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FIRST DIVISION

[G.R. No. 8936. October 2, 1915. ]

CONSUELO LEGARDA, with her husband MAURO PRIETO, Plaintiffs-Appellants, v. N. M.


SALEEBY, Defendant-Appellee.

Singson, Ledesma & Lim for Appellants.

D. R. Williams for Appellee.

SYLLABUS

1. REGISTRATION OF LAND; REGISTRATION OF SAME LAND IN THE NAMES OF TWO DIFFERENT PERSONS.
— L obtained a decree of registration of a parcel of land on the 25th 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
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 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 land registration 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 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 under the torrens
system and the issuance of a certificate of title do not give the owner any 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 can not secure his certificate.
Having a fee simple title, 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
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 permitted by law. The
title represented by the certificate can not be changed, altered, modified, enlarged or diminished in a
collateral proceeding.

DECISION

JOHNSON, J. :

From the record the following facts appear: chanrob1es v irt ual 1aw l ibra ry

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

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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
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 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

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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 vi rtua1 aw lib rary

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 l ibra ry

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

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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 of which is not the owner of the original certificate, or his successors. He, in no
sense, can be an "innocent purchaser" of the portion of the land included in another earlier original

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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 safer 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 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 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 must, by
the very nature and purposes of that system, supersede all other registries. If that view is correct then it will
be sufficient, in dealing with land registered and recorded under the torrens system, to examine that record
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 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.

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 question 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 finding as to costs, it is so ordered.

Arellano, C.J. Torres and Araullo, JJ., concur.

Separate Opinions

CARSON J., with whom concurs TRENT, J., dissenting: chanrob1e s virtual 1aw libra ry

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 inapplicable 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

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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." cralaw virt ua1aw lib ra ry

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 accrued 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 many 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 in any case wherein the fraud or negligence of the holder 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 holder 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 earlier
certificate was wholly or largely to blame for 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 the 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 be held to have been at 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
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 anyone 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 a 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 purchaser 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 ofttimes uncertain searches of the land records 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.

6
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 mortgagee 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 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 maybe 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." cralaw virtua 1aw lib rary

It will be observed that I limit the exception to the general equitable rule, as laid down in the majority
opinion, to cases wherein the holder of the earlier certificate of title has actual notice of the pendency of the
proceedings in the course of which the later 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

7
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 collusively, 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 their 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
question 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 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 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 defend 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.

8
FIRST DIVISION

[G.R. No. 80687. April 10, 1989.]

REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, Petitioner, v.


HONORABLE MARIANO, M. UMALI, in his capacity as Presiding Judge Regional Trial Court, Fourth
Judicial Region, Branch 23, Trece Martires City, REMEDIOS MICLAT, JUAN C. PULIDO, ROSALINA
NAVAL, and the REGISTER OF DEEDS OF CAVITE, Respondents.

SYLLABUS

1. LAND REGISTRATION; TORRENS SYSTEM; PROTECTS INNOCENT TRANSFEREES FOR VALUE; TITLES
OBTAINED RENDERED INDEFEASIBLE AND CONCLUSIVE. — There is no allegation in the complaint filed by
the petitioner that any one of the defendants was privy to the forged joint affidavit or that they had acquired
the subject land in bad faith. Their status as innocent transferees for value was never questioned in that
pleading. Not having been disproved, that status now accords to them the protection of the Torrens System
and renders the titles obtained by them thereunder indefeasible and conclusive. The rule will not change
despite the flaw in TCT No. 55044. Section 39 of the Land Registration Act clearly provided: "Sec. 39. Every
person receiving a certificate of title in pursuance of a decree of registration, and every subsequent
purchaser of registered land who takes a certificate of title for value in good faith shall hold the same free of
all encumbrance except those noted on said certificate." cralaw vi rtua1aw l ibrary

2. ID.; ID.; ID.; PIÑERO v. DIRECTOR OF LANDS, 57 SCRA 386, NOT APPLICABLE IN CASE AT BAR. — The
decision in Piñero v. Director of Lands is not applicable to the present proceeding because the lands involved
in that case had not yet passed to the hands of an innocent purchaser for value. They were still held by the
Piñeros. The action for reversion was filed by the government against them as the original transferees of the
properties in question. They were the direct grantees of the free patents issued by the government pursuant
to which the corresponding certificates of title were issued under the Torrens system. The fraud alleged by
the government as a ground for the reversion sought was imputable directly to the Piñeros, who could not
plead the status of innocent purchasers for value. The difference between them and the private respondents
is that the latter acquired the land in question not by direct grant but in fact after several transfers following
the original sale thereof to Bobadilla in 1910. The presumption is that they are innocent transferees for
value in the absence of evidence to the contrary.

3. ID.; ID.; SUBJECT LAND NO LONGER PART OF PUBLIC DOMAIN; LAND REGISTRATION ACT, NOW CALLED
"PRIVATE REGISTRATION DECREE" GOVERNS. — The land being now registered under the Torrens system
in the names of the private respondents, the government has no more control or jurisdiction over it. It is no
longer part of the public domain or, as the Solicitor General contends — as if it made any difference — of the
Friar Lands. The subject property ceased to be public land when OCT No. 180 was issued to Florentina
Bobadilla in 1910 or at the latest from the date it was sold to the Cenizals in 1971 upon full payment of the
purchase price. As private registered land, it is governed by the provisions of the Land Registration Act, now
denominated the Property Registration Decree, which applies even to the government. The pertinent
provision of the Land Registration Act was Section 122, which read as follows: Sec. 122. "Whenever public
lands in the Philippine Islands belonging to the Government of the United States or to the Government of
the Philippine Islands are alienated, granted, or conveyed to persons or to public or private corporations, the
same shall be brought forthwith under the operation of this Act and shall become registered lands." This
should be related to Section 12 of the Friar Lands Act, providing thus: "Sec. 12. . . . upon the payment of
the final installment together with all accrued interest, the Government will convey to such settler and
occupant the said land so held by him by proper instrument of conveyance, which shall be issued and
become effective in the manner provided in section one hundred and twenty-two (Sec. 122) of the Land
Registration Act."cralaw virt ua1aw lib rary

4. ID.; ID.; ORIGINAL TRANSFER OF LAND, MERELY AVOIDABLE, NOT VOID AB-INITIO; LAND CEASES TO
BE PUBLIC UPON REGISTRATION AND ISSUANCE OF CERTIFICATE OF TITLE. — The petitioner errs in
arguing that the original transfer was null and void ab initio, for the fact is that it is not so. It was only
voidable. The land remained private as long as the title thereto had not been voided, but it is too late to do
that now. As the Court has held in Ramirez v. Court of Appeals. (30 SCRA 301): "A certificate of title
fraudulently secured is not null and void ab initio, unless the fraud consisted in misrepresenting that the
land is part of the public domain, although it is not. In such case the nullity arises, not from the fraud or
deceit, but from the fact that the land is not under the jurisdiction of the Bureau of Lands. Inasmuch as the
land involved in the present case does not belong to such category. OCT No. 282-A would be merely
voidable or reviewable. . . . Once a patent is registered and the corresponding certificate of title is issued,
the land ceases to be part of public domain and becomes private property over which the director of Lands
has neither control nor jurisdiction. A public land patent, when registered in the corresponding Register of
Deeds, is a veritable Torrens Title, and becomes as indefeasible as Torrens Title upon the expiration of one
(1) year from the date of issuance thereof."

