Director of Lands v. Jugado
Named respondent in the
1. HOMESTEAD PATENTS; REGISTRATION AND ISSUANCE OF CERTIFICATE AND
OWNER’S DUPLICATE CERTIFICATE OF TITLE; WHEN LAND COMES UNDER
OPERATION OF ACT 496. — After the registration and issuance of the certificate and owner’s
duplicate certificate of title of a public land patent, the land covered thereby automatically
comes under the operation of Act 496 and subject to all the safeguards provided herein
2. ID.; ID.; WHEN LAND CEASES TO BE PART OF THE PUBLIC DOMAIN. — Well settled is
the rule that once the patent is registered and the corresponding certificate of title is issued,
the land ceases to be part of the public domain and becomes private property over which the
Director of Lands has neither control nor jurisdiction.
3. REGISTRATION OF LAND TITLES; RAISING OF QUESTIONS CONCERNING VALIDITY
OF CERTIFICATE OF TITLE; ONE-YEAR PERIOD PRESCRIBED BY LAW BEGINS FROM
ISSUANCE OF PATENT. — Section 38 of Act 496 prohibits the raising of any question
concerning the validity of a certificate of title after one year from entry of the decree of
registration. And the period of one year has been construed, in the case of public land grants,
to begin from the issuance of the patent
4. PUBLIC LANDS; REVERSION OF FRAUDULENTLY AWARDED LANDS OF THE PUBLIC
DOMAIN; ACTION TO BE FILED BY SOLICITOR GENERAL. — Sec. 101 of Commonwealth
Act 141 affords a remedy whereby lands of the public domain fraudulently awarded may be
recovered or reverted back to its original owner, the Government. But the provision requires
that all such actions for reversion shall be instituted by the Solicitor General or the officer acting
in his stead, in the proper courts, in the name of the Republic of the Philippines.
This is an appeal from an order of the Court of First Instance of Negros Occidental dismissing
a petition for the cancellation of a homestead patent.
There is no dispute as to the main facts. It appears that on November 26, 1956, the Director of
Lands filed with the Court of First Instance of Negros Occidental a petition seeking to annul
and cancel Homestead Patent No. V-28407 covering a parcel of land identified as Lot No. 2644,
portion of Lot No. 2290 of the Himamaylan Cadastre, that province.
petition was Lelita Jugado to whom the homestead patent was issued on May 4, 1954, and the
ground relied upon was that the patent aforesaid was fraudulently issued in favor of said
respondent because the land is covered by a prior and subsisting approved homestead
application of one Conrada Villavera.
On October 25, 1957, the Philippine National Bank, claiming to be a mortgagee in good faith
of the property subject of the petition, moved to intervene in the proceedings and after its motion
was granted, the said entity filed an answer. This was soon followed by a motion to dismiss
filed by the same intervenor, alleging as ground therefor that inasmuch as the petition to cancel
was filed on December 5, 1956, more than one year had already elapsed since the issuance
of the patent and the certificate of title in favor of respondent, and that, therefore, the said title
had already become perfect, absolute and indefeasible.
After the usual responsive pleadings had been filed by both parties, the trial court, finding merit
in the intervenor's motion, issued an order dismissing the petition. From the order of dismissal,
the Director of Lands has appealed to this Court insisting that the provision, of law (section 38
of Act 496), which limits to only one year the period within which to contest the validity of a
certificate of title, is inapplicable in the instant case where a homestead patent is involved.
The main issue to be determined is whether or not the appellant's petition to cancel or annul
Homestead Patent No. V-28407 issued to Lelita Jugado could prosper under the
circumstances.
It has already been laid down as a doctrine in this jurisdiction that after the registration and
issuance of the certificate and owner's duplicate certificate of title of a public land patent, the
land covered thereby automatically comes under the operation of Act 496 and subject to all the
safeguards provided therein (See El Hogar Filipino vs. Olviga, 60 Phil. 17; Aquino vs. Director
of Lands, 39 Phil. 850; Manalo vs. Lukban and Liwanag, 48 Phil. 973). Section 38 of Act 496,
otherwise called the Land Registration Act, prohibits the raising of any question concerning the
validity of a certificate of title after one year from entry of the decree of registration. And the
period of one year has been construed, in the case of public land grants, to begin from the
issuance of the patent (Sumail vs. C.F.I. of Cotabato, infra; Nelayan vs. Nelayan, G.R. No. L-
14518, August 29, 1960). It is not disputed that the patent in this case was issued way back in
May, 1954, and that the petition to have it annulled was filed only on December 5, 1956, more
than two years thereafter. Under the circumstances, therefore, the Director of Lands has no
longer any right to contest the validity of the patent issued to Lelita Jugado. It may be well, in
this connection, to quote the opinion of this Court in a similar case, to wit:
Well settled is the rule that once the patent is registered and the corresponding
certificate of title is issued, the land ceases to be part of the public domain and
becomes private property over which the Director of Lands has neither control nor
jurisdiction. (Sumail vs. Judge of the Court of First Instance of Cotabato, et al., G.R.
No. L-8287, April 30, 1955; Republic vs. Heirs of Ciriaco Carle G.R. No. L-12485, July
31, 1959). And a public land patent, when registered, is a veritable torrens title (Dagdag
vs. Nepomuceno, G.R. No. L-12691, Feb. 27, 1959) and becomes indefeasible as a
torrens title (Ramoso vs. Obligado, 70 Phil. 86), upon the expiration of one year from
the date of issuance thereof (Lucas vs. Durian, G.R. No. L-7886, Sept. 23, 1957). As
such it can no longer be cancelled and annulled. (Dir. of Lands vs. de Luna, G.R. No.
