Babasanta and the Spouses Lu is a contract to sell and not a contract of sale. Contracts, in general, are perfected by mere consent,19 which is manifested by the meeting of the offer and the acceptance upon the thing which are to constitute the contract. The offer must be certain and the acceptance absolute.20 Moreover, contracts shall be obligatory in whatever form they may have been entered into, provided all the essential requisites for their validity are present.21 The receipt signed by Pacita Lu merely states that she accepted the sum of fifty thousand pesos (P50,000.00) from Babasanta as partial payment of 3.6 hectares of farm lot situated in Sta. Rosa, Laguna. While there is no stipulation that the seller reserves the ownership of the property until full payment of the price which is a distinguishing feature of a contract to sell, the subsequent acts of the parties convince us that the Spouses Lu never intended to transfer ownership to Babasanta except upon full payment of the purchase price. Babasantas letter dated 22 May 1989 was quite telling. He stated therein that despite his repeated requests for the execution of the final deed of sale in his favor so that he could effect full payment of the price, Pacita Lu allegedly refused to do so. In effect, Babasanta himself recognized that ownership of the property would not be transferred to him until such time as he shall have effected full payment of the price. Moreover, had the sellers intended to transfer title, they could have easily executed the document of sale in its required form simultaneously with their acceptance of the partial payment, but they did not. Doubtlessly, the receipt signed by Pacita Lu should legally be considered as a perfected contract to sell. The distinction between a contract to sell and a contract of sale is quite germane. In a contract of sale, title passes to the vendee upon the delivery of the thing sold; whereas in a contract to sell, by agreement the ownership is reserved in the vendor and is not to pass until the full payment of the price.22 In a contract of sale, the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded; whereas in a contract to sell, title is retained by the vendor until the full payment of the price, such payment being a positive suspensive condition and failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective.23 The perfected contract to sell imposed upon Babasanta the obligation to pay the balance of the purchase price. There being an obligation to pay the price, Babasanta should have made the proper tender of payment and consignation of the price in court as required by law. Mere sending of a letter by the vendee expressing the intention to pay without the accompanying payment is not considered a valid tender of payment.24 Consignation of the amounts due in court is essential in order to extinguish Babasantas obligation to pay the balance of the purchase price. Glaringly absent from the records is any indication that Babasanta even attempted to make the proper consignation of the amounts due, thus, the obligation on the part of the sellers to convey title never acquired obligatory force. On the assumption that the transaction between the parties is a contract of sale and not a contract to sell, Babasantas claim of ownership should nevertheless fail. Sale, being a consensual contract, is perfected by mere consent25 and from that moment, the parties may reciprocally demand performance.26 The essential elements of a contract of sale, to wit: (1) consent or meeting of the minds, that is, to transfer ownership in exchange for the price; (2) object certain which is the subject matter of the contract; (3) cause of the obligation which is established.27 The perfection of a contract of sale should not, however, be confused with its consummation. In relation to the acquisition and transfer of ownership, it should be noted that sale is not a mode, but merely a title. A mode is the legal means by which dominion or ownership is created, transferred or destroyed, but title is only the legal basis by which to affect dominion or ownership.28 Under Article 712 of the Civil Code, "ownership and other real rights over property are acquired and transmitted by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition." Contracts only constitute titles or rights to the transfer or acquisition of ownership, while delivery or tradition is the mode of accomplishing the same. 29 Therefore, sale by itself does not transfer or affect ownership; the most that sale does is to create the obligation to transfer ownership. It is tradition or delivery, as a consequence of sale, that actually transfers ownership. Explicitly, the law provides that the ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Article 1497 to 1501.30 The word "delivered" should not be taken restrictively to mean transfer of actual physical possession of the property. The law recognizes two principal modes of delivery, to wit: (1) actual delivery; and (2) legal or constructive delivery. Actual delivery consists in placing the thing sold in the control and possession of the vendee. 31 Legal or constructive delivery, on the other hand, may be had through any of the following ways: the execution of a public instrument evidencing the sale; 32 symbolical tradition such as the delivery of the keys of the place where the movable sold is being kept;33 traditio longa manu or by mere consent or agreement if the movable sold cannot yet be transferred to the possession of the buyer at the time of the sale;34 traditio brevi manu if the buyer already had possession of the object even before the sale;35 and traditio constitutum possessorium, where the seller remains in possession of the property in a different capacity.36 Following the above disquisition, respondent Babasanta did not acquire ownership by the mere execution of the receipt by Pacita Lu acknowledging receipt of partial payment for the property. For one, the agreement between Babasanta and the Spouses Lu, though valid, was not embodied in a public instrument. Hence, no constructive delivery of the lands could have been effected. For another, Babasanta had not taken possession of the property at any time after the perfection of the sale in his favor or exercised acts of dominion over it despite his assertions that he was the rightful owner of the lands. Simply stated, there was no delivery to Babasanta, whether actual or constructive, which is essential to transfer ownership of the property. Thus, even on the assumption that the perfected contract between the parties was a sale, ownership could not have passed to Babasanta in the absence of delivery, since in a contract of sale ownership is transferred to the vendee only upon the delivery of the thing sold.37 However, it must be stressed that the juridical relationship between the parties in a double sale is primarily governed by Article 1544 which lays down the rules of preference between the two purchasers of the same property. It provides: Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. The principle of primus tempore, potior jure (first in time, stronger in right) gains greater significance in case of double sale of immovable property. When the thing sold twice is an immovable, the one who acquires it and first records it in the Registry of Property, both made in good faith, shall be deemed the owner. 38 Verily, the act of registration must be coupled with good faith that is, the registrant must have no knowledge of the defect or lack of title of his vendor or must not have been aware of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor.39 Admittedly, SLDC registered the sale with the Registry of Deeds after it had acquired knowledge of Babasantas claim. Babasanta, however, strongly argues that the registration of the sale by SLDC was not sufficient to confer upon the latter any title to the property since the registration was attended by bad faith. Specifically, he points out that at the time SLDC registered the sale on 30 June 1990, there was already a notice of lis pendens on the file with the Register of Deeds, the same having been filed one year before on 2 June 1989. Did the registration of the sale after the annotation of the notice of lis pendens obliterate the effects of delivery and possession in good faith which admittedly had occurred prior to SLDCs knowledge of the transaction in favor of Babasanta? We do not hold so. It must be stressed that as early as 11 February 1989, the Spouses Lu executed the Option to Buy in favor of SLDC upon receiving P316,160.00 as option money from SLDC. After SLDC had paid more than one half of the agreed purchase price of P1,264,640.00, the Spouses Lu subsequently executed on 3 May 1989 a Deed of Absolute Sale in favor or SLDC. At the time both deeds were executed, SLDC had no knowledge of the prior transaction of the Spouses Lu with Babasanta. Simply stated, from the time of execution of the first deed up to the moment of transfer and delivery of possession of the lands to SLDC, it had acted in good faith and the subsequent annotation of lis pendens has no effect at all on the consummated sale between SLDC and the Spouses Lu. A purchaser in good faith is one who buys property of another without notice that some other person has a right to, or interest in, such property and pays a full and fair price for the same at the time of such purchase, or before he has notice of the claim or interest of some other person in the property.40 Following the foregoing definition, we rule that SLDC qualifies as a buyer in good faith since there is no evidence extant in the records that it had knowledge of the prior transaction in favor of Babasanta. At the time of the sale of the property to SLDC, the vendors were still the registered owners of the property and were in fact in possession of the lands.l^vvphi1.net Time and again, this Court has ruled that a person dealing with the owner of registered land is not bound to go beyond the certificate of title as he is charged with notice of burdens on the property which are noted on the face of the register or on the certificate of title. 41 In assailing knowledge of the transaction between him and the Spouses Lu, Babasanta apparently relies on the principle of constructive notice incorporated in Section 52 of the Property Registration Decree (P.D. No. 1529) which reads, thus: Sec. 52. Constructive notice upon registration. Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed, or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing, or entering. However, the constructive notice operates as suchby the express wording of Section 52from the time of the registration of the notice of lis pendens which in this case was effected only on 2 June 1989, at which time the sale in favor of SLDC had long been consummated insofar as the obligation of the Spouses Lu to transfer ownership over the property to SLDC is concerned. More fundamentally, given the superiority of the right of SLDC to the claim of Babasanta the annotation of the notice of lis pendens cannot help Babasantas position a bit and it is irrelevant to the good or bad faith characterization of SLDC as a purchaser. A notice of lis pendens, as the Court held in Natao v. Esteban,42serves as a warning to a prospective purchaser or incumbrancer that the particular property is in litigation; and that he should keep his hands off the same, unless he intends to gamble on the results of the litigation." Precisely, in this case SLDC has intervened in the pending litigation to protect its rights. Obviously, SLDCs faith in the merit of its cause has been vindicated with the Courts present decision which is the ultimate denouement on the controversy. The Court of Appeals has made capital43 of SLDCs averment in its Complaint-in-Intervention44 that at the instance of Pacita Lu it issued a check for P200,000.00 payable to Babasanta and the confirmatory testimony of Pacita Lu herself on cross-examination.45 However, there is nothing in the said pleading and the testimony which explicitly relates the amount to the transaction between the Spouses Lu and Babasanta for what they attest to is that the amount was supposed to pay off the advances made by Babasanta to Pacita Lu. In any event, the incident took place after the Spouses Lu had already executed the Deed of Absolute Sale with Mortgage in favor of SLDC and therefore, as previously explained, it has no effect on the legal position of SLDC. Assuming ex gratia argumenti that SLDCs registration of the sale had been tainted by the prior notice of lis pendens and assuming further for the same nonce that this is a case of double sale, still Babasantas claim could not prevail over that of SLDCs. In Abarquez v. Court of Appeals,46 this Court had the occasion to rule that if a vendee in a double sale registers the sale after he has acquired knowledge of a previous sale, the registration constitutes a registration in bad faith and does not confer upon him any right. If the registration is done in bad faith, it is as if there is no registration at all, and the buyer who has taken possession first of the property in good faith shall be preferred. In Abarquez, the first sale to the spouses Israel was notarized and registered only after the second vendee, Abarquez, registered their deed of sale with the Registry of Deeds, but the Israels were first in possession. This Court awarded the property to the Israels because registration of the property by Abarquez lacked the element of good faith. While the facts in the instant case substantially differ from that in Abarquez, we would not hesitate to rule in favor of SLDC on the basis of its prior possession of the property in good faith. Be it noted that delivery of the property to SLDC was immediately effected after the execution of the deed in its favor, at which time SLDC had no knowledge at all of the prior transaction by the Spouses Lu in favor of Babasanta.1a\^/phi1.net The law speaks not only of one criterion. The first criterion is priority of entry in the registry of property; there being no priority of such entry, the second is priority of possession; and, in the absence of the two priorities, the third priority is of the date of title, with good faith as the common critical element. Since SLDC acquired possession of the property in good faith in contrast to Babasanta, who neither registered nor possessed the property at any time, SLDCs right is definitely superior to that of Babasantas. At any rate, the above discussion on the rules on double sale would be purely academic for as earlier stated in this decision, the contract between Babasanta and the Spouses Lu is not a contract of sale but merely a contract to sell. In Dichoso v. Roxas,47 we had the occasion to rule that Article 1544 does not apply to a case where there was a sale to one party of the land itself while the other contract was a mere promise to sell the land or at most an actual assignment of the right to repurchase the same land. Accordingly, there was no double sale of the same land in that case. WHEREFORE, the instant petition is hereby GRANTED. The decision of the Court of Appeals appealed from is REVERSED and SET ASIDE and the decision of the Regional Trial Court, Branch 31, of San Pedro, Laguna is REINSTATED. No costs. SO ORDERED. G.R. No. L-76265 March 11, 1994 VIRGINIA CALALANG, petitioner, vs. REGISTER OF DEEDS OF QUEZON CITY, ADMINISTRATOR OF NATIONAL LAND TITLES AND DEEDS REGISTRATION, LUCIA DE LA CRUZ, CONSTANCIO SIMANGAN, and IGLESIA NI KRISTO, respondents. MELO, J.: The Decision of the Second Division of this Court promulgated April 22, 1992 (208 SCRA 215) dismissing, for lack of merit, these two (2) consolidated petitions, is assailed by petitioners in their separate motions for reconsideration. The assailed Decision states: With this Court's ruling promulgated in 1984, it is our considered view that the petitioners cannot raise anew the question of ownership of Lucia de la Cruz over Lot 671 which had been determined by the Court of Appeals and affirmed by the Supreme Court in the de la Cruz case. Well-settled in the rule enunciated in Church Assistance Program, Inc. v. Sibulo, 171 SCRA 408 [1989] that: When a right or fact has been judicially tried and determined by a court of competent jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with them in law or estate. The Court's ruling has long been final and the issue on ownership of Lot 671 finally disposed of several years ago. This declaration must be respected and followed in the instant case applying the principle of res judicata or, otherwise, the rule on conclusiveness of judgment. The less familiar concept of less terminological usage of res judicata as a rule on conclusiveness of judgment refers to the situation where the judgment in the prior action operates as an estoppel only as to the matters actually determined therein or which were necessarily included therein. (De la Cruz v. Court of Appeals, 187 SCRA 165 [1990]). Inevitably, the de la Cruz ruling should be applied to the present petitions since the facts on which such decision was predicated continue to be the facts of the case before us now (See Rivas v. SEC, 190 SCRA 295 [1990]). Even the petitioners substantially adopt the same findings of facts in their pleadings. The factual inquiry with regards to the history of Lot 671 has already been laid to rest and may no longer be disturbed. xxx xxx xxx In our capacity as the court of last resort, the petitioners try to convince us to look or inquire into the validity of the reconstitution proceedings initiated by Lucia de la Cruz ruling, contending that the implementation of de la Cruz ruling would deprive them of their properties without due process of law. We have looked long and hard into the records of the case but the facts and circumstances plus law and jurisprudence on the matter do not warrant such action from the Court. INK's title over Lot 671 which necessarily included Lot 671-A had already become incontrovertible and indefeasible. To reopen or to question the legality of INK's title would defeat the purpose of our Torrens system which seeks to insure stability by quieting titled lands and putting to a stop forever any question of the legality of the registration in the certificate or questions which may arise therefrom. (de la Cruz v. de la Cruz, supra.) In fairness to INK, as registered owner it is entitled to rest secure in its land title. In view of all the foregoing, it would be for the public interest and the maintenance of the integrity and stability of the Torrens system of land registration that all transfer certificates of title derived from the reconstituted title of Eugenia de la Paz and Dorotea de la Cruz be annulled in order to prevent the proliferation of

derivative titles which are null and void. The legality or validity of INK's title over Lot 671 has been settled. The Court has spoken and it has done so with finality, logically and rightly so as to assure stability in legal relations and avoid confusion. (See Ver v. Quetulio, 163 SCRA 80 [1988]). (pp. 224-225; 229-230.) In G.R. No. 76265, petitioners seek a reconsideration of the aforesaid decision because allegedly, the same is contrary to the following settled principles of law and doctrines laid down this Court, to wit: 1. That a judgment rendered in an action in personam binds only the parties to the action; 2. That a petition for "reconstitution" of a certificate of title filed in 1971, thirty years after the sale to respondent Lucia de la Cruz in 1941, without personal notice to petitioners and other title holders of Lot 671-A, whose titles date from 1952, is void and can be collaterally attacked; 3. That the registration of the sale to respondent Lucia de la Cruz in the Primary Entry Book of the Register of Deeds of Manila in 1943 of a land located in Caloocan, Rizal, cannot be the operative act to convey said property to the vendee, as the record of the title to said property was then in Pasig, Rizal and then transferred to Quezon City, after the war; 4. That the indefeasibility of a Torrens title after one year from issuance, refers to the indefeasibility of a decree of registration after one year from entry thereof in an original registration or cadastral proceeding, and by analogy, the principle is extended to a patent issued in an administrative proceeding, but not to a reconstitution of a certificate of title allegedly lost, nor to the issuance of subsequent transfer certificate of title; and 5. That respondent Iglesia ni Kristo cannot be considered as an innocent purchaser for value as far as petitioners and other title holders to Lot 671-A are concerned, because the titles of respondent Iglesia ni Kristo are derived from the "reconstituted" title of respondent Lucia de la Cruz issued in 1971. Respondent Iglesia ni Kristo is deemed to have actual and constructive knowledge of the rights of more than 80 buyers of Lot 671-A who were issued transfer certificates of title dating from 1952. In G.R. No. 83280, petitioners assail the decision on the following grounds: 1. The decision in the de la Cruz case does not bind the petitioners. 2. The Iglesia ni Kristo, represented by public respondent, is not an innocent purchaser for value of the parcels of land in dispute. 3. Petitioners, as duly registered owners of land under the Torrens system, are purchasers in good faith whose titles have become indefeasible. Aware of the importance of the case, the Court granted the request of petitioners to have their motions for reconsideration be considered by the Court en banc. At the core of the controversy is the case of Agustina de la Cruz et al. vs. Lucia de la Cruz, Iglesia ni Kristo and Hon. Court of Appeals (130 SCRA 666 [1984]) which has settled once and for all the question of ownership of Lot 671 of the Piedad Estate in Barrio Culiat, Quezon City. A portion of this lot, Lot 671-A, is the subject of these two (2) consolidated petitions at bar. In said de la Cruz case, the Court found and held: 1. The mother title of Lot 671 is OCT. No. 614 registered on March 12, 1912 in the name of the Philippine Government. When Lot 671, with an area of 184,268 square meters, more or less, was segregated the original title was partially cancelled and TCT-40355 T-201 was issued to Eugenia de la Paz and Dorotea de la Cruz by virtue of Entry No. 3241 which reads: . . . Vendido a Eugenia de la Paz y Dorotea de la Paz y Dorotea de la Cruz el Lote No. 671 del terreno en este certificado de titulo, mediante escritura ratificada al 27 de Julio de 1931 en Manila, ante Vicente Garcia, Notario Publico, se cancela parcialmente al presente certificado de titulo, en cuanto al lote mencianado y se expide otro a nombre de las compradoras con el No. 40355, folio 5, Tomo T-201 del libro de transferencias; archivandose la escritura de que se ha hecho referencia en el Legajo T-No. 40355. 2. On November 29, 1941 Eugenia de la Paz and Dorotea de la Cruz sold Lot 671 to Lucia de la Cruz and TCT No. 40355 T-201 was cancelled by virtue of Entry No. 258, Page 7, volume 7, Primary Entry Book of the Registry of Deeds of Manila. Said entry reads as follows:
1. Number of Entry 258 2. Date of filing: Month, day & year July 17, 1943 Hour and Minute 10:15 A.M. 3. Nature of Contract Sale 4. Executed by Doroteo (sic) de la Cruz, et al. 5. In favor of Lucia de la Cruz 6. Date of Instrument 11-29-41 7. Relative to: Certificate of Title No 40355 Book T-201 8. Papers presented by: Name Regino Cleofas Address Pasong Tamo, Quezon City 9. Contract value P2,500.00 10. Remark Caloocan

3. In 1971, Lucia de la Cruz petitioned for the reconstitution of her title in the Court of First Instance of Manila. The court granted the petition and the Register of Deeds of Manila issued to her TCT No. RT-58, thereby cancelling TCT 40355 T-201. (at p. 698.) 4. The petition for reconstitution was duly published and proper notices posted in accordance with law; and after due hearing, was granted by the court in the exercise of its authority and jurisdiction. "Hence, We reject petitioners' assignment of error that the Court of Appeals erred in not declaring that the reconstituted title of Lucia de la Cruz is absolutely null and void." (at p. 698.). 5. "With respect to the reconstituted title of Dorotea de la which was granted by the Court of First Instance of Rizal on December 14, 1945 and TCT 5284 of the Register of Deeds of Quezon City was issued in substitution and/or reconstitution of TCT 40355 of the Register of Deeds of Rizal, . . . it may be true that the order granting reconstitution was null and void by reason of the failure to cause the necessary publication of the petition, and, therefore, the reconstituted title was ineffective. More than that, it is established that Dorotea de la Cruz and Eugenia de la Paz had previously sold the land to Lucia de la Cruz on November 29, 1941 as indicated in Entry No. 258 so that Dorotea de la Cruz was no longer the owner at the time she petitioned for reconstitution." (at pp. 298-699.) 6. "Nonetheless, it is not disputed that Dorotea de la Cruz together with Eugenia de la Paz were the registered owners of Lot 671 under TCT 40355, T-201 of the Register of Deeds of Rizal and they could legally transfer the same to Lucia de la Cruz who thereafter sold in favor of Iglesia ni Kristo." (at p. 699.) 7. Under Section 38 of the Land Registration Act, "the registered title of Lucia de la Cruz reconstituted as TCT No. RT-58 in 1971 became indefeasible and incontrovertible one year from its issuance. As registered owner, Lucia de la Cruz had the perfect and legal right to sell, assign, and convey the property to respondent Iglesia ni Kristo who as purchaser for value in good faith hold the same free from all encumbrances except those noted in said certificate (Sec. 39 Land Registration Act). The Iglesia may then safely rely on the correctness of the certificate of title issued therefor and the will in no way oblige him to go behind the certificate to determine the condition of the property". (at p. 7063.) The rule is well-settled that once a decision becomes final, the Court can no longer amend, modify, much less, set aside the same (Adez Realty Inc. vs. Court of Appeals, 212 SCRA 625 [1992]); otherwise, endless litigation will result (Fabular vs. Court of Appeals, 119 SCRA 329 [1982]) In fact, in Duenas vs. Mandi (151 SCRA 530 [1987]) cited in Adez, we held that the trial court and the appellate court may have committed error in the assignment or partition of the eight (8) parcels of land to the parties in said case, but considering that their judgments are already final, the error, assuming one was committed, can no longer be amended or corrected. In Icao vs. Apalisok (180 SCRA 680 [1989]), likewise cited in Adez, we ruled that even the subsequent discovery of an erroneous imposition of a penalty will not justify correction of the judgment after it has become final. Our decision in these two consolidated petitions is an application of this well-established rule, that once a decision becomes final, the Court can no longer modify, amend, much less, set aside the same. To grant a reconsideration of this decision would also reconsider, reverse, and set aside our 1984 decision which was long become final. For, while the 1984 decision declared the reconstituted title RT-58 of Lucia de la Cruz valid and legal, petitioners would want us to reach 10 years back and declare the same title null and void; while the 1984 decision declared the Iglesia ni Kristo a purchaser in good faith and for value, petitioners would want us to do a complete turn around and find the Iglesia ni Kristo a purchaser in bad faith. In the case of Legarda vs. Savellano (158 SCRA 194 [1988] the Court stated: . . . It is a general rule common to all civilized system of jurisprudence, that the solemn and deliberate sentence of the law, pronounced by its appointed organs, upon a disputed fact or a state of facts, should be regarded as a final and conclusive determination of the question litigated, and should forever set the controversy at rest. Indeed, it has been well said that this maxim is more than a mere rule of law, more than an important principle of public policy; and that it is not too much to say that it is a fundamental concept in the organization of every jural system. Public policy and sound practice demand that at the risk of occasional errors, judgments of courts should become final at some definite date fixed by law. The very object for which courts were constituted was to put an end to controversies. If we were to allow repeated suits seeking to nullify OCT Nos. 1348-1355 issued to Benito Legarda, Sr. in 1907, the indefeasibility of titles issued under the Torrens systems and land registration, which the Philippines has adopted, will be defeated and set to naught. (at p. 200.) The Court, speaking through Justice Nocon, in Swan vs. Court of Appeals (212 SCRA 114 [1992]) stated: It is high time that we write finis to a litigation that has been pending for years not only to the prejudice of the prevailing parties, but also to the prompt determination of controversies, and in violation of the fundamental concept that public policy and sound practice demand that judgments of courts shall become final at some definite date fixed by law. (at p. 124) Petitioners contend that the de la Cruz case is not applicable and that the doctrine of res judicatashould not have been applied. We do not agree. The doctrine res judicata actually embraces two different concepts: (1) bar by former judgment and (b) conclusiveness of judgment. The second concept conclusiveness of judgment states that a fact or question which was in issue in a former suit and was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to the action and persons in privity with them are concerned and cannot be again litigated in any future action between such parties or their privies, in the same court or any other court of concurrent jurisdiction on either the same or different cause of action, while the judgment remains unreversed by proper authority. It has been held that in order that a judgment in one action

can be conclusive as to a particular matter in another action between the same parties or their privies, it is essential that the issue be identical. If a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit (Nabus vs. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause of action is not required but merely identity of issue. Justice Feliciano, in Smith Bell & Company (Phils.), Inc. vs. Court of Appeals (197 SCRA 201, 210 [1991]), reiterated Lopez vs. Reyes (76 SCRA 179 [1977]) in regard to the distinction between bar by former judgment which bars the prosecution of a second action upon the same claim, demand, or cause of action, and conclusiveness of judgment which bars the relitigation of particular facts or issues in another litigation between the same parties on a different claim or cause of action. The general rule precluding the relitigation of material facts or questions which were in issue and adjudicated in former action are commonly applied to all matters essentially connected with the subject matter of the litigation. Thus, it extends to questions necessarily implied in the final judgment, although no specific finding may have been made in reference thereto and although such matters were directly referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former trial shows that the judgment could not have been rendered without deciding the particular matter, it will be considered as having settled that matter as to all future actions between the parties and if a judgment necessarily presupposes certain premises, they are as conclusive as the judgment itself . . . (at pp. 186-187.) The issue of the validity of the reconstituted title of Lucia de la Cruz over Lot 671 of the Piedad Estate, the issue of whether or not the Iglesia ni Kristo was an innocent purchaser for value and in good faith, and the issue of the validity of the reconstituted title of Dorotea de la Cruz and Eugenia de la Paz (herein petitioners' predecessors-in-interest) were actually, directly, and expressly raised, controverted, litigated and resolved in our 1984 decision. Applying the rule on conclusiveness of judgment, these issue may no longer be relitigated in these present petitions. Petitioners cannot evade the conclusive effect of the 1984 decision, merely because they were not impleaded parties in the said case. It has been said that the foundation principle upon which the doctrine of res judicata rests is that parties ought no to be permitted to litigate the same issue more than once; that, when a right or fact has been judicially tried and determined by a court of competent jurisdiction, or an opportunity for such trials has been given, the judgment of the court, so long as it remains unreversed, should be conclusive upon the parties those in privity with them in law or estate. (Nabus vs. Court of Appeals, supra). In the case of Vda. de Medina vs. Cruz (161 SCRA 36 [1988]), the Court stated: The crucial issue in this case is whether or not the decision in Civil Case No. C-120 which has long become final and executory can be enforced against the petitioner who is not a party to the aforementioned case. Petitioner alleged in her memorandum that she is not affected by the decision in C-120 as persons who are not parties to a suit are not bound by the judgment and that she purchased the lot in good faith from an entirely different person the Heirs of Don Mariano San Pedro y Esteban and not from either the plaintiffs or defendants of the aforesaid case. It is a generally accepted principle "that no man shall be affected by any proceeding to which he is a stranger . . . [but] being a privy, the petitioner can be reached by the order of execution and Writ of Demolition. (at pp. 43-44.) Also, in the case of Varsity Hills, Inc. vs. Navarro (43 SCRA 503 [1972]), the Court ruled: In the face of these declarations in a final decisions of the highest Court of the land, it becomes indubitable that the action in the court below was definitely barred: for while present private respondents were not parties in the 1993 cause, their predecessor-in-interest Quintin Mejia was such a party and the final judgment against him concludes and bars his successors and privies as well. (at pp. 510-511.) Admittedly, petitioners derived their title from Amando Clemente and/or Clemville Subdivision. Amando Clemente derived his title from Dorotea de la Cruz and Eugenia de la Paz. Being privies and/or successors in interest to the parties in the 1984 decision, petitioners are bound by said decision. Likewise untenable is petitioners' contention that the reconstituted titled of Lucia de la Cruz, RT-58, is void. Proceedings for judicial reconstitution or certificates of title are proceedings in rem. Thus, notice of hearing by proper publication is sufficient to clothe the Court with jurisdiction and the mere fact that a person purporting to have a legitimate claim in the property did not receive personal notice is not sufficient ground to invalidate the proceedings. In Adez Realty, Inc. vs. Court of Appeals (212 SCRA 625 [1992]), the Court, through Justice Bellosillo, held: Besides, as early as 1910, in Grey Alba v. de la Cruz (17 Phil. 41) We already ruled that the land registration proceedings are proceedings in rem, not in personam, and therefore it is not necessary to give personal notice to the owners or claimants of the land sought to be registered, in order to vest the courts with power and authority over the res. Thus, while, it may be true that no notice was sent by registered mail to petitioners when the judicial reconstitution of title was sought, such failure, however, did not amount to a jurisdictional defect. (See PNR vs. De la Vina & Zamacona, 109 Phil. 342). In Register of Deeds of Malabon vs. RTC, Malabon, Metro Manila, Br. 170 (G.R. No. 886623, February 5, 1990, 181 SCRA 788), We said that "the purpose of the publication of the notice of the petition for reconstitution in the Official Gazette is to apprise the whole world that such a petition has been filed and that whoever is minded to oppose it for good cause may do so within thirty (30) days before the date set by the court for hearing the petition. It is the publication of such notice that brings in the whole word as a party in the case and vests the court with jurisdiction to hear and decide it." Thus, notice of hearing by proper publication in the Official Gazette is sufficient to clothe the court with jurisdiction, and the mere fact that a person purporting to have a legitimate claim in the property did not receive personal notice is not sufficient ground to invalidate the proceedings. (at p. 628.) Besides, the official records of the Quezon City Municipal Hall, as certified to by the Office of the City Assessor of Quezon City (pp. 456-556, Rollo of G.R. No. 83280) show that there are no improvements whatsoever on the property in question thus signifying that the property is unoccupied. Therefore, it would have been impossible for Lucia de la Cruz to notify petitioners. Be this as it may, the issue of the validity of the 1971 reconstitution proceedings is no longer a valid issue in these petitions at bar, its validity having already been resolved with finality in the 1984 decision. The contention that the registration of the November 29, 1941 sale by Dorotea de la Cruz and Eugenia de la Paz to Lucia de la Cruz, with the Register of Deeds of Manila is irregular deserves scant consideration. As certified to by the Administrator of the Land. Registration Authority (p. 448, Rollo of G.R. No. 83280) the City of Manila and the nearby towns and cities were treated as a single political unit, that is Greater Manila, during the Japanese Occupation. Thus, the Excerpts from volume 7 of the Registry Book of Manila, year 1943 (p. 447, Rollo of G.R. No. 83280), show, among other things, the following entries: (a) The sale of a parcel of land located in Quezon City executed by Magdalena Estates, Inc. in favor of Dionisio Bravo; (b) The mortgage of a parcel of land in Quezon City by Antonio Zuzuareggui in favor of Elena Africa, et al.; and (c) The sale of a parcel of land in Quezon City to Lucia de la Cruz by Dorotea de la Cruz, et al. clearly indicating that transactions involving parcels of land located in Quezon City were indeed recorded and registered in the Registry of Manila. Under the law, it is the act of registration of the deed of conveyance that serves as the operative act to convey the land registered under the Torrens system. The act of registration creates constructive notice to the whole world of the fact of such conveyance. (Quilisadio vs. Court of Appeals, 182 SCRA 401 [1990]; De la CalzadaCierras vs. Court of Appeals, 212 SCRA 390 [1992]). We cannot go along with petitioners' position that their titles, because they were issued in 1952, must prevail over the title of the Iglesia ni Kristo. The titles issued to petitioners are derived from TCT No. 5284. This title, TCT No. 5284 is the reconstituted title of Dorotea de la Cruz which was declared null and void in the 1984 decision. 3. With respect to the reconstituted title of Dorotea de la Cruz which was granted by the Court of First Instance of Rizal on December 14, 1945 and TCT 5284 of the Register of Deeds of Quezon City was issued in substitution and/or reconstitution of TCT 40355 of the Register of Deeds of Rizal by virtue of the following inscription on TCT 40335, to wit: Se expide otra copia para el dueno del presente certificado de titulo en sustitucion del duplicado que se alega haberse quemado, en virtud de na orden del juzgado de Primera Instancia de Rizal dictada el 14 de Deciembre, 1945, en Expediente G.L.R.O. Rec. No. 5975, y en donde se declara nulo y ninguna valor dicho duplicado quemado. MAMERTO TINGKUNGKO Register of Deeds Interino it may be true that the order granting reconstitution was null and void by reason of the failure to cause the necessary publication of the petition, and therefore, the reconstituted title was ineffective. More than that, it is established that Dorotea de la Cruz and Eugenia de la Paz had previously sold the land to Lucia de la Cruz executed on November 29, 1941 as indicated in Entry No. 258 so that Dorotea de la Cruz was no longer the owner at the time she petitioned for reconstitution. Nonetheless, it is not disputed that Dorotea de la Cruz together with Eugenia de la Paz were the registered owners of Lot 671 under TCT 40355, T201 of the Register of Deeds of Rizal, and they could legally transfer the same to Lucia de la Cruz who thereafter sold in favor of respondent Iglesia ni Kristo. (at pp. 698-699.) Needless to state, all subsequent certificates of title including petitioners' titles are also void because of the legal truism that the spring cannot rise higher than its source (De Santos vs. Intermediate Appellate Court, 157 SCRA 295 [1988].) The law must protect and prefer the lawful holder of registered title over the transferee of a vendor bereft of any transmissible rights (Baltazar vs. Court of Appeals, 168 SCRA 354 [1988]). Finally, both petitions are procedurally erroneous because certiorari is not the proper remedy. G.R. No. 76265 stemmed from a letter in consulta addressed by the then Acting Register of Deeds of Quezon City to the Administrator of the National Land Titles and Deeds Registration Administration involving the registrability of a deed of sale presented for registration. by Mr. Constancio Simangan. The Administrator issued a resolution dated April 4, 1988 ordering the Register of Deeds to register the deed of sale subject of the consulta. The Register of Deeds moved for reconsideration. Herein petitioner Virginia Calalang moved to intervene.

The Acting Administrator denied both motions. Calalang filed a motion for reconsideration but the same was denied, and forthwith, Calalang filed the present petition. The proper remedy available to Calalang is an appeal to the Court of Appeals pursuant to Section 117 of Presidential Decree No. 1529 and Republic Act No. 5434, and not certiorari or prohibition. Sec. 117, PD 1529 (Property Registration Decree) Procedure . . . the party in interest who disagrees with the final resolution, ruling or order of the Commission relative to theconsultas may appeals to the Court of Appeals within the period and in the manner provided in Republic Act No. 5434. Sec. 2, RA 5434 (Uniform Procedure for Appeals) Appeals to Court of Appeals. Appeals to the Court of Appeals shall be filed within fifteen (15) days from notice of the ruling, award, order, decision or judgment or from the date of its last publication, if publication is required by law for its effectivity; . . . If no appeal is filed within the periods here fixed, the ruling, award, order, decision or judgment shall become final and may be executed as provided by existing law. The other case, G.R. No. 83280, stemmed from an injunction suit filed by Augusto de Leon et al. against the Iglesia ni Kristo and Bishop Manalo. The case was dismissed by the Regional Trial Court. Instead of appealing the order of dismissal, petitioners filed with the Court of Appeals the following. 1. A "Motion for Reconsideration Ad Cautelam"; and 2. An "Omnibus Motion Incident to Execution of the Decision" The Court of Appeals denied both motions. Hence, the other herein petition. It is elementary that a petition for certiorari can not substitute for a lost appeal. The order of the Regional Trial Court dismissing the case was appealable. Petitioners in the second petition failed to appeal the same, consequently the order has already become final and may no longer be reviewed oncertiorari. Moreover, these petitions amount to a collateral attack on the title of the Iglesia ni Kristo. Well-settled is the rule that a certificate of title cannot be altered, modified or cancelled except in a direct proceeding in accordance with law. (Section 48, PD No. 1529.) IN VIEW OF THE FOREGOING, petitioners' Motion for Reconsiderations are hereby DENIED. Narvasa, C.J., Cruz, Padilla, Bidin, Regalado, Nocon, Bellosillo and Puno, JJ., concur. G.R. No. L-56232 June 22, 1984 ABELARDO CRUZ (deceased) substituted by Heirs Consuelo C. Cruz, Claro C. Cruz and Stephen C. Cruz, per Resolution, Petitioners, vs. LEODEGARIA CABANA, TEOFILO LEGASPI , ILUMINADA CABANA and THE HONOR- ABLE COURT OF APPEALS,* respondents. TEEHANKEE, J.: The Court affirms the questioned decision of the now defunct Court of Appeals which affirmed that of the Court of First Instance of Quezon Province, but directs that the seller, respondent Leodegaria Cabana who sold the property in question twice, first to her corespondents Teofilo Legaspi and Iluminada Cabana and later to petitioner Abelardo Cruz (now deceased), should reimburse to petitioner's heirs the amounts of P2,352.50, which the late petitioner Abelardo Cruz paid to the Philippine National Bank to discharge the mortgage obligation of said respondent Leodegaria Cabana in favor of said bank, and of P3,397.50, representing the amount paid by said Abelardo Cruz to her as consideration of the sale with pacto de retro of the subject property.chanroblesvirtualawlibrary chanrobles virtual law library This is a simple case of double sale of real property. Respondent appellate court in its decision of August 13, 1980 stated the background facts and resolved the issue in favor of defendants- appellees, first buyers- respondents herein, and against plaintiffappellant Abelardo Cruz, petitioner herein (substituted by his heirs), as follows: Defendants' evidence shows that on October 21, 1968, defendant Leodegaria Cabana sold the land in question to defendants-spouses Teofilo Legaspi and Iluminada Cabana (Exh. 1). The said defendants-spouses attempted to register the deed of sale but said registration was not accomplished because they could not present the owner's duplicate of title which was at that time in the possession of the PNB as mortgage.chanroblesvirtualawlibrary chanrobles virtual law library Likewise, when plaintiff tried to register the deed of sale executed by Leodegaria Cabana on September 3, 1970, said plaintiff was informed that the owner thereof had sold the land to defendants-spouses on October 21, 1968. Plaintiff was able to register the land in his name on February 9, 1971 (Exh. A). With the admission of both parties that the land in question was sold to two persons, the main issue to be resolved in this appeal is as to who of said vendees has a better title to said land.chanroblesvirtualawlibrary chanrobles virtual law library There is no dispute that the land in question was sold with right of repurchase on June 1, 1965 to defendants- spouses Teofilo Legaspi and Iluminada Cabana (Exh. 1). The said document 'Bilihang Muling Mabibili' stipulated that the land can be repurchased by the vendor within one year from December 31, 1966 (see par. 5, Exh. 1). Said land was not repurchased and in the meantime, however, said defendants-spouses took possession of the land.chanroblesvirtualawlibrary chanrobles virtual law library Upon request of Leodegaria Cabana, the title of the land was lent to her in order to mortgage the property to the Philippine National Bank. Said title was, forthwith, deposited with the PNB. On October 21, 1968, defendant Leodegaria Cabana sold the land by way of absolute sale to the defendants- spouses (Exh. 2). However, on November 29, 1968 defendant sold the same property to herein plaintiff and the latter was able to register it in his name.chanroblesvirtualawlibrary chanrobles virtual law library The transaction in question is governed by Article 1544 of the Civil Code. True it is that the plaintiff was able to register the sale in his name but was he in good faith in doing so? chanrobles virtual law library While the title was registered in plaintiff- appellant's name on February 9, 1971 (Exh. A), it appears that he knew of the sale of the land to defendants-spouses Legaspi as he was informed in the Office of the Register of Deeds of Quezon. It appears that the defendants-spouses registered their document of sale on May 13, 1965 under Primary Entry No. 210113 of the Register of Deeds (Exh. 2).chanroblesvirtualawlibrary chanrobles virtual law library Under the foregoing circumstances, the right of ownership and title to the land must be resolved in favor of the defendants- spouses Legaspi on three counts. First, the plaintiff-appellant was not in good faith in registering the title in his name. Consistent is the jurisprudence in this jurisdiction that in order that the provisions of Article 1544 of the new Civil Code may be invoked, it is necessary that the conveyance must have been made by a party who has an existing right in the thing and the power to dispose of it (10 Manresa 170, 171). It cannot be set up by a second purchaser who comes into possession of the property that has already been acquired by the first purchaser in full dominion (Bautista vs. Sison, 39 Phil. 615), this not withstanding that the second purchaser records his title in the public registry, if the registration be done in bad faith, the philosophy underlying this rule being that the public records cannot be covered into instruments of fraud and oppression by one who secures an inscription therein in bad faith (Chupinghong vs. Borreros, 7 CA Rep. 699).chanroblesvirtualawlibrary chanrobles virtual law library A purchaser who has knowledge of fact which would put him upon inquiry and investigation as to possible defects of the title of the vendor and fails to make such inquiry and investigation, cannot claim that he is a purchaser in good faith. Knowledge of a prior transfer of a registered property by a subsequent purchaser makes him a purchaser in bad faith and his knowledge of such transfer vitiates his title acquired by virtue of the latter instrument of conveyance which creates no right as against the first purchaser (Reylago vs. Jarabe, L-20046, March 27, 1968, 22 SCRA 1247).chanroblesvirtualawlibrary chanrobles virtual law library In the second place, the defendants-spouses registered the deed of absolute sale ahead of plaintiff- appellant. Said spouses were not only able to obtain the title because at that time, the owner's duplicate certificate was still with the Philippine National Bank.chanroblesvirtualawlibrary chanrobles virtual law library In the third place, defendants-spouses have been in possession all along of the land in question. If immovable property is sold to different vendees, the ownership shall belong to the person acquiring it who in good faith first recorded it in the registry of property; and should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession (Soriano, et al. vs. The Heirs of Domingo Magali et al., L-15133 , July 31, 1963, 8 SCRA 489). Priority of possession stands good in favor of herein defendants-spouses (Evangelista vs. Abad, [CA] 36 O.G. 2913; Sanchez vs. Ramos, 40 Phil. 614, Quimson vs, Rosete, 87 Phil. 159). The Court finds that in this case of double sale of real property, respondent appellate court, on the basis of the undisputed facts, correctly applied the provisions of Article 1544 of the Civil Code that Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.chanroblesvirtualawlibrary chanrobles virtual law library Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.chanroblesvirtualawlibrary chanrobles virtual law library Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

There is no question that respondents-spouses Teofilo Legaspi and Iluminada Cabana were the first buyers, first on June 1, 1965 under a sale with right of repurchase and later on October 21, 1968 under a deed of absolute sale and that they had taken possession of the land sold to them; that petitioner was the second buyer under a deed of sale dated November 29, 1968, which to all indications, contrary to the text, was a sale with right of repurchase for ninety (90) days. 1 There is no question either that respondents legaspi spouses were the first and the only ones to be in possession of the subject property.chanroblesvirtualawlibrary chanrobles virtual law library Said respondents spouses were likewise the first to register the sale with right of repurchase in their favor on May 13, 1965 unde r Primary Entry No. 210113 of the Register of Deeds. They could not register the absolute deed of sale in their favor and obtain the corresponding transfer certificate of title because at that time the seller's duplicate certificate was still with the bank . But there is no question, and the lower courts so found conclusively as a matter of fact, that when petitioner Cruz succeeded in registering the later sale in his favor, he knew and he was informed of the prior sale in favor of respondents-spouses. Respondent appellate court correctly held that such "knowledge of a prior transfer of a registered property by a subsequent purchaser makes him a purchaser in bad faith and his knowledge of such transfer vitiates his title acquired by virtue of the latter instrument of conveyance which creates no right as against the first purchaser." chanrobles virtual law library As the Court held in Carbonell vs. Court of Appeals 2 "it is essential that the buyer of realty must act in good faith in registering his deed of sale to merit the protection of the second paragraph of [the above quoted] Article 1544." As the writer stressed in his concurring opinion therein, "(T)he governing principle here is prius tempore, potior jure (first in time, stronger in right). Knowledge gained by the first buyer of the second sale cannot defeat the first buyer's rights except only as provided by the Civil Code and that is where the second buyer first registers in good faith the second sale ahead of the first. Such knowledge of the first buyer does not bar her from availing of her rights under the law, among them, to register first her purchase as against the second buyer. But in converso knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register the second sale, since such knowledge taints his prior registration with bad faith. This is the price exacted by Article 1544 of the Civil Code for the second buyer being able to displace the first buyer; that before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e. in ignorance of the first sale and of the first buyer's rights) - from the time of acquisition until the title is transferred to him by registration or failing registration, by delivery of possession. The second buyer must show continuing good faith and innocence or lack of knowledge of the first sale until his contract ripens into full ownership through prior registration as provided by law." chanrobles virtual law library Petitioner's prayer for alternative relief for reimbursement of the amount of P2,352.50 paid by him to the bank to discharge the existing mortgage on the property and of the amount of P3,397.50 representing the price of the second sale are well taken insofar as the seller Leodegaria Cabana is concerned. These amounts have been received by the said seller Leodegaria Cabana on account of a void second sale and must be duly reimbursed by her to petitioner's heirs, but the Legaspi spouses cannot be held liable therefor since they had nothing to do with the said second sale nor did they receive any benefit therefrom. Petitioner's claim for reimbursement of the amount of P102.58 as real estate taxes paid on the property is not well taken because the respondents Legaspi spouses had been paying the real estate taxes on the same property since June 1, 1969. 4 chanrobles virtual law library ACCORDINGLY, the appealed judgment of respondent appellate court, upholding respondents-spouses Teofilo Legaspi and Iluminada Cabana as the true and rightful owners of the property in litigation and ordering the issuance of a new title with the cancellation as null and void of Title No. T- 99140 obtained by petitioner Abelardo C. Cruz, is hereby affirmed in toto. In accordance with the partial grant of petitioner's prayer for alternative relief as stated in the preceding paragraph hereof, the Court hereby orders and sentences respondent Leodegaria Cabana to reimburse and pay to petitioner's heirs the total sum of P5,750.00. Melencio-Herrera, Plana, Relova, Gutierrez, Jr. and De la Fuente, JJ., concur. G.R. No. L-13551 January 30, 1960 CONSTANCIO JOAQUIN, petitioner, vs. ABUNDIO MADRID, ET AL., respondents. LABRADOR, J.: This is a petition to review the decision of the Court of Appeals against petitioner and in favor of respondents. The facts found in the appellate court below are as follows: The spouses Abundio Madrid and Rosalinda Yu are the owners of a residential lot at 148 Provincial corner Sto. Sacramento, Makati, Rizal, covered by Transfer Certificate of Title No. 31379 (for Rizal). Planning to build a house thereon, the said spouses sought short, in November, 1953. One Carmencita de Jesus, godmother of Rosalinda, offered to work for the shortening of the usually long process before a loan could be granted and the spouses, accepting the proferred assistance, delivered to her the Transfer Certificate of Title covering the lot in January, 1954, to be surrendered to ]the RFC. Later the spouses were able to secure a loan of P4,000.00 from their parents for the construction of their house and they decided to withdraw the application for a loan they had filed with the RFC. They so informed Carmencita de Jesus and asked her to retrieve the Transfer Certificate of Title and return it to them. Shortly thereafter, Carmencita told them, however, that the RFC employee in charge of keeping the Transfer Certificate of Title was out on leave. In August, 1954, one Florentino Calayag showed up in the house of the spouses and asked for Abundio Madrid and Rosalinda Yu. Rosalinda answered that she was Rosalinda Yu and Abundio, that he was Abundio Madrid. Calayag would not believe them. He said that he was looking for Abundio Madrid and Rosalinda Yu who had executed a deed of mortgage on the lot where the house they were in then stood, and that the term of the mortgage had already expired, he added. Abundio and Rosalinda then retorted that they had not mortgaged their land to anyone. The spouses immediately went to consult with a lawyer who accompanied them to the Office of the Register of Deeds of Rizal. They found out then that the land had been mortgaged to Constancio Joaquin on January 21, 1954 (Exh. B). Thus runs the evidence of the plaintiffs-appellees. The appellant admits that Abundio Madrid and Rosalinda Yu, the registered owners of the mortgaged property, were not those persons who had signed the deed of mortgage. His version of the case is as follows: In the month of January, 1954 Carmencita de Jesus saw Florentino Calayag and asked the latter to find a money-lender who could grant a loan on a security of real property, showing, at the same time, a Transfer Certificate of Title in the name of the spouses Abundio Madrid and Rosalinda Yu. Calayag approached Constancio Joaquin who having funds to spare for the purpose, visited the land and. finding it well situated, told Calayag to show him the prospective borrowers. On the following day, Calayag brought two women to the law office of Atty. M.S. Calayag and presente them to Constancio Joaquin as Rosalinda Yu and Carmencita de Jesus. The alleged Rosalinda Yu claimed to be the owner of the lot with her husband Abundio Madrid who authorized her to secure a loan on their property, she assured him, and that Abundio would come where the contract therefor was ready to sign it with her. Thus, the deed of mortgage Exhibit I was signed by the persons who posed themselves as Abundio Madrid and Rosalinda Yu on the following day. The whole amount of the loan was delivered to the supposed Rosalinda Yu immediately after the registration of the document of mortgage in the Office of the Register of Deeds of Rizal, according to Florentino Calayag. (Dec. of the Court of Appeals, CA-G.R. No. 16717-R, prom. Nov. 29, 1957). The appellate court below further found that the petitioner "visited the property proposed for mortgage to find out at the same time who was the real owner thereof. But he contented himself with the information given to him by the person living then on the land that the owner was woman known as 'Taba'. There ended his inquiry about the identity of the prospective mortgagors."(Dec. of the Court of Appeals, p. 8). The lower court based it decision on the case of Lara, et al., vs. Ayroso, 95 Phil., 185, 50 Off. Gaz., (10), 4838, in which we held that as the land mortgaged was still in the name of the real owner when mortgaged to the mortgagees by an impostor, the mortgagees were defrauded not because they relied upon what appeared in a Torrens certificate of title, but because they believed the words of the impostor; that it was the duty of the mortgagees to ascertain the identity of the man with whom they were dealing which circumstances differentiate the case from the previous cases of De la Cruz vs, Fabie, 35 Phil., 144 and Blondeau, et al., vs. Nano and Vallejo, 61 Phil., 625. In the first assignment of error it is argued that since par. 2 of Sec. 55 of the Land Registration Act expressly provides that "in all cases of registration by fraud the owner may pursue all his legal and equitable remedies against the parties to the fraud, without prejudice to the rights of any innocent holder for value of a certificate of title", the second proviso in the same section "that a registration procured by the presentation of a forged deed shall be null and void" should be overlooked. There is no merit in this argument, which would have the effect of deleting the last proviso. This last proviso is a limitation of the first part of par. 2 in the sense that in order that the holder of a certificate for value issued by virtue of the registration of a voluntary instrument may be considered a holder in good faith for value, the instrument registered should be forged. When the instrument presented is forged, even if accompanied by the owner's duplicate certificate of title, the registered owner does not thereby lose his title, and neither does the assignee in the forged deed acquire any right or title to the property. In the second assignment of error it is further argued that as the petitioner is an innocent purchaser for value, he should be protected as against the registered owner because the latter can secure reparation from the assurance fund. The fact is, however, that petitioner herein in not the innocent purchaser for value protected by law is one who purchases a titled land by virtue of a deed executed by the registered owner himself, not by a forged deed, as the law expressly states. Such is not the situation of the petitioner, who has been the victim of impostors pretending to be registered owners but who are not said owners. The next assignments of errors are predicted on the assumption that both the petitioner and the respondents are guilty of negligence. The giving of the certificate of title to Carmencita de Jesus is in itself no act of negligence on the part of respondents; it was perfectly a legitimate act. Delay in demanding the certificate of title is no act of neglect either, as respondents have not executed any deed or document authorizing Carmencita de Jesus to execute deeds for and on their behalf. It was petitioner who was negligent, as he did not take enough care to see to it that the persons who executed the deed of mortgage are the real registered owners of the property. The argument raised by petitioner's counsel that in case of negligence on the part of both the one who committed a breach of faith is responsible, is not applicable. Petitioner alone is guilty of neglect, so he must suffer from it. Finding no error in the decision of the Court of Appeals, we hereby affirm it with costs against petitioner. So ordered.