9
DECISION

CRUZ, J.:

The petitioner seeks reversion of a parcel of land on the ground that the original sale thereof from the
government was tainted with fraud because based on a forgery and therefore void ab initio. The present
holders of the property claiming to be innocent purchasers for value and not privy to the alleged forgery,
contend that the action cannot lie against them.

The land in question is situated in Tanza, Cavite, and consists of 78,865 square meters. 1 It was originally
purchased on installment from the government on July 1, 1910 by Florentina Bobadilla, who allegedly
transferred her rights thereto in favor of Martina, Tomasa, Gregorio and Julio, all surnamed Cenizal, in 1922.
2 Tomasa and Julio assigned their shares to Martina, Maria and Gregorio. 3 In 1971 these three assignees
purportedly signed a joint affidavit which was filed with the Bureau of Lands to support their claim that they
were entitled to the issuance of a certificate of title over the said land on which they said they had already
made full payment 4 On the basis of this affidavit, the Secretary of Agriculture and Natural Resources
executed Deed No. V-10910 (Sale Certificate No. 1280) on September 10, 1971, in favor of the said
affiants. 5 Subsequently, on October 13, 1971, TCT No. 55044 (replacing Bobadilla’s OCT No. 180) was
issued by the register of deeds of Cavite in favor of Maria Cenizal, Gregorio Cenizal, and (in lieu of Martina
Cenizal) Rosalina Naval, Luz Naval, and Enrique Naval. 6

When the complaint for reversion was filed on October 10, 1985, the registered owners of the land, following
several transfers, were Remedios Miclat under TCT No. 80392, Juan C. Pulido under TCT No. 80393, and
Rosalina, Luz and Enrique Naval under TCT No. 80394. 7 they were named as defendants and asked to
return the property to the State on the aforestated grounds of forgery and fraud. The plaintiff claimed that
Gregorio Cenizal having died on February 25, 1943, and Maria Cenizal on January 8, 1959, they could not
have signed the joint affidavit dated August 9, 1971, on which Deed No. V-10910 (Sale Certificate No. 1280)
was based. 8

In their answer, Pulido and the Navals denied any participation in the join affidavit and said they had all
acquired the property in good faith and for value. By way of affirmative defenses, they invoked estoppel,
laches, prescription and res judicata. 9 For her part, Miclat moved to dismiss the complaint, contending that
the government had no cause of action against her because there was no allegation that she had violated
the plaintiff’s right, that the government was not the real party-in-interest because the subject land was
already covered by the Torrens system, and that in any event the action was barred by prescription or
laches. 10

The respondent court, in its order dated October 2, 1987, granted the motion. 11 The petitioner, contesting
this order, now insists that it has a valid cause of action and that it is not barred by either prescription or res
judicata.

The Court will observe at the outset that the joint affidavit is indeed a forgery. Apart from the fact that two
of the supposed affiants were already dead at the time they were supposed to have signed the sworn
statement, even the most cursory examination of the document will show that the three signatures affixed
thereto were written by one and the same hand. 12 There is no doubt about it. It is indeed difficult to
understand how such an obvious forgery could have deceived the people in the Bureau of Lands who
processed the papers of this case and made possible the fraudulent transfer of the land.

But given such deception, would the sale itself be considered null and void from the start, as the petitioner
insists, so as to make all titles derived therefrom also ineffectual ab initio? chanrobles vi rt ualawlib ra ry chan roble s.com:c han robles. com.ph

We agree with the contention that there is no allegation in the complaint 13 filed by the petitioner that any
one of the defendants was privy to the forged joint affidavit or that they had acquired the subject land in
bad faith. Their status as innocent transferees for value was never questioned in that pleading. Not having
been disproved, that status now accords to them the protection of the Torrens System and renders the titles
obtained by them thereunder indefeasible and conclusive. The rule will not change despite the flaw in TCT
No. 55044.

Section 39 of the Land Registration Act clearly provided: cha nrob1es vi rtual 1aw lib rary

Sec. 39. Every person receiving a certificate of title in pursuance of a decree of registration, and every
subsequent purchaser of registered land who takes a certificate of title for value in good faith shall hold the
same free of all encumbrance except those noted on said certificate.

The rulings on this provision are indeed as numerous as they are consistent: chanrob 1es vi rtua l 1aw lib rary

Thus, under Section 44 of P.D. 1529 (then Sec. 39 of the Land Reg. Act), 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

10
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. 14

x x x

A holder in bad faith is not entitled to the protection of Sec. 39 of the Land Registration Act. 15

x x x

The real purpose of the Torrens System of land registration 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 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. 16

The decision in Piñero v. Director of Lands 17 is not applicable to the present proceeding because the lands
involved in that case had not yet passed to the hands of an innocent purchaser for value. They were still
held by the Piñeros. The action for reversion was filed by the government against them as the original
transferees of the properties in question. They were the direct grantees of the free patents issued by the
government pursuant to which the corresponding certificates of title were issued under the Torrens system.
The fraud alleged by the government as a ground for the reversion sought was imputable directly to the
Piñeros, who could not plead the status of innocent purchasers for value. chanrobles v irt ual lawl ibra ry

The difference between them and the private respondents is that the latter acquired the land in question not
by direct grant but in fact after several transfers following the original sale thereof to Bobadilla in 1910. The
presumption is that they are innocent transferees for value in the absence of evidence to the contrary. The
petitioner contends that it was Pedro Miclat who caused the falsification of the joint affidavit, but that is a
bare and hardly persuasive allegation, and indeed, even if true, would still not prove any collusion between
him and the private respondents. The mere fact that Remedios Miclat was the daughter and heiress of
Miclat, without more, would not necessarily visit upon her the alleged sins of her father.

The Solicitor General also argues that Remedios is an extension of the juridical personality of her father and
so cannot claim to be an innocent purchaser for value because she is charged with knowledge of her father’s
deceit. Such conclusion has no basis in fact or law. Moreover, there is evidence that Remedios did not
merely inherit the land but actually purchased it for valuable consideration and without knowledge of its
original defect. The agreement to subdivide, 18 which she presented to show that she had acquired the land
for valuable consideration, is more acceptable than the conjectures of the petitioner. It is also consonant
with the presumption of good faith.

The land being now registered under the Torrens system in the names of the private respondents, the
government has no more control or jurisdiction over it. It is no longer part of the public domain or, as the
Solicitor General contends — as if it made any difference — of the Friar Lands. The subject property ceased
to be public land when OCT No. 180 was issued to Florentina Bobadilla in 1910 or at the latest from the date
it was sold to the Cenizals in 1971 upon full payment of the purchase price. As private registered land, it is
governed by the provisions of the Land Registration Act, now denominated the Property Registration Decree,
which applies even to the government.

The pertinent provision of the Land Registration Act was Section 122, which read as follows: c hanro b1es vi rtua l 1aw li bra ry

Sec. 122. Whenever public lands in the Philippine Islands belonging to the Government of the United States
or to the Government of the Philippine Islands are alienated, granted, or conveyed to persons or to public or
private corporations, the same shall be brought forthwith under the operation of this Act and shall become
registered lands. 19

This should be related to Section 12 of the Friar Lands Act, providing thus: chan rob1e s virtual 1aw l ibra ry

Sec. 12. . . . upon the payment of the final installment together with all accrued interest, the Government
will convey to such settler and occupant the said land so held by him by proper instrument of conveyance,
which shall be issued and become effective in the manner provided in section one hundred and twenty-two
(Sec. 122) of the Land Registration Act.