L-14641, November 23, 1960)
There is, however, a section in the Public Land Law (sec. 101 of Commonwealth Act 141),
which affords a remedy whereby lands of the public domain fraudulently awarded may be
recovered or reverted back to its original owner, the Government. But the provision requires
that all such actions for reversion shall be instituted by the Solicitor General or the officer acting
in his stead, in the proper courts, in the name of the Republic of the Philippines (See Director
of Lands vs. De Luna, supra). As the party in interest in this case is the Director of Lands and
not the Republic of the Philippines, the action cannot prosper in favor of the appellant.
HEIRS OF GREGORIO TENGCO, Petitioners, v. HEIRS OF JOSE and VICTORIA
ALIWALAS
1. CIVIL LAW; LAND REGISTRATION; HOMESTEAD PATENT; ORIGINAL CERTIFICATE
OF TITLE ISSUED ON THE STRENGTH OF A HOMESTEAD PATENT PARTAKES OF
CERTIFICATE OF TITLE ISSUED IN A JUDICIAL PROCEEDING. — The rule is well-settled
that an original certificate of title issued on the strength of a homestead patent partakes of the
nature of a certificate of title issued in a judicial proceeding, as long as the land disposed of is
really part of the disposable land of the public domain, and becomes indefeasible and
incontrovertible upon the expiration of one year from the date of the promulgation of the order
of the Director of Lands for the issuance of the patent. (Republic v. Heirs of Carle, 105 Phil.
1227 [1959] and other cases cited.)
2. ID.; ID.; ID.; DIRECTOR OF LANDS; POWER TO REVIEW HOMESTEAD PATENTS
PERTAINS ONLY TO LAND THAT REMAINS PART OF PUBLIC DOMAIN AND CONTINUES
TO BE UNDER HIS EXCLUSIVE CONTROL. — While the Director of Lands has the power to
review homestead patents, he may do so only so long as the land remains part of the public
domain and continues to be under his exclusive control; but once the patent is registered and
a certificate of title is issued, the land ceases to be a part of public domain and becomes private
property over which the Director of Lands has neither control nor jurisdiction (Sumail v. Judge
of Court of First Instance, 96 Phil. 946 [1955]).
3. ID.; ID.; CERTIFICATE OF TITLE; TITLE TO PROPERTY THAT BECOMES
INCONTROVERTIBLE MAY NO LONGER BE COLLATERALLY ATTACKED. — A title to the
property having become incontrovertible, such may no longer be collaterally attacked. If indeed
there had been any fraud or misrepresentation in obtaining the title, an action for reversion
instituted by the Solicitor General would be the proper remedy (Sec. 101, C.A. No. 141; Director
of Lands v. Jugado, G.R. No. L-14702, May 21, 1961, 2 SCRA 32).
4. ID.; CIVIL CODE; PRESCRIPTION; CANNOT OPERATE AGAINST REGISTERED
OWNER. — Title acquired through a homestead patent registered under the Land Registration
Act is imprescriptible.
The instant case stemmed from an action to quiet title instituted by the late Victoria L. Vda. de
Aliwalas against the Heirs of Gregorio Tengco, the Director of Lands and the Register of Deeds
of Pampanga.cralawnad
The facts as found by the Court of First Instance of San Fernando, Pampanga, Branch VI, in
Civil Case No. 4308, are as follows:
The evidence adduced by the parties in this case shows that Lot No. 3563 of the Arayat
Cadastre was originally a part of the public domain and it was so declared on October 12, 1933
(Exh. "A-2"). Thereafter, Dr. Jose Aliwalas applied with the Bureau of Lands for the issuance
of a homestead patent covering this lot. On December 12, 1936, the Director of Lands granted
this application and issued in favor of Jose Aliwalas Homestead Patent No. 38588 (Exh. "E").
This patent was duly registered in the Register of Deeds of Pampanga on April 8, 1937 after
the corresponding fees thereon were paid (Exhs. "D-5" and "D-6"). On the same day, the
Register of Deeds of Pampanga issued OCT No. 159 (Exh. "D") in the name of Jose Aliwalas.
From that time on, Dr. Aliwalas did the corresponding land taxes thereon (Exh. "I", "I-1" to "I-
25") after having declared the land for taxes (sic) purposes in his name (Exh. "F" "G" and "H").
As owner of this property, Jose Aliwalas, thru his overseer Espiridion Manaul, had this parcel
fenced and vegetables were planted in some portions thereof. Other portions were dedicated
initially to cattle raising until the last war broke out.
After the war, palay was planted on some portions of this land, by the tenants of Jose Aliwalas
who gave the owner’s share to him, thru his caretaker and overseer Espiridion Manaul. Other
seasonal crops were also planted on the land as well as ipil-ipil trees for firewood purposes.
There were also planted mango trees which ultimately bore fruit which were harvested by the
caretaker of Aliwalas in this property and who delivered them to Jose Aliwalas until he died in
1962 when the administration and management was assumed by Jose Aliwalas, Jr., a son of
Dr. Aliwalas.
When the properties left by Dr. Jose Aliwalas were petitioned among his surviving heirs, the lot
in question was alloted in favor of the plaintiff Victoria L. Vda. de Aliwalas as indicated in the
amended project of partition (Exh. "B") executed by her and her nine children, one of whom is
Jose Aliwalas, Jr.
After this amended project of partition was approved (Exh. "C") and registered with the Register
of Deeds of Pampanga, OCT No. 52526-R (Exh. "A") was issued in the name of the plaintiff on
November 14, 1966 (Exh. "A-1"). Thereafter, the tax declaration pertaining to this parcel of land
was also transferred to her name (Exhs. "O", "P" and "A"). She also paid the real estate taxes
thereon (Exhs. "N", "N-1" to "N-14", Exhs. "R-1" to "R-53").
