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1. Cruz vs Sec.

of DENR
RESOLUTION
PER CURIAM:
Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as citizens and
taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371 (R.A. 8371),
otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and its Implementing Rules and
Regulations (Implementing Rules).
In its resolution of September 29, 1998, the Court required respondents to comment.1 In compliance,
respondents Chairperson and Commissioners of the National Commission on Indigenous Peoples (NCIP),
the government agency created under the IPRA to implement its provisions, filed on October 13, 1998
their Comment to the Petition, in which they defend the constitutionality of the IPRA and pray that the
petition be dismissed for lack of merit.
On October 19, 1998, respondents Secretary of the Department of Environment and Natural Resources
(DENR) and Secretary of the Department of Budget and Management (DBM) filed through the Solicitor
General a consolidated Comment. The Solicitor General is of the view that the IPRA is partly
unconstitutional on the ground that it grants ownership over natural resources to indigenous peoples and
prays that the petition be granted in part.
On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the authors of the
IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional Commission, and the leaders and
members of 112 groups of indigenous peoples (Flavier, et. al), filed their Motion for Leave to Intervene.
They join the NCIP in defending the constitutionality of IPRA and praying for the dismissal of the petition.
On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to Intervene and/or
to Appear as Amicus Curiae. The CHR asserts that IPRA is an expression of the principle of parens patriae
and that the State has the responsibility to protect and guarantee the rights of those who are at a serious
disadvantage like indigenous peoples. For this reason it prays that the petition be dismissed.
On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the Haribon
Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a motion to Intervene
with attached Comment-in-Intervention. They agree with the NCIP and Flavier, et al. that IPRA is
consistent with the Constitution and pray that the petition for prohibition and mandamus be dismissed.
The motions for intervention of the aforesaid groups and organizations were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors filed their
respective memoranda in which they reiterate the arguments adduced in their earlier pleadings and
during the hearing.
Petitioners assail the constitutionality of the following provisions of the IPRA and its Implementing Rules
on the ground that they amount to an unlawful deprivation of the State’s ownership over lands of the
public domain as well as minerals and other natural resources therein, in violation of the regalian doctrine
embodied in Section 2, Article XII of the Constitution:
"(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b) which, in
turn, defines ancestral lands;
"(2) Section 5, in relation to section 3(a), which provides that ancestral domains including inalienable
public lands, bodies of water, mineral and other resources found within ancestral domains are private but
community property of the indigenous peoples;
"(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral domains and
ancestral lands;
"(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the ancestral
domains;
(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the ancestral
lands;
"(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting, extraction,
development or exploration of minerals and other natural resources within the areas claimed to be their
ancestral domains, and the right to enter into agreements with nonindigenous peoples for the
development and utilization of natural resources therein for a period not exceeding 25 years, renewable
for not more than 25 years; and
"(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop, protect and
conserve the ancestral domains and portions thereof which are found to be necessary for critical
watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover or reforestation."2
Petitioners also content that, by providing for an all-encompassing definition of "ancestral domains" and
"ancestral lands" which might even include private lands found within said areas, Sections 3(a) and 3(b)
violate the rights of private landowners.3
In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of the
NCIP and making customary law applicable to the settlement of disputes involving ancestral domains and
ancestral lands on the ground that these provisions violate the due process clause of the Constitution.4
These provisions are:
"(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of ancestral domains
and which vest on the NCIP the sole authority to delineate ancestral domains and ancestral lands;
"(2) Section 52[i] which provides that upon certification by the NCIP that a particular area is an ancestral
domain and upon notification to the following officials, namely, the Secretary of Environment and Natural
Resources, Secretary of Interior and Local Governments, Secretary of Justice and Commissioner of the
National Development Corporation, the jurisdiction of said officials over said area terminates;
"(3) Section 63 which provides the customary law, traditions and practices of indigenous peoples shall be
applied first with respect to property rights, claims of ownership, hereditary succession and settlement of
land disputes, and that any doubt or ambiguity in the interpretation thereof shall be resolved in favor of
the indigenous peoples;
"(4) Section 65 which states that customary laws and practices shall be used to resolve disputes involving
indigenous peoples; and
"(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes involving rights of the
indigenous peoples."5
Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative Order No. 1,
series of 1998, which provides that "the administrative relationship of the NCIP to the Office of the
President is characterized as a lateral but autonomous relationship for purposes of policy and program
coordination." They contend that said Rule infringes upon the President’s power of control over executive
departments under Section 17, Article VII of the Constitution.6
Petitioners pray for the following:
"(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other related provisions of
R.A. 8371 are unconstitutional and invalid;
"(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of the NCIP to
cease and desist from implementing the assailed provisions of R.A. 8371 and its Implementing Rules;
"(3) The issuance of a writ of prohibition directing the Secretary of the Department of Environment and
Natural Resources to cease and desist from implementing Department of Environment and Natural
Resources Circular No. 2, series of 1998;
"(4) The issuance of a writ of prohibition directing the Secretary of Budget and Management to cease and
desist from disbursing public funds for the implementation of the assailed provisions of R.A. 8371; and
"(5) The issuance of a writ of mandamus commanding the Secretary of Environment and Natural
Resources to comply with his duty of carrying out the State’s constitutional mandate to control and
supervise the exploration, development, utilization and conservation of Philippine natural resources."7
After due deliberation on the petition, the members of the Court voted as follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice and
Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged provisions of
R.A. 8371. Justice Puno also filed a separate opinion sustaining all challenged provisions of the law with
the exception of Section 1, Part II, Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules
and Regulations Implementing the IPRA, and Section 57 of the IPRA which he contends should be
interpreted as dealing with the large-scale exploitation of natural resources and should be read in
conjunction with Section 2, Article XII of the 1987 Constitution. On the other hand, Justice Mendoza voted
to dismiss the petition solely on the ground that it does not raise a justiciable controversy and petitioners
do not have standing to question the constitutionality of R.A. 8371.
Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a separate
opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are
unconstitutional. He reserves judgment on the constitutionality of Sections 58, 59, 65, and 66 of the law,
which he believes must await the filing of specific cases by those whose rights may have been violated by
the IPRA. Justice Vitug also filed a separate opinion expressing the view that Sections 3(a), 7, and 57 of
R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the
separate opinions of Justices Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was
redeliberated upon. However, after redeliberation, the voting remained the same. Accordingly, pursuant
to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.
Attached hereto and made integral parts thereof are the separate opinions of Justices Puno, Vitug,
Kapunan, Mendoza, and Panganiban.

SO ORDERED.
2. Sec. of DENR vs Yap
DECISION
REYES, R.T., J.:
AT stake in these consolidated cases is the right of the present occupants of Boracay Island to secure titles
over their occupied lands.
There are two consolidated petitions. The first is G.R. No. 167707, a petition for review on certiorari of the
Decision[1] of the Court of Appeals (CA) affirming that[2] of the Regional Trial Court (RTC) in Kalibo, Aklan,
which granted the petition for declaratory relief filed by respondents-claimants Mayor Jose Yap, et al. and
ordered the survey of Boracay for titling purposes. The second is G.R. No. 173775, a petition for
prohibition, mandamus, and nullification of Proclamation No. 1064[3] issued by President Gloria
Macapagal-Arroyo classifying Boracay into reserved forest and agricultural land.
The Antecedents
G.R. No. 167707
Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand beaches and warm
crystalline waters, is reputedly a premier Philippine tourist destination. The island is also home to 12,003
inhabitants[4] who live in the bone-shaped islands three barangays.[5]
On April 14, 1976, the Department of Environment and Natural Resources (DENR) approved the National
Reservation Survey of Boracay Island,[6] which identified several lots as being occupied or claimed by
named persons.[7]
On November 10, 1978, then President Ferdinand Marcos issued Proclamation No. 1801[8] declaring
Boracay Island, among other islands, caves and peninsulas in the Philippines, as tourist zones and marine
reserves under the administration of the Philippine Tourism Authority (PTA). President Marcos later
approved the issuance of PTA Circular 3-82[9] dated September 3, 1982, to implement Proclamation No.
1801.
Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from filing an application
for judicial confirmation of imperfect title or survey of land for titling purposes, respondents-claimants
Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a petition for declaratory
relief with the RTC in Kalibo, Aklan.
In their petition, respondents-claimants alleged that Proclamation No. 1801 and PTA Circular No. 3-82
raised doubts on their right to secure titles over their occupied lands. They declared that they themselves,
or through their predecessors-in-interest, had been in open, continuous, exclusive, and notorious
possession and occupation in Boracay since June 12, 1945, or earlier since time immemorial. They
declared their lands for tax purposes and paid realty taxes on them.[10]
Respondents-claimants posited that Proclamation No. 1801 and its implementing Circular did not place
Boracay beyond the commerce of man. Since the Island was classified as a tourist zone, it was susceptible
of private ownership. Under Section 48(b) of Commonwealth Act (CA) No. 141, otherwise known as the
Public Land Act, they had the right to have the lots registered in their names through judicial confirmation
of imperfect titles.
The Republic, through the Office of the Solicitor General (OSG), opposed the petition for declaratory
relief. The OSG countered that Boracay Island was an unclassified land of the public domain. It formed
part of the mass of lands classified as public forest, which was not available for disposition pursuant to
Section 3(a) of Presidential Decree (PD) No. 705 or the Revised Forestry Code,[11] as amended.
The OSG maintained that respondents-claimants reliance on PD No. 1801 and PTA Circular No. 3-82 was
misplaced. Their right to judicial confirmation of title was governed by CA No. 141 and PD No. 705. Since
Boracay Island had not been classified as alienable and disposable, whatever possession they had cannot
ripen into ownership.
During pre-trial, respondents-claimants and the OSG stipulated on the following facts: (1) respondents-
claimants were presently in possession of parcels of land in Boracay Island; (2) these parcels of land were
planted with coconut trees and other natural growing trees; (3) the coconut trees had heights of more or
less twenty (20) meters and were planted more or less fifty (50) years ago; and (4) respondents-claimants
declared the land they were occupying for tax purposes.[12]
The parties also agreed that the principal issue for resolution was purely legal: whether Proclamation No.
1801 posed any legal hindrance or impediment to the titling of the lands in Boracay. They decided to
forego with the trial and to submit the case for resolution upon submission of their respective
memoranda.[13]
The RTC took judicial notice[14] that certain parcels of land in Boracay Island, more particularly Lots 1 and
30, Plan PSU-5344, were covered by Original Certificate of Title No. 19502 (RO 2222) in the name of the
Heirs of Ciriaco S. Tirol. These lots were involved in Civil Case Nos. 5222 and 5262 filed before the RTC of
Kalibo, Aklan.[15] The titles were issued on August 7, 1933.[16]
RTC and CA Dispositions
On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, with a fallo reading:
WHEREFORE, in view of the foregoing, the Court declares that Proclamation No. 1801 and PTA Circular
No. 3-82 pose no legal obstacle to the petitioners and those similarly situated to acquire title to their
lands in Boracay, in accordance with the applicable laws and in the manner prescribed therein; and to
have their lands surveyed and approved by respondent Regional Technical Director of Lands as the
approved survey does not in itself constitute a title to the land.
SO ORDERED.[17]

The RTC upheld respondents-claimants right to have their occupied lands titled in their name. It ruled that
neither Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned that lands in Boracay were
inalienable or could not be the subject of disposition.[18] The Circular itself recognized private ownership
of lands.[19] The trial court cited Sections 87[20] and 53[21] of the Public Land Act as basis for
acknowledging private ownership of lands in Boracay and that only those forested areas in public lands
were declared as part of the forest reserve.[22]
The OSG moved for reconsideration but its motion was denied.[23] The Republic then appealed to the CA.
On December 9, 2004, the appellate court affirmed in toto the RTC decision, disposing as follows:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DENYING the appeal
filed in this case and AFFIRMING the decision of the lower court.[24]
The CA held that respondents-claimants could not be prejudiced by a declaration that the lands they
occupied since time immemorial were part of a forest reserve.
Again, the OSG sought reconsideration but it was similarly denied.[25] Hence, the present petition under
Rule 45.
G.R. No. 173775
On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-Arroyo issued
Proclamation No. 1064[26] classifying Boracay Island into four hundred (400) hectares of reserved forest
land (protection purposes) and six hundred twenty-eight and 96/100 (628.96) hectares of agricultural land
(alienable and disposable). The Proclamation likewise provided for a fifteen-meter buffer zone on each
side of the centerline of roads and trails, reserved for right-of-way and which shall form part of the area
reserved for forest land protection purposes.
On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,[27] Wilfredo Gelito,[28] and other
landowners[29] in Boracay filed with this Court an original petition for prohibition, mandamus, and
nullification of Proclamation No. 1064.[30] They allege that the Proclamation infringed on their prior
vested rights over portions of Boracay. They have been in continued possession of their respective lots in
Boracay since time immemorial. They have also invested billions of pesos in developing their lands and
building internationally renowned first class resorts on their lots.[31]
Petitioners-claimants contended that there is no need for a proclamation reclassifying Boracay into
agricultural land. Being classified as neither mineral nor timber land, the island is deemed agricultural
pursuant to the Philippine Bill of 1902 and Act No. 926, known as the first Public Land Act.[32] Thus, their
possession in the concept of owner for the required period entitled them to judicial confirmation of
imperfect title.
Opposing the petition, the OSG argued that petitioners-claimants do not have a vested right over their
occupied portions in the island. Boracay is an unclassified public forest land pursuant to Section 3(a) of PD
No. 705. Being public forest, the claimed portions of the island are inalienable and cannot be the subject
of judicial confirmation of imperfect title. It is only the executive department, not the courts, which has
authority to reclassify lands of the public domain into alienable and disposable lands. There is a need for a
positive government act in order to release the lots for disposition.
On November 21, 2006, this Court ordered the consolidation of the two petitions as they principally
involve the same issues on the land classification of Boracay Island.[33]
Issues
G.R. No. 167707
The OSG raises the lone issue of whether Proclamation No. 1801 and PTA Circular No. 3-82 pose any legal
obstacle for respondents, and all those similarly situated, to acquire title to their occupied lands in
Boracay Island.[34]
G.R. No. 173775
Petitioners-claimants hoist five (5) issues, namely:
I. AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN CONCEPT OF OWNER OVER
THEIR RESPECTIVE AREAS IN BORACAY, SINCE TIME IMMEMORIAL OR AT THE LATEST SINCE 30
YRS. PRIOR TO THE FILING OF THE PETITION FOR DECLARATORY RELIEF ON NOV. 19, 1997, WERE
THE AREAS OCCUPIED BY THEM PUBLIC AGRICULTURAL LANDS AS DEFINED BY LAWS THEN ON
JUDICIAL CONFIRMATION OF IMPERFECT TITLES OR PUBLIC FOREST AS DEFINED BY SEC. 3a, PD
705?
II. HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF PRIVATE OWNERSHIP OVER
THEIR OCCUPIED PORTIONS OF BORACAY LAND, DESPITE THE FACT THAT THEY HAVE NOT
APPLIED YET FOR JUDICIAL CONFIRMATION OF IMPERFECT TITLE?
III. IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS ALIENABLE AND DISPOSABLE UNDER SEC 6,
CA 141 [AN] INDISPENSABLE PRE-REQUISITE FOR PETITIONERS TO OBTAIN TITLE UNDER THE
TORRENS SYSTEM?