The petitioner claims that it is not barred by the statute of limitations because the original transfer of the
land was null and void ab initio and did not give rise to any legal right. The land therefore continued to be
part of the public domain and the action for this reversion could be filed at any time. The answer to that is
the statement made by the Court in Heirs of Tanak Pangawaran Patiwayan v. Martinez 20 that "even if
respondent Tagwalan eventually is proven to have procured the patent and the original certificate of title by
means of fraud, the land would not revert back to the State," precisely because it has become private land.
Moreover, the petitioner errs in arguing that the original transfer was null and void ab initio, for the fact is
that it is not so. It was only voidable. The land remained private as long as the title thereto had not been
voided, but it is too late to do that now. As the Court has held in Ramirez v. Court of Appeals. 21

A certificate of title fraudulently secured is not null and void ab initio, unless the fraud consisted in
misrepresenting that the land is part of the public domain, although it is not. In such case the nullity arises,

11
not from the fraud or deceit, but from the fact that the land is not under the jurisdiction of the Bureau of
Lands. Inasmuch as the land involved in the present case does not belong to such category, OCT No. 282-A
would be merely voidable or reviewable (Vda. de Cuaycong v. Vda. de Sengbengco, 110 Phil. 113): (1) upon
proof of actual fraud; (2) although valid and effective, until annulled or reviewed in a direct proceeding
therefor (Legarda v. Saleeby, 31 Phil. 590), not collaterally (Soroñgon v. Makalintal, 80 Phil. 259, 262;
Director of Lands v. Gan Tan, 89 Phil. 184; Henderson v. Garrido, 90 Phil. 624, 630; Samonte v. Sambilon,
107 Phil. 198, 200); (3) within the statutory period therefor (Sec. 38, Act 496; Velasco v. Gochuico, 33 Phil.
363; Delos Reyes v. Paterno, 34 Phil. 420; Snyder v. Provincial Fiscal, 42 Phil. 761, 764; Reyes v. Borbon,
50 Phil. 791; Clemente v. Lukban, 53 Phil. 931; Sugayan v. Solis, 56 Phil. 276, 279; Heirs of Lichauco v.
Director of Lands, 70 Phil. 69); (4) after which, the title would be conclusive against the whole world,
including the Government (Legarda v. Saleeby, 31 Phil. 590, 596; Central Capiz v. Ramirez, 40 Phil. 883; J.
M. Tuason v. Santiago, 99 Phil. 615).

And as we declared in Municipality of Hagonoy v. Secretary of Agriculture and Natural Resources: 22

. . . Once a patent is registered and the corresponding certificate of title is issued, the land ceases to be part
of public domain and becomes private property over which the director of Lands has neither control nor
jurisdiction. A public land patent, when registered in the corresponding Register of Deeds, is a veritable
Torrens Title, and becomes as indefeasible as Torrens Title upon the expiration of one (1) year from the date
of issuance thereof. Said title is, like one issued pursuant to a judicial decree, subject to review within one
(1) year from the date of the issuance of the patent. Beyond said period, the action for the annulment of the
certificate of title issued upon the land grant can no longer be entertained. (Emphasis supplied)

It is worth observing here that in two earlier cases, the private respondents were challenged by the heirs of
Matilde Cenizal Arguson but both were dismissed and the titles of the registered owners were confirmed by
the trial court. 23 This decision was later sustained by this Court. 24 While this is not to say that the present
petition is barred by res judicata, as the government was not a party in these cases, it does suggest that the
issue it wants to rake up now has long been settled. It should not be the subject of further judicial inquiry,
especially at this late hour. Litigation must stop at some point instead of dragging on interminably.

The Torrens system was adopted in this country because it was believed to be the most effective measure to
guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is
established and recognized. If a person purchases a piece of land on the assurance that the seller’s title
thereto is valid, he should not run the risk of being told later that his acquisition was ineffectual after all.
This would not only be unfair to him. What is worse is that if this were permitted, public confidence in the
system would be eroded and land transactions would have to be attended by complicated and not
necessarily conclusive investigations and proof of ownership. The further consequence would be that land
conflicts could be even more numerous and complex than they are now and possibly also more abrasive if
not even violent. The government, recognizing the worthy purposes of the Torrens system, should be the
first to accept the validity of titles issued thereunder once the conditions laid down by the law are satisfied.
As in this case. chanrobles vi rtua l lawlib ra ry

We find that the private respondents are transferees in good faith and for value of the subject property and
that the original acquisition thereof, although fraudulent, did not affect their own titles. These are valid
against the whole world, including the government.

ACCORDINGLY, the petition is DENIED, without any pronouncement as to costs. It is so ordered.

Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

Endnotes:

1. Rollo, p. 9.

2. Ibid.

3. Id.

4. Id.

5. Id., p. 51.

6. Id., p. 35.

7. Id., pp. 45-48.

8. Id., p. 46.

9. Id., p. 59.

10. Id., pp. 61-62.

11. Id., pp., 40-41.

12
12. Id., p. 50.

13. Id., p. 83.

14. National Grains Authority v. Intermediate Appellate Court, 157 SCRA 380-381.

15. Ignacio v. Chua Hong, 52 Phil. 940.

16. Legarda v. Saleeby, 31 Phil. 590.

17. 57 SCRA 386.

18. Rollo, p. 45.

19. Sec. 103, P.D. 1529.

20. 142 SCRA 252.

21. 30 SCRA 301.

22. 73 SCRA 507.

23. Rollo, p. 10.

24. Ibid.

13
SECOND DIVISION

[G.R. No. 94114. June 19, 1991.]

FELICISIMA PINO, Petitioner, v. COURT OF APPEALS, DEMETRIA GAFFUD, ROMUALDO


GAFFUD, ADOLFO GAFFUD & RAYMUNDO GAFFUD, Respondents.

Ramon A. Barcelona for Petitioner.

Eligio A. Labog for Private Respondents.

SYLLABUS

1. LAND REGISTRATION; TORRENS SYSTEM; CERTIFICATE OF TITLE; VENDEE NEED NOT


INVESTIGATE TITLE OF VENDOR APPEARING ON CERTIFICATE. — Where the certificate of title is in
the name of the vendor when the land is sold, the vendee for value has the right to rely on what
appears on the certificate of title. In the absence of anything to excite or arouse suspicion, said
vendee is under no obligation to look beyond the certificate and investigate the title of the vendor
appearing on the face of the certificate.

2. ID.; ID.; ID.; ID.; VENDEE IN CASE AT BAR, INNOCENT PURCHASER FOR VALUE. — In the case at
bar, the evidence on record discloses that when petitioner purchased the subject property on June 10,
1970, the title thereto (TCT NO. T-32683) was in name of her vendor Rafaela Donato alone. The said
certificate was shown to petitioner which shows on its face that the lien imposed by Section 4, Rule
74, Rules of Court was cancelled on April 8, 1969. Petitioner was advised by her lawyers that she
could proceed to buy the property because the same was registered in the name of the vendor. She
paid the sum of P10,000.00 in consideration of the sale which is fair and reasonable considering that
in 1967 Fortunato Pascua paid the sum of P390.00 for the portion of the land consisting of 1,704
square meters. The exta-juducial settlement, upon which was based the lien imposed by Section 4,
Rule 74, Rules of Court, was executed after the death of vendor’s husband in 1936 but before the
isuance of the original title on January 11, 1938 so that the title would be issued in the names of the
heirs of Juan Gaffud, namely: Rafaela Donato, Raymundo Gaffud and Cicero Gaffud. It was a Deed of
Transfer which transferred the subject property from the original owners to Rafael Donato. That
petitioner is an innocent purchaser for value is within the scope of jurisprudence established by the
rulings in Benin v. Tuason, 57 SCRA 531, 581: Duran v. Intermediate Appellate Court, 138 SCRA 489,
494-495 and Centeno v. Court of Appeals, 139 SCRA 545, 555)