On the other hand, the evidence further show that on October 31, 1973, the defendant
Ponciano Tengco in representation of the defendants Heirs of Gregorio Tengco filed an
application with the Bureau of Lands, thru its District Land Office here in San Fernando,
Pampanga. Among other things, he alleged in his application that this parcel of land had been
occupied and cultivated originally and continuously thereafter by Gregorio Tengco. After being
given due course, this application was approved by the Director of Lands who issued Free
Patent No. 557692 covering this lot on February 5, 1974 (Exh. "3" Tengco; Exh. "6" Dir. of
Lands).
This free patent issued in favor of the Heirs of Gregorio Tengco was predicated on the
assumption that the lot still formed part of the public domain and on the findings of the Public
Land Inspector Romeo Buenaventura who conducted an investigation thereon and who also
reported that the land in question was possessed and occupied by the applicant, Heirs of
Gregorio Tengco (Exh. "2" -Tengco and Exh. "5" -Dir. of Lands) who had planted different kinds
of trees on the land aside from rice and corn.
The defendants Heirs of Gregorio Tengco also adduced evidence tending to show that their
late grandfather Gregorio Tengco had occupied this parcel of land exclusively years before the
last (sic) and after he died in 1934, his children succeeded him in its possession and enjoying
the fruits from the different trees planted thereon, and that the possession of Gregorio Tengco
and his successors-in-interest have not been disturbed by anyone including the Aliwalas family.
On rebuttal, the plaintiff adduced evidence showing that the pre-war records of the Bureau of
Lands pertaining to public land applications were burned during the war as indicated in the
certification issued by the Chief of the Records Management Division of the Bureau of Lands.
This is to explain why the Bureau has no more record pertaining to the Homestead Patent
issued in favor of Jose Aliwalas in 1936 which gave rise to the issuance of OCT No. 159 of the
Register of Deeds of Pampanga on April 8, 1937. The certification also attests that what is now
found in the files of the Bureau of Lands is Free Patent V-557692 issued on February 5, 1974
in favor of the Heirs of Gregorio Tengco pertaining to Lot No. 3563. [Rollo, pp. 18-20.].
On the basis of the evidence, the trial court rendered judgment as follows:
WHEREFORE, and in view of all the foregoing, judgment is hereby rendered:
1. Declaring the herein plaintiff Victoria Vda. de Aliwalas as the true owner of Lot No. 3563 of
Arayat Cadastre embraced in TCT No. 52526-R of the Register of Deeds of Pampanga in her
name;
2. Ordering the Register of Deeds of Pampanga to cancel TCT Nos. 132263-R, 132264-R and
132349-R in the name of Cipriano Tengco, Ponciano Tengco, Et Al., and Eugenia Tengco,
respectively, covering portions of this Lot No. 3563;
3. Ordering the herein defendants-Heirs of Gregorio Tengco to vacate the land in question and
to pay the amount of P5,000.00 a year to the plaintiff beginning from the year 1974 until the
land is vacated by them and turned over to the plaintiff; and
4. Ordering the defendants-Heirs of Gregorio Tengco to pay the plaintiff the sum of P2,000.00
as attorney’s fees, plus costs. [Rollo, p. 17-18.].
Dissatisfied with the trial court’s judgment, the Heirs of Gregorio Tengco interposed an appeal
to the Court of Appeals, docketed as CA-G.R. CV No. 69706. The appellate court, adopting the
trial court’s findings of fact, affirmed the latter’s judgment [Rollo, pp. 17-24.] Petitioners moved
for reconsideration but their motion was denied [Rollo, pp. 25-26.] Hence, the instant petition.
Private respondents filed a comment to the petition, to which petitioners replied. On September
16, 1987, the Court resolved to give due course to the petition and the parties were required to
submit their respective memoranda. After the petitioner filed a reply to private respondent’s
memorandum, the case was deemed submitted for decision.
In their petition the Heirs of Gregorio Tengco have ascribed several errors to the Court of
Appeals, which involved mixed questions of fact and law [Rollo, p. 4.] But, as stated in their
memorandum, the issues may be limited to the following:
(a) Whether or not the court of origin and/or, subsequently, the respondent Honorable Court of
Appeals, had jurisdiction to take cognizance of, and pass upon, the instant case;
(b) Whether or not the claim or contention of the private respondents will hold true and prosper
before a proper forum; and
(c) Whether or not the private respondents, assuming for the sake of argument, that they have
proprietary rights on and to the land in question, have not long lost such rights by laches and/or
prescription. [Memorandum for Petitioners, p. 6.]
1. Petitioners contend that the trial court (and, consequently, the Court of Appeals) had no
jurisdiction to take cognizance of and pass upon the instant case as private respondents have
failed to exhaust administrative remedies. They point out that instead of bringing her case to
the Bureau of Lands, Victoria Vda. de Aliwalas went directly to the court.
On the other hand, private respondents argue that since a homestead patent and an original
certificate of title had already been issued to their predecessor-in-interest, the land had ceased
to be part of the public domain and, hence, the Bureau of Lands had no jurisdiction over the
controversy. Private respondents add that since an original certificate of title had been issued
pursuant to the homestead patent, their title to the property had become conclusive, absolute,
indefeasible and imprescriptible.

In rebuttal, petitioner contend that private respondents’ title had not acquired said qualities as
it was derived from a homestead patent. Petitioners advanced the view that only titles based
upon a judicial declaration can be vested with the attributes of conclusiveness, indefeasibility
and imprescriptibility.