IV. IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006, VIOLATIVE OF THE PRIOR VESTED
RIGHTS TO PRIVATE OWNERSHIP OF PETITIONERS OVER THEIR LANDS IN BORACAY, PROTECTED
BY THE DUE PROCESS CLAUSE OF THE CONSTITUTION OR IS PROCLAMATION 1064 CONTRARY TO
SEC. 8, CA 141, OR SEC. 4(a) OF RA 6657.
V. CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE SURVEY AND TO APPROVE
THE SURVEY PLANS FOR PURPOSES OF THE APPLICATION FOR TITLING OF THE LANDS OF
PETITIONERS IN BORACAY?[35] (Underscoring supplied)
In capsule, the main issue is whether private claimants (respondents-claimants in G.R. No. 167707 and
petitioners-claimants in G.R. No. 173775) have a right to secure titles over their occupied portions in
Boracay. The twin petitions pertain to their right, if any, to judicial confirmation of imperfect title under
CA No. 141, as amended. They do not involve their right to secure title under other pertinent laws
Our Ruling
Regalian Doctrine and power of the executive to reclassify lands of the public domain
Private claimants rely on three (3) laws and executive acts in their bid for judicial confirmation of
imperfect title, namely: (a) Philippine Bill of 1902[36] in relation to Act No. 926, later amended and/or
superseded by Act No. 2874 and CA No. 141;[37] (b) Proclamation No. 1801[38] issued by then President
Marcos; and (c) Proclamation No. 1064[39] issued by President Gloria Macapagal-Arroyo. We shall
proceed to determine their rights to apply for judicial confirmation of imperfect title under these laws and
executive acts.
But first, a peek at the Regalian principle and the power of the executive to reclassify lands of the public
domain.
The 1935 Constitution classified lands of the public domain into agricultural, forest or timber.[40]
Meanwhile, the 1973 Constitution provided the following divisions: agricultural, industrial or commercial,
residential, resettlement, mineral, timber or forest and grazing lands, and such other classes as may be
provided by law,[41] giving the government great leeway for classification.[42] Then the 1987
Constitution reverted to the 1935 Constitution classification with one addition: national parks.[43] Of
these, only agricultural lands may be alienated.[44] Prior to Proclamation No. 1064 of May 22, 2006,
Boracay Island had never been expressly and administratively classified under any of these grand
divisions. Boracay was an unclassified land of the public domain.
The Regalian Doctrine dictates that all lands of the public domain belong to the State, that the State is the
source of any asserted right to ownership of land and charged with the conservation of such
patrimony.[45] The doctrine has been consistently adopted under the 1935, 1973, and 1987
Constitutions.[46]
All lands not otherwise appearing to be clearly within private ownership are presumed to belong to the
State.[47] Thus, all lands that have not been acquired from the government, either by purchase or by
grant, belong to the State as part of the inalienable public domain.[48] Necessarily, it is up to the State to
determine if lands of the public domain will be disposed of for private ownership. The government, as the
agent of the state, is possessed of the plenary power as the persona in law to determine who shall be the
favored recipients of public lands, as well as unde what terms they may be granted such privilege, not
excluding the placing of obstacles in the way of their exercise of what otherwise would be ordinary acts of
ownership.[49]
Our present land law traces its roots to the Regalian Doctrine. Upon the Spanish conquest of the
Philippines, ownership of all lands, territories and possessions in the Philippines passed to the Spanish
Crown.[50] The Regalian doctrine was first introduced in the Philippines through the Laws of the Indies
and the Royal Cedulas, which laid the foundation that all lands that were not acquired from the
Government, either by purchase or by grant, belong to the public domain.[51]
The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage Law of 1893. The Spanish
Mortgage Law provided for the systematic registration of titles and deeds as well as possessory
claims.[52]
The Royal Decree of 1894 or the Maura Law[53] partly amended the Spanish Mortgage Law and the Laws
of the Indies. It established possessory information as the method of legalizing possession of vacant
Crown land, under certain conditions which were set forth in said decree.[54] Under Section 393 of the
Maura Law, an informacion posesoria or possessory information title,[55] when duly inscribed in the
Registry of Property, is converted into a title of ownership only after the lapse of twenty (20) years of
uninterrupted possession which must be actual, public, and adverse,[56] from the date of its
inscription.[57] However, possessory information title had to be perfected one year after the
promulgation of the Maura Law, or until April 17, 1895. Otherwise, the lands would revert to the
State.[58]
In sum, private ownership of land under the Spanish regime could only be founded on royal concessions
which took various forms, namely: (1) titulo real or royal grant; (2) concesion especial or special grant; (3)
composicion con el estado or adjustment title; (4) titulo de compra or title by purchase; and (5)
informacion posesoria or possessory information title.[59]
The first law governing the disposition of public lands in the Philippines under American rule was
embodied in the Philippine Bill of 1902.[60] By this law, lands of the public domain in the Philippine
Islands were classified into three (3) grand divisions, to wit: agricultural, mineral, and timber or forest
lands.[61] The act provided for, among others, the disposal of mineral lands by means of absolute grant
(freehold system) and by lease (leasehold system).[62] It also provided the definition by exclusion of
agricultural public lands.[63] Interpreting the meaning of agricultural lands under the Philippine Bill of
1902, the Court declared in Mapa v. Insular Government:[64]
x x x In other words, that the phrase agricultural land as used in Act No. 926 means those public lands
acquired from Spain which are not timber or mineral lands. x x x[65] (Emphasis Ours)
On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise known as the Land
Registration Act. The act established a system of registration by which recorded title becomes absolute,
indefeasible, and imprescriptible. This is known as the Torrens system.[66]
Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926, which was the first
Public Land Act. The Act introduced the homestead system and made provisions for judicial and
administrative confirmation of imperfect titles and for the sale or lease of public lands. It permitted
corporations regardless of the nationality of persons owning the controlling stock to lease or purchase
lands of the public domain.[67] Under the Act, open, continuous, exclusive, and notorious possession and
occupation of agricultural lands for the next ten (10) years preceding July 26, 1904 was sufficient for
judicial confirmation of imperfect title.[68]
On November 29, 1919, Act No. 926 was superseded by Act No. 2874, otherwise known as the second
Public Land Act. This new, more comprehensive law limited the exploitation of agricultural lands to
Filipinos and Americans and citizens of other countries which gave Filipinos the same privileges. For
judicial confirmation of title, possession and occupation en concepto dueo since time immemorial, or
since July 26, 1894, was required.[69]
After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874 on December 1, 1936. To
this day, CA No. 141, as amended, remains as the existing general law governing the classification and
disposition of lands of the public domain other than timber and mineral lands,[70] and privately owned
lands which reverted to the State.[71]
Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of possession and occupation of
lands of the public domain since time immemorial or since July 26, 1894. However, this provision was
superseded by Republic Act (RA) No. 1942,[72] which provided for a simple thirty-year prescriptive period
for judicial confirmation of imperfect title. The provision was last amended by PD No. 1073,[73] which
now provides for possession and occupation of the land applied for since June 12, 1945, or earlier.[74]
The issuance of PD No. 892[75] on February 16, 1976 discontinued the use of Spanish titles as evidence in
land registration proceedings.[76] Under the decree, all holders of Spanish titles or grants should apply for
registration of their lands under Act No. 496 within six (6) months from the effectivity of the decree on
February 16, 1976. Thereafter, the recording of all unregistered lands[77] shall be governed by Section
194 of the Revised Administrative Code, as amended by Act No. 3344.
On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, known as the Property
Registration Decree. It was enacted to codify the various laws relative to registration of property.[78] It
governs registration of lands under the Torrens system as well as unregistered lands, including chattel
mortgages.[79]
A positive act declaring land as alienable and disposable is required. In keeping with the presumption of
State ownership, the Court has time and again emphasized that there must be a positive act of the
government, such as an official proclamation,[80] declassifying inalienable public land into disposable
land for agricultural or other purposes.[81] In fact, Section 8 of CA No. 141 limits alienable or disposable
lands only to those lands which have been officially delimited and classified.[82]
The burden of proof in overcoming the presumption of State ownership of the lands of the public domain
is on the person applying for registration (or claiming ownership), who must prove that the land subject of
the application is alienable or disposable.[83] To overcome this presumption, incontrovertible evidence
must be established that the land subject of the application (or claim) is alienable or disposable.[84] There
must still be a positive act declaring land of the public domain as alienable and disposable. To prove that
the land subject of an application for registration is alienable, the applicant must establish the existence
of a positive act of the government such as a presidential proclamation or an executive order; an
administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a
statute.[85] The applicant may also secure a certification from the government that the land claimed to
have been possessed for the required number of years is alienable and disposable.[86]
In the case at bar, no such proclamation, executive order, administrative action, report, statute, or
certification was presented to the Court. The records are bereft of evidence showing that, prior to 2006,
the portions of Boracay occupied by private claimants were subject of a government proclamation that
the land is alienable and disposable. Absent such well-nigh incontrovertible evidence, the Court cannot
accept the submission that lands occupied by private claimants were already open to disposition before
2006. Matters of land classification or reclassification cannot be assumed. They call for proof.[87]
Ankron and De Aldecoa did not make the whole of Boracay Island, or portions of it, agricultural lands.
Private claimants posit that Boracay was already an agricultural land pursuant to the old cases Ankron v.
Government of the Philippine Islands (1919)[88] and De Aldecoa v. The Insular Government (1909).[89]
These cases were decided under the provisions of the Philippine Bill of 1902 and Act No. 926. There is a
statement in these old cases that in the absence of evidence to the contrary, that in each case the lands
are agricultural lands until the contrary is shown.[90]
Private claimants reliance on Ankron and De Aldecoa is misplaced. These cases did not have the effect of
converting the whole of Boracay Island or portions of it into agricultural lands. It should be stressed that
the Philippine Bill of 1902 and Act No. 926 merely provided the manner through which land registration
courts would classify lands of the public domain. Whether the land would be classified as timber, mineral,
or agricultural depended on proof presented in each case.
Ankron and De Aldecoa were decided at a time when the President of the Philippines had no power to
classify lands of the public domain into mineral, timber, and agricultural. At that time, the courts were
free to make corresponding classifications in justiciable cases, or were vested with implicit power to do
so, depending upon the preponderance of the evidence.[91] This was the Courts ruling in Heirs of the Late
Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic,[92] in which it stated,
through Justice Adolfo Azcuna, viz.:
x x x Petitioners furthermore insist that a particular land need not be formally released by an act of the
Executive before it can be deemed open to private ownership, citing the cases of Ramos v. Director of
Lands and Ankron v. Government of the Philippine Islands.
Petitioners reliance upon Ramos v. Director of Lands and Ankron v. Government is misplaced. These cases
were decided under the Philippine Bill of 1902 and the first Public Land Act No. 926 enacted by the
Philippine Commission on October 7, 1926, under which there was no legal provision vesting in the Chief
Executive or President of the Philippines the power to classify lands of the public domain into mineral,
timber and agricultural so that the courts then were free to make corresponding classifications in
justiciable cases, or were vested with implicit power to do so, depending upon the preponderance of the
evidence.[93]
To aid the courts in resolving land registration cases under Act No. 926, it was then necessary to devise a
presumption on land classification. Thus evolved the dictum in Ankron that the courts have a right to
presume, in the absence of evidence to the contrary, that in each case the lands are agricultural lands
until the contrary is shown.[94]
But We cannot unduly expand the presumption in Ankron and De Aldecoa to an argument that all lands of
the public domain had been automatically reclassified as disposable and alienable agricultural lands. By
no stretch of imagination did the presumption convert all lands of the public domain into agricultural
lands.
If We accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926 would have
automatically made all lands in the Philippines, except those already classified as timber or mineral land,
alienable and disposable lands. That would take these lands out of State ownership and worse, would be
utterly inconsistent with and totally repugnant to the long-entrenched Regalian doctrine.
The presumption in Ankron and De Aldecoa attaches only to land registration cases brought under the
provisions of Act No. 926, or more specifically those cases dealing with judicial and administrative
confirmation of imperfect titles. The presumption applies to an applicant for judicial or administrative
conformation of imperfect title under Act No. 926. It certainly cannot apply to landowners, such as private
claimants or their predecessors-in-interest, who failed to avail themselves of the benefits of Act No. 926.
As to them, their land remained unclassified and, by virtue of the Regalian doctrine, continued to be
owned by the State.
In any case, the assumption in Ankron and De Aldecoa was not absolute. Land classification was, in the
end, dependent on proof. If there was proof that the land was better suited for non-agricultural uses, the
courts could adjudge it as a mineral or timber land despite the presumption. In Ankron, this Court stated:
In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in effect that
whether the particular land in question belongs to one class or another is a question of fact. The mere fact
that a tract of land has trees upon it or has mineral within it is not of itself sufficient to declare that one is
forestry land and the other, mineral land. There must be some proof of the extent and present or future
value of the forestry and of the minerals. While, as we have just said, many definitions have been given
for agriculture, forestry, and mineral lands, and that in each case it is a question of fact, we think it is safe
to say that in order to be forestry or mineral land the proof must show that it is more valuable for the
forestry or the mineral which it contains than it is for agricultural purposes. (Sec. 7, Act No. 1148.) It is not
sufficient to show that there exists some trees upon the land or that it bears some mineral. Land may be
classified as forestry or mineral today, and, by reason of the exhaustion of the timber or mineral, be
classified as agricultural land tomorrow. And vice-versa, by reason of the rapid growth of timber or the
discovery of valuable minerals, lands classified as agricultural today may be differently classified
tomorrow. Each case must be decided upon the proof in that particular case, having regard for its present
or future value for one or the other purposes. We believe, however, considering the fact that it is a matter
of public knowledge that a majority of the lands in the Philippine Islands are agricultural lands that the
courts have a right to presume, in the absence of evidence to the contrary, that in each case the lands are
agricultural lands until the contrary is shown. Whatever the land involved in a particular land registration
case is forestry or mineral land must, therefore, be a matter of proof. Its superior value for one purpose
or the other is a question of fact to be settled by the proof in each particular case. The fact that the land is
a manglar [mangrove swamp] is not sufficient for the courts to decide whether it is agricultural, forestry,
or mineral land. It may perchance belong to one or the other of said classes of land. The Government, in
the first instance, under the provisions of Act No. 1148, may, by reservation, decide for itself what
portions of public land shall be considered forestry land, unless private interests have intervened before
such reservation is made. In the latter case, whether the land is agricultural, forestry, or mineral, is a
question of proof. Until private interests have intervened, the Government, by virtue of the terms of said
Act (No. 1148), may decide for itself what portions of the public domain shall be set aside and reserved as
forestry or mineral land. (Ramos vs. Director of Lands, 39 Phil. 175; Jocson vs. Director of Forestry,
supra)[95] (Emphasis ours)
Since 1919, courts were no longer free to determine the classification of lands from the facts of each case,
except those that have already became private lands.[96] Act No. 2874, promulgated in 1919 and
reproduced in Section 6 of CA No. 141, gave the Executive Department, through the President, the
exclusive prerogative to classify or reclassify public lands into alienable or disposable, mineral or
forest.96-a Since then, courts no longer had the authority, whether express or implied, to determine the
classification of lands of the public domain.[97]
Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in 1933,[98] did not
present a justiciable case for determination by the land registration court of the propertys land
classification. Simply put, there was no opportunity for the courts then to resolve if the land the Boracay
occupants are now claiming were agricultural lands. When Act No. 926 was supplanted by Act No. 2874 in
1919, without an application for judicial confirmation having been filed by private claimants or their
predecessors-in-interest, the courts were no longer authorized to determine the propertys land
classification. Hence, private claimants cannot bank on Act No. 926.