3. ID.; ID.; ID.; ACTION FOR RECONVEYANCE PRESCRIBES IN TEN YEARS FROM ISSUANCE OF TITLE.
— And it is now well-settled that an action for reconveyance prescribes in ten years from the issuance
of the Torrens Title over the property. (Armerol v. Bagumbaran, 154 SCRA 396, 407: Caro v. Court of
Appeals, 180 SCRA 401, 407: Walstron v. Mapa, Jr., 181 SCRA 431, 442. Transfer Certificate of Title
No. T-32683 was issued in the name of Rafaela Donato on March 2, 1967. The present action for
reconveyance was filed only on March 9, 1982. Clearly then, the action has already prescribed
because it was filed fifteen (15) years after the issuance of TCT No. T-32683. Even if the period were
to be reckoned from the registration of the deed of absolute sale in favor of petitioner on July 13,
1970, which is also the date of the issuance of Transfer Certificate of Title No. T-49380 in the name of
petitioner, the action of private respondents had already prescribed because a period of eleven (11)
years, seven (7) months and twenty-six (26) days has elapsed from July 13, 1970 to March 9, 1982.

DECISION

PARAS, J.:

The decision of respondent Court of Appeals in CA-G.R. CV No. 21457 which affirmed in toto, the
decision of the Regional Trial Court of Echague, Isabela, Branch 24 in Civil Case No. 240190, the
dispositive portion of which latter decision reads:
jgc:chanrob les.com. ph

"WHEREFORE, premises considered, judgment is hereby rendered: jgc:chanrob les.co m.ph

14
"1. Declaring the Deed of Absolute Sale made by Rafaela Donato Vda. de Gaffud in favor of the
defendant on June 10, 1970 over Lot 6-B of the subdivision plan (LRC) Psd-68395 being a portion of
Lot 6 of the Echague Cadastre LRC Cad. Rec. No. 1063, containing an area of 11,095 square meters,
more or less, null and void insofar as the shares of Cicero Gaffud and Raymundo Gaffud are
concerned, which is one-half-thereof, or approximately 5,547.5 square meters, more or less;

"2. Ordering the cancellation of TCT No. 49380 in the name of the defendant;

"3. Ordering the defendant to reconvey one-half of the property subject of this proceeding to the
plaintiffs within ten (10) days from finality of this Decision, failing which the same shall be done at the
cost of the defendant by the Clerk of Court end such act, when so done, shall have like effect as if
done by her;

"4. Ordering the defendant to pay the plaintiffs P5,000.00 by way of attorney’s fees.

"No costs.

"SO ORDERED." (pp. 20-21, Rollo)

is now being assailed in the instant petition for Certiorari upon the ground —

THAT RESPONDENT COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION, AMOUNTING


TO LACK OF JURISDICTION —

WHEN IT ERRED IN CONCLUDING THAT THE PETITIONER IS NOT AN INNOCENT PURCHASER OF THE
SUBJECT PROPERTY;

II

WHEN IT ERRED IN CONCLUDING THAT PRESCRIPTION WOULD NOT LIE TO BAR PRIVATE
RESPONDENTS’ ACTION; and

III

WHEN IT ERRED IN NOT DECLARING AS VALID THE TRANSFER OF THE SUBJECT PROPERTY FROM THE
ORIGINAL REGISTERED OWNERS TO RAFAELA DONATO;

The pertinent background facts as found by the trial court and adopted by the respondent Court of
Appeals in its now assailed decision are the following: chanrob1es vi rt ual 1aw li bra ry

The property subject of the controversy is a parcel of land situated in Echague, Isabela, identified as
Lot 6-B of the Subdivision Plan (LRC) Psd-68395, being a portion of Lot 6 containing an area of 11,095
square meters, more or less.

Lot 6 has an area of 12,799 square meters, more or less. It was acquired in 1924 by the spouses Juan
Gaffud and Rafaela Donato. Juan Gaffud died in 1936. On January 11, 1938, Lot 6 was originally
registered in the Registration Book of the Office of the Register of Deeds of Isabela, under Original
Certificate of Title No. 4340 pursuant to Decree No. 650247 issued under L.R.C. Cadastral Record No.
1063 in the names of Rafaela Donato, Raymundo Gaffud and Cicero Gaffud (Raymundo and Cicero are
the sons of the spouses) as co-owners thereof in fee simple subject to such of the incumbrances
mentioned in Section 39 of said act and to Section 4, Rule 74, Rules of Court. The said lot was sold to
Rafaela Donato through a Deed of Transfer which cancelled O.C.T. No. 4340 and in lieu thereof T.C.T.
No. T-30407 was issued in the name of Rafaela Donato.

On February 25, 1967, Rafaela Donato sold a portion of said Lot 6, consisting of 1,704 sq. m., more or
less in favor of Fortunato Pascua. The aforesaid sale caused the subdivision of the said Lot 6 into Lot
6-A containing an area of 1,704 sq. m., more or less, and Lot 6-B containing an area of 11,095 sq. m.,
more or less, under Subdivision Plan (LRC) Psd-68395.

Upon registration of said sale in favor of Fortunato Pascua, Transfer Certificate of Title No. T-30407
was cancelled, and in lieu thereof, Transfer Certificate of Title No. T-32683 was issued in the name of
Rafaela Donato on March 2,1967 covering the land designated as Lot 6-B of the subdivision Plan (LRC)
Psd-68395, being a portion of Lot 6 of the Echague Cadastre, LRC Cad. Rec. No. 1063, containing an
area of 11,095 sq.m., more or less, which is the subject land. (RTC Decision dated November 15,
1988, p. 310 Record).

On June 10, 1970 Rafaela Donato sold to petitioner Felicisima Pino said Lot 6-B in consideration of

15
P10,000.00 as evidenced by the Deed of Absolute Sale she executed in favor of petitioner Felicisima
Pino which was notarized by her lawyer, Atty. Concepcion Tagudin (Exh. 1).

Rafaela Donato undertook to register the Deed of Absolute Sale with the Register of Deeds of Isabela
and on July 13, 1970 the sale was inscribed therein under Entry No. 9286 and Transfer Certificate of
Title No. T-49380 was issued in the name of Felicisima Pino.

On September 30, 1980, Cicero Gaffud died survived by his wife Demetria Gaffud and sons Romualdo
Gaffud and Adolfo Gaffud who are the private respondents herein. chan robles lawlib rary : re dnad

On March 9, 1982, private respondents filed a complaint for nullity of sale and reconveyance against
petitioner - Felicisima Pino. Incidentally, the sale of the other portion (Lot A) of the same lot to
Fortunato Pascua is not assailed by private respondents.

During the pendency of the case before the trial court, Rafaela Donato (who was not a party to the
case) died on November 26, 1982.

On November 5, 1988, the trial court rendered its decision (the dispositive portion of which was earlier
quoted in this decision) which was affirmed on appeal by the Court of Appeals, in its now assailed
decision, the pertinent portion of which reads: jgc:c hanro bles. com.ph

"The defense of an innocent purchaser for value would be of no help to appellant in the absence of the
document on extra-judicial partition indicating that the conjugal property has been adjudicated to
Rafaela Donato Vda. de Gaffud and which would be the source of her authority in transferring the
subject property to defendant. The sensible thing to do by any prudent person is to examine not only
the certificate of title of said property but also all the factual circumstances necessary for him to
determine if there are any flaw in vendor’s capacity to transfer the land.