Petitioners’ theory is not supported by the jurisprudence on the matter. The rule is well-settled
that an original certificate of title issued on the strength of a homestead patent partakes of the
nature of a certificate of title issued in a judicial proceeding, as long as the land disposed of is
really part of the disposable land of the public domain, and becomes indefeasible and
incontrovertible upon the expiration of one year from the date of the promulgation of the order
of the Director of Lands for the issuance of the patent. [Republic v. Heirs of Carle, 105 Phil.
1227 (1959); Ingaran v. Ramelo, 107 Phil. 498 (1960); Lopez v. Padilla, G.R. No. L-27559, May
18, 1972, 45 SCRA 44.] A homestead patent, once registered under the Land Registration Act,
becomes as indefeasible as a Torrens Title. [Pamintuan v. San Agustin, 43 Phil. 558 (1982);
El Hogar Filipino v. Olviga, 60 Phil. 17 (1934); Duran v. Oliva, 113 Phil. 144 (1961); Pajomayo
v. Manipon, G.R. No. L-33676, June 30, 1971, 39 SCRA 676.]
The contention of non-exhaustion of administrative remedies, on the theory that the case
should have been brought before the Director of Lands, had already been rejected by the Court
in earlier decisions. Thus, while the Director of Lands has the power to review homestead
patents, he may do so only so long as the land remains part of the public domain and continues
to be under his exclusive control; but once the patent is registered and a certificate of title is
issued, the land ceases to be a part of public domain and becomes private property over which
the Director of Lands has neither control nor jurisdiction [Sumail v. Judge of Court of First
Instance, 96 Phil. 946 (1955); Republic v. Heirs of Carle, supra.]
2. Anent the second issue, petitioners contend that petitioners’ title to the property was
defective for the following reasons: (a) Dr. Jose Aliwalas was not qualified to be a homesteader
being a rich landed person; and (b) private respondents and their predecessors-in-interest have
never been in actual or physical possession of the property, unlike petitioners and their
predecessor-in-interest who have been in continuous and open possession of the property
since 1918. Thus, petitioners rely on a report prepared by a certain Librado B. Luna, hearing
officer of the Bureau of Lands, attesting to such facts [Memorandum for Petitioners, p. 13.]
But, as correctly pointed out by the respondent Court of Appeals, Dr. Aliwalas’ title to the
property having become incontrovertible, such may no longer be collaterally attacked. If indeed
there had been any fraud or misrepresentation in obtaining the title, an action for reversion
instituted by the Solicitor General would be the proper remedy [Sec. 101, C.A. No. 141; Director
of Lands v. Jugado, G.R. No. L-14702, May 21, 1961, 2 SCRA 32; Lopez v. Padilla, supra.]
3. Finally, petitioners contend that private respondent have lost their title to the property through
laches and prescription. They assert that private respondents and their predecessors-in-
interest have never actually possessed the property while petitioners and their predecessor-in-
interest have been in actual, open, uninterrupted and adverse possession of the property since
1918.
But as stated above, title acquired through a homestead patent registered under the Land
Registration Act is imprescriptible. Thus, prescription cannot operate against the registered
owner.
Moreover, as found by the Court of Appeals:
. . . The allegation of defendants-appellants (petitioners herein) that plaintiff-appellee (Victoria
L. Vda. de Aliwalas) and her predecessor-in-interest slept on their rights for over 40 years,
since 1936 when the patent was issued to Aliwalas is untenable. It has been established that
Jose Aliwalas through his overseer Espiridion Manaul planted the subject land to vegetables
and raised cattle therein until the last war broke out. After the war, the land was planted with
palay, seasonal crops, ipil-ipil trees and mango trees. When Jose Aliwalas died in 1962, the
administration and management of the farm was assumed by his son, Jose Aliwalas, Jr. Upon
the partition of the properties left by the late Jose Aliwalas, the subject property was allotted to
and registered in the name of plaintiff-appellee. It was in 1974 when the defendants-Heirs of
Gregorio Tengco wrested possession of the subject land from plaintiff-appellee’s caretaker and
deprived her of its produce. On October 14, 1976, the plaintiff filed her second amended
complaint. The foregoing facts show that plaintiff-appellee and her predecessor-in-interest
occupied, possessed and exercised rights of ownership over the subject land prior to the filing
of the instant suit .. [Rollo, pp. 23-24.]
The Court finds no cogent reason to disturb the appellate court’s findings, in the absence of a
clear showing that the facts have been misapprehended.
the title, except claims which were noted, at the time of registrations 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 might 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. The
proceeding for the registration of land under the torrens system is a judicial proceeding, but it
involves more in its consequences than does an ordinary action.

3. ID; ID.; EFFECT OF REGISTRATION AND CERTIFICATE OF TITLE. — The registration

WHEREFORE, finding no reversible error, the petition is DENIED and the decision of the Court under the torrens system and the issuance of a certificate of title do not give the owner any
of Appeals in CA-G.R. CV No. 69706 is AFFIRMED. better title than he had. He does not obtain title by virtue of the certificate. He secures his
certificate by virtue of the fact that he has a fee simple title. If he obtains a certificate of title, by
mistake, to more land than he really and in fact owns, the certificate should be corrected. If he
does not already have a perfect title, he cannot secure his certificate. Having a fee simple title,
SO ORDERED.
and presenting sufficient proof of that fact, he is entitled to a certificate of registration. The
certificate of registration simply accumulates, in one document, a precise and correct statement
of the exact status of the fee simple title, which the owner, in fact, has. The certificate, once
Legarda v. Saleeby issued, is the evidence of the title which the owner has. The certificate should not be altered,
changed, modified, enlarged or diminished, except to correct errors, in some direct proceedings
1. REGISTRATION OF LAND; REGISTRATION OF SAME LAND IN THE NAMES OF TWO
permitted by law. The title represented by the certificate cannot be changed, altered, modified,
DIFFERENT PERSONS. — L obtained a decree of registration of a parcel of land on the 25th
enlarged or diminished in a collateral proceeding.