We note that the RTC decision[99] in G.R. No. 167707 mentioned Krivenko v. Register of Deeds of
Manila,[100] which was decided in 1947 when CA No. 141, vesting the Executive with the sole power to
classify lands of the public domain was already in effect. Krivenko cited the old cases Mapa v. Insular
Government,[101] De Aldecoa v. The Insular Government,[102] and Ankron v. Government of the
Philippine Islands.[103]
Krivenko, however, is not controlling here because it involved a totally different issue. The pertinent issue
in Krivenko was whether residential lots were included in the general classification of agricultural lands;
and if so, whether an alien could acquire a residential lot. This Court ruled that as an alien, Krivenko was
prohibited by the 1935 Constitution[104] from acquiring agricultural land, which included residential lots.
Here, the issue is whether unclassified lands of the public domain are automatically deemed agricultural.
Notably, the definition of agricultural public lands mentioned in Krivenko relied on the old cases decided
prior to the enactment of Act No. 2874, including Ankron and De Aldecoa.[105] As We have already
stated, those cases cannot apply here, since they were decided when the Executive did not have the
authority to classify lands as agricultural, timber, or mineral.
Private claimants continued possession under Act No. 926 does not create a presumption that the land is
alienable. Private claimants also contend that their continued possession of portions of Boracay Island for
the requisite period of ten (10) years under Act No. 926[106] ipso facto converted the island into private
ownership. Hence, they may apply for a title in their name.
A similar argument was squarely rejected by the Court in Collado v. Court of Appeals.[107] Collado, citing
the separate opinion of now Chief Justice Reynato S. Puno in Cruz v. Secretary of Environment and Natural
Resources,107-a ruled:
Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the Philippine Bill of
1902. The law governed the disposition of lands of the public domain. It prescribed rules and regulations
for the homesteading, selling and leasing of portions of the public domain of the Philippine Islands, and
prescribed the terms and conditions to enable persons to perfect their titles to public lands in the Islands.
It also provided for the issuance of patents to certain native settlers upon public lands, for the
establishment of town sites and sale of lots therein, for the completion of imperfect titles, and for the
cancellation or confirmation of Spanish concessions and grants in the Islands. In short, the Public Land Act
operated on the assumption that title to public lands in the Philippine Islands remained in the
government; and that the governments title to public land sprung from the Treaty of Paris and other
subsequent treaties between Spain and the United States. The term public land referred to all lands of the
public domain whose title still remained in the government and are thrown open to private appropriation
and settlement, and excluded the patrimonial property of the government and the friar lands.
Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and Public Land Act No.
926, mere possession by private individuals of lands creates the legal presumption that the lands are
alienable and disposable.[108] (Emphasis Ours)
Except for lands already covered by existing titles, Boracay was an unclassified land of the public domain
prior to Proclamation No. 1064. Such unclassified lands are considered public forest under PD No. 705.
The DENR[109] and the National Mapping and Resource Information Authority[110] certify that Boracay
Island is an unclassified land of the public domain.
PD No. 705 issued by President Marcos categorized all unclassified lands of the public domain as public
forest. Section 3(a) of PD No. 705 defines a public forest as a mass of lands of the public domain which has
not been the subject of the present system of classification for the determination of which lands are
needed for forest purpose and which are not. Applying PD No. 705, all unclassified lands, including those
in Boracay Island, are ipso facto considered public forests. PD No. 705, however, respects titles already
existing prior to its effectivity.
The Court notes that the classification of Boracay as a forest land under PD No. 705 may seem to be out of
touch with the present realities in the island. Boracay, no doubt, has been partly stripped of its forest
cover to pave the way for commercial developments. As a premier tourist destination for local and foreign
tourists, Boracay appears more of a commercial island resort, rather than a forest land.
Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts on the
island;[111] that the island has already been stripped of its forest cover; or that the implementation of
Proclamation No. 1064 will destroy the islands tourism industry, do not negate its character as public
forest.
Forests, in the context of both the Public Land Act and the Constitution[112] classifying lands of the public
domain into agricultural, forest or timber, mineral lands, and national parks, do not necessarily refer to
large tracts of wooded land or expanses covered by dense growths of trees and underbrushes.[113] The
discussion in Heirs of Amunategui v. Director of Forestry[114] is particularly instructive:
A forested area classified as forest land of the public domain does not lose such classification simply
because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land
may actually be covered with grass or planted to crops by kaingin cultivators or other farmers. Forest
lands do not have to be on mountains or in out of the way places. Swampy areas covered by mangrove
trees, nipa palms, and other trees growing in brackish or sea water may also be classified as forest land.
The classification is descriptive of its legal nature or status and does not have to be descriptive of what
the land actually looks like. Unless and until the land classified as forest is released in an official
proclamation to that effect so that it may form part of the disposable agricultural lands of the public
domain, the rules on confirmation of imperfect title do not apply.[115] (Emphasis supplied)
There is a big difference between forest as defined in a dictionary and forest or timber land as a
classification of lands of the public domain as appearing in our statutes. One is descriptive of what
appears on the land while the other is a legal status, a classification for legal purposes.[116] At any rate,
the Court is tasked to determine the legal status of Boracay Island, and not look into its physical layout.
Hence, even if its forest cover has been replaced by beach resorts, restaurants and other commercial
establishments, it has not been automatically converted from public forest to alienable agricultural land.
Private claimants cannot rely on Proclamation No. 1801 as basis for judicial confirmation of imperfect
title. The proclamation did not convert Boracay into an agricultural land. However, private claimants
argue that Proclamation No. 1801 issued by then President Marcos in 1978 entitles them to judicial
confirmation of imperfect title. The Proclamation classified Boracay, among other islands, as a tourist
zone. Private claimants assert that, as a tourist spot, the island is susceptible of private ownership.
Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay into an agricultural
land. There is nothing in the law or the Circular which made Boracay Island an agricultural land. The
reference in Circular No. 3-82 to private lands[117] and areas declared as alienable and disposable[118]
does not by itself classify the entire island as agricultural. Notably, Circular No. 3-82 makes reference not
only to private lands and areas but also to public forested lands. Rule VIII, Section 3 provides:
No trees in forested private lands may be cut without prior authority from the PTA. All forested areas in
public lands are declared forest reserves. (Emphasis supplied)
Clearly, the reference in the Circular to both private and public lands merely recognizes that the island can
be classified by the Executive department pursuant to its powers under CA No. 141. In fact, Section 5 of
the Circular recognizes the then Bureau of Forest Developments authority to declare areas in the island as
alienable and disposable when it provides:
Subsistence farming, in areas declared as alienable and disposable by the Bureau of Forest Development.
Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to classify Boracay Island as
alienable and disposable land. If President Marcos intended to classify the island as alienable and
disposable or forest, or both, he would have identified the specific limits of each, as President Arroyo did
in Proclamation No. 1064. This was not done in Proclamation No. 1801.
The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the declaration of
Boracay Island, together with other islands, caves and peninsulas in the Philippines, as a tourist zone and
marine reserve to be administered by the PTA to ensure the concentrated efforts of the public and private
sectors in the development of the areas tourism potential with due regard for ecological balance in the
marine environment. Simply put, the proclamation is aimed at administering the islands for tourism and
ecological purposes. It does not address the areas alienability.[119]
More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-four (64) other islands,
coves, and peninsulas in the Philippines, such as Fortune and Verde Islands in Batangas, Port Galera in
Oriental Mindoro, Panglao and Balicasag Islands in Bohol, Coron Island, Puerto Princesa and surrounding
areas in Palawan, Camiguin Island in Cagayan de Oro, and Misamis Oriental, to name a few. If the
designation of Boracay Island as tourist zone makes it alienable and disposable by virtue of Proclamation
No. 1801, all the other areas mentioned would likewise be declared wide open for private disposition.
That could not have been, and is clearly beyond, the intent of the proclamation.
It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as alienable and opened
the same to private ownership. Sections 6 and 7 of CA No. 141[120] provide that it is only the President,
upon the recommendation of the proper department head, who has the authority to classify the lands of
the public domain into alienable or disposable, timber and mineral lands.[121]
In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised the authority
granted to her to classify lands of the public domain, presumably subject to existing vested rights.
Classification of public lands is the exclusive prerogative of the Executive Department, through the Office
of the President. Courts have no authority to do so.[122] Absent such classification, the land remains
unclassified until released and rendered open to disposition.[123]
Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and 628.96 hectares of
agricultural land. The Proclamation likewise provides for a 15-meter buffer zone on each side of the
center line of roads and trails, which are reserved for right of way and which shall form part of the area
reserved for forest land protection purposes.
Contrary to private claimants argument, there was nothing invalid or irregular, much less
unconstitutional, about the classification of Boracay Island made by the President through Proclamation
No. 1064. It was within her authority to make such classification, subject to existing vested rights.
Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform Law. Private claimants
further assert that Proclamation No. 1064 violates the provision of the Comprehensive Agrarian Reform
Law (CARL) or RA No. 6657 barring conversion of public forests into agricultural lands. They claim that
since Boracay is a public forest under PD No. 705, President Arroyo can no longer convert it into an
agricultural land without running afoul of Section 4(a) of RA No. 6657, thus:
SEC. 4. Scope. The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for
agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval
of this Act until Congress, taking into account ecological, developmental and equity considerations,
shall have determined by law, the specific limits of the public domain.
(b) That Boracay Island was classified as a public forest under PD No. 705 did not bar the Executive from
later converting it into agricultural land. Boracay Island still remained an unclassified land of the
public domain despite PD No. 705.
In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic,[124] the Court stated that
unclassified lands are public forests.
While it is true that the land classification map does not categorically state that the islands are public
forests, the fact that they were unclassified lands leads to the same result. In the absence of the
classification as mineral or timber land, the land remains unclassified land until released and rendered
open to disposition.[125] (Emphasis supplied)
Moreover, the prohibition under the CARL applies only to a reclassification of land. If the land had never
been previously classified, as in the case of Boracay, there can be no prohibited reclassification under the
agrarian law. We agree with the opinion of the Department of Justice[126] on this point:
Indeed, the key word to the correct application of the prohibition in Section 4(a) is the word
reclassification. Where there has been no previous classification of public forest [referring, we repeat, to
the mass of the public domain which has not been the subject of the present system of classification for
purposes of determining which are needed for forest purposes and which are not] into permanent forest
or forest reserves or some other forest uses under the Revised Forestry Code, there can be no
reclassification of forest lands to speak of within the meaning of Section 4(a).
Thus, obviously, the prohibition in Section 4(a) of the CARL against the reclassification of forest lands to
agricultural lands without a prior law delimiting the limits of the public domain, does not, and cannot,
apply to those lands of the public domain, denominated as public forest under the Revised Forestry Code,
which have not been previously determined, or classified, as needed for forest purposes in accordance
with the provisions of the Revised Forestry Code.[127]
Private claimants are not entitled to apply for judicial confirmation of imperfect title under CA No. 141.
Neither do they have vested rights over the occupied lands under the said law. There are two requisites
for judicial confirmation of imperfect or incomplete title under CA No. 141, namely: (1) open, continuous,
exclusive, and notorious possession and occupation of the subject land by himself or through his
predecessors-in-interest under a bona fide claim of ownership since time immemorial or from June 12,
1945; and (2) the classification of the land as alienable and disposable land of the public domain.[128]
As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801 did not convert portions
of Boracay Island into an agricultural land. The island remained an unclassified land of the public domain
and, applying the Regalian doctrine, is considered State property.
Private claimants bid for judicial confirmation of imperfect title, relying on the Philippine Bill of 1902, Act
No. 926, and Proclamation No. 1801, must fail because of the absence of the second element of alienable
and disposable land. Their entitlement to a government grant under our present Public Land Act
presupposes that the land possessed and applied for is already alienable and disposable. This is clear from
the wording of the law itself.[129] Where the land is not alienable and disposable, possession of the land,
no matter how long, cannot confer ownership or possessory rights.[130]
Neither may private claimants apply for judicial confirmation of imperfect title under Proclamation No.
1064, with respect to those lands which were classified as agricultural lands. Private claimants failed to
prove the first element of open, continuous, exclusive, and notorious possession of their lands in Boracay
since June 12, 1945.
We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that private claimants
complied with the requisite period of possession.
The tax declarations in the name of private claimants are insufficient to prove the first element of
possession. We note that the earliest of the tax declarations in the name of private claimants were issued
in 1993. Being of recent dates, the tax declarations are not sufficient to convince this Court that the
period of possession and occupation commenced on June 12, 1945.
Private claimants insist that they have a vested right in Boracay, having been in possession of the island
for a long time. They have invested millions of pesos in developing the island into a tourist spot. They say
their continued possession and investments give them a vested right which cannot be unilaterally
rescinded by Proclamation No. 1064.
The continued possession and considerable investment of private claimants do not automatically give
them a vested right in Boracay. Nor do these give them a right to apply for a title to the land they are
presently occupying. This Court is constitutionally bound to decide cases based on the evidence presented
and the laws applicable. As the law and jurisprudence stand, private claimants are ineligible to apply for a
judicial confirmation of title over their occupied portions in Boracay even with their continued possession
and considerable investment in the island.
One Last Note
The Court is aware that millions of pesos have been invested for the development of Boracay Island,
making it a by-word in the local and international tourism industry. The Court also notes that for a
number of years, thousands of people have called the island their home. While the Court commiserates
with private claimants plight, We are bound to apply the law strictly and judiciously. This is the law and it
should prevail. Ito ang batas at ito ang dapat umiral.
All is not lost, however, for private claimants. While they may not be eligible to apply for judicial
confirmation of imperfect title under Section 48(b) of CA No. 141, as amended, this does not denote their
automatic ouster from the residential, commercial, and other areas they possess now classified as
agricultural. Neither will this mean the loss of their substantial investments on their occupied alienable
lands. Lack of title does not necessarily mean lack of right to possess.
For one thing, those with lawful possession may claim good faith as builders of improvements. They can
take steps to preserve or protect their possession. For another, they may look into other modes of
applying for original registration of title, such as by homestead[131] or sales patent,[132] subject to the
conditions imposed by law.
More realistically, Congress may enact a law to entitle private claimants to acquire title to their occupied
lots or to exempt them from certain requirements under the present land laws. There is one such bill[133]
now pending in the House of Representatives. Whether that bill or a similar bill will become a law is for
Congress to decide.
In issuing Proclamation No. 1064, the government has taken the step necessary to open up the island to
private ownership. This gesture may not be sufficient to appease some sectors which view the
classification of the island partially into a forest reserve as absurd. That the island is no longer overrun by
trees, however, does not becloud the vision to protect its remaining forest cover and to strike a healthy
balance between progress and ecology. Ecological conservation is as important as economic progress.