"Nor would prescription of action lie. An ordinary action for reconveyance based on fraud prescribes in
four (4) years (Lanera v. Lopos, 106 Phil. 70). Appellant was a party to the alleged fraudulent transfer
of the subject property, consequently, appellees have four (4) years to file an action to annul the deed
of sale from the discovery of the fraudulent act. In the case at bar, appellees learned about the fraud
on July 6, 1981 when they received a letter from the appellant (Exhibit D). The filing, therefore, of the
complaint on March 9, 1982 (p. 1. Rec.) was within the prescriptive period." (pp. 62-63, Rollo)

In elevating the judgment of the respondent Court of Appeals to Us for review petitioner prays that
the appealed decision be reversed and another one entered declaring as valid (1) the sale of the
subject property executed on June 10, 1970 in favor of petitioner Felicisima Pino by Rafaela Donato
Vda. de Gaffud and (2) the Transfer Certificate of Title No. T-49380 issued in the name of petitioner
by the Register of Deeds of Isabela on July 13, 1970 upon the grounds —

"(a) that private respondents has (sic) no cause of action against petitioner because she is an innocent
purchaser for value of the subject property;

"(b) that the action of private respondents was already barred by prescription when it was filed; and

"(c) that the transfer of the subject property from the original registered owners to Rafaela Donato
was valid." (pp. 61-62, Rollo)

The rule applicable to this controversy is well-settled. Where the certificate of title is in the name of
the vendor when the land is sold, the vendee for value has the right to rely on what appears on the
certificate of title. In the absence of anything to excite or arouse suspicion, said vendee is under no
obligation to look beyond the certificate and investigate the title of the vendor appearing on the face
of said certificate. The rationale for the rule is stated thus: jgc: chan robles .com.p h

"The main purpose of the Torrens’ System is to avoid possible conflicts of title to real estate and to
facilitate transactions relative thereto by giving the public the right to rely upon the face of a Torrens
Certificate of Title and to dispense with the need of inquiring further, except when the party concerned
had actual knowledge of facts and circumstances that should impel a reasonably cautious man to
make such further inquiry. (Pascua v. Capuyoc, 77 SCRA 78) Thus, where innocent third persons
relying on the correctness of the certificate thus issued, acquire rights over the property, the court
cannot disregard such rights." (Director of Land v. Abache, Et Al., 73 Phil. 606)

In the case at bar, the evidence on record discloses that when petitioner purchased the subject
property on June 10, 1970, the title thereto (TCT No. T-32683) was in the name of her vendor Rafaela
Donato alone. The said TCT No. T-32683 was shown to petitioner which shows on its face the
following:jgc:chanrobles. com.ph

"is registered in accordance with the provisions of the Land Registration Act in the name of —

"RAFAELA DONATO, Filipino, of legal age, widow and with residence and postal address at Centro,
Echague, Isabela, Philippines as owner thereof in fee simple, subject to such of the encumbrances

16
mentioned in Section 39 of said Act as may be subsisting, and to Section 4, Rule 74, of the Rules of
Court." (Ex. A, p. 169, Record)

The lien imposed by Section 4, Rule 74, Rules of Court appears as cancelled on April 8, 1969 under
the following entry: jgc:chanrob les.com. ph

"Entry No. 2090 — Petition for cancellation of Sec. 4 Rule 74 of

D-340; P-75; the Rules of Court executed by

Rafaela D. Vda. de Gaffud. Hence, by virtue of B-4; S-1969 which the lien appearing on the face of

R.M. Angubong, this title is now cancelled.

Notary Public

Date of Instrument — March 11, 1969

Date of Inscription — April 2, 1969

Time: 12:30 p.m.

(Sgd.) ANASTACIO J. PASCUA

ANASTACIO J. PASCUA

Deputy Register of Deeds V"

(Emphasis supplied) (p. 15, Rollo)

Petitioner was advised by her lawyers that she could proceed to buy the property because the same
was registered in the name of the vendor. Thus, on pp. 13 & 14 of the Transcript of Stenographic
Notes of the hearing of December 12, 1986, petitioner testified as follows: chanro b1es vi rtua l 1aw lib ra ry

Atty. Mallabo: chanrob1e s virtual 1aw l ibra ry

Q Before you brought this property madam witness, were you shown a copy of the title of Rafaela
Donato vda. de Gaffud on the property?

A Yes, sir, she showed me the title. And I saw that the title was in her name.

Q When the offer was made to you and the title was shown to you, do you remember if you have done
anything?

A Yes, sir, before I bought the property, I showed the documents she bought to me to our lawyer,
Custodio Villalva and Concepcion Tagudin.

Q Why did you show them the title Madam witness?

A To be sure that the title does not have any encumbrance and because I do not know anything about
legal matters.

Q What did they advise you?

A Yes, Okey, I can proceed in buying the property, the title was registered in her name, it was her
personal property. (pp. 15-16, Rollo)

In the case of Maguiling v. Umadhay, (33 SCRA 99, 103) this Court held: jgc:chanro bles. com.ph

"However, while the Umadhay spouses cannot rely on the title, the same not being in the name of
their grantor, respondent Crisanta S. Gumban stands on a different footing altogether. At the time she
purchased the land the title thereto was already in the name of her vendors (T.C.T. 15522). She had
the right to rely on what appeared on the face of said title. There is nothing in the record to indicate
that she knew of any unregistered claims to or equities in the land pertaining to other persons, such
as that of herein petitioner, or of any other circumstances which should put her on guard and cause
her to inquire behind the certificate. According to the Court of Appeals she took all the necessary
precautions to ascertain the true ownership of the property, having engaged the services of a lawyer
for the specific purpose and, it was only after said counsel had assured her that everything was in
order did she make the final arrangements to purchase the property. The appellate court’s conclusion
that respondent Crisanta S. Gumban was a purchaser in good faith and for value is correct, and the
title she has thereof acquired is good and indefeasible." cra law virt ua1aw lib ra ry

17
Petitioner paid the sum of P10,000.00 in consideration of the sale which is fair and reasonable
considering that in 1967 Fortunato Pascua paid the sum of P390.00 for the portion of the land
consisting of 1,704 square meters. (Exhs. 1 and 5). cha nrob lesvi rtu alawlibra ry

The court a quo, however, ruled and this was sustained by respondent Court of Appeals that petitioner
was not an innocent purchaser.

"The defense of an innocent purchaser for value could be of no help to appellant in the absence of the
document on extra-judicial partition indicating that the conjugal property has been adjudicated to
Rafaela Donato Vda. de Gaffud and which would be the source of her authority in transferring the
subject property to defendant. The sensible thing to do by any prudent person is to examine not only
the certificate of title of said property but also all the factual circumstances necessary for him to
determine if there are any flaws in vendor’s capacity to transfer the land." (p. 10, Rollo)

We do not find any evidence in the record that would sustain such a finding. The extra-judicial
partition adverted to in said ruling was executed by the heirs of Juan Gaffud prior to, and as the basis
for, the issuance of the Original Certificate of Title No. 4340 in the names of the heirs of Juan Gaffud,
as testified to by witness Demetria Gaffud in this wise: chanro b1es vi rtua l 1aw lib ra ry

Q Were you able to read the title that was kept by your brother in law?

A Yes, sir.