G.R. No. 142676 June 6, 2011 EMERITA MUOZ, Petitioner, vs. ATTY. VICTORIANO R. YABUT, JR. and SAMUEL GO CHAN, Respondents. LEONARDO-DE CASTRO, J.: Before Us are the following consolidated petitions for review on certiorari under Rule 45 of the Rules of Court. In G.R. No. 142676, Emerita Muoz (Muoz) is seeking the reversal, annulment, and setting aside of the Decision1dated July 21, 1995 and Resolution2 dated March 9, 2000 of the Court of Appeals in CA-G.R. SP No. 35322, which affirmed the Orders3 dated June 10, 1994 and August 5, 1994 of the Regional Trial Court, Branch 88 (RTCBranch 88) of Quezon City in Civil Case No. Q-94-20632. The RTC dismissed Civil Case No. 8286, the forcible entry case instituted by Muoz against Atty. Victoriano R. Yabut, Jr. (Atty. Yabut) and Samuel Go Chan before the Metropolitan Trial Court (MeTC), Branch 33 of Quezon City; and nullified the MeTC Order 4 dated May 16, 1994, granting Muozs prayer for the issuance of a writ of preliminary mandatory injunction which restored possession of the subject property to Muoz. In G.R. No. 146718, Muoz is praying for the reversal, setting aside, and nullification of the Decision 5 dated September 29, 2000 and Resolution6 dated January 5, 2001 of the Court of Appeals in CA-G.R. SP No. 40019, which affirmed the Orders7 dated August 21, 1995 and October 3, 1995 of the Quezon City RTC, Branch 95 (RTC-Branch 95) in Civil Case No. Q-28580 denying Muozs Motion for an Alias Writ of Execution and Application for Surrender of the Owners Duplicate Copy of TCT No. 532978 against respondents Bank of the Philippine Islands (BPI) and the spouses Samuel Go Chan and Aida C. Chan (spouses Chan). I FACTS The subject property is a house and lot at No. 48 Scout Madrian St., Diliman, Quezon City, formerly owned by Yee L. Ching. Yee L. Ching is married to Emilia M. Ching (spouses Ching), Muozs sister. Muoz lived at the subject property with the spouses Ching. As consideration for the valuable services rendered by Muoz to the spouses Chings family, Yee L. Ching agreed to have the subject property transferred to Muoz. By virtue of a Deed of Absolute Sale, seemingly executed by Yee L. Ching in favor of Muoz,9 the latter acquired a Transfer Certificate of Title (TCT) No. 186306 covering the subject property in her name on December 22, 1972.10However, in a Deed of Absolute Sale dated December 28, 1972, Muoz purportedly sold the subject property to her sister, Emilia M. Ching. As a result, TCT No. 186306 was cancelled and TCT No. 186366 was issued in Emilia M. Chings name. Emilia M. Ching, in a Deed of Absolute Sale dated July 16, 1979, sold the subject property to spouses Go Song and Tan Sio Kien (spouses Go), hence, TCT No. 186366 was cancelled and replaced by TCT No. 258977 in the spouses Gos names. On October 15, 1979, Muoz registered her adverse claim to the subject property on TCT No. 258977 of the spouses Go. The next day, on October 16, 1979, Muoz filed a complaint for the annulment of the deeds of absolute sale dated December 28, 1972 and July 16, 1979, the cancellation of TCT No. 258977 in the spouses Gos names, and the restoration and revival of TCT No. 186306 in Muozs name. The complaint was docketed as Civil Case No. Q-28580 and raffled to RTC-Branch 95. On October 17, 1979, Muoz caused the annotation of a notice of lis pendens on TCT No. 258977 of the spouses Go. In an Order dated December 17, 1979, the RTCBranch 95 granted the spouses Gos motion for the issuance of a writ of preliminary mandatory injunction and ordered the sheriff to put the spouses Go in possession of the subject property. The writ was implemented by the sheriff on March 26, 1980, driving Muoz and her housemates away from the subject property. Muoz filed a petition for certiorari and prohibition before the Court of Appeals, assailing the issuance of the writ of preliminary mandatory injunction, which was docketed as CA-G.R. SP No. 10148. The appellate court dismissed Muozs petition on January 4, 1980. Yee L. Ching and his son Frederick M. Ching filed an urgent motion for leave to intervene in CA-G.R. SP No. 10148 and for the issuance of a temporary restraining order (TRO). The Court of Appeals issued a TRO. However, in a Resolution dated March 18, 1980, the appellate court denied the motion to intervene of Yee L. Ching and Frederick M. Ching, and cancelled the TRO previously issued. Yee L. Ching and Frederick M. Ching challenged before this Court, in G.R. No. 53463, the Resolution dated March 18, 1980 of the Court of Appeals. Eventually, in a Resolution dated June 3, 1981, the Court dismissed the petition in G.R. No. 53463, for lack of merit and failure of Yee L. Ching and Frederick M. Ching to substantially show that the RTC-Branch 95 and the Court of Appeals gravely abused their discretion. In a subsequent Resolution dated June 21, 1982, the Court clarified that its Resolution of June 3, 1981 was without prejudice to the continuation of the litigation in Civil Case No. Q-28580 still pending before the trial court, "in order that proper and final adjudication may be made of whether or not the deed of sale by Emerita L. Muoz in favor of Emilia M. Ching is a real, genuine and authentic transaction, thereby to settle once and for all the issue of ownership of the property herein in question." 11 Trial in Civil Case No. Q-28580 proceeded before RTC-Branch 95. In the meantime, Muozs adverse claim and notice of lis pendens on TCT No. 258977 was cancelled on October 28, 1982 on the basis of an alleged final judgment in favor of the spouses Go.12 The spouses Go obtained a loan of P500,000.00 from BPI Family Savings Bank (BPI Family) and to secure the same, they constituted a mortgage on the subject property on November 23, 1982.13 When the spouses Go defaulted on the payment of their loan, BPI Family foreclosed the mortgage. BPI Family was the highest bidder at the auction sale of the subject property. The spouses Go failed to exercise their right of redemption within the prescribed period, thus, BPI Family was finally able to register the subject property in its name on October 23, 1987 under TCT No. 370364.14 Apparently, the original copy of TCT No. 370364 was among those razed in the fire at the Quezon City Register of Deeds on June 11, 1988. As a result of the administrative reconstitution of the lost title, TCT No. RT-54376 (370364) was issued to BPI Family. On December 3, 1990, BPI Family executed in favor of the spouses Samuel Go Chan and Aida C. Chan (spouses Chan) a Deed of Absolute Sale15 covering the subject property for and in consideration ofP3,350,000.00. Consequently, TCT No. RT-54376 (370364) in the name of BPI Family was cancelled and TCT No. 53297 was issued in the spouses Chans names on January 28, 1991.16 The spouses Chan obtained a loan from BPI Family on October 2, 1992 for the construction of a building on the subject property, and to secure the same, constituted a mortgage on the subject property in favor of BPI Family.17 On July 19, 1991, RTC-Branch 95 rendered its Decision18 in Civil Case No. Q-28580, against Emilia M. Ching, Yee L. Ching, and the spouses Go (Emilia M. Ching, et al.). It found that Muozs signature on the Deed of Absolute Sale dated December 28, 1972 was forged; that Muoz never sold the subject property to her sister, Emilia M. Ching; and that the spouses Go were not innocent purchasers for value of the subject property. The fallo of the said decision reads: WHEREFORE, judgment is hereby rendered dismissing for lack of merit *Emilia M. Ching, et al.s+ respective counterclaims, cross-claims, and counter-cross-claim, declaring as null and void ab initio the following documents, to wit: (a) Deed of Absolute Sale dated December 28, 1972, copy of which is marked in evidence as Exh. M; (b) TCT No. 186366 of the Registry of Deeds for Quezon City, copy of which is marked in evidence as Exh. N; (c) Deed of Absolute Sale dated July 16, 1979, copy of which is marked in evidence as Exh. 3; and, (d) TCT No. 258977 of the Registry of Deeds for Metro Manila District III, copy of which is marked in evidence as Exh. 4, and directing defendant Register of Deeds of Quezon City to cancel from the records of the subject property the registrations of all the said documents and to restore and revive, free from all liens and encumbrances, TCT No. 186306 of the Registry of Deeds for Quezon City, copy of which is marked in evidence as Exh. L, as well as ordering defendants Emilia M. Ching, Go Song and Tan Sio Kien jointly and severally to pay [Muoz] the sum ofP50,000.00 as and for attorneys fees and to pay the costs of suit. The court also hereby dismisses the rest of the claims in *Muozs+ complaint, there being no satisfactory warrant therefor.19 Emilia M. Ching, et al.s, appeal of the foregoing judgment of the RTC-Branch 95 was docketed as CA-G.R. CV No. 33811 before the Court of Appeals. In its Decision20 dated March 4, 1993, the appellate court not only affirmed the appealed judgment, but also ordered the spouses Go and their successors-in-interest and assigns and those acting on their behalf to vacate the subject property, to wit: WHEREFORE, premises considered, the decision appealed from is AFFIRMED, with costs against [Emilia M. Ching, et al.]. The writ of preliminary mandatory injunction issued on December 17, 1979 is hereby set aside and declared dissolved. Defendants-appellants Go and Tan, their successors-in-interest and assigns and those acting on their behalf, are ordered to vacate the disputed premises and to deliver the same to [Muoz] immediately upon receipt of this decision.21 Emilia L. Ching, et al., filed before this Court a motion for extension of time to file their petition for review, which was assigned the docket number G.R. No. 109260. However, they failed to file their intended petition within the extended period which expired on April 23, 1993. In a Resolution22 dated July 12, 1993, the Court declared G.R. No. 109260 terminated. The Resolution dated July 12, 1993 of the Court in G.R. No. 109260 became final and executory on July 15, 1993 and was entered in the Book of Entries of Judgments on even date.23 More than two months later, on September 20, 1993, the RTC-Branch 95 issued a writ of execution to implement the judgment in Civil Case No. Q-28580. The spouses Chan, who bought the subject property from BPI Family, then came forward and filed before the RTC-Branch 95 on October 22, 1993 an Urgent Motion to Stop Execution as Against Spouses Samuel Go Chan and Aida Chan, 24 opposing the writ of execution issued in Civil Case No. Q-28580. The spouses Chan asserted ownership and possession of the subject property on the basis of a clean title registered in their names under TCT No. 53297. The spouses Chan further contended that the final judgment in Civil Case No. Q-28580 could not be executed against them since they were not parties to the said case; they were not successors-ininterest, assigns, or acting on behalf of the spouses Go; and they purchased the subject property from BPI Family without any notice of defect in the latters title. It was only at this point that Muoz, upon her own inquiry, discovered the cancellation on October 28, 1982 of her adverse claim and notice of lis pendens annotated on the spouses Gos TCT No. 258977, and the subsequent events that led to the transfer and registration of the title to the subject property from the spouses Go, to BPI Family, and finally, to the spouses Chan. In its Order25 dated December 28, 1993, the RTC-Branch 95 denied the spouses Chans urgent motion to stop the execution. According to the RTC-Branch 95, the photocopy of TCT No. 370364 in the name of BPI Family, submitted by the spouses Chan with their motion, could hardly be regarded as satisfactory proof that Muozs adverse claim and notice of lis pendens annotated therein were also missing from the original copy of said certificate of title. Muozs adverse claim and notice of lis pendens were annotated on TCT No. 258977 in the spouses Gos names as P.E.-8078 and P.E.-8178, respectively. So when TCT No. 258977 of the spouses Go was cancelled and TCT No. 370364 was issued to BPI Family, it could be presumed that the Register of Deeds regularly performed his official duty by carrying over Muozs adverse claim and notice of lis pendens to TCT No. 370364. In addition, the RTC-Branch 95 pointed out that in this jurisdiction, the entry of the notice of lis pendens in the day book of the Register of Deeds was already sufficient notice to the whole world of the dispute over the subject property, and there was no more need to annotate the same on the owners duplicate of the certificate of title. Finally, the RTC-Branch 95 held that TCT No. RT-54376 (370364) of BPI Family and TCT No. 53297 of the spouses Chan shall be subject to the reservation under Section 7 of Republic Act No. 26 26 "[t]hat certificates of title reconstituted extrajudicially, in

the manner stated in sections five and six hereof, shall be without prejudice to any party whose right or interest in the property was duly noted in the original, at the time it was lost or destroyed, but entry or notation of which has not been made on the reconstituted certificate of title." Thus, the spouses Chan were deemed to have taken the disputed property subject to the final outcome of Civil Case No. Q-28580. On January 3, 1994, the RTC-Branch 95 issued an Alias Writ of Execution.27 On January 10, 1994, the writ was enforced, and possession of the subject property was taken from the spouses Chan and returned to Muoz.28 In its Orders dated April 8, 1994 and June 17, 1994, the RTC-Branch 95 denied the spouses Chans motion for reconsideration and notice of appeal, respectively.29 G.R. No. 142676 Pending resolution by the RTC-Branch 95 of the spouses Chans motion for reconsideration and notice of appeal in Civil Case No. Q-28580, Muoz instituted before the MeTC on February 4, 1994 a Complaint for Forcible Entry with Prayer for Preliminary Mandatory Injunction30 against Samuel Go Chan and Atty. Yabut, docketed as Civil Case No. 8286. Muoz alleged in her complaint that she had been in actual and physical possession of the subject property since January 10, 1994. She hired a caretaker and two security guards for the said property. On February 2, 1994, Samuel Go Chan and Atty. Yabut, along with 20 other men, some of whom were armed, ousted Muoz of possession of the subject property by stealth, threat, force, and intimidation. Muoz prayed for the issuance of a writ of preliminary mandatory injunction directing Samuel Go Chan and Atty. Yabut and all persons claiming right under them to vacate the subject property. Muoz additionally prayed for judgment making the mandatory injunction permanent and directing Samuel Go Chan and Atty. Yabut to pay Muoz: (1) compensation for the unlawful occupation of the subject property in the amount of P50,000.00 per month, beginning February 2, 1994 until the said property is fully and completely turned over to Muoz; (2) attorneys fees in the amount ofP50,000.00, plus P1,500.00 per court appearance of Muozs counsel; and (3) costs of suit. Samuel Go Chan and Atty. Yabut denied Muozs allegations, insisting that Samuel Go Chan is the valid, lawful, and true legal owner and possessor of the subject property. Samuel Go Chan and Atty. Yabut averred that the Turn-Over of Possession and Receipt of Possession dated January 10, 1994 attached to Muozs complaint as proof that the subject property had been placed in her possession is a falsified document. The Writ of Execution issued on September 20, 1993 in Civil Case No. Q-28580 had already expired and the Sheriffs Return on the Writ another document purporting to show that possession of the subject property was turned-over to Muoz on January 10, 1994 was then being challenged in a complaint before the Office of Deputy Court Administrator Reynaldo L. Suarez of the Supreme Court. Samuel Go Chans possession of the subject property has never been interrupted. His sister, Cely Chan, resided at the subject property and was never removed therefrom. On February 2, 1994, Atty. Yabut was at the subject property only to protect the rights and interest of his client, Samuel Go Chan, and since the latters possession of the subject property had never been interrupted, Atty. Yabut entered the same peacefully, without intimidation, force, or stealth. The other people at the subject property on February 2, 1994 were there to attend the services at the Buddhist Temple which occupied the fourth floor of the building erected by the spouses Chan on the subject property. Samuel Go Chan and Atty. Yabut, thus, asked the MeTC to dismiss Muozs complaint for lack of merit and legal basis.31 The MeTC received evidence from the parties on whether a writ of preliminary injunction should be issued, as prayed for by Muoz. In its Order dated May 16, 1994, the MeTC adjudged that the final judgment in Civil Case No. Q-28580 was already executed against the spouses Chan and there was, indeed, a turn-over of possession of the subject property to Muoz. Accordingly, the MeTC granted Muozs prayer for the issuance of a writ of preliminary mandatory injunction, restoring possession of the subject property to Muoz. Samuel Go Chan and Atty. Yabut questioned the foregoing MeTC order through a Petition for Certiorari with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction32 before the RTC-Branch 88, which was docketed as Civil Case No. Q-94-20632. They asserted that they were not bound by the execution of the final judgment of RTC-Branch 95 in Civil Case No. Q-28580 as they were not parties to the said case. Muoz, on the other hand, argued that the MeTC Order of May 16, 1994 was an interlocutory order, and under Section 19 of the Rules of Summary Procedure, a petition for certiorari against an interlocutory order issued by the court is one of the prohibited pleadings and motions in summary proceedings. In its Order dated June 10, 1994, the RTC-Branch 88 issued a writ of preliminary injunction to enjoin the implementation of the MeTC Order dated May 16, 1994. On August 5, 1994, the RTC-Branch 88 issued another Order resolving Muozs motion to dismiss the petition for certiorari in Civil Case No. Q-94-20632, motion for reconsideration of the Order dated June 10, 1994 of RTC-Branch 88 granting the issuance of a writ of preliminary injunction, and motion to resolve with additional grounds for dismissal. According to the RTC-Branch 88, the MeTC failed to distinguish the issue of finality of the judgment of the RTC-Branch 95 in Civil Case No. Q28580 from the assertions of Samuel Go Chan and Atty. Yabut that the spouses Chan are not covered by said final judgment because they are not successors-ininterest, assigns, or privies of the spouses Go and they are purchasers of the subject property in good faith. The issue of whether the final judgment in Civil Case No. Q-28580 extended to the spouses Chan was then still being litigated in the same case before RTC-Branch 95, where the spouses Chans motion for reconsideration of the denial of their notice of appeal was pending. The RTC-Branch 88 further found that the MeTC committed grave abuse of discretion in not dismissing Muozs complaint for forcible entry on the ground of "lis pendens," as the issue as to who between Muoz and the spouses Chan had the better right to possession of the subject property was the subject of the pending proceeding in Civil Case No. Q-28580 before the RTC-Branch 95. In the end, the RTC-Branch 88 decreed: WHEREFORE, premises considered, the Court renders judgment (a) Denying the motion to dismiss of respondent Muoz for lack of merit; (b) Denying the motion for reconsideration of respondent Muoz for the recall and/or setting aside of the writ of preliminary injunction granted to petitioners; (c) Declaring the Order dated May 16, 1994 of Public respondent Hon. Elsa de Guzman in Civil Case No. 8286 illegal and therefore null and void; and (d) Dismissing the ejectment suit in Civil Case No. 8286 on ground of lis pendens. Without pronouncement as to costs.33 Muoz appealed the Orders dated June 10, 1994 and August 5, 1994 of RTC-Branch 88 before the Court of Appeals. Her appeal was docketed as CA-G.R. SP No. 35322. Aside from the nullification of the two orders, Muoz additionally prayed for the dismissal from the service of the RTC-Branch 88 presiding judge and the disbarment of Atty. Yabut. The Court of Appeals, in its Decision dated July 21, 1995, sustained the appealed orders of RTC-Branch 88. The Court of Appeals held that the MeTC should have dismissed the forcible entry case on the ground of "lis pendens"; that the spouses Chan were not parties in Civil Case No. Q-28580, and impleading them only in the execution stage of said case vitiated their right to due process; that the order of the RTC-Branch 95 involving the spouses Chan in Civil Case No. Q-28580 was null and void, considering that they are strangers to the case, and they are innocent purchasers for value of the subject property; that the notice of lis pendens was already cancelled from the spouses Gos certificate of title at the time they mortgaged the subject property to BPI Family; and that the title to the subject property was already free of any and all liens and encumbrances when the spouses Chan purchased the said property from BPI Family. The Court of Appeals, in its Resolution dated March 9, 2000, denied Muozs motion for reconsideration. G.R. No. 146718 Meanwhile, Muoz filed before the RTC-Branch 95 in Civil Case No. Q-28580 a Motion to Cite the Register of Deeds in Contempt of Court for the failure of the Register of Deeds to restore Muozs TCT No. 186306 despite having been served with a copy of the writ of execution on October 11, 1993. In its Judgment (on the Contempt Proceedings against the Register of Deeds of Quezon City Samuel C. Cleofe)34 dated March 18, 1994, the RTC-Branch 95 denied Muozs motion, convinced that the Register of Deeds had a valid excuse for his inability to implement the served writ. The Register of Deeds could not cancel the spouses Chans TCT No. 53297, the subsisting certificate of title over the subject property, absent any authority or directive for him to do so. The directive in the final judgment in Civil Case No. Q28580 and the writ of execution for the same only pertained to the cancellation of the spouses Gos TCT No. 258977. Thereafter, Muoz filed a Motion for Contempt against the spouses Chan and a Second Motion for Contempt against Samuel Go Chan and Atty. Yabut. Muoz also filed a Motion for an Alias Writ of Execution and Application for Surrender of the Owners Duplicate Copy of TCT No. 53297, 35 in which she prayed for the issuance of an alias writ of execution directing the Register of Deeds not only to cancel TCT No. 258977 and all documents declared null and void ab initio in the dispositive portion of the Decision36 dated July 19, 1991 of RTC-Branch 95 in Civil Case No. Q-28580, and to restore and revive, free from all liens and encumbrances Muozs TCT No. 186306, but likewise to cancel the present certificate of title covering the subject property, TCT No. 53297. In its Order dated August 21, 1995, the RTC-Branch 95 denied all of Muozs aforementioned motions. The RTC-Branch 95 was of the view that Samuel Go Chans title should be litigated in another forum, not in Civil Case No. Q-28580 where the judgment had already become final and executory. The RTC-Branch 95 also stressed that since the judgment in Civil Case No. Q-28580 had long become final and executory, it could no longer be changed or amended except for clerical error or mistake. Accordingly, the RTC-Branch 95 resolved as follows: 1. Ordering, as it hereby orders, the denial of *Muozs+ first and second motions for contempt and hereby absolves respondents Samuel Go Chan, Celia Chan, Atty. Victoriano R. Yabut, Jr., and several John Does of the Contempt Charges against them. 2. Ordering, as it hereby orders, the issuance of an alias writ of execution directing the Courts Deputy Sheriff: (a) Defendants Go Song and Tan Sio Kien, their successors-in-interest and assigns and those acting on their behalf to vacate the disputed premises and deliver the same to [Muoz]; (b) Defendant Register of Deeds of Quezon City to cancel from the records of the subject property the registration of all the following documents, to wit: (1) "Deed of Absolute Sale" dated December 28, 1972; (2) Transfer Certificate of Title (TCT) No. 186366 of the Register of Deeds of Quezon City; (3) "Deed of Absolute Sale" dated July 16, 1979; and (4) TCT No. 258977 of the Registry of Deeds for Metro Manila II, and to restore and revive, free from all liens and encumbrances TCT No. 186306 of the Registry of Deeds for Quezon City; and (c) Defendants Emilia M. Ching, Go Song and Tan Sio Kien jointly and severally to pay [Muoz] the sum of P50,000.00 as and for attorneys fees and to pay the cost of suit.37 Unrelenting, Muoz filed a Motion for Clarificatory Order, pointing out that the spouses Chan are the present occupants of the subject property. The Order dated August 21, 1995 of the RTC-Branch 95 directed the deputy sheriff to deliver the subject property to Muoz, and this could not be done unless the spouses Chan are evicted therefrom. Resultantly, Muoz prayed that "a clarificatory order be made categorically stating that the spouses Samuel Go Chan and Aida C. Chan, and all persons claiming right under them, are likewise evicted from the subject premises pursuant to the Order of 21 August 1995." 38 Once more, the RTC-Branch 95 denied Muozs motion in its Order dated October 3, 1995. The RTC-Branch 95 reiterated the rule that after the judgment had become final, only clerical errors, as distinguished from substantial errors, can be amended by the court. Furthermore, when the decision or judgment sought to be amended is promulgated by an appellate court, it is beyond the power of the trial court to change, amplify, enlarge, alter, or modify. Ultimately, the RTC-Branch 95

pronounced that it was "restrained x x x to consider as mere clerical error the exclusion of spouses Samuel Go Chan and Aida C. Chan in the Decision of the Court dated July 19, 1991, a final judgment, which judgment cannot now be made to speak a different language."39 Attributing grave abuse of discretion on the part of the RTC-Branch 95 in issuing its Orders dated August 21, 1995 and October 3, 1995, Muoz filed before this Court a Petition for Certiorari and Mandamus, which was remanded to the Court of Appeals in observance of the hierarchy of courts, where it was docketed as CA-G.R. SP No. 40019. The Court of Appeals promulgated its Decision on September 29, 2000 dismissing Muozs petition. The Court of Appeals agreed with the RTC-Branch 95 that the spouses Chan could not be covered by the alias writ of execution considering that they were not impleaded in Civil Case No. Q-28580. The cancellation of TCT No. 53297 in the spouses Chans names could not be done apart from a separate action exclusively for that matter. The spouses Chan are deemed buyers in good faith and for value as the certificate of title delivered to them by BPI Family was free from any liens or encumbrances or any mark that would have raised the spouses Chans suspicions. Every person dealing with registered lands may safely rely on the correctness of the certificate of title of the vendor/transferor, and he is not required to go beyond the certificate and inquire into the circumstances culminating in the vendors acquisition of the property. The Court of Appeals denied Muozs motion for reconsideration in a Resolution dated January 5, 2001. Muoz comes before this Court via the present consolidated petitions. Muoz posits that the final judgment and writ of execution of RTC-Branch 95 in Civil Case No. Q-28580 bind not only Emilia M. Ching and the spouses Go, but also their successors-in-interest, assigns, or persons acting on their behalf, namely, BPI Family and spouses Chan. The spouses Chan cannot be deemed innocent purchasers for value of the property since the cancellation of the adverse claim and notice of lis pendens on the spouses Gos TCT No. 258977 is completely null and void. Muoz further argues that the MeTC Order dated May 16, 1994 in Civil Case No. 8286 correctly ordered the issuance of a writ of preliminary mandatory injunction restoring possession of the subject property to her, as she had already acquired prior possession of the said property upon the execution of the final judgment in Civil Case No. Q-28580. Also, the spouses Chans petition for certiorari before the RTC-Branch 88, docketed as Civil Case No. Q-94-20632, challenging the Order dated May 16, 1994 of the MeTC in Civil Case No. 8286, is a prohibited pleading under the Rules of Summary Procedure; and the RTC-Branch 88 and the Court of Appeals should be faulted for giving due course to the said petition even in the absence of jurisdiction. On the other hand, in their comments to the two petitions at bar, the spouses Chan, Atty. Yabut, and BPI Family assert that given the peculiar factual circumstances of the case, RTC-Branch 88 was justified in taking cognizance of Samuel Go Chan and Atty. Yabuts petition for certiorari in Civil Case No. Q-94-20632; that Muoz is estopped from questioning the jurisdiction of RTC-Branch 88 after participating in the proceedings in Civil Case No. Q-94-20632; that the spouses Chans title to the subject property is not affected by the final judgment of RTC-Branch 95 in Civil Case No. Q-28580, and the said judgment cannot be executed against the spouses Chan since they are neither parties to the case, nor are they the successors-in-interest, assigns, or persons acting on behalf of Emilia M. Ching or the spouses Go; that BPI Family and consequently, the spouses Chan, obtained title to the subject property as innocent purchasers for value, there being no notice of any infirmity in said title; and that Muoz is guilty of forum shopping for filing her petition in G.R. No. 146718 even while her petition in G.R. No. 142676 is still pending. II RULING For the sake of expediency, we will be discussing first the merits of the petition in G.R. No. 146718. G.R. No. 146718 Civil Case No. Q-28580 involved Muozs complaint for the annulment of the deeds of absolute sale dated December 28, 197240 and July 16, 1979,41 the cancellation of the spouses Gos TCT No. 258977, and the restoration and revival of Muozs TCT No. 186306. The final judgment of RTC-Branch 95 in Civil Case No. Q-28580 was in favor of Muoz and against Emilia M. Ching and the spouses Go. The problem arose when during the pendency of the said case, title and possession of the subject property were transferred from the spouses Go, to BPI Family, and finally, to the spouses Chan. BPI Family and the spouses Chan were never impleaded as parties and were not referred to in the dispositive portion of the final judgment in Civil Case No. Q-28580. Muoz questions in G.R. No. 146718: (1) the Order dated August 21, 1995 denying her Motion for Contempt against the spouses Chan, Second Motion for Contempt against Samuel Go Chan and Atty. Yabut, and Motion for an Alias Writ of Execution and Application for Surrender of the Owners Duplicate Copy of TCT No. 53297; and (2) the Order dated October 3, 1995 denying her Motion for Clarificatory Order, both issued by the RTC-Branch 95 in Civil Case No. Q-28580, and upheld by the Court of Appeals in CA-G.R. SP No. 40019. In sum, Muoz was seeking in her aforementioned motions: (1) a categorical order from the RTC-Branch 95 that the final judgment in Civil Case No. Q-28580 be executed against the spouses Chan; and (2) the surrender and cancellation of the spouses Chans TCT No. 53297 and restoration of Muozs TCT No. 186306. There is no merit in Muozs petition in G.R. No. 146718. Civil Case No. Q-28580 is an action for reconveyance of real property. In Heirs of Eugenio Lopez, Sr. v. Enriquez, 42 we described an action for reconveyance as follows: An action for reconveyance is an action in personam available to a person whose property has been wrongfully registered under the Torrens system in anothers name. Although the decree is recognized as incontrovertible and no longer open to review, the registered owner is not necessarily held free from liens. As a remedy, an action for reconveyance is filed as an ordinary action in the ordinary courts of justice and not with the land registration court. Reconveyance is always available as long as the property has not passed to an innocent third person for value. A notice of lis pendens may thus be annotated on the certificate of title immediately upon the institution of the action in court. The notice of lis pendens will avoid transfer to an innocent third person for value and preserve the claim of the real owner.43 (Emphases ours.) The rule is that: (1) a judgment in rem is binding upon the whole world, such as a judgment in a land registration case or probate of a will; and (2) a judgment in personam is binding upon the parties and their successors-in-interest but not upon strangers. A judgment directing a party to deliver possession of a property to another is in personam; it is binding only against the parties and their successors-in-interest by title subsequent to the commencement of the action. An action for declaration of nullity of title and recovery of ownership of real property, or re-conveyance, is a real action but it is an action in personam, for it binds a particular individual only although it concerns the right to a tangible thing. Any judgment therein is binding only upon the parties properly impleaded.44 Since they were not impleaded as parties and given the opportunity to participate in Civil Case No. Q-28580, the final judgment in said case cannot bind BPI Family and the spouses Chan. The effect of the said judgment cannot be extended to BPI Family and the spouses Chan by simply issuing an alias writ of execution against them. No man shall be affected by any proceeding to which he is a stranger, and strangers to a case are not bound by any judgment rendered by the court. In the same manner, a writ of execution can be issued only against a party and not against one who did not have his day in court. Only real parties in interest in an action are bound by the judgment therein and by writs of execution issued pursuant thereto.45 A similar situation existed in Dino v. Court of Appeals,46 where we resolved that: As the registered owner of the subject property, petitioners are not bound by decision in Civil Case No. R-18073 for they were never summoned in said case and the notice of lis pendens annotated on TCT No. 73069 was already cancelled at the time petitioners purchased the subject property. While it is true that petitioners are indispensable parties in Civil Case No. R-18073, without whom no complete relief could be accorded to the private respondents, the fact still remains that petitioners were never actually joined as defendants in said case. Impleading petitioners as additional defendants only in the execution stage of said case violated petitioners right to due process as no notice of lis pendens was annotated on the existing certificate of title of said property nor were petitioners given notice of the pending case, therefore petitioners remain strangers in said case and the Order of the trial court involving them is null and void, considering that petitioners are innocent purchasers of the subject property for value.47 We further stress that Section 48 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, clearly provides that "[a] certificate of title shall not be subject to collateral attack. It cannot be altered, modified or cancelled except in a direct proceeding in accordance with law." Herein, several Torrens titles were already issued after the cancellation of Muozs. Certificates of title had been successively issued to Emilia M. Ching, spouses Go, BPI Family, and spouses Chan. Civil Case No. Q-28580, in which a final judgment had already been rendered, specifically challenged the validity of the certificates of title of Emilia M. Ching and the spouses Go only. To have the present certificate of title of the spouses Chan cancelled, Muoz must institute another case directly attacking the validity of the same. The fact that the titles to the subject property of Emilia M. Ching and the spouses Go were already declared null and void ab initio by final judgment in Civil Case No. Q-28580 is not enough, for it does not automatically make the subsequent titles of BPI Family and the spouses Chan correspondingly null and void ab initio. It has long been ingrained in our jurisprudence that a void title may become the root of a valid title if the derivative title was obtained in good faith and for value. Following the principle of indefeasibility of a Torrens title, every person dealing with registered lands may safely rely on the correctness of the certificate of title of the vendor/transferor, and he is not required to go beyond the certificate and inquire into the circumstances culminating in the vendors acquisition of the property. The rights of innocent third persons who relied on the correctness of the certificate of title and acquired rights over the property covered thereby cannot be disregarded and the courts cannot order the cancellation of such certificate for that would impair or erode public confidence in the Torrens system of land registration.48 Hence, we pronounced in Republic v. Agunoy, Sr.49: Here, it bears stressing that, by petitioner's own judicial admission, the lots in dispute are no longer part of the public domain, and there are numerous third, fourth, fifth and more parties holding Torrens titles in their favor and enjoying the presumption of good faith. This brings to mind what we have reechoed in Pino v. Court of Appeals and the cases therein cited: [E]ven on the supposition that the sale was void, the general rule that the direct result of a previous illegal contract cannot be valid (on the theory that the spring cannot rise higher than its source) cannot apply here for We are confronted with the functionings of the Torrens System of Registration. The doctrine to follow is simple enough: a fraudulent or forged document of sale may become the ROOT of a valid title if the certificate of title has already been transferred from the name of the true owner to the name of the forger or the name indicated by the forger.50(Emphases ours.) Although the RTC-Branch 95 had declared with finality in Civil Case No. Q-28580 that the titles of Emilia M. Ching and the spouses Go were null and void, there is yet no similar determination on the titles of BPI Family and the spouses Chan. The question of whether or not the titles to the subject property of BPI Family and the spouses Chan are null and void, since they are merely the successors-in-interest, assigns, or privies of Emilia M. Ching and the spouses Go, ultimately depends on the issue of whether or not BPI Family and the spouses Chan obtained their titles to the subject property in bad faith, i.e., with notice of Muozs adverse claim and

knowledge of the pendency of Civil Case No. Q-28580. The latter is a factual issue on which we cannot rule in the present petition, not only because we are not a trier of facts, but more importantly, because it was not among the issues raised and tried in Civil Case No. Q-28580. In support of her prayer for an alias writ of execution against BPI Family and the spouses Go, Muoz cites our ruling in Calalang v. Register of Deeds of Quezon City,51 in relation to De la Cruz v. De la Cruz.52 De la Cruz is an action for reconveyance of Lot 671 founded on breach of trust filed by Augustina de la Cruz, et al., against Lucia dela Cruz (Lucia) and Iglesia Ni Kristo (INK). We upheld the validity of the sale of Lot 671 by Lucia to INK, and thereby validated the title of INK to the said property. Calalang actually involved two petitions: (1) a special civil action for certiorari and prohibition originally filed by Virginia Calalang (Calalang) before this Court, and (2) a petition for injunction with damages originally filed by Augusto M. de Leon (De Leon), et al., before the RTC and docketed as Civil Case No. Q-45767. Calalang and De Leon, et al., assert titles that were adverse to that of INK. De Leon, et al., in particular, claim that their titles to Lot 671 were derived from Amando Clemente. Calalang and De Leon, et al., sought from the court orders enjoining INK from building a fence to enclose Lot 671; requiring the Administrator of the National Land Titles and Deeds Registration Administration (NLTDRA) to conduct an investigation of the anomaly regarding Lucias reconstituted title to Lot 671; and dismissing the proceedings instituted by the Register of Deeds for the cancellation of their titles. We dismissed the petitions of Calalang and De Leon, et al., on the ground of res judicata, the legality or validity of the title of INK over Lot 671 had been settled with finality in De la Cruz. De la Cruz was applied to Calalang and De Leon, et al., since the facts on which such decision was predicated continued to be the facts on which the petitions of Calalang and De Leon, et al., were based. Muozs reliance on Calalang is misplaced. There are substantial differences in the facts and issues involved in Calalang and the present case. In Calalang, there is duplication or overlapping of certificates of title issued to different persons over the same property. We already upheld in De la Cruz the validity of the certificate of title of INK over Lot 671, which effectively prevents us from recognizing the validity of any other certificate of title over the same property. In addition, Lucia, the predecessor-in-interest of INK, had her certificate of title judicially reconstituted. The judicial reconstitution of title is a proceeding in rem, constituting constructive notice to the whole world. Hence, we rejected the petitions of Calalang and De Leon, et al., to enjoin INK from building a fence enclosing Lot 671, and the concerned public authorities from instituting appropriate proceedings to have all other certificates of title over Lot 671 annulled and cancelled. In the instant case, there has been no duplication or overlapping of certificates of title. The subject property has always been covered by only one certificate of title at a time, and at present, such certificate is in the spouses Chans names. As we have previously discussed herein, Muoz cannot have the spouses Chans TCT No. 53297 cancelled by a mere motion for the issuance of an alias writ of execution in Civil Case No. Q-28580, when the spouses Chan were not parties to the case. Civil Case No. Q-28580 was a proceeding in personam, and the final judgment rendered therein declaring null and void the titles to the subject property of Emilia M. Ching and the spouses Go should bind only the parties thereto. Furthermore, despite the void titles of Emilia M. Ching and the spouses Go, the derivative titles of BPI Family and the spouses Chan may still be valid provided that they had acquired the same in good faith and for value. More in point with the instant petition is Pineda v. Santiago.53 Pineda still involved Lot 671. INK sought from the RTC a second alias writ of execution to implement the judgment in Calalang against Conrado Pineda (Pineda), et. al. In opposing the issuance of such writ, Pineda, et al., asserted that they held titles to Lot 671 adverse to those of Lucia and INK and that they were not parties in De la Cruz or in Calalang. In its assailed order, the RTC granted the second alias writ of execution on the basis that the issue of ownership of Lot 671 was already determined with finality in favor of Lucia and INK. The writ ordered the deputy sheriff to eject Pineda, et al., from Lot 671. When the matter was brought before us, we annulled the assailed order as the writ of execution issued was against Pineda, et al., who were not parties to Civil Case No. Q-45767, the ejectment suit instituted by De Leon, et al. We elaborated in Pineda that: Being a suit for injunction, Civil Case No. Q-45767 partakes of an action in personam. In Domagas v. Jensen, we have explained the nature of an action in personam and enumerated some actions and proceedings which are in personam, viz: "The settled rule is that the aim and object of an action determine its character. Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its nature and purpose, and by these only. A proceeding in personam is a proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance with the mandate of the court. The purpose of a proceeding in personam is to impose, through the judgment of a court, some responsibility or liability directly upon the person of the defendant. Of this character are suits to compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on him. An action in personam is said to be one which has for its object a judgment against the person, as distinguished from a judgment against the propriety to determine its state. It has been held that an action in personam is a proceeding to enforce personal rights or obligations; such action is brought against the person. As far as suits for injunctive relief are concerned, it is well-settled that it is an injunctive act in personam. In Combs v. Combs, the appellate court held that proceedings to enforce personal rights and obligations and in which personal judgments are rendered adjusting the rights and obligations between the affected parties is in personam. Actions for recovery of real property are in personam." The respondent judge's jurisdiction is, therefore, limited to the parties in the injunction suit. To stress, the petition for injunction, docketed as Civil Case No. Q-45767, was filed only by therein petitioners Augusto M. de Leon, Jose de Castro, Jose A. Panlilio, Felicidad Vergara Vda. De Pineda, Fernando L. Vitug I, Fernando M. Vitug II, Fernando M. Vitug III, and Faustino Tobia, and later amended to include Elena Ostrea and Feliza C. Cristobal-Generoso as additional petitioners therein, against Bishop Erao Manalo, in his capacity as titular and spiritual head of I.N.K. Herein petitioners Conrado Pineda, et al. never became parties thereto. Any and all orders and writs of execution, which the respondent judge may issue in that case can, therefore, be enforced only against those parties and not against the herein petitioners Conrado Pineda, et al. In issuing the assailed Order dated 22 April 1998, which directed the issuance of the 2nd Alias Writ of Execution to eject non-parties (herein petitioners), the respondent judge clearly went out of bounds and committed grave abuse of discretion. The nature of the injunction suit Civil Case No. Q-45767 as an action in personam in the RTC remains to be the same whether it is elevated to the CA or to this Court for review. An action in personam does not become an action in rem just because a pronouncement confirming I.N.K.'s title to Lot 671 was made by this Court in the Calalang decision. Final rulings may be made by this Court, as the Highest Court of the Land, in actions in personam but such rulings are binding only as against the parties therein and not against the whole world. Here lies another grave abuse of discretion on the part of the respondent judge when he relied on the Calalang decision in his assailed Order dated 07 May 1998 as if it were binding against the whole world, saying: "After evaluating the arguments of both parties, decisive on the incident is the decision of the Supreme Court in favor of the respondent I.N.K., represented by its titular and spiritual head Bishop Erao G. Manalo, sustaining its ownership over the subject Lot 671. This Court could do no less but to follow and give substantial meaning to its ownership which shall include all dominical rights by way of a Writ of Execution. To delay the issuance of such writ is a denial of justice due the I.N.K." As a final word, this decision shall not be misinterpreted as disturbing or modifying our ruling in Calalang. The final ruling on I.N.K.'s ownership and title is not at all affected. Private respondent I.N.K., as the true and lawful owner of Lot 671 as ruled by the Court in Calalang, simply has to file the proper action against the herein petitioners to enforce its property rights within the bounds of the law and our rules. I.N.K.'s recourse of asking for the issuance of an alias writ of execution against the petitioners in Civil Case No. Q-45767 and the respondent judge's orders in said case, granting I.N.K.'s prayer and enforcing the alias writ of execution against the present petitioners, constitutes blatant disregard of very fundamental rules and must therefore be stricken down.54 (Emphases ours.) Consistent with Pineda, and as appositely recommended by the RTC-Branch 95 and the Court of Appeals in the present case, Muozs legal remedy is to directly assail in a separate action the validity of the certificates of title of BPI Family and the spouses Chan. G.R. No. 142676 G.R. No. 142676 is Muozs appeal of the dismissal of Civil Case No. 8286, the forcible entry case she instituted against Samuel Go Chan and Atty. Yabut before the MeTC. There is forcible entry or desahucio when one is deprived of physical possession of land or building by means of force, intimidation, threat, strategy or stealth. In such cases, the possession is illegal from the beginning and the basic inquiry centers on who has the prior possession de facto. In filing forcible entry cases, the law tells us that two allegations are mandatory for the municipal court to acquire jurisdiction: first, the plaintiff must allege prior physical possession of the property, and second, he must also allege that he was deprived of his possession by any of the means provided for in Section 1, Rule 70 of the Rules of Court, i.e., by force, intimidation, threat, strategy, or stealth. It is also settled that in the resolution thereof, what is important is determining who is entitled to the physical possession of the property. Indeed, any of the parties who can prove prior possession de facto may recover such possession even from the owner himself since such cases proceed independently of any claim of ownership and the plaintiff needs merely to prove prior possession de facto and undue deprivation thereof.55 Title is never in issue in a forcible entry case, the court should base its decision on who had prior physical possession. The main thing to be proven in an action for forcible entry is prior possession and that same was lost through force, intimidation, threat, strategy, and stealth, so that it behooves the court to restore possession regardless of title or ownership.56 We more extensively discussed in Pajuyo v. Court of Appeals57 that: Ownership or the right to possess arising from ownership is not at issue in an action for recovery of possession. The parties cannot present evidence to prove ownership or right to legal possession except to prove the nature of the possession when necessary to resolve the issue of physical possession. The same is true when the defendant asserts the absence of title over the property. The absence of title over the contested lot is not a ground for the courts to withhold relief from the parties in an ejectment case. The only question that the courts must resolve in ejectment proceedings is - who is entitled to the physical possession of the premises, that is, to the possession de facto and not to the possession de jure. It does not even matter if a partys title to the property is questionable, or when both parties intruded into public land and their applications to own the land have yet to be approved by the proper government agency. Regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be thrown out by a strong hand, violence or terror. Neither is the unlawful withholding of property allowed. Courts will always uphold respect for prior possession. Thus, a party who can prove prior possession can recover such possession even against the owner himself. Whatever may be the character of his possession, if he has in his favor prior possession in time, he has the security that entitles him to remain on the property until a person with a better right lawfully ejects him. To repeat, the only issue that the court has to settle in an ejectment suit is the right to physical possession.58 (Emphases ours.) Based on the foregoing, we find that the RTC-Branch 88 erred in ordering the dismissal of Civil Case No. 8286 even before completion of the proceedings before the MeTC. At the time said case was ordered dismissed by RTC-Branch 88, the MeTC had only gone so far as holding a hearing on and eventually granting Muozs prayer for the issuance of a writ of preliminary mandatory injunction.