To be sure, forest lands are fundamental to our nations survival. Their promotion and protection are not
just fancy rhetoric for politicians and activists. These are needs that become more urgent as destruction
of our environment gets prevalent and difficult to control. As aptly observed by Justice Conrado Sanchez
in 1968 in Director of Forestry v. Munoz:[134]
The view this Court takes of the cases at bar is but in adherence to public policy that should be followed
with respect to forest lands. Many have written much, and many more have spoken, and quite often,
about the pressing need for forest preservation, conservation, protection, development and
reforestation. Not without justification. For, forests constitute a vital segment of any country's natural
resources. It is of common knowledge by now that absence of the necessary green cover on our lands
produces a number of adverse or ill effects of serious proportions. Without the trees, watersheds dry up;
rivers and lakes which they supply are emptied of their contents. The fish disappear. Denuded areas
become dust bowls. As waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile
topsoil is washed away; geological erosion results. With erosion come the dreaded floods that wreak
havoc and destruction to property crops, livestock, houses, and highways not to mention precious human
lives. Indeed, the foregoing observations should be written down in a lumbermans decalogue.[135]
WHEREFORE, judgment is rendered as follows:
1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of Appeals Decision in CA-G.R.
CV No. 71118 REVERSED AND SET ASIDE.
2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit.

SO ORDERED
3. Republic vs CA, et.al
Spouses Carag Case
D E C I S IO N
CARPIO, J.:
The Case
This is a petition for review[1] of the 21 May 2001[2] and 25 September 2002[3] Resolutions of the Court
of Appeals in CA-G.R. SP No. 47965.
The 21 May 2001 Resolution dismissed petitioner Republic of the Philippines (petitioner) amended
complaint for reversion, annulment of decree, cancellation and declaration of nullity of titles. The 25
September 2002 Resolution denied petitioners motion for reconsideration.
The Facts
On 2 June 1930, the then Court of First Instance of Cagayan (trial court) issued Decree No. 381928[4] in
favor of spouses Antonio Carag and Victoria Turingan (spouses Carag), predecessors-in-interest of private
respondents Heirs of Antonio Carag and Victoria Turingan (private respondents), covering a parcel of land
identified as Lot No. 2472, Cad. 151, containing an area of 7,047,673 square meters (subject property),
situated in Tuguegarao, Cagayan. On 19 July 1938, pursuant to said Decree, the Register of Deeds of
Cagayan issued Original Certificate of Title No. 11585[5] (OCT No. 11585) in the name of spouses Carag.
On 2 July 1952, OCT No. 11585 was cancelled to discharge the encumbrance expressly stated in Decree
No. 381928. Two transfer certificates of title were issued: Transfer Certificate of Title No. T-1277,[6]
issued in the name of the Province of Cagayan, covering Lot 2472-B consisting of 100,000 square meters
and Transfer Certificate of Title No. T-1278,[7] issued in the name of the private respondents, covering Lot
2472-A consisting of 6,997,921 square meters.
On 19 May 1994, Bienvenida Taguiam Vda. De Dayag and others filed with the Regional Office No. 2 of the
Department of Environment and Natural Resources (DENR), Tuguegarao, Cagayan, a letter-petition
requesting the DENR to initiate the filing of an action for the annulment of Decree No. 381928 on the
ground that the trial court did not have jurisdiction to adjudicate a portion of the subject property which
was allegedly still classified as timber land at the time of the issuance of Decree No. 381928.
The Regional Executive Director of the DENR created an investigating team to conduct ground verification
and ocular inspection of the subject property.
The investigating team reported that:
A) The portion of Lot 2472 Cad-151 as shown in the Plan prepared for spouses Carag, and covered under
LC Project 3-L of Tuguegarao, Cagayan, was found to be still within the timberland area at the time of the
issuance of the Decree and O.C.T. of the spouses Antonio Carag and Victoria Turingan, and the same was
only released as alienable and disposable on February 22, 1982, as certified by USEC Jose G. Solis of the
NAMRIA on 27 May 1994.
B) Petitioner Bienvenida Taguiam Vda. De Dayag and others have possessed and occupied by themselves
and thru their predecessors-in-interest the portion of Lot 2472 Cad-151, covered by LC Project 3-L of LC
Map 2999, since time immemorial.[8]
Thus, the investigating team claimed that a portion of Lot 2472 Cad-151 was only released as alienable
and disposable on 22 February 1982.
In a Memorandum dated 9 September 1996, the Legal Division of the Land Management Bureau
recommended to the Director of Lands that an action for the cancellation of OCT No. 11585, as well as its
derivative titles, be filed with the proper court. The Director of Lands approved the recommendation.

On 10 June 1998, or 68 years after the issuance of Decree No. 381928, petitioner filed with the Court of
Appeals a complaint for annulment of judgment, cancellation and declaration of nullity of titles[9] on the
ground that in 1930 the trial court had no jurisdiction to adjudicate a portion of the subject property,
which portion consists of 2,640,000 square meters (disputed portion). The disputed portion was allegedly
still classified as timber land at the time of issuance of Decree No. 381928 and, therefore, was not
alienable and disposable until 22 February 1982 when the disputed portion was classified as alienable and
disposable.
On 19 October 1998, private respondents filed a motion to dismiss.[10] Private respondents alleged that
petitioner failed to comply with Rule 47 of the Rules of Court because the real ground for the complaint
was mistake, not lack of jurisdiction, and that petitioner, as a party in the original proceedings, could have
availed of the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies but
failed to do so. Private respondents added that petitioner did not attach to the complaint a certified true
copy of the decision sought to be annulled. Private respondents also maintained that the complaint was
barred by the doctrines of res judicata and law of the case and by Section 38 of Act No. 496.[11] Private
respondents also stated that not all the heirs of spouses Carag were brought before the Court of Appeals
for an effective resolution of the case. Finally, private respondents claimed that the real party in interest
was not petitioner but a certain Alfonso Bassig, who had an ax to grind against private respondents.[12]
On 3 March 1999, petitioner filed an amended complaint for reversion, annulment of decree, cancellation
and declaration of nullity of titles.[13]
The Ruling of the Court of Appeals
On 21 May 2001, the Court of Appeals dismissed the complaint because of lack of jurisdiction over the
subject matter of the case. The Court of Appeals declared:
The rule is clear that such judgments, final orders and resolutions in civil actions which this court may
annul are those which the ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies are no longer available. The Amended Complaint contains no such allegations which are
jurisdictional neither can such circumstances be divined from its allegations. Furthermore, such actions
for Annulment may be based only on two (2) grounds: extrinsic fraud and lack of jurisdiction. Neither
ground is alleged in the Amended Complaint which is for Reversion/Annulment of Decree, Cancellation
and Declaration of Nullity of Titles. It merely alleges that around 2,640,000 square meters of timberland
area within Lot 2472 Cad. 151, had been erroneously included in the title of the Spouses Antonio Carag
and Victoria Turingan under Decree No. 381928 and O.C.T. No. 11585 issued on June 2, 1930 and July 19,
1938, respectively; that hence, such adjudication and/or Decree and Title covering a timberland area is
null and void ab initio under the provisions of the 1935, 1973 and 1987 Constitutions.
Finally, it is clear that the issues raised in the Amended Complaint as well as those in the Motion to
dismiss are factual in nature and should be threshed out in the proper trial court in accordance with
Section 101 of the Public Land Act.[14] (Citations omitted)
Petitioner filed a motion for reconsideration. In its 25 September 2002 Resolution, the Court of Appeals
denied the motion for reconsideration.
Hence, this petition.
The Issues
Petitioner raises the following issues:
1. Whether the allegations of the complaint clearly stated that the ordinary remedies of new trial,
appeal, petition for relief and other appropriate remedies are no longer available;
2. Whether the amended complaint clearly alleged the ground of lack of jurisdiction;
3. Whether the Court of Appeals may try the factual issues raised in the amended complaint and in the
motion to dismiss;
4. Whether the then Court of First Instance of Cagayan had jurisdiction to adjudicate a tract of
timberland in favor of respondent spouses Antonio Carag and Victoria Turingan;
5. Whether the fact that the Director of Lands was a party to the original proceedings changed the
nature of the land and granted jurisdiction to the then Court of First Instance over the land
6. Whether the doctrine of res judicata applies in this case; and
7. Whether Section 38 of Act No. 496 is applicable in this case.

The Ruling of the Court


While the Court of Appeals erred in dismissing the complaint on procedural grounds, we will still deny the
petition because the complaint for annulment of decree has no merit.
Petitioner Complied with Rule 47 of the Rules of Court
First, the Court of Appeals ruled that petitioner failed to allege either of the grounds of extrinsic fraud or
lack of jurisdiction in the complaint for annulment of decree.[15]
We find otherwise. In its complaint and amended complaint, petitioner stated:
11. In view of the fact that in 1930 or in 1938, only the Executive Branch of the Government had the
authority and power to declassify or reclassify land of the public domain, the Court did not, therefore,
have the power and authority to adjudicate in favor of the spouses Antonio Carag and Victoria Turingan
the said tract of timberland, portion of the Lot 2472 Cad-151, at the time of the issuance of the Decree
and the Original Certificate of Title of the said spouses; and such adjudication and/or Decree and Title
issued covering the timberland area is null and void ab initio considering the provisions of the 1935, 1973
and 1987 Philippine constitution
xxxx
15. The issuance of Decree No. 381928 and O.C.T. No. 11585 in the name of spouses Antonio Carag and
Victoria Turingan, and all the derivative titles thereto in the name of the Heirs and said spouses,
specifically with respect to the inclusion thereto of timberland area, by the then Court of First Instance
(now the Regional Trial Court), and the Register of Deeds of Cagayan is patently illegal and erroneous for
the reason that said Court and/or the Register of Deeds of Cagayan did not have any authority or
jurisdiction to decree or adjudicate the said timberland area of Lot 2472 Cad-151, consequently, the same
are null and void ab initio, and of no force and effect whatsoever.[16] (Emphasis supplied; citations
omitted)
Petitioner clearly alleged in the complaint and amended complaint that it was seeking to annul Decree
No. 381928 on the ground of the trial courts lack of jurisdiction over the subject land, specifically over the
disputed portion, which petitioner maintained was classified as timber land and was not alienable and
disposable.
Second, the Court of Appeals also dismissed the complaint on the ground of petitioners failure to allege
that the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no
longer available.
In Ancheta v. Ancheta,[17] we ruled:
In a case where a petition for annulment of judgment or final order of the RTC filed under Rule 47 of the
Rules of Court is grounded on lack of jurisdiction over the person of the defendant/respondent or over
the nature or subject of the action, the petitioner need not allege in the petition that the ordinary remedy
of new trial or reconsideration of the final order or judgment or appeal therefrom are no longer available
through no fault of her own. This is so because a judgment rendered or final order issued by the RTC
without jurisdiction is null and void and may be assailed any time either collaterally or in a direct action or
by resisting such judgment or final order in any action or proceeding whenever it is invoked, unless barred
by laches.[18]
Since petitioners complaint is grounded on lack of jurisdiction over the subject of the action, petitioner
need not allege that the ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies are no longer available through no fault of petitioner.
Third, the Court of Appeals ruled that the issues raised in petitioners complaint were factual in nature and
should be threshed out in the proper trial court in accordance with Section 101 of the Public Land Act.[19]
Section 6, Rule 47 of the Rules of Court provides:
SEC. 6. Procedure. - The procedure in ordinary civil cases shall be observed. Should a trial be necessary,
the reception of evidence may be referred to a member of the court or a judge of a Regional Trial Court.
Therefore, the Court of Appeals may try the factual issues raised in the complaint for the complete and
proper determination of the case.
However, instead of remanding the complaint to the Court of Appeals for further proceedings, we shall
decide the case on the merits.
Complaint for Annulment of Decree Has No Merit
Petitioner contends that the trial court had no jurisdiction to adjudicate to spouses Carag the disputed
portion of the subject property. Petitioner claims that the disputed portion was still classified as timber
land, and thus not alienable and disposable, when Decree No. 381928 was issued in 1930. In effect,
petitioner admits that the adjacent 4,407,673 square meters of the subject property, outside of the
disputed portion, were alienable and disposable in 1930. Petitioner argues that in 1930 or in 1938, only
the Executive Branch of the Government, not the trial courts, had the power to declassify or reclassify
lands of the public domain.
Lack of jurisdiction, as a ground for annulment of judgment, refers to either lack of jurisdiction over the
person of the defending party or over the subject matter of the claim.[20] Jurisdiction over the subject
matter is conferred by law and is determined by the statute in force at the time of the filing of the
action.[21]
Under the Spanish regime, all Crown lands were per se alienable. In Aldecoa v. Insular Government,[22]
we ruled:
From the language of the foregoing provisions of law, it is deduced that, with the exception of those
comprised within the mineral and timber zone, all lands owned by the State or by the sovereign nation
are public in character, and per se alienable and, provided they are not destined to the use of the public in
general or reserved by the Government in accordance with law, they may be acquired by any private or
juridical person x x x[23] (Emphasis supplied)
Thus, unless specifically declared as mineral or forest zone, or reserved by the State for some public
purpose in accordance with law, all Crown lands were deemed alienable.
In this case, petitioner has not alleged that the disputed portion had been declared as mineral or forest
zone, or reserved for some public purpose in accordance with law, during the Spanish regime or
thereafter. The land classification maps[24] petitioner attached to the complaint also do not show that in
1930 the disputed portion was part of the forest zone or reserved for some public purpose. The
certification of the National Mapping and Resources Information Authority, dated 27 May 1994,
contained no statement that the disputed portion was declared and classified as timber land.[25]
The law prevailing when Decree No. 381928 was issued in 1930 was Act No. 2874,[26] which provides:
SECTION 6. The Governor-General, upon the recommendation of the Secretary of Agriculture and Natural
Resources, shall from time to time classify the lands of the public domain into -
(a) Alienable or disposable
(b) Timber and
(c) Mineral lands and may at any time and in a like manner transfer such lands from one class to another,
for the purposes of their government and disposition.
Petitioner has not alleged that the Governor-General had declared the disputed portion of the subject
property timber or mineral land pursuant to Section 6 of Act No. 2874.
It is true that Section 8 of Act No. 2874 opens to disposition only those lands which have been declared
alienable or disposable. Section 8 provides:
SECTION 8. Only those lands shall be declared open to disposition or concession which have been officially
delimited and classified and, when practicable, surveyed, and which have not been reserved for public or
quasi-public uses, not appropriated by the Government, nor in any manner become private property, nor
those on which a private right authorized and recognized by this Act or any other valid law may be
claimed, or which, having been reserved or appropriated, have ceased to be so. However, the Governor-
General may, for reasons of public interest, declare lands of the public domain open to disposition before
the same have had their boundaries established or been surveyed, or may, for the same reasons, suspend
their concession or disposition by proclamation duly published or by Act of the Legislature. (Emphasis
supplied)
However, Section 8 provides that lands which are already private lands, as well as lands on which a
private claim may be made under any law, are not covered by the classification requirement in Section 8
for purposes of disposition. This exclusion in Section 8 recognizes that during the Spanish regime, Crown
lands were per se alienable unless falling under timber or mineral zones, or otherwise reserved for some
public purpose in accordance with law.
Clearly, with respect to lands excluded from the classification requirement in Section 8, trial courts had
jurisdiction to adjudicate these lands to private parties. Petitioner has not alleged that the disputed
portion had not become private property prior to the enactment of Act No. 2874. Neither has petitioner
alleged that the disputed portion was not land on which a private right may be claimed under any existing
law at that time.