Q Who was the registered owner?

A Rafaela Donato, Raymundo Gaffud and Cicero Gaffud, co-owner.

Q In other words, the title you read appears that the owners were Raymundo, Cicero and Rafaela?

A Yes, sir.

Q Do you know what a title is?

A Yes, it is thick.

Q You said that the property was bought by Juan Gaffud and Rafaela Gaffud, how come that there is
no name Juan Gaffud in the title?

A Because he was already dead when I got married.

Q Do you have a knowledge how the title come to have the name of Raymundo, Rafaela and Cicero?

A Yes, sir. (p. 66, Rollo)

The extra-judicial settlement, upon which was based the lien imposed by Section 4, Rule 74, Rules of
Court, was executed after the death of Juan Gaffud in 1936 but before the issuance of the original title
on January 11, 1938 so that the title would be issued in the names of the heirs of Juan Gaffud,
namely: Rafaela Donato, Raymundo Gaffud and Cicero Gaffud.

This conclusion is supported (a) by the fact that the subject property was registered only on January
11, 1938, which is around two (2) years after the death of Juan Gaffud in 1936, and therefore the title
could not have been issued in the name of Juan Gaffud; (b) by the fact that the lien imposed by
Section 4, Rule 74, Rules of Court was inscribed on the face of the title itself and was not entered on
the Memorandum of Encumbrances as were done with the mortgages and their releases which were
inscribed under their Entry Numbers on the page for Memorandum of Encumbrances and (c) by the
fact that the Original Certificate of Title was issued in the names of the heirs of Juan Gaffud.

The extra-judicial settlement, therefore, has no bearing on whether or not there was fraud in the
transfer of the subject property to Rafaela Donato.

On the other hand, it was a Deed of Transfer which transferred the subject property from the original
owners to Rafaela Donato as stated in Exhibit 3 which is the petition to cancel the conditions imposed
by Section 4, Rule 74, Rules of Court, to wit:chanrobles vi rt ual lawli bra ry

"That since the time of the execution of the Deed of Transfer from the original owners to herein
petitioner in 1967, and also since the time of the registration of the said transfer at Register of Deeds
of Isabela — last March 2, 1967, — more than two (2) years have already elapsed;

"That from the time of the Deed of Transfer and within the period of two years thereafter, NO CLAIM
WHATSOEVER has been filed against the herein petitioner with respect to the property thus sold to
her." (p. 67, Rollo)

18
Even granting that the extra-judicial settlement was the document which transferred the subject
property from the original owners to Rafaela Donato the non-production thereof (private respondents
should have presented it, not petitioner) does not prove that there was fraud committed in its
execution and neither does it prove that petitioner was a party thereto. There was no allegation, and
much less any evidence, that the transfer of the subject property from the original owners to Rafaela
Donato was fraudulent.

What private respondents allege as fraudulent was the extrajudicial settlement of the estate of Juan
Gaffud. But it has been shown that this settlement was not the basis of the transfer of the subject
property to Rafaela Donato, petitioner’s vendor.

That petitioner is an innocent purchaser for value is within the scope of established jurisprudence.

"The decision of the lower court would set at naught the settled doctrine that the holder of a certificate
of title who acquired the property covered by the title in good faith and for value can rest assured that
his title is perfect and incontrovertible." (Benin v. Tuason, 57 SCRA 531, 581).

x x x

"Guided by previous decisions of this Court, good faith consists in the possessor’s belief that the
person from whom he received the thing was the owner of the same and could convey his title (Ariola
v. Gomez dela Serna, 14 Phil. 627). Good faith, while it is always presumed in the absence of proof to
the contrary, requires a well-founded belief that the person from whom title was received by himself
the owner of the land, with the right to convey it (Santiago v. Cruz, 19 Phil. 148). There is good faith
where there is an honest intention to abstain from taxing any unconscientious advantage from another
(Fule v. Legare, 7 SCRA 351). Otherwise stated, good faith is the opposite of fraud and it refers to the
state of mind which is manifested by the acts of the individual concerned. In the case at bar, private
respondents (petitioner in this case), in good faith relied on the certificate of title in the name of Fe S.
Duran (Rafaela Donato in this case) end . . .’even on the supposition that the sale was void, the
general rules that the direct result of a previous illegal contract cannot be valid (on the theory that the
spring cannot rise higher than its source) cannot apply here for We are confronted with the
functionings of the Torrens System of Registration. The doctrine to follow is simple enough: a
fraudulent or forged document of sale may become the ROOT of a valid title if the certificate of title
has already been transferred from the name of the true owner to the name of the forger or the name
indicated by the forger.’" (Duran v. Intermediate Appellate Court, 138 SCRA 439, 494).

x x x

"Thus, where innocent third persons relying on the correctness of the certificate of title issued, acquire
rights over the property, the court cannot disregard such rights and order the total cancellation of the
certificate for that would impair public confidence in the certificate of title; otherwise everyone dealing
with property registered under the torrens system would have to inquire in every instance as to
whether the title had been regularly or irregularly issued by the court. Indeed, this is contrary to the
evident purpose of the law. Every person dealing with registered land may safely rely on the
correctness of the certificate of title issued therefor and the law will in no way oblige him to go behind
the certificate to determine the condition of the property. Stated differently, an innocent purchaser for
value relying on a torrens title issued is protected. . . ." (Duran v. Intermediate Appellate Court, 138
SCRA 489, 494-495). (pp. 68-70, Rollo).

In the case of Centeno v. Court of Appeals (139 SCRA 545, 555) the same rule was observed by this
Court when it ruled —

". . . Well settled is the rule that all persons dealing with property covered by 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. (William Anderson v. Garcia, 64 Phil., 506; Fule v. Legare, 7 SCRA 351)." (p. 71, Rollo)

Petitioner being an innocent purchaser for value, private respondents will have no cause of action
against her. "The issue alone that petitioner is a purchaser in good faith and for value sufficiently
constitutes a bar to the complaint of private respondents . . . ." (Medina v. Chanco, 117 SCRA 201,
205).

If an action for reconveyance based on constructive trust cannot reach an innocent purchaser for
value, the remedy of the defrauded party is to bring an action for damages against those who caused
the fraud or were instrumental in depriving him of the property. And it is now well-settled that such
action prescribes in ten years from the issuance of the Torrens Title over the property. (Armerol v.
Bagumbaran, 154 SCRA 396, 407; Caro v. Court of Appeals, 180 SCRA 401, 407; Walstron v. Mapa,
Jr., 181 SCRA 431, 442).

19
Transfer Certificate of Title No. T-32683 was issued in the name of Rafaela Donato on March 2, 1967.
The present action for reconveyance was filed only on March 9, 1982. Clearly then, the action has
already prescribed because it was filed fifteen (15) years after the issuance of TCT No. T-32683. Even
if the period were to be reckoned from the registration of the deed of absolute sale in favor of
petitioner on July 13, 1970, which is also the date of the issuance of Transfer Certificate of Title No. T-
49380 in the name of petitioner, the action of private respondents had already prescribed because a
period of eleven (11) years, seven (7) months and twenty-six (26) days has elapsed from July 13,
1970 to March 9, 1982. chan robles v irt ualawli bra ry cha nroble s.com:c hanrobles. com.ph

WHEREFORE, the petition is GRANTED; the assailed decision of the Court of Appeals is REVERSED and
SET ASIDE and another one rendered dismissing Civil Case No. Br. V-756, of the Regional Trial Court,
Branch 24, Echague, Isabela.

SO ORDERED.