Muoz alleges in her complaint in Civil Case No. 8286 that she had been in prior possession of the subject property since it was turned-over to her by the sheriff on January 10, 1994, pursuant to the Alias Writ of Execution issued by the RTC-Branch 95 to implement the final judgment in Civil Case No. Q-28580. The factual issue of who was in prior possession of the subject property should be litigated between the parties regardless of whether or not the final judgment in Civil Case No. Q-28580 extended to the spouses Chan. Hence, the pendency of the latter issue in Civil Case No. Q-28580 before the RTC-Branch 95 did not warrant the dismissal of Civil Case No. 8286 before the MeTC on the ground of litis pendentia. The two cases could proceed independently of one another. Samuel Go Chan and Atty. Yabut aver that the spouses Chan have never lost possession of the subject property since acquiring the same from BPI Family in 1990. This is a worthy defense to Muozs complaint for forcible entry, which Samuel Go Chan and Atty. Yabut should substantiate with evidence in the continuation of the proceedings in Civil Case No. 8286 before the MeTC. In addition, Civil Case No. 8286, a forcible entry case, is governed by the Revised Rule on Summary Procedure, Section 19 whereof provides: SEC. 19. Prohibited pleadings and motions. The following pleadings, motions, or petitions shall not be allowed in the cases covered by this Rule: xxxx (g) Petition for certiorari, mandamus, or prohibition against any interlocutory order issued by the court. The purpose of the Rule on Summary Procedure is to achieve an expeditious and inexpensive determination of cases without regard to technical rules. Pursuant to this objective, the Rule prohibits petitions for certiorari, like a number of other pleadings, in order to prevent unnecessary delays and to expedite the disposition of cases.59 Interlocutory orders are those that determine incidental matters that do not touch on the merits of the case or put an end to the proceedings.60 An order granting a preliminary injunction, whether mandatory or prohibitory, is interlocutory and unappealable.611avvphil The writ of preliminary mandatory injunction issued by the MeTC in its Order dated May 16, 1994, directing that Muoz be placed in possession of the subject property during the course of Civil Case No. 8286, is an interlocutory order. Samuel Go Chan and Atty. Yabut assailed the said order before the RTC-Branch 88 via a petition for certiorari, docketed as Civil Case No. Q-94-20632. The RTC-Branch 88 gave due course to said petition, and not only declared the MeTC Order dated May 16, 1994 null and void, but went further by dismissing Civil Case No. 8286. The prohibition in Section 19(g) of the Revised Rule on Summary Procedure is plain enough. Its further exposition is unnecessary verbiage.62 The petition for certiorari of Samuel Go Chan and Atty. Yabut in Civil Case No. Q-94-20632 is clearly covered by the said prohibition, thus, it should have been dismissed outright by the RTCBranch 88. While the circumstances involved in Muozs forcible entry case against Samuel Go Chan and Atty. Yabut are admittedly very peculiar, these are insufficient to except the petition for certiorari of Samuel Go Chan and Atty. Yabut in Civil Case No. Q-94-20632 from the prohibition. The liberality in the interpretation and application of the rules applies only in proper cases and under justifiable causes and circumstances. While it is true that litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to insure an orderly and speedy administration of justice.63 Nonetheless, even though the peculiar circumstances extant herein do not justify the dismissal of Civil Case No. 8286, they do require limiting pro hac vice the reliefs the MeTC may accord to Muoz in the event that she is able to successfully prove forcible entry by Samuel Go Chan and Atty. Yabut into the subject property (i.e., that the sheriff actually turned-over to Muoz the possession of the subject property on January 10, 1994, and that she was deprived of such possession by Samuel Go Chan and Atty. Yabut on February 2, 1994 by means of force, intimidation, threat, strategy, and stealth). Taking into account our ruling in G.R. No. 146718 that the final judgment in Civil Case No. Q-28580 does not extend to the spouses Chan, who were not impleaded as parties to the said case the MeTC is precluded from granting to Muoz relief, whether preliminary or final, that will give her possession of the subject property. Otherwise, we will be perpetuating the wrongful execution of the final judgment in Civil Case No. Q-28580. Based on the same reason, Muoz can no longer insist on the reinstatement of the MeTC Order dated May 16, 1994 granting a preliminary mandatory injunction that puts her in possession of the subject property during the course of the trial. Muoz though may recover damages if she is able to prove wrongful deprivation of possession of the subject property from February 2, 1994 until the finality of this decision in G.R. No. 146718. WHEREFORE, in view of the foregoing, we: (1) GRANT Emerita Muozs petition in G.R. No. 142676. We REVERSE and SET ASIDE the Decision dated July 21, 1995 and Resolution dated March 9, 2000 of the Court of Appeals in CA-G.R. SP No. 35322, which affirmed the Orders dated June 10, 1994 and August 5, 1994 of the Regional Trial Court, Branch 88 of Quezon City in Civil Case No. Q-94-20632. We DIRECT the Metropolitan Trial Court, Branch 33 of Quezon City to reinstate Emerita Muozs complaint for forcible entry in Civil Case No. 8286 and to resume the proceedings only to determine whether or not Emerita Muoz was forcibly deprived of possession of the subject property from February 2, 1994 until finality of this judgment, and if so, whether or not she is entitled to an award for damages for deprivation of possession during the aforementioned period of time; and (2) DENY Emerita Munozs petition in G.R. No. 146718 for lack of merit, and AFFIRM the Decision dated September 29, 2000 and Resolution dated January 5, 2001 of the Court of Appeals in CA-G.R. SP No. 40019, which in turn, affirmed the Orders dated August 21, 1995 and October 3, 1995 of the Regional Trial Court, Branch 95 of Quezon City in Civil Case No. Q-28580. No pronouncement as to costs. SO ORDERED. G.R. No. L-64159 September 10, 1985 CIRCE S. DURAN and ANTERO S. GASPAR, Petitioners, vs. INTERMEDIATE APPELLATE COURT, ERLINDA B. MARCELO TIANGCO and RESTITUTO TIANGCO, Respondents.chanrobles virtual law library RELOVA, J.: The respondent then Court of Appeals rendered judgment, modifying the decision of the then Court of First Instance of Rizal, which reads as follows: (1) the complaint of the plaintiffs (herein petitioners) is hereby DISMISSED; chanrobles virtual law library (2) the defendants-appellants spouses Erlinda B. Marcelo Tiangco and Restituto Tiangco (herein private respondents) are hereby declared the lawful owners of the two (2) parcels of land and all the improvements thereon including the 12-door apartment thereon described in the complaint, in the counterclaim, in the cross-claim, and in the Sheriff's Certificate of Sale; chanrobles virtual law l (3) the plaintiffs-appellants and the defendant-appellee Fe S. Duran are hereby ordered to deliver to (the Tiangcos) the two parcels of land and all the improvements thereon including the 12-door apartment thereon, subject matter of the complaint, counterclaim, and cross-claim, and in the Sheriff's Certificate of Sale; chanrobles virtual law library (4) the plaintiffs-appellants and the defendant-appellee Fe S. Duran are hereby ordered to pay solidarily to the Tiangcos the sum of Two Thousand Four Hundred Pesos (P2,400) a month from May 16, 1972 until delivery of possession of the properties in question to said Tiangco spouses, representing rentals collected by plaintiffs-appellants and defendant- appellee Fe S. Duran; chanrobles virtual l(5) the plaintiffs-appellants and defendant-appellee Fe S. Duran are hereby ordered to pay solidarily to the spouses Tiangco the sum of Twenty Thousand Pesos (P20,000) as damages for attorney's fees, and the sum of Twenty-Five Thousand Pesos (P25,000) for moral damages, and the costs. (pp. 149-150, Rollo) The antecedent facts showed that petitioner Circe S. Duran owned two (2) parcels of land (Lots 5 and 6, Block A, Psd 32780) covered by Transfer Certificate of Title No. 1647 of the Register of Deeds of Caloocan City which she had purchased from the Moja Estate. She left the Philippines in June 1954 and returned in May 1966.chanroblesvirtualawlibrary chanrobles virtual law library On May 13, 1963, a Deed of Sale of the two lots mentioned above was made in favor of Circe's mother, Fe S. Duran who, on December 3, 1965, mortgaged the same property to private respondent Erlinda B. Marcelo-Tiangco. When petitioner Circe S. Duran came to know about the mortgage made by her mother, she wrote the Register of Deeds of Caloocan City informing the latter that she had not given her mother any authority to sell or mortgage any of her properties in the Philippines. Failing to get an answer from the registrar, she returned to the Philippines. Meanwhile, when her mother, Fe S. Duran, failed to redeem the mortgage properties, foreclosure proceedings were initiated by private respondent Erlinda B. Marcelo Tiangco and, ultimately, the sale by the sheriff and the issuance of Certificate of Sale in favor of the latter.chanroblesvirtualawlibrary chanrobles virtual law library Petitioner Circe S. Duran claims that the Deed of Sale in favor of her mother Fe S. Duran is a forgery, saying that at the time of its execution in 1963 she was in the United States. On the other hand, the adverse party alleges that the signatures of Circe S. Duran in the said Deed are genuine and, consequently, the mortgage made by Fe S. Duran in favor of private respondent is valid.chanroblesvirtualawlibrary chanrobles virtual law library With respect to the issue as to whether the signature of petitioner Circe S. Duran in the Deed of Sale is a forgery or not, respondent appellate court held the same to be genuine because there is the presumption of regularity in the case of a public document and "the fact that Circe has not been able to satisfactorily prove that she was in the United States at the time the deed was executed in 1963. Her return in 1966 does not prove she was not here also in 1963, and that she did not leave shortly after 1963. She should have presented her old passport, not her new one. But even if the signatures were a forgery, and the sale would be regarded as void, still it is Our opinion that the Deed of Mortgage is VALID, with respect to the mortgagees, the defendants-appellants. While it is true that under Art. 2085 of the Civil Code, it is essential that the mortgagor be the absolute owner of the property mortgaged, and while as between the daughter and the mother, it was the daughter who still owned the lots, STILL insofar as innocent third persons are concerned the owner was already the mother (Fe S. Duran) inasmuch as she had already become the registered owner (Transfer

Certificates of Title Nos. 2418 and 2419). The mortgagee had the right to rely upon what appeared in the certificate of title, and did not have to inquire further. If the rule were otherwise, the efficacy and conclusiveness of Torrens Certificate of Titles would be futile and nugatory. Thus the rule is simple: the fraudulent and forged document of sale may become the root of a valid title if the certificate has already been transferred from the name of the true owner to the name indicated by the forger (See De la Cruz v. Fable, 35 Phil. 144; Blondeau et al. v. Nano et al., 61 Phil. 625; Fule et al. v. Legare et al., 7 SCRA 351; see also Sec. 55 of Act No. 496, the Land Registration Act). The fact that at the time of the foreclosure sale proceedings (1970-72) the mortgagees may have already known of the plaintiffs' claim is immaterial. What is important is that at the time the mortgage was executed, the mortgagees in good faith actually believed Fe S. Duran to be the owner, as evidenced by the registration of the property in the name of said Fe S. Duran (pp. 146-147, Rollo)." chanrobles virtual law library In elevating the judgment of the respondent appellate court to Us for review, petitioners discussed questions of law which, in effect and substance, raised only one issue and that is whether private respondent Erlinda B. Marcelo-Tiangco was a buyer in good faith and for value.chanroblesvirtualawlibrary chanrobles virtual law library Guided by previous decisions of this Court, good faith consists in the possessor's belief that the person from whom he received the thing was the owner of the same and could convey his title (Arriola vs. Gomez dela Serna, 14 Phil. 627). Good faith, while it is always to be presumed in the absence of proof to the contrary, requires a well-founded belief that the person from whom title was received was himself the owner of the land, with the right to convey it (Santiago vs. Cruz, 19 Phil. 148). There is good faith where there is an honest intention to abstain from taking any unconscientious advantage from another (Fule vs. Legare, 7 SCRA 351). Otherwise stated, good faith is the opposite of fraud and it refers to the state of mind which is manifested by the acts of the individual concerned. In the case at bar, private respondents, in good faith relied on the certificate of title in the name of Fe S. Duran and as aptly stated by respondent appellate court "[e]ven on the supposition that the sale was void, the general rule that the direct result of a previous illegal contract cannot be valid (on the theory that the spring cannot rise higher than its source) cannot apply here for We are confronted with the functionings of the Torrens System of Registration. The doctrine to follow is simple enough: a fraudulent or forged document of sale may become the ROOT of a valid title if the certificate of title has already been transferred from the name of the true owner to the name of the forger or the name indicated by the forger." (p. 147, Rollo) chanrobles virtual law library Thus, where innocent third persons relying on the correctness of the certificate of title issued, acquire rights over the property, the court cannot disregard such rights and order the total cancellation of the certificate for that would impair public confidence in the certificate of title; otherwise everyone dealing with property registered under the torrens system would have to inquire in every instance as to whether the title had been regularly or irregularly issued by the court. Indeed, this is contrary to the evident purpose of the law. Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go behind the certificate to determine the condition of the property. Stated differently, an innocent purchaser for value relying on a torrens title issued is protected. A mortgagee has the right to rely on what appears in the certificate of title and, in the absence of anything to excite suspicion, he is under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of said certificate.chanroblesvirtualawlibrary chanrobles virtual law library Likewise, We take note of the finding and observation of respondent appellate court in that petitioners were guilty of estoppel by laches "in not bringing the case to court within a reasonable period. Antero Gaspar, husband of Circe, was in the Philippines in 1964 to construct the apartment on the disputed lots. This was testified to by Circe herself (tsn., p. 41, Nov. 27, 1973). In the process of construction, specifically in the matter of obtaining a building permit, he could have discovered that the deed of sale sought to be set aside had been executed on May 13, 1963 (the building permit needed an application by the apparent owner of the land, namely, Circe's mother, Fe S. Duran). And then again both plaintiffs could have intervened in the foreclosure suit but they did not. They kept silent until almost the last moment when they finally decided, shortly before the sheriff's sale, to file a third-party claim. Clearly, the plaintiffs can be faulted for their estoppel by laches." (p. 148, Rollo) chanrobles virtual law library IN VIEW OF THE FOREGOING, We find the petition without merit and hereby AFFIRMED in toto the decision of respondent appellate court promulgated on August 12, 1981.chanroblesvirtualawlibrary chanrobles virtual law library SO ORDERED. G.R. No. 137471 January 16, 2002 GUILLERMO ADRIANO, petitioner, vs. ROMULO PANGILINAN, respondent. PANGANIBAN, J.: Loss brought about by the concurrent negligence of two persons shall be borne by the one who was in the immediate, primary and overriding position to prevent it. In the present case, the mortgagee -- who is engaged in the business of lending money secured by real estate mortgages -- could have easily avoided the loss by simply exercising due diligence in ascertaining the identity of the impostor who claimed to be the registered owner of the property mortgaged. The Case Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the November 11, 1998 Decision1of the Court of Appeals (CA) in CA-GR CV No. 44558. The dispositive portion of the CA Decision reads as follows: "WHEREFORE, premises considered, the judgment appealed from is hereby REVERSED and SET ASIDE, and another entered dismissing the complaint instituted in the court below. Without costs in this instance."2 Also questioned is the February 5, 1999 CA Resolution3 denying petitioner's Motion for Reconsideration. The CA reversed the Regional Trial Court (RTC) of San Mateo, Rizal (Branch 76) in Civil Case No. 845, which disposed as follows: "WHEREFORE, premises considered, judgment is hereby rendered declaring the real estate mortgage constituted on the property described in and covered by TCT No. 337942 of the Registry of Deeds for the Province of Rizal, in the name of Guillermo Adriano, to be null and void and of no force and effect, and directing defendant Romulo Pangilinan to reconvey or deliver to herein plaintiff Guillermo Adriano the aforesaid title after causing and effecting a discharge and cancellation of the real estate mortgage annotated on the said title. No pronouncement as to costs. "Defendant's counterclaim is dismissed for want of basis."4 The Facts The undisputed facts of the case are summarized by the Court of Appeals as follows: "[Petitioner] Guillermo Adriano is the registered owner of a parcel of land with an area of three hundred four (304) square meters, more or less, situated at Col. S. Cruz, Geronimo, Montalban, Rizal and covered by Transfer Certificate of Title No. 337942. "Sometime on November 23, 1990[, petitioner] entrusted the original owner's copy of the aforesaid Transfer Certificate of Title to Angelina Salvador, a distant relative, for the purpose of securing a mortgage loan. "Without the knowledge and consent of [petitioner], Angelina Salvador mortgaged the subject property to the [Respondent] Romulo Pangilinan. After a time, [petitioner] verified the status of his title with the Registry of Deeds of Marikina, Metro Manila, and was surprised to discover that upon the said TCT No. 337942 was already annotated or inscribed a first Real Estate Mortgage purportedly executed by one Guillermo Adriano over the aforesaid parcel of land, together with the improvements thereon, in favor of the [Respondent] Romulo Pangilinan, in consideration of the sum of Sixty Thousand Pesos (P60,000.00). [Petitioner] denied that he ever executed the deed of mortgage, and denounced his signature thereon as a forgery; he also denied having received the consideration of P60,000.00 stated therein. "[Petitioner] thereafter repeatedly demanded that [respondent] return or reconvey to him his title to the said property and when these demands were ignored or disregarded, he instituted the present suit. "[Petitioner] likewise filed a criminal case for estafa thru falsification of public document against [Respondent] Romulo Pangilinan, as well as against Angelina Salvador, Romy de Castro and Marilen Macanaya, in connection with the execution of the allegedly falsified deed of real estate mortgage: this was docketed as Criminal Case No. 1533-91 of the Regional Trial Court of San Mateo, Rizal, Branch 76. "[Respondent] in his defense testified that he [was] a businessman engaged in the buying and selling as well as in the mortgage of real estate properties; that sometime in the first week of December, 1990 Angelina Salvador, together with Marilou Macanaya and a person who introduced himself as Guillermo Adriano, came to his house inquiring on how they could secure a loan over a parcel of land; that he asked them to submit the necessary documents, such as the owner's duplicate of the transfer certificate of title to the property, the real estate tax declaration, its vicinity location plan, a photograph of the property to be mortgaged, and the owner's residence certificate; that when he conducted an ocular inspection of the property to be mortgaged, he was there met by a person who had earlier introduced himself as Guillermo Adriano, and the latter gave him all the original copies of the required documents to be submitted; that after he (defendant) had verified from the Registry of Deeds of Marikina that the title to the property to be mortgaged was indeed genuine, he and that person Guillermo Adriano executed the subject real estate mortgage, and then had it notarized and registered with the Registry of Deeds. After that, the alleged owner, Guillermo Adriano, together with Marilou Macanaya and another person signed the promissory note in the amount of Sixty Thousand Pesos (P60,000.00) representing the appraised value of the mortgage property. This done, he (defendant) gave them the aforesaid amount in cash. "[Respondent] claimed that [petitioner] voluntarily entrusted his title to the subject property to Angelina Salvador for the purpose of securing a loan, thereby creating a principal-agent relationship between the plaintiff and Angelina Salvador for the aforesaid purpose. Thus, according to [respondent], the execution of the real estate

mortgage was within the scope of the authority granted to Angelina Salvador; that in any event TCT No. 337942 and the other relevant documents came into his possession in the regular course of business; and that since the said transfer certificate of title has remained with [petitioner], the latter has no cause of action for reconveyance against him."5 In his appeal before the CA,6 respondent contended that the RTC had erred (1) in holding that petitioner's signature on the Real Estate Mortgage was a forgery and (2) in setting aside and nullifying the Mortgage. Ruling of the Court of Appeals The CA ruled that "when a mortgagee relies upon a Torrens title and lends money in all good faith on the basis of the title standing in the name of the mortgagor, only to discover one defendant to be an alleged forger and the other defendant to have by his negligence or acquiescence made it possible for fraud to transpire, as between two innocent persons, the mortgagee and one of the mortgagors, the latter who made the fraud possible by his act of confidence must bear the loss."7 It further explained that "even conceding for the sake of argument that the appellant's signature on the Deed of First Real Estate Mortgage was a forgery, and even granting that the appellee did not participate in the execution of the said deed of mortgage, and was not as well aware of the alleged fraud committed by other persons relative to its execution, the undeniable and irrefutable fact remains that the appellee did entrust and did deliver his Transfer Certificate of Title No. 337942 covering the subject property, to a distant relative, one Angelina Salvador, for the avowed purpose of using the said property as a security or collateral for a real estate mortgage debt of loan."8 Hence, this present recourse.9 The Issues In his Memorandum,10 petitioner raises the following issues for our consideration: I "Whether or not consent is an issue in determining who must bear the loss if a mortgage contract is sought to be declared a nullity[;] and II "Whether or not the Motion for Reconsideration filed by the petitioner before the Court of Appeals should have been dismissed[.]"11 This Court's Ruling The Petition is meritorious. First Issue: Effect of Mortgage by Non-Owner Petitioner contends that because he did not give his consent to the real estate mortgage (his signature having been forged), then the mortgage is void and produces no force and effect. Article 2085 of the Civil Code enumerates the essential requisites of a mortgage, as follows: "Art. 2085. The following requisites are essential to the contracts of pledge and mortgage: "(1) That they be constituted to secure the fulfillment of a principal obligation; "(2) That the pledgor or mortgagor be the absolute owner of the thing pledged or mortgaged; "(3) That the persons constituting the pledge or mortgage have the free disposal of their property, and in the absence thereof, that they be legally authorized for that purpose. "Third persons who are not parties to the principal obligation may secure the latter by pledging or mortgaging their own property. (1857)" (Italics supplied) In the case at bar, not only was it proven in the trial court that the signature of the mortgagor had been forged, but also that somebody else -- an impostor -- had pretended to be the former when the mortgagee made an ocular inspection of the subject property. On this point, the RTC held as follows: "The falsity attendant to the subject real estate mortgage is evidenced not only by herein plaintiff's vehement denial of having entered into that contract with defendant, but also by a comparison between the signature of the debtor-mortgagor appearing in the said mortgage contract, and plaintiff's signatures appearing in the records of this case. Even to the naked eye, the difference is glaring, and there can be no denying the fact that both signatures were not written or affixed by one and the same person. The falsity is further infe[r]able from defendant's admission that the plaintiff in this case who appeared in court [was] not the same person who represented himself as the owner of the property (TSN, pp. 7, 11, June 21, 1993 hearing) and who therefore was the one who signed the contract as the debtormortgagor."12 The CA did not dispute the foregoing finding, but faulted petitioner for entrusting to Angelina Salvador the TCT covering the property. Without his knowledge or consent, however, she caused or abetted an impostor's execution of the real estate mortgage. "Even conceding for the sake of argument that the appellee's signature on the Deed of First Real Estate Mortgage (Exh. B; Original Record, pp. 56-58) was a forgery, and even granting that the appellee did not participate in the execution of the said deed of mortgage, and was not as well aware of the alleged fraud committed by other persons relative to its execution, the undeniable and irrefutable fact remains that the appellee did entrust and did deliver his Transfer Certificate of Title No. 337942 (Exh. A; Original Record, pp. 53-55) covering the subject property, to a distant relative, one Angelina Salvador, for the avowed purpose of using the said property as a security or collateral for a real estate mortgage debt of loan. x x x"13 Be that as it may, it is clear that petitioner who is undisputedly the property owner -- did not mortgage the property himself. Neither did he authorize Salvador or anyone else to do so. In Parqui v. Philippine National Bank,14 this Court affirmed the trial court's ruling that a mortgage was invalid if the mortgagor was not the property owner: "After carefully considering the issue, we reach the conclusion that His Honor's decision was correct. One of the essential requisites of a valid mortgage, under the Civil Code is 'that the thing pledged or mortgaged be owned by the person who pledges or mortgages it' (Art. 1857, par. 2); and there is no question that Roman Oliver who pledged the property to the Philippine National Bank did not own it. The mortgage was consequently void."15 Second Issue: Concurrent Negligence of the Parties The CA reversed the lower court, because petitioner had been negligent in entrusting and delivering his TCT No. 337942 to his "distant relative" Angelina Salvador, who undertook to find a money lender. Citing Blondeau v. Nano16 and Philippine National Bank v. CA,17 it then applied the "bona fide purchaser for value" principle. Both cases cited involved individuals who, by their negligence, enabled other persons to cause the cancellation of the original TCT of the disputed property and the issuance of a new one in their favor. Having obtained TCTs in their names, they conveyed the subject property to third persons, who in Blondeau was a bona fide purchaser while in Philippine National Bank was an innocent mortgagee for value. It should be stressed that in both these cases, the seller and the mortgagor were the registered owners of the subject property; whereas in the present case, the mortgagor was an impostor, not the registered owner.1wphi1.nt It must be noted that a Torrens certificate "serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein."18 Moreover, the Torrens system "does not create or vest title. It only confirms and records title already existing and vested. It does not protect a usurper from the true owner. It cannot be a shield for the commission of fraud. It does not permit one to enrich himself at the expense of another."19 Thus, we ask these questions: Was petitioner negligent in entrusting and delivering his TCT to a relative who was supposed to help him find a money lender? And if so, was such negligence sufficient to deprive him of his property? To be able to answer these questions and apply the holding in Philippine National Bank, it is crucial to determine whether herein respondent was an "innocent mortgagee for value." After a careful review of the records and pleadings of the case, we hold that he is not, because he failed to observe due diligence in the grant of the loan and in the execution of the real estate mortgage.20 Respondent testified that he was engaged in the real estate business, including the grant of loans secured by real property mortgages. Thus, he is expected to ascertain the status and condition of the properties offered to him as collaterals, as well as to verify the identities of the persons he transacts business with. Specifically, he cannot simply rely on a hasty examination of the property offered to him as security and the documents backing them up. 21 He should also verify the identity of the person who claims to be the registered property owner. Respondent stated in his testimony that he had been engaged in the real estate business for almost seven years. 22 Before the trial court, he testified on how he had approved the loan sought and the property mortgaged: "Q Mr. witness, you stated earlier that you are a businessman. Will you please inform the Hon. Court what kind of business you are engaged in? A First, as a businessman, I buy and sell real estate properties, sir, and engaged in real estate mortgage, sir. Q In relation to your buy and sell business, Mr. witness, how many clients have you had since you started? A Since I started in 1985, I have [had] almost 30 to 50 clients, sir. xxx xxx xxx Q Will you inform the Court, Mr. [W]itness, how are you found by your clients? A I advertise it in the newspapers, sir. Q And what is the frequency of this advertisement in the newspapers? A One whole week in every month, sir. Q Let us go specifically [to] the real estate mortgage, Mr. [W]itness, which has relation to this case. Will you inform the Court how you go about this business, meaning, if you have any procedure that you follow? A As soon as my client go[es] to our house, I usually give them the requirements, sir. Q And what are these requirements? A I usually require them to submit to me at least a machine copy of the title, the location plan with vicinity, the real estate tax, the tax declaration, the picture of the property and the Res. Cert. of the owner, sir. Q And when these documents are given to you, what else do you do, if any? A When they present to me the machine copy, I require them to visit the place for the ocular inspection for the appraisal of the property, sir.

Q What other steps, if any? A After that ocular inspection, sir, appraising the property, I usually tell them to come back after one week for verification of the title in the Register of Deeds, sir. Q Will you inform the Court how you verif[ied] the title with the Register of Deeds? A I got a certified true copy from the Register of Deeds, sir. Q Certified true copy of what, Mr. witness? A The owner's duplicate title [to] the property, sir. Q Will you inform the Court why you asked for these documents? A To see to it that the title [was] genuine, sir. xxx xxx xxx Q You mentioned Residence Certificate. Why did you ask for a Residence Certificate? A To fully identify the alleged owner, sir. Q So, when the machine copies of these documents x x x were given to you [as you said], what did you do next, if any? A x x x [O]cular inspection, sir, that is my standard procedure. After they gave me all the requirements, we usually go there for the ocular inspection for the appraisal of the property, sir. Q So, you went to the house itself? A Yes, sir. Q Did you go there alone or were you with somebody else? A With the[ir] group x x x, sir, the one [which] came to our house. The two of them were Marilou Macanaya and Angelina Salvador. Q And when you went to the house, what did you see? A I saw a man there x x x who posed as Guillermo Adriano and gave me all the original copies of the requirements, sir. Q Did you get to enter the house? A As an architect, as soon as I [saw] the house, I already knew what [was] the appraisal, sir, and I knew already the surroundings of the property. Q So, you did not need to go inside the house? A Inside the house, not anymore, sir, we talked only inside the property. Q And this person who gave you the original documents is the owner of the house? A I assumed it, sir, [that] he [was] the owner."23 (Emphasis supplied) On cross[-]examination, he made a clarification: "Q Mr. Pangilinan, will you state again what business are you engaged [in]? A First, as an Architect, I do design and build and as a businessman, I do the buy and sell of real properties and engag[e] in mortgage contract, sir. Q Actually, it is in the mortgage business that you practically have the big bulk of your business. Isn't it? A Yes, sir."24 It is quite clear from the testimony of respondent that he dismally failed to verify whether the individual executing the mortgage was really the owner of the property. The ocular inspection respondent conducted was primarily intended to appraise the value of the property in order to determine how much loan he would grant. He did not verify whether the mortgagor was really the owner of the property sought to be mortgaged. Because of this, he must bear the consequences of his negligence. In Uy v. CA,25 the Court through Mr. Justice Jose A. R. Melo made the following significant observations: "Thus, while it is true, as asserted by petitioners, that a person dealing with registered lands need not go beyond the certificate of title, it is likewise a well-settled rule that a purchaser or mortgagee cannot close his eyes to facts which should put a reasonable man on his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor or mortgagor. His mere refusal to face up to the fact that such defect exists, or his willful closing of his eyes to the possibility of the existence of a defect in the vendor's or mortgagor's title, will not make him an innocent purchaser for value, if it afterwards develops that the title was in fact defective, and it appears that he had such notice of the defect as would have led to its discovery had he acted with the measure of precaution which may be required of a prudent man in a like situation."26 Indeed, there are circumstances that should put a party on guard and prompt an investigation of the property being mortgaged. Citing Torres v. CA,27 the Court continued as follows: "x x x [T]he value of the property, its principal value being its income potential in the form of monthly rentals being located at the corner of Quezon Boulevard and Raon Street, Manila, and the registered title not yielding any information as to the amount of rentals due from the building, much less on who is collecting them, or who is recognized by the tenants as their landlord - it was held that any prospective buyer or mortgagee of such a valuable building and land at the center of Manila, if prudent and in good faith, is normally expected to inquire into all these and related facts and circumstances. For failing to conduct such an investigation, a party would be negligent in protecting his interests and cannot be held as an innocent purchaser for value."28 We are not impressed by the claim of respondent that he exercised due diligence in ascertaining the identity of the alleged mortgagor when he made an ocular inspection29 of the mortgaged property. Respondent's testimony negated this assertion. "Q Now you told me also that you conducted an ocular inspection o[f] the premises. How many times did you do it? A Once, sir. Q Who were with you when you went there? A The same group of them, sir. Q How long did you stay in the premises? A I think 5 to 10 minutes, sir. Q And did you see any people inside the premises where you visited? A Yes, sir. Q Did you ask these persons? A They told me that. . . Q Did you ask these persons whom you saw in the premises? A No, sir. Q And what x x x did you [just] do when you inspected the premises? xxx xxx xxx A When I arrived in the property, that house, the alleged owner told me that the one staying at his house were just renting from him, sir. xxx xxx xxx Q Again, Mr. Pangilinan, my question to you is, what did you do when you arrived in the premises in the course of your ocular inspection? Atty. Garcia: Already answered. Court: You may answer. A When I arrived at that place, I just looked around and as an Architect, I [saw] that I [could] appraise it just [by] one look at it, sir. Atty. Amado: Q And after that, where did you go? Where did you and this group go? A Just inside the property, sir. We talked [about] how much [would] be given to them and I told them this [was] only the amount I [could] give them, 30 sir." (Emphasis supplied) Since he knew that the property was being leased, respondent should have made inquiries about the rights of the actual possessors. He could have easily verified from the lessees whether the claimed owner was, indeed, their lessor. Petitioner's act of entrusting and delivering his TCT and Residence Certificate to Salvador was only for the purpose of helping him find a money lender. Not having executed a power of attorney in her favor, he clearly did not authorize her to be his agent in procuring the mortgage. He only asked her to look for possible money lenders. Article 1878 of the Civil Code provides: "Art. 1878. Special powers of attorney are necessary in the following cases: xxx xxx xxx (7) To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration; xxx xxx xxx (12) To create or convey real rights over immovable property; xxx xxx x x x." As between petitioner and respondent, we hold that the failure of the latter to verify essential facts was the immediate cause of his predicament. If he were an ordinary individual without any expertise or experience in mortgages and real estate dealings, we would probably understand his failure to verify essential facts. However, he has been in the mortgage business for seven years. Thus, assuming that both parties were negligent, the Court opines that respondent should bear the loss. His superior knowledge of the matter should have made him more cautious before releasing the loan and accepting the identity of the mortgagor.31 Given the particular circumstances of this case, we believe that the negligence of petitioner is not enough to offset the fault of respondent himself in granting the loan. The former should not be made to suffer for respondent's failure to verify the identity of the mortgagor and the actual status of the subject property before

agreeing to the real estate mortgage. While we commiserate with respondent -- who in the end appears to have been the victim of scoundrels -- his own negligence was the primary, immediate and overriding reason that put him in his present predicament.1wphi1.nt To summarize, we hold that both law and equity favor petitioner. First, the relevant legal provision, Article 2085 of the Civil Code, requires that the "mortgagor be the absolute owner of the thing x x x mortgaged." Here, the mortgagor was an impostor who executed the contract without the knowledge and consent of the owner. Second, equity dictates that a loss brought about by the concurrent negligence of two persons shall be borne by one who was in the immediate, primary and overriding position to prevent it. Herein respondent who, we repeat, is engaged in the business of lending money secured by real estate mortgages could have easily avoided the loss by simply exercising due diligence in ascertaining the identity of the impostor who claimed to be the owner of the property being mortgaged. Finally, equity merely supplements, not supplants, the law. The former cannot contravene or take the place of the latter. In any event, respondent is not precluded from availing himself of proper remedies against Angelina Salvador and her cohorts. WHEREFORE, the Petition is GRANTED and the assailed Decision SET ASIDE. The November 25, 1993 Decision of the RTC of San Mateo, Rizal (Branch 76) is hereby REINSTATED. No costs. SO ORDERED. G.R. Nos. 115981-82 August 12, 1999 RUBEN LAGROSA, petitioner, vs. COURT OF APPEALS, SPOUSES ROMULO & EVELYN A. BANUA, and CESAR OROLFO, respondents. GONZAGA-REYES, J.: Petitioner seeks to review and set aside the Decision1 of respondent Court of Appeals dated January 7, 1994 affirming the July 12, 1993 decision of the Regional Trial Court of Manila (Branch 42) in Civil Case No. 93-65646 (CA-G.R. SP No. 31683); and reversing the decision dated March 15, 1993 of the Regional Trial Court of Manila (Branch 12) in Civil Case No. 92-62967 (CA-G.R. SP No. 32070). The two petitions for review of two (2) conflicting decisions rendered by two different branches of the Regional Trial Court of Manila in ejectment suits involving the same parties and property were consolidated before the Court of Appeals upon motion of one of herein respondents, Cesar Orolfo. The consolidation was granted considering the property involved is one and the same in both petitions and Ruben Lagrosa, petitioner in CA-G.R. SP No. 31683 is the same Ruben Lagrosa, who is the private respondent in CA-G.R. SP No. 32070; in the same manner that Evelyn Arizapa Banua is the private respondent in CA-G.R. SP No. 31683 while Cesar Orolfo, who is the caretaker of the subject property representing Evelyn Arizapa Banua, is the petitioner in CA-G.R. SP No. 32070.2 Both petitions involve the possession of sixty-five (65) square meters of residential lot located in Paco, Manila, originally owned by the City of Manila which, in due course, following its land and housing program for the under-privileged, awarded it to one Julio Arizapa who constructed a house and upholstery shop thereon. The award was in the nature of a "Contract to Sell" payable monthly for a period of twenty (20) years. Julio Arizapa is the predecessor-in-interest of respondent Evelyn Arizapa Banua in CA-G.R. SP No. 31683, while Cesar Orolfo, petitioner in CA-G.R. SP No. 32070, is the caretaker of the same subject property as authorized and appointed by Evelyn Arizapa Banua, in whose name Transfer Certificate of Title No. 197603 covering the said property is registered. Cesar Orolfo, as aforestated, represented Evelyn Arizapa Banua, in CA-G.R. SP No. 32070.3 As found by the trial court, the title of respondent Evelyn Arizapa Banua to the subject property is evidenced by the "Deed of Sale" executed by the City of Manila in her favor and the Transfer Certificate of Title No. 197603, issued to her by the Register of Deeds of Manila.4 Respondent Evelyn Arizapa Banua derived her title as follows Before Julio Arizapa could make the full payment for the said lot, he died on January 20, 1987, intestate, at the age of 67 and was survived by his wife, Josefa Albaytar Arizapa and children5. His wife Josefa Alabaytar Arizapa died intestate on January 21, 1988. On February 17, 1988, Evelyn Arizapa and her brothers and sisters executed a "Deed of Extrajudicial Partition" adjudicating unto themselves, as the sole heirs of the deceased, the aforesaid lot and a "Renunciation" in favor of Evelyn Arizapa under which they renounced and waived all their rights over the aforesaid lot in favor of Evelyn Arizapa. The "Notice of Extrajudicial Settlement of Estate of Deceased Julio Arizapa and Josefa Albaytar" was duly published in the "BALITA" in its March 4, 11 and 18, 1988 issues. On March 22, 1988, the heirs of Julio Arizapa wrote a letter to the City of Manila, through the City Tenants Security Committee, requesting that the award of said lot be placed under the name of Evelyn Arizapa based on said "Deed of Extrajudicial Partition" and the "Renunciation". On December 26, 1988, the Committee approved the request by Resolution. On January 8, 1990, Evelyn Arizapa paid the amount of P29,500.00 to the City of Manila which constituted the full payment of the lot for which Evelyn Arizapa was issued Official Receipt No. 738608 by the City Treasurer. On April 8, 1991, the City of Manila executed a "Deed of Sale" over the lot in favor of Evelyn Arizapa and, on the basis thereof, Transfer Certificate of Title No. 197603 was issued to Evelyn Arizapa.1wphi1.nt Petitioner Ruben Lagrosa claims to be the lawful possessor of the subject property by virtue of the "Deed of Assignment of Real Estate Mortgage" executed in his favor by Presentacion Quimbo on the basis of a "Contract of Real Estate Mortgage" executed by Julio Arizapa in favor of the latter. Lagrosa posits that he cannot be evicted from the subject property because he had prior possession as assignee of the said "Assignment of Real Estate Mortgage" executed by Presentacion Quimbo in his favor, and with the consent of Mauricia Albaytar, the sister of the deceased Josefa Albaytar Arizapa, after the demise of the spouses Julio Arizapa and Josefa Albaytar. The first petition (CA-G.R. SP No. 31683) sought the review of the decision rendered by the Regional Trial Court of Manila, Branch 49, with the Honorable Romeo J. Callejo presiding in Civil Case No. 93-65646 entitled "Spouses Romulo and Evelyn Arizapa-Banua, plaintiffs-appellees, vs. Ruben Lagrosa, et al., defendantsappellants," affirming in toto the judgment dated March 24, 1993 of the Metropolitan Trial Court of Manila, Branch 2, the dispositive portion of which reads: WHEREFORE, judgment is rendered for the PLAINTIFFS. The DEFENDANTS and all other persons claiming rights under them are hereby ordered: (a) To vacate the land covered by T.C.T. No. 197603 situated in Paco, Manila; (b) To pay the amount of P1,000.00 per month as reasonable compensation for the use and enjoyment of the premises, from the filing of this complaint until possession is restored to the plaintiffs; (c) To pay the amount of P2,000.00 as attorney's fees; and costs of suit. SO ORDERED. (Rollo, 73-74)6 The second petition (CA-G.R. SP No. 32070) sought the review of the decision rendered on March 15, 1993 by the Regional Trial Court of Manila, Branch 12, with the Honorable Edgardo Sundiam presiding in Civil Case No. 92-62967 entitled "Ruben Lagrosa, plaintiff, versus, Cesar Orolfo, defendant," affirming in toto on appeal the judgment of the Metropolitan Trial Court of Manila, Branch 5, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant Cesar Orolfo ordering the said defendant and all the persons claiming rights under him to vacate the leased premises located at 1765 La Purisima Concepcion, Pedro Gil, Paco, Manila; ordering the Defendant to pay the plaintiff the sum of P5,950.00 representing the arrears in monthly rental from October 1989 up to February 1991; ordering the defendant to pay the monthly rental of P350.00 starting March 1991 until the defendant actually vacates the leased premises in question and, ordering the defendant to pay plaintiff the sum of P5,000.00 as attorney's fees plus the costs of suit.7 In sum, in Civil Case No. 93-65646 (subject of CA-G.R. SP No. 31683), the trial court upheld the rightful possession of Evelyn Arizapa Banua over the subject lot and accordingly ordered the immediate execution of its judgment against Ruben Lagrosa, et al. On the other hand, in Civil Case No. 92-62967 (subject of CA-G.R. SP No. 32070), the trial court opined that a preponderance of evidence tilted on the side of Ruben Lagrosa and gave judgment in his favor, all because defendant therein, Cesar Orolfo, through utter negligence of his former counsel, failed to submit countervailing evidence on time, i.e. prior to the rendition of judgment by the Metropolitan Trial Court.8 After a careful review of the records, the respondent Court of Appeals proceeded to determine which of the two conflicting decisions should be sustained and given effect, the decision in Civil Case No. 93-65646 in favor of Evelyn Arizapa Banua, or the decision in Civil Case No. 92-62967 in favor of Ruben Lagrosa. The controlling operative facts as found by the respondent Court of Appeals are: 1. The subject property involved in both petitions is more particularly described as Lot No. 2, Block No. 29 of the former Fabmar Estate owned by the City of Manila. Subject property contains an area of 65 square meters. 2. On June 24, 1977, the City of Manila awarded said lot to Julio Arizapa under its land for the landless program. It was payable in monthly installments for a period twenty (20) years. 3. Julio Arizapa obtained a loan of P17,000.00 from one Presentacion B. Quimbo and he executed on August 2, 1985 a Contract of Real Estate Mortgage of his right over the subject property in favor of the latter. He failed to pay his loan and on top of which he borrowed more from Presentacion Quimbo until his account reached P28,000.00. 4. Julio Arizapa died intestate on January 20, 1987, leaving no other property except the lot in question. Meanwhile, his wife Josefa Albaytar, on account of her deteriorating health, borrowed P40,000.00 from Ruben Lagrosa, for which she executed a deed mortgaging her one-half right to the lot. When Quimbo was poised to foreclose the mortgage, Albaytar convinced her to execute instead a Deed of Assignment of Mortgage in favor of Ruben Lagrosa for a certain consideration, which she did. 5. Josefa Albaytar died on January 21, 1988. For her burial expenses, Mauricia Albaytar sister of the deceased, borrowed P65,000.00 from Ruben Lagrosa. In the meantime, Ruben Lagrosa with the permission of Mauricia Albaytar, allowed his relatives, to occupy and take possession of the subject property. Ruben Lagrosa himself was never in actual physical possession or occupation of the property. 6. Thus, the tenuous claim of Ruben Lagrosa over the subject property rests on the Deed of Assignment of Mortgage executed by Presentacion B. Quimbo in his favor. This deed of assignment was correctly declared illegal by the Honorable Romeo Callejo in SP No. 31683. It was declared illegal for the simple reason that the Deed of Mortgage executed by the late Julio Arizapa in favor of Presentacion D. Quimbo was fatally defective in that the property subject thereof was still owned by the City of Manila when said deed of mortgage was executed. 7. Concerning the issue of possession of the subject property, the rightful possession thereof of Evelyn Arizapa Banua is traceable to the possession of the City of Manila, then to her father Julio Arizapa; whereas, the possession claimed by Ruben Lagrosa is founded on that illegal Deed of Assignment of Mortgage (which was not even notarized), and the permission given him by Mauricia Albaytar after the death of her sister Josefa Albaytar, a permission which derives no legal authority

or validity because Mauricia, apart from her being a sister of the deceased, was not and has never been appointed as a legal representative or administratrix of the deceased spouses.9 In light of the foregoing, the respondent Court of Appeals affirmed the decision of the Regional Trial Court of Manila (Branch 49) in Civil Case No. 93-65646 finding for spouses Romulo and Evelyn Arizapa Banua. The dispositive portion of said decision reads: WHEREFORE, considering that respondent court has committed no error of law of fact in the decision under review, the same is affirmed and the petition is hereby DISMISSED. Costs against petitioner. On the other hand, the respondent Court of Appeals reversed the decision of Regional Trial Court of Manila (Branch 12) in Civil Case No. 92-62967 which ruled in favor of Ruben Lagrosa. The dispositive portion of said decision reads: WHEREFORE, the decision under review in SP No. 32070 is reversed and set aside, and another one is hereby entered dismissing the complaint for ejectment against petitioner Cesar Orolfo. Accordingly, other writ of execution and notice to vacate issued by respondent court in Civil Case No. 92-1291711 are hereby declared null and void and set aside. Costs against private respondents.12 Thus, the conflict between the two decisions as to who is entitled to the possession of the subject property, Ruben Lagrosa on the one hand, or Evelyn Arizapa-Banua on the other, with Cesar Orolfo merely representing the latter in Civil No. 92-62967, was resolved. Hence, the instant petition on grounds that may be summarized as follows: (1) that the respondent Court of Appeals erred in declaring the "Contract of Real Estate Mortgage" and the "Assignment of Mortgage" as illegal; (2) that the respondent Court of Appeals erred in upholding the validity of Transfer Certificate of Title No. 197603 in the name of Evelyn Arizapa Banua despite the fact that Josefa Arizapa was the only legal wife of Julio Arizapa and that they were childless; (3) that the respondent Court of Appeal erred in declaring that Cesar Orolfo was appointed caretaker of the subject property and that he was not given a chance to present his evidence before the lower court. The petition is bereft of merit. The only issue to be resolved in ejectment cases is the question as to who is entitled to the physical or material possession of the premises or possession de facto.13 In the event the issue ownership is raised in the pleadings, such issue shall be taken up the limited purpose of determining who between the contending parties has the better right of possession.14 As it were, herein petitioner Ruben Lagrosa also filed before the Regional Trial Court of Manila (Branch 32), in Civil Case No. 90-55315 entitled "Ruben Lagrosa, versus, City Tenants Security Committee, represented by its Chairman, Hon. Gemiliano Lopez, Jr., Intestate Estate of Julio Arizapa represented by Mauricia Albaytar, Evelyn Arizapa Banua and Register of Deeds of Manila," a "Complaint for Foreclosure of the "Real Estate Mortgage", Annulment of Awards with Damages, and Cancellation of Title and Reconveyance of Real Property."15 As mentioned earlier, petitioner Lagrosa claims to be the lawful possessor of the subject property by virtue of the "Deed of Assignment" of "Real Estate Mortgage" executed by Julio Arizapa in favor of the latter. Lagrosa posits that he cannot be evicted from the subject property because he had prior possession as assignee of the said "Assignment of Real Estate Mortgage" executed by Presentacion Quimbo in his favor, and with the consent of Mauricia Albaytar, the sister of the deceased Josefa Albaytar Arizapa, after the demise of the spouses Julio Arizapa and Josefa Albaytar. On the other hand, Evelyn Arizapa Banua's title to the property is evidenced by a "Deed of Sale" executed by the City of Manila in her favor and the Transfer Certificate of Title No. 197603 issued to her by the Register of Deeds. Evelyn Arizapa Banua sought to evict Lagrosa from the subject property citing, among others, the need to repossess the property for her own personal use. We agree with the respondent Court of Appeals that petitioner Lagrosa's right to possess the subject property is clearly inferior to or inexistent in relation to Evelyn Arizapa Banua. As correctly held by the lower courts, the "Deed of Real Estate Mortgage" executed by Julio Arizapa is null and void, the property mortgaged by Julio Arizapa owned by the City of Manila under Transfer Certificate of Title No. 91120. For a person to validly constitute a valid mortgage on real estate, he must be the absolute owner thereof as required by Article 2085 of the Civil Code of the Philippines. 16 Since the mortgage to Presentacion Quimbo of the lot is null and void, the assignment by Presentacon Quimbo of her rights as mortgage to Lagrosa is likewise void. Even if the mortgage is valid as insisted by herein petitioner, it is well-settled that a mere mortgagee has not right to eject the occupants of the property mortgaged. 17 This is so, because a mortgage passes no title to the mortgagee. Indeed, by mortgaging a piece of property, a debtor merely subjects it to lien but ownership thereof is not parted with.18 Thus, a mortgage is regarded as nothing more than a mere lien, encumbrance, or security for a debt, and passes no title or estate to the mortgagee and gives him no right or claim to the possession of the property. Petitioner Lagrosa now contends that what was mortgaged by Julio Arizapa in favor of Presentacion Quimbo was "his right as an awardee over the homelot in question, and not the homelot itself." Petitioner would have this Court uphold the validity and legality of the mortgage over the "right as an awardee" rather than the homelot itself. The agreement between the City of Manila and Julio Arizapa was in the nature of a "contract to sell," the price for the lot being payable on installment for a period of twenty (20) years which could yet prevent, such as by the non-fulfillment of the condition, the obligation to convey title from acquiring any obligatory force.19 Hence, there is no "right" as awardee to speak of, and there is no alienable interest in the property to deal with. The further allegation in petitioner's memorandum that Evelyn Arizapa Banua is not the lawful owner of the lot and residential house in question because the "Extrajudicial Partition" and the "Renunciation" on the basis of which the "Deed of Sale" was executed by the City of Manila and the Transfer Certificate of Title No. 197603 was issued, are all falsified because Julio Arizapa and Josefa Albaytar Arizapa were childless up to their demise deserves no prolonged consideration, being factual in nature. Factual findings of the Court of Appeals are conclusive on the parties and carry even more weight when said court affirms the factual findings of the trial court.20 We quote the following findings of the trial court as adopted by the respondent Court of Appeals, to wit: The Court cannot accord its imprimatur to the stance of the Defendants-Appellants. As borne by the evidence of the Plaintiff-Appellee, Julio Arizapa and Bernardita Iigo Arizapa were married on May 9, 1963 in Manila (Exhibit "GG"). Julio Arizapa, during his lifetime, wrote a letter to the Plaintiff-Appellee and her brothers and sisters and addressing them as his children, thus: Mahal kong mga anak, magmahalan kayong mabuti at magtulungan habang buhay. Ala-ala ko kayo kailan mang. Exhibit "RR." The bare fact that, after the demise of Bernardita Iigo Arizapa in 1984, Julio Arizapa and Josefa Albaytar lived together as husband and wife but bore no children does not necessarily mean that Julio Arizapa was incapable of procreation. Indeed, there is persuasive authority to the effect that "it is presumed in the absence of evidence to the contrary, that a male person of mature years, is capable of sexual intercourse and procreation, even though he has reached a very advanced age (Francisco, The Revised Rules of Court in the Philippines, Volume VII, Part II, at pages 142-143, citing Love versus Mcdonald, 148 S.W. 2d. 170, 201 Ark. 882). While it is true that in their "Extrajudicial Partition", the Plaintiff-Appellee and her brothers and sisters called Julio Arizapa and Josefa Arizapa, as their parents, however, this is not unusual because, after all, after the demise of Bernardita Iigo, Josefa Albaytar and Julio Arizapa lived together as husband and wife and, in the process, the Plaintiff-Appellee must have considered Josefa Albaytar as their step-mother in deference and out of respect to their father. (Resolution, at page 348, Records).21 Moreover, it is a well-known doctrine that the issue as to whether title was procured by falsification or fraud as advanced by petitioner can only be raised in an action expressly instituted for the purpose. Torrens title can be attacked only for fraud, within one year after the date of the issuance of the decree of registration. Such attack must be direct, and not by a collateral proceeding.22 The title represented by the certificate cannot be changed, altered, modified, enlarged, or diminished in a collateral proceeding.23 Thus, the arguments of petitioner Lagrosa in the ejectment suit are misplaced.1wphi1.nt As to Lagrosa's prior possession of the subject property, their stay in the property as correctly found by the respondent Court of Appeals was by mere tolerance or permission. It is well-settled that "a person who occupies the land of another at the latter's tolerance or permission, without any contract between them is necessarily bound by an implied promise that he will vacate upon demand, failing which, a summary action for ejectment is the proper remedy against him.24 The trial court rationalized thus: On the other hand, the possession of the Plaintiff-Appellee retroacted to the possession of the City of Manila of the property in question because the PlaintiffAppellee merely stepped into the shoes of the owner of the property when she purchased the said property from the Appellants from said property (Caudal versus Court of Appeals, et al., 175 SCRA 798). It must be borne in mind that, as mere assignee of the mortgage rights of Presentation Quimbo, the Defendant-Appellant is not entitled to the physical possession of the mortgaged property. The same is true even if the Defendant-Appellant was himself the mortgagee. In point of fact, during the lifetime of Julio Arizapa and Josefa Albaytar, they had possession of the property. The Defendant-Appellant managed to take possession of the property only because of the alleged consent thereto by Mauricia Albaytar, who was merely the sister of Josefa Albaytar. By then, the couple, Julio Arizapa and Josefa Albaytar were already dead. Mauricia Albaytar thus had no lawful authority to allow anybody to enter into and occupy the property. There is no evidence in the records that Mauricia Albaytar had been appointed by any Court as the Administratix of the estate of the Spouses.25 By Lagrosa's own admission, he is merely an assignee of the rights of the mortgage of the lot and that, consequently, the respondent Court of Appeals correctly ruled that the only right of action of Lagrosa as such assignee of the mortgagee, where the mortgagor is already dead, is that provided for in Section 7 of Rule 8626and Section 5 of Rule 8727 of the Rules of Court. Thus, the mortgagee does not acquire title to the mortgaged real estate unless and until he purchases the same at public auction and the property is not redeemed within the period provided for by the Rules of Court. The issues by petitioner in CA G.R. SP No. 32070 that the respondent Court of Appeals erred in declaring Cesar Orolfo as the caretaker of the subject property and that he was not given a chance to present his evidence before the lower courts are also factual. The jurisdiction of this Court is limited to reviewing errors of law unless there is a showing that the findings complained of are totally devoid of support in the record or that they are so glaringly erroneous as to constitute serious abuse of discretion.28 We find no such showing in this case. More importantly, whether Cesar Orolfo is the caretaker of the property as appointed by Evelyn Arizapa Banua and the representative of the latter is now beside the point. As was discussed by this Court, petitioner Ruben Lagrosa's right to possess the subject property is clearly inexistent in relation to herein respondent Evelyn Arizapa Banua. WHEREFORE, the joint decision of the Court of Appeals in CA-G.R. SP Nos. 31683 and 32070 promulgated on January 7, 1994 is AFFIRMED in toto. SO ORDERED. G.R. No. 142015 April 29, 2003