of October, 1906. S, on the 25th of March, 1912, obtained a certificate of registration for his
land which joined the land theretofore registered by L. The certificate of title issued to S
included a narrow strip of the land theretofore registered in the name of L. On the 13th of
December, 1912, L presented a petition in the Court of Land Registration for the adjustment
and correction of the error committed in the certificate issued to S, which included said narrow
DECISION
strip of land. Held: That in a case where two certificates of title include or cover the same land,
the earlier in date must prevail as between the original parties, whether the land comprised in
the latter certificate be wholly or only in part comprised in the earlier certificate. In successive
registrations where more than one certificate is issued in respect of a particular interest in land,
the person holding under the prior certificate is entitled to the land as against the person who JOHNSON, J. :
obtained the second certificate. The decree of registration is conclusive upon and against all
persons.

2. ID.; PURPOSE OF THE TORRENS SYSTEM. — The real purpose of the torrens system of From the record the following facts appear:
land registration is to quiet title to land; to put a stop forever to any question of the legality of
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 for 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 the 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 the 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 his 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 someone 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 v. 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 v. Director of Lands (supra);
Grey Alba v. De la Cruz, 17 Phil. Rep., 49; Roxas v. Enriquez, 29 Phil. Rep., 31; Tyler v. Judges,
175 Mass., 71; American Land Co. v. 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 one
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 discussed 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 v. Merry, 2 Q. S. C. R., 193; Miller v. Davy, 7 N. Z. R., 155; Lloyd v. May-field, 7 A. L.
T. (V.) 48; Stevens v. Williams, 12 V. L. R., 152; Register of Titles v. Esperance Land Co., 1
W. A. R., 118.)" Hogg adds however that, "if it can be 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 certificate 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."cralaw virtua1aw library
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
different persons. Article 1473 of the Civil Code provides, among other things, that when one
piece of real property has 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 others, 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 cannot
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."cralaw virtua1aw library
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 his 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 all of the
conditions and the diligence of the respective parties to avoid them. In the present case, the
appellee was 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 setup 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, if 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 is 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 v. Freeman, 171 U. S.,
620, 629; Delvinon 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 v. Anderson, 15 Ohio
State, 286, 289; Orvis v. Newell, 17 Conn., 97; Buchanan v. International Bank, 78 Ill., 500;
Youngs v. Wilson, 27 N. Y., 351; McCabe v. Grey, 20 Cal., 509; Montefiore v. 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 anymore 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 is 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 plea of ignorance of the
law affecting a contract as 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 purchasers 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 the record under the torrens system must, by the very nature and purposes of that system,
of which is not the owner of the original certificate, or his successors. He, in no sense, can be supersede all other registries. If that view is correct then it will be sufficient, in dealing with land
an "innocent purchaser" of the portion of the land included in another earlier original certificate. registered and recorded under the torrens system, to examine that record alone. Once land is
The rule of notice of what the record contains precludes the idea of innocence. By reason of registered and recorded under the torrens system, that record alone can be examined for the
the prior registry there cannot be an innocent purchaser of land included in a prior original purpose of ascertaining the real status of the title to the land.
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 safer rule to establish. We believe the phrase "innocent
purchaser," used in said sections, should be limited only to cases where unregistered land has It would seem to be a just and equitable rule, when two persons have acquired equal rights in
been wrongfully included in a certificate under the torrens system. When land is once brought the same thing, to hold that the one who acquired it first and who has complied with all the
under the torrens system, the record of the original certificate and all subsequent transfers requirements of the law should be protected.
thereof is notice to all the world. That being the rule, could Teus even be regarded as the holder
in good faith of that part of the land included in his certificate which had theretofore been
included in the original certificate of the appellants? We think not. Suppose, for example, that
In view of our conclusions, above stated, the judgment of the lower court should be and is
Teus had never had his lot registered under the torrens system. Suppose he had sold his lot
hereby revoked. The record is hereby returned to the court now having and exercising the
to the appellee and had included in his deed of transfer the very strip of land now in question.
jurisdiction heretofore exercised by the land court, with direction to make such orders and
Could his vendee be regarded as an "innocent purchaser" of said strip? Would his vendee be
decrees in the premises as may correct the error heretofore made in including the land in
an "innocent purchaser" of said strip? Certainly not. The record of the original certificate of the
question in the second original certificate issued in favor of the predecessor of the appellee, as
appellants precludes the possibility. Has the appellee gained any right by reason of the
well as in all other duplicate certificates issued.
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 Without any finding as to costs, it is so ordered.
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 Arellano, C.J. Torres and Araullo, JJ., concur.
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
Sps. Cusi vs. Lilia Domingo
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 Under the Torrens system of land registration, the registered owner of realty cannot be
and who was innocent of any act of negligence. deprived of her property through fraud, unless a transferee acquires the property as an
innocent purchaser for value. A transferee who acquires the property covered by a reissued
owner’s copy of the certificate of title without taking the ordinary precautions of honest
The foregoing decision does not solve, nor pretend to solve, all the difficulties resulting from persons in doing business and examining the records of the proper Registry of Deeds, or who
double registration under the torrens system and the subsequent transfer of the land. Neither fails to pay the full market value of the property is not considered an innocent purchaser for
do we now attempt to decide the effect of the former registration in the ordinary registry upon
value.
the registration under the torrens system. We are inclined to the view, without deciding it, that

Under review in these consolidated appeals is the Decision promulgated on July 16, 2010,1
whereby the Court of Appeals (CA) in CA-G.R. CV No. 90452 affirmed the revised decision
rendered on March 1, 2007 by the Regional Trial Court in Quezon City (RTC) against the
petitioners and their seller.2
Antecedents
The property in dispute was a vacant unfenced lot situated in White Plains, Quezon City and
covered by Transfer Certificate of Title (TCT) No. N-165606 issued in the name of respondent
Lilia V. Domingo by the Registry of Deeds of Quezon City. It had an area of 658 square meters.3
In July 1999, Domingo learned that construction activities were being undertaken on her
property without her consent. She soon unearthed the series of anomalous transactions
affecting her property.