Melencio-Herrera, Padilla and Regalado, JJ., concur.

Sarmiento, J., is on leave.

20
[G.R. No. 114299. September 24, 1999]

TRADERS ROYAL BANK, petitioner, vs. HON. COURT OF APPEALS,


PATRIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA
JOY, all surnamed CAPAY and RAMON A. GONZALES, respondents.

[G.R. No. 118862. September 24, 1999]

PATRIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA JOY,


all surnamed CAPAY, and RAMON A. GONZALES, petitioners, vs. SPS.
HONORATO D. SANTOS and MARIA CRISTINA S. SANTOS, SPS.
CECILIO L. PE and JOSEFINA L. PE, FLORA LARON WESCOMBE,
SPS. TELESFORO P. ALFELOR II and LIZA R. ALFELOR, SPS.
DEAN RODERICK FERNANDO and LAARNI MAGDAMO
FERNANDO, REMEDIOS OCA, DEVELOPMENT BANK OF THE
PHILIPPINES and TRADERS ROYAL BANK, respondents.

DECISION
KAPUNAN, J.:

The present controversy has its roots in a mortgage executed by the spouses Maximo and
Patria Capay in favor of Traders Royal Bank (TRB) pursuant to a loan extended by the latter to
the former. The mortgage covered several properties, including a parcel of land, the subject of the
present dispute.[1] The loan became due on January 8, 1964 and the same having remained unpaid,
TRB instituted extra-judicial foreclosure proceedings upon the mortgaged property.
To prevent the propertys sale by public auction, the Capays, on September 22, 1966, filed a
petition for prohibition with preliminary injunction (Civil Case No. Q-10453) before the Court of
First Instance (CFI) of Rizal, alleging that the mortgage was void since they did not receive the
proceeds of the loan. The trial court initially granted the Capays' prayer for preliminary injunction.
On March 17, 1967, the Capays caused to be filed in the Register of Deeds of Baguio City a
notice of lis pendens over the disputed property. Said notice was entered in the Day Book, as well
as in the Capays certificate of title.
Subsequently, the injunction issued by the trial court was lifted thus allowing the foreclosure
sale to proceed. Foreclosure proceedings were initiated and on October 17, 1968, the property was
sold to TRB which was the highest bidder at the auction sale. A sheriff certificate of sale was
issued in its name on the same day. On February 25, 1970, the property was consolidated in the
name of TRB, the sole bidder in the sale. TCT No. T-6595 in the name of the Capay spouses was
then cancelled and a new one, TCT No. T-16272,[2] was entered in the banks name. The notice
of lis pendens, however, was not carried over in the certificate of title issued in the name of TRB.
Thereafter, the Capays filed with the CFI a supplemental complaint praying for the recovery
of the property with damages and attorneys fees. Trial in Civil Case No. Q-10453 proceeded and,
on October 3, 1977, the CFI rendered its decision declaring the mortgage void for want of
consideration. The CFI ordered, among other things, the cancellation of TCT No. T-16272 in the
name of TRB and the issuance of new certificates of title in the name of the Capay spouses.
TRB appealed to the Court of Appeals. While the case was pending in the Court of Appeals,
TRB on March 17, 1982 sold the land to Emelita Santiago in whose name a new certificate of title,
TCT No. 33774,[3] was issued, also, without any notice of lis pendens annotated thereon. Santiago

21
in turn divided the land into six (6) lots and sold these to Marcial Alcantara, Armando Cruz and
Artemio Sanchez, who became co-owners thereof.[4] Alcantara and his co-owners developed the
property and thereafter sold the six (6) lots to separate buyers who were issued separate titles,
again, bearing no notice of lis pendens.[5]
On July 30, 1982, the Court of Appeals rendered its decision modifying the decision of the
trial court as to the award of damages but affirming the same in all other respects.
For having been filed out of time and for lack of merit, the petition for certiorari filed by TRB
before this Court[6] was denied in a Resolution dated September 12,1983. TRBs motion for
reconsideration was similarly denied in a Resolution dated October 12, 1983. The Courts
September 12, 1983 Resolution having become final and executory on November 9, 1983, the trial
court issued a writ of execution directing the Register of Deeds of Baguio City to cancel TCT No.
T-16272 in the name of TRB, and to issue a new one in the name of the Capay spouses.
Said writ, however, could not be implemented because of the successive subsequent transfers
of the subdivided property to buyers who obtained separate titles thereto. Thus, a complaint for
recovery of possession/ownership dated 8 June 1985 was filed before the Quezon City Regional
Trial Court against TRB and the subsequent transferees of the property, the respondents in G.R.
No. 118862 (hereinafter, the non-bank respondents). Plaintiffs in said case were Patria Capay, her
children by Maximo[7] who succeeded him upon his death on August 25, 1976, and Ramon
Gonzales, counsel of the spouses in Civil Case No. Q-10453 who became co-owner of the property
to the extent of 35% thereof as his attorneys fees (collectively, the Capays). On March 27, 1991,
the trial court rendered its decision, the dispositive portion of which states:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs against the


defendants and ordering the Register of Deeds for Baguio to cancel TCT No. T-
36177, Books 198, Page 177 in the names of defendants Spouses Honorato D. Santos
and Maria Cristina Santos; to cancel TCT No. 36707, Book 201, Page 107 in the
names of defendant Spouses Cecilio Pe and Josefina L. Pe; to cancel TCT No. T-
36051, Book 198, Page 51 in the name of Flora Laron Wescombe, married to Kevin
Lind Wescombe (now deceased); to cancel TCT No. T-36147, Book 198, page 147 in
the names of Spouses Telesforo P. Alfelor II and Liza R. Alfelor; to cancel TCT No.
T-36730, Book 201, Page 130 in the names of Spouses Dean Roderick Fernando and
Laarni Magdamo Fernando; to cancel TCT No. 37437, Book 205, Page 37 in the
name of Remedios Oca, and issue new ones free from all liens and encumbrances,
together with all the improvements therein in the names of plaintiffs sharing pro
indiviso as follows: 35% to Ramon A. Gonzales, married to Lilia Y. Gonzales, of
legal age, with postal address at 23 Sunrise Hill, New Manila, Quezon City; 37.92%
to Patria B. Capay, of legal age, widow, Filipino; 5.41% each to Ruby Ann Capay, of
legal age, Filipino, married to Pokka Vainio, Finnish citizen; Chona Margarita Capay,
of legal age, Filipino, married to Waldo Flores; Rosario Capay, of legal age, Filipino,
married to Jose Cuaycong, Jr.; Cynthia Capay, of legal age, Filipino, married to Raul
Flores; Linda Joy Capay, of legal age, Filipino, married to Pedro Duran, all with
postal address at 37 Sampaguita St., Capitolville Subd., Bacolod City, ordering said
defendants to vacate the premises in question and restoring plaintiffs thereto and for
defendant Traders Royal Bank to pay each of the plaintiffs moral damages in the
amount of P100,000.00, P40,000.00 in exemplary damages and P40,000.00 as
attorneys fees, all with legal interest from the filing of the complaint, with costs
against defendants.