RURAL BANK OF STA. IGNACIA, INC., petitioner, vs. PELAGIA DIMATULAC, GLORIA DIMATULAC, NORA M. VDA. DE GRACIA AND ANTONIO NUQUI, respondents. QUISUMBING, J.: Before us is a petition for review on certiorari seeking to set aside the decision1 of the Court of Appeals, dated November 26, 1999, in CA-GR SP No. 52157, which dismissed the petitioner's petition for review to set aside the decision2 of the Regional Trial Court (RTC) of Tarlac City, Branch 64, in Civil Case No. 8670. The RTC affirmed the decision3 of the Municipal Trial Court (MTC) of Tarlac City, Branch 2, dismissing herein petitioner's complaint for unlawful detainer and damages against respondents. Before the MTC, petitioner had filed what appeared to be a simple ejectment case, but as found out by the Court of Appeals, the parcel of land subject of the dispute has a long and convoluted history, to wit: Back in August 17, 1965, Prudencia Reyes purchased from the now defunct Rural Progress Administration (RPA), an 800-square meter parcel of land identified as Lot 11, Block 8 of the Subdivision Plan, Psd-24941 located in Barrio Suizo and Barrio San Rafael, Tarlac, Tarlac. As a result of the purchase, TCT No. 65765 was issued in her favor. However, the deed of sale in favor of Reyes was later cancelled by the Department of Agrarian Reform (DAR) by reason of her non-occupancy of said property, and made the land available for distribution to the landless residents of San Rafael. In 1971, respondents took possession of the property and were allocated portions of 200 square meters each. They paid the purchase price and awaited their Emancipation Patent titles. Despite her knowledge that the land had reverted to the government, Reyes sold the property to the spouses Maximo Valentin and Retina Razon in a Deed of Sale dated April 4, 1973. The spouses thereafter obtained TCT No. 106153 thereon. On finding, however, that respondents were in possession of the property, Valentin and Razon filed a complaint for recovery and damages against respondents, docketed as Civil Case No. 6152, with the Regional Trial Court of Tarlac, Tarlac. The Republic of the Philippines intervened in said case and along with respondents, contending that the title of the spouses was null and void, because the sale by Reyes was in violation of the terms and conditions of sale of the lot by the RPA to Reyes. The trial court decided in favor of the spouses Maximo Valentin and Retina Razon. But on appeal, the appellate court in CA-G.R. CV No. 14909, entitled "Spouses Maximo E. Valentin and Retina Razon v. Sps. Ricardo Garcia and Mona Macabili, et al.," reversed the judgment, cancelled the title of the spouses, and decreed the reversion of the property to the government for disposition to qualified beneficiaries. The decision of the Court of Appeals in CA-G.R. CV No. 14909 dated August 31, 1990, attained finality on September 22, 1990, as per entry of judgment dated February 22, 1991. Meanwhile, on February 15, 1987, or during the pendency of CA-G.R. CV No. 14909, Razon, through her attorney-in-fact, mortgaged the property to petitioner rural bank to secure a loan of P37,500.00. The property was subsequently extra-judicially foreclosed when Razon failed to pay the loan and on October 20, 1987, petitioner purchased the property. TCT No. 330969 dated May 11, 1989 was accordingly issued to herein petitioner. On March 4, 1997, petitioner filed a complaint for unlawful detainer and damages with the MTC of Tarlac, Tarlac, docketed as Civil Case No. 6367. Petitioner alleged that respondents were occupying the property by mere tolerance as they had no contract of lease with it, nor right or claim annotated on its title. It also averred that it had advised respondents of its purchase of the property and had demanded that respondents vacate the same, but its notice went unheeded. Respondents in their Answer claimed that they had been occupants of the land since 1971 and had been awarded as beneficiaries by the government after the titles of Reyes and Razon were nullified. They also maintained that the lots had been reverted to the government by virtue of the final and executory judgment in CA-G.R. CV No. 14909.4 On April 6, 1998, the municipal court decided Civil Case No. 6367 in this wise: WHEREFORE, premises considered, the instant case is hereby dismissed for want of jurisdiction. The counter-claim is likewise dismissed for lack of jurisdiction to grant. No pronouncement as to costs. SO ORDERED.5 In dismissing the complaint, the MTC found that the possession of respondents was not by mere tolerance but as lawful beneficiaries. It also declared that it had no jurisdiction over the case as it involved the issue of ownership. The court noted that the respondents were lawful beneficiaries of a government land grant while petitioner was not a purchaser in good faith and hence, could not avail of the protective mantle of the indefeasibility of Torrens Title. It concluded that its competence to decide the case was limited only to addressing the question of ownership in order to determine the issue of de facto possession.6 Petitioner then elevated the matter to the RTC of Tarlac City, Branch 64 in Civil Case No. 8670. The RTC ruled on the appeal as follows: ACCORDINGLY, above premises all considered, this Court hereby affirms the lower court's Judgment, dated April 6, 1998, dismissing the case. With costs against appellant. SO ORDERED.7 In affirming the judgment of the municipal court, the RTC ruled that petitioner could not eject respondents from said property as: (1) there was no legal relationship, e.g. such as a lease agreement or otherwise, between them that has expired or terminated; (2) respondents' possession was not through the tolerance of petitioner; (3) respondents were in possession of the lot as lawful/rightful possessors, vis-a-vis their status as occupants-beneficiaries of the DAR, previously RPA. Therefore, respondents had a better right to possession as against petitioner rural bank. 8 Petitioner then moved for reconsideration, but this was likewise denied by the RTC in its Order dated March 15, 1999. 9 Petitioner then filed a petition for review on certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 52517. The appellate court, however, dismissed the petition and ruled that the possession of respondents was not by mere tolerance but by lawful mandate of the law and by virtue of its final judgment in CA-G.R. CV No. 14909, thus: WHEREFORE, the petition at bench is hereby DISMISSED. Without costs. SO ORDERED.10 Hence, the instant recourse to this Court premised on the following issues: 1. WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT CONSIDERING THAT PETITIONERS' OWNERSHIP OVER THE PROPERTY IN LITIGATION WAS ACQUIRED THRU AN EXTRAJUDICIAL FORECLOSURE SALE; 2. WHETHER OR NOT THE COURT OF APPEALS ERRED IN APPLYING THE DECISION IN C.A.-G.R. CV NO. 14909 IN THE CASE AT BENCH; 3. WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT TREATING THE POSITION PAPER OF THE RESPONDENTS AS A MERE SCRAP OF PAPER FOR HAVING BEEN FILED FIFTEEN (15) DAYS LATE; 4. WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT CONSIDERING THAT EXHIBITS MARKED ONLY DURING THE PRE-TRIAL SHOULD NOT BE TREATED AS EVIDENCES.11 Worth noting, the issues raised by petitioner involve questions on procedure premised on a very rigid and strict application of the Rules of Court. Petitioner faults the appellate court for sustaining the liberal interpretation of the rules by the trial court. However, this case springs from a complaint for unlawful detainer. In forcible entry and detainer cases, which are summary in nature to minimize disturbance of social order, procedural technicalities should be carefully avoided and should not be allowed to override substantial justice.12 The interest of substantial justice is best served if both parties in a case like this are heard and their respective claims considered through their respective pleadings and position papers. A liberal interpretation of the technical rules, which does not subvert the nature of the Rule on Summary Procedure nor defeat its objective of expediting the adjudication of suits,13 is not disfavored by this Court. Coming to the issues as formulated by petitioner, we find that the only issue left for our resolution is: Did the Court of Appeals commit a reversible error when it dismissed the petition of the bank? In our view, it did not err when it sustained the judgment of the regional trial court which earlier also sustained that of the municipal trial court. Petitioner contends that as the absolute and registered owner of the subject land as a mortgagee-purchaser in a foreclosure sale it is entitled to possession of the land as an attribute of ownership. Petitioner further argues that it cannot be faulted for relying on the validity of Valentin and Razon's title as it had checked and verified the status of said title on file with the Register of Deeds and found that it was free from any lien and encumbrance.14 Further, petitioner submits that the decision of the Court of Appeals in CA-G.R. No. 14909 cannot defeat its right to eject respondents as it is not bound by the said judgment because petitioner was not impleaded as a party therein. Moreover, according to petitioner when the decision in CA-G.R. No. 14909 nullifying Razon's title became final, said title was already cancelled and another title already issued in favor of petitioner. For this reason, petitioner insists the CA decision could not comprehend within its ambit petitioner's title to the land. Respondents contend that petitioner could not properly raise in issue the question of ownership in an action for unlawful detainer under the Rule on Summary Procedure. Petitioner should seek the proper remedy through an ordinary civil proceeding. Moreover, they argue that petitioner was totally negligent in its duty to determine the propriety of accepting the property for a mortgage by the Valentin and Razon spouses. Thus, it is estopped from claiming good faith. Further, respondents add that since the title of Razon was declared null and void, petitioner as the successor-in-interest acquired no rights of ownership over the land it purchased through public auction. In ejectment cases the question is limited to which party among the litigants is entitled to the physical or material possession of the premises, that is to say, who should have possession de facto.15 Settled is the rule, however, that in an ejectment case, the assertion by a defendant of ownership over the disputed property does not serve to divest an inferior court of its jurisdiction.16 When the defendant raises the defense of ownership and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved for the purpose only of determining the issue of possession.17 Said judgment shall be conclusive with respect to the possession only, and shall in no wise bind the title of the realty, or affect the ownership thereof. It shall not bar an action between the same parties respecting title to the real property.18 Only with this understanding of that well-entrenched principle can we accept the ruling of the municipal court in Civil Case No. 6367 that "the case is dismissed for want of jurisdiction."19 Petitioner's contention that the final and executory judgment of the Court of Appeals in CA-G.R. CV No. 14909 does not bind the bank, in our view, is devoid of merit. Rule 39, Section 47 (b)20 of the 1997 Rules of Civil Procedure, speaks of conclusiveness of judgment as "between the parties and their successors-in-interest by title

subsequent to the commencement of the action." In the present case, petitioner herein derived its title from the Valentin and Razon spouses, after an extrajudicial foreclosure sale. Under the law which permits a successor in interest to redeem the property sold on execution, the term "successor-in-interest" includes one to whom the debtor has transferred his statutory right of redemption; one to whom the debtor has conveyed his interest in the property for the purpose of redemption; or one who succeeds to the interest of the debtor by operation of law. 21Petitioner acquired its title while CA-G.R. CV No. 14909 was pending before the Court of Appeals. To acquire title, the successor-in-interest must do so subsequent to the commencement of the action, and not before such commencement.22 Having derived little from the Spouses Valentin and Razon, whose title was nullified by the final and executory decision of the Court of Appeals in CA-G.R. CV No. 14909, the petitioner cannot escape the effect of the appellate court's judgment in said case. The rural bank as purchaser at an auction sale does not have a better right to said property than their predecessors-in-interest, namely the Valentin and Razon couple. The rule that persons dealing with registered lands can rely solely on the certificate of title does not apply to banks.23 The degree of diligence required of banks is more than that of a good father of a family; in keeping with their responsibility to exercise the necessary care and prudence in dealing even with a registered or titled property. The business of a bank is affected with public interest, holding in trust the money of the depositors, which the bank should guard against loss due to negligence or bad faith. For this reason, the bank is not allowed to rely merely on the protective mantle of the land registration law, which is normally accorded only to purchasers or mortgagees for value and in good faith.24 In the present case, while petitioner sent a representative to verify the original TCT on file with the Registrar of Deeds, no ocular inspection of the premises took place. Judicial notice may be taken of the common practice of banks, before approving a loan, to send a representative to the premises of the land offered as collateral and duly investigate who are the true owners thereof. Failure to do so is negligence on the part of a bank. 25 Had petitioner taken extra steps, time and effort in dealing with the property it purchased by conducting proper ocular inspection of the premises, it could have discovered early the presence of settlers therein who are land reform beneficiaries. To capitulate, we find no reversible error in the decision of the Court of Appeals sustaining those of the lower courts that the possession of respondents is not by mere tolerance. Respondents' possession springs from their right as lawful beneficiaries of a government program, pursuant to law. Certainly, the decision of the appellate court in CA G.R. CV No. 14909 binds not just the beneficiary but also the bank as claimant of the land. In contrast, petitioner's claim to possession of the land emanates from a nullified and non-existing title of its predecessors-in-interest, from which it cannot rely to eject the respondents from the premises. WHEREFORE, the petition is DENIED. The decision of Court of Appeals, dated November 26, 1999 in CA-G.R. SP No. 52157 as well as the Resolution dated February 18, 2000, denying the Motion for Reconsideration are AFFIRMED. Costs against petitioner. SO ORDERED. G.R. No. L-69622 January 29, 1988 LILIA Y. GONZALES, petitioner, vs. INTERMEDIATE APPELLATE COURT and RURAL BANK OF PAVIA, INC., respondents. GANCAYCO, J.: This is a petition for review on certiorari of the Decision of the Court of Appeals dated November 15,1983, 1affirming the decision of the trial court of July 16, 1975 2 dismissing the complaint for annulment of title and ordering plaintiff, herein petitioner, to deliver possession of the property covered by said title and to account for the produce thereof to defendant bank, private respondent herein. The antecedent facts of this case as found by the Appellate Court are as follows: The spouses Asuncion Sustiguer and Dioscoro Buensuceso were the original owners of Lot No. 2161 of the Cadastral Survey of Barotac Nuevo, the property subject of this controversy. For delinquency in the payment of the real estate taxes due thereon, the land was sold at public auction to the Province of Iloilo in 1955. Hortencia Buensuceso, daughter of said spouses, discovered in the office of the Register of Deeds of Iloilo that the Certificate of Title of subject land, OCT No. 3351, was still in the name of her parents. Hortencia paid the back taxes on the land in behalf of her mother (who by that time was already separated in fact from her father) in whose favor the Provincial Treasurer executed a deed of repurchase on April 10, 1969. On April 17, 1969, the spouses Gaudioso Panzo and Hortencia Buensuceso bought the land from the latter's mother for P1,000.00. Thereafter, the spouses Panzo filed a petition in the Court of First Instance of Iloilo for the reconstitution of the original certificate of title. On February 26,1971, a reconstituted original certificate of title was issued in the name of Asuncion Sustiguer alone. And by virtue of the sale of said property by Sustiguer to the spouses Panzo, her title was cancelled and in lieu thereof TCT No. T-64807 was issued by the Register of Deeds of Iloilo in the spouses' name on March 3, 1971. The said spouses then mortgaged the property to respondent Rural Bank of Pavia for P5,000.00. Upon their failure to pay the account, respondent bank foreclosed the mortgage on August 11, 1973 and the bank was the highest bidder. A certificate of sale was executed by the Provincial Sheriff in its favor. On April 18, 1974, petitioner as judicial co-administratrix of the Intestate Estate of the late Matias Yusay brought an action, against the spouses Panzo and the respondent Rural Bank seeking the annulment and cancellation of the title in the name of the Panzos and the issuance of a new title in favor of Yusay. In her complaint, 3 petitioner alleged among other things: that the subject property was first mortgaged to Yusay on April 30, 1929 by the spouses Sustiguer and Buensuceso; that sometime November, 1934, said property was verbally sold to Yusay by the same spouses; that since Yusay bought the property in 1948, he and his administrator and later plaintiff administratrix, have been in possession of the property thru their tenant Elias Daguino until April 15, 1971, when defendants spouses Panzo wrested possession from their tenant; that on May 12, 1971, plaintiff administratrix filed an action, for forcible entry against them before the Municipal Court of Barotac Nuevo, Iloilo docketed as Civil Case No. 577; that the trial court having ruled in favor of plaintiffs on November 4, 1972, defendants spouses appealed the said decision to the Court of First Instance of Iloilo, where the said appeal still pends; that defendant Rural Bank was not a mortgagee in good faith for not having taken the necessary precaution before accepting the subject property as collateral for the loan granted the defendants-spouses. In its answer of May 14,1984 4 defendant Rural Bank set up the defense of good faith alleging that the certificate of title in the names of the spouses Panzo was free from any lien and that the rigid requirements for loan applications had been duly deserved by the Bank. It further claimed that on August 11, 1973, the mortgage executed by the spouses was foreclosed and defendant bank being the highest bidder was issued a certificate of sale by the Provincial Sheriff of Iloilo. Upon receipt of the answer of defendant Bank, plaintiff on July 15, 1974 moved to dismiss the case as regards defendants spouses Panzo on the ground that the subject property having already been sold to defendant Rural Bank, the said spouses ceased to have any interest in the property. 5 The lower court acting on this motion ordered the dismissal of the case on July 26, 1974 against the said defendant-spouses only. 6 After trial and submission of the respective memoranda of the parties, the court a quo addressing itself to the only issue of whether or not defendant Rural Bank was a mortgagee and subsequent buyer for value and in good faith ruled in favor of said defendant. 7 From the decision of the court a quo, petitioner appealed to the Intermediate Appellate Court which rendered its decision, subject of this petition, agreement in toto the decision of the court a quo. Thus: xxx xxx xxx This being so, whether or not the bank inspect d the premises or whether or not the reconstituted title was void is indeed irrelevant in the land in question was confiscated for non-payment of taxes and that it was sold at public auction, for if so, then at the time of its confiscation, in effect the land in question lost its Identity as private land and acquired the status of a government land to say the least. If sold at public auction and the buyer was Asuncion Sustiguer, then all prior ownership there was cancelled, including that of the original owners, (the spouses Asuncion Sustiguer and her husband Dioscoro Buensuceso). Record shows they were later separated. There is therefore, no conjugal property to speak of for the exclusive buyer of the land at the public auction was Asuncion Sustiguer and she alone. When this was not redeemed by the couple as they were then separated, Asuncion Sustiguer became the exclusive owner of the land on the basis of the Tax Sale pursuant to Sec. 40 Com. Act No. 470 and Velasquez vs. Coroner, 9 SCRA 986-990. Its subsequent sale to the Panzos and later its acquisition by the Rural Bank, the herein defendant, is now beyond question. 8 In the petition for review before Us, herein petitioner, assigns the following errors: I THE INTERMEDIATE APPELLATE COURT COMMITTED AN ERROR OF LAW IN HOLDING THAT THE LAND IN QUESTION LOST ITS IdENTITY AS A PRIVATE LAND AND ACQUIRED THE STATUS OF A GOVERNMENT LAND, WHEN IT WAS SOLD AT PUBLIC AUCTION FOR NON-PAYMENT OF TAXES TO THE PROVINCE OF ILOILO, DIVESTING THE SPOUSES BUENSUCESO AND THEIR SUCCESSOR-IN-INTEREST, MATIAS YUSAY, OF THE OWNERSHIP THEREOF, WITH ASUNCION SUSTIGUER BECOMING THE EXCLUSIVE OWNER UPON HER REPURCHASE OF THE SAID LAND FROM THE PROVINCE OF ILOILO. II THE INTERMEDIATE APPELLATE COURT COMMITTED AN ERROR OF LAW IN NOT HOLDING THAT THE RECONSTITUTED TITLE IN THE NAME OF ASUNCION SUSTIGUER IS VOID FOR WANT OF JURISDICTION OF THE CADASTRAL COURT IN RECONSTITUTING THE SAME. III THE INTERMEDIATE APPELLATE COURT COMMITTED AN ERROR OF LAW IN NOT HOLDING THAT SINCE ADMITTEDLY THE SPOUSES PANZOS WERE GUILTY OF FRAUD IN SECURING THE SAID RECONSTITUTED TITLE IN THE NAME OF ASUNCION SUSTIGUER FROM THE CADASTRAL COURT, THEN THEY CAN NOT TRANSMIT TITLE TO DEFENDANT BANK. IV THE INTERMEDIATE APPELLATE COURT COMMITTED AN ERROR OF LAW IN NOT HOLDING THAT THE PUBLIC AUCTION SALE OF THE PROPERTY IN QUESTION IN 1955 FOR NON-PAYMENT OF TAXES IN FAVOR OF THE PROVINCE OF ILOILO, IS NULL AND VOID, FOR WANT OF NOTICE TO JOSE S. YUSAY, THEN ADMINISTRATOR OF THE ESTATE OF MATIAS YUSAY, HENCE THE SALE OF THE PROVINCE OF ILOILO IN FAVOR OF ASUNCION SUSTIGUER AND FROM HER TO THE SPOUSES PANZOS, ARE NULL AND VOID. V THE INTERMEDIATE APPELLATE COURT ERRED IN NOT RESOLVING THE FOLLOWING ERRORS OF FACT OF THE TRIAL COURT.

(a) The lower court erred in finding that defendant bank has made an ocular inspection of the property prior to the granting of the loan in favor of the spouses Gaudioso Panzo and Hortencia Buensuceso; (b) The lower court erred in holding that defendant bank is not negligent in not consulting a lawyer before granting the loan; (c) The lower court erred in finding plaintiff as grossly negligent in not taking steps to perfect its title over the property. We affirm the dismissal by the court a quo. The principal question in this controversy is whether or not the respondent bank was an innocent mortgagee and subsequent buyer for value in good faith of the property. When the certificate of title in the name of the Panzo spouses was submitted to private respondent bank for purposes of their loan application, it was free from any lien and encumbrance. The mortgage was duly constituted and registered with the Register of Deeds on May 28,1971. The ejectment case which was filed by petitioner against the said spouses which petitioner claims should have put the respondent bank on its guard was annotated at the back of the subject title only on March 29,1973. There was therefore nothing on the face of the title of the Panzos which would arouse the suspicion of the respondent bank. The certificate of title was in the name of the mortgagors when the land was mortgaged by them to respondent bank. Such being the case, said respondent bank, As mortgagee, had the right to rely on what appeared on the certificate of title and, in the absence of anything to excite suspicion, was under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of said certificate. 9 To further determine the good faith of the mortgagee Rural Bank, We must address ourselves to the fifth assigned error which focuses on the alleged negligence of the respondent bank in taking the precautionary steps in the processing of the loan application of the Panzo spouses. The findings of the trial court which were affirmed by the appellate court ruled out any negligence of the Rural Bank, thus: The preponderance of evidence favors defendant Rural Bank. This Court is satisfied that an ocular inspection was indeed conducted by Gorriceta pursuant to established practice among banks. Assuming, for the sake of argument, that the Panzo spouses were not in actual possession of the entire property, the fact is that they possessed a substantial part thereof and his possession coincided with the visit of Gorriceta. At that particular moment, Panzo had been working for him in the construction of the building and weeding of the land. These man had recognized Panzo as the owner of the land in response to inquiries by Gorriceta to go around the entire perimeter of the property because there was nothing to arouse his suspicion, what with certificate of title in the name of the Panzos having been submitted to him. A contrary requirement would negate the efficacy of a torrens title. In fact, the allegations of plaintiff in Civil Case No. 517 (the ejectment case filed against Gaudencio Panzo and Hortencia Buensuceso Annex D of the complaint in this case), would bear out the claim of defendant Bank that the Panzos were in effective possession of the property. 10 We have examined the records of this case and We find no cogent reason to disturb the findings of the court below in this regard. Well-settled is the rule that the findings of facts of the Court of Appeals are generally final and conclusive upon this Court. 11 Petitioner now claims that the negligence of respondent bank consists in its failure to consult a lawyer before approving the loan of the Panzo spouses. She asserts that had a lawyer been consulted, the fact that the Panzo's title had been derived from a reconstituted title would have surfaced. This would have provoked an inquiry as to the status of the original title by the lawyer and he would have found out about the irregularity of the reconstitution proceedings consisting of the lack of publication and notices. We agree with the trial court that the respondent Bank was not negligent in failing to consult a lawyer. The loan application of the Panzos was subjected to the rigid requirements of the bank. There was a physical inspection of the property. The loan application passed thru the scrutiny of the Credit Committee, the members of which are also the Directors of the Bank. 12 The mortgage wits then duly registered with the Register of Deeds. The credit investigation and approval were undertaken by responsible officers of the respondent Bank. For the bank to consult a lawyer would not have made much difference in its findings. As the trial court pointed out, the most that a lawyer could have done was to consult the records in the reconstitution case which would not reveal anything irregular. It must be presumed that official duty was duly and properly exercised in the reconstitution proceedings. 13 The well-known rule in this jurisdiction is that a person dealing with a registered land has a light to rely upon the face of the torrens certificate of title and to dispense with the need of inquiring her except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make inquiry. 14 It has also been held that a bank is not required, before accepting a mortgage, to make an investigation of the title of the property being given as security. 15 Of course, banks are cautioned to exercise more care and prudence in dealing even with registered lands, than private individuals, "for their business is one affected with public interest, keeping in trust money belonging to their depositors, which they should guard against loss by not committing any act of negligence which amounts to lack of good faith by which they would be denied the protective mantle of the land registration statute Act 496, extended only to purchasers for value and in good faith, as well as to mortgagees of the same character and description. 16It is for this reason that banks before approving a loan send representatives to the premises of the land offered as collateral and investigate who are the true owners thereof. 17 In this regard, We believe that respondent bank had exercised the due care demanded of it relative to the real estate loan of the Panzos for it to be considered an innocent mortgagee for value. If anyone can be faulted for being negligent, it is the petitioner herself and her predecessors-in-interest. In the complaint, petitioner alleged that the subject property was sold verbally to Matias Yusay by the original owners, the spouses Buensuceso, in November, 1934 (under paragraph 5 of the same complaint, it was alleged to have been bought by Yusay in 1948). From that time to the filing of the ejectment case in May 1971, or a period of almost 37 years, petitioner and her predecessors did not take any step to perfect their title over the property. There was not even a tax declaration over the subject property of Matias Yusay or his successors-ininterest. When the land was sold at public auction to the Province of Iloilo in 1955 for non-payment of taxes, petitioner's brother Jose Yusay, the administrator of the Yusay estate did not do anything to redeem the property. Petitioner alleged that the reason why she and her predecessors had not been paying the taxes was their mistaken belief that Lot 2161, the subject property, was Lot 2159, an adjacent lot, 18 the taxes of which were being paid by her. She further claims that they were not given any notice of the public auction sale. So it was only in 1971, at the time of the filing of their ejectment case against the Panzos that petitioner came to know of said public auction. Noteworthy is the case of Paguio vs. Ruiz, 19 where this Court upheld the city treasurer's 1947 tax sale of the delinquent property despite non-delivery of the treasurer's notices of sale to the registered owner who was already deceased. We ruled Yet it was her gross negligence which brought about the appellee's predicament. Knowing her property to be subject to tax, she neglected to pay her obligation. Vigorous in her protest that she was not given opportunity to protect her rights, she at least neglected to put the Government in a position to allow her that opportunity. And this, notwithstanding the categorical mandate of Section 2482 of the Revised Administrative Code, which she was presumed to know, and which makes it the duty of each person acquiring real estate in the City to make a new declaration thereof, with the advertence that failure to do so shall make the assessment in the name of the previous owner valid and binding on all persons interested and for all purposes, as though the same had been assessed in the name of the actual owner. Apart from this, the subject property was not even included in the project of partition and even the re-amended project of partition over the estate of Matias Yusay after he died in 1948. What is revealing is that it took them almost 37 years to discover that there was such a discrepancy. The law helps the vigilant but not those who sleep on their rights. For time is a means of destroying obligations and actions, because time runs against the slothful and contemners of their own rights. 20 By their inexplicable inaction for such a long period of time, they are now barred by laches to lay claim over the property. 21 Moreover, there are several inconsistencies in the evidence of petitioner ranging from the date of the alleged verbal sale in favor of Matias Yusay as stated in the complaint 22 to the testimonies of her witnesses, particularly her tenant Elias Daguino as to his possession of subject property. 23 Indeed, the validity of petitioner's claim appears to be questionable. Respondent bank is no doubt an innocent mortgagee for value but is it a subsequent purchaser in good faith and for value? It will be remembered that at the time of the purchase of the subject property at the foreclosure sale on August 11, 1973, the notice of lis pendens had already been inscribed in the title of the Panzos, subject of the mortgage. It is true that the notice of lis pendens is an announcement to the whole world that a particular real property is in litigation, and serves as a warning that one who acquires an interest over said property does so at his own risk, so that he gambles on the results of the litigation over said property. 24 However, it has also been held that any subsequent lien or encumbrance annotated at the back of the certificate of title cannot in any way prejudice the mortgage previously registered, and the lots subject thereto pass to the purchaser at the public auction sale free from any lien or encumbrance. Otherwise, the value of the mortgage could be easily destroyed by a subsequent record of an adverse claim, for no one would purchase at a foreclosure sale if bound by the posterior claim. 25 In the case of Gomes vs. Government of the Philippine Islands 26 this Court ruled: The appealed judgment was finally based on the fact that both the plaintiff and the intervenor had succeeded in having notices of lis pendens noted in transfer certificate of title No. 25909. It seems that it is desired to attribute to these notations a legal effect similar to a lien. This is not, however, the effect of a notice of lis pendens under sections 79 of Act No. 496, and 401 of the Code of Civil Procedure. The notation of the plaintiffs notice produced no effect whatsoever against the Government's mortgage not only because the latter was prior to the former but also because once the mortgage is declared valid and effective by final judgment, the plaintiff can no longer enforce any preferential right. ... We hold, therefore, that the notices of lis pendens and the attachment did not constitute justifiable or lawful cause to prevent the execution of the judgment of foreclosure of mortgage obtained by the Government. A person who takes a mortgage in good faith and for a valuable consideration, the record showing a clear title in the mortgagor will be protected against any equitable titles to the premises or equitable claims on the title, in favor of their persons, of which he had no notice, actual or constructive and that protection extends to a purchaser at a Sheriff s sale under proceedings on the mortgage although such purchaser had notice of the alleged equity. 27 In the case at bar, it is the respondent bank, the mortgagee itself, which purchased the subject property in the foreclosure sale. Being an innocent mortgagee with a superior lien over that of petitioner, its right to a foreclosure of the property is reserved. 28 The notice of lis pendens which antedated the foreclosure and sale at

public auction of subject property could not affect the rights of the respondent bank because the foreclosure sale retroacts to the date of registration of the mortgage. 29 Its character of being an innocent mortgagee continues up to the date of actual foreclosure and sale at public auction. At any rate, even if the pending litigation between petitioner and the Panzos be finally decided in favor of the former, it will have no effect on the ownership rights of the respondent bank over the subject property since a forcible entry suit is not conclusive as to ownership but only as to possession. 30 Petitioner, in the rest of the assigned errors, persists in questioning the validity of the titles of the respondent bank's predecessors-in-interest, not only the title of its immediate transferor, the Panzo spouses but even that of Asuncion Sustiguer, seeking a declaration of their nullity. Furthermore, petitioner contends that notwithstanding the good faith of the respondent bank, its title over the subject property is fatally defective since the title of its predecessors are null and void. Respondent Bank, however, maintains that the arguments of petitioner constitute a collateral attack on said titles. We find merit in this contention. Asuncion Sustiguer from whom the Panzo spouses obtained their title was never made a party to the proceedings. Her title was acquired from the Province of Iloilo which in turn acquired the property way back in 1955 at a sale at public auction. As to the Panzo spouses, they were originally defendants in this case but on petitioner's motion, they were dropped from the complaint even before they had the opportunity to file their answer. Thus, the case proceeded against the respondent bank alone. It is well-settled that a Torrens Title cannot be collaterally attacked. The issue on the validity of the title can only be raised in an action expressly instituted for that purpose. 31 A Torrens Title can be attacked only for fraud within one year after the date of the issuance of the decree of registration. Such attack must be direct and not by collateral proceeding. The title represented by the certificate cannot be changed, altered, modified, enlarged or diminished in a collateral proceeding. 32 After one year from the date of the degree, the sole remedy of the landowner whose property has been wrongfully or erroneously registered in another's name is not to set aside the decree, but, respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice for reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for damages. 33 The title of Asuncion Sustiguer was obtained on February 26, 1971 while that of the Panzos on March 3, 1971. The complaint in this acto, was filed only on April 18, 1974, clearly more than one year from the date of the decree of registration. The disputed titles by then had become indefeasible. Since the property had already been acquired by respondent bank at the foreclosure sale, as an innocent purchaser for value, an action for reconveyance cannot prosper. The only remedy of petitioner is an action for damages against the person whom she claims procured the wrongful registration in his name. 34 Nevertheless, even assuming that the validity of the titles of Asuncion Sustiguer and the Panzo spouses may be questioned in these proceedings and such titles may be declared null and void, it will still be of no moment in this case. Where the torrens title of the land was in the name of the mortgagor and later given as security for a bank loan, the subsequent declaration of said title as null and void is not a ground for nullifying the mortgage right of the bank, which had acted in good faith. 35 Being thus an innocent mortgagee for value, its right or lien upon the land mortgaged must be respected and protected, even if the mortgagors obtained their title thereto thru fraud. 36 WHEREFORE, the decision of respondent Intermediate Appellate Court of November 15, 1983 agreement in totowith costs the decision of the Court of First Instance of Iloilo dated July 16, 1975 is hereby AFFIRMED without pronouncement as to costs. SO ORDERED. G.R. No. L-53466 November 10, 1980 RURAL BANK OF OROQUIETA (MIS. OCC.), INC., Petitioner, vs. COURT OF APPEALS, Eighth Division; JUDGE MELECIO A. GENATO Court of First Instance of Misamis Occidental, Oroquieta Branch I; PROCOPIO SERRANO and MARIA CUEME respondents.chanrobles virtual law library AQUINO, J.: This case is about the mortgagor's equity of redemption in case of judicial foreclosure of a mortgage in favor of a rural bank.chanroblesvirtualawlibrary chanrobles virtual law library In Civil Case No. 2988 of the Court of First Instance of Misamis Occidental, Oroquieta City Branch I, entitled "Rural Bank of Oroquieta (Mis. Occ.), Inc. vs. Procopio Serrano and Maria Cueme a case of foreclosure of mortgage, Judge Melecio A. Genato on July 3, 1974 rendered a decision, ordering the defendants to pay plaintiff bank within a period of "not less than ninety (90) days nor more than one hundred (100) days from" the receipt of the decision the loan of P1,500 with twelve percent interest per annum from January 16, 1972 plus ten percent of the principal as attorney's fees (p. 29, Rollo).chanroblesvirtualawlibrary chanrobles virtual law library In case of nonpayment within that period, the trial court, in order to satisfy that obligation, ordered the sheriff to sell at public auction the mortgaged lot, a parcel of coconut land with an area of 2.8 hectares, covered by TCT No. T-1753, located at Sitio Petugo Barrio Bato, Plaridel, Misamis Occidental and assessed at P3,433.86 (p. 29, Rollo).chanroblesvirtualawlibrary chanrobles virtual law library That judgment became final and executory. The Serrano spouses did not pay their mortgage debt. A writ of execution was issued. On January 13, 1975, the sheriff levied upon the mortgaged lot and advertised its sale at public auction to satisfy the mortgage obligation which, together with the sheriff's fees and costs, amounted to P2,223.60 on January 28, 1975.chanroblesvirtualawlibrary chanrobles virtual law library At the auction sale held on March 3, 1975, the mortgaged lot was sold to the bank as the only bidder. The sheriff issued a certificate of sale dated March 4, 1975 (p. 34, Rollo).chanroblesvirtualawlibrary chanrobles virtual law library There being no redemption within the one-year period (sec. 78, General Banking Law), the sheriff issued a final certificate of sale dated April 19, 1976 which was registered on the following day.chanroblesvirtualawlibrary chanrobles virtual law library On September 20, 1976, the bank sold the lot to Eufemia Mejos. TCT No. 6035 was issued to her (pp. 47-48, Rollo).chanroblesvirtualawlibrary chanrobles virtual law library On September 8, 1977, Judge Genato issued an order directing the issuance of a writ of possession to the bank. The mortgagors or judgment debtors filed a motion for the reconsideration of that order on the grounds that, because there was no judicial confirmation of the action sale, they still have an equity of redemption and could still pay the mortgage debt (alleged to be usurious) and that the auction sale was fraudulent and irregular. They averred that the bank rejected their offer to redeem the mortgaged lot and that the issuance of the writ of possession was premature.chanroblesvirtualawlibrary chanrobles virtual law library Judge Genato granted the motion for reconsideration in his order of October 12, 1977 which contains these inconsistent or contradictory directives: "Let the execution of judgment in this case be ordered and subsequently the writ of possession be accordingly issued. The Rural Bank of Oroquieta is hereby ordered to accept payment of the loan with interests." (p. 36, Record.) chanrobles virtual law library On December 23, 1977, the bank filed a manifestation and motion wherein it revealed that the land had already been sold to Eufemia Mejos and, therefore, its acceptance of the redemption price amounting to P2,820.60 would not produce any legal effect (pp. 47-48, Rollo).chanroblesvirtualawlibrary chanrobles virtual law library The bank further disclosed that there is pending in the trial court a case for the annulment of the foreclosure sale of the said lot and the release of the mortgage, docketed as Civil Case No. 3265, which was instituted by the Serrano spouses, as mortgagors, against the bank and the Mejos spouses. The bank prayed that it should not be compelled to accept the proffered redemption price.chanroblesvirtualawlibrary chanrobles virtual law library The trial court denied the motion. The bank filed a notice of appeal, deposited the appeal bond of P120 and submitted a record on appeal. It specified in its notice of appeal that it was appealing to the Court of Appeals from the trial court's order of October 12, 1977, allowing the redemption.chanroblesvirtualawlibrary chanrobles virtual law library The Serrano spouses filed a motion to dismiss the appeal on the ground that they had already deposited with the clerk of court the redemption price of P2,830.chanroblesvirtualawlibrary chanrobles virtual law library The trial court in its order of February 27, 1978 dismissed the appeal on the ground that the order sought to be appealed is interlocutory or not appealable. The bank assailed that order in the Court of Appeals by means of certiorari which was really a mandamus action to compel the trial court to give due course to its appeal.chanroblesvirtualawlibrary chanrobles virtual law library The Court of Appeals dismissed the petition. It sustained the trial court's position that the order sought to be appealed is interlocutory because the trial court had not yet confirmed the foreclosure sale (Rural Bank of Oroquieta [Mis. Occ.], Inc. vs. Judge Genato, CA-G. R. No. SP-07756, October 26, 1979).chanroblesvirtualawlibrary chanrobles virtual law library The bank appealed to this Court. The issue is whether the trial court and the Court of Appeals erred in not giving due course to the bank's appeal.chanroblesvirtualawlibrary chanrobles virtual law library We hold that the trial court and the Court of Appeals acted correctly in refusing to give due course to the bank's appeal not only because the order sought to be appealed is in interlocutory but also because in the present posture of the case it is imperative that the trial court should consolidate the foreclosure case, Civil Case No. 2988, with the other case, Civil Case No. 3265 filed by the Serrano spouses for the annulment of the foreclosure sale and the subsequent sale of the mortgaged lot to the Mejos spouses. Note that the latter case is also pending in the sala of respondent Judge.chanroblesvirtualawlibrary chanrobles virtual law library

The trial court erred in unreservedly allowing the Serrano spouses to redeem the mortgaged lot without taking into account the supervening fact that the lot is now registered in the name of Eufemia Mejos who is not a party in the foreclosure proceeding and who is entitled to be heard. That complication cannot be summarily ignored.chanroblesvirtualawlibrary chanrobles virtual law library At this stage, a decision cannot be rendered outright on the conflicting rights of the Serrano spouses, the bank and the Mejos spouses with respect to the mortgaged lot. The trial court should first try and resolve the issues arising out of the lack of judicial confirmation of the foreclosure sale and the subsequent sale of the mortgaged lot to a third person after the expiration of the oneyear period for exercising the right of redemption. We can only state some guidelines in resolving those issues.chanroblesvirtualawlibrary chanrobles virtual law library After the execution of a real estate mortgage, the mortgagor has an equity of redemption exercisable within the period stipulated in the mortgage deed. In case of judicial foreclosure, that equity of redemption subsists after the sale and before it is confirmed by the court (Raymundo vs. Sunico, 25 Phil. 365; Benedicto vs. Yulo, 26 Phil. 160; Grimalt vs. Velasquez and Sy Quio 36 Phil. 936; Sun Life Assurance Co. vs. Gonzales Diez, 52 Phil. 271; La Urbana vs. Belando 54 Phil. 930; Villar vs. Javier de Paderanga 97 Phil. 604; Piano vs. Cayanong 117 Phil. 415).chanroblesvirtualawlibrary chanrobles virtual law library However, in case of a judicial foreclosure of a mortgage in favor of a banking institution, section 78 of the General Banking Law grants the mortgagor a right of redemption which may be exercised within one year from the sale.chanroblesvirtualawlibrary chanrobles virtual law library Under section 3, Rule 68 of the Rules of Court, it is the confirmation by the court of the auction sale that would divest the Serrano spouses of their rights to the mortgaged lot and that would vest such rights in the bank as purchaser at the auction sale.chanroblesvirtualawlibrary chanrobles virtual law library The clause "subject to such rights of redemption as may be allowed by law," found in the last part of section 3, has no application to this case because the mortgagor did not exercise his right of redemption under section 78 of the General BanKing Law.chanroblesvirtualawlibrary chanrobles virtual law library What applies to this case is the settled rule that "a foreclosure sale is not complete until it is confirmed, and before said confirmation, the court retains control of the proceedings by exercising a sound discretion in regard to it, either granting or withholding confirmation as the rights and interests of the parties and the ends of justice may require." (Salazar vs. Tor res, 108 Phil. 209, 2145).chanroblesvirtualawlibrary chanrobles virtual law library "In order that a foreclosure sale may be validly confirmed by the court, it is necessary that a hearing be given the interested parties, at which they may have an opportunity to show cause why the sale should not be confirmed." (Raymundo vs. Sunico, 25 Phil. 365).chanroblesvirtualawlibrary chanrobles virtual law library "The acceptance of a bid at the foreclosure sale confers no title on the purchaser. Until the sale has been validly confirmed by the court, he is nothing more than a preferred bidder. Title vests only when the sale has been validly confirmed by the court." (Raymundo vs. Sunico, 25 Phil. 365).chanroblesvirtualawlibrary chanrobles virtual law library The confirmation retroacts to the date of the sale (Villar vs. Javier de Paderanga 97 Phil. 604, citing Binalbagan Estate, Inc. vs. Gatuslao, 74 Phil. 128).chanroblesvirtualawlibrary chanrobles virtual law library A hearing should be held for the confirmation of the sale. The mortgagor should be notified of that hearing. Lack of notice vitiates the confirmation of the sale. The mortgagor may still redeem the mortgaged lot after the rendition of the order confirming the sale which is void for lack of hearing and notice to the mortgagor. Grimalt vs. Velasquez and Sy Quio 36 Phil. 936; Raymundo vs. Sunico, 25 Phil. 365).chanroblesvirtualawlibrary chanrobles virtual law library Notice and hearing of a motion for confirmation of sale are essential to the validity of the order of confirmation, not only to enable the interested parties to resist the motion but also to inform them of the time when their right of redemption is cut off (Tiglao vs. Botones, 90 Phil. 275, 279).chanroblesvirtualawlibrary chanrobles virtual law library An order of confirmation, void for lack of notice and hearing, may be set aside anytime (Tiglao vs. Botones, supra).chanroblesvirtualawlibrary chanrobles virtual law library It is equally settled that after the foreclosure sale but before its confirmation, the court may grant the judgment debtor or mortgagor an opportunity to pay the proceeds of the sale and thus refrain from confirming it (Anderson and De Mesa vs. Reyes and Gutierrez Saenz 54 Phil. 944, citing Grit vs. Velasquez and Sy Quio 36 Phil. 936 and La Urbana vs. Belan do, 54 Phil. 930).chanroblesvirtualawlibrary chanrobles virtual law library If after the foreclosure sale and before the confirmation thereof, the mortgagee, as purchaser at the auction sale, sold the mortgaged property to another person, that subsequent sale does not render the foreclosure sale more effective. That subsequent sale does not prevent the trial court from granting the mortgagor a period within which to redeem the mortgaged lot by paying the judgment debt and the expenses of the sale and costs (Anderson and De Mesa vs. Reyes and Gutierrez Saenz, 54 Phil. 944).chanroblesvirtualawlibrary chanrobles virtual law library "Whatever may have been the old rule by all of the modern authorities, it is the policy of the courts to assist rather than to defeat the right of redemption" (De Castro vs. Olondriz and Escudero 50 Phil. 725, 732).chanroblesvirtualawlibrary chanrobles virtual law library After the confirmation of the sale, made after hearing and with due notice to the mortgagor, the latter cannot redeem anymore the mortgaged lot (unless the mortgagee is a banking institution) (Piano vs. Cayanong 117 Phil. 415).chanroblesvirtualawlibrary chanrobles virtual law library It is after the confirmation of the sale that the mortgagor loses all interest in the mortgaged property (Clemente vs. H. E. Heacock Co., 106 Phil. 1163; Clemente vs. Court of Appeals, 109 Phil. 798; Clemente vs. H.E. Heacock Co., L-23212, May 18, 1967, 20 SCRA 115).chanroblesvirtualawlibrarychanrobles virtual law library In the instant case, where the foreclosure sale has not yet been confirmed but the statutory one-year period for redemption tion expired and the mortgaged lot was sold by the mortgagee (as the only bidder at the auction sale) to a third person, the trial court should give the purchaser a chance to be heard before requiring the mortgagee-bank to accept the redemption price tendered by the mortgagors.chanroblesvirtualawlibrary chanrobles virtual law library WHEREFORE, while we affirm the decision of the Court of Appeals in not giving due course to petitioner's appeal from the trial court's aforementioned order of October 12, 1977, at the same time the said order is reversed and set aside for being premature.chanroblesvirtualawlibrary chanrobles virtual law library The trial court is directed to consolidate the foreclosure case, Civil Case No. 2988, with Civil Case No. 3265 for the annulment of the foreclosure sale and the sale of the mortgaged lot to Eufemia Mejos and to proceed in accordance with the guidelines laid down in this decision. No costs.chanroblesvirtualawlibrary chanrobles virtual law library SO ORDERED. G.R. No. 169846 March 28, 2008 SPS. NESTOR AND MA. NONA BORROMEO, Petitioners, vs. HONORABLE COURT OF APPEALS and EQUITABLE SAVINGS BANK, Respondents. DECISION CHICO-NAZARIO, J.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision, 1 dated 29 April 2005, thereafter, upheld in a Resolution2 dated 16 September 2005, both rendered by the Court of Appeals in CA-G.R. SP No. 85114. The Court of Appeals, in its assailed Decision, reversed the Order dated 3 March 2004 of Branch 215 of the Regional Trial Court (RTC) of Quezon City in Civil Case No. Q-03-51184, and denied the issuance of a Writ of Preliminary Injunction enjoining respondent Equitable Savings Bank (ESB) from executing the extra-judicial foreclosure of the mortgaged property owned by petitioners, Spouses Nestor and Nona Borromeo. Respondent is a domestic savings bank corporation with principal office and place of business at EPCIB Tower 2, Makati Avenue, Salcedo Village, Makati City.3 At the time the dispute began, it was a subsidiary of Equitable PCI Bank (EPCIB), a domestic universal banking corporation with principal office at Makati Avenue, Salcedo Village, Makati City. After the merger of EPCIB and Banco De Oro (BDO), they have adopted the corporate name "Banco De Oro."4 Petitioners were client-depositors of EPCIB for more than 12 years. Petitioners alleged that sometime in mid-1999, the branch manager of EPCIB, J.P. Rizal Branch, offered a loan to the petitioners under its "Own-a-Home Loan Program." Petitioners applied for a loan of P4,000,000.00 and were informed of the approval of their loan application sometime in October 1999. It was in the early part of 2000 that petitioners signed blank loan documents consisting of the Loan Agreement, Promissory Notes, a Real Estate Mortgage (REM) and Disclosure Statements.5 To secure the payment of the loan, petitioners executed an REM over their land, registered under Transfer Certificate of Title (TCT) No. N-203923, located at Loyola Grand Villas, Quezon City, consisting of 303 square meters; and the proposed house that was to be built thereon. 6 Petitioners asserted that even if the loan documents were signed in blank, it was understood that they executed the REM in favor of EPCIB.7 From April 2001 to September 2002, respondent released a total amount of P3,600,000.00 in four installments, while the balance of P400,000.00 was not drawn by petitioners.8 On the other hand, petitioners started to pay their monthly amortizations on 21 April 2001.9

Petitioners made repeated verbal requests to EPCIB to furnish them their copies of the loan documents.10 On 6 August 2003, they sent the president of EPCIB a letter11 which reiterated their request for copies of the loan documents. In addition, petitioners stated that the interest rate of 14% to 17% that was charged against them was more than the interest rate of 11% or 11.5% that the parties agreed upon. They further claimed that they purposely did not draw the remaining balance of the loan in the amount of P400,000.00 and stopped paying their loan amortizations to protest EPCIBs continued failure to provide them copies of the loan documents and its imposition of an interest rate higher than that agreed upon. From the time petitioners began paying their monthly amortizations on 21 April 2001 until the time they stopped, petitioners made total payments of approximatelyP500,000.00.12 In reply to the petitioners letter dated 6 August 2003, the Vice President of EPCIB, Gary Vargas, sent to the petitioners a letter13 dated 27 August 2003 explaining that as a matter of practice, their clients were given original copies of the loan documents only upon full release of the amount loaned. EPCIB clarified that since petitioners loan had not been fully released, the original documents were not yet sent to them. Petitioners were also informed that the applicable interest rate was set at the time the loan was released, not at the time the loan was approved, and that the prevailing interest when the first four installments of the loan were released ranged from 9.5% to 16%. In the meantime, on 13 August 2003, respondent, through counsel, also sent a letter 14 to the petitioners demanding payment for their obligation, which, as of 15 August 2003, amounted to P4,097,261.04, inclusive of interest and other charges. Respondent informed petitioners that failure to pay their obligation would result in its pursuing legal action against petitioners, including foreclosure proceedings on their REM. In a letter dated 18 September 2003,15 respondent, through counsel, reiterated to petitioners its demand for the full settlement of their obligation on or before 30 September 2003. Finally, on 3 October 2003, petitioners received copies of the loan documents which they had earlier signed in blank.16 According to petitioners, they were surprised to find out that the Loan Agreement and REM designated respondent ESB as lender and mortgagor, instead of EPCIB with whom they allegedly entered into the agreement. However, in contrast to the Loan Agreement and the REM, the four Promissory Notes designated EPCIB as the lender. Petitioners also alleged that instead of the prevailing interest rates of 8% to 10% annually, which the parties agreed upon,17 the four Promissory Notes were set at the following interest rates:18 DATE AMOUNT INTEREST RATE 25 April 2001 18 January 2002 29 June 2001 P1,200,000.00 16% P 800,000.00 14.0% P 800,000.00 15%