On July 18, 1997, one Radelia Sy (Sy),4 representing herself as the owner of the property,
petitioned the RTC for the issuance of a new owners copy of Domingos TCT No. N-165606,
appending to her petition a deed of absolute sale dated July 14, 1997 purportedly executed
in her favor by Domingo;5 and an affidavit of loss dated July 17, 1997,6 whereby she claimed
that her bag containing the owners copy of TCT No. N-165606 had been snatched from her
on July 13, 1997 while she was at the SM City in North EDSA, Quezon City. The RTC granted
Sys petition on August 26, 1997.7 The Registry of Deeds of Quezon City then issued a new
owners duplicate copy of TCT No. N-165606, which was later cancelled by virtue of the deed
of absolute sale dated July 14, 1997, and in its stead the Registry of Deeds of Quezon City
issued TCT No. 186142 in Sys name.8
Sy subsequently subdivided the property into two, and sold each half by way of contract to
sell to Spouses Edgardo and Ramona Liza De Vera and to Spouses Alfonso and Maria Angeles
Cusi. The existence of the individual contracts to sell was annotated on the dorsal portion of
Sys TCT No. 186142 as Entry No. PE-8907/N-186142,9 stating that the consideration of the
sale was P1,000,000.00 for each set of buyers, or for a total of P2,000,000.00 for the entire
property that had an actual worth of not less than P14,000,000.00. TCT No. 186142 in the
name of Sy was then cancelled by virtue of the deeds of sale executed between Sy and
Spouses De Vera, and between Sy and Spouses Cusi, to whom were respectively issued TCT
No. 18956810 and TCT No. 189569.11 All the while, the transactions between Sy and the De
Veras, and between Sy and the Cusis were unknown to Domingo, whose TCT No. N-165606
remained in her undisturbed possession.12
It turned out that the construction activities taking place on the property that Domingo
learned about were upon the initiative of the De Veras in the exercise of their dominical and
possessory rights.
Domingo commenced this action against Sy and her spouse, the De Veras and the Cusis in the
RTC, the complaint being docketed as Civil Case No. Q-99-39312 and entitled Lilia V. Domingo
v. Spouses Radelia and Alfred Sy, Spouses Alfonso G. and Maria Angeles S. Cusi, Spouses
Edgardo M. and Ramona Liza L. De Vera, BPI Family Savings Bank and The Register of Deeds
of Quezon City, seeking the annulment or cancellation of titles, injunction and damages.
Domingo applied for the issuance of a writ of preliminary prohibitory and mandatory
injunction, and a temporary restraining order (TRO).13 The RTC granted Domingos application
for the TRO enjoining the defendants from proceeding with the construction activities on the
property. The RTC later granted her application for the writ of preliminary injunction.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT TRANSFER
CERTIFICATE OF TITLE NO. 186142 REGISTERED IN THE NAME OF RADELIA SY IS A
RECONSTITUTED TITLE.
II
WHETHER OR NOT THE PETITIONERS ARE BUYERS IN GOOD FAITH AND FOR VALUE.
III
GRANTING, WITHOUT ADMITTING, THAT THE DECISION OF THE HONORABLE COURT OF
APPEALS IS CORRECT WITH RESPECT TO THE SECOND ISSUE, WHETHER OR NOT PETITIONERS
ARE ENTITLED TO REIMBURSEMENT OF ALL THE PAYMENTS MADE BY PETITIONERS TO THEIR
CO-DEFENDANTS SPOUSES ALFRED AND RADELIA SY IN ADDITION TO DAMAGES AND
ATTORNEY�S FEES.
The petitions for review are bereft of merit.
Firstly, now beyond dispute is the nullity of the transfer of Domingo�s property to Sy because
both lower courts united in so finding. The unanimity in findings of both the RTC and the CA
on this all-important aspect of the case is now conclusive on the Court in view of their
consistency thereon as well as by reason of such findings being fully supported by
preponderant evidence. We consider to be significant that the Sys no longer came to the
Court for further review, thereby rendering the judgment of the CA on the issue of nullity final
and immutable as to them.
Secondly, the Cusis and De Vera commonly contend that the CA gravely erred in not
considering them to be purchasers in good faith and for value. They argue that Sy�s TCT No.
186142 was free of any liens or encumbrances that could have excited their suspicion; and
that they nonetheless even went beyond the task of examining the face of Sy�s TCT No.
186142, recounting every single detail of their quest to ascertain the validity of Sy�s title,
but did not find anything by which to doubt her title.
The Court concurs with the finding by the CA that the Cusis and De Vera were not purchasers
for value and in good faith. The records simply do not support their common contention in
that respect.