In Republic of the Philippines v. Court of Appeals,[27] the Republic sought to annul the judgment of the
Court of First Instance (CFI) of Rizal, sitting as a land registration court, because when the application for
land registration was filed in 1927 the land was alleged to be unclassified forest land. The Republic also
alleged that the CFI of Rizal had no jurisdiction to determine whether the land applied for was forest or
agricultural land since the authority to classify lands was then vested in the Director of Lands as provided
in Act Nos. 926[28] and 2874. The Court ruled:
We are inclined to agree with the respondent that it is legally doubtful if the authority of the Governor
General to declare lands as alienable and disposable would apply to lands that have become private
property or lands that have been impressed with a private right authorized and recognized by Act 2874 or
any valid law. By express declaration of Section 45 (b) of Act 2874 which is quoted above, those who have
been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain under a bona fide claim of acquisition of ownership since July 26, 1894 may file an
application with the Court of First Instance of the province where the land is located for confirmation of
their claims and these applicants shall be conclusively presumed to have performed all the conditions
essential to a government grant and shall be entitled to a certificate of title. When the land registration
court issued a decision for the issuance of a decree which was the basis of an original certificate of title to
the land, the court had already made a determination that the land was agricultural and that the
applicant had proven that he was in open and exclusive possession of the subject land for the prescribed
number of years. It was the land registration court which had the jurisdiction to determine whether the
land applied for was agricultural, forest or timber taking into account the proof or evidence in each
particular case. (Emphasis supplied)
As with this case, when the trial court issued the decision for the issuance of Decree No. 381928 in 1930,
the trial court had jurisdiction to determine whether the subject property, including the disputed portion,
applied for was agricultural, timber or mineral land. The trial court determined that the land was
agricultural and that spouses Carag proved that they were entitled to the decree and a certificate of title.
The government, which was a party in the original proceedings in the trial court as required by law, did
not appeal the decision of the trial court declaring the subject land as agricultural. Since the trial court
had jurisdiction over the subject matter of the action, its decision rendered in 1930, or 78 years ago, is
now final and beyond review.
The finality of the trial courts decision is further recognized in Section 1, Article XII of the 1935
Constitution which provides:
SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the
Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be
limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the
capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the
time of the inauguration of the Government established under this Constitution. (Emphasis supplied)
Thus, even as the 1935 Constitution declared that all agricultural, timber and mineral lands of the public
domain belong to the State, it recognized that these lands were subject to any existing right, grant, lease
or concession at the time of the inauguration of the Government established under this Constitution.[29]
When the Commonwealth Government was established under the 1935 Constitution, spouses Carag had
already an existing right to the subject land, including the disputed portion, pursuant to Decree No.
381928 issued in 1930 by the trial court.
WHEREFORE, we DENY the petition. We DISMISS petitioner Republic of the Philippines complaint for
reversion, annulment of decree, cancellation and declaration of nullity of titles for lack of merit.

SO ORDERED.
4. CONSUELO LEGARDA, with her husband MAURO PRIETO, plaintiffs-appellants, vs.
N.M. SALEEBY, defendant-appellee.
From the record the following facts appear:
First. That the plaintiffs and the defendant occupy, as owners, adjoining lots in the district of Ermita in the
city of Manila.
Second. That there exists and has existed a number of years a stone wall between the said lots. Said wall
is located on the lot of the plaintiffs.
Third. That the plaintiffs, on the 2d day of March, 1906, presented a petition in the Court of Land
Registration for the registration of their lot. After a consideration of said petition the court, on the 25th
day of October, 1906, decreed that the title of the plaintiffs should be registered and issued to them the
original certificate provided for under the torrens system. Said registration and certificate included the
wall.
Fourth. Later the predecessor of the defendant presented a petition in the Court of Land Registration for
the registration of the lot now occupied by him. On the 25th day of March, 1912, the court decreed the
registration of said title and issued the original certificate provided for under the torrens system. The
description of the lot given in the petition of the defendant also included said wall.
Fifth. Several months later (the 13th day of December, 1912) the plaintiffs discovered that the wall which
had been included in the certificate granted to them had also been included in the certificate granted to
the defendant .They immediately presented a petition in the Court of Land Registration for an adjustment
and correction of the error committed by including said wall in the registered title of each of said parties.
The lower court however, without notice to the defendant, denied said petition upon the theory that,
during the pendency of the petition for the registration of the defendant's land, they failed to make any
objection to the registration of said lot, including the wall, in the name of the defendant.
Sixth. That the land occupied by t he wall is registered in the name of each of the owners of the adjoining
lots. The wall is not a joint wall.
Under these facts, who is the owner of the wall and the land occupied by it?
The decision of the lower court is based upon the theory that the action for the registration of the lot of
the defendant was a judicial proceeding and that the judgment or decree was binding upon all parties
who did not appear and oppose it. In other words, by reason of the fact that the plaintiffs had not
opposed the registration of that part of the lot on which the wall was situate they had lost it, even though
it had been theretofore registered in their name. Granting that theory to be correct one, and granting
even that the wall and the land occupied by it, in fact, belonged to the defendant and his predecessors,
then the same theory should be applied to the defendant himself. Applying that theory to him, he had
already lost whatever right he had therein, by permitting the plaintiffs to have the same registered in
their name, more than six years before. Having thus lost hid right, may he be permitted to regain it by
simply including it in a petition for registration? The plaintiffs having secured the registration of their lot,
including the wall, were they obliged to constantly be on the alert and to watch all the proceedings in the
land court to see that some one else was not having all, or a portion of the same, registered? If that
question is to be answered in the affirmative, then the whole scheme and purpose of the torrens system
of land registration must fail. The real purpose of that system is to quiet title to land; to put a stop forever
to any question of the legality of the title, except claims which were noted at the time of registration, in
the certificate, or which may arise subsequent thereto. That being the purpose of the law, it would seem
that once a title is registered the owner may rest secure, without the necessity of waiting in the portals of
the court, or sitting in the "mirador de su casa," to avoid the possibility of losing his land. Of course, it can
not be denied that the proceeding for the registration of land under the torrens system is judicial (Escueta
vs. .Director of Lands, 16 Phil. Rep., 482). It is clothed with all the forms of an action and the result is final
and binding upon all the world. It is an action in rem. (Escueta vs. Director of Lands (supra); Grey Alba vs.
De la Cruz, 17 Phil. rep., 49 Roxas vs. Enriquez, 29 Phil. Rep., 31; Tyler vs. Judges, 175 Mass., 51 American
Land Co. vs. Zeiss, 219 U.S., 47.)
While the proceeding is judicial, it involves more in its consequences than does an ordinary action. All the
world are parties, including the government. After the registration is complete and final and there exists
no fraud, there are no innocent third parties who may claim an interest. The rights of all the world are
foreclosed by the decree of registration. The government itself assumes the burden of giving notice to all
parties. To permit persons who are parties in the registration proceeding (and they are all the world) to
again litigate the same questions, and to again cast doubt upon the validity of the registered title, would
destroy the very purpose and intent of the law. The registration, under the torrens system, does not give
the owner any better title than he had. If he does not already have a perfect title, he can not have it
registered. Fee simple titles only may be registered. The certificate of registration accumulates in open
document a precise and correct statement of the exact status of the fee held by its owner. The certificate,
in the absence of fraud, is the evidence of title and shows exactly the real interest of its owner. The title
once registered, with very few exceptions, should not thereafter be impugned, altered, changed,
modified, enlarged, or diminished, except in some direct proceeding permitted by law. Otherwise all
security in registered titles would be lost. A registered title can not be altered, modified, enlarged, or
diminished in a collateral proceeding and not even by a direct proceeding, after the lapse of the period
prescribed by law.
For the difficulty involved in the present case the Act (No. 496) providing for the registration of titles
under the torrens system affords us no remedy. There is no provision in said Act giving the parties relief
under conditions like the present. There is nothing in the Act which indicates who should be the owner of
land which has been registered in the name of two different persons.
The rule, we think, is well settled that the decree ordering the registration of a particular parcel of land is
a bar to future litigation over the same between the same parties .In view of the fact that all the world are
parties, it must follow that future litigation over the title is forever barred; there can be no persons who
are not parties to the action. This, we think, is the rule, except as to rights which are noted in the
certificate or which arise subsequently, and with certain other exceptions which need not be dismissed at
present. A title once registered can not be defeated, even by an adverse, open, and notorious possession.
Registered title under the torrens system can not be defeated by prescription (section 46, Act No. 496).
The title, once registered, is notice to the world. All persons must take notice. No one can plead ignorance
of the registration.
The question, who is the owner of land registered in the name of two different persons, has been
presented to the courts in other jurisdictions. In some jurisdictions, where the "torrens" system has been
adopted, the difficulty has been settled by express statutory provision. In others it has been settled by the
courts. Hogg, in his excellent discussion of the "Australian Torrens System," at page 823, says: "The
general rule is that in the case of two certificates of title, purporting to include the same land, the earlier
in date prevails, whether the land comprised in the latter certificate be wholly, or only in part, comprised
in the earlier certificate. (Oelkers vs. Merry, 2 Q.S.C.R., 193; Miller vs. Davy, 7 N.Z.R., 155; Lloyd vs.
Myfield, 7 A.L.T. (V.) 48; Stevens vs. Williams, 12 V.L. R., 152; Register of Titles, vs. Esperance Land Co., 1
W.A.R., 118.)" Hogg adds however that, "if it can be very clearly ascertained by the ordinary rules of
construction relating to written documents, that the inclusion of the land in the certificate of title of prior
date is a mistake, the mistake may be rectified by holding the latter of the two certificates of title to be
conclusive." (See Hogg on the "Australian torrens System," supra, and cases cited. See also the excellent
work of Niblack in his "Analysis of the Torrens System," page 99.) Niblack, in discussing the general
question, said: "Where two certificates purport to include the same land the earlier in date prevails. ... In
successive registrations, where more than one certificate is issued in respect of a particular estate or
interest in land, the person claiming under the prior certificates is entitled to the estate or interest; and
that person is deemed to hold under the prior certificate who is the holder of, or whose claim is derived
directly or indirectly from the person who was the holder of the earliest certificate issued in respect
thereof. While the acts in this country do not expressly cover the case of the issue of two certificates for
the same land, they provide that a registered owner shall hold the title, and the effect of this undoubtedly
is that where two certificates purport to include the same registered land, the holder of the earlier one
continues to hold the title" (p. 237).
Section 38 of Act No. 496, provides that; "It (the decree of registration) shall be conclusive upon and
against all persons, including the Insular Government and all the branches thereof, whether mentioned by
name in the application, notice, or citation, or included in the general description "To all whom it may
concern." Such decree shall not be opened by reason of the absence, infancy, or other disability of any
person affected thereby, nor by any proceeding in any court for reversing judgments or decrees; subject,
however, to the right of any person deprived of land or of any estate or interest therein by decree of
registration obtained by fraud to file in the Court of Land Registration a petition for review within one
year after entry of the decree (of registration), provided no innocent purchaser for value has acquired an
interest.
It will be noted, from said section, that the "decree of registration" shall not be opened, for any reason, in
any court, except for fraud, and not even for fraud, after the lapse of one year. If then the decree of
registration can not be opened for any reason, except for fraud, in a direct proceeding for that purpose,
may such decree be opened or set aside in a collateral proceeding by including a portion of the land in a
subsequent certificate or decree of registration? We do not believe the law contemplated that a person
could be deprived of his registered title in that way.
We have in this jurisdiction a general statutory provision which governs the right of the ownership of land
when the same is registered in the ordinary registry in the name of two persons. Article 1473 of the Civil
Code provides, among other things, that when one piece of real property had been sold to two different
persons it shall belong to the person acquiring it, who first inscribes it in the registry. This rule, of course,
presupposes that each of the vendees or purchasers has acquired title to the land. The real ownership in
such a case depends upon priority of registration. While we do not now decide that the general provisions
of the Civil Code are applicable to the Land Registration Act, even though we see no objection thereto, yet
we think, in the absence of other express provisions, they should have a persuasive influence in adopting
a rule for governing the effect of a double registration under said Act. Adopting the rule which we believe
to be more in consonance with the purposes and the real intent of the torrens system, we are of the
opinion and so decree that in case land has been registered under the Land Registration Act in the name
of two different persons, the earlier in date shall prevail.
In reaching the above conclusion, we have not overlooked the forceful argument of the appellee. He says,
among other things; "When Prieto et al. were served with notice of the application of Teus (the
predecessor of the defendant) they became defendants in a proceeding wherein he, Teus, was seeking to
foreclose their right, and that of orders, to the parcel of land described in his application. Through their
failure to appear and contest his right thereto, and the subsequent entry of a default judgment against
them, they became irrevocably bound by the decree adjudicating such land to Teus. They had their day in
court and can not set up their own omission as ground for impugning the validity of a judgment duly
entered by a court of competent jurisdiction. To decide otherwise would be to hold that lands with
torrens titles are above the law and beyond the jurisdiction of the courts".
As was said above, the primary and fundamental purpose of the torrens system is to quiet title. If the
holder of a certificate cannot rest secure in this registered title then the purpose of the law is defeated. If
those dealing with registered land cannot rely upon the certificate, then nothing has been gained by the
registration and the expense incurred thereby has been in vain. If the holder may lose a strip of his
registered land by the method adopted in the present case, he may lose it all. Suppose within the six years
which elapsed after the plaintiff had secured their title, they had mortgaged or sold their right, what
would be the position or right of the mortgagee or vendee? That mistakes are bound to occur cannot be
denied, and sometimes the damage done thereby is irreparable. It is the duty of the courts to adjust the
rights of the parties under such circumstances so as to minimize such damages, taking into consideration
al of the conditions and the diligence of the respective parties to avoid them. In the present case, the
appellee was the first negligent (granting that he was the real owner, and if he was not the real owner he
can not complain) in not opposing the registration in the name of the appellants. He was a party-
defendant in an action for the registration of the lot in question, in the name of the appellants, in 1906.
"Through his failure to appear and to oppose such registration, and the subsequent entry of a default
judgment against him, he became irrevocably bound by the decree adjudicating such land to the
appellants. He had his day in court and should not be permitted to set up his own omissions as the ground
for impugning the validity of a judgment duly entered by a court of competent jurisdiction." Granting that
he was the owner of the land upon which the wall is located, his failure to oppose the registration of the
same in the name of the appellants, in the absence of fraud, forever closes his mouth against impugning
the validity of that judgment. There is no more reason why the doctrine invoked by the appellee should
be applied to the appellants than to him.
We have decided, in case of double registration under the Land Registration Act, that the owner of the
earliest certificate is the owner of the land. That is the rule between original parties. May this rule be
applied to successive vendees of the owners of such certificates? Suppose that one or the other of the
parties, before the error is discovered, transfers his original certificate to an "innocent purchaser." The
general rule is that the vendee of land has no greater right, title, or interest than his vendor; that he
acquires the right which his vendor had, only. Under that rule the vendee of the earlier certificate would
be the owner as against the vendee of the owner of the later certificate.