19 September 2002 P 800,000.00 9.0% When the petitioners failed to pay for the loan in full by 30 September 2003, respondent sought to extra-judicially foreclose the REM. Upon the respondents petition for foreclosure, the Office of the Ex-Officio Sheriff of Quezon City issued a Notice of Extrajudicial Sale dated 16 October 2003, wherein the mortgage debt was set atP5,114,601.00.19 The Extrajudicial Sale was set to take place on 26 November 2003. On 14 November 2003, petitioners received Notice of Extrajudicial Sale of their property.20 On 20 November 2003, petitioners filed with the RTC a Complaint for Injunction, Annulment of Mortgage with Damages and with Prayer for Temporary Restraining Order and Preliminary and Mandatory Injunction against EPCIB and respondent, docketed as Civil Case No. Q-03-51184. In their Complaint, petitioners alleged that the loan documents failed to reflect the true agreement between the parties. Firstly, the agreement was between the petitioners and EPCIB and, consequently, respondent had no interest in the REM. Secondly, the interest rates reflected in the Promissory Notes were not the interest rates on which the parties had settled. They also averred in their Complaint that EPCIB committed a breach of contract when it failed to release the fifth and last installment of the loan to petitioners. 21 Petitioners sought to prevent the Extrajudicial Sale from taking place on 26 November 2003. Petitioners maintained that EPCIB acted in bad faith when it foreclosed the subject property simply because petitioners complained that the interest rates unilaterally imposed by EPCIB were excessive. It further averred that their deposit accounts with EPCIB were more than sufficient to pay for the amortizations due on the housing loan.22 The scheduled date for the Extrajudicial Foreclosure, namely, 26 November 2003, fell on the holiday Eid-el-Fitr, and as a result, it did not push through. In an Order dated 5 December 2003, the RTC determined that there was no longer any need to issue a temporary restraining order (TRO) and/or preliminary injunction.23 On 14 December 2003, respondent re-filed its petition for extrajudicial foreclosure of the REM. The Ex-Officio Sheriff of Quezon City set the auction sale on 14 January 2004. Petitioners reacted by filing with the RTC a Motion for Reconsideration of its Order dated 5 December 2003, again praying for the issuance of a TRO and/or preliminary injunction to forestall the extrajudicial sale of their property scheduled for 14 January 2004.24 On 3 March 2004, the RTC granted petitioners motion for reconsideration and ordered the issuance of a preliminary injunction after declaring that the validity of the REM was yet to be determined. It found that petitioners were bound to suffer grave injustice if they were deprived of their property before the RTC could rule on the validity of the REM constituted on the same. On the other hand, it held that respondents interest was amply protected, since petitioners mortgaged property was valued at P12,000,000.00, which was more than sufficient to answer for petitioners obligation pegged at P4,097,261.00, and respondents REM over said property remained in effect. Moreover, petitioners posted a bond in the amount of P3,500,000.00 to cover their unpaid liabilities.25 In its Order dated 3 March 2004, the RTC ordered that26: With all the foregoing disquisitions and finding merit in plaintiffs application, the same *is+ hereby GRANTED. Let a writ of preliminary injunction issue upon plaintiffs posting of a bond in the amount of three million five hundred thousand (P3,500,000.00) pesos. Respondent filed a Motion for Reconsideration of the afore-quoted Order, which was denied for lack of merit by the RTC in an Order dated 29 April 2004. Thereafter, respondent filed on 14 July 2004 a Special Civil Action for Certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 85114. During the proceedings before the Court of Appeals, petitioner presented a letter dated 19 December 2002, with supporting documents, written and compiled by EPCIB for Home Guaranty Corporation, wherein EPCIB included petitioners loan among its housing loans for which it sought insurance coverage.27 In reversing the RTC Order dated 3 March 2004, the Court of Appeals decreed that pending the RTCs determination of the validity of the REM, its validity should be presumed. It further ruled that the intended foreclosure of the mortgage by respondent was a proper exercise of its right after petitioners admittedly stopped paying their loan amortizations. Moreover, it held that the foreclosure of the REM would not result in any grave and irreparable damage to the petitioners since petitioners, as mortgagors, may redeem the subject property or avail themselves of the remedy of claiming damages or nullifying the sale.28 The dispositive portion of the Court of Appeals Decision, dated 29 April 2005, reads:29 WHEREFORE, in view of the foregoing, the assailed Orders dated March 3, 2004 and April 29, 2004 issued by the Regional Trial Court of Quezon City, Branch 215 in Civil Case No. Q-03-51184 are hereby ANNULLED and SET ASIDE. Petitioners filed a Motion for Reconsideration of the foregoing Decision, which the Court of Appeals denied in a Resolution dated 16 September 2005.30 Hence, the present Petition, in which the following issues are raised31: I WHETHER OR NOT THE PRIVATE RESPONDENT SAVINGS BANK IS THE REAL PARTY-IN-INTEREST. II WHETHER OR NOT PETITIONERS ARE ENTITLED TO THE RELIEF DEMANDED, THAT THE FORECLOSURE AND PUBLIC AUCTION OF THE PROPERTY BELONGING TO PETITIONERS DURING THE LITIGATION PROCEEDINGS IN THE LOWER COURT WOULD PROBABLY WORK INJUSTICE TO THEM SUCH THAT THE JUDGMENT WHICH MAY BE ISSUED BY THE SAID COURT WILL BE RENDERED INEFFECTUAL BY SUCH FORECLOSURE AND PUBLIC AUCTION OF SAID PROPERTY. III WHETHER OR NOT THE LOWER COURT WAS CORRECT IN GRANTING THE WRIT OF PRELIMINARY INJUNCTION, ALL REQUISITES BEING PRESENT The petition is meritorious. The only issue that needs to be determined in this case is whether or not a writ of preliminary injunction should be issued to enjoin the foreclosure and public auction of petitioners property during the proceedings and pending determination of the main cause of action for annulment of the REM on said property. By no means is this a final determination of the merits of the main case still before the RTC.32 Section 3, Rule 58 of the Rules of Court provides that: SEC. 3. Grounds for issuance of preliminary injunctions.A preliminary injunction may be granted when it is established: (a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. As such, a writ of preliminary injunction may be issued only upon clear showing of an actual existing right to be protected during the pendency of the principal action. The twin requirements of a valid injunction are the existence of a right and its actual or threatened violations. Thus, to be entitled to an injunctive writ, the right to be protected and the violation against that right must be shown.33 In this case, petitioners rights to their property is restricted by the REM they executed over it. Upon their default on the mortgage debt, the right to foreclose the property would be vested upon the creditor-mortgagee.34Nevertheless, the right of foreclosure cannot be exercised against the petitioners by any person other than the creditor-mortgagee or its assigns. According to the pertinent provisions of the Civil Code: Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent. If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person. (Emphasis ours.)1avvphi1

An extrajudicial foreclosure instituted by a third party to the Loan Agreement and the REM would, therefore, be a violation of petitioners rights over their property. It is clear that under Article 1311 of the Civil Code, contracts take effect only between the parties who execute them. 35 Where there is no privity of contract, there is likewise no obligation or liability to speak about.36 The civil law principle of relativity of contracts provides that contracts can only bind the parties who entered into it, and it cannot favor or prejudice a third person, even if he is aware of such contract and has acted with knowledge thereof.37 Since a contract may be violated only by the parties thereto as against each other, a party who has not taken part in it cannot sue for performance, unless he shows that he has a real interest affected thereby.38 In the instant case, petitioners assert that their creditor-mortgagee is EPCIB and not respondent. While ESB claims that petitioners have had transactions with it, particularly the five check payments made in the name of ESB, it fails to categorically state that ESB and not EPCIB is the real creditor-mortgagor in this loan and mortgage transaction. This Court finds the position taken by the petitioners to be more credible. The four Promissory Notes designate EPCIB as the "lender."39 In a letter dated 19 December 2002, addressed to Home Guaranty Corporation, EPCIB Vice President Gary Vargas even specified petitioners loan as one of its housing loans for which it sought insurance coverage.40 Records also show that petitioners repeatedly dealt with EPCIB. When the petitioners complained of not receiving the loan documents and the allegedly excessive interest charges, they addressed their letter dated 3 August 2003 to the president of EPCIB.41 The response, which explained the loan transactions in detail in a letter dated 27 August 2003, was written by Gary Vargas, EPCIB Vice President.42 Of almost three years amortizations, the checks were issued by petitioners in the name of EPCIB, except only for five checks which were issued in respondents name.43 Respondent, although a wholly-owned subsidiary of EPCIB, has an independent and separate juridical personality from its parent company. The fact that a corporation owns all of the stocks of another corporation, taken alone, is not sufficient to justify their being treated as one entity. If used to perform legitimate functions, a subsidiarys separate existence shall be respected, and the liability of the parent corporation, as well as the subsidiary, shall be confined to those arising from their respective businesses. A corporation has a separate personality distinct from its stockholders and other corporations to which it may be conducted.44 Any claim or suit of the parent corporation cannot be pursued by the subsidiary based solely on the reason that the former owns the majority or even the entire stock of the latter. From a perusal of the records, petitioners did not enter into a Loan Agreement and REM with respondent. Respondent, therefore, has no right to foreclose the subject property even after default, since this right can only be claimed by the creditor-mortgagor, EPCIB; and, consequently, the extrajudicial foreclosure of the REM by respondent would be in violation of petitioners property rights. This Court takes note of the fact that in several cases45 the Court denied the application for a Writ of Preliminary Injunction that would enjoin an extrajudicial foreclosure of a mortgage, and declared that foreclosure is proper when the debtors are in default of the payment of their obligation. Where the parties stipulated in their credit agreements, mortgage contracts and promissory notes that the mortgagee is authorized to foreclose the mortgaged properties in case of default by the mortgagors, the mortgagee has a clear right to foreclosure in case of default, making the issuance of a Writ of Preliminary Injunction improper. However, the doctrine in these cases is not applicable to the case at bar where the identity of the creditor-mortgagor is highly disputable. This Court emphasizes that the determination of who is the creditor-mortgagee is only for purposes of determining the propriety of issuing a writ of preliminary injunction, based on the evidence presented before the hearing for the issuance of a preliminary injunction. It will not bar the RTC from making its own determination as to who is the true creditor-mortgagee after trial and presentation of evidence on the main case. To establish the essential requisites for a preliminary injunction, the evidence submitted by the plaintiff need not be conclusive and complete. The plaintiffs are only required to show that they have an ostensible right to the final relief prayed for in their complaint.46 In Urbanes, Jr. v. Court of Appeals, this Court expounded that: A writ of preliminary injunction is generally based solely on initial and incomplete evidence. The evidence submitted during the hearing on an application for a writ of preliminary injunction is not conclusive or completefor only a sampling is needed to give the trial court an idea of the justification for the preliminary injunction pending the decision of the case on the merits. As such, the findings of fact and opinion of a court when issuing the writ of preliminary injunction are interlocutory in nature and made even before the trial on the merits is commenced or terminated. There are vital facts that have yet to be presented during the trial which may not be obtained or presented during the hearing on the application for the injunctive writ. The trial court needs to conduct substantial proceedings in order to put the main controversy to rest. It does not necessarily proceed that when a writ of preliminary injunction is issued, a final injunction will follow.47 (Emphasis provided.) The extrajudicial foreclosure of the petitioners property pending the final determination by the RTC of their complaint for annulment of the REM and claim for damages would result in an injustice to the petitioners. If the RTC would subsequently declare that respondent was entitled to have petitioners property foreclosed, it may still foreclose the subject property which is valued at P12,000,000.00,48 to answer for the debt which is estimated atP5,000,000.00, and further claim the P3,500,000.00 surety bond posted by petitioners with the RTC. On the other hand, if the RTC later finds that respondent is not the creditor-mortgagee and, therefore, the foreclosure of the property is invalid, petitioners would be placed in an oppressively unjust situation where they will be tied up in litigation for the recovery of their property while their debt to the real creditor-mortgagee, EPCIB, would remain unpaid and continue to accrue interest and other charges. The sole object of a preliminary injunction is to maintain the status quo until the merits can be heard. A preliminary injunction is an order granted at any stage of an action prior to judgment of final order, requiring a party, court, agency, or person to refrain from a particular act or acts. It is a preservative remedy to ensure the protection of a partys substantive rights or interests pending the final judgment on the principal action. A plea for an injunctive writ lies upon the existence of a claimed emergency or extraordinary situation which should be avoided for, otherwise, the outcome of a litigation would be useless as far as the party applying for the writ is concerned.49 IN VIEW OF THE FOREGOING, the instant Petition is GRANTED. This Court REVERSES the assailed Decision dated 29 April 2005 of the Court of Appeals in CA-G.R. SP No. 85114, and REINSTATES the Order dated 3 March 2004 of Branch 215 of the Regional Trial Court of Quezon City in Civil Case No. Q-03-51184 ordering the issuance of a Writ of Preliminary Injunction. SO ORDERED. G.R. No. 133079. August 9, 2005] SPS. MAXIMO LANDRITO, JR. and PACITA EDGALANI, Petitioners, vs. THE HONORABLE COURT OF APPEALS; SPS. BENJAMIN SAN DIEGO and CARMENCITA SAN DIEGO; The EX-OFFICIO SHERIFF and CLERK OF COURT of the Regional Trial Court, Makati City; and the REGISTER OF DEEDS, Makati City, Respondent. DECISION GARCIA, J.: Herein petitioners, the spouses Maximo Landrito, Jr. and Pacita Landrito, have come to this Court via this petition for review on certiorari under Rule 45 of the Rules of Court to seek the reversal and setting aside of the decision dated 12 December 19971 and resolution dated 10 March 19982 of the Court of Appeals in CA-G.R. CV No. 48896, affirming an earlier order of the Regional Trial Court at Makati City which granted the motion to dismiss filed by the herein private respondents, the spouses Benjamin San Diego and Carmencita San Diego, in its Civil Case No. 94-2950, a complaint for annulment of extrajudicial foreclosure and auction sale, thereat commenced by them against the San Diegos, the ex-officio sheriff and the Register of Deeds of Makati City. The facts: In July 1990, petitioners obtained a loan of P350,000.00 from respondent Carmencita San Diego. To secure payment thereof, petitioners executed on 02 August 1990 in favor of the same respondent a deed of real estate mortgage over their parcel of land located at Bayanan, Muntinlupa, Rizal and registered in their names under Transfer Certificate of Title No. (432281) S-21000. After making substantial payments, petitioners again obtained and were granted by Carmencita San Diego an additional loan of One Million Pesos (P1,000,000.00). To secure this additional loan, the parties executed on 13 September 1991 an "Amendment of Real Estate Mortgage", where under they stipulated that the loan shall be paid within six (6) months from 16 September 1991, and if not paid within said period, the mortgagee shall have the right to declare the mortgage due and may immediately foreclose the same judicially or extrajudicially, in accordance with law. It appears that petitioners defaulted in paying their loan and continuously refused to comply with their obligation despite repeated demands therefor, prompting respondent Carmencita San Diego to send them on 27 April 1993, a final notice of demand requiring them to settle their financial obligation which, by then, already amounted toP1,950,000.00. On 30 June 1993, after her efforts to collect proved futile, respondent Carmencita San Diego filed with the Office of the Clerk of Court and Ex-Officio Sheriff of RTCMakati, a petition for the extrajudicial foreclosure of the mortgage. On 06 July 1993, said office sent to the parties a Notice of Sheriffs Sale, therein announcing that petitioners mortgaged property will be sold in a public auction to be conducted on 11 August 1993 at 10:00 oclock in the morning, copies of which notice were posted in several conspicuous places within the sheriffs territorial jurisdiction. As announced, on 11 August 1993, at 10:00 oclock in the morning, the public auction sale was held and the mortgaged property sold to respondent Carmencita San Diego as the highest bidder for P2,000,000.00, as evidenced by the Sheriffs Certificate of Sale issued in her favor on 07 October 1993. On 29 October 1993, respondent San Diego caused the registration of the same sheriffs certificate of sale with the Office of the Register of Deeds, Makati City, and duly inscribed on the same date at the dorsal side of the petitioners TCT No. (432281) S-21000. With the petitioners having failed to redeem their property within the 1-year redemption period from the date of inscription of the sheriffs certificate of sale, as provided for in Act No. 3135, as amended, the San Diegos caused the consolidation of title over the foreclosed property in their names. Then, on 09 November 1994, before the Regional Trial Court at Makati City, petitioners filed their complaint for annulment of the extrajudicial foreclosure and auction sale, with damages. In their complaint, thereat docketed as Civil Case No. 94-2950, petitioners alleged that (1) said foreclosure and auction sale were null and void for failure to comply with the requirements of notice and publication, as mandated by Act 3135, as amended; (2) the mortgaged property was illegally foreclosed in the light of the settled rule that an action to foreclose a mortgage must be limited to the amount mentioned in the mortgage document, in this case, P1,000,000.00, which amount was allegedly bloated by respondent Carmencita San Diego to P1,950,000.00; and (3) the San Diegos application for consolidation of title was premature because the husband, Benjamin San Diego, allegedly granted them an extension of the period of redemption up to 11 November 1994.

To the complaint, respondents interposed a Motion to Dismiss, therein alleging that said complaint failed to state a cause of action as no primary right of the petitioners had been violated since they actually failed to exercise their right of redemption within the one-year redemption period, adding that petitioners never took any action which may stall the running of the same period, thereby leaving them no further right or interest in the property in question. In an order dated 13 January 1995, the trial court granted respondents motion to dismiss and accordingly dismissed petitioners complaint, saying that the latters cause of action, if any, is already barred by laches on account of their failure or neglect for an unreasonable length of time to do that which, by exercising due diligence, could or should have been done earlier. Further, the trial court ruled that petitioners inaction constituted a waiver on their part. Therefrom, petitioners went on appeal to the Court of Appeals in CA-G.R. CV No. 48896. As stated at the outset hereof, the appellate court, in its decision of 12 December 1997, dismissed petitioners appeal and affirmed in toto the trial courts order of dismissal. With their motion for reconsideration having been denied by the same court in its resolution of 10 March 1998, 3 petitioners are now with us via the present recourse, faulting the Court of Appeals, as follows: 1. The Court of Appeals gravely erred in avoiding to resolve in the assailed Decision and in the questioned Resolution the basic issue as to whether or not the extrajudicial foreclosure and public auction sale of the subject parcel of land are valid and lawful when the amount stated in letter-request or the petition for extra-judicial foreclosure and in the notice of sheriff sale doubled the amount stipulated in the Amendment of Real Estate Mortgage; 2. The Court of Appeals has similarly committed serious error in considering that the complaint of the petitioner is a complaint for redemption when in the caption; in the body; and in the prayer of the complaint, petitioner spouses have sought the nullity as void ab initio the extra-judicial foreclosure and auction sale of the subject property; 3. The respondent Appellate Court likewise incredulously erred to have resolved the admissibility and probative value of the statement of account attached as Annex "E" of the complaint when it was not yet presented in evidence; because the stage of the case at the time the assailed dismissal order was issued, was yet in the period of pleadings; 4. The Court of Appeals has grievously erred in affirming the assailed dismissal order by declaring petitioner spouses to have been guilty of laches in failing to redeem during the legal period of redemption the foreclosed parcel of land; when the cause of the failure to redeem was the illegal increase by 100% of the original obligation, stated in the Amendment of Real Estate Mortgage and bloating of the redemption price from Two Million Pesos (P2,000,000.00) to Three Million Four Hundred Ninety One Thousand Two Hundred Twenty Five & 98/100 Pesos (P3,491,225.98). We DENY. The records indubitably show that at the time of the foreclosure sale on 11 August 1993, petitioners were already in default in their loan obligation to respondent Carmencita San Diego. Much earlier, or on 27 April 1993, a final notice of demand for payment had been sent to them, despite which they still failed to pay. Hence, respondent Carmencita San Diegos resort to extrajudicial foreclosure, provided no less in the parties "Amendment of Real Estate Mortgage". The rule has been, and still is, that in real estate mortgage, when the principal obligation is not paid when due, the mortgagee has the right to foreclose on the mortgage and to have the mortgaged property seized and sold with the view of applying the proceeds thereof to the payment of the obligation.4 Here, the validity of the extrajudicial foreclosure on 11 August 1993 was virtually confirmed by the trial court when it dismissed petitioners complaint, and rightly so, what with the fact that petitioners failed to exercise their right of redemption within the 1-year period therefor counted from the registration of the sheriffs certificate of sale. It is petitioners main submission, however, that the very reason why they did not avail of their redemption right is because Mrs. San Diego bloated their original loan of P1,000,000.00 to P1,950,000.00, an issue supposedly not considered and/or addressed by the appellate court in the decision under review. In this regard, petitioners argue that the Court of Appeals, in sustaining the extrajudicial foreclosure proceedings, thereby go against the established jurisprudence that an action for foreclosure must be limited to the amount mentioned in the mortgage document, P1,000,000.00 in this case. We do not take issue with petitioners submission that a mortgage may be foreclosed only for the amount appearing in the mortgage document, more so where, as here, the mortgage contract entered into by the parties is evidently silent on the payment of interest. However, contrary to petitioners claim, the appellate court did pass upon the legal issue raised by them, albeit ruling that petitioners had been barred by laches from raising the same. We quote from the challenged decision: [Petitioners] next argued that the mortgaged property was illegally foreclosed since it is a well settled rule that an action to foreclose a mortgage must be limited to the amount mentioned in the mortgage. The argument is without merit. It appears from the evidence on record that despite due notice and publication of the same in a newspaper of general circulation (Exhs. "5", "5-A" and "5-B", pp. 53-55, Record), [petitioners] did not bother to attend the foreclosure sale nor raise any question regarding the propriety of the sale. It was only on November 9, 1994, or more than one year from the registration of the Sheriffs Certificate of Sale, that *petitioners+ filed the instant complaint. Clearly, [petitioners] had slept on their rights and are therefore guilty of laches, which is defined as the failure or neglect for an unreasonable or explained length of time to do that which, by exercising due diligence, could or should have been done earlier, failure of which gives rise to the presumption that the person possessed of the right or privilege has abandoned or has declined to assert the same. (Words in bracket added.) For sure, in the very petition they filed in this case, petitioners have not offered any valid excuse why, despite notice to them of the petition for extrajudicial foreclosure filed by the respondents, they failed to attend the proceedings and there voiced out what they are now claiming. Truly, laches has worked against them. The law on redemption of mortgaged property is clear. Republic Act No. 3135 (An Act to Regulate the Sale of Property Under Special Powers Inserted In Or Annexed to Real Estate Mortgages), as amended by Republic Act No. 4118, provides in Section 6 thereof, thus: "Sec. 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of the sale; xxx" (Emphasis supplied) In a long line of cases5, this Court has consistently ruled that the one-year redemption period should be counted not from the date of foreclosure sale, but from the time the certificate of sale is registered with the Register of Deeds. Here, it is not disputed that the sheriffs certificate of sale was registered on 29 October 1993. And under Article 13 of the New Civil Code6, a year is understood to have three hundred sixty-five (365) days each. Thus, excluding the first day and counting from 30 October 1993 (under paragraph 3 of Article 13 of the New Civil Code), and bearing in mind that 1994 was a leap year, petitioners had only until 29 October 1994, the 365th day after registration of the sheriffs certificate of sale on 29 October 1993, within which to redeem the foreclosed property in accordance with law. And since 29 October 1994 fell on a Saturday, petitioners had until the following working day, 31 October 1994, within which to exercise their right of redemption. From the foregoing, it is clear as day that even the complaint filed by the petitioners with the trial court on 09 November 1994 was instituted beyond the 1-year redemption period. In fact, petitioners no less acknowledged that their complaint for annulment of extrajudicial foreclosure and auction sale was filed about eleven (11) days after the redemption period had already expired on 29 October 19947. They merely harp on the alleged increase in the redemption price of the mortgaged property as the reason for their failure to redeem the same. However, and as already pointed out herein, they chose not, despite notice, to appear during the foreclosure proceedings. Of course, petitioners presently insist that they requested for and were granted an extension of time within which to redeem their property, relying on a handwritten note allegedly written by Mrs. San Diegos husband on petitioners statement of account, indicating therein the date 11 November 1994 as the last day to pay their outstanding account in full. Even assuming, in gratia argumenti, that they were indeed granted such an extension, the hard reality, however, is that at no time at all did petitioners make a valid offer to redeem coupled with a tender of the redemption price. Even on this score, petitioners case must fall. For, in Lazo v. Republic Surety & Insurance Co., Inc.8, this Court has made it clear that it is only where, by voluntary agreement of the parties, consisting of extensions of the redemption period, followed by commitment by the debtor to pay the redemption price at a fixed date, will the concept of legal redemption be converted into one of conventional redemption. Here, there is no showing whatsoever that petitioners agreed to pay the redemption price on or before 11 November 1994, as allegedly set by Mrs. San Diegos husband. On the contrary, their act of filing their complaint on 09 November 1994 to declare the nullity of the foreclosure sale is indicative of their refusal to pay the redemption price on the alleged deadline set by the husband. At the very least, if they so believed that their loan obligation was only for P1,000,000.00, petitioners should have made an offer to redeem within one (1) year from the registration of the sheriffs certificate of sale, together with a tender of the same amount. This, they never did. It must be remembered that the period of redemption is not a prescriptive period but a condition precedent provided by law to restrict the right of the person exercising redemption. Correspondingly, if a person exercising the right of redemption has offered to redeem the property within the period fixed, he is considered to have complied with the condition precedent prescribed by law and may thereafter bring an action to enforce redemption. If, on the other hand, the period is allowed to lapse before the right of redemption is exercised, then the action to enforce redemption will not prosper, even if the action is brought within the ordinary prescriptive period. Moreover, the period within which to redeem the property sold at a sheriffs sale is not suspended by the institution of an action to annul the foreclosure sale.9 It is clear, then, that petitioners have lost any right or interest over the subject property primarily because of their failure to redeem the same in the manner and within the period prescribed by law. Their belated attempts to question the legality and validity of the foreclosure proceedings and public auction must accordingly fail. WHEREFORE, the instant petition is DENIED and the challenged decision and resolution of the Court of Appeals AFFIRMED. No pronouncement as to costs. SO ORDERED. G. R. No. 141365 - November 27, 2002

SPOUSES FELIPE YULIENCO and FLORA YULIENCO, Petitioners, vs. HON. COURT OF APPEALS (4th DIVISION); HON. LUCAS P. BERSAMIN in his official capacity as Presiding Judge of the Regional Trial Court, Branch 96, NCJR, Quezon City; DEPUTY SHERIFF JOSE G. MARTINEZ of Branch 96, RTC, Quezon City; and ADVANCE CAPITAL CORPORATION, Respondents. DECISION QUISUMBING, J.: Petitioners seek to annul and set aside the decision1 dated December 20, 1999 of the Court of Appeals, which (1) affirmed the order of the Regional Trial Court of Quezon City, Branch 96, in Land Registration Case No. Q-11564 (99) granting a writ of possession to private respondent Advance Capital Corporation; and (2) lifted the temporary restraining order issued by the CA on September 17, 1999. The records show that petitioner spouses Felipe and Flora Yulienco were the owners of a residential house and lot located at Nos. 136-138 Biak-na-Bato Street, Sta. Mesa Heights, Quezon City, covered by Transfer Certificate of Title No. RT-2572 (57609).2 On June 29, 1990, petitioners obtained a loan of P20,000,000 from private respondent Advance Capital Corporation (ACC) with interest at 24 percent per annum and evidenced by a promissory note. To secure the loan, deeds of real estate mortgage were executed on their properties in Makati City, Benguet, and Quezon City. When petitioners failed to pay the loan in full, ACC filed on July 2, 1993 a petition for extrajudicial foreclosures of the properties with the Ex-Officio Sheriff of Quezon City, pursuant to the authority provided in the deed of real estate mortgage. Auction sale of the properties was scheduled on July 30, 1993 and notice of the sale was published in the Times Record on July 7, 14, and 21, 1993.3 To forestall the foreclosure of their properties, petitioners filed on July 26, 1993 a petition for injunction, reformation, and damages with prayer for temporary restraining order and/or preliminary injunction against ACC with the Regional Trial Court of Makati City, Branch 61. In their complaint, petitioners questioned the validity of the promissory notes and real estate mortgages. They alleged that their true agreement with ACC was to pay the loan from the proceeds of the sale of their shares of stock in PHESCO which were then subject of a pending case in the Securities and Exchange Commission. They also assailed the Notice of Sheriffs Sale in Makati and Quezon City because it was not published in newspapers of general circulation in Metro Manila. On July 28, 1993, or two days before the scheduled sale, the Makati RTC issued an order4 enjoining private respondent and the sheriffs of Makati, Quezon City, and Benguet from proceeding with the foreclosure of petitioners properties. The auction sale of petitioners Quezon City property scheduled on July 30, 1993 was likewise cancelled. On August 30, 1993, ACC filed with the Office of the Clerk of Court and Ex-Officio Sheriff of Quezon City a letter-request to proceed with the auction sale of petitioners Quezon City property since, by that time, the 20-day effectivity period of the temporary restraining order issued by the Makati RTC had expired5 and, therefore, there was no more legal impediment to the sale. On the same day, the Sheriff of Quezon City prepared and issued a Second Notice of Sheriffs Sale of the Quezon City property, scheduling the sale on September 27, 1993. The notice was published in the Times Record on September 1, 8, and 15 1993.6 In the meantime, the RTC of Makati issued on September 20, 1993 an order granting petitioners prayer for preliminary injunction as to the foreclosure of their property in Makati City, but not as to the Quezon City and Benguet properties since under Section 21 of Batas Pambansa Bilang 129, the court does not have jurisdiction to enforce a writ of preliminary injunction outside its territorial jurisdiction. The public auction was held on September 27, 1993 and petitioners Quezon City property was sold to ACC as the highest bidder. 7 On the same date, the Sheriffs Certificate of Sale was annotated on the TCT. 8 A year later, petitioners filed a second amended and supplemental petition in the case pending before the RTC of Makati. On September 26, 1994, the RTC issued a temporary restraining order enjoining ACC from exercising its right of consolidation of ownership of the foreclosed property in Quezon City.9 Then on October 13, 1994, the RTC, again citing Section 21 of Batas Pambansa Bilang 129, finally denied petitioners prayer for preliminary injunction to enjoin ACC from consolidating title.10 Thereafter, when petitioners failed to redeem the foreclosed property, ACC caused the consolidation of its ownership and paid the necessary taxes with the Bureau of Internal Revenue to effect transfer of the title to its name. 11 Accordingly, the Register of Deeds of Quezon City cancelled TCT No. RT-2572 (57609) and issued TCT No. 119740 in ACCs name.12 Tax declarations over the subject property were likewise transferred in the name of ACC after it paid real estate taxes.13 From then on, private respondent ACC has been paying real taxes on the property.14 Petitioners continued to occupy the house and lot over the property so, in a letter dated May 3, 1999, ACC made a formal and final demand on petitioners to vacate the subject house and lot within five days from receipt of the letter. ACC also demanded P1,080,000 corresponding to rental arrearages from October 1994 to the date of the letter, at P20,000 per month.15 ACC likewise filed with the RTC of Quezon City, Branch 96, a petition for the issuance of a writ of possession over the subject property. The case was docketed as Land Registration Case No. Q-11564 (99).16 At the hearing of June 25, 1999, public respondent Hon. Lucas Bersamin, the presiding judge of the RTC of Quezon City, Branch 96, allowed ACC to present its evidence ex parte without prejudice to any comment that may be filed by petitioners. In their comment below, petitioners alleged, among others, that it would be improper for the court to issue a writ of possession pending the outcome of Special Civil Case No. 93-2521 before Branch 61 of the Makati RTC for injunction, reformation, and damages assailing the validity of the loan and the mortgage.17 On September 3, 1999, the RTC of Quezon City granted the petition for writ of possession, disposing as follows: ACCORDINGLY, premises considered, the instant petition is hereby GRANTED. Let a writ of possession be issued over the property covered by Transfer Certificate of Title No. 119740 of the Registry of Deeds of Quezon City and located at 136-138 Biak-na-Bato, Sta. Mesa Heights, Quezon City. SO ORDERED.18 Petitioners motion for reconsideration was denied. To annul the trial courts decision dated September 3, 1999, petitioners elevated the case to the Court of Appeals via certiorari and prohibition with a prayer for temporary restraining order and/or writ of preliminary injunction.19 In a resolution dated September 17, 1999, the CA issued a temporary restraining order enjoining the implementation of the writ of possession issued by the RTC of Quezon City.20 Then on December 20, 1999, respondent Court of Appeals denied the petition for certiorari.21 The appellate court confined its discussion to the validity of the trial courts issuance of the writ of possession, finding the same neither a capricious nor a whimsical exercise of judgment that could amount to grave abuse of discretion. In the same decision, the CA likewise lifted the temporary restraining order it issued on September 17, 1999. 22 Hence, the instant petition under Rule 45 of the Rules of Court, anchored on the following averments: A. THE RESPONDENT COURT HAS RENDERED THE DECISION DATED DECEMBER 20, 1999 (ANNEX B) IN DISREGARD OF THE FRAUD COMMITTED BY RESPONDENT ACC PROVEN BY FACTS NOT DENIED BY RESPONDENT ACC WHICH CLEARLY VIOLATE THE CONSTITUTIONAL RIGHT TO DUE PROCESS OF PETITIONERS AND WILL FRAUDULENTLY ENRICH RESPONDENT ACC THRU ACTUAL AND ILLEGAL CONFISCATION OF THE PROPERTIES OF PETITIONERS IN AN ILLEGAL AND FRAUDULENT MANNER, THUS CONSTITUTING A DEPARTURE FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS OR SO FAR SANCTIONED SUCH DEPARTURE BY A LOWER COURT, AS TO CALL FOR AN EXERCISE OF THE POWER OF SUPERVISION OF THIS HONORABLE COURT; and B. THE RESPONDENT JUDGE COURT HAS DECIDED IN ITS DECISION DATED DEC. 20, 1999 (ANNEX B) QUESTIONS OF SUBSTANCE NOT THERETOFORE DETERMINED BY THIS HONORABLE COURT, OR HAS DECIDED IT IN A WAY NOT IN ACCORD WITH LAW AND LOGIC AND/OR WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT.23 At issue is whether the Court of Appeals committed reversible error in affirming the RTC decision granting the writ of possession to respondent corporation. To resolve this issue, we must also inquire whether prohibition lies to enjoin the Regional Trial Court of Quezon City from issuing to ACC the writ of possession over the property covered by TCT No. 119740 of the Quezon City Register of Deeds. Petitioners assail the jurisdiction of the Quezon City RTC in taking cognizance of the present case on the ground that there is a pending case in the Makati RTC for injunction, reformation, and damages impugning the validity of the promissory notes and mortgage contracts used as basis for the foreclosure sale. They likewise lament that the grant of the writ and the displacement of petitioners from their residence on the basis of fraud smacks of deprivation of property without due process of law. Petitioners contention cannot stand judicial muster. Act 3135, otherwise known as "An Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real Estate Mortgages," mandates that jurisdiction over a petition for a writ of possession lies in the court of the province, city, or municipality where the property subject thereof is situated. Section 7 of the said Act is clear on this matter, thus: SEC. 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance [now Regional Trial Court] of the province or place where the property or any part thereof is situated, to give him possession thereof during the

redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Since the land subject of the controversy is located in Quezon City, the citys RTC should rightly take cognizance of the case, to the exclusion of other courts. Neither can this Court consider the pendency of Special Civil Case No. 93-2521 before Branch 61 of the Makati RTC a procedural obstacle. Said action for injunction, reformation, and damages does not raise an issue that constitutes a prejudicial question in relation to the present case. A prejudicial question is one that arises in a case the resolution of which is a logical antecedent of the issue involved therein, and the cognizance of which pertains to another tribunal.24 It generally comes into play in a situation where a civil action and a criminal action are both pending and there exists in the former an issue that must be preemptively resolved before the criminal action may proceed, because howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the criminal case.25 The rationale behind the principle of prejudicial question is to avoid two conflicting decisions.26 Here, Special Civil Case No. 93-2521 and the present one are both civil in nature and, therefore, no prejudicial question can arise from the existence of the two actions. It taxes our imagination how the questions raised in Special Civil Case No. 93-2521 would be determinative of Land Registration Case No. Q-11564 (99). The basic issue in the former is whether the promissory note and mortgage agreement executed between petitioners and private respondent ACC are valid. In the latter case, the issue is whether respondent, armed with a TCT in its name, is entitled to a writ of possession. Clearly, the two cases can proceed separately and take their own direction independently of each other. In the present case, petitioners cannot anchor their case on the purported interest they have, as owners, over the land and the improvements thereon. They have been stripped of their rights over the property when, as mortgagors, they failed to redeem it after foreclosure took place. A mortgagor has only one year after registration of sale with the Register of Deeds within which to redeem the foreclosed real estate.27 After that one-year period, he loses all his interests over it. This is in consonance with Section 78 of Republic Act 337, otherwise known as the "General Banking Act," which provides: SEC. 78. In the event of foreclosure, whether judicially or extrajudicially, of any mortgage on real estate which is security for any loan granted before the passage of this Act or under the provisions of this Act, the mortgagor or debtor whose real property has been sold at public auction, judicially or extrajudicially, for the full or partial payment of an obligation to any bank, banking, or credit institution, within the purview of this Act, shall have the right, within one year after the sale of the real estate as a result of the foreclosure of the respective mortgage, to redeem the property by paying the amount fixed by the court in the order of execution (Emphasis supplied.) Likewise, Section 6 of Act 3135 states: SEC. 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of the sale; (Emphasis supplied.) Well established is the rule that after the consolidation of title in the buyers name, for failure of the mortgagor to redeem, the writ of possession becomes a matter of right.28 Its issuance to a purchaser in an extrajudicial foreclosure is merely a ministerial function.29The writ of possession issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond. The judge issuing the writ following these express provisions of law neither exercises his official discretion nor judgment.30 As such, the court granting the writ cannot be charged with having acted without jurisdiction or with grave abuse of discretion. Petitioners cite the 1987 case of Cometa vs. IAC,31 to bolster their argument that a writ of possession should not be granted in the light of a pending case for annulment of the foreclosure sale wherein the properties were sold at an unusually low price. We note that petitioners reliance thereon is as flawed as their citation thereof.32 In said case, there was a pending action where the validity of the levy and sale of the properties in question were directly put in issue, which is not the case here. Special Civil Case No. 93-2521 pending before the Makati RTC for reformation of instrument is not the pending case as contemplated in Cometa because (1) the sale and levy of the property are not directly put in issue, and (2) the Makati RTC could not have taken cognizance of the foreclosure proceedings of the Quezon City property for lack of jurisdiction. A direct action for annulment of the foreclosure sale of the subject property should have been filed in the RTC of Quezon City where the property is located. More instructive is the 1997 case of Arcega vs. CA,33 where we held that the purchaser in a foreclosure sale is entitled to possession of the property: Respondent banks right to possess the property is clear and is based on its right of ownership as a purchaser of the properties in the foreclosure sale to whom title has been conveyed. Under Section 7 of Act No. 3135 and Section 35 [now Section 33] of Rule 39, the purchaser in a foreclosure sale is entitled to possession of the property. The bank in this case has a better right to possess the subject property because of its title over the same. (Emphasis supplied.) If only to stress the writs ministerial character, we have, in a case more recent than Cometa, disallowed injunction prohibiting its issuance,34 just as we have held that its issuance may not be stayed by a pending action for annulment of mortgage or the foreclosure itself.35 Guided by the foregoing principles, until the foreclosure sale of the property in question is annulled by a court of competent jurisdiction, petitioners are bereft of valid title and right to prevent the issuance of a writ of possession to respondent corporation. Until then, it is the trial courts ministerial function to grant the possessory writ to said corporation. No error could be attributed to the respondent appellate court for affirming the trial courts order in favor of private respondent, Advance Capital Corporation. WHEREFORE, the instant petition is DENIED for lack of merit. The challenged decision of the Court of Appeals dated December 20, 1999 in CA-G.R. SP No. 54949 is AFFIRMED. Costs against petitioners. SO ORDERED. G.R. No. 154355 May 20, 2004 Spouses REMPSON SAMSON and MILAGROS SAMSON; and REMPSON REALTY & DEVELOPMENT CORPORATION petitioners, vs. Judge MAURICIO M. RIVERA, in His Capacity as Presiding Judge of the Regional Trial Court of Antipolo City, Branch 73; Atty. JOSELITA MALIBAGO-SANTOS, in Her Capacity as Ex Officio Sheriff, RTC of Antipolo City; and LENJUL REALTY CORPORATION, respondents. DECISION PANGANIBAN**, J.: In denying the Petition, this Court applies the well-entrenched rule that the buyer in an extrajudicial foreclosure sale is entitled to possession of the purchased property. Any question regarding the regularity and validity of the mortgage and foreclosure sale may be determined only after the issuance of the writ of possession. The Case Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to set aside the March 7, 2002 Resolution2 and the July 18, 2002 Resolution3 of the Court of Appeals (CA) in CA-GR SP No. 69266. The March 7, 2002 Resolution disposed as follows: "WHEREFORE, the instant petition is DISMISSED."4 The July 18, 2002 Resolution denied reconsideration. The Facts The pertinent facts are undisputed. Petitioner Spouses Rempson and Milagros Samson incurred from Far East Bank and Trust Company (FEBTC) loan obligations, the principal of which amounted to fifty-five million pesos (P55,000,000).5 On October 10, 1994 and February 22, 1996, in order to secure the payment of the loan obligations, Spouses Samson executed in favor of FEBTC two real estate mortgages covering five parcels of commercial property located at Antipolo City, Rizal.6 Petitioner spouses failed to settle their loan obligations. Thus, on May 16, 2000, FEBTC filed an Application for Extra-Judicial Foreclosure of Real Estate Mortgage7 before the Office of the Clerk of Court and Ex-Officio Sheriff of the Regional Trial Court (RTC) of Antipolo City.8 In their application, FEBTC requested the said office to foreclose the two mortgages extrajudicially, in the manner and form prescribed by Act 3135, as amended, to satisfy the debt of P72,219,158.45, inclusive of interest, penalties and other charges.9 Acting on the application, the Office of the Clerk of Court and Ex-Officio Sheriff issued a Notice of Sheriff Sale dated May 19, 2000, 10 setting the foreclosure sale on June 22, 2000.11 There was only one bidder during the foreclosure sale, so in accordance with AM 99-10-05-0,12 the sheriff postponed the auction to July 5, 2000.13 On July 5, 2000, the auction sale proceeded with two bidders participating -- FEBTC and Lenjul Realty and Development Corporation, with the latter declared as the highest bidder in the amount of eighty million pesos (P80,000,000).14 On July 11, 2000, a Certificate of Sheriffs Sale was issued confirming the sale of the foreclosed properties to the winning bidder.15 Shortly thereafter, the Certificate of Sale was registered with the Registry of Deeds of Antipolo City. 16 On February 19, 2001, new Certificates of Title over the foreclosed properties were issued by the Register of Deeds of Antipolo City in favor of Lenjul Realty Corporation.17

On April 3, 2001, Private Respondent Lenjul Realty filed a Petition for the Issuance of a Writ of Possession, which sought an ex parte issuance of a writ of possession over the foreclosed properties.18 The Petition was docketed as Land Registration Case No. 01-2698 and raffled to Branch 73 presided by Judge Mauricio M. Rivera.19 On June 11, 2001 and June 15, 2001, Spouses Samson and Rempson Corporation filed their respective Answer/Opposition.20 While the Petition was pending, Spouses Samson and Rempson Corporation filed with the Antipolo City RTC, an action for Annulment of Extra-Judicial Foreclosure and/or Nullification of Sale and the Certificates of Title, plus Reconveyance and Damages with Prayer for a Temporary Restraining Order and/or Writ of Preliminary Injunction. Petitioners filed it against Lenjul Realty Corporation, FEBTC, Bank of the Philippine Islands, Joselita Malibao-Santos in her capacity as the clerk of court and ex officio sheriff of the Antipolo City RTC, and the Register of Deeds of Antipolo City. The case was docketed as Civil Case No. 01-6219 and raffled to Branch 71 presided by Judge Felix S. Caballes.21 On August 15, 2001, upon motion of Petitioner Rempson Realty and Development Corporation, Judge Caballes issued an Order directing the consolidation of the civil case with the land registration case.22 On September 18, 2001, Judge Rivera issued an order denying the consolidation of the Petition for Writ of Possession and the civil case for annulment of foreclosure.23 On October 22, 2001 and December 4, 2001, respectively, Rempson Corporation and Spouses Samson moved for a reconsideration of the September 18, 2001 Order denying consolidation.24 On November 5, 2001, Judge Rivera gave due course to the Petition for the Issuance of a Writ of Possession and denied the Opposition of Spouses Samson and Rempson Corporation.25 Thus, they filed their respective Motions for Reconsideration on December 4, 2001 and December 7, 2001.26 On February 11, 2002, Judge Rivera denied reconsideration of the Order giving due course to the Petition for the Issuance of the Writ of Possession and directed the issuance of such writ of possession.27 On February 20, 2002, Judge Rivera issued an Order granting petitioners Motion for Reconsideration with regard to the September 18, 2001 Order denying the consolidation of cases.28 On February 26, 2002, a Writ of Possession29 was issued directing the sheriff of the Antipolo City RTC to place Lenjul Realty Corporation in physical possession of the foreclosed properties. On the same date, the sheriff issued a Notice to Vacate30 addressed to Rempson Corporation, ordering it to leave the properties on or before March 2, 2002. On February 22, 2002, petitioners filed with the Court of Appeals the aforesaid Special Civil Action for Certiorari with Prohibition/Mandamus under Rule 65 with an Application for Issuance of a Writ of Preliminary Injunction and/or Temporary Restraining Order to annul the November 5, 2001 and the February 11, 2002 Orders of Judge Rivera.31 Ruling of the Court of Appeals The Court of Appeals ruled that certiorari was improper, because there was an adequate remedy in the ordinary course of law. Citing Section 8 of Act No. 3135, it opined that petitioners remedy was to file a petition to set aside the foreclosure sale and to cancel the writ of possession in LR Case No. 01-2698. The CA further noted that certiorari was premature inasmuch as petitioners had failed to file a motion for reconsideration of the Order directing the issuance of the writ of possession.32 In denying the Motion for Reconsideration, the Court of Appeals held that the issuance of a writ of possession was a ministerial function that was done upon the filing of the proper motion and the approval of the corresponding bond.33 It further ruled that prohibition did not lie to enjoin the implementation of the writ.34 Hence this Petition.35 The Issues In their Memorandum, petitioners assign the following issues for our consideration: "1.) Whether or not the Court of Appeals had erroneously affirmed the ruling of x x x Judge Rivera ordering the immediate issuance of a writ of possession in favor of private respondent Lenjul Realty Corporation without first requiring presentation of evidence and formal offer thereof; "2.) Whether or not the Court of Appeals had erroneously affirmed the ruling of x x x Judge Rivera upholding the validity of the issuance of new titles over the foreclosed properties in the name of Private Respondent Lenjul Realty Corporation despite the fact that the consolidation of ownership therein was done prior to the expiration of the 1-year period of redemption. "3.) Whether or not the Court of Appeals had erroneously affirmed the ruling of x x x Judge Rivera upholding the now 3-month period of redemption for juridical mortgagors under the General Banking Act of Year 2000 and the application of said law retroactively as to violate the equal protection clause of the [n]ew Constitution and the prohibition therein on non-impairment of contracts. "4.) Whether or not the Court of Appeals had erroneously affirmed the ruling of x x x Judge Rivera refusing consolidation of the annulment case pending in the sala of Judge Caballes with the case below despite the fact that petitioners had already contested Private Respondent Lenjul Realty Corporations presumed ownership over the foreclosed properties so that the issue of such presumed ownership should first be resolved before the petition for writ of possession is heard. "5.) Whether or not the Court of Appeals had erroneously affirmed the ruling of x x x Judge Rivera giving due course to the petition for writ of possession despite the fact that Private Respondent Lenjul Realty Corporation was not the winning bidder at the foreclosure sale, nor a transferee and/or successor-in-interest of the rightful winning bidder Lenjul Realty and Development Corporation. "6.) Whether or not the Court of Appeals had erroneously affirmed the ruling of x x x Judge Rivera ignoring and disregarding existing rules of procedure and jurisprudence that foreclosed properties, consisting of separate lots covered by individual transfer certificates of title, should be sold separately and not en masse. "7.) Whether or not the Court of Appeals had erred in dismissing the special civil action for certiorari on grounds of perceived technicalities and/or alleged procedural imperfections rather than on its merits."36 The issues to be addressed in this case are as follows: (1) whether the trial court committed grave abuse of discretion in granting the Petition for the Issuance of a Writ of Possession; and (2) whether the filing of a Petition for Certiorari with the Court of Appeals was the proper remedy. The Courts Ruling The Petition has no merit. First Issue: Writ of Possession The Court of Appeals correctly sustained the issuance of the Writ of Possession. The issuance of the Writ is explicitly authorized by Act 313537 (as amended by Act 4118), which regulates the methods of effecting an extrajudicial foreclosure of mortgage.38 Section 7 thereof provides: "Section 7. Possession during redemption period. In any sale made under the provisions of this Act, the purchaser may petition the [Regional Trial Court] where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately." Entitlement to Writ of Possession Under the provision cited above, the purchaser in a foreclosure sale may apply for a writ of possession during the redemption period by filing for that purpose an ex parte motion under oath, in the corresponding registration or cadastral proceeding in the case of a property with torrens title. Upon the filing of such motion and the approval of the corresponding bond, the court is expressly directed to issue the writ.39 This Court has consistently held that the duty of the trial court to grant a writ of possession is ministerial.40 Such writ issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond. No discretion is left to the trial court. 41 Any question regarding the regularity and validity of the sale, as well as the consequent cancellation of the writ, is to be determined in a subsequent proceeding as outlined in Section 8 of Act 3135.42 Such question cannot be raised to oppose the issuance of the writ, since the proceeding is ex parte. 43The recourse is available even before the expiration of the redemption period provided by law and the Rules of Court.44 The purchaser, who has a right to possession that extends after the expiration of the redemption period, 45becomes the absolute owner of the property when no redemption is made. Hence, at any time following the consolidation of ownership and the issuance of a new transfer certificate of title in the name of the purchaser, he or she is even more entitled to possession of the property.46 In such a case, the bond required under Section 7 of Act 3135 is no longer necessary, since possession becomes an absolute right of the purchaser as the confirmed owner.47 The Petition for Writ of Possession Not Stayed by the Annulment Case This Court has long settled that a pending action for annulment of mortgage or foreclosure does not stay the issuance of a writ of possession. 48 Therefore, the contention of petitioners that the RTC should have consolidated Civil Case No. 01-6219 with LR Case No. 01-2698 and resolved the annulment case prior to the issuance of the Writ of Possession is unavailing. Their reliance on Active Wood Products Co., Inc. v. Court of Appeals 49 is misplaced. In that case, the sole issue was the consolidation of a civil case regarding the validity of the mortgage and a land registration case for the issuance of a writ of possession. It did not declare that the writ of possession must be stayed until the questions on the mortgage or the foreclosure sale were resolved. Moreover, the issue of consolidation in the present case has become moot, considering that the trial court has already granted it. Second Issue: Proper Remedy The Court of Appeals correctly declared that petitioners pursued the wrong remedy. A special civil action for certiorari could be availed of only if the lower tribunal has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and if there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law.50

No Grave Abuse of Discretion There is grave abuse when the court -- in the exercise of its judgment -- acts in a capricious, whimsical, arbitrary or despotic manner equivalent to acting with lack of jurisdiction.51 Considering that the trial court issued the Writ of Possession in compliance with the express provisions of Act 3135, it cannot be charged with having acted in excess of its jurisdiction or with grave abuse of discretion.52 Since there was no grave abuse of discretion, petitioner should have filed an ordinary appeal instead of a petition for certiorari. In GSIS v. CA,53 this Court held that "the wisdom or soundness of the x x x order granting [the] writ of possession x x x is a matter of judgment [in] which the remedy is ordinary appeal."54 An error of judgment committed by a court in the exercise of its legitimate jurisdiction is not the same as "grave abuse of discretion." 55Errors of judgment are correctible by appeal, while those of jurisdiction are reviewable by certiorari.56 Available Remedy Section 8 of Act 3135 provides the plain, speedy, and adequate remedy in opposing the issuance of a writ of possession.57 The provision reads: "Section 8. Setting aside of sale and writ of possession. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of possession cancelled, specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety-six; but the order of possession shall continue in effect during the pendency of the appeal." (Emphasis supplied) A party may petition for the setting aside of a foreclosure sale and for the cancellation of a writ of possession in the same proceedings where the writ of possession was requested. In petitioners case, the filing of the Petition is no longer necessary because the pendency of Civil Case No. 01-6219 (which was consolidated with the present case) already challenged the foreclosure sale. Pending proceedings assailing the issuance of the writ, the purchaser in a foreclosure sale is entitled to possession of property. If the trial court later finds merit in a petition to set the writ aside, it shall dispose in favor of the mortgagor the bond furnished by the purchaser.58 It should also be noted that prior to the filing of a petition for certiorari, a motion for reconsideration is generally required.59 Petitioner may have filed a Motion for Reconsideration with regard to the trial courts Order giving due course to the Petition, but not with regard to the Order directing the issuance of a writ of possession. Finally, petitioners allegation that the RTC issued the Writ of Possession despite failing to receive evidence is unsupported by the record. The documents submitted to this Court show sufficient basis for the trial court to rule accordingly. Despite the ex parte nature of the proceedings, and aside from the oral arguments, the RTC allowed petitioners to file pleadings to oppose the Petition for the issuance of the Writ of Possession. Other Issues The other issues raised by petitioners are factual matters which, subject to certain exceptions not applicable here, 60 this Court does not review. Moreover, petitioners rely on factual matters on which the trial court has yet to make any finding. The tenability of their arguments should be ventilated in Civil Case No. 01-6219, an "Annulment of Extra-Judicial Foreclosure and/or Nullification of Sale and the Certificates of Title, plus Reconveyance and Damages." Those factual issues cannot be ruled upon in these proceedings. WHEREFORE, the Petition is DENIED, and the assailed Resolutions of the Court of Appeals AFFIRMED. Costs against petitioners. SO ORDERED. G.R. No. 155673 January 14, 2005 SPOUSES SALVADOR F. DE VERA and FELIZA V. DE VERA, petitioners, vs. HON. GUILLERMO P. AGLORO, Presiding Judge, RTC Branch 83 Malolos, Bulacan and BPI FAMILY SAVINGS BANK, INC., respondents. DECISION CALLEJO, SR., J.: This is a petition for review on certiorari with urgent application for temporary restraining order/preliminary injunction of the March 22, 2002 Decision 1 of the Court of Appeals (CA) in CA-G.R. SP No. 67164. On March 25, 1996, the Spouses Salvador F. De Vera and Feliza V. De Vera secured a loan in the amount ofP1,200,000.00 from the BPI Family Savings Bank, Inc. (the Bank, for brevity).2 To secure the payment thereof, the Spouses executed a Real Estate Mortgage over their property located in Guiguinto, Bulacan, with an area of 232 square meters covered by Transfer Certificate of Title (TCT) No. T-85716.3 When the Spouses De Vera defaulted in the payment of the balance of their loan amounting to P1,091,484.01 and failed to pay despite demands of the Bank, the latter filed a petition4 with the ex-officio sheriff of the Regional Trial Court (RTC) of Malolos, Bulacan, for the extrajudicial foreclosure of the real estate mortgage. At the public auction scheduled on October 9, 1998, the Bank was declared the highest bidder for the property. On October 18, 1998, the Sheriff executed a certificate of sale5 in favor of the Bank. On November 18, 1999, the Bank filed in the Office of the Register of Deeds an affidavit for the consolidation of its ownership over the property.6 Thus, on December 1, 1999, TCT No. T-133862 was issued in the name of the Bank.7 On February 11, 2000, the Spouses De Vera filed a Complaint8 for the nullification of the real estate mortgage against the Bank and the Sheriff with the RTC of Malolos, Bulacan, as well as the extrajudicial sale of the property at public auction. The Spouses prayed that, after due proceedings, judgment be rendered in their favor as follows: WHEREFORE, it is most respectfully prayed that, after hearing, judgment be rendered: 1. Setting aside the Mortgage Loan Agreement and any/all contracts, accessory or subsidiary thereto; 2. Setting aside the foreclosure proceedings and the issuance of new title to the defendant Bank; 3. Allowing the plaintiffs to pay to the defendant Bank what is legal, just and equitable under the premises; 4. Sentencing defendant Bank to pay plaintiffs the following items of damages: a. At least P500,000.00 as actual or compensatory damages; b. At least P100,000.00 as moral damages; c. At least P100,000.00 as exemplary damages; d. 25% of total recovery as attorneys fees; e. Cost of suit.9 The case was docketed as Civil Case No. 109-M-2000 and was raffled to Branch 83 of the court. On February 23, 2000, the Bank filed an Ex Parte Petition for Writ of Possession with the RTC of Malolos, Bulacan, docketed as LRC Case No. P-97-2000. The case was raffled to Branch 83 of the court. The Bank impleaded the Spouses as respondents and prayed that after an ex parte hearing, an order be issued as follows: 1. Granting petitioner a writ of possession over the properties covered by TCT No. T-133862 of the Registry of Deeds of Bulacan, together with all the improvements thereon; and 2. Ordering the Sheriff or any of his duly authorized deputies to immediately place petitioner in possession thereof. 3. Petitioner further prays for such other reliefs as may be deemed just and equitable under the premises.10 The trial court set the petition for hearing at 8:30 a.m. of August 16, 2000 at the Building of the Bulwagan ng Katarungan, Provincial Capitol Compound in Malolos, Bulacan.11 When the petition was called for hearing on August 16, 2000, no oppositor appeared. Forthwith, the trial court authorized its Branch Clerk of Court to receive the evidence of the Bank ex parte,12 and the Bank adduced its testimonial and documentary evidence ex parte on August 28, 2000. On September 8, 2000, the Spouses De Vera filed in LRC Case No. P-97-2000 an Urgent Motion to Suspend Proceedings to await the resolution of Civil Case No. 109M-2000 or for the consolidation of the two cases. The Spouses cited the rulings of this Court in Barican v. IAC13 and Sulit v. Court of Appeals .14 Opposing the motion, the Bank alleged that the pendency of Civil Case No. 109-M-2000 was not a bar to the petition for a writ of possession because the issuance of the said writ was ministerial on the part of the trial court. The petitioner cited the rulings of this Court in Ong v. Court of Appeals15 and Vaca v. Court of Appeals.16 In an Order17 dated February 13, 2001, the trial court denied the motion of the Spouses. Citing the case of Vda. de Zaballero v. CA,18 the trial court ruled that the purchaser of the foreclosed property, upon ex parte application and the posting of the required bond, has the right to acquire possession of the foreclosed property during the 12-month redemption period. According to the trial court, this is sanctioned under Section 7 of Act No. 3135, as amended by Act No. 4118. The trial court also declared that considering that the redemption period had already expired, the Bank as purchaser, can, and with more reason, demand for a writ of possession. The trial court emphasized that it is its ministerial duty to issue the writ of possession in favor of a purchaser at public auction, and that such duty could not be defeated by the pendency of a civil case, in this instance Civil Case No. 109-M-2000.19 A motion for reconsideration was filed by the Spouses De Vera which was denied in an Order20 dated September 7, 2001. The trial court cited the case of Banco Filipino Savings and Mortgage Bank v. IAC,21 which reiterated the rule that a purchaser in a foreclosed sale of mortgaged property is entitled to a writ of possession and that upon an ex parte petition of the purchaser, it is ministerial upon the trial court to issue such writ in the latters favor. It added that the pendency of a separate civil action questioning the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of the writ of possession. Aggrieved, the Spouses De Vera filed a petition for certiorari and mandamus with temporary restraining order and writ of preliminary injunction before the CA docketed as CA-G.R. SP No. 67164. Therein, they alleged that: A. PUBLIC RESPONDENT GRAVELY ABUSED HIS DISCRETION IN NOT SUSPENDING THE PETITION FOR WRIT OF POSSESSION DESPITE THE PENDENCY OF CIVIL CASE NO. 109-M-2000, WHICH IS A VIRTUAL REFUSAL TO PERFORM A BOUNDEN DUTY ENJOINED BY LAW AND JURISPRUDENCE, TENDING TO RENDER SAID CASE MOOT AND ACADEMIC, AND EXPOSING THE PETITIONERS TO GREAT AND IRREPARABLE INJURIES AS THEY STAND TO BE OUSTED FROM THEIR HOUSE AND LOT. B.