Under the Torrens system of land registration,24 the State is required to maintain a register
of landholdings that guarantees indefeasible title to those included in the register. The system
has been instituted to combat the problems of uncertainty, complexity and cost associated
with old title systems that depended upon proof of an unbroken chain of title back to a good
root of title. The State issues an official certificate of title to attest to the fact that the person
named is the owner of the property described therein, subject to such liens and
encumbrances as thereon noted or what the law warrants or reserves.25
One of the guiding tenets underlying the Torrens system is the curtain principle, in that one
does not need to go behind the certificate of title because it contains all the information about
the title of its holder. This principle dispenses with the need of proving ownership by long
complicated documents kept by the registered owner, which may be necessary under a
private conveyancing system, and assures that all the necessary information regarding
ownership is on the certificate of title. Consequently, the avowed objective of the Torrens
system is to obviate possible conflicts of title by giving the public the right to rely upon the
face of the Torrens certificate and, as a rule, to dispense with the necessity of inquiring
further; on the part of the registered owner, the system gives him complete peace of mind
that he would be secured in his ownership as long as he has not voluntarily disposed of any
right over the covered land.26
The Philippines adopted the Torrens system through Act No. 496,27 also known as the Land
Registration Act, which was approved on November 6, 1902 and took effect on February 1,
1903.� In this jurisdiction, therefore, �a person dealing in registered land has the right to
rely on the Torrens certificate of title and to dispense with the need of inquiring further,
except when the party has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry�.28
To obtain a grasp of whether a person has actual knowledge of facts and circumstances that
would impel a reasonably cautious man to make such inquiry, an internal matter, necessitates
an analysis of evidence of a person�s conduct.29 That renders the determination of intent
as a factual issue,30� something that the Court does not normally involve itself in because
of its not being a trier of facts. Indeed, as a rule, the review function of the Court is limited to
a review of the law involved.
But the Court now delves into the facts relating to the issue of innocence of the petitioners in
their purchase of the property, considering that the RTC, through its original decision, at first
regarded them to have been innocent purchasers who were not aware of any flaw or defect
in Sy�s title based on the fact that the property had been unfenced and vacant. The RTC also
regarded the petitioners� making of reasonable verifications as their exercise of the due
diligence required of an ordinary buyer.31 The RTC later completely turned around through
another decision, however, and it was such decision that the CA affirmed subject to the
modifications of the damages granted to Domingo.
There is no question that the petitioners exerted some effort as buyers to determine whether
the property did rightfully belong to Sy. For one, they did not find any encumbrance, like a
notice of lis pendens, being annotated on the TCT of Sy. Nonetheless, their observance of a
certain degree of diligence within the context of the principles underlying the Torrens system
was not their only barometer under the law and jurisprudence by which to gauge the validity
of their acquisition of title. As the purchasers of the property, they also came under the clear
obligation to purchase the property not only in good faith but also for value.
Therein lay the problem. The petitioners were shown to have been deficient in their vigilance
as buyers of the property. It was not enough for them to show that the property was unfenced
and vacant; otherwise, it would be too easy for any registered owner to lose her property,
including its possession, through illegal occupation. Nor was it safe for them to simply rely on
the face of Sy�s TCT No. 186142 in view of the fact that they were aware that her TCT was
derived from a duplicate owner�s copy reissued by virtue of the loss of the original duplicate
owner�s copy. That circumstance should have already alerted them to the need to inquire
beyond the face of Sy�s TCT No. 186142. There were other circumstances, like the almost
simultaneous transactions affecting the property within a short span of time, as well as the
gross undervaluation of the property in the deeds of sale, ostensibly at the behest of Sy to
minimize her liabilities for the capital gains tax, that also excited suspicion, and required them
to be extra-cautious in dealing with Sy on the property.
To the Court, the CA�s treatment of Sy�s TCT No. 186142 as similar to a reconstituted copy
of a Torrens certificate of title was not unwarranted. In doing so, the CA cited the ruling in
Barstowe Philippines Corporation v. Republic,32 where the Court, quoting from precedents,
opined that �[t]he nature of a reconstituted Transfer Certificate of Title of registered land is
similar to that of a second Owner�s Duplicate Transfer Certificate of Title,� in that �[b]oth
are issued, after the proper proceedings, on the representation of the registered owner that
the original of the said TCT or the original of the Owner�s Duplicate TCT, respectively, was
lost and could not be located or found despite diligent efforts exerted for that purpose;�33
and that both were �subsequent copies of the originals thereof,� a fact that a �cursory
examination of these subsequent copies would show� and �put on notice of such fact
[anyone dealing with such copies who is] thus� warned to be extra-careful.�34
Verily, the Court has treated a reissued duplicate owner�s copy of a TCT as merely a
reconstituted certificate of title. In Garcia v. Court of Appeals,35 a case with striking
similarities to this one, an impostor succeeded in tricking a court of law into granting his
petition for the issuance of a duplicate owner�s copy of the supposedly lost TCT. The
impostor then had the TCT cancelled by presenting a purported deed of sale between him
and the registered owners, both of whom had already been dead for some time, and another
TCT was then issued in the impostor�s own name. This issuance in the impostor�s own
name was followed by the issuance of yet another TCT in favor of a third party, supposedly
the buyer of the impostor. In turn, the impostor�s transferee (already the registered owner
in his own name) mortgaged the property to Spouses Miguel and Adela Lazaro, who then
caused the annotation of the mortgage on the TCT. All the while, the original duplicate
owner�s copy of the TCT remained in the hands of an heir of the deceased registered owners
with his co-heirs� knowledge and consent.