We find statutory provisions which, upon first reading, seem to cast some doubt upon the rule that the
vendee acquires the interest of the vendor only. Sections 38, 55, and 112 of Act No. 496 indicate that the
vendee may acquire rights and be protected against defenses which the vendor would not. Said sections
speak of available rights in favor of third parties which are cut off by virtue of the sale of the land to an
"innocent purchaser." That is to say, persons who had had a right or interest in land wrongfully included in
an original certificate would be unable to enforce such rights against an "innocent purchaser," by virtue of
the provisions of said sections. In the present case Teus had his land, including the wall, registered in his
name. He subsequently sold the same to the appellee. Is the appellee an "innocent purchaser," as that
phrase is used in said sections? May those who have been deprived of their land by reason of a mistake in
the original certificate in favor of Teus be deprived of their right to the same, by virtue of the sale by him
to the appellee? Suppose the appellants had sold their lot, including the wall, to an "innocent purchaser,"
would such purchaser be included in the phrase "innocent purchaser," as the same is used in said
sections? Under these examples there would be two innocent purchasers of the same land, is said
sections are to be applied .Which of the two innocent purchasers, if they are both to be regarded as
innocent purchasers, should be protected under the provisions of said sections? These questions indicate
the difficulty with which we are met in giving meaning and effect to the phrase "innocent purchaser," in
said sections.
May the purchaser of land which has been included in a "second original certificate" ever be regarded as
an "innocent purchaser," as against the rights or interest of the owner of the first original certificate, his
heirs, assigns, or vendee? The first original certificate is recorded in the public registry. It is never issued
until it is recorded. The record notice to all the world. All persons are charged with the knowledge of what
it contains. All persons dealing with the land so recorded, or any portion of it, must be charged with
notice of whatever it contains. The purchaser is charged with notice of every fact shown by the record and
is presumed to know every fact which the record discloses .This rule is so well established that it is
scarcely necessary to cite authorities in its support (Northwestern National Bank vs. Freeman, 171 U.S.,
620, 629; Delvin on Real Estate, sections 710, 710 [a]).
When a conveyance has been properly recorded such record is constructive notice of its contents and all
interests, legal and equitable, included therein. (Grandin vs. Anderson, 15 Ohio State, 286, 289; Orvis vs.
Newell, 17 Conn., 97; Buchanan vs. Intentional Bank, 78 Ill., 500; Youngs vs. Wilson, 27 N.Y., 351; McCabe
vs. Grey, 20 Cal., 509; Montefiore vs. Browne, 7 House of Lords Cases, 341.)
Under the rule of notice, it is presumed that the purchaser has examined every instrument of record
affecting the title. Such presumption is irrebutable. He is charged with notice of every fact shown by the
record and is presumed to know every fact which an examination of the record would have disclosed. This
presumption cannot be overcome by proof of innocence or good faith. Otherwise the very purpose and
object of the law requiring a record would be destroyed. Such presumption cannot be defeated by proof
of want of knowledge of what the record contains any more than one may be permitted to show that he
was ignorant of the provisions of the law. The rule that all persons must take notice of the facts which the
public record contains is a rule of law. The rule must be absolute. Any variation would lead to endless
confusion and useless litigation.
While there is no statutory provision in force here requiring that original deeds of conveyance of real
property be recorded, yet there is a rule requiring mortgages to be recorded. (Arts. 1875 and 606 of the
Civil Code.) The record of a mortgage is indispensable to its validity. (Art .1875.) In the face of that statute
would the courts allow a mortgage to be valid which had not been recorded, upon the plea of ignorance
of the statutory provision, when third parties were interested? May a purchaser of land, subsequent to
the recorded mortgage, plead ignorance of its existence, and by reason of such ignorance have the land
released from such lien? Could a purchaser of land, after the recorded mortgage, be relieved from the
mortgage lien by the plea that he was a bona fide purchaser? May there be a bona fide purchaser of said
land, bona fide in the sense that he had no knowledge of the existence of the mortgage? We believe the
rule that all persons must take notice of what the public record contains in just as obligatory upon all
persons as the rule that all men must know the law; that no one can plead ignorance of the law. The fact
that all men know the law is contrary to the presumption. The conduct of men, at times, shows clearly
that they do not know the law. The rule, however, is mandatory and obligatory, notwithstanding. It would
be just as logical to allow the defense of ignorance of the existence and contents of a public record.
In view, therefore, of the foregoing rules of law, may the purchaser of land from the owner of the second
original certificate be an "innocent purchaser," when a part or all of such land had theretofore been
registered in the name of another, not the vendor? We are of the opinion that said sections 38, 55, and
112 should not be applied to such purchasers. We do not believe that the phrase "innocent purchaser
should be applied to such a purchaser. He cannot be regarded as an "innocent purchaser" because of the
facts contained in the record of the first original certificate. The rule should not be applied to the
purchaser of a parcel of land the vendor of which is not the owner of the original certificate, or his
successors. He, in nonsense, can be an "innocent purchaser" of the portion of the land included in
another earlier original certificate. The rule of notice of what the record contains precludes the idea of
innocence. By reason of the prior registry there cannot be an innocent purchaser of land included in a
prior original certificate and in a name other than that of the vendor, or his successors. In order to
minimize the difficulties we think this is the safe rule to establish. We believe the phrase "innocent
purchaser," used in said sections, should be limited only to cases where unregistered land has been
wrongfully included in a certificate under the torrens system. When land is once brought under the
torrens system, the record of the original certificate and all subsequent transfers thereof is notice to all
the world. That being the rule, could Teus even regarded as the holder in good fifth of that part of the
land included in his certificate of the appellants? We think not. Suppose, for example, that Teus had never
had his lot registered under the torrens system. Suppose he had sold his lot to the appellee and had
included in his deed of transfer the very strip of land now in question. Could his vendee be regarded as an
"innocent purchaser" of said strip? Would his vendee be an "innocent purchaser" of said strip? Certainly
not. The record of the original certificate of the appellants precludes the possibility. Has the appellee
gained any right by reason of the registration of the strip of land in the name of his vendor? Applying the
rule of notice resulting from the record of the title of the appellants, the question must be answered in
the negative. We are of the opinion that these rules are more in harmony with the purpose of Act No. 496
than the rule contended for by the appellee. We believe that the purchaser from the owner of the later
certificate, and his successors, should be required to resort to his vendor for damages, in case of a
mistake like the present, rather than to molest the holder of the first certificate who has been guilty of no
negligence. The holder of the first original certificate and his successors should be permitted to rest
secure in their title, against one who had acquired rights in conflict therewith and who had full and
complete knowledge of their rights. The purchaser of land included in the second original certificate, by
reason of the facts contained in the public record and the knowledge with which he is charged and by
reason of his negligence, should suffer the loss, if any, resulting from such purchase, rather than he who
has obtained the first certificate and who was innocent of any act of negligence.
The foregoing decision does not solve, nor pretend to solve, all the difficulties resulting from double
registration under the torrens system and the subsequent transfer of the land. Neither do we now
attempt to decide the effect of the former registration in the ordinary registry upon the registration under
the torrens system. We are inclined to the view, without deciding it, that the record under the torrens
system, supersede all other registries. If that view is correct then it will be sufficient, in dealing with land
registered and recorded alone. Once land is registered and recorded under the torrens system, that
record alone can be examined for the purpose of ascertaining the real status of the title to the land.
It would be seen to a just and equitable rule, when two persons have acquired equal rights in the same
thing, to hold that the one who acquired it first and who has complied with all the requirements of the
law should be protected.
In view of our conclusions, above stated, the judgment of the lower court should be and is hereby
revoked. The record is hereby returned to the court now having and exercising the jurisdiction heretofore
exercised by the land court, with direction to make such orders and decrees in the premises as may
correct the error heretofore made in including the land in the second original certificate issued in favor of
the predecessor of the appellee, as well as in all other duplicate certificates issued.
Without any findings as to costs, it is so ordered.
Arellano, C.J., Torrens, and Araullo, JJ., concur.
Separate Opinions
TRENT, J., dissenting:
I dissent.
In cases of double or overlapping registration, I am inclined to agree with the reasoning and authority on
which it is held in the majority opinion (first) that the original holder of the prior certificate is entitled to
the land as against the original holder of the later certificate, where there has been no transfer of title by
either party to an innocent purchaser; both, as is shown in the majority opinion, being at fault in
permitting the double registration to take place; (second) that an innocent purchaser claiming under the
prior certificate is entitled to the land as against the original holder of the later certificate, and also as
against innocent purchasers from the holder of the later certificate; the innocent purchaser being in no
wise at fault in connection with the issuance of the later certificate.
But I am of opinion that neither the authorities cited, nor the reasoning of the majority opinion sustains
the proposition that the original holder of the prior certificate is entitled to the land as against an
innocent purchaser from the holder of the later certificate.
As to the text-book authorities cited in the majority opinion, it is sufficient to say that the rules laid down
by both Hogg and Niblack are mere general rules, admittedly subject to exception, and of course of no
binding force or authority where the reasoning upon which these rules are based is applicable to the facts
developed in a particular case.
In its last analysis the general rule laid down in the majority opinion rests upon the proposition set forth in
the last page of the opinion wherein it is said that "it would seem to be a just and equitable rule, when
two persons have acquired equal rights in the same thing, to hold that the one who acquired it first and
who has complied with all the requirements of the law should be protected." The rule, as applied to the
matter in hand, may be stated as follows: It would seem to be a just and equitable rule when two persons
have acquired separate and independent registered titles to the same land, under the Land Registration
Act, to hold that the one who first acquired registered title and who has complied with all the
requirements of the law in that regard should be protected, in the absence of any express statutory
provision to the contrary.
Thus stated I have no quarrel with the doctrine as a statement of the general rule to be applied in cases of
double or overlapping registration under the Land Registration Act; for it is true as stated in the majority
opinion that in the adjudication and registration of titles by the Courts of Land Registration "mistakes are
bound to occur, and sometimes the damage done thereby is irreparable;" and that in the absence of
statutory provisions covering such cases, "it is the duty of the courts to adjust the rights of the parties,
under such circumstances, so as to minimize such damages, taking into consideration all of the conditions,
and the diligence of the respective parties to avoid them."
But like most such general rules, it has its exceptions and should not be applied in a case wherein the
reasons on which it is based do not exist, or in cases wherein still more forceful reasons demand the
application of a contrary rule.
The general rule relied upon in the majority opinion is a mere application of a well settled equity rule that:
"Where conflicting equities are otherwise equal in merit, that which first occurred will be given the
preference." But it is universally laid down by all the courts which have had occasion to apply this equity
rule that "it should be the last test resorted to," and that "it never prevails when any other equitable
ground for preference exists." (See 19 Cent. Dig., tit. Equity, par. 181; and may cases cited in 16 Cyc., 139,
note 57.) It follows that the general rules, that in cases of double or overlapping registration the earlier
certificate should be protected, ought not to prevail so as to deprive an innocent purchaser under the
later certificate of his title of the earlier certificate contributed to the issuance of the later certificate.
Hence the holder of the earlier certificate of title should not be heard to invoke the "just and equitable
rule" as laid down in the majority opinion, in order to have his own title protected and the title of an
innocent purchaser of a later certificate cancelled or annulled, in any case wherein it appears that the
holder of the later certificate was wholly without fault, while the holder of the issuance of the later
certificate, in that he might have prevented its issuance by merely entering his appearance in court in
response to lawful summons personally served upon him in the course of the proceedings for the issuance
of the second certificate, and pleading his superior rights under the earlier certificate, instead of keeping
silent and by his silence permitting a default judgment to be entered against him adjudicating title in favor
of the second applicant. The majority opinion clearly recognizes the soundness of the principles I am
contending for by reasoning (with which I am inclined to agree) whereby it undertakes to demonstrate
that as between the original holders of the double or overlapping registration the general rule should
prevail, because both such original parties must held to have been fault and, their equities being equal,
preference should be given to the earlier title. The majority opinion further recognizes the soundness of
my contention by the reasoning whereby it undertakes to sustain the application of the general rule in
favor of the original holder of the earlier certificate against purchasers from the original holder of the
later certificate, by an attempt to demonstrate that such purchasers can in no event be held to be
innocent purchasers; because, as it is said, negligence may and should always be imputed to such a
purchaser, so that in no event can he claim to be without fault when it appears that the lands purchased
by him from the holder of a duly registered certificate of title are included within the bounds of the lands
described in a certificate of title of an earlier date. At considerable length the majority opinion (in reliance
upon the general rule laid down under the various systems of land registration, other than those based on
the torrens system) insists that a purchaser of land land duly registered in the Land Registration Court, is
charged with notice of the contents of each and every one of the thousands and tens of thousands of
certificates of registry on file in the land registry office, so that negligence may be imputed to him if he
does not ascertain that all or any part of the land purchased by him is included within the boundary lines
of any one of the thousands or tens of thousands of tracts of land whose original registry bears an earlier
date than the date of the original registry of the land purchased by him. It is contended that he cannot
claim to be without fault should he buy such land because, as it is said, it was possible for him to discover
that the land purchased by him had been made the subject of double or overlapping registration by a
comparison of the description and boundary lines of the thousands of tracts and parcels of land to be
found in the land registry office. But such ruling goes far to defeat one of the principal objects sought to
be attained by the introduction and adoption of the so-called torrens system for the registration of land.
The avowed intent of that system of land registration is to relieve the purchase of registered lands from
the necessity of looking farther than the certificate of title of the vendor in order that he may rest secure
as to the validity of the title to the lands conveyed to him. And yet it is said in the majority opinion that he
is charged with notice of the contents of every other certificate of title in the office of the registrar so that
his failure to acquaint himself with its contents may be imputed to him as negligence.
If the rule announced in the majority opinion is to prevail, the new system of land registration, instead of
making transfers of real estate simple, expenditious and secure, and instead of avoiding the necessity for
expensive and oftimes uncertain searches of the land record and registries, in order to ascertain the true
condition of the title before purchase, will, in many instances, add to the labor, expense and uncertainty
of any attempt by a purchaser to satisfy himself as to the validity of the title to lands purchased by him.
As I have said before, one of the principal objects, if not the principal object, of the torrens system of land
registration upon which our Land Registration Act is avowedly modelled is to facilitate the transfer of real
estate. To that end the Legislature undertakes to relieve prospective purchasers and all others dealing in
registered lands from the necessity of looking farther than the certificate of title to such lands furnished
by the Court of Land Registration, and I cannot, therefore, give my consent to a ruling which charges a
purchaser or mortgage of registered lands with notice of the contents of every other certificate of title in
the land registry, so that negligence and fault may be imputed to him should he be exposed to loss or
damages as a result of the lack of such knowledge.
Suppose a prospective purchaser of lands registered under the Land Registration Act desires to avoid the
imputation of negligence in the event that, unknown to him, such lands have been made the subject of
double or overlapping registration, what course should he pursue? What measures should he adopt in
order to search out the information with notice of which he is charged? There are no indexes to guide him
nor is there anything in the record or the certificate of title of the land he proposes to buy which
necessarily or even with reasonable probability will furnish him a clue as to the fact of the existence of
such double or overlapping registration. Indeed the only course open to him, if he desires to assure
himself against the possibility of double or overlapping registration, would even seem to be a careful,
laborious and extensive comparison of the registered boundary lines contained in the certificate of title of
the tract of land he proposes to buy with those contained in all the earlier certificates of title to be found
in the land registry. Assuredly it was never the intention of the author of the new Land Registration Act to
impose such a burden on a purchaser of duly registered real estate, under penalty that a lack of the
knowledge which might thus be acquired may be imputed to him by this court as negligence in ruling
upon the respective equities of the holders of lands which have been the subject of double or overlapping
registration.
On the other hand, I think that negligence and fault may fairly be imputed to a holder of a registered
certificate of title who stood supinely by and let a default judgment be entered against him, adjudicating
all or any part of his registered lands to another applicant, if it appears that he was served with notice or
had actual notice of the pendency of the proceedings in the Court of Land Registration wherein such
default judgment was entered.