PUBLIC RESPONDENT GRAVELY ABUSED HIS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DENYING PETITIONERS MOTION FOR RECONSIDERATION DESPITE CLEAR GROUND TO RECONSIDER THE ORDER DATED FEBRUARY 11, 2001. The Bank posited that Section 7 of Act No. 3135, as amended by Act No. 4118, authorizes it to obtain a writ of possession by filing a petition under oath in the registration or cadastral proceedings in the form of an ex parte motion. It further emphasized that the issuance of a writ of possession is a ministerial duty of the trial court, as held in Spouses Ong v. Court of Appeals .22 On March 22, 2002, the CA rendered a decision denying due course to and dismissing the petition. The dispositive portion reads: WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and accordingly DISMISSED, for lack of merit.23 The CA ruled that the respondent judge did not act with grave abuse of discretion when he denied the petitioners motion to suspend proceedings. It reasoned that since the subject parcel of land (with all its improvements) was not redeemed within one (1) year from the registration of the extrajudicial foreclosure sale, it follows that the bank, as purchaser thereof, acquired an absolute right to the writ of possession. It emphasized that the land registration court has the ministerial duty to issue the writ of possession upon mere motion, conformably to Section 7, Act No. 3135, as amended. Thus, the CA found that the Spouses De Vera failed to show that the injunctive relief prayed for was warranted. The Spouses filed a motion for reconsideration which the appellate court denied in a Resolution24 dated October 15, 2002. The Spouses forthwith filed their petition for review on certiorari under Rule 45 of the Rules of Court assailing the decision and the October 15, 2002 Resolution of the CA, asserting that: A. THE COURT OF APPEALS ERRED IN NOT SUSPENDING THE PROCEEDINGS IN LRC CASE NO. N-3507 BECAUSE OF THE PENDENCY OF CIVIL CASE NO. 109-M-2000 FILED BY PETITIONERS SEEKING THE NULLITY, NOT ONLY OF THE FORECLOSURE AND AUCTION SALE, BUT ALSO OF THE MORTGAGE ITSELF.25 B. THE RESPONDENT JUDGE SHOULD [HAVE] CONSOLIDATED THE P-97-2000 LRC CASE NO. 3507 WITH CIVIL CASE NO. 109-M-2000 (BRANCH 83, RTC, BULACAN).26 The petition has no merit. Section 6 of Act No. 313527 provides that the mortgagor or his successor-in-interest may redeem the foreclosed property within one (1) year from the registration of the sale with the Register of Deeds. Under Section 728 of the law, if the mortgagor fails to redeem the property, the buyer at public auction may file, with the RTC in the province or place where the property or portion thereof is located, an ex parte motion for the issuance of a writ of possession within one (1) year from the registration of the Sheriffs Certificate of Sale, and the court shall grant the said motion upon the petitioners posting a bond in an amount equivalent to the use of the property for a period of twelve (12) months. On the strength of the writ of possession, the Sheriff is duty-bound to place the buyer at public auction in actual possession of the foreclosed property.29 After the one-year period, the mortgagor loses all interest over it.30 The purchaser, who has a right to possession that extends after the expiration of the redemption period, becomes the absolute owner of the property when no redemption is made. 31 Thus, the bond required under Section 7 of Act No. 3135 is no longer needed. The possession of land becomes an absolute right of the purchaser as confirmed owner.32 The purchaser can demand possession at any time following the consolidation of ownership in his name and the issuance to him of a new transfer certificate of title. After the consolidation of title in the buyers name for failure of the mortgagor to redeem the property, the writ of possession becomes a matter of right. Its issuance to a purchaser in an extrajudicial foreclosure sale is merely a ministerial function.33 In the present case, the petitioners-mortgagors failed to redeem the property within one (1) year from the registration of the Sheriffs Certificate of Sale with the Register of Deeds. The respondent, being the purchaser of the property at public auction, thus, had the right to file an ex parte motion for the issuance of a writ of possession; and considering that it was its ministerial duty to do so, the trial court had to grant the motion and to thereafter issue the writ of possession. The bare fact that the petitioners were impleaded in the ex parte petition for a writ of possession filed by the respondent did not alter the summary nature of the proceedings in Act No. 3135. Indeed, there was no need for the respondent to implead the petitioners as parties-respondents in its petition with the RTC. Hence, the petitioners cannot claim that they were denied due process when the RTC took cognizance of the respondents petition without prior service of copies of the petition and of the notice of hearing thereof on them. Neither was there a need for the court to suspend the proceedings merely and solely because the petitioners filed a complaint in the RTC for the nullification of the real estate mortgage, the sale at public auction and the Sheriffs Certificate of Sale issued in favor of the respondent. First. An ex parte petition for the issuance of a possessory writ under Section 7 of Act No. 3135 is not, strictly speaking, a "judicial process" as contemplated in Article 433 of the Civil Code.34 It is a judicial proceeding for the enforcement of ones right of possession as purchaser in a foreclosure sale. It is not an ordinary suit filed in court, by which one party "sues another for the enforcement of a wrong or protection of a right, or the prevention or redress of a wrong." It is a non-litigious proceeding authorized in an extrajudicial foreclosure of mortgage pursuant to Act No. 3135, as amended.35 It is brought for the benefit of one party only, and without notice to, or consent by any person adversely interested.36 It is a proceeding where the relief is granted without an opportunity for the person against whom the relief is sought to be heard.37 No notice is needed to be served upon persons interested in the subject property. Hence, there is no necessity of giving notice to the petitioners since they had already lost all their interests in the property when they failed to redeem the same.38 Second. As a rule, any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of execution.39 The right of the purchaser to have possession of the subject property would not be defeated notwithstanding the pendency of a civil case seeking the annulment of the mortgage or of the extrajudicial foreclosure.40 Indeed, under Section 8 of Act No. 3135,41 even if the mortgagor files a petition assailing the writ of possession granted to the buyer and the sale at public auction within thirty (30) days from the issuance of a writ of possession in favor of the buyer at public auction of the property, and the court denies the same, the buyer may appeal the order of denial. However, the buyer at public auction remains in possession of the property pending resolution of the appeal. We have consistently ruled that it is the ministerial duty of the court to issue writ of possession in favor of the purchaser in a foreclosure sale. The trial court has no discretion on this matter.42 On the issue of whether the RTC was mandated to consolidate LRC Case No. P-97-2000 and Civil Case No. 109-M-2000, we agree with the following ruling of the CA: Neither can the prayer for mandamus be granted under the present circumstances. The reason is simple: Mandamus as a remedy applies only where petitioners right is founded clearly in law and not when it is doubtful. It will not issue to give to him something to which he is not clearly and conclusively entitled. Here, respondent JUDGEs ministerial duty in issuing the questioned issuance of the writ of possession finds ample support not only in the jurisprudence laid down by the Supreme Court in Navarra, but also in the case of Philippine National Bank v. Adil: "The rule, therefore, is that after the redemption period has expired, the purchaser of the property has the right to be placed in possession thereof. Accordingly, it is the inescapable duty of the Sheriff to enforce the writ of possession especially as in this case, a new title has already been issued in the name of the purchaser." (Emphasis supplied) Therefore, petitioners, who failed to establish a clear right, cannot compel respondent JUDGE to deviate from his duty to issue the writ of possession which is ministerial in nature, not requiring the exercise of sound discretion, especially since, as we have said, the redemption period has expired and a new title has already been issued in the name of BPI. As correctly pointed out in the assailed Order dated February 13, 2001: "x x x it is its ministerial duty to issue the writ of possession in favor of a purchaser in a foreclosure sale and the right of the petitioner cannot be defeated notwithstanding the pendency of Civil Case No. 109-M-2000 being invoked by herein oppositor."43 Section 1, Rule 31 of the Rules of Court, as amended, reads: Section 1. Consolidation. When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay. It is plain as day that the trial court is not mandated to consolidate two or more related cases. The trial court is vested with discretion whether or not to consolidate two or more cases.44 The grant of discretion to the trial court is incompatible with the clear legal duty, the existence of which is essential to warrant the issuance of a writ of mandamus. It bears stressing that consolidation is aimed to obtain justice with the least expense and vexation to the litigants. The object of consolidation is to avoid multiplicity of suits, guard against oppression or abuse, prevent delays and save the litigants unnecessary acts and expense.45 Consolidation should be denied when prejudice would result to any of the parties or would cause complications, delay, prejudice, cut off, or restrict the rights of a party.46 In the present case, the trial court acted in the exercise of its sound judicial discretion in denying the motion of the petitioners for the consolidation of LRC Case No. P-97-2000 with Civil Case No. 109-M-2000. First. The proceedings in LRC Case No. P-97-2000 is not, strictly speaking, a judicial process and is a non-litigious proceeding; it is summary in nature. In contrast, the action in Civil Case No. 109-M-2000 is an ordinary civil action and adversarial in character. The rights of the respondent in LRC Case No. P-97-2000 would be prejudiced if the said case were to be consolidated with Civil Case No. 109-M-2000, especially since it had already adduced its evidence. Second. The matter of whether or not consolidation is proper has certainly become moot and academic. The RTC had already issued an order granting the writ of possession in favor of the respondent herein, and declared that the latter had already been placed in actual possession of the property per its Order of November 8, 2002. The petitioners herein had already appealed the said order of the RTC granting the writ of possession to the CA on December 2, 2002. In the meantime, Civil Case No. 109-M-2000 is still pending trial in Branch 83 of the RTC of Malolos, Bulacan. IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. The decision of the Court of Appeals in CA-G.R. SP No. 67164 is AFFIRMED. Costs against the petitioners. SO ORDERED. G.R. No. 86679 July 23, 1991 PHILIPPINE NATIONAL BANK, petitioner, vs. INTERNATIONAL CORPORATE BANK and COURT OF APPEALS, * respondents. Domingo A. Santiago, Jr., Nicolas C. Alino, Cesar T. Basa and Evelyn A. Alvarez for petitioner.

A.M. Perez & Associates for private respondent. REGALADO, J.:p Challenged in this petition for review on certiorari is the decision of the Court of Appeals, dated January 31, 1989, in C.A.-G.R. CV No. 12342 affirming the decision of the Regional Trial Court of Alaminos, Pangasinan, acting as a land registration court, which dismissed petitioner's application for the cancellation of annotations of an encumbrance on its transfer certificates of title. 1 As found by respondent court and sustained by the record, on May 7, 1985, petitioner filed with the Regional Trial Court of Alaminos, Pangasinan and docketed therein as LRC No. A-229, Record No. N-33399, a petition for the cancellation of a memorandum of encumbrance annotated upon its sixteen (16) transfer certificates of title. As a backdrop, petitioner alleged that spouses Archimedes J. Balingit and Ely Suntay executed in its favor the following real estate mortgages, to wit: 2. On December 16, 1966, a real estate mortgage was executed and registered on December 19, 1966 with the Register of Deeds of Alaminos, Pangasinan. The corresponding annotations were made on Transfer Certificates of Title Nos. 49020 and 49021 covering the mortgaged parcels of land as entry No. 264514 therein. 3. On September 14, 1967, an amendment of mortgage was executed in favor of the petitioner and registered on September 15, 1967 with the Register of Deeds of Alaminos, Pangasinan. The corresponding annotations were made on the aforesaid Transfer Certificates of Title Nos. 49020 and 49021 as entry No. 282423 therein. 4. On August 1, 1968, another real estate mortgage was executed and registered on August 2, 1968 with the Register of Deeds of Alaminos, Pangasinan. The corresponding annotations were made on Original Certificates of Title Nos. 18988, 18987, 19020, 19021, 19017, 19015, 18989, 19018, 19019, 19016, 18983, 18984, 18985 and 18986 covering the mortgaged parcels of land as entry No. 302341 therein. 5. On October 31, 1968, a real estate mortgage was executed in favor of the petitioner and registered on November 4, 1968 with the Register of Deeds of Alaminos, Pangasinan. The corresponding annotations were made on the Original Certificates of Title with numbers as enumerated in the immediately preceding paragraph as entry No. 306445 therein. 2 Annotated subsequent to the foregoing memoranda of the mortgage lien of petitioner on the above-mentioned properties is a "Notice of Levy re Civil Case No. 69035, CFI-Manila, Continental Bank vs. Archimedes J. Balingit and Ely Suntay Balingit" for a total sum of P96,636.10, as entry No. 285511 at the back of the titles enumerated in paragraph 2 and as entry No. 308262 in the titles enumerated in paragraph 4 of said petition. 3 For failure of the Balingit spouses to settle their loan obligation with petitioner, the latter extrajudicially foreclosed under Act 3135, as amended, the sixteen (16) parcels of land covered by the real estate mortgages executed by the said spouses in favor of petitioner. The sheriffs certificate of sale was registered on April 3, 1972 with the Register of Deeds, with a memorandum thereof duly annotated at the back of the aforesaid certificates of title of the foreclosed properties. Upon the expiration of the one-year legal redemption period, petitioner consolidated in its name the ownership of all the foregoing mortgaged properties for which new transfer certificates of title were issued in its name. However, the annotation of the notice of levy in favor of private respondent was carried over to and now appears as the sole annotated encumbrance in the new titles of petitioner, that is, Transfer Certificates of Title Nos. 1228, 1229, 1230, 1231, 1232, 1236, 1237, 1238, 1239, 1240, 1242, 1243, 1244, 1216, 1217 and 1218. 4 On May 28, 1986, private respondent International Corporate Bank, as successor in interest of the defunct Continental Bank, filed an opposition to the petition contending that, since it was not informed of the extrajudicial foreclosure proceedings, the new and consolidated titles over the foreclosed properties issued in favor of herein petitioner are null and void. 5 On August 28, 1986, the lower court rendered a decision, denying the petition for lack of jurisdiction, the pertinent part whereof reads: Section 108 of Presidential Decree No. 1529 (Section 112 of Act 496) under which the petitioner seeks remedy has been interpreted by the Supreme Court that the relief therein can only be granted if there is no adverse claim or serious objection on the part of any party in interest otherwise the case becomes controversial and should be threshed out in an ordinary case or in the case where the incident properly belongs. Accordingly, an annotation of an adverse claim may be ordered cancelled only where the issue involved is not controversial or so disputed as to warrant that it be litigated in an ordinary action. (Tangunan and Tangunan vs. Republic of the Philippines, 94 Phil. 171; Asturias Sugar Central vs. Segovia, 190 Phil. 383; RP vs. Laperal, 108 Phil. 860; Abustan vs. Ferrer and Golez, 63 O.G. 34, August 21, 1967 and Cheng vs. Lim (Second Division), L-27614 jointly decided with L-27148, June 29, 1977). Considering that the issue of whether the notice of levy should be cancelled as sought by the petitioner becomes controversial in view of the opposition and adverse claim of the oppositor Interbank, this Court, as land registration court and in accordance with the jurisprudence above cited, has no jurisdiction to entertain and act on the contested petition. The cancellation prayed for should be threshed out in an ordinary case. WHEREFORE, the petition is hereby DENIED, without prejudice to the filing of an ordinary case by the petitioner. SO ORDERED. 6 Not satisfied therewith, petitioner appealed to respondent Court of Appeals, asserting that the lower court erred in ruling that (1) there is an adverse claim or serious objection on the part of oppositor rendering the case controversial and therefore should be threshed out in an ordinary case; and (2) it has no jurisdiction to entertain and act on the contested petition. 7 On January 13, 1989, respondent court rendered judgment affirming the appealed decision, 8 as a consequence of which petitioner is now before us contending that: I REGIONAL TRIAL COURTS (RTC's) HAVE JURISDICTION TO ACT UPON PETITIONS FILED UNDER SEC. 108 OF "THE PROPERTY REGISTRATION DECREE" (P.D. 1529), WHETHER THEY ARE ACTING AS A LAND REGISTRATION COURT OR A COURT OF GENERAL JURISDICTION. II PURCHASER OF REAL PROPERTY AT AN EXTRAJUDICIAL FORECLOSURE SALE ACQUIRES SUCH PROPERTY FREE FROM ALL LIENS AND ENCUMBRANCES. THE ACTION OF REGISTER OF DEEDS IN CARRYING THE ANNOTATION OF THE NOTICES OF LEVY OVER TO THE NEW TITLE CERTIFICATES ISSUED IN PURCHASER'S FAVOR IS VOID AND ILLEGAL. III SECTION 108 OF "PROPERTY REGISTRATION DECREE" EXPRESSLY ALLOWS THE SUMMARY AMENDMENT OF CERTIFICATES OF TITLE WHENEVER INTEREST ANNOTATED HAS "TERMINATED AND CEASED." IV REMAND OF PROCEEDINGS TO TRIAL COURT TO DETERMINE PRIORITY OF LIENS BETWEEN PETITIONER AND RESPONDENT MAY BE UNNECESSARY AS FACTUAL BASIS OF PNB'S SUPERIOR LIEN IS BORNE OUT AND DISCLOSED BY THE RECORDS OF CASE BEFORE THIS TRIBUNAL. 9 We find the foregoing contentions meritorious. The rule that was adopted by respondent Court of Appeals in its decision to the effect that a regional trial court sitting as a land registration court has limited jurisdiction and has no authority to resolve controversial issues, which should accordingly be litigated in a court of general jurisdiction, no longer holds. We have held that under Section 2 of Presidential Decree No. 1529 (The Property Registration Decree) which took effect on June 11, 1979, regional trial courts acting as land registration courts now have exclusive jurisdiction not only over applications for original registration of title to lands, including improvements and interests therein, but also over petitions filed after original registration of title, with power to hear and determine all questions arising upon such applications or petitions. 10 That definitive ruling was precisely to correct the position taken therein by the Court of Appeals that the court a quo has limited jurisdiction and has no authority to resolve controversial issues which should be litigated before a court of general jurisdiction. In the same case, the Court further noted that even under Act 496 (Land Registration Act), specifically Section 110 thereof, the court of first instance, sitting as a land registration court, has the authority to conduct a hearing, receive evidence, and decide controversial matters with a view to determining whether or not the filed notice of adverse claim is valid. The said doctrine was a reiteration of our earlier ruling in Averia, Jr. vs. Caguioa, etc., et al., 11 as follows: In Section 2 of the Id P.D. No. 1529, it is clearly provided that: Sec. 2. Nature of registration proceedings; jurisdiction of courts. Judicial proceedings for the registration of lands throughout the Philippines shall be in rem and shall be based on the generally accepted principles underlying the Torrens system. Courts of First Instance shall have exclusive jurisdiction over all applications for original registration of titles to lands, including improvements and interest therein, and over an petitions filed after original registration of title, with power to hear and determine all questions arising upon such applications or petitions . . . The above provision has eliminated the distinction between the general jurisdiction vested in the regional trial court and the limited jurisdiction conferred upon it by the former law when acting merely as a cadastral court. Aimed at avoiding multiplicity of suits, the change has simplified registration proceedings by conferring upon the regional trial courts the authority to act not only on applications for "original registration" but also "over all petitions filed after original registration of title, with power to hear and determine all questions arising upon such applications or petitions." Consequently, and specifically with reference to Section 112 of the Land Registration Act (now Section 108 of P.D. No. 1529), the court is no longer fettered by its former limited jurisdiction which enabled it to grant relief only in cases where there was "unanimity among the parties" or none of them raised any "adverse claim or serious objection." Under the amended law, the court is now authorized to hear and decide not only such non-controversial case but even the contentious and substantial issues, such as the question at bar, which were beyond its competence before. It is now beyond cavil, therefore, that the court below has ample jurisdiction to decide the controversy raised by the petition in LRC No. A-229, Record No. N-33399 initiated therein by petitioner. However, considering that the issue of whether the adverse claim of private respondent should be cancelled or allowed to remain as annotations on the certificates of title involved can be resolved by us in the present recourse, we agree that the remand of the case to the court of origin is no longer necessary. We have time and again laid down the rule that the remand of the case to the lower court for further reception of evidence is no longer necessary where this Court is in a position to resolve the dispute based on the records before it. In a number of cases, the Court, in the public interest and for the expeditious administration of justice, has resolved actions on the merits instead of remanding them to the trial court for further proceedings, such as where the ends of justice would not be subserved by the remand of the case. 12

In the case at bar, the right of petitioner to the relief prayed for is clear. The facto before us sufficiently show that the cancellation of the disputed annotation from the certificates of title of petitioner is justified in law. It is undisputed that private respondent is a subsequent lien holder whose rights over the mortgaged property are inferior to that of petitioner as a mortgagee. Being a subsequent lien holder, private respondent acquires only the right of redemption vested in the mortgagor, and his rights are strictly subordinate to the superior lien of the anterior mortgagee. 13 After the foreclosure sale, the remedy of the second mortgagee is limited to the right to redeem by paying off the debt secured by the first mortgage. 14 The rule is that upon a proper foreclosure of a prior mortgage, all liens subordinate to the mortgage are likewise foreclosed, and the purchaser at public auction held pursuant thereto acquires title free from the subordinate liens. Ordinarily, thereafter the Register of Deeds is authorized to issue the new titles without carrying over the annotation of subordinate liens. 15 In a case with similar features, we had earlier held that the failure of the subsequent attaching creditor to redeem, within the time allowed by Section 6 of Act 3136, the land which was sold extrajudicially to satisfy the first mortgage, gives the purchaser a perfect right to secure the cancellation of the annotation of said creditor's attachment lien on the certificates of title of said land. 16 It has likewise been declared in Bank of the Philippine Islands, etc., et al. vs. Noblejas, etc., et al., 17 that "(a)ny subsequent lien or encumbrance annotated at the back of the certificates of title cannot in any way prejudice the mortgage previously registered, and the lots subject thereto pass to the purchaser at the public auction sale free from any lien or encumbrance. Otherwise, the value of the mortgage could be easily destroyed by a subsequent record of an adverse claim, for no one would purchase at a foreclosure sale if bound by the posterior claim. . . . This alone is sufficient justification for the dropping of the adverse claim from the new certificates of title to be issued to her, as directed by respondent Commissioner in his opinion subject of this appeal." The contention of private respondent in its opposition that the extrajudicial foreclosure is null and void for failure of petitioner to inform them of the said foreclosure and the pertinent dates of redemption so that it can exercise its prerogatives under the law 18 is untenable. There being obviously no contractual stipulation therefor, personal notice is not necessary and what governs is the general rule in Section 3 of Act 3135, as amended, which directs the posting of notices of the sale in at least three (3) public places of the municipality where the property is situated, and the publication thereof in a newspaper of general circulation in said municipality. Finally, the levy in favor of private respondent's predecessor in interest arising from the judgment in Civil Case No. 69035 of the Court of First Instance of Manila, appearing at the back of petitioner's certificates of titles, is already without force and effect consider that the same has been annotated in the certificates of title for more than ten (10) years without being duly implemented. Properties levied upon by execution must be sold at public auction within the period of ten (10) years during which the judgment can be enforced by action. 19 WHEREFORE, the judgment of respondent Court of Appeals is hereby SET ASIDE. Instead, another judgment is hereby rendered ordering that the annotations of the notice of levy in favor of Continental Bank, now substituted by private respondent, on petitioner's Transfer Certificates of Title Nos. 1216, 1217, 1218, 1228, 1229, 1230, 1231, 1232, 1236, 1237, 1238, 1239, 1240, 1242, 1243 and 1244 should be, as they are hereby, CANCELLED. SO ORDERED. G.R. No. 154450 July 28, 2008 JOSEPH L. SY, NELSON GOLPEO and JOHN TAN, Petitioners, vs. NICOLAS CAPISTRANO, JR., substituted by JOSEFA B. CAPISTRANO, REMEDIOS TERESITA B. CAPISTRANO and MARIO GREGORIO B. CAPISTRANO; NENITA F. SCOTT; SPS. JUANITO JAMILAR and JOSEFINA JAMILAR; SPS. MARIANO GILTURA and ADELA GILTURA, Respondents. RESOLUTION NACHURA, J.: This is a petition for review on certiorari under Rule 45 of the Rules of Court of the Decision of the Court of Appeals (CA) dated July 23, 2002 in CA-G.R. CV No. 53314. The case originated from an action for reconveyance of a large tract of land in Caloocan City before the Regional Trial Court (RTC), Branch 129, Caloocan City, entitled Nicolas Capistrano, Jr. v. Nenita F. Scott, Spouses Juanito and Josefina Jamilar, Joseph L. Sy, Nelson Golpeo and John Tan, and the Register of Deeds, Caloocan City. Said case was docketed as Civil Case No. C-15791. The antecedents are as follows: Sometime in 1980, Nenita Scott (Scott) approached respondent Nicolas Capistrano, Jr. (Capistrano) and offered her services to help him sell his 13,785 square meters of land covered by Transfer Certificate of Title (TCT) No. 76496 of the Register of Deeds of Caloocan City. Capistrano gave her a temporary authority to sell which expired without any sale transaction being made. To his shock, he discovered later that TCT No. 76496, which was in his name, had already been cancelled on June 24, 1992 and a new one, TCT No. 249959, issued over the same property on the same date to Josefina A. Jamilar. TCT No. 249959 likewise had already been cancelled and replaced by three (3) TCTs (Nos. 251524, 251525, and 251526), all in the names of the Jamilar spouses. TCT Nos. 251524 and 251526 had also been cancelled and replaced by TCT Nos. 262286 and 262287 issued to Nelson Golpeo and John B. Tan, respectively. Upon further inquiries, Capistrano also discovered the following: 1. The cancellation of his TCT No. 76496 and the issuance of TCT No. 249959 to Jamilar were based upon two (2) deeds of sale, i.e., a "Deed of Absolute Sale" purportedly executed by him in favor of Scott on March 9, 1980 and a "Deed of Absolute Sale" allegedly executed by Scott in favor of Jamilar on May 17, 1990. 2. The supposed 1980 sale from him to Scott was for P150,000.00; but despite the lapse of more than 10 years thereafter, the alleged 1990 sale from Scott to Jamilar was also for P150,000.00. 3. Both deeds were presented for registration simultaneously on June 24, 1992. 4. Although the deed in favor of Scott states that it was executed on March 9, 1980, the annotation thereof at the back of TCT No. 76496 states that the date of the instrument is March 9, 1990. 5. Even if there was no direct sale from Capistrano to Jamilar, the transfer of title was made directly to the latter. No TCT was issued in favor of Scott. 6. The issuance of TCT No. 249959 in favor of Jamilar was with the help of Joseph Sy, who provided for (sic) money for the payment of the capital gains tax, documentary stamps, transfer fees and other expenses of registration of the deeds of sale. 7. On July 8, 1992, an Affidavit of Adverse Claim was annotated at the back of Jamilars TCT No. 249959 at the instance of Sy, Golpeo, and Tan under a Contract to Sell in their favor by the Jamilar spouses. Said contract was executed sometime in May, 1992 when the title to the property was still in the name of Capistrano. 8. Around July 28, 1992, upon request of the Jamilar spouses, TCT No. 249959 was cancelled and three (3) new certificates of title (TCT Nos. 251524, 251525, and 251526) all in the name of Jamilar on the basis of an alleged subdivision plan (No. Psd-13-011917) without Capistranos knowledge and consent as registered owner. The notice of adverse claim of Sy, Golpeo, and Tan was carried over to the three new titles. 9. Around August 18, 1992, Sy, Golpeo, and Tan filed Civil Case No. C-15551 against the Jamilars and another couple, the Giltura spouses, for alleged violations of the Contract to Sell. They caused a notice of lis pendens to be annotated on the three (3) TCTs in Jamilars name. Said civil case, however, was not prosecuted. 10. On January 26, 1993, a Deed of Absolute Sale was executed by the Jamilars and the Gilturas, in favor of Golpeo and Tan. Thus, TCT Nos. 251524 and 251526 were cancelled and TCT Nos. 262286 and 262287 were issued to Golpeo and Tan, respectively. TCT No. 251525 remained in the name of Jamilar.1 Thus, the action for reconveyance filed by Capistrano, alleging that his and his wifes signatures on the purported deed of absolute sale in favor of Scott were forgeries; that the owners duplicate copy of TCT No. 76496 in his name had always been in his possession; and that Scott, the Jamilar spouses, Golpeo, and Tan were not innocent purchasers for value because they all participated in defrauding him of his property. Capistrano claimedP1,000,000.00 from all defendants as moral damages, P100,000.00 as exemplary damages; and P100,000.00 as attorneys fees. In their Answer with Counterclaim, the Jamilar spouses denied the allegations in the complaint and claimed that Capistrano had no cause of action against them, as there was no privity of transaction between them; the issuance of TCT No. 249959 in their names was proper, valid, and legal; and that Capistrano was in estoppel. By way of counterclaim, they sought P50,000.00 as actual damages, P50,000.00 as moral damages, P50,000.00 as exemplary damages, and P50,000.00 as attorneys fees. In their Answer, Sy, Golpeo, and Tan denied the allegations in the complaint and alleged that Capistrano had no cause of action against them; that at the time they bought the property from the Jamilars and the Gilturas as unregistered owners, there was nothing in the certificates of title that would indicate any vice in its ownership; that a buyer in good faith of a registered realty need not look beyond the Torrens title to search for any defect; and that they were innocent purchasers of the land for value. As counterclaim, they sought P500,000.00 as moral damages and P50,000.00 as attorneys fees. In her Answer with Cross-claim, Scott denied the allegations in the complaint and alleged that she had no knowledge or any actual participation in the execution of the deeds of sale in her favor and the Jamilars; that she only knew of the purported conveyances when she received a copy of the complaint; that her signatures appearing in both deeds of sale were forgeries; that when her authority to sell the land expired, she had no other dealings with it; that she never received any amount of money as alleged consideration for the property; and that, even if she were the owner, she would never have sold it at so low a price. By way of Cross-claim against Sy, Golpeo, Tan, and the Jamilars, Scott alleged that when she was looking for a buyer of the property, the Jamilars helped her locate the property, and they became conversant with the details of the ownership and other particulars thereof; that only the other defendants were responsible for the seeming criminal conspiracy in defrauding Capistrano; that in the event she would be held liable to him, her other co-defendants should be ordered to reimburse her of whatever amount she may be made to pay Capistrano; that she was entitled to P50,000.00 as moral damages and P50,000.00 as attorneys fees from her codefendants due to their fraudulent conduct. Later, Sy, Golpeo, and Tan filed a third-party complaint against the Giltura spouses who were the Jamilars alleged co-vendors of the subject property. Thereafter, trial on the merits ensued. Subsequently, the trial court decided in favor of Capistrano. In its Decision dated May 7, 1996, adopting the theory of Capistrano as presented in his memorandum, the trial court rendered judgment as follows: 1. Declaring plaintiff herein as the absolute owner of the parcel of land located at the Tala Estate, Bagumbong, Caloocan City and covered by TCT No. 76496; 2. Ordering defendant Register of Deeds to cause the cancellation of TCT No. 251525 registered in the name of defendant Josefina Jamilar; 3. Ordering defendant Register of Deeds to cause the cancellation of TCT Nos. 262286 and 262287 registered in the names of defendants Nelson Golpeo and John B. Tan;

4. Ordering defendant Register of Deeds to cause the issuance to plaintiff of three (3) new TCTs, in replacement of the aforesaid TCTs Nos. 251525, 262286 and 262287; 5. Ordering all the private defendants in the above-captioned case to pay plaintiff, jointly and severally, the reduced amount of P400,000.00 as moral damages; 6. Ordering all the private defendants in the above-captioned case to pay to plaintiff, jointly and severally, the reduced sum of P50,000.00 as exemplary damages; 7. Ordering all the private defendants in the above-captioned case to pay plaintiffs counsel, jointly and severally, the reduced amount of P70,000.00 as attorneys fees, plus costs of suit; 8. Ordering the dismissal of defendants Sy, Golpeo and Tans Cross-Claim against defendant spouses Jamilar; 9. Ordering the dismissal of defendants Sy, Golpeo and Tans Third-Party Complaint against defendant spouses Giltura; and 10. Ordering the dismissal of the Counterclaims against plaintiff. SO ORDERED.2 On appeal, the CA, in its Decision dated July 23, 2002, affirmed the Decision of the trial court with the modification that the Jamilar spouses were ordered to return to Sy, Golpeo, and Tan the amount of P1,679,260.00 representing their full payment for the property, with legal interest thereon from the date of the filing of the complaint until full payment. Hence, this petition, with petitioners insisting that they were innocent purchasers for value of the parcels of land covered by TCT Nos. 262286 and 262287. They claim that when they negotiated with the Jamilars for the purchase of the property, although the title thereto was still in the name of Capistrano, the documents shown to them the court order directing the issuance of a new owners duplicate copy of TCT No. 76496, the new owners duplicate copy thereof, the tax declaration, the deed of absolute sale between Capistrano and Scott, the deed of absolute sale between Scott and Jamilar, and the real estate tax receipts there was nothing that aroused their suspicion so as to compel them to look beyond the Torrens title. They asseverated that there was nothing wrong in financing the cancellation of Capistranos title and the issuance of titles to the Jamilars because the money they spent therefor was considered part of the purchase price they paid for their property. In their Comment, the heirs of Capistrano, who were substituted after the latters death, reiterated the factual circumstances which should have alerted the petitioners to conduct further investigation, thus (a) Why the "Deed of Absolute Sale" supposedly executed by Capistrano had remained unregistered for so long, i.e., from March 9, 1980 up to June 1992, when they were negotiating with the Jamilars and the Gilturas for their purchase of the subject property; (b) Whether or not the owners copy of Capistranos certificate of title had really been lost; (c) Whether Capistrano really sold his property to Scott and whether Scott actually sold it to the Jamilars, which matters were easily ascertainable as both Capistrano and Scott were still alive and their names appear on so many documents; (d) Why the consideration for both the March 9, 1980 sale and the May 17, 1990 sale was the same (P150,000.00), despite the lapse of more than 10 years; (e) Why the price was so low (P10.88 per square meter, both in 1980 and in 1990) when the petitioners were willing to pay and actually paid P150.00 per square meter in May 1992; and (f) Whether or not both deeds of sale were authentic.3 In addition, the heirs of Capistrano pointed out that petitioners entered into negotiations over the property, not with the registered owner thereof, but only with those claiming ownership thereof based on questionable deeds of sale. The petition should be denied. The arguments proffered by petitioners all pertain to factual issues which have already been passed upon by both the trial court and the CA. Findings of facts of the CA are final and conclusive and cannot be reviewed on appeal, as long as they are based on substantial evidence. While, admittedly, there are exceptions to this rule such as: (a) when the conclusion is a finding grounded entirely on speculations, surmises or conjectures; (b) when the inference made is manifestly mistaken, absurd or impossible; (c) when there is grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the findings of facts are conflicting; (f) when the CA, in making its findings, went beyond the issues of the case and the same were contrary to the admissions of both the appellant and appellee.4 Not one of these exceptional circumstances is present in this case. First. The CA was correct in upholding the finding of the trial court that the purported sale of the property from Capistrano to Scott was a forgery, and resort to a handwriting expert was not even necessary as the specimen signature submitted by Capistrano during trial showed marked variance from that found in the deed of absolute sale. The technical procedure utilized by handwriting experts, while usually helpful in the examination of forged documents, is not mandatory or indispensable to the examination or comparison of handwritings.5 By the same token, we agree with the CA when it held that the deed of sale between Scott and the Jamilars was also forged, as it noted the stark differences between the signatures of Scott in the deed of sale and those in her handwritten letters to Capistrano. Second. In finding that the Jamilar spouses were not innocent purchasers for value of the subject property, the CA properly held that they should have known that the signatures of Scott and Capistrano were forgeries due to the patent variance of the signatures in the two deeds of sale shown to them by Scott, when Scott presented to them the deeds of sale, one allegedly executed by Capistrano in her favor covering his property; and the other allegedly executed by Scott in favor of Capistrano over her property, the P40,000.00 consideration for which ostensibly constituted her initial and partial payment for the sale of Capistranos property to her. The CA also correctly found the Gilturas not innocent purchasers for value, because they failed to check the veracity of the allegation of Jamilar that he acquired the property from Capistrano. In ruling that Sy was not an innocent purchaser for value, we share the observation of the appellate court that Sy knew that the title to the property was still in the name of Capistrano, but failed to verify the claim of the Jamilar spouses regarding the transfer of ownership of the property by asking for the copies of the deeds of absolute sale between Capistrano and Scott, and between Scott and Jamilar. Sy should have likewise inquired why the Gilturas had to affix their conformity to the contract to sell by asking for a copy of the deed of sale between the Jamilars and the Gilturas. Had Sy done so, he would have learned that the Jamilars claimed that they purchased the property from Capistrano and not from Scott. We also note, as found by both the trial court and the CA, Tans testimony that he, Golpeo and Sy are brothers, he and Golpeo having been adopted by Sys father. Tan also testified that he and Golpeo were privy to the transaction between Sy and the Jamilars and the Gilturas, as shown by their collective act of filing a complaint for specific performance to enforce the contract to sell.1avvphi1 Also noteworthy and something that would have ordinarily aroused suspicion is the fact that even before the supposed execution of the deed of sale by Scott in favor of the Jamilars, the latter had already caused the subdivision of the property into nine (9) lots, with the title to the property still in the name of Capistrano. Notable likewise is that the owners duplicate copy of TCT No. 76496 in the name of Capistrano had always been in his possession since he gave Scott only a photocopy thereof pursuant to the latters authority to look for a buyer of the property. On the other hand, the Jamilars were able to acquire a new owners duplicate copy thereof by filing an affidavit of loss and a petition for the issuance of another owners duplicate copy of TCT No. 76496. The minimum requirement of a good faith buyer is that the vendee of the real property should at least see the owners duplicate copy of the title. 6 A person who deals with registered land through someone who is not the registered owner is expected to look beyond the certificate of title and examine all the factual circumstances thereof in order to determine if the vendor has the capacity to transfer any interest in the land. He has the duty to ascertain the identity of the person with whom he is dealing and the latters legal authority to convey.7 Finally, there is the questionable cancellation of the certificate of title of Capistrano which resulted in the immediate issuance of a certificate of title in favor of the Jamilar spouses despite the claim that Capistrano sold his property to Scott and it was Scott who sold the same to the Jamilars. In light of the foregoing disquisitions, based on the evidence on record, we find no error in the findings of the CA as to warrant a discretionary judicial review by this Court. WHEREFORE, the petition is DENIED DUE COURSE for failure to establish reversible error on the part of the Court of Appeals. Costs against petitioners. SO ORDERED. G.R. No. 187824 : November 17, 2010 FILINVEST DEVELOPMENT CORPORATION, Petitioner, v. GOLDEN HAVEN MEMORIAL PARK, INC., Respondent. G.R. No. 188265 : November 17, 2010 GOLDEN HAVEN MEMORIAL PARK, INC., Petitioner, v. FILINVEST DEVELOPMENT CORPORATION, Respondent. DECISION ABAD, J.: These cases are about which of two real estate developers, both buyers of the same lands, acted in good faith and has a better title to the same. The Facts and the Case Petronila Yap (Yap), Victoriano and Policarpio Vivar (the Vivars), Benjamin Cruz (Cruz), Juan Aquino (Aquino), Gideon Corpuz (Corpuz), and Francisco Sobremesana (Sobremesana), and some other relatives inherited a parcel of land in Las Pias City covered by Transfer Certificate of Title (TCT) 67462 RT-1. Subsequently, the heirs had the land divided into 13 lots and, in a judicial partition, the court distributed four of the lots as follows: a) Lots 1 and 12 to Aquino; b) Lot 2 to Corpuz and Sobremesana; and (c) Lot 6 to Yap, Cruz, and the Vivars. The other lots were distributed to the other heirs. On March 6, 1989 Yap, acting for herself and for Cruz and the Vivars, executed an agreement to sell Lot 6 in favor of Golden Haven Memorial Park, Inc. (GHM), payable in three installments. On July 31, 1989 another heir, Aquino, acting for himself and for Corpuz and Sobremesana, also executed an agreement to sell Lots 1, 2, and 12 in favor of GHM, payable in the same manner. In both instances, GHM paid the first installment upon execution of the contract.