The inevitable litigation ensued, and ultimately ended up with the Court. The Lazaros, as the
mortgagees, claimed good faith, and urged the Court to find in their favor. But the Court
rebuffed their urging, holding instead that they did not deal on the property in good faith
because: (a) �the title of the property mortgaged to the Lazaros was a second owner�s
duplicate TCT, which is, in effect a reconstituted title. This circumstance should have alerted
them to make the necessary investigation, but they did not;� and (b) their argument, that
�because the TCT of the property on which their mortgage lien was annotated did not
contain the annotation: �Reconstituted title,� the treatment of the reissued duplicate
owner�s copy of the TCT as akin to a reconstituted title did not apply, had no merit
considering that: �The nature of a reconstituted Transfer Certificate of Title of registered
land is similar to that of a second Owner's Duplicate Transfer Certificate of Title. Both are
issued, after the proper proceedings, on the representation of the registered owner that the
original of the said TCT or the original of the Owner's Duplicate TCT, respectively, was lost and
could not be located or found despite diligent efforts exerted for that purpose. Both,
therefore, are subsequent copies of the originals thereof. A cursory examination of these
subsequent copies would show that they are not the originals. Anyone dealing with such
copies are put on notice of such fact and thus warned to be extra-careful. This warning the
mortgagees Lazaros did not heed, or they just ignored it.�36
The fraud committed in Garcia paralleled the fraud committed here. The registered owner of
the property was Domingo, who remained in the� custody of her TCT all along; the impostor
was Sy, who succeeded in obtaining a duplicate owner�s copy; and the Cusis and the De
Veras were similarly situated as the Spouses Lazaro, the mortgagees in Garcia.� The Cusis
and the De Veras did not investigate beyond the face of Sy�s TCT No. 186142, despite the
certificate derived from the reissued duplicate owner�s copy being akin to a reconstituted
TCT. Thereby, they denied themselves the innocence and good faith they supposedly clothed
themselves with when they dealt with Sy on the property.
The records also show that the forged deed of sale from Domingo to Sy appeared to be
executed on July 14, 1997; that the affidavit of loss by which Sy would later on support her
petition for the issuance of the duplicate owner�s copy of Domingo�s TCT No. 165606 was
executed on July 17, 1997, the very same day in which Sy registered the affidavit of loss in the
Registry of Deeds of Quezon City; that Sy filed the petition for the issuance of the duplicate
owner�s copy of Domingo�s TCT No. 165606; that the RTC granted her petition on August
26, 1997; and that on October 31, 1997, a real estate mortgage was executed in favor of one
Emma Turingan, with the mortgage being annotated on TCT No. 165606 on November 10,
1997.
Being the buyers of the registered realty, the Cusis and the De Veras were aware of the
aforementioned several almost simultaneous transactions affecting the property. Their
awareness, if it was not actual, was at least presumed, and ought to have put them on their
guard, for, as the CA pointed out, the RTC observed that �[t]hese almost simultaneous
transactions, particularly the date of the alleged loss of the TCT No. 165606 and the purported
Deed of Sale, suffice[d] to arouse suspicion on [the part of] any person dealing with the
subject property.�37 Simple prudence would then have impelled them as honest persons to
make deeper inquiries to clear the suspiciousness haunting Sy�s title. But they still went on
with their respective purchase of the property without making the deeper inquiries. In that
regard, they were not acting in good faith.
Another circumstance indicating that the Cusis and the De Veras were not innocent
purchasers for value was the gross undervaluation of the property in the deeds of sale at the
measly price of P1,000,000.00 for each half when the true market value was then in the
aggregate of at least P14,000,000.00 for the entire property. Even if the undervaluation was
to accommodate the request of Sy to enable her to minimize her liabilities for the capital gains
tax, their acquiescence to the fraud perpetrated against the Government, no less, still
rendered them as parties to the wrongdoing. They were not any less guilty at all. In the
ultimate analysis, their supposed passivity respecting the arrangement to perpetrate the
fraud was not even plausible, because they knew as the buyers that they were not personally
liable for the capital gains taxes and thus had nothing to gain by their acquiescence. There
was simply no acceptable reason for them to have acquiesced to the fraud, or for them not
to have rightfully insisted on the declaration of the full value of the realty in their deeds of
sale. By letting their respective deeds of sale reflect the grossly inadequate price, they should
suffer the consequences, including the inference of their bad faith in transacting the sales in
their favor.
De Vera particularly insists that she and her late husband did not have any hand in the
undervaluation; and that Sy, having prepared the deed of sale, should alone� be held
responsible for the undervaluation that had inured only to her benefit as the seller. However,
such insistence was rendered of no consequence herein by the fact that neither she nor her
late husband had seen fit to rectify the undervaluation. It is notable that the De Veras were
contracting parties who appeared to have transacted with full freedom from undue influence
from Sy or anyone else.
Although the petitioners argue that the actual consideration of the sale was nearly
P7,000,000.00 for each half of the property, the Court rejects their argument as devoid of
factual basis, for they did not adduce evidence of the actual payment of that amount to Sy.
Accordingly, the recitals of the deeds of sale were controlling on the consideration of the
sales.
Good faith is the honest intention to abstain from taking unconscientious advantage of
another. It means the �freedom from knowledge and circumstances which ought to put a
person on inquiry.� 38
Given this notion of good faith, therefore, a purchaser in good faith is one who buys the
property of another without notice that some other person has a right to, or interest in, such
property and pays full and fair price for the same.39 As an examination of the records shows,
the petitioners were not innocent purchasers in good faith and for value.� Their failure to
investigate Sy�s title despite the nearly simultaneous transactions on the property that
ought to have put them on inquiry manifested their awareness of the flaw in Sy�s title.�
That they did not also appear to have paid the full price for their share of the property evinced
their not having paid true value.40
Resultantly, the Court affirms the lower courts, and restores to Domingo her rights of
dominion over the property.

WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals promulgated on July
16, 2010; and ORDERS the petitioners to pay the costs of suit.

SO ORDERED.