The owner of land who enjoys the benefits secured to him by its registry in the Court of Land Registration
may reasonably be required to appear and defend his title when he has actual notice that proceedings are
pending in that court wherein another applicant, claiming the land as his own, is seeking to secure its
registry in his name. All that is necessary for him to do is to enter his appearance in those proceedings,
invite the court's attention to the certificate of title registered in his name, and thus, at the cost of the
applicant, avoid all the damage and inconvenience flowing from the double or overlapping registration of
the land in question. There is nothing in the new system of land registration which seems to render it
either expedient or necessary to relieve a holder of a registered title of the duty of appearing and
defending that title, when he has actual notice that it is being attacked in a court of competent
jurisdiction, and if, as a result of his neglect or failure so to do, his lands become subject to double or
overlapping registration, he should not be permitted to subject an innocent purchaser, holding under the
later certificate, to all the loss and damage resulting from the double or overlapping registration, while he
goes scot free and holds the land under a manifest misapplication of the equitable rule that "where
conflicting equities are otherwise equal in merit, that which first accrued will be given the preference." It
is only where both or neither of the parties are at fault that the rule is properly applicable as between
opposing claimants under an earlier and a later certificate of registry to the same land.
Of course all that is said in the briefs of counsel and the majority opinion as to the right of the holder of a
certificate to rest secure in his registered title so that those dealing with registered lands can confidently
rely upon registry certificates thereto is equally forceful by way of argument in favor of the holder of one
or the other certificate in case of double or overlapping registration. The problem is to determine which
of the certificate holders is entitled to the land. The decision of that question in favor of either one must
necessarily have the effect of destroying the value of the registered title of the other and to that extent
shaking the public confidence in the value of the whole system for the registration of lands. But, in the
language of the majority opinion, "that mistakes are bound to occur cannot be denied and sometimes the
damage done thereby is irreparable. It is the duty of the courts to adjust the rights of the parties under
such circumstances so as to minimize the damages, taking into consideration all the conditions and the
diligence of the respective parties to avoid them."lawphil.net
It will be observed that I limit the exception to the general equitable rule, as laid down in the majority
opinion, to case wherein the holder of the earlier certificate of title has actual notice of the pendency of
the proceedings in the course of which the latter certificate of title was issued, or to cases in which he has
received personal notice of the pendency of those proceedings. Unless he has actual notice of the
pendency of such proceedings I readily agree with the reasoning of the majority opinion so far as it holds
that negligence, culpable negligence, should not be imputed to him for failure to appear and defend his
title so as to defeat his right to the benefit of the equitable rule. It is true that the order of publication in
such cases having been duly complied with, all the world is charged with notice thereof, but it does not
necessarily follow that, in the absence of actual notice, culpable negligence in permitting a default
judgment to be entered against him may be imputed to the holder of the earlier certificate so as to defeat
his right to the land under the equitable rule favoring the earlier certificate. Such a holding would have
the effect (to quote the language of the majority opinion) of requiring the holder of a certificate of title to
wait indefinitely "in the portals of the court" and to sit in the "mirador de su casa" in order to avoid the
possibility of losing his lands; and I agree with the writer of the majority opinion that to do so would place
an unreasonable burden on the holders of such certificate, which was not contemplated by the authors of
the Land Registration Act. But no unreasonable burden is placed upon the holder of a registered title by a
rule which imputes culpable negligence to him when he sits supinely by and lets a judgment in default be
entered against him adjudicating title to his lands in favor of another applicant, despite the fact that he
has actual knowledge of the pendency of the proceedings in which such judgment is entered and despite
the fact that he has been personally served with summons to appear and default his title.
"Taking into consideration all of the conditions and the diligence of the respective parties," it seems to me
that there is no "equality in merit" between the conflicting equities set up by an innocent purchaser who
acquires title to the land under a registered certificate, and the holder of an earlier certificate who
permitted a default judgment to be entered against him, despite actual notice of the pendency of the
proceedings in the course of which the later certificate was issued.
I am convinced, furthermore, that aside from the superior equities of the innocent purchaser in cases
such as that now under discussion, there are strong reasons of convenience and public policy which
militate in favor of the recognition of his title rather than that of the holder of the earlier title.
One ruling exposes all persons purchasing or dealing in registered lands to unknown, unspecified and
uncertain dangers, to guard against which all such persons will be put to additional cost, annoyance and
labor on every occasion when any transaction is had with regard to such lands; while the other ruling
tends to eliminate consequences so directly adverse to the purpose and object for which the land
registration law was enacted, and imposes no burden upon any holder of a certificate of registered lands
other than that of defending his title on those rare, definite and specific occasions wherein he has actual
notice that his title is being challenged in a Court of Land Registration, a proceeding in which the cost and
expense is reduced to the minimum by the conclusive character of his certificate of title in support of his
claim of ownership. Furthermore, judgment against the innocent purchaser and in favor of the holder of
the earlier certificate in a case such as that under consideration must inevitably tend to increase the
danger of double or overlapping registrations by encouraging holders of registered titles, negligently or
fraudulently and conclusively, to permit default judgments to be entered against them adjudicating title
to all or a part of their registered lands in favor of other applicants, despite actual notice of the pendency
of judicial proceedings had for that purpose, and this, without adding in any appreciable degree to the
security of thir titles, and merely to save them the very slight trouble or inconvenience incident to an
entry of appearance in the court in which their own titles were secured, and inviting attention to the fact
that their right, title and ownership in the lands in questions has already been conclusively adjudicated.
The cases wherein there is a practical possibility of double or overlapping registration without actual
notice to the holder of the earlier certificate must in the very nature of things to be so rare as to be
practically negligible. Double or overlapping registration almost invariably occurs in relation to lands held
by adjoining occupants or claimants. It is difficult to conceive of a case wherein double registration can
take place, in the absence of fraud, without personal service of notice of the pendency of the proceedings
upon the holder of the earlier certificate, the statute requiring such notice to be served upon the owner
or occupant of all lands adjoining those for which application for registration is made; and the cases
wherein an adjoining land owner can, even by the use of fraud, conduct proceedings for the registration
of his land to a successful conclusion without actual notice to the adjoining property owners must be rare
indeed.
In the case at bar the defendant purchased the land in question from the original holder of a certificate of
title issued by the Court of Land Registration, relying upon the records of the Court of Land Registration
with reference thereto and with no knowledge that any part of the land thus purchased was included in
an earlier certificate of title issued to the plaintiff. The plaintiff, the holder of the earlier certificate of title,
negligently permitted a default judgment to be entered against him in the Court of Land Registration,
adjudicating part of the lands included in his own certificate of title in favor of another applicant, from
whom the defendant in this action acquired title, and this despite the fact that he was an adjoining land
owner, had actual notice of the pendency of the proceedings and was personally served with summons to
appear and defends his rights in the premises. It seems to me that there can be no reason for doubt as to
the respective merits of the equities of the parties, and further that the judgment of the majority in favor
of the plaintiff will inevitably tend to increase the number of cases wherein registered land owners in the
future will fail to appear and defend their titles when challenged in other proceedings in the Courts of
Land Registration, thereby enormously increasing the possibility and probability of loss and damage to
innocent third parties and dealers in registered lands generally, arising out of erroneous, double or
overlapping registration of lands by the Courts of Land Registration.
Carson, J., concurs.
5. Bishop vs CA
The question presented in this case is not novel. As in previous cases resolving the same issue, the answer
will not change.
In dispute are certain portions of a parcel of land situated in Calapacuan, Subic, Zambales, with a total
area of 1,652 square meters. These portions are in the possession of the petitioners. The entire parcel is
registered in the name of the private respondents under Transfer Certificate of Title No. T-29018.
On January 22, 1985, the private respondents sued the petitioners for recovery of possession of the lots in
question. The plaintiffs invoked their rights as registered owners of the land. In their answer, the
defendants claimed that the lots were part of the public domain and could not have been registered
under the Torrens system. All alleged long and continuous possession of the lots and produced tax
declarations in their names. Two of them maintained that they had acquired their respective lots by virtue
of valid contracts of sale. Another based her claim on inheritance.
After trial, Judge Nicias O. Mendoza of the Regional Trial Court of Olongapo City rendered judgment in
favor of the plaintiffs. 1 He held in part as follows:
The plaintiffs, being the registered owners in fee simple of the land in question, necessarily have the
lawful right to the physical possession of the land. The owner of a land has a right to enjoy and possess it,
and he has also the right to recover and repossess the same from any person occupying it unlawfully.
Art. 428 –– New Civil Code
The owner has the right to enjoy and dispose of a thing, without other limitations than those established
by law.
The owner has also a right of action against the holder and possessor of the thing in order to recover it.
There is, therefore, no doubt in law, that the plaintiffs being the registered owners of the land in question
have also the corresponding right to the recovery and possession of the same. The defendants who are in
physical occupancy of the land belonging to the plaintiffs have no right whatsoever to unjustly withhold
the possession of the said land from the plaintiffs. The defendants' occupancy of the land in question is
unlawful and in violation of plaintiffs right to the recovery and possession of the land they owned. The
evidence presented by the defendants claiming as per certifications of the Bureau of Forestry that the
land occupied by them is within the alienable and disposable public land, deserves scant consideration as
the said certification are without basis in law. The moment the land in question was titled in the name of
the plaintiffs, it ceased to become a part of the public domain as the same became the private property of
the registered owner, the herein plaintiffs. Tax declarations of the land made in the names of the
defendants are not evidence of title, it appearing that the land is already titled to the plaintiffs. The
registration of the land in the names of the defendants with the Assessor's Office for taxation purposes
and the payments of real property taxes by the defendants can not and does not defeat the title of the
plaintiffs to the land. The fact that the defendants have been in occupancy of the land in question for
quite a period of time is of no moment as prescription will not ripen into ownership because the land is
covered by a torrens title. Acquisitive prescription will not be available to land titled under Art. 496.
PREMISED THEREFORE on the foregoing consideration, the Court finds and so holds that the plaintiffs
being the registered owners of the land in question are entitled to the possession of the same, and that
the defendants who are occupying the land belonging to the plaintiffs in violation of the right of the latter,
are duty-bound to restore possession of the same to the titled owners, the herein plaintiffs.
On appeal, this decision was affirmed by the respondent court on August 22, 1988. 2 Their motion for
reconsideration having been denied, the petitioners then came to this Court, urging reversal of the courts
below.
They allege that:
1.The land in question is part of the public domain and could not have been validly registered under the
Torrens system.
2.The petitioners have acquired title to their respective lots by laches.
3.In the alternative, they should be considered builders in good faith entitled to the rights granted by
Articles 448, 546, 547 and 548 of the Civil Code.
The petition has no merit.
On the first ground, the Court notes that the private respondents' title is traceable to an Original
Certificate of Title issued way back in 1910 or eighty-two years ago. That certificate is now
incontrovertible and conclusive against the whole world. The resumption of regularity applies to the
issuance of that certificate. This presumption covers the finding that the land subject of the certificate
was private in nature and therefore registrable under the Torrens system.
To sustain an action for annulment of a Torrens certificate for being void ab initio, it must be shown that
the registration court had not acquired jurisdiction over the case and that there was actual fraud in
securing the title. 3 Neither of these requirements has been established by the petitioners. All they
submitted was the certification of the Bureau of Forestry that the land in question was alienable and
disposable public land. The trial court was correct in ruling that this deserved scant consideration for lack
of legal basis. To be sure, a certification from an administrative body cannot prevail against court decision
declaring the land to be registrable.
Significantly, it does not appear in the record that the Director of Forestry, or any other representative of
the Government for that matter, entered any opposition to the land registration proceedings that led to
the issuance of the Original Certificate of Title. No less importantly, an action to invalidate a certificate of
title on the ground of fraud prescribes after the expiration of one (1) year from the entry of the decree of
registration 4 and cannot now be resorted to by the petitioners at this late hour. And collaterally at that.
The strange theory submitted by the petitioners that the owner of registered land must also possess it
does not merit serious attention. The non-presentation by the private respondents of their tax
declarations on the land is no indication that they have never acquired ownership thereof or have lost it
by such omission.
The second ground must also be rejected.
As registered owners of the lots in question, the private respondents have a right to eject any person
illegally occupying their property. This right is imprescriptible. Even if it be supposed that they were aware
of the petitioners' occupation of the property, and regardless of the length of that possession, the lawful
owners have a right to demand the return of their property at any time as long as the possession was
unauthorized or merely tolerated, if at all. This right is never barred by laches.
In urging laches against the private respondents for not protesting their long and continuous occupancy of
the lots in question, the petitioners are in effect contending that they have acquired the said lots by
acquisitive prescription. It is an elementary principle that the owner of a land registered under the
Torrens system cannot lose it by prescription. 5
As the Court observed in the early case Legarda v. Saleeby: 6
The real purpose of the Torrens system of land registration is to quite title to land; to put a stop forever to
any question of the legality of the title, except claims which were noted at the time of registration in the
certificate, or which may arise subsequent thereto. That being the purpose of the law, it would seem that
once the title was registered, the owner may rest secure, without the necessity of waiting in the portals of
the court, or sitting in the "mirador de su casa," to avoid the possibility of losing his land.
Applied consistently these many years, this doctrine has been burnished bright with use and has long
become a settled rule of law.
In light of the observations already made, it is obvious that the petitioners cannot invoke the status of
builders in good faith to preserve their claimed rights to the constructions they have made on the lots in
dispute.
A builder in good faith is one who is unaware of any flaw in his title to the land at the time he builds on it.
7 This definition cannot apply to the petitioners because they knew at the very outset that they had no
right at all to occupy the subject lots.
The petitioners have consistently insisted that the lots were part of the public domain and even submitted
a certification to that effect from the Bureau of Forestry. The land was in fact registered under the
Torrens system and such registration was constructive notice to the whole world, including the
petitioners. Apparently, the petitioners did not take the trouble of checking such registration. At any rate,
the point is that, whether the land be public or private, the petitioners knew they had no right to occupy it
and build on it. The Court of Appeals was correct in calling them squatters for having entered, without
permission or authority, land that did not belong to them.
In urging reversal of the trial court and the respondent court, the petitioners are asking us to overturn
long established doctrines guaranteeing the integrity of the Torrens system and the indefeasibility of titles
issued thereunder for the protection and peace of mind of the registered owner against illegal
encroachments upon his property. We are not disposed to take this drastic step on the basis alone of their
feeble arguments.
WHEREFORE, the petition is DENIED, with costs against the petitioners. It is so ordered.
6. NGA vs IAC
This is a petition for review of the decision of the then Intermediate Appellate Court * (now Court of
Appeals) dated January 31, 1984, reversing the decision of the Court of First Instance of Laguna and San
Pablo City, 8th Judicial District, Branch III, and of the resolution dated August 28, 1984 denying the motion
for reconsideration filed thereof.