On August 4, 1989 GHM caused to be annotated a Notice of Adverse Claim on TCT 67462 RT-1. On September 20, 1989 the sellers of the four lots wrote GHM that they were still working on the titling of the lots in their names and wanted to know if GHM was still interested in proceeding with their agreements. GHM replied in the affirmative on September 21, 1989 and said that it was just waiting for the sellers titles so it can pay the second installments. Sometime in August of 1989, Filinvest Development Corporation (Filinvest) applied for the transfer in its name of the titles over Lots 2, 4, and 5 but the Las Pias Register of Deeds declined its application. Upon inquiry, Filinvest learned that Lot 8, a lot belonging to some other heir or heirs and covered by the same mother title, had been sold to Household Development Corporation (HDC), a sister company of GHM, and HDC held the owners duplicate copy of that title. Filinvest immediately filed against HDC a petition for the surrender and cancellation of the co-owners duplicate copy of TCT 67462 RT-1. Filinvest alleged that it bought Lots 1, 2, 6, and 12 of the property from their respective owners as evidenced by three deeds of absolute sale in its favor dated September 10, November 18, and December 29, 1989 and that Filinvest was entitled to the registrations of such sales. On January 14, 1991 GHM filed against the sellers and Filinvest a complaint for the annulment of the deeds of sale issued in the latters favor before the Regional Trial Court (RTC) of Las Pias City in Civil Case 91-098. On March 16, 2006 the RTC rendered a decision after trial, declaring the contracts to sell executed by some of the heirs in GHMs favor valid and enforceable and the sale in favor of Filinvest null and void. Only Filinvest appealed among the defendants. On November 25, 2008 the Court of Appeals (CA) affirmed the RTC decision with respect to the validity of the contract to sell Lot 6 in GHMs favor. But the CA declared the contracts to sell Lots 1, 2, and 12 in GHMs favor void and the sale of the same lots in favor of Filinvest valid. Both parties filed their petitions for review before this Court, Filinvest in G.R. 187824, and GHM in G.R. 188265. The Issue Presented The issue presented in these cases is whether or not the contracts to sell that the sellers executed in GHMs favor covering the same lots sold to Filinvest are valid and enforceable. The Courts Ruling To prove good faith, the rule is that the buyer of registered land needs only show that he relied on the title that covers the property. But this is true only when, at the time of the sale, the buyer was unaware of any adverse claim to the property.[1] Otherwise, the law requires the buyer to exercise a higher degree of diligence before proceeding with his purchase. He must examine not only the certificate of title, but also the sellers right and capacity to transfer any interest in the property.[2] In such a situation, the buyer must show that he exercised reasonable precaution by inquiring beyond the four corners of the title.[3] Failing in these, he may be deemed a buyer in bad faith.[4]cralaw Here, Filinvest was on notice that GHM had caused to be annotated on TCT 67462 RT-1, the mother title, as early as August 4, 1989 a notice of adverse claim covering Lot 6. This notwithstanding, Filinvest still proceeded to buy Lots 1, 2, 6, and 12 on September 10, November 18, and December 29, 1989. Filinvest of course contends that, although the title carried a notice of adverse claim, that notice was only with respect to seller Yaps interest in Lot 6 and it did not affect Lots 1, 2, 12, and the remaining interests in Lot 6. The Court disagrees. The annotation of an adverse claim is intended to protect the claimants interest in the property. The notice is a warning to third parties dealing with the property that someone claims an interest in it or asserts a better right than the registered owner.[5] Such notice constitutes, by operation of law, notice to the whole world.[6] Here, although the notice of adverse claim pertained to only one lot and Filinvest wanted to acquire interest in some other lots under the same title, the notice served as warning to it that one of the owners was engaged in double selling. What is more, upon inquiry with the Register of Deeds of Las Pias, Filinvest also learned that the heirs of Andres Aldana sold Lot 8 to HDC and turned over the co-owners duplicate copy of TCT 67462 RT-1 to that company which had since then kept the title. Filinvest (referred to below as FDC) admits this fact in its petition,[7] thus:chanroblesvirtuallawlibrary Sometime in August 1989, FDC applied with the Register of Deeds of Las Pias for the transfer and registration of Lots 2, 4, and 5 in its name and surrendered the co-owners duplicate copy of TCT No. (67462) RT-1 given to it by the Vivar family, but the Register of Deeds of Las Pias City refused to do the transfer of title in the name of FDC and instead demanded from FDC to surrender as well the other co-owner's duplicate copy of TCT No. (67462) RT-1 which was issued to the heirs of Andres Aldana. Upon further inquiry, FDC came to know that the heirs of Andres Aldana sold Lot 8 and delivered their co-owner's duplicate copy of TCT No. (67462) RT-1 to Household Development Corporation, a sister company of respondent GHMPI. FDC made representations to Household Development Corporation for the surrender of said co-owner's duplicate copy of TCT No. (67462) RT-1 to the Register of Deeds of Las Pias City, but Household Development Corporation refused to do so. Filinvests knowledge that GHM, a competitor, had bought Lot 6 in which Filinvest was interested, that GHM had annotated an adverse claim to that Lot 6, and that GHM had physical possession of the title, should have put Filinvest on its toes regarding the prospects it faced if it bought the other lots covered by the title in question. Filinvest should have investigated the true status of Lots 1, 2, 6, and 12 by asking GHM the size and shape of its interest in the lands covered by the same title, especially since both companies were engaged in the business of developing lands. One who has knowledge of facts which should have put him upon such inquiry and investigation cannot claim that he has acquired title to the property in good faith as against the true owner of the land or of an interest in it.[8]cralaw The Court upholds the validity of the contracts between GHM and its sellers. As the trial court aptly observed, GHM entered into valid contracts with its sellers but the latter simply and knowingly refused without just cause to honor their obligations. The sellers apparently had a sudden change of heart when they found out that Filinvest was willing to pay more. As to the award of exemplary damages, the Court sustains the CA ruling. This species of damages is allowed only in addition to moral damages such that exemplary damages cannot be awarded unless the claimant first establishes a clear right to moral damages.[9] Here, since GHM failed to prove that it is entitled to moral damages, the RTCs award of exemplary damages had no basis. But the grant of attorneys fees is proper. As the RTC noted, this case has been pending since 1991, or for 19 years now. GHM was forced to litigate and incur expenses in order to protect its rights and interests. WHEREFORE, the Court GRANTS the petition in G.R. 188265 and DISMISSES the petition in G.R. 187824. The Court likewise REVERSES and SETS ASIDE the decision of the Court of Appeals dated November 25, 2008 in CA-G.R. CV 89448, and REINSTATES the decision of the Regional Trial Court in Civil Case 91-098 dated March 16, 2006 with the MODIFICATION that the award of exemplary damages is DELETED. SO ORDERED. G.R. No. 141256 July 15, 2005 ESTANISLAO PADILLA, JR., Petitioner, vs. PHILIPPINE PRODUCERS COOPERATIVE MARKETING ASSOCIATION, INC., Respondent. DECISION CORONA, J.: In implementing the involuntary transfer of title of real property levied and sold on execution, is it enough for the executing party to file a motion with the court which rendered judgment, or does he need to file a separate action with the Regional Trial Court? This is a petition for review on certiorari1 from a decision of the Court of Appeals in CA-G.R. CV No. 53085,2 and its resolution denying reconsideration,3 both of which affirmed the orders of the Regional Trial Court of Bacolod City, Branch 51.4 The undisputed facts of the case follow.5 Petitioner and his wife are the registered owners of the following real properties: Lot Nos. 2904-A (covered by TCT No. T-36090), 2312-C-5 (covered by TCT No. T3849), and 2654 (covered by TCT No. T-8053), all situated in Bago City. Respondent is a marketing cooperative which had a money claim against petitioner. On April 24, 1987, respondent filed a civil case against petitioner for collection of a sum of money in the Regional Trial Court of Bacolod City.6 Despite receipt of summons on May 18, 1987, petitioner (then defendant) opted not to file an answer. 7 On March 3, 1988, respondent (then plaintiff) moved to have petitionerdefendant declared in default, which the trial court granted on April 15, 1988.8 Respondent presented its evidence on October 9, 1989.9On November 28, 1989, the trial court rendered a decision in respondents favor.10 Petitioner was furnished a copy of this decision by mail on November 29, 1989 but, because of his failure to claim it, the copy was returned.11 On May 31, 1990, the Court issued a writ of execution. On June 4, 1990, the three lots (Lot 2904-A, Lot 2312-C-5 and Lot 2654), all of the Bago Cadastre and registered in petitioners name, were levied by virtue of that writ. On July 4, 1990, sheriff Renato T. Arimas auctioned off the lots to satisfy the judgment, with respondent as the only bidder. On July 10, 1990, ex-officio provincial sheriff and clerk of court Antonio Arbis executed a certificate of sale in favor of respondent. On August 13, 1990, the certificate of sale was recorded in the Register of Deeds.12

When petitioner failed to exercise his right of redemption within the 12-month period allowed by law, the court, on motion of respondent, ordered on February 5, 1992 the issuance of a writ of possession for the sheriff to cause the delivery of the physical possession of the properties in favor of respondent.13 On May 17, 1995, respondent filed a motion to direct the Register of Deeds to issue new titles over the properties in its name, alleging that the Register of Deeds (RD) of Bago City would not issue new titles (in respondents name) unless the owners copies were first surrendered to him. Respondent countered that such surrender was impossible because this was an involuntary sale and the owners copies were with petitioner.14 On July 3, 1995, the trial court issued an order granting the motion. In a subsequent order dated August 8, 1995, it denied petitioners motion for reconsideration. Petitioner appealed. Four years later, the Court of Appeals rendered the assailed decision affirming the order of the trial court. Petitioner contends that respondents motion for the RD to cancel the existing certificates of title and issue new ones in its name was in fact a real action and that the motion was procedurally infirm because respondent did not furnish him a copy.15 He also claims that under Section 6 of Rule 39 of the 1997 Rules of Civil Procedure, the execution of the judgment was barred by prescription, given that the motion was filed more than 5 years after the writ of execution was issued on March 23, 1990.16 He also argues that respondent failed to follow the correct procedure for the cancellation of a certificate of title and the issuance of a new one, which is contained in Section 107 of PD 1529.17 In its comment,18 respondent claims that the motion dated May 15, 1995 to direct the RD to issue new certificates of title was but a continuation of the series of events that began with the decision in its favor on November 28, 1989, and from there, the auction of the properties and the issuance of a certificate of sale in 1990. The two principal issues for consideration are: (1) whether or not respondents right to have new titles issued in its name is now barred by prescription and (2) whether or not the motion in question is the proper remedy for cancelling petitioners certificates of title and new ones issued in its name. On the first issue, we rule that the respondents right to petition the court for the issuance of new certificates of title has not yet prescribed. In Heirs of Blancaflor vs. Court of Appeals,19 Sarmiento Trading Corporation, predecessor-in-interest of the private respondent Greater Manila Equipment Marketing Corporation, secured a writ of execution in 1968 by virtue of which it levied real property belonging to petitioners predecessor-in-interest, Blancaflor. When the property was auctioned, Sarmiento Trading bid successfully and, in 1970, after the lapse of the one-year redemption period, consolidated its ownership over the lot. Sarmiento Trading then filed a petition with the Court of First Instance to order the cancellation of Blancaflors title and the issuance of a new one in its name. In 1972, Sarmiento Trading sold the lot to private respondent which, at the time, went by the name Sarmiento Distributors Corporation. In 1988, the Deputy Register of Deeds of Iloilo wrote to Blancaflor requesting him to surrender his owners duplicate copy of the TCT. Blancaflor did not comply and the RD refused to issue a new title. On May 25, 1989, private respondent filed a petition in the Regional Trial Court praying that the petitioners be ordered to surrender the owners duplicate copy of the title. The petitioners refused, claiming that respondents cause of action had already prescribed. Ruling otherwise, we stated: It is settled that execution is enforced by the fact of levy and sale. The result of such execution salewith Sarmiento Trading Corporation as the highest bidderwas that title to Lot No. 22 of TCT No. 14749 vested immediately in the purchaser subject only to the judgment debtors right to repurchase. Therefore, upon Sarmiento Trading Corporations purchase of Lot No. 22 covered by TCT No. 14749 at the auction sale, private respondents successor-in-interest had acquired a right over said title. The right acquired by the purchaser at an execution sale is inchoate and does not become absolute until after the expiration of the redemption period without the right of redemption having been exercised. But inchoate though it be, it is like any other right, entitled to protection and must be respected until extinguished by redemption. Gaudencio Blancaflor was not able to redeem his property after the expiration of the redemption period, which was 12 months after the entry or annotation of the certificate of sale made on the back of TCT No. 14749. Consequently, he had been divested of all his rights to the property. (underscoring ours) In this case, the rule being invoked by petitioner20 states: SEC. 6. Execution by motion or by independent action.A final and executory judgment or order may be executed on motion within five (5) years from the date of its entry. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action. The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by the statute of limitations. As should be evident from Blancaflor, petitioner Padillas reliance on Section 6 of Rule 39 of the 1997 Revised Rules of Civil Procedure is misplaced. The fact of levy and sale constitutes execution, and not the action for the issuance of a new title. Here, because the levy and sale of the properties took place in June and July of 1990, respectively, or less than a year after the decision became final and executory, the respondent clearly exercised its rights in timely fashion. In addition, petitioner himself admits his failure to redeem the properties within the one-year period by adopting the facts stated in the Court of Appeals decision.21 There is thus no doubt he had been divested of his ownership of the contested lots. Respondents position hinges on petitioners failure to redeem the properties 12 months after the certificate of sale was recorded in the Register of Deeds on August 13, 1990. There is no uncertainty about respondents having become the new lawful owner of the lots in question by virtue of the levy and the execution sale. On the other hand, the issue of whether to acquire new titles by mere motion or through a separate petition is an entirely different matter. Petitioner is correct in assailing as improper respondents filing of a mere motion for the cancellation of the old TCTs and the issuance of new ones as a result of petitioners refusal to surrender his owners duplicate TCTs. Indeed, this called for a separate cadastral action initiated via petition. Section 107 of PD 1529,22 formerly Section 111 of Act 496,23 provides: Sec. 107. Surrender of withheld duplicate certificates.Where it is necessary to issue a new certificate of title pursuant to any involuntary instrument which divests the title of the registered owner against his consent or where a voluntary instrument cannot be registered by reason of the refusal or failure of the holder to surrender the owners duplicate certificate of title, the party in interest may file a petition in court to compel the surrender of the same to the Register of Deeds. The court, after hearing, may order the registered owner or any person withholding the duplicate certificate to surrender the same, and direct the entry of a new certificate or memorandum upon such surrender. If the person withholding the duplicate certificate is not amenable to the process of the court, or if for any reason the outstanding owners duplicate certificate cannot be delivered, the court may order the annulment of the same as well as the issuance of a new certificate of title in lieu thereof. Such new certificate and all duplicates thereof shall contain a memorandum of the annulment of the outstanding duplicate. Respondent alleges that it resorted to filing the contested motion because it could not obtain new certificates of title, considering that petitioner refused to surrender his owners duplicate TCTs. This contention is incorrect. The proper course of action was to file a petition in court, rather than merely move, for the issuance of new titles. This was the procedure followed in Blancaflor by Sarmiento Trading which was in more or less the same situation as the respondent in this case:24 Petitioners reliance on prescription and laches is unavailing in this instance. It was proper for Sarmiento Trading Corporation to file a petition with the Court of First Instance of Iloilo, acting as a cadastral court, for the cancellation of TCT No. 14749 in the name of Gaudencio Blancaflor and the issuance of another in its name. This is a procedure provided for under Section 78 of Act No. 496 and Section 75 of PD No. 1529 Section 78 of Act 496 reads: Sec. 78. Upon the expiration of the time, if any allowed by law for redemption after registered land has been sold on any execution, or taken or sold for the enforcement of any lien of any description, the person claiming under the execution or under any deed or other instrument made in the course of the proceedings to levy such execution or enforce any lien, may petition the court for the entry of a new certificate to him, and the application may be granted: Provided, however, That every new certificate entered under this section shall contain a memorandum of the nature of the proceeding on which it is based: Provided, further, That at any time prior to the entry of a new certificate the registered owner may pursue all his lawful remedies to impeach or annul proceedings under execution or to enforce liens of any description. Section 75 of PD 1529 provides: Sec. 75. Application for new certificate upon expiration of redemption period.Upon the expiration of the time, if any, allowed by law for redemption after the registered land has been sold on execution, or taken or sold for the enforcement of a lien of any description, except a mortgage lien, the purchaser at such sale or anyone claiming under him may petition the court for the entry of a new certificate to him. Before the entry of a new certificate of title, the registered owner may pursue all legal and equitable remedies to impeach or annul such proceedings. It is clear that PD 1529 provides the solution to respondents quandary. The reasons behind the law make a lot of sense; it provides due process to a registered landowner (in this case the petitioner) and prevents the fraudulent or mistaken conveyance of land, the value of which may exceed the judgment obligation. Petitioner contends that only his interest in the subject lots, and not that of his wife who was not a party to the suit, should have been subjected to execution, and he should have had the opportunity to prove as much. While we certainly will not condone any attempt by petitioner to frustrate the ends of justice the only way to describe his refusal to surrender his owners duplicates of the certificates of title despite the final and executory judgment against him respondent, on the other hand, cannot simply disregard proper procedure for the issuance to it of new certificates of title. There was a law on the matter and respondent should have followed it. In any event, respondent can still file the proper petition with the cadastral court for the issuance of new titles in its name. WHEREFORE, the instant petition is hereby GRANTED. The decision of the Court of Appeals in CA-G.R. CV No. 53085 is hereby REVERSED. The order of the Regional Trial Court of Bacolod City ordering the Register of Deeds of Bago City to issue new certificates of title in favor of respondent is ANULLED. SO ORDERED. G.R. No. 136283 February 29, 2000 VIEWMASTER CONSTRUCTION CORPORATION, petitioner, vs. HON. REYNALDO Y. MAULIT in his official capacity as administrator of the Land Registration Authority; and EDGARDO CASTRO, acting register of deeds of Las Pias, Metro Manila, respondents. PANGANIBAN, J.:

A notice of lis pendens may be registered when an action or a proceeding directly affects the title to the land or the buildings thereon; or the possession, the use or the occupation thereof. Hence, the registration of such notice should be allowed if the litigation involves the enforcement of an agreement for the co-development of a parcel of land. Statement of the Case Before us is a Petition for Review on Certiorari 1 assailing the February 27, 1998 Decision 2 of the Court of Appeals (CA) 3 in CA-GR SP No. 39649 and its November 12, 1998 Resolution 4 denying reconsideration. The assailed Decision affirmed the Resolution 5 of the Land Registration Authority (LRA) in Consulta No. 2381, which ruled as follows: PREMISES CONSIDERED, this Authority is of the considered view and so holds that the Notice of Lis Pendens subject of this consulta is not registrable. 6 The Facts The undisputed facts were summarized by the Court of Appeals as follows: The subject property is known as the Las Pias property registered in the name of Peltan Development Inc. (now State Properties Corporation) covered by Transfer Certificate of Title No. (S-17882) 12473-A situated in Barrio Tindig na Manga, Las Pias, Rizal. The Chiong/Roxas family collectively owns and controls State Investment Trust, Inc. (formerly State Investment House, Inc.) and is the major shareholder of the following corporations, namely: State Land Investment Corporation, Philippine Development and Industrial Corporation and Stronghold Realty Development. Sometime in 1995, the said family decided to give control and ownership over the said corporations to only one member of the family, through the process of bidding among the family members/stockholders of the said companies. It was agreed that the bidder who acquires 51% or more of the said companies shall be deemed the winner. Defendant Allen Roxas, one of the stockholders of State Investment Trust, Inc. applied for a loan with First Metro Investment, Inc. (First Metro for brevity) in the amount of P36,500,000.00 in order to participate in the bidding. First Metro granted Alien Roxas' loan application without collateral provided, however, that he procure a guarantor/surety/solidary co-debtor to secure the payment of the said loan. Petitioner Viewmaster agreed to act as guarantor for the aforementioned loan in consideration for its participation in a Joint Venture Project to co-develop the real estate assets of State Investment Trust, Inc. After a series of negotiations, petitioner Viewmaster and defendant Allen Roxas agreed that should the latter prevail and win in the bidding, he shall sell to petitioner fifty percent (50%) of the total eventual acquisitions of shares of and stock in the State Investment Trust, Inc., at a purchase price equivalent to the successful bid price per share plus an additional ten percent (10%) per share. As a result of the loans granted by First Metro in consideration of and upon the guaranty of petitioner Viewmaster, defendant Allen Roxas, eventually gained control and ownership of State Investment Trust, Inc. However, notwithstanding the lapse of two (2) years since defendant Allen Roxas became the controlling stockholder of State Investment Trust, Inc., he failed to take the necessary action to implement the Joint Venture Project with petitioner Viewmaster to co-develop the subject properties.1wphi1.nt Thus, petitioner's counsel wrote defendant Allen Roxas, reiterating petitioner's demand to comply with the agreement to co-develop the Las Pias Property and to set in operation all the necessary steps towards the realization of the said project. On September 8, 1995, petitioner Viewmaster filed a Complaint for Specific Performance, Enforcement of Implied Trust and Damages against State Investment Trust, Inc. Northeast Land Development, Inc., State Properties Corporation (formerly Peltan Development, Inc.) and defendant Allen Roxas, in his capacity as Vice-Chairman of State Investment Trust, Inc., and Chairman of Northeast Land Development, Inc., State Properties Corporation, which was docketed as Civil Case No. 65277. On September 11, 1995, petitioner Viewmaster filed a Notice of Lis Pendens with the Register of Deeds of Quezon City and Las Pias for the annotation of a Notice of Lis Pendens on Transfer Certificate of Title No. (S-17992) 12473-A, registered in the name of Peltan Development, Inc. (now State Properties Corporation). In a letter dated September 15, 1995, the respondent Register of Deeds of Las Pias denied the request for annotation of the Notice of Lis Pendens on the following grounds: 1. the request for annotation and the complaint [do] not contain an adequate description of the subject property; 2. petitioner's action only has an incidental effect on the property in question. On September 20, 1995, petitioner filed an appeal to the respondent Land Registration Authority, which was docketed as Consulta No. 2381. On December 14, 1995, the Respondent Land Registration Authority issued the assailed Resolution holding that petitioner's "Notice of Lis Pendens" was not registrable. 7 Ruling of the Court of Appeals In affirming the ruling of the LRA, the Court of Appeals held that petitioner failed to adequately describe the subject property in the Complaint and in the application for the registration of a notice of lis pendens. The CA noted that while Transfer Certificate of Title No. (S-17992) 12473-A indicated six parcels of land, petitioner's application mentioned only one parcel. Moreover, the CA also ruled that a notice of lis pendens may be registered only when an action directly affects the title to or possession of the real property. In the present case, the proceedings instituted by petitioner affected the title or possession incidentally only, not directly. Hence, this Petition. 8 Issues Petitioner submits for the consideration of the Court the following issues: I Whether or not the petitioner failed to adequately describe the subject property in its complaint and in the notice of lis pendens. II Whether or not the Las Pias property is directly involved in Civil Case No. 65277. 9 The Court's Ruling The Petition is meritorious. First Issue: Description of Property Petitioner contends that the absence of the property's technical description in either the notice of lis pendens or the Complaint is not a sufficient ground for rejecting its application, because a copy of TCT No. (S-17992) 12473-A specifically describing the property was attached to and made an integral part of both documents. On the other hand, respondents argue that petitioner failed to provide an accurate description of the Las Pias property, which was merely referred to as a "parcel of land." The notice of lis pendens described the property as follows: A parcel of land situated in the Barrio of Tindig na Manga, Municipality of Las Pias, Province of Rizal . . . containing an area of Seven Hundred Eighty Six Thousand One Hundred Sixty Seven (786,167) square meters, more or less. By itself, the above does not adequately describe the subject property, pursuant to Section 14 of Rule 13 of the Rules of Court and Section 76 of Presidential Decree (PD) No. 1529. It does not distinguish the said property from other properties similarly located in the Barrio of Tindig na Manga, Municipality of Las Pias, Province of Rizal. Indeed, by the above description alone, it would be impossible to identify the property. In the paragraph directly preceding the description quoted above, however, petitioner specifically stated that the property referred to in the notice of lis pendens was the same parcel of land covered by TCT No. (S-17992) 12473-A: Please be notified that on 08 September 1995, the [p]laintiff in the above-entitled case filed an action against the above-named [d]efendants for specific performance, enforcement of an implied trust and damages, now pending in the Regional Trial Court of Pasig, Branch 166, which action involves a parcel of land covered by Transfer Certificate Title (TCT) No. (S-17992) 12473-A, registered in the name of Peltan Development Incorporated which changed its corporate name to State Properties Corporation, one of the [d]efendants in the aforesaid case. The said parcel of land is more particularly described as follows: A parcel of land situated in the Barrio of Tindig na Manga, Municipality of Las Pias, Province of Rizal . . . containing an area of Seven Hundred Eighty Six Thousand One Hundred Sixty Seven (786,167) square meters, more or less. Request is therefore made [for] your good office to record this notice of pendency of the aforementioned action in TCT No. (S-17892) 12473-A for all legal purposes. 10 As earlier noted, a copy of the TCT was attached to and made an integral part of both documents. Consequently, the notice of lis pendens submitted for registration, taken as a whole, leaves no doubt as to the identity of the property, the technical description of which appears on the attached TCT. We stress that the main purpose of the requirement that the notice should contain a technical description of the property is to ensure that the same can be distinguished and readily identified. In this case, we agree with petitioner that there was substantial compliance with this requirement. Second Issue: Property Directly Involved In upholding the LRA, the Court of Appeals held that "the doctrine of lis pendens has no application to a proceeding in which the only object sought is the recovery of [a] money judgment, though the title [to] or right or possession [of] a property may be incidentally affected. It is thus essential that the property be directly affected where the relief sought in the action or suit includes the recovery of possession, or the enforcement [thereof], or an adjudication between the conflicting claims of title, possession or right of possession to specific property, or requiring its transfer or sale." 11 On the other hand, petitioner contends that the civil case subject of the notice of lis pendens directly involved the land in question, because it prayed for the enforcement of a prior agreement between herein petitioner and Defendant Allen Roxas to co-develop the latter's property. We agree with the petitioner. A notice of lis pendens, which literally means "pending suit," may involve actions that deal not only with the title or possession of a property, but even with the use or occupation thereof. Thus, Section 76 of PD 1529 reads:

Sec. 76. Notice of lis pendens. No action to recover possession of real estate, or to quiet title thereto, or to remove clouds upon the title thereof, or for partition, or other proceedings of any kind in court directly affecting the title to land or the use or occupation thereof or the buildings thereon, and no judgment, and no proceeding to vacate or reverse any judgment, shall have any effect upon registered land as against persons other than the parties thereto, unless a memorandum or notice stating the institution of such action or proceeding and the court wherein the same is pending, as well as the date of the institution thereof, together with a reference to the number of the certificate of title, and an adequate description of the land affected and the registered owner thereof, shall have been filed and registered. In Magdalena Homeowners Association, Inc. v. Court of Appeals, 12 the Court did not confine the availability of lis pendens to cases involving the title to or possession of real property. Thus, it held: According to Section 24, Rule 14 13 of the Rules of Court and Section 76 of Presidential Decree No. 1529, a notice of lis pendens is proper in the following cases, viz.: a) An action to recover possession of real estate; b) An action to quiet title thereto; c) An action to remove clouds thereon; d) An action for partition; and e) Any other proceedings of any kind in Court directly affecting the title to the land or the use or occupation thereof or the buildings thereon. In Villanueva v. Court of Appeals, 14 this Court further declared that the rule of lis pendens applied to suits brought "to establish an equitable estate, interest, or right in specific real property or to enforce any lien, charge, or encumbrance against it . . . ." Thus, this Court observed that the said notice pertained to the following: . . . all suits or actions which directly affect real property and not only those which involve the question of title, but also those which are brought to establish an equitable estate, interest, or right, in specific real property or to enforce any lien, charge, or encumbrance against it, there being in some cases a lis pendens, although at the commencement of the suit there is no present vested interest, claim, or lien in or on the property which it seeks to charge. It has also been held to apply in the core of a proceeding to declare an absolute deed of mortgage, or to redeem from a foreclosure sale, or to establish a trust, or to suits for the settlement and adjustment of partnership interests. In the present case, petitioner's Complaint docketed as Civil Case No. 65277 clearly warrants the registration of a notice of lis pendens. The Complaint prayed for the following reliefs: 1. Render judgment ordering the Defendant Allen Roxas to sell fifty percent (50%) of his shareholdings in Defendant State Investment to Plaintiff at the price equivalent to the successful bid price per share plus an additional ten percent (10%) per share and directing Defendants to co-develop with the Plaintiff the subject real properties; 2. Render judgment ordering the Defendant Allen Roxas to: a. Pay the Plaintiff the amount of at least Twenty Million Pesos (P20,000,000.00) and/or such other amounts as may be proven during the course of the trial, by way of actual damages; b. Pay the Plaintiff the amount of at least One Million Pesos (P1,000,000.00), by way of moral damages; c. Pay the Plaintiff the amount of at least One Million Pesos (P1000,000.00), by way of exemplary damages; d. Pay the Plaintiff the amount of Two Hundred Fifty Thousand Pesos (P250,000.00) by way of attorney's fees; and e. Pay expenses of litigation and costs of suit. 15 Undeniably, the prayer that Defendant Allen Roxas be ordered to sell 50 percent of his shareholdings in State Investment does not directly involve title to the property and is therefore not a proper subject of a notice of lis pendens. Neither do the various amounts of damages prayed for justify such annotation. We disagree, however, with the Court of Appeals and the respondents that the prayer for the co-development of the land was merely incidental to the sale of shares of defendant company. The Complaint shows that the loan obtained by Allen Roxas (one of the defendants in the civil case) from First Metro was guaranteed by petitioner for two distinct considerations: (a) to enable it to purchase 50 percent of the stocks that the said defendant may acquire in State Investment and (b) to co-develop with the defendants the Quezon City and the Las Pias properties of the corporation. In other words, the co-development of the said properties is a separate undertaking that did not arise from petitioner's acquisition of the defendant's shares in the corporation. To repeat, the co-development is not merely auxiliary or incidental to the purchase of the shares; it is a distinct consideration for Viewmaster's guaranty. 16 Hence, by virtue of the alleged agreement with Allen Roxas, petitioner has a direct not merely incidental interest in the Las Pias property. Contrary to respondents' contention, 17 the action involves not only the collection of a money judgment, but also the enforcement of petitioner's right to co-develop and use the property. The Court must stress that the purpose of lis pendens is (1) to protect the rights of the party causing the registration thereof 18 and (2) to advise third persons who purchase or contract on the subject property that they do so at their peril and subject to the result of the pending litigation. 19 One who deals with property subject of a notice of lis pendens cannot acquire better rights than those of his predecessors-in-interest. 20 In Tanchoco v.Aquino, 21 the Court held: . . . . The doctrine of lis pendens is founded upon reason of public policy and necessity, the purpose of which is to keep the subject matter of the litigation within the power of the court until the judgment or decree shall have been entered; otherwise, by successive alienations pending the litigation, its judgment or decree shall be rendered abortive and impossible of execution. Purchasers pendente lite of the property subject of the litigation after the notice of lis pendens is inscribed in the Office of the Register of Deeds are bound by the judgment against their predecessors. . . . Without a notice of lis pendens, a third party who acquires the property after relying only on the Certificate of Title would be deemed a purchaser in good faith. Against such third party, the supposed rights of petitioner cannot be enforced, because the former is not bound by the property owner's undertakings not annotated in the TCT. 22 Likewise, there exists the possibility that the res of the civil case would leave the control of the court and render ineffectual a judgment therein. Indeed, according to petitioner, it was not even informed when Allen Roxas exchanged the Quezon City property for shares of stock in Northeast Land Development, Inc. 23 Hence, it maintains that there is a clear risk that the same thing would be done with the Las Pias property. In this light, the CA ruling left unprotected petitioner's claim of co-development over the Las Pias property. Hence, until the conflicting rights and interests are threshed out in the civil case pending before the RTC, it will be in the best interest of the parties and the public at large that a notice of the suit be given to the whole world. The Court is not here saying that petitioner is entitled to the reliefs prayed for in its Complaint pending in the RTC. Verily, there is no requirement that the right to or the interest in the property subject of a lis pendens be proven by the applicant. The Rule merely requires that an affirmative relief be claimed. 24 A notation of lis pendens neither affects the merits of a case nor creates a right or a lien. 25 It merely protects the applicant's rights, which will be determined during the trial. WHEREFORE, the Petition is hereby GRANTED and the assailed Decision of the Court of Appeals REVERSED and SET ASIDE. The Las Pias Register of Deeds is directed to cause the annotation of lis pendens in TCT No. (S-17992) 12473-A. No costs.1wphi1.nt SO ORDERED. G.R. No. 174290 : January 20, 2009 ST. MARY OF THE WOODS SCHOOL, INC. and MARCIAL P. SORIANO, Petitioners, v. OFFICE OF THE REGISTRY OF DEEDS OF MAKATI CITY and HILARIO P. SORIANO, G.R. No. 176116 : January 20, 2009 ST. MARY OF THE WOODS SCHOOL, INC. and MARCIAL P. SORIANO, Petitioners, v. OFFICE OF THE REGISTRY OF DEEDS OF MAKATI CITY, NATIONAL BUREAU OF INVESTIGATION, and HILARIO P. SORIANO, Respondents. DECISION CHICO-NAZARIO, J.: Before this Court are two special civil actions for Certiorari and Prohibition under Rule 65 of the 1997 Revised Rules of Civil Procedure, which were consolidated per Resolution1 dated 5 February 2007. The petitioners in G.R. No. 174290, namely: St. Mary of the Woods School, Inc. (SMWSI) and Marcial P. Soriano, seek to annul and set aside on the ground of grave abuse of discretion tantamount to lack or excess of jurisdiction the Resolution 2 dated 18 August 2006 of the Court of Appeals in CA-G.R. CV No. 85561, which granted herein private respondent Hilario P. Soriano's Motion to Reinstate/Re-annotate the Notice of Lis Pendens over Transfer Certificates of Title (TCT) No. 175029,3 2209774 and 220978,5 of the Registry of Deeds of Makati City, all registered in the name of herein petitioner SMWSI. The afore-named petitioners are the same petitioners in G.R. No. 176116 in which they also seek to annul and set aside, on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction, the three Resolutions similarly rendered by the Court of Appeals in CA-G.R. CV No. 85561, to wit: (1) Resolution6 dated 18 August 2006 denying petitioners' Motion to Dismiss Appeal of herein private respondent Hilario P. Soriano; (2) Resolution7 dated 9 November 2006 denying for lack of merit petitioners' Motion for Reconsideration of the 18 August 2006 Resolution of the appellate court, as well as the supplement to the said motion; and (3) Resolution8 dated 9 November 2006 requiring the Register of Deeds of Makati City to submit to the appellate court the original copies of the documents involved in Civil Case No. 03-954 so that they can be presented to the National Bureau of Investigation (NBI) for comparative analysis of the signatures of Tomas Q. Soriano. Petitioner SMWSI is an educational institution incorporated and existing by virtue of the laws of the Republic of the Philippines. It is the current registered owner of the three parcels of land (subject properties), located in Makati City and covered by TCTs No. 175029, No. 220977 and No. 220978. Petitioner Marcial P. Soriano is the President of petitioner SMWSI. Private respondent Hilario P. Soriano, on the other hand, is one of the siblings of petitioner Marcial P. Soriano.

The consolidated cases presently before this Court originated from the Complaint9 filed on 14 August 2003 by the private respondent with the Regional Trial Court (RTC) of Makati City, Branch 148, for Declaration of Nullity of Deed of Assignment, Deed of Sale and Cancellation of TCTs No. 156249, No. 156250, and No. 156251 of the Register of Deeds of Makati, Metro Manila, 10 registered in the name of Oro Development Corporation (ODC); and TCT No. 175029, registered in the name of petitioner SMWSI. Named defendants therein were the petitioners, together with ODC, Antonio P. Soriano, Aurelia P. Soriano-Hernandez, Rosario P. Soriano-Villasor, Eugenia Ma. P. Soriano-Lao and Josefina P. Soriano (hereinafter collectively referred to as petitioners, et al.). The Complaint was docketed as Civil Case No. 03-954. In his Complaint, private respondent alleged that during the marriage of his parents, Tomas Q. Soriano and Josefina P. Soriano, the couple acquired both real and personal properties, including the subject properties, which were then covered by TCTs No. 169941,11 No. 114408,12 and No. 114409.13 On 10 May 1988, the Soriano couple allegedly executed14 a Deed of Assignment15 in favor of ODC involving the subject properties to pay for Tomas Q. Soriano's subscription of stocks in the said corporation. On 14 June 1988, Tomas Q. Soriano died16 intestate. By virtue of the said Deed of Assignment, the ownership and title over the subject properties were transferred to ODC. Consequently, TCTs No. 169941, No. 114408 and No. 114409 were cancelled and the new TCTs No. 156249, 17 No. 15625018and No. 15625119 were issued in the name of ODC. Thereafter, on 26 April 1991, ODC executed20 in favor of petitioner SMWSI a Deed of Sale21 over the subject property covered by TCT No. 156249. By virtue of the sale, petitioner SMWSI acquired ownership and title over the particular property. Thus, TCT No. 156249 was cancelled and the new TCT No. 175209 was issued in the name of petitioner SMWSI. Private respondent claimed that several years after his father Tomas Q. Soriano's death, he discovered that the latter's signature in the Deed of Assignment of 10 May 1988 in favor of ODC was a forgery. Being very familiar with his father's signature, private respondent compared Tomas Q. Soriano's purported signature in the Deed of Assignment of 10 May 1988 with Tomas Q. Soriano's genuine signature in another document captioned Second Amendment of Credit Agreement.22 Private respondent also presented a Certification23 from the Records Management and Archives Office which stated that the forged Deed of Assignment dated 10 May 1988 was not available in the files of the Office. Meanwhile, by reason of the pendency of Civil Case No. 03-954, a Notice of Lis Pendens was annotated on TCTs No. 156249, No. 156250, and No. 156251, in the name of ODC. With the subsequent cancellation of TCT No. 156249 and the issuance of TCT No. 175209 in the name of petitioner SMWSI, the Notice of Lis Pendens was carried over to the new certificate of title. In a Joint Affidavit24 dated 18 July 1990 executed by petitioner Marcial P. Soriano, it appears that the other individual defendants in Civil Case No. 03-954, and private respondent, recognized and acknowledged the validity, legality and propriety of the transfer of the subject properties from Tomas Q. Soriano to ODC. On this basis, defendants filed with the RTC a Motion to Dismiss 25 Civil Case No. 03-954 on the grounds that: (1) the Complaint states no cause of action; (2) the claim set forth in the Complaint has been paid, waived, abandoned or otherwise extinguished; (3) the Complaint is barred by estoppel or laches; (4) the Complaint is barred by prescription; (5) the titles to the subject properties are incontestable and can no longer be annulled; and (6) a condition precedent for filing the claim has not been complied with, i.e., the compromise agreement failed despite earnest efforts towards that end. On 17 January 2005, the RTC issued an Order26 dismissing the private respondent's Complaint. The RTC ratiocinated in this manner:cra:nad A careful reading of the [14] August 2003 Complaint filed by [herein private respondent] Hilario P. Soriano would suffice that he indeed failed to state that he has a right over the [subject properties] and that the [herein petitioners, et al.] have the obligation to observe such right. Assuming for the sake of argument that the signature was forged, the [private respondent] did not state that he was deprived of his share in the legitime of the deceased. Thus, his right over the [subject properties which were] assigned by the deceased was not clearly defined and stated in the [C]omplaint filed. xxx x x x. Also, the [private respondent] must comply with the provision of the Civil Code of [the] Philippines, to wit:cra:nad "Article 22227 - No suit shall be filed or maintained between members of the same family unless it should appear that earnest efforts toward a compromise have been made, but that the same have failed, subject to the limitations in Article 2035." x x x. There is no showing in the allegations in the [C]omplaint of the [private respondent] that he complied with the requirement of the law. Thus, the Court finds merit in the position of the [petitioners, et al.] xxx x x x. Clearly, the act of the [private respondent] in acknowledging the legality, validity and genuineness of the [D]eed of [A]ssignment in the [J]oint [A]ffidavit placed him in no better position to question the validity of the subject document. [Private respondent] never questioned the distribution of the properties among the heirs of Tomas Soriano. [Private respondent] even accepted the conveyance of a parcel of land covered by TCT No. 156253. By accepting said property as his share in the estate of his late father, [private respondent] is now deemed to have been paid or compensated because there was delivery of his share in the estate of the deceased. It can now be conclusively presumed that his share in the legitime of deceased Tomas Soriano was fully awarded to [private respondent]. He is now estopped in questioning the validity of the [D]eed of [A]ssignment by Tomas Q. Soriano in favor of [ODC]. Accordingly, all subsequent conveyances involving the subject properties can no longer be questioned by [private respondent] Hilario P. Soriano.28 chanroblesvirtuallawlibary Accordingly, the RTC decreed:cra:nad WHEREFORE, finding merits on the [M]otion to [D]ismiss filed by [herein petitioners, et al.] and in the prayer set forth in the [A]nswer of defendants Josefina P. Soriano and Rosario P. Soriano-Villasor, the dismissal of this case is hereby GRANTED. Accordingly, the Complaint filed by [private respondent] Hilario P. Soriano is dismissed because it asserts no cause of action and the claim or demand set forth in the [private respondent's] pleading has been waived, abandoned, or otherwise extinguished, and that a condition precedent for filing the claim has not been complied with.29 chanroblesvirtuallawlibary In the interim, the subject properties covered by TCTs No. 156250 and No. 156251 in the name of ODC were also transferred to petitioner SMWSI by virtue of a Deed of Sale dated 3 February 2005. TCTs No. 156250 and No. 156251 in the name of ODC were then cancelled and the new TCTs No. 220977 and No. 220978 were issued in the name of petitioner SMWSI. The Notice of Lis Pendens annotated on the cancelled TCTs was copied into the new TCTs in the name of petitioner SMWSI. Aggrieved by the RTC Order dated 17 January 2005, private respondent moved for its reconsideration, but the RTC denied the same in an Order30 dated 26 April 2005. On 16 May 2005, petitioners, et al., filed with the RTC a Motion to Cancel Notice of Lis Pendens 31 annotated on the titles covering the subject properties, which Motion was opposed by the private respondent. The very next day, 17 May 2005, private respondent filed a Notice of Appeal stating his intention to elevate the RTC Orders dated 17 January 2005 and 26 April 2005 to the Court of Appeals. Private respondent's appeal before the Court of Appeals was docketed as CA-G.R. CV No. 85561. Meanwhile, the RTC issued its Order32 dated 20 June 2005 granting the Motion to Cancel Notice of Lis Pendens filed by petitioners, et al., and ordering the Registrer of Deeds of Makati City to cancel the Notice of Lis Pendens annotated on TCTs No. 156249, No. 156250, No. 156251 in the name of ODC and TCT No. 175029 in the name of petitioner SMWSI. The RTC justified its latest Order as follows:cra:nad As mentioned in the case, the notice of lis pendens can be cancelled if it is not necessary to protect the interest of the party who caused it to be recorded. In this case, the [herein private respondent's] interest should be considered on whether the notice of lis pendens should be cancelled or not. As it is the Court believes that the cancellation is proper in this case. First, the Court still has jurisdiction of the case considering that the Notice of Appeal was only filed on [17 May 2005], while the Motion to cancel Notice of Lis Pendens was filed on [16 May 2005]. Second, [private respondent] Hilario P. Soriano has no interest to be protected insofar as the subject properties are concerned because of his acknowledgment that he already received his share in the estate of Tomas Soriano. Lastly, the contention of the [private respondent] that the motion is premature is not tenable. The authority of the Court to Cancel Notice of Lis Pendens is even evident in the Comment/Opposition of the [private respondent] which states that "While it may be true that the cancellation of a notice of lis pendens may be ordered at any given time even before final judgment, x x x."33 chanroblesvirtuallawlibary On 4 July 2005, the petitioners, et al., filed with the RTC a Motion for Issuance of Supplement to Order Cancelling Notice of Lis Pendens34 to clarify that TCTs No. 156249, No. 156250, and No. 156251 in the name of ODC were already cancelled and replaced with TCTs No. 175209, No. 220977, and No. 220978 all registered in the name of petitioner SMWSI in which the Notice of Lis Pendens was carried over. The private respondent, on the other hand, filed a Motion for Reconsideration of the RTC Order dated 20 June 2005 with Comment on the petitioners, et al.'s, Motion for Issuance of Supplement to the same RTC Order. On 15 July 2005, the RTC issued another Order 35 by way of supplement to its Order dated 20 June 2005, directing anew the Registrer of Deeds of Makati City to cancel the Notice of Lis Pendens annotated on TCTs No. 175029, No. 220977 and No. 220978 in the name of petitioner SMWSI.

In a subsequent Order36 dated 15 August 2005, the RTC denied for lack of merit private respondent's Motion for Reconsideration of the RTC Order dated 20 June 2005. On 28 September 2005, private respondent received a directive from the Court of Appeals dated 20 September 2005 requiring him to file his Appellant's Brief pursuant to his Notice of Appeal dated 17 May 2005. In compliance therewith, private respondent submitted his Appellant's Brief to the Court of Appeals with the following assignment of errors: 1. The lower court erred in dismissing the [C]omplaint on the ground that no certificate from a signature expert was attached to affirm the conclusion of the [herein private respondent] that the signature of Tomas Q. Soriano in the [D]eed of [A]ssignment was forged and on the ground that neither can the certificate issued by the Records Management and Archive Office support such allegation and that the [herein petitioners, et al.] cannot shoulder the burden caused by the Notary Public in failing to file the notarized documents, if he indeed failed. 2. The lower court erred in dismissing the [C]omplaint on the ground that the [private respondent] failed to state that he has a right over the subject properties and that the [petitioners, et al.] have the obligation to observe such right. 3. The lower court erred in ruling that Article 151 of the Family Code should have been complied with. 4. The lower court erred in denying [private respondent's] [M]otion for [R]econsideration despite valid and compelling arguments that warrant the reconsideration prayed for. 5. The lower court erred in granting [petitioners, et al.] [M]otion for [C]ancellation of Lis Pendens. 6. The lower court erred in dismissing the [C]omplaint on the ground that by accepting the conveyance of a parcel of land covered by TCT No. 156253 as his share in the estate of his late father, [private respondent] is now deemed to have been paid or compensated because there was delivery of his share in the estate of the deceased.37 While CA-G.R. CV No. 85561 was still pending, and since the Notice of Lis Pendens annotated on the TCTs of the subject properties in the name of petitioner SMWSI was already cancelled per RTC Orders dated 20 June 2005 and 15 July 2005, petitioner SMWSI mortgaged the subject properties on 15 February 2006 for the amount of P8,000,000.00. On 14 March 2006, private respondent filed before the Court of Appeals a Motion to Reinstate/Re-annotate Notice of Lis Pendens on the TCTs of the subject properties given that there was yet no final judgment of dismissal of his Complaint, as its dismissal had been duly appealed. Moreover, it had not been shown that the Notice of Lis Pendens was to molest the petitioners, et al., or that the same was not necessary to protect his interests; thus, its re-annotation on the TCTs of the subject properties while the appeal was pending would be in accordance with public policy. Petitioners, et al., opposed the aforesaid Motion of private respondent. On 17 March 2006, petitioners, et al., filed a Motion to Dismiss Appeal on the ground that "the issues in the appeal are and can only be questions of law, the appellate jurisdiction over which belongs exclusively to the Supreme Court, thus the dismissal of [private respondent's] appeal is mandatory pursuant to Supreme Court Circular No. 2-90 and Section 2, Rule 50 of the 1997 Rules of Civil procedure."38 chanroblesvirtuallawlibary Thereafter, on 18 August 2006, the Court of Appeals issued a Resolution granting private respondent's Motion to Reinstate/Reannotate Notice of Lis Pendens on the TCTs of the subject properties. The Court of Appeals ruled that although the RTC found that private respondent had no interest to be protected by the Notice of Lis Pendens, since the appellate court already acquired jurisdiction over the case, it was the latter which must ascertain the propriety of canceling the Notice of Lis Pendens upon proper motion and hearing.39 On the same day, the Court of Appeals also issued a separate Resolution denying petitioners, et al.'s, Motion to Dismiss Appeal of private respondent. According to the appellate court, private respondent raised both questions of fact and law in his appeal; hence, the ground for the dismissal of the appeal relied upon by the petitioners, et al., was untenable. G.R. No. 17429040 cra Aggrieved by the Resolution dated 18 August 2006 of the Court of Appeals granting private respondent's Motion to Reinstate/Reannotate Notice of Lis Pendens on the subject properties, petitioners, without filing a Motion for Reconsideration, filed on 11 September 2006 before this Court the instant Petition for Certiorari under Rule 65 of the 1997 Revised Rules of Civil Procedure alleging grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the appellate court in rendering the assailed Resolution. The Petition is docketed as G.R. No. 174290. Petitioners maintain that the RTC Orders canceling the Notice of Lis Pendens on the TCTs of the subject properties were valid and proper as they were issued on the basis of private respondent's lack of interest/right over the subject properties to be protected by the annotation of such Notice. Moreover, the cancellation of the Notice of Lis Pendens is authorized by Section 14, 41 Rule 13 of the 1997 Revised Rules of Civil Procedure, as well as under Section 77, 42 Presidential Decree No. 1529.43Hence, the reinstatement of the Notice of Lis Pendens should not have been allowed. Petitioners opine that the Court of Appeals gravely abused its discretion when it ordered the re-annotation of the Notice of Lis Pendens based on the mere motion filed by private respondent, as it was violative of the proper procedures prescribed under Presidential Decree No. 1529. Grave abuse of discretion is committed when an act is 1) done contrary to the Constitution, the law or jurisprudence; or 2) executed "whimsically or arbitrarily" in a manner "so patent and so gross as to amount to an evasion of a positive duty, or to a virtual refusal to perform the duty enjoined." What constitutes grave abuse of discretion is such capricious and arbitrary exercise of judgment as that which is equivalent, in the eyes of the law, to lack of jurisdiction.44 It does not encompass an error of law.45 chanroblesvirtuallawlibary At the outset, it is significant to note that petitioners filed the instant Petition without filing a Motion for Reconsideration of the assailed Resolution. A Motion for Reconsideration of the order or resolution is a condition precedent for the filing of a Petition for Certiorari challenging the issuance of the same.46 cra The general rule that the filing of a Motion for Reconsideration before resort to certiorari will lie is intended to afford the public respondent an opportunity to correct any factual or fancied error attributed to it by way of re-examination of the legal and factual aspects of the case.47 This rule, however, is subject to certain recognized exceptions, to wit: (1) where the order or a resolution, is a patent nullity, as where the court a quo has no jurisdiction; (2) where the questions raised in the certiorariproceeding have been duly raised and passed upon in the lower court; (3) where there is an urgent necessity for the resolution of the question, and any further delay would prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable; (4) where, under the circumstances, a Motion for Reconsideration would be useless; (5) where petitioner was deprived of due process and there is extreme urgency for relief; (6) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable; (7) where the proceedings in the lower court are a nullity for lack of due process; (8) where the proceedings were ex parte or were such that the petitioner had no opportunity to object; and (9) where the issue raised is one purely of law or where public interest is involved.48 chanroblesvirtuallawlibary In the case at bar, petitioners aver that they dispensed with the filing of a Motion for Reconsideration of the 18 August 2006 before the Court of Appeals because of the extreme urgency of the relief prayed for, and the issues raised herein are purely of law and involve public interest, therefore, placing the instant case within the ambit of the exceptions to the general rule. Petitioners claim that at the time of filing of this Petition, private respondent was taking steps and other measures to present for registration the 18 August 2006 Resolution of the Court of Appeals to the Office of the Registry of Deeds of Makati City so as to already re-annotate the Notice of Lis Pendens on the TCTs of the subject properties, prompting petitioners to immediately file the instant Petition without seeking reconsideration of the assailed Resolution. We find that petitioners' reasons for excusing themselves from filing a Motion for Reconsideration before filing the present Petition for Certiorari are baseless and unsubstantiated. Petitioners' averment of sense of urgency in that private respondent was already taking steps and other measures to have the Notice of Lis Pendens re-annotated by presenting the 18 August 2006 Resolution of the Court of Appeals to the Office of the Registry of Deeds of Makati City deserves scant consideration. Petitioners never described with particularity, much less, presented proof of the steps purportedly taken by the private respondent that would justify their immediate resort to this Court on certiorari without seeking reconsideration of the Resolution in question from the Court of Appeals. Petitioners simply made a sweeping allegation that absolutely has no basis. The records themselves are bare of any proof that would convince this Court that the private respondent indeed, took steps to have the challenged Resolution implemented. In fact, petitioners themselves, in their letter 49 dated 8 September 2006 addressed to the Office of the Registry of Deeds of Makati City, pointed out that the questioned Resolution of the Court of Appeals did not yet order the said Office to re-annotate the Notice of Lis Pendens. Petitioners explained in their letter that the 18 August 2006 Resolution granting private respondent's Motion to Reinstate/Re-annotate Notice of Lis Pendens is a mere indication that private respondent can proceed with the legal procedure leading to the actual re-annotation of the said notice. They even reminded the Register of Deeds of Makati City that even if it would be furnished with a copy of the assailed Resolution, it had no authority to reinstate/re-annotate the Notice of Lis Pendens without a proper and direct order from the appellate court. More importantly, petitioners explicitly revealed in their letter that they intended to file a Motion for Reconsideration with the Court of Appeals, as its Resolution dated 18 August 2006 had not yet acquired finality. Why then did petitioners not proceed with filing their motion for reconsideration, and opted to immediately file the present Petition for Certiorari ?cralaw

Similarly baseless is petitioners' bare assertion, without even an attempt at explaining, that the issues subject of the Petition at bar involve public interest sufficient to excuse them from filing a Motion for Reconsideration of the Resolution dated 18 August 2006. Given the foregoing, the Court dismisses the instant Petition for Certiorari for petitioners' failure to comply with a condition precedent for filing such a petition. Granting arguendo that the present special civil action for certiorari can be given due course, the Court still finds that the Court of Appeals did not commit any grave abuse of discretion in granting private respondent's Motion to Reinstate/Re-annotate Notice of Lis Pendens. Lis pendens, which literally means pending suit, refers to the jurisdiction, power or control which a court acquires over property involved in a suit, pending the continuance of the action, and until final judgment. Founded upon public policy and necessity, lis pendens is intended (1) to keep the properties in litigation within the power of the court until the litigation is terminated and to prevent the defeat of the judgment or decree by subsequent alienation; and (2) to announce to the whole world that a particular property is in litigation and serves as a warning that one who acquires an interest over said property does so at his own risk, or that he gambles on the result of the litigation over said property.50 chanroblesvirtuallawlibary A trial court has, however, the inherent power to cancel a notice of lis pendens, under the express provisions of law. 51 As provided for by Sec. 14, Rule 13 of the 1997 Rules of Civil Procedure, a notice of lis pendens may be cancelled on two grounds: (1) if the annotation was for the purpose of molesting the title of the adverse party; or (2) when the annotation is not necessary to protect the title of the party who caused it to be recorded. Considering that the dismissal of private respondent's Complaint by the RTC was appealed to the Court of Appeals, which Complaint refers to the properties covered by TCTs No. 175209, No. 220977, and No. 220978 that bear the annotations of lis pendens, and such properties therefore are irrefragably still the subject matter of litigation, the appellate court rightly saw the need for giving notice to the public of such a fact. The necessity becomes even more compelling considering that petitioner SMWSI had already entered into transactions with third parties involving the subject properties. On the issue of jurisdiction of the Court of Appeals to entertain the issue on the notice of lis pendens, we adhere to the Court of Appeals' ratiocination, thus:cra:nad However, as the dismissal of this case by the lower court has been appealed to us, we now have jurisdiction over the case. The doctrine of lis pendens is based on consideration of public policy and convenience, under the view that once a court has taken cognizance of a controversy, it should be impossible to interfere with the consummation of the judgment by any ad interim transfer, encumbrance, or change of possession. Now that the case is pending before us on appeal, there is no certainty as to the outcome of the case. There is a need to warn the whole world that a particular property is in litigation, serving as a warning that the one who acquires an interest over said property does so at his own risk, or that he gambles on the result of the litigation over said property. x x x. Although the lower court made a finding that [herein private respondent] Hilario has no interest to be protected by the annotation of the notice of the pendency of the case as we now have jurisdiction over the case, we have to ascertain for ourselves the propriety of canceling the annotation of the notice of lis pendens upon proper motion and hearing.52 chanroblesvirtuallawlibary There is likewise no merit in petitioners' contention that the filing by private respondent with the Court of Appeals of an appeal (where he already raised the issue of re-annotating the Notice of Lis Pendens) and, subsequently, a separate Motion to Reinstate/Reannotate Notice of Lis Pendens is tantamount to forum shopping. Forum shopping is committed by a party who, having received an adverse judgment in one forum, seeks another opinion in another court, other than by appeal or the special civil action of certiorari . More accurately, however, forum shopping is the institution of two or more suits in different courts, either simultaneously or successively, in order to ask the courts to rule on the same or related causes and/or to grant the same or substantially the same reliefs.53 The essence of forum-shopping is the filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively, to secure a favorable judgment. Forum-shopping is present when in the two or more cases pending, there is identity of parties, rights of action and reliefs sought.54 cra In the present case, what were filed by the private respondent before the appellate court were an appeal and a motion relative to the same case. The appeal and the motion filed by the private respondent cannot be regarded as separate and distinct cases or suits. It is settled that the office of a motion is not to initiate new litigation, but to bring up a material but incidental matter arising in the progress of the case in which the motion was filed. A motion is not an independent right or remedy, but is confined to incidental matters in the progress of a cause. It relates to some question that is collateral to the main object of the action and is connected with and dependent upon the principal remedy.55 Private respondent's Motion to Reinstate/Re-annotate Notice of Lis Pendens is, at the very least, a mere reiteration of one particular issue already raised in the appeal, and an insistence on the urgency of resolving the same ahead of the other issues. The filing of said Motion cannot be considered forum shopping and the admission thereof by the Court of Appeals did not constitute grave abuse of discretion. Finally, petitioners futilely attempt to convince this Court that the Court of Appeals acted with grave abuse of discretion in granting private respondent's Motion to Reinstate/Re-annotate Notice of Lis Pendens in violation of the proper procedures prescribed under Presidential Decree No. 1529:cra:nad Section 117. Procedure. When the Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be made in pursuance of any deed, mortgage or other instrument presented to him for registration, or where any party in interest does not agree with the action taken by the Register of Deeds with reference to any such instrument, the question shall be submitted to the Commissioner of Land Registration by the Register of Deeds, or by the party in interest thru the Register of Deeds. Where the instrument is denied registration, the Register of Deeds shall notify the interested party in writing, setting forth the defects of the instrument or legal grounds relied upon, and advising him that if he is not agreeable to such ruling, he may, without withdrawing the documents from the Registry, elevate the matter by consulta within five days from receipt of notice of the denial of registration to the Commissioner of Land Registration. The Register of Deeds shall make a memorandum of the pending consulta on the certificate of title which shall be canceled motu proprio by the Register of Deeds after final resolution or decision thereof, or before resolution, if withdrawn by petitioner. The Commissioner of Land Registration, considering the consulta and the records certified to him after notice to the parties and hearing, shall enter an order prescribing the step to be taken or memorandum to be made. His resolution or ruling in consultas shall be conclusive and binding upon all Registers of Deeds, provided, that the party in interest who disagrees with the final resolution, ruling or order of the Commissioner relative to consultas may appeal to the Court of Appeals within the period and in the manner provided in Republic Act No. 5434. It is clear that the afore-quoted procedure applies only when the instrument is already presented for registration and: (1) the Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be made in pursuance of any deed, mortgage or other instrument presented to him for registration; or (2) where any party in interest does not agree with the action taken by the Register of Deeds with reference to any such instrument; and (3) when the registration is denied. None of these situations is present in this case. There was no evidence that the 18 August 2006 Resolution of the Court of Appeals was already presented to the Register of Deeds of Makati City for the re-annotation of the Notice of Lis Pendens. There is also no showing that the Register of Deeds denied the reannotation. G.R. No. 17611656 cra Unsatisfied with the other Resolution dated 18 August 2006 of the Court of Appeals denying their Motion to Dismiss Appeal, petitioners moved for its reconsideration, but it was denied by the appellate court in a Resolution 57 dated 9 November 2006. In a separate Resolution58 also dated 9 November 2006, the Court of Appeals ordered the Register of Deeds of Makati City to submit the original copies of the Minutes of the Meeting of the Board of Directors of ODC dated 7 May 1988, together with the Deed of Assignment dated 10 May 1988 entered into by and between Tomas Q. Soriano and ODC involving the subject properties, so that they could be referred to the NBI for comparative analysis of Tomas Q. Soriano's signatures. Following the foregoing development, petitioners filed before this Court another Petition for Certiorari under Rule 65 of the 1997 Revised Rules of Civil Procedure on 29 December 2006, docketed as G.R. No. 176116. Petitioners assert that the Court of Appeals acted with grave abuse of discretion amounting to lack or excess of jurisdiction in refusing to dismiss private respondent's appeal in its Resolutions dated 18 August 2006 and 9 November 2006, even though the appeal raised only questions of law. Petitioners argue that an appeal raising pure questions of law must be filed with the Supreme Court via Petition for Review under Rule 45 and not with the Court of Appeals. Petitioners also contend that the Resolution dated 9 November 2006 of the Court of Appeals ordering the submission of documents so that the NBI could perform a comparative analysis of Tomas Q. Soriano's signatures, was apparently for the purpose of finding out whether forgery was committed in the Deed of Assignment dated 10 May 1988. Petitioners assert that the appellate court has absolutely no original jurisdiction to rule whether Tomas Q. Soriano's signature was forged in the Deed of Assignment in question.

There is no need for the Court of Appeals to have done an analytical comparison of Tomas Q. Soriano's signatures considering that the RTC made no factual finding as regards the existence or non-existence of forgery. Accordingly, the Court of Appeals has no power to inquire into the allegations of forgery made in the private respondent's Complaint, and for it to proceed to do so is grave abuse of discretion tantamount to lack or excess of jurisdiction. The Court resolves first the issue of whether the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction in denying petitioners' Motion to Dismiss Appeal. In resolving such issue, it is necessary to determine only if private respondent's appeal to the Court of Appeals involves purely questions of law, in which case, the proper mode of appeal would be a Petition for Review on Certiorari to the Supreme Court under Rule 45 of the 1997 Revised Rules of Civil Procedure; or questions of fact or mixed questions of fact and law, in which case, the proper mode would be by ordinary appeal to the Court of Appeals under Rule 41. A question of law exists when there is doubt or controversy as to what the law is on a certain state of facts, and there is a question of fact when the doubt or difference arises as to the truth or falsehood of facts, or when the query necessarily invites calibration of the whole evidence considering mainly the credibility of witnesses, existence and relevancy of specific surrounding circumstances, their relation to one another and to the whole, and probabilities of the situation. Ordinarily, the determination of whether an appeal involves only questions of law or questions both of law and of fact is best left to the appellate court, and all doubts as to the correctness of such conclusions will be resolved in favor of the Court of Appeals.59 cra Among the grounds raised by petitioners in seeking the dismissal by the RTC of private respondent's Complaint in Civil Case No. 03954 are: (1) the Complaint stated no cause of action;60 (2) the claim or demand set forth in the Complaint had been paid, waived, abandoned, or otherwise extinguished;61 and (3) a condition precedent for filing the claim has not been complied with.62 chanroblesvirtuallawlibary Settled is the rule that in a Motion to Dismiss based on lack of cause of action, the issue is passed upon on the basis of the allegations in the complaint, assuming them to be true. The court does not inquire into the truth of the allegations and declare them to be false; otherwise, it would be a procedural error and a denial of due process to the plaintiff. Only the statements in the complaint may be properly considered, and the court cannot take cognizance of external facts or hold preliminary hearings to ascertain their existence. To put it simply, the test for determining whether a complaint states or does not state a cause of action against the defendants is whether or not, admitting hypothetically the truth of the allegations of fact made in the complaint, the judge may validly grant the relief demanded in the complaint.63 cra In a Motion to Dismiss based on failure to state a cause of action, there cannot be any question of fact or "doubt or difference as to the truth or falsehood of facts," simply because there are no findings of fact in the first place. What the trial court merely does is to apply the law to the facts as alleged in the complaint, assuming such allegations to be true. It follows then that any appeal therefrom could only raise questions of law or "doubt or controversy as to what the law is on a certain state of facts." Therefore, a decision dismissing a complaint based on failure to state a cause of action necessarily precludes a review of the same decision on questions of fact. One is the legal and logical opposite of the other.64 chanroblesvirtuallawlibary Hence, private respondent did raise a question of law when he assigned as an error in his appeal to the Court of Appeals the RTC's alleged error in dismissing his Complaint in Civil Case No. 03-954 for failure to state a cause of action. It must be remembered, however, that the basis of the RTC Order on 17 January 2005 dismissing private respondent's Complaint was not only its failure to state a cause of action, but also the fact that the claim or demand set forth therein had been paid, waived, abandoned, or otherwise extinguished, and that the condition precedent for filing a claim had not been complied with. According to the RTC, the Complaint was dismissible on the ground that the claim or demand set forth therein had been paid, waived, abandoned, or otherwise extinguished. Private respondent, in accepting a certain parcel of land as his share in the estate of his late father Tomas Q. Soriano, was now deemed to have been paid or compensated because his share in the estate of the deceased had been delivered to him. In arriving at such a finding, the RTC necessarily made a preliminary determination of the facts in order to verify that, indeed, private respondent's claim or demand had been paid. When the private respondent assigned as error in his appeal such finding of the RTC, he raised not only a question of law, but also a question of fact. The Court agrees in the following observation and pronouncement made by the Court of Appeals:cra:nad The lower court evaluated the documents [herein private respondent] Hilario submitted to prove his claim of forgery. The lower court practically made a finding of fact that the signature of Tomas Q. Soriano in the [D]eed of [A]ssignment is a forgery when the court stated that "the signatures in the [D]eed of [A]ssignment and in the [S]econd [A]mendment of [C]redit [A]greement are the same." Whether the signature of Tomas Q. Soriano was a forgery or not should have been determined during a trial, and not merely in the resolution of a [M]otion to [D]ismiss. [Private respondent] Hilario likewise raised the issue of whether or not there was payment or estoppel as claimed by the [herein peititoners]. At first glance, it could be surmised that the issue of estoppel is a question of law. However, in this case, there is a question of fact involved. [Private respondent] Hilario comments that there is precisely a need to factually ascertain whether there has been full payment or award of his legitime, as a compulsory heir of Tomas Q. Soriano, before the court can conclude that [private respondent] Hilario is estopped from questioning the [D]eed of [A]ssignment. xxx As [private respondent] Hilario raised questions of fact as well as questions of law in his appeal, the ground for dismissal relied upon by the [petitioners] is not applicable in his case.65 chanroblesvirtuallawlibary The rule is that the determination of whether an appeal involves only questions of law or questions of both law and fact is best left to the appellate court, and all doubts as to the correctness of such conclusions will be resolved in favor of the Court of Appeals.66 chanroblesvirtuallawlibary Finally, we do not perceive any abusive exercise of power in the Resolution dated 9 November 2006 of the Court of Appeals requiring the submission of the original copies of the documents involved in Civil Case No. 03-954 to enable the NBI to perform a comparative analysis of Tomas Q. Soriano's signatures therein. It must be stressed that in its 17 January 2005 Order, the trial court expressed a finding that "in the beholder of untrained eyes, the signatures in the Deed of Assignment and in the Second Amendment of Credit Agreement are the same." 67Considering that the trial court made a finding of fact as regards the issue of forgery and such issue was properly raised in the private respondent's appeal with the appellate court, it certainly behooves the appellate court to review the said findings. Accordingly, as the Court of Appeals has the power to inquire into the allegations of forgery made in the private respondent's Complaint, it can validly require the submission of the original copies of the documents involved in Civil Case No. 03-954 to enable the NBI to perform a comparative analysis of Tomas Q. Soriano's signatures therein. WHEREFORE, premises considered, these consolidated Petitions for Certiorari are hereby DISMISSED. SO ORDERED. G.R. No. 167140 November 23, 2011 COL. FRANCISCO DELA MERCED, substituted by his heirs namely, LUIS CESAR DELA MERCED, BLANQUITA DELA MERCED nee MACATANGAY, and MARIA OLIVIA M. PAREDES, Petitioners, vs. GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) and Spouses VICTOR and MILAGROS MANLONGAT,Respondents. DECISION DEL CASTILLO, J.: A transferee pendente lite of registered land, whose title bears a notice of a pending litigation involving his transferors title to the said land, is bound by the outcome of the litigation, whether it be for or against his transferor. Given this principle, the modification of the final decision against the transferor in order to include the transferee pendente lite does not violate the doctrine of immutability of final judgments. His inclusion does not add to or change the judgment; it is only a legal consequence of the established doctrine that a final judgment binds the privy of a litigating party. Before the Court is a Petition for Review1 assailing the validity of the February 9, 2005 Order2 of Branch 160 of the Regional Trial Court (RTC) of Pasig City. The said Order denied petitioners motion for supplemental writ of execution:3 Conformably with Section 8, Rule 39, 1997 Rules of Civil Procedure, execution in this case can only be implemented as far as what has been decreed in the decision dated September 11, 2001, qualified by the Order of this Court dated January 20, 2003 with respect [to] the payment of attorneys fees. In view thereof, plaintiffs motion for supplemental writ of execution is DENIED. SO ORDERED.4 The September 11, 2001 Decision referred to in the assailed Order was rendered by this Court in G.R. No. 140398, entitled Col. Francisco Dela Merced, substituted by his heirs, namely, BLANQUITA E. DELA MERCED, LUIS CESAR DELA MERCED, BLANQUITA E. DELA MERCED (nee MACATANGAY), and MARIA OLIVIA M. PAREDES, v. GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) and SPOUSES VICTOR and MILAGROS MANLONGAT.5 The fallo of the said Decision reads:

WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals is REVERSED AND SET ASIDE. The decision of the Regional Trial Court of Pasig City, Branch 160, in Civil Case Nos. 51410 and 51470, is REINSTATED. The foreclosure sale of Lot Nos. 6, 7, 8 and 10 of Block 2 and Lot 8 of Block 8 of the property originally covered by TCT 26105, and the subsequent certificates of titles issued to GSIS as well as TCT No. PT-94007 in the name of Elizabeth Manlongat, are declared NULL AND VOID. The Register of Deeds of Pasig City is ordered to CANCEL all present certificates of title in the name of GSIS and Elizabeth Manlongat covering the above-mentioned properties, and to ISSUE new certificates of title over the same in the name of petitioners as co-owners thereof. Respondents GSIS and spouses Victor and Milagros Manlongat are ORDERED to pay, jointly and severally, attorneys fees in the increased amount of P50,000.00, and to pay the costs. SO ORDERED.6 G.R. No. 140398 has long attained finality7 but could not be executed because of the objections raised by the Register of Deeds (RD) and respondent Government Service Insurance System (GSIS). These objections, which the trial court found insurmountable in its assailed February 9, 2005 Order, are now presented to us for resolution. Factual antecedents This case involves five registered parcels of land located within the Antonio Subdivision, Pasig City Lots 6, 7, 8, and 10 of Block 2 and Lot 8 of Block 8 (subject properties). These lots were originally owned by, and titled in the name of, Jose C. Zulueta (Zulueta), as evidenced by Transfer Certificate of Title (TCT) No. 26105.8 TCT No. 26105 contains several lots, other than the subject properties, within the Antonio Subdivision. Later, the Zulueta spouses mortgaged9 several lots contained in TCT No. 26105 to the GSIS, which eventually foreclosed on the mortgaged properties, including the subject properties. Upon consolidation of GSISs ownership, TCT No. 26105 in Zuluetas name was cancelled, and TCT No. 23554 10 was issued in GSISs name.11 Upon learning of the foreclosure, petitioners predecessor, Francisco Dela Merced (Dela Merced) filed a complaint12 praying for the nullity of the GSIS foreclosure on the subject properties (Lots 6, 7, 8, and 10 of Block 2 and Lot 8 of Block 8) on the ground that he, not the Zuluetas, was the owner of these lots at the time of the foreclosure. Dela Merced also impleaded Victor and Milagros Manlongat, 13 who were claiming Lot 6, Block 2 by virtue of a sale executed by the GSIS in their daughters (Elizabeth Manlongat) favor.14 Dela Merced argued that, due to the nullity of GSISs foreclosure over the subject properties, it had no ownership right that could be transferred to Elizabeth Manlongat. Dela Merced caused the annotation of lis pendens15 on GSISs TCT No. 23554 on September 21, 1984 in order to protect his interests in the subject properties. Dela Merced died in 1988 and was substituted by his heirs, the petitioners in the instant case. After a protracted litigation, the case reached this Court as G.R. No. 140398. On September 11, 2001, a Decision16 was rendered in petitioners favor. The Court nullified GSISs foreclosure of the subject properties because these lots were never part of its mortgage agreement with the Zulueta spouses. The dispositive portion of said Decision reads: WHEREFORE, in view of the foregoing, the petition is granted. The decision of the Court of Appeals is reversed and set aside. The decision of the Regional Trial Court of Pasig City, Branch 160, in Civil Case Nos. 51410 and 51470, is REINSTATED. The foreclosure sale of Lot Nos. 6, 7, 8 and 10 of Block 2 and Lot 8 of Block 8 of the property originally covered by TCT 26105, and the subsequent certificates of titles issued to GSIS as well as TCT No. PT-94007 in the name of Elizabeth Manlongat, are declared NULL AND VOID. The Register of Deeds of Pasig City is ordered to CANCEL all present certificates of title in the name of GSIS and Elizabeth Manlongat covering the above-mentioned properties, and to ISSUE new certificates of tile over the same in the name of petitioners as co-owners thereof. Respondents GSIS and spouses Victor and Milagros Manlongat are ORDERED to pay, jointly and severally, attorneys fees in the increased amount of P50,000.00, and to pay the costs.17 Judgment was entered on April 23, 2002.18 Pursuant to the finality of the above Decision, petitioners filed a Motion for Execution19 with Branch 160 of the RTC of Pasig City. First obstacle: GSISs alleged exemption from execution GSIS opposed the motion for execution, citing as basis Section 39 of Republic Act No. 8291 (RA 8291), also known as the GSIS Act of 1997. The said provision allegedly exempts GSIS funds and properties from attachment, garnishment, execution, levy and other court processes.20 On January 20, 2003, the trial court granted petitioners motion for execution; but held in abeyance the execution of the award of attorneys fees, pending clarification before the higher courts of the issue of GSISs exemption under Section 39 of RA 8291. The said Order is reproduced below: Acting on the Motion for Execution filed by the plaintiff herein together with the opposition of defendant GSIS, and considering that the judgment has already become final and executory, the same is hereby Granted. As prayed for, let a writ of execution issue to enforce the judgment of this court. However, with respect to the payment of attorneys fees in the increased amount of P50,000.00 which has to be paid jointly and severally by the GSIS and Sps. Manlongat, the same is held in abeyance as far as GSIS is concerned pending clarification by the GSIS before the Supreme Court on the issue of whether its funds and assets are exempt from execution pursuant to Section 39, R.A. 8291, otherwise known as the GSIS Act of 1997. SO ORDERED.21 A writ of execution was issued on July 24, 2003.22 Eventually, GSIS filed with the Court of Appeals (CA) a petition for certiorari and prohibition against the trial courts implementation of the writ of execution against it.23 The petition, docketed as CA-G.R. SP No. 87821, presented the issue whether the trial judge gravely abused her discretion in ordering execution against GSIS funds and properties despite their alleged express and absolute exemption from execution, garnishment, and other court processes under Section 39 of RA 8291.24 In its October 28, 2005 Decision, the CA dismissed GSISs petition and held that execution may be enforced against it. 25 The ratio of the appellate court is reproduced in part: Public respondent court presided by Hon. Amelia A. Fabros did not commit grave abuse of discretion when it issued the Writ of Execution dated 24 July 2003. It must be considered that the properties which (Lots 6, 7, 8, and 10 of Block 2 and Lot 8 of Block 8 of Antonio Subdivision) were the subject of the writ of execution in the instant case are not the properties of petitioner GSIS. In the court a quos Decision dated October 23, 1987 and reiterated in the Honorable Supreme Courts Decision dated September 11, 2001, it declared inter alia that the certificates of title issued to petitioner GSIS pertaining to Lot Nos. 6, 7, 8, and 10 of Block 2 and Lot 8 of Block 8 are null and void and further directed inter alia the Register of Deeds of Pasig City to cancel all the present certificates of title in the name of petitioner GSIS. x x x26 xxxx [P]etitioner GSIS has no interest over the subject properties and x x x had never validly acquired ownership thereof. x x x 27 Therefore, any and all [rights] that petitioner GSIS may have on the subject properties were non-existent from the very beginning. Verily, the court a quo was right then in issuing the writ of execution dated 24 July 2003 and that petitioner GSIS claim that it should be exempted from execution has no basis in fact and in law.28 xxxx We lay stress that the pronouncement made in the abovementioned SC circular and in the case of Commissioner of Public Highways vs. San Diego, cited in the Armovit case find no application in the case at bar. It must be noted that the properties referred to therein are those owned by government which could not be seized under writ of execution to satisfy such judgment because to do so, there is a necessity for the corresponding appropriation of public funds by Congress before the same could be disbursed. In this instant case, it has already been settled that the herein properties involved are not owned by petitioner GSIS; hence, there is no prohibition that the same could be executed and that there is no public funds involved which require the corresponding appropriation thereof. x x x29 xxxx In fine, the execution of the subject properties is proper for to assert otherwise, would be depriving private respondents dela Merced and Paredes of their properties without due process of law as it had been clearly established on record that they really owned the subject properties. To sustain petitioner GSIS view that it should be exempt from execution would be putting the subject properties beyond the reach of the rightful owners thereof x x x. Likewise, to uphold petitioner GSIS theory would inevitably lead to a disastrous consequence and lend imprimatur to deprivation of property without due process of law. Additionally, to grant petitioner GSIS prayer that the subject properties be exempt from execution without any factual and legal basis thereof would resultantly remain the same in the custody or control of petitioner GSIS which unjustly enriches itself at the expense of private respondents dela Merced and Paredes and who the latter could be deprived of the beneficial use/ownership thereof when in the very first place they were able to establish the ownership thereof. Every person who through an act or performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him. 30 xxxx WHEREFORE, premises considered, the instant PETITION FOR CERTIORARI and PROHIBITION is hereby DISMISSED. Accordingly, the Writ of Execution dated 24 July 2003 and the Order dated 16 September 2004 both rendered by the Regional Trial Court of Pasig City, Branch 160 stand. SO ORDERED. 31 GSISs motion for reconsideration of the above Decision was denied in the June 30, 2006 Resolution of the appellate court. 32 GSIS appealed the CA Decision to this Court33 but the petition was denied in a Resolution dated February 12, 2007,34 which denial was entered in the Book of Judgments on October 2, 2007.35 Second obstacle: Alleged inadequacy of the fallo After the resolution of the issue of GSISs exemption, petitioners encountered more problems with the execution of the September 11, 2001 Decision in G.R. No. 140398. According to the RD of Pasig City, Policarpio Espenesin, he could not enforce the Decision in G.R. No. 140398 as worded. The order to cancel the titles of GSIS over Lots 7 and 8 of Block 2 allegedly could not be enforced because GSIS no longer had title over these two lots. GSIS had already conveyed these lots in 1985 and 1988 to Diogenes Bartolome (Lot 8) and Antonio Dimaguila [Dimaguila] (Lot 7), respectively. At present, Lot 7 of Block 2 is titled in Dimaguilas name (TCT No. PT-67466)36 while Lot 8 of Block 2 is titled in the name of Bartolomes assignee, Zenaida Victorino *Victorino+ (TCT No. 53031).37 While both titles contain notices of lis pendens carried over from GSISs title,38 the RD claimed that the writ of execution must first be modified to include the cancellation of derivative titles of the GSIS title. The RD also found difficulty in implementing the order to cancel GSISs titles over Lot 10 of Block 2 and Lot 8 of Block 8 and to issue new ones in petitioners name because no such individual titles exist in his records. The RD posited that these two lots must still be included in GSISs "mother" title, TCT No. 23554. The RD opined

that he cannot cancel GSISs mother title, even if it contains Lot 10 of Block 2 and Lot 8 of Block 8 because it would affect other lots that might still be included therein. The RD further lamented that assuming he could cancel GSISs mother title with respect to Lot 10 of Block 2 and Lot 8 of Block 8, there is still no way that he could issue new titles over these lots in petitioners name. This is because his office has no information regarding the technical descriptions for these two lots. The RD thus suggested that the parties provide him with these relevant information before he can proceed. In order to address these difficulties, petitioners filed before the trial court a Motion for Supplemental Writ of Execution. 39 They prayed for a supplemental writ ordering the RD to cancel the titles over Lots 7 and 8 of Block 2 in GSISs name or in the name of other subsequent transferees; and directing the GSIS and the Bureau of Lands to supply the RD with the technical descriptions of Lot 10, Block 2, and Lot 8, Block 8.40 GSIS opposed the issuance of a supplemental writ of execution.41 On February 9, 2005, Judge Amelia A. Fabros issued the assailed order denying petitioners motion for supplemental writ of execution. Respondents arguments The Manlongats could not be served with copies of the Courts resolutions; hence the Court dispensed with their comment. 42 GSIS argues that petitioners motion was properly denied because it seeks to modify a final and executory Decision. The September 11, 2001 Decision in G.R. No. 140398 only ordered the cancellation of GSISs titles over the subject properties. It did not order the cancellation of all derivative titles of GSISs transferees; nor did it order the GSIS to perform acts such as providing the RD with the technical descriptions for Lot 10, Block 2 and Lot 8, Block 8. GSIS maintains that a supplemental writ that includes such additional orders is null and void for nonconformity with the judgment. Further, GSIS argues that the inclusion of "derivative titles" in the September 11, 2001 Decision in G.R. No. 140398 would deprive the holders of these derivative titles their day in court. GSIS opines that the holders of the derivative titles are not bound by the judgment against GSIS because these holders are strangers to the action between GSIS and petitioners. Lastly, GSIS again raises its earlier argument that the September 11, 2001 Decision in G.R. No. 140398 cannot be enforced because of GSISs exemption from court processes under RA 8291. Petitioners arguments Petitioners counter that the September 11, 2001 Decision in G.R. No. 140398 can be enforced against GSISs transferees pendente lite because these transferees were given notice of the pendency of the case by virtue of the notice of lis pendens that had been inscribed on GSISs TCT No. 23554 as early as September 21, 1984. In fact, when TCT No. 23554 was cancelled with respect to Lots 7 and 8 of Block 2 in order to issue new titles in Dimaguilas and Victorinos names, this notice was carried over to their respective titles. Moreover, the conveyance of these lots to Victorino and Dimaguila transpired in 1985 and 1988, respectively; clearly during the pendency of the case and with notice of the questions surrounding GSISs ownership over these properties. As transferees pendente lite, Dimaguilas and Victorinos titles are proper subjects of writs of execution even if they were not actual parties to the case. Petitioners cite Voluntad v. Spouses Dizon43 as their authority.44 With regard to the issuance of new titles for Lot 10, Block 2 and Lot 8, Block 8, petitioners argue that GSIS can be compelled to provide the RD with their respective technical descriptions. This power is granted to the courts under Section 10, Rule 39 of the Rules of Court.45 Petitioners maintain that execution of the Decision in G.R. No. 140398 should not be confined to the literal terms contained only in the fallo or the dispositive portion.46 As regards GSISs alleged exemption, petitioners posit that the GSIS can no longer raise the issue of exemption from execution given that the CA had already rendered its Decision on that question in CA-G.R. SP No. 87821. The said Decision was affirmed by this Court in G.R. No. 173391 through our February 12, 2007 Resolution47 and entry of judgment in that case was made on October 2, 2007.48 Issues Can GSIS still raise the issue of exemption? Whether a final and executory judgment against GSIS and Manlongat can be enforced against their successors-in-interest or holders of derivative titles Whether an order to cancel title to a particular property includes an order to provide technical descriptions and segregate it from its mother title Our Ruling On the issue of GSISs exemption The issue of GSISs alleged exemption under RA 8291 had been finally decided against GSIS in G.R. No. 173391, when this Court denied GSISs petition for review. The denial rendered the CA Decision in CA-G.R. SP No. 87821 final and executory. GSISs attempt to resurrect the same issue by interjecting the same in this proceeding is barred by the principle of "law of the case," which states that "determinations of questions of law will generally be held to govern a case throughout all its subsequent stages where such determination has already been made on a prior appeal to a court of last resort."49 The Decision in G.R. No. 173391 allowing the execution of the judgment against GSIS is the "law of the case" and controls the proceedings below which are already in the execution stage. Enforcement of judgment against transferees pendente lite "A notice of lis pendens is an announcement to the whole world that a particular real property is in litigation, serving as a warning that one who acquires an interest over said property does so at his own risk, or that he gambles on the result of the litigation over the said property." 50 The effect of the annotation of lis pendens on future transactions over the subject property is discussed by an authority on land titles and registration: Once a notice of lis pendens has been duly registered, any cancellation or issuance of the title of the land involved as well as any subsequent transaction affecting the same, would have to be subject to the outcome of the litigation. In other words, upon the termination of the litigation there can be no risk of losing the property or any part thereof as a result of any conveyance of the land or any encumbrance that may be made thereon posterior to the filing of the notice of lis pendens.51 It is not disputed that petitioners caused the annotation of lis pendens on TCT No. 23554, which covers Lots 7 and 8 of Block 2, as early as September 21, 1984.52 On July 29, 1985 and August 24, 1998, TCT No. 23554 was cancelled with respect to Lots 7 and 8 of Block 2 and new individual titles were issued to Victorino and Dimaguila. Both titles had the notice of lis pendens which was carried over from TCT No. 23554. Ineluctably, both Victorino and Dimaguila had notice of the litigation involving GSISs ownership over the subject properties, and were bound by the outcome of the litigation. When a transferee pendente lite takes property with notice of lis pendens, such transferee undertakes to respect the outcome of the litigation. As held in Selph v. Vda. de Aguilar, 53 an order to cancel the transferors title may be enforced against his transferee, whose title is expressly subject to the outcome of the litigation by the fact of the annotation of lis pendens. The existence of these entries on Dimaguilas and Victorinos titles bars any defense of good faith 54 against petitioners and effectively makes Dimaguila and Victorino mere privies of GSIS and subject to whatever rights GSIS might have in the subject properties, which (as it turns out) is none at all. What Dimaguila and Victorino possess are derivative titles of the GSISs title over Lots 7 and 8 of Block 2, which this Court has finally adjudicated to be null and void. Given the legal maxim that a spring cannot rise higher than its source, it follows that Dimaguilas and Victorinos titles, or any other title over the subject properties that are derived from TCT No. 23554 of the GSIS, are likewise null and void. As explained by this Court in another case, the title obtained by the transferee pendente lite affords him no special protection; he cannot invoke the rights of a purchaser in good faith and cannot acquire better rights than those of his predecessor-in-interest.55 In Voluntad v. Spouses Dizon,56 the Court allowed the issuance of an alias writ of execution against the transferees pendente lite, who had knowledge of the pending litigation on the basis of the annotation of the notice of lis pendens on their titles. The Court clarified therein that there was no need for the victorious [parties] to file a separate action to enforce their right to recover the property as against the new registered owners.57 In Associated Bank v. Pronstroller,58 the Court affirmed the judgments of the trial and appellate courts cancelling the titles of the spouses Vaca, who were transferees pendente lite of Associated Bank, despite the fact that the spouses Vaca were not parties to the case between Associated Bank and the Pronstrollers. The Court explained therein: Admittedly, during the pendency of the case, respondents timely registered a notice of lis pendens to warn the whole world that the property was the subject of a pending litigation. Lis pendens, which literally means pending suit, refers to the jurisdiction, power or control which a court acquires over property involved in a suit, pending the continuance of the action, and until final judgment. Founded upon public policy and necessity, lis pendens is intended to keep the properties in litigation within the power of the court until the litigation is terminated, and to prevent the defeat of the judgment or decree by subsequent alienation. x x x The filing of a notice of lis pendens has a twofold effect: (1) to keep the subject matter of the litigation within the power of the court until the entry of the final judgment to prevent the defeat of the final judgment by successive alienations; and (2) to bind a purchaser, bona fide or not, of the land subject of the litigation to the judgment or decree that the court will promulgate subsequently. This registration, therefore, gives the court clear authority to cancel the title of the spouses Vaca, since the sale of the subject property was made after the notice of lis pendens. x x x59 Upon Associated Banks MR, the spouses Vaca filed a motion to intervene arguing that they had a real interest in assailing the July 14, 2008 Decision, which ordered the cancellation of their title. The Court denied the intervention. It was held that the interests of the spouses Vaca in the subject property were properly represented in the action by their transferor/vendor Associated Bank, which was already a party thereto. As transferees pendente lite, the spouses Vaca stand exactly in the shoes of their predecessor-in-interest, Associated Bank.60 The Court cannot accept GSISs theory that the dispositive portion of the Decision in G.R. No. 140398 is enforceable only against GSISs title because it does not contain the phrase "and all its derivative titles." GSISs narrow interpretation would render nugatory the principle that a final judgment against a party is binding on his privies and successors-in-interest. We cannot sustain this interpretation. In Cabresos v. Judge Tiro, 61 the Court upheld the respondent judges issuance of an alias writ of execution against the successors-in-interest of the losing litigant despite the fact that these successors-in-interest were not mentioned in the judgment and were never parties to the case. The Court explained that an action is binding on the privies of the litigants even if such privies are not literally parties to the action. Their inclusion in the writ of execution does not vary or exceed the terms of the judgment. In the same way, the inclusion of the "derivative titles" in the writ of execution will not alter the Decision in G.R. No. 140398 ordering the cancellation of GSISs title.

Cancellation of title The RD claimed that it cannot execute the order to cancel the GSISs titles over Lot 10, Block 2 and Lot 8, Block 8 because it has no record of GSISs title over these two lots. The RD theorized that these lots are included in a mother title in GSISs possession and would still have to be segregated therefrom. To effectuate such segregation, the RD needed the technical descriptions of the two lots and the mother title. Thus, petitioners ask that the GSIS be compelled to surrender its title over, as well as the technical descriptions of, Lot 10, Block 2 and Lot 8, Block 8. GSIS refused to turn over the needed documents and information, claiming that these acts go beyond what were ordered in the Decision in G.R. No. 140398. GSISs protestations ring hollow. The order contained in the Decision in G.R. No. 140398 is for the RD to cancel GSISs titles over Lot 10, Block 2 and Lot 8, Block 8, inter alia. Whether these titles are individual or contained in a mother title is of no consequence. The RD has to cause their cancellation. If the cancellation can only be carried out by requiring GSIS or the Bureau of Lands to provide the necessary information, then they can be compelled to do so. Otherwise, the Courts decision would be rendered inefficacious, and GSIS would retain ostensible ownership over the lots by the simple expedience that they are included in a mother title, instead of individual titles. That result is manifestly contrary to the Courts ruling and would subvert the very purpose of bringing this case for a complete resolution. A similar predicament was ruled upon by the Court in Republic Surety and Insurance Co., Inc. v. Intermediate Appellate Court.62 In that case, the Court declared that Republic Mines had no right to the property involved but during the execution, the RD refused to cancel the TCT in Republic Mines name on the ground that the dispositive portion of the trial courts Decision did not order the RD to cancel the title and to revive the old title in favor of the victorious party. The Court held that the missing "order to cancel and revive" should be deemed implied in the trial courts decision. Speaking through Justice Feliciano, the Court explained thus: What is involved here is not what is ordinarily regarded as a clerical error in the dispositive part of the decision of the Court of First Instance, which type of error is perhaps best typified by an error in arithmetical computation. At the same time, what is involved here is not a correction of an erroneous judgment or dispositive portion of a judgment. What we believe is involved here is in the nature of an inadvertent omission on the part of the Court of First Instance x x x, of what might be described as a logical follow-through of something set forth both in the body of the decision and in the dispositive portion thereof: the inevitable follow-through, or translation into, operational or behavioral terms, of the annulment of the Deed of Sale with Assumption of Mortgage, from which petitioners' title or claim of title embodied in TCT 133153 flows. The dispositive portion of the decision itself declares the nullity ab initio of the simulated Deed of Sale with Assumption of Mortgage and instructed the petitioners and all persons claiming under them to vacate the subject premises and to turn over possession thereof to the respondent-spouses. Paragraph B of the same dispositive portion, confirming the real estate mortgage executed by the respondent-spouses also necessarily assumes that Title No. 133153 in the name of petitioner Republic Mines is null and void and therefore to be cancelled, since it is indispensable that the mortgagors have title to the real property given under mortgage to the creditor (Article 2085 [2], Civil Code).63 xxxx There are powerful considerations of an equitable nature which impel us to the conclusions we reach here. Substantial justice cannot be served if the petitioner Republic Mines, having absolutely no right, legal or equitable, to the property involved, its claim thereto being based upon a transaction which was not only simulated but also immoral and unconscionable, should be allowed to retain the Transfer Certificate of Title in its name. The petitioner would thereby be in a position to inflict infinite mischief upon the respondent-spouses whom they deprived for 15 years of the possession of the property of which they were and are lawful owners, and whom they compelled to litigate for 15 years to recover their own property. The judicial process as we know it and as administered by this Court cannot permit such a situation to subsist. It cannot be an adequate remedy for the respondent-spouses to have to start once more in the Court of First Instance, to ask that court to clarify its own judgment, a process which could be prolonged by the filing of petitions for review in the Court of Appeals and eventually in this Court once more. Public policy of the most fundamental and insistent kind requires that litigation must at last come to an end if it is not to become more pernicious and unbearable than the very injustice or wrong sought to be corrected thereby. That public policy demands that we cut this knot here and now. 64 When a judgment calls for the issuance of a new title in favor of the winning party (as in the instant case), it logically follows that the judgment also requires the losing party to surrender its title for cancellation. It is the only sensible way by which the decision may be enforced. To this end, petitioners can obtain a court order requiring the registered owner to surrender the same and directing the entry of a new certificate of title in petitioners favor.65 The trial court should have granted petitioners motion for supplemental writ of execution as it had authority to issue the necessary orders to aid the execution of the final judgment.66 GSISs objection that these orders cannot be enforced because they do not literally appear in the Decision in G.R. No. 140398 is unreasonable. GSIS would have the Court spell out the wheres, whys, and hows of the execution. GSIS wants a dispositive portion that is a step-by-step detailed description of what needs to be done for purposes of execution. This expectation is unreasonable and absurd. WHEREFORE, the petition is GRANTED. The February 9, 2005 Order of Branch 160 of the Regional Trial Court of Pasig City is REVERSED and SET ASIDE. The September 11, 2001 Decision in G.R. No. 140398 is clarified to read as follows: WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals is REVERSED AND SET ASIDE. The decision of the Regional Trial Court of Pasig City, Branch 160, in Civil Case Nos. 51410 and 51470, is REINSTATED.1wphi1 The foreclosure sale of Lot Nos. 6, 7, 8 and 10 of Block 2 and Lot 8 of Block 8 of the property originally covered by TCT No. 26105, and the subsequent certificates of titles issued to GSIS as well as TCT No. PT-94007 in the name of Elizabeth Manlongat, and their respective derivative titles are declared NULL AND VOID. The Register of Deeds of Pasig City is ordered to CANCEL all present certificates of title covering the above-mentioned properties, whether contained in individual titles or in a mother title, in the name of GSIS and Elizabeth Manlongat, or in the name of their privies, successors-in-interest or transferees pendente lite, and to ISSUE new certificates of title over the same in the name of petitioners as co-owners thereof. GSIS and the Bureau of Lands are ordered to supply the necessary documents and information for the proper enforcement of the above orders. Respondents GSIS and spouses Victor and Milagros Manlongat are ORDERED to pay, jointly and severally, attorneys fees in the increased amount of P50,000.00, and to pay the costs. SO ORDERED. The trial court is ordered to ISSUE the writ of execution in accordance with the above clarified dispositive portion. GSIS is seriously warned not to further delay the execution of this case. SO ORDERED. G.R. No. 189239 November 24, 2010 SPOUSES LETICIA & JOSE ERVIN ABAD, SPS. ROSARIO AND ERWIN COLLANTES, SPS. RICARDO AND FELITA ANN, SPS. ELSIE AND ROGER LAS PIAS, LINDA LAYDA, RESTITUTO MARIANO, SPS. ARNOLD AND MIRIAM MERCINES, SPS. LUCITA AND WENCESLAO A. RAPACON, SPS. ROMEO AND EMILYN HULLEZA, LUZ MIPANTAO, SPS. HELEN AND ANTHONY TEVES, MARLENE TUAZON, SPS. ZALDO AND MIA SALES, SPS. JOSEFINA AND JOEL YBERA, SPS. LINDA AND JESSIE CABATUAN, SPS. WILMA AND MARIO ANDRADA, SPS. RAYMUNDO AND ARSENIA LELIS, FREDY AND SUSANA PILONEO, Petitioners, vs. FIL-HOMES REALTY and DEVELOPMENT CORPORATION and MAGDIWANG REALTY CORPORATION,Respondents. DECISION CARPIO MORALES, J.: Fil-Homes Realty and Development Corporation and Magdiwang Realty Corporation (respondents), co-owners of two lots situated in Sucat, Paraaque City and covered by Transfer Certificates of Title Nos. 21712 and 21713, filed a complaint for unlawful detainer on May 7, 2003 against above-named petitioners before the Paraaque Metropolitan Trial Court (MeTC). Respondents alleged that petitioners, through tolerance, had occupied the subject lots since 1980 but ignored their repeated demands to vacate them. Petitioners countered that there is no possession by tolerance for they have been in adverse, continuous and uninterrupted possession of the lots for more than 30 years; and that respondents predecessor-in-interest, Pilipinas Development Corporation, had no title to the lots. In any event, they contend that the question of ownership must first be settled before the issue of possession may be resolved. During the pendency of the case or on June 30, 2004, the City of Paraaque filed expropriation proceedings covering the lots before the Regional Trial Court of Paraaque with the intention of establishing a socialized housing project therein for distribution to the occupants including petitioners. A writ of possession was consequently issued and a Certificate of Turn-over given to the City. Branch 77 of the MeTC, by Decision of March 3, 2008, rendered judgment in the unlawful detainer case against petitioners, disposing as follows: WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants Leticia and Ervin Abad et. als. ordering the latter and all persons claiming rights under them to VACATE and SURRENDERpossession of the premises (Lots covered by TCT NOS. (71065) 21712 and (71066) 21713 otherwise known as Purok I Silverio Compound, Barangay San Isidro, Paraaque City to plaintiff and to PAY the said plaintiff as follows: 1. The reasonable compensation in the amount of P20,000.00 a month commencing November 20, 2002 and every month thereafter until the defendants shall have finally vacated the premises and surrender peaceful possession thereof to the plaintiff; 2. P20,000.00 as and for attorneys fees, and finally 3. Costs of suit. SO ORDERED.1 (emphasis in the original) The MeTC held that as no payment had been made to respondents for the lots, they still maintain ownership thereon. It added that petitioners cannot claim a better right by virtue of the issuance of a Writ of Possession for the project beneficiaries have yet to be named. On appeal, the Regional Trial Court (RTC), by Decision of September 4, 2008,2 reversed the MeTC decision and dismissed respondents complaint in this wise: x x x The court a quo ruled that the case filed by plaintiffs (respondents herein) is unlawful detainer as shown by the allegations of the Complaint. The ruling of the court a quo is not accurate. It is not the allegations of the Complaint that finally determine whether a case is unlawful detainer, rather it is the evidence in the case. Unlawful detainer requires the significant element of "tolerance". Tolerance of the occupation of the property must be present right from the start of the defendants possession. The phrase "from the start of defendants possession" is significant. When there is no "tolerance" right from the start of the possession sought to be recovered, the case of unlawful detainer will not prosper.3 (emphasis in the original; underscoring supplied)

The RTC went on to rule that the issuance of a writ of possession in favor of the City bars the continuation of the unlawful detainer proceedings, and since the judgment had already been rendered in the expropriation proceedings which effectively turned over the lots to the City, the MeTC has no jurisdiction to "disregard the . . . final judgment and writ of possession" due to non-payment of just compensation: The Writ of Possession shows that possession over the properties subject of this case had already been given to the City of Paraaque since January 19, 2006 after they were expropriated. It is serious error for the court a quo to rule in the unlawful detainer case that Magdiwang Realty Corporation and Fil-Homes Realty and Development Corporation could still be given possession of the properties which were already expropriated in favor of the City of Paraaque. There is also another serious lapse in the ruling of the court a quo that the case for expropriation in the Regional Trial Court would not bar, suspend or abate the ejectment proceedings. The court a quo had failed to consider the fact that the case for expropriation was already decided by the Regional Trial Court, Branch 196 way back in the year 2006 or 2 years before the court a quo rendered its judgment in the unlawful detainer case in the year 2008. In fact, there was already a Writ of Possession way back in the year 1996 (sic) issued in the expropriation case by the Regional Trial Court, Branch 196. The court a quo has no valid reason to disregard the said final judgment and the writ of possession already issued by the Regional Trial Court in favor of the City of Paraaque and against Magdiwang Realty Corporation and Fil-Homes Realty Development Corporation and make another judgment concerning possession of the subject properties contrary to the final judgment of the Regional Trial Court, Branch 196.4 (emphasis in the original) Before the Court of Appeals where respondents filed a petition for review, they maintained that respondents "act of allowing several years to pass without requiring [them] to vacate nor filing an ejectment case against them amounts to acquiescence or tolerance of their possession."5 By Decision of May 27, 2009,6 the appellate court, noting that petitioners did not present evidence to rebut respondents allegation of possession by tolerance, and considering petitioners admission that they commenced occupation of the property without the permission of the previous owner Pilipinas Development Corporation as indicium of tolerance by respondents predecessor-in-interest, ruled in favor of respondents. Held the appellate court: Where the defendants entry upon the land was with plaintiffs tolerance from the date and fact of entry, unlawful detainer proceedings may be instituted within one year from the demand on him to vacate upon demand. The status of such defendant is analogous to that of a tenant or lessee, the term of whose lease, has expired but whose occupancy is continued by the tolerance of the lessor. The same rule applies where the defendant purchased the house of the former lessee, who was already in arrears in the payment of rentals, and thereafter occupied the premises without a new lease contract with the landowner.7 Respecting the issuance of a writ of possession in the expropriation proceedings, the appellate court, citingRepublic v. Gingoyon,8 held the same does not signify the completion of the expropriation proceedings. Thus it disposed: WHEREFORE, premises considered, the instant Petition is GRANTED. The assailed Decision of the Court a quo is REVOKED and SET ASIDE. The Decision of the Metropolitan Trial Court dated March 3, 2008 is hereby REINSTATED with MODIFICATION *by+ deleting the award for attorneys fees. SO ORDERED. (underscoring supplied) Petitioners motion for reconsideration was denied by Resolution dated August 26, 2009, hence, the filing of the present petition for review. The petition fails. In the exercise of the power of eminent domain, the State expropriates private property for public use upon payment of just compensation. A socialized housing project falls within the ambit of public use as it is in furtherance of the constitutional provisions on social justice. 9 As a general rule, ejectment proceedings, due to its summary nature, are not suspended or their resolution held in abeyance despite the pendency of a civil action regarding ownership. Section 1 of Commonwealth Act No. 53810 enlightens, however: Section 1. When the Government seeks to acquire, through purchase or expropriation proceedings, lands belonging to any estate or chaplaincy (cappellania), any action for ejectment against the tenants occupying said lands shall be automatically suspended, for such time as may be required by the expropriation proceedings or the necessary negotiations for the purchase of the lands, in which latter case, the period of suspension shall not exceed one year. To avail himself of the benefits of the suspension, the tenants shall pay to the landowner the current rents as they become due or deposit the same with the court where the action for ejectment has been instituted. (emphasis and underscoring supplied) Petitioners did not comply with any of the acts mentioned in the law to avail of the benefits of the suspension. They nevertheless posit that since the lots are the subject of expropriation proceedings, respondents can no longer assert a better right of possession; and that the City Ordinance authorizing the initiation of expropriation proceedings designated them as beneficiaries of the lots, hence, they are entitled to continue staying there. Petitioners position does not lie. The exercise of expropriation by a local government unit is covered by Section 19 of the Local Government Code (LGC): SEC. 19. Eminent Domain. A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value of the property. Lintag v. National Power Corporation11 clearly outlines the stages of expropriation, viz: Expropriation of lands consists of two stages: The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint x x x. The second phase of the eminent domain action is concerned with the determination by the court of "the just compensation for the property sought to be taken." This is done by the court with the assistance of not more than three (3) commissioners x x x .lavvphi1 It is only upon the completion of these two stages that expropriation is said to have been completed. The process is not complete until payment of just compensation. Accordingly, the issuance of the writ of possession in this case does not write finis to the expropriation proceedings. To effectuate the transfer of ownership, it is necessary for the NPC to pay the property owners the final just compensation.12 (emphasis and underscoring supplied) In the present case, the mere issuance of a writ of possession in the expropriation proceedings did not transfer ownership of the lots in favor of the City. Such issuance was only the first stage in expropriation. There is even no evidence that judicial deposit had been made in favor of respondents prior to the Citys possession of the lots, contrary to Section 19 of the LGC. Respecting petitioners claim that they have been named beneficiaries of the lots, the city ordinance authorizing the initiation of expropriation proceedings does not state so.13 Petitioners cannot thus claim any right over the lots on the basis of the ordinance. Even if the lots are eventually transferred to the City, it is non sequitur for petitioners to claim that they are automatically entitled to be beneficiaries thereof. For certain requirements must be met and complied with before they can be considered to be beneficiaries. In another vein, petitioners posit that respondents failed to prove that their possession is by mere tolerance. This too fails. Apropos is the ruling in Calubayan v. Pascual:14 In allowing several years to pass without requiring the occupant to vacate the premises nor filing an action to eject him, plaintiffs have acquiesced to defendants possession and use of the premises. It has been held that a person who occupies the land of another at the latters tolerance or permission, without any contract between them, is necessarily bound by an implied promise that he will vacate upon demand, failing which a summary action for ejectment is the proper remedy against them. The status of the defendant is analogous to that of a lessee or tenant whose term of lease has expired but whose occupancy continued by tolerance of the owner. In such a case, the unlawful deprivation or withholding of possession is to be counted from the date of the demand to vacate. (emphasis and underscoring supplied) Respondents bought the lots from Pilipinas Development Corporation in 1983. They stepped into the shoes of the seller with respect to its relationship with petitioners. Even if early on respondents made no demand or filed no action against petitioners to eject them from the lots, they thereby merely maintained the status quo allowed petitioners possession by tolerance. WHEREFORE, the petition for review is DENIED.