The undisputed facts of this case as found by the Trial Court and the Intermediate Appellate Court are as
follows:
On December 2,1971, the spouses Paulino Vivas and Engracia Lizards, as owners of a parcel of land
situated in Bo. San Francisco, Victoria, Laguna, comprising more or less 105,710 square meters, sold for
P30,000.00 said property in favor of spouses Melencio Magcamit and Nena Cosico, and Amelita Magcamit
(herein private respondents) as evidenced by "Kasulatan Ng Bilihang Mabiling Muli." This sale with right to
repurchase was recorded in the Office of the Register of Deeds of Laguna on December 6,1971 under Act
No. 3344. On January 31,1972 the sale was made absolute by the spouses Vivas and Lizardo in favor of the
private respondents for the sum of P90,000.00; P50,000.00 of which was paid upon the execution of the
instrument, entitled "Kasulatan Ng Bilihan Tuluyan," after being credited with the P30,000.00
consideration of the "Kasulatan Ng Mabibiling Muli," and the balance of P40,000.00 was to be paid the
moment that the certificate of title is issued. From the execution of said Kasulatan, private respondent
have remained in peaceful, adverse and open possession of subject property.
On February 26, 1975, an Original Certificate of Title No. T-1728 covering the property in question was
issued to and in the name of the spouses Vivas and Lizardo without the knowledge of the private
respondents and on April 30, 1975, said Spouses executed a Special Power of Attorney in favor of Irenea
Ramirez authorizing the latter to mortgage the property with the petitioner, National Grains Authority.
On May 2, 1974, the counsel for the petitioner wrote the Provincial Sheriff in Sta. Cruz, Laguna, requesting
for the extrajudicial foreclosure of the mortgage executed by Irenea Ramirez on May 18, 1975, covering,
among others, the property involved in this case covered by OCT No. T-1728, for unpaid indebtedness in
the amount of P63,948.80 in favor of the petitioner.
On May 31, 1974, the Provincial Sheriff caused the issuance of the notice of sale of the property in
question, scheduling the public auction sale on June 28, 1974. The petitioner was the highest and
successful bidder so that a Certificate of Sale was issued in its favor on the same date by the Provincial
Sheriff.
On July 10, 1974, the petitioner in its capacity as attorney-in-fact of the mortgagor sold the subject real
property in favor of itself. By virtue of the deed of absolute sale, TCT No. T-75171 of the Register of Deeds
for the Province of Laguna was issued in the name of the petitioner on July 16, 1974. It was only in July
1974, that private respondents learned that a title in the name of the Vivas spouses had been issued
covering the property in question and that the same property had been mortgaged in favor of the
petitioner. Private respondent Nena Magcamit offered to pay the petitioner NGA the amount of
P40,000.00 which is the balance of the amount due the Vivas spouses under the terms of the absolute
deed of sale but the petitioner refused to accept the payment. On July 31, 1974, counsel for private
respondents made a formal demand on the spouses Vivas and Lizardo to comply with their obligation
under the terms of the absolute deed of sale; and soon after reiterated to the NGA, the offer to pay the
balance of P40,000.00 due under the absolute deed of sale. On August 13, 1974 petitioner in its reply
informed counsel of private respondents that petitioner is now the owner of the property in question and
has no intention of disposing of the same.
The private respondents, who as previously stated, are in possession of subject property were asked by
petitioner to vacate it but the former refused. Petitioner filed a suit for ejectment against private
respondents in the Municipal Court of Victoria, Laguna, but the case was dismissed.
On June 4, 1975, private respondents filed a complaint before the then Court of First Instance of Laguna
and San Pablo City, Branch III, San Pablo City, against the petitioner and the spouses Vivas and Lizardo,
praying, among others, that they be declared the owners of the property in question and entitled to
continue in possession of the same, and if the petitioner is declared the owner of the said property, then,
to order it to reconvey or transfer the ownership to them under such terms and conditions as the court
may find just, fair and equitable under the premises. (Record on Appeal, pp. 2-11).
In its answer to the complaint, the petitioner (defendant therein) maintained that it was never a privy to
any transaction between the private respondents (plaintiffs therein) and the spouses Paulino Vivas and
Engracia Lizardo that it is a purchaser in good faith and for value of the property formerly covered by OCT
No. 1728; and that the title is now indefeasible, hence, private respondents' cause of action has' already
prescribed. (Record on Appeal, pp. 16-22).
After due hearing, the trial court ** rendered its decision on March 17, 1981, in favor of the petitioner,
the dispositive portion of said judgment reading as follows:
WHEREFORE, judgment is hereby rendered as follows:
(1)declaring defendant National Grains Authority the lawful owner of the property in question by virtue of
its indefeasible title to the same;
(2)ordering plaintiffs to turn over possession of the land to defendant National Grains Authority;
(3)ordering defendants-spouses Paulino Vivas and Engracia Lizardo to pay plaintiffs the sum of P56,000.00
representing the amount paid pursuant to the Kasulatan Ng Bilihang Tuluyan marked Exhibit "3", with
legal interest thereon from January 31, 1972 until the amount is paid, to pay an additional amount of
P5,000.00 for and as attorney's fees, an additional amount of Pl0,000.00 as moral damages, another
amount of P5,000.00 by way of exemplary damages and to pay the costs of this suit. (Rollo, P. 35).
The private respondents interposed an appeal from the decision of the trial court to the Intermediate
Appellate Court.
After proper proceedings, the appellate court rendered its decision on January 31, 1984, reversing and
setting aside the decision of the trial court as follows:
WHEREFORE, the decision of the lower court is hereby reversed and set aside and another one is
rendered ordering the National Grains Authority to execute a deed of reconveyance sufficient in law for
purposes of registration and cancellation of transfer Certificate of Title No. T-75171 and the issuance of
another title in the names of plaintiff-appellants, and ordering defendants-appellees Paulino Vivas and
Engracia Lizardo to pay the National Grains Authority the sum of P78,375.00 (Exh. 3) within thirty (30)
days from the receipts of the writ of execution. No damages and costs. (Rollo, p. 19).
The petitioner filed a motion for reconsideration of the said decision but the same was denied. (Rollo, p.
26).Hence, this petition.
In the resolution of May 20, 1985, the petition was given due course and the parties were required to
submit simultaneous memoranda (Rollo, p. 128). The memorandum for the petitioner was filed on July 3,
1985 (Rollo, p. 129) while the memorandum for the private respondents was filed on August 26, 1985 1
Rollo p. 192).
The main issue in this case is whether or not violation of the terms of the agreement between the spouses
Vivas and Lizardo, the sellers, and private respondents, the buyers, to deliver the certificate of title to the
latter, upon its issuance, constitutes a breach of trust sufficient to defeat the title and right acquired by
petitioner NGA, an innocent purchaser for value.
It is undisputed that: (1) there are two deeds of sale of the same land in favor of private respondents,
namely: (a) the conditional sale with right to repurchase or the 'Kasulatan Ng Bilihang Mabibiling Muli"
which was registered under Act 3344 and (b) the deed of absolute sale or "Kasulatan ng Bilihang Tuluyan"
which was not registered; (2) the condition that the Certificate of Title will be delivered to the buyers
upon its issuance and upon payment of the balance of P40,000.00 is contained in the deed of absolute
sale; and (3) the land in question at the time of the execution of both sales was not yet covered by the
Torrens System of registration.
It is axiomatic, that while the registration of the conditional sale with right of repurchase may be binding
on third persons, it is by provision of law "understood to be without prejudice to third party who has
better right" (Section 194 of the Administrative Code, as amended by Act No. 3344). In this case, it will be
noted that the third party NGA, is a registered owner under the Torrens System and has obviously a
better right than private respondents and that the deed of absolute sale with the suspensive condition is
not registered and is necessarily binding only on the spouses Vivas and Lizardo and private respondents.
In their complaint at the Regional Trial Court, private respondents prayed among others, for two
alternative reliefs, such as: (a) to be declared the owners of the property in question or (b) to order the
declared owner to reconvey or transfer the ownership of the property in their favor.
Private respondents claim a better right to the property in question by virtue of the Conditional Sale, later
changed to a deed of Absolute Sale which although unregistered under the Torrens System allegedly
transferred to them the ownership and the possession of the property in question. In fact, they argue that
they have been and are still in possession of the same openly, continuously, publicly under a claim of
ownership adverse to all other claims since the purchase on December 2, 1971 (Rollo, p. 165). It is
stressed that not until the month of July, 1974 did the plaintiff learn that a title had been issued covering
the property in question (Rollo, p. 15).
Time and time again, this Court has ruled that the proceedings for the registration of title to land under
the Torrens System is an action in rem not in personam, hence, personal notice to all claimants of the res
is not necessary in order that the court may have jurisdiction to deal with and dispose of the res. Neither
may lack of such personal notice vitiate or invalidate the decree or title issued in a registration
proceeding, for the State, as sovereign over the land situated within it, may provide for the adjudication
of title in a proceeding in rem or one in the nature of or akin a to proceeding in rem which shall be binding
upon all persons, known or unknown (Moscoso vs. Court of appeals, 128 SCRA 719 [1984], citing: City of
Manila vs. Lack, et al., 19 Phil. 324, 337; Roxas vs. Enriquez, 29 Phil. 31; Director of Lands vs. Roman
Catholic Archbishop of Manila, 41 Phil. 120; Aguilar vs. Caogdan, 105 Phil. 661). It is thus evident that
respondents' right over the property was barred by res judicata when the decree of registration was
issued to spouses Vivas and Lizards. It does not matter that they may have had some right even the right
of ownership, BEFORE the grant of the Torrens Title.
Thus, under Section 44 of P.D. 1529, 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 the
certificate and any of the encumbrances which may be subsisting, and enumerated in the law. Under said
provision, claims and liens of whatever character, except those mentioned by law as existing, against the
land prior to the issuance of certificate of title, are cut off by such certificate if not noted thereon, and the
certificate so issued binds the whole world, including the government (Aldecoa and Co. vs. Warner Barns
& Co., 30 Phil. 209 [1915]; Snyder vs. Fiscal of Cebu and Avila, 42 Phil. 766 [1922]). Under said ruling, if the
purchaser is the only party who appears in the deeds and the registration of titles in the property registry,
no one except such purchaser may be deemed by law to be the owner of the properties in question (Ibid).
Moreover, no title to registered land in derogation to that of the registered owner shall be acquired by
prescription or adverse possession (Umbay vs. Alecha, 135 SCRA 427 [1985]).
It does not appear that private respondents' claim falls under any of the exceptions provided for under
Section 44 of P.D. 1529 which can be enforced against petitioner herein.
Thus, it has been invariably restated by this Court, that "The real purpose of the Torrens System is to quiet
title to land and to stop forever any question as to its legality. "Once a title is registered, the owner may
rest secure, without the necessity of waiting in the portals of the court, or sitting on the "mirador su
casato," avoid the possibility of losing his land." "An indirect or collateral attack on a Torrens Title is not
allowed (Dominga vs. Santos, 55 Phil. 361; Singian vs. Manila Railroad, 62 Phil. 467)."
The only exception to this rule is where a person obtains a certificate of title to a land belonging to
another and he has full knowledge of the rights of the true owner. He is then considered as guilty of fraud
and he may be compelled to transfer the land to the defrauded owner so long as the property has not
passed to the hands of an innocent purchaser for value (Angeles vs. Sania, 66 Phil. 444 [1938], emphasis
supplied).
It will be noted that the spouses Vivas and Lizardo never committed any fraud in procuring the
registration of the property in question. On the contrary, their application for registration which resulted
in the issuance of OCT No. 1728 was with complete knowledge and implied authority of private
respondents who retained a portion of the consideration until the issuance to said spouses of a certificate
of title applied for under the Torrens Act and the corresponding delivery of said title to them. The
question therefore, is not about the validity of OCT No. 1728 but in the breach of contract between
private respondents and the Vivas spouses. Petitioner NGA was never a privy to this transaction. Neither
was it shown that it had any knowledge at the time of the execution of the mortgage, of the existence of
the suspensive condition in the deed of absolute sale much less of its violation. Nothing appeared to
excite suspicion. The Special Power of Attorney was regular on its face; the OCT was in the name of the
mortgagor and the NGA was the highest bidder in the public auction. Unquestionably, therefore, the NGA
is an innocent purchaser for value, first as an innocent mortgagee under Section 32 of P.D. 1529 and later
as innocent purchaser for value in the public auction sale.
Private respondents claim that NGA did not even field any representative to the land which was not even
in the possession of the supposed mortgagors, nor present any witness to prove its allegations in the
ANSWER nor submit its DEED OF MORTGAGE to show its being a mortgages in good faith and for value
(Rollo, p. 110).
Such contention is, however, untenable. Well settled is the rule that all persons dealing with property
covered by a torrens certificate of title are not required to go beyond what appears on the face of the
title. When there is nothing on the certificate of title to indicate any cloud or vice in the ownership of the
property, or any encumbrance thereon, the purchaser is not required to explore further than what the
torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently
defeat his right thereto (Centeno vs. Court of Appeals, 139 SCRA 545 [1985]).
More specifically, the Court has ruled that a bank is not required before accepting a mortgage to make an
investigation of the title of the property being given as security (Phil. National Cooperative Bank vs.
Carandang Villalon, 139 SCRA 570 [1985]), and where innocent third persons like mortgagee relying on
the certificate of title acquire rights over the property, their rights cannot be disregarded (Duran vs. IAC,
138 SCRA 489 [1985]).
Under the circumstances, the Regional Trial Court could not have erred in ruling that plaintiffs (private
respondents herein) complaint insofar as it prays that they be declared owners of the land in question can
not prosper in view of the doctrine of indefeasibility of title under the Torrens System, because it is an
established principle that a petition for review of the decree of registration will not prosper even if filed
within one year from the entry of the decree if the title has passed into the hands of an innocent
purchaser for value (Pres. Decree No. 1529, Sec. 32). The setting aside of the decree of registration issued
in land registration proceedings is operative only between the parties to the fraud and the parties
defrauded and their privies, but not against acquirers in good faith and for value and the successors in
interest of the latter; as to them the decree shall remain in full force and effect forever (Domingo vs. The
Mayon Realty Corp. et al., 102 Phil. 32 [19571). Assuming, therefore, that there was fraud committed by
the sellers against the buyers in the instant case, petitioner NGA who was not privy therein cannot be
made to suffer the consequences thereof As correctly declared by the trial court, the National Grains
Authority is the lawful owner of the property in question by virtue of its indefeasible title.
As to private respondents' alternative prayer that the declared owner be ordered to reconvey or transfer
the ownership of the property in their favor, it is clear that there is absolutely no reason why petitioner,
an innocent purchaser for value, should reconvey the land to the private respondents.
PREMISES CONSIDERED, the decision of the Court of Appeals is REVERSED and SET ASIDE, and the decision
of the Court of First Instance of Laguna and San Pablo City, now Regional Trial Court, is REINSTATED.

SO ORDERED.
7. D.B.T. MAR-BAY CONSTRUCTION, INCORPORATED, vs
RICAREDO PANES
DECISION
Before this Court is a Petition[1] 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
Order[3] 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 pago[6] 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 Complaint[7] 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 Complaint[8] and a Second Amended Complaint[9] particularly 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 Certification[10] 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-91-011, 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]
211095[13] 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,[15] 14827,[16] 14815[17] 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 Answer[18] 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 Motion[19]
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 decision[21] 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 Decision[23] 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 Motion[25] 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 Motion[26] 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 Complaint[27] 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 Order[28] 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 Order[30] 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 directive[34] 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 Order[37] 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 Reconsideration[38] which the RTC denied in its
Order[39] dated 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
Resolution[43] 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 Appeals[45] 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.[47] 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.[50] Thus, 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 1126[54] of the Civil Code in connection with Section 46[55] of Act No. 496 (The Land Registration
Act), as amended by Section 47[56] 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 32[61] 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