SO ORDERED.[8]

TRB and the non-bank respondents appealed to the Court of Appeals. In a Decision
promulgated on February 24, 1994 in CA-G.R. CV No. 33920, the appellate court affirmed the

22
decision of the trial court in toto.[9] It ruled that the non-bank respondents cannot be considered as
purchasers for value and in good faith, having purchased the property subsequent to the action in
Civil Case No. Q-10453 and that while the notice of lis pendens was not carried over to TRBs
certificate of title, as well as to the subsequent transferees titles, it was entered in the Day Book
which is sufficient to constitute registration and notice to all persons of such adverse claim, citing
the cases of Villasor vs. Camon,[10] Levin vs. Bass[11] and Director of Lands vs. Reyes.[12]
As regard TRB, the Court of Appeals said that the bank was in bad faith when it sold the
property knowing that it was under litigation and without informing the buyer of that fact.
On April 26, 1994, TRB filed with this Court a petition for review to set aside the CA decision,
docketed herein as G.R. No. 114299, invoking the following grounds:
I.

THE RESPONDENT HONORABLE COURT OF APPEALS COMMITTED


GRAVE AND SERIOUS ERROR OF LAW IN PROMULGATING THE
DISPUTED DECISION AND THEREBY DECIDED A QUESTION OF
SUBSTANCE WHOLLY CONTRARY TO SETTLED JURISPRUDENCE AND
TOTALLY NOT IN ACCORD WITH APPLICABLE DECISION OF THIS
HONORABLE SUPREME COURT.
II.

THE RESPONDENT HONORABLE COURT OF APPEALS HAS COMMITTED


SO GRAVE AND SERIOUS ERRORS OF LAW IN SANCTIONING A
DEPARTURE FROM THE USUAL AND ACCEPTED COURSE OF JUDICIAL
PROCEEDING AS TO CALL FOR THE EXERCISE OF THE POWER OF
REVIEW BY THIS HONORABLE SUPREME COURT.

a) The public respondent has plainly and manifestly acted whimsically, arbitrarily,
capriciously, with grave abuse of discretion, in excess of jurisdiction tantamount to
lack of jurisdiction.

xxx

b) The public respondent erred in not finding that it was not the fault of petitioner
when the notice of lis pendens was not carried over to its new title.

xxx

c) The public respondent erred in not finding that PD No. 1271 had legally caused the
invalidation of the Capays property and the subsequent validation of TRBs title over
the same property was effective even as against the Capays.[13]

Meanwhile, the non-bank respondents moved for a reconsideration of the Court of Appeals
decision. Convinced of the movants arguments, the Court of Appeals in a Resolution promulgated
on August 10, 1994 granted the motion for reconsideration and dismissed the complaint as against
them. The dispositive portion of the resolution states:

ACCORDINGLY, in view of the foregoing disquisitions and finding merit in the


motion for reconsideration, the same is hereby GRANTED. Consequently, the
decision of this Court, promulgated on February 24, 1994, is hereby
RECONSIDERED. The complaint filed against defendants-appellants with the
court a quo is hereby ordered DISMISSED, and the certificate of titles originally

23
issued to them in their individual names are hereby ordered restored and duly
respected. We make no pronouncement as to costs.

SO ORDERED.[14]

The Capays thus filed with this Court a petition for review, docketed as G.R. No. 118862, to
set aside the resolution of the Court of Appeals raising the following errors:
I

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY


NOW HOLDING THAT TUAZON VS. REYES, 48 PHIL. 814 AND RIVERA VS.
MORAN, 48 PHIL. 836 ARE NOT APPLICABLE HEREOF, WHILE PINO VS.
COURT OF APPEALS, 198 SCRA 436, IS APPLICABLE.
II

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY


NOW HOLDING THAT ATUN VS. MUNOZ, 97 PHIL. 762 AND LAROZA VS.
GUIA, 134 SCRA 34, ARE NOT APPLICABLE.
III

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY


NOW HOLDING THAT LEVIN VS. BASS, 91 PHIL. 419 VILLASOR VS.
CAMON, 89 PHIL. 404 AND DIRECTOR OF LANDS VS. REYES, 68 SCRA 73,
ARE NOT APPLICABLE HEREOF.
IV

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY


NOW HOLDING THAT PETITIONERS ARE GUILTY OF LACHES.
V

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY


NOW HOLDING THAT THERE IS NO DISTINCTION IN THE REGISTRATION
OF VOLUNTARY INSTRUMENTS VIS--VIS INVOLUNTARY INSTRUMENTS.
VI

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY


NOW HOLDING THAT RESPONDENTS WHO ARE LAWYERS, RESPONSIBLE
CITIZENS AND WELL-RESPECTED RESIDENTS IN THE COMMUNITY, ARE
EXEMPTED FROM THE EFFECTS OF THE CONSTRUCTIVE NOTICE
ARISING FROM REGISTRATION.
VII

THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF WITH


REGARDS TO TRADERS ROYAL BANK, AFTER THE LATTER HAS
PERFECTED ITS APPEAL TO THE SUPREME COURT.
VIII

24
THE COURT OF APPEALS PALPABLY ERRED IN NOT RULING ON THE
COUNTER-ASSIGNMENT OF ERROR THAT:

B) THE LOWER COURT ERRED IN NOT HOLDING THAT DEFENDANTS ARE


BOUND BY THE DECISION IN CIVIL CASE NO. Q-10453.

Subsequently, G.R. No. 118862 was consolidated with G. R. No. 114299, pursuant to this
Courts Resolution dated July 3, 1996.[15]
The consolidated cases primarily involve two issues: (1) who, as between the Capays and the
non-bank respondents, has a better right to the disputed property, and (2) whether or not TRB is
liable to the Capays for damages.
On the first issue, we rule for the non-bank respondents.
I

First, when TRB purchased the property at the foreclosure sale, the notice of lis pendens that
the Capays caused to be annotated on their certificate of title was not carried over to the new one
issued to TRB. Neither did the certificate of title of Emelita Santiago, who purchased the property
from TRB, contain any such notice. When Santiago caused the property to be divided, six (6) new
certificates of title were issued, none of which contained any notice of lis pendens. Santiago then
sold the lots to Marcial Alcantara and his co-owners who next sold each of these to the non-bank
respondents. The non-bank respondents, therefore, could not have been aware that the property in
question was the subject of litigation when they acquired their respective portions of said
property. There was nothing in the certificates of title of their respective predecessors-in-interest
that could have aroused their suspicion. The non-bank respondents had a right to rely on what
appeared on the face of the title of their respective predecessors-in-interest, and were not bound to
go beyond the same. To hold otherwise would defeat one of the principal objects of the Torrens
system of land registration, that is, to facilitate transactions involving lands.

The main purpose of the torrens system is to avoid possible conflicts of title to real
estate and to facilitate transactions relative thereto by giving the public the right to
rely upon the face of a Torrens certificate of title and to dispense with the need of
inquiring further, except when the party concerned has actual knowledge of facts and
circumstances that should impel a reasonably cautious man to make such further
inquiry. Where innocent third persons, relying on the correctness of the certificate of
title thus issued, acquire rights over the property, the court cannot disregard such
rights and order the total cancellation of the certificate. The effect of such an outright
cancellation would be to impair public confidence in the certificate of title, for
everyone dealing with property registered under the Torrens system would have to
inquire in every instance as to whether the title has been regularly or irregularly issued
by the court. Every person dealing with registered land may safely rely on the
correctness of the certificate of title issued therefor and the law will in no way oblige
him to go beyond the certificate to determine the condition of the property.

The Torrens system was adopted in this country because it was believed to be the
most effective measure to guarantee the integrity of land titles and to protect their
indefeasibility once the claim of ownership is established and recognized. If a person
purchases a piece of land on the assurance that the sellers title thereto is valid, he
should not run the risk of being told later that his acquisition was ineffectual after
all. This would not only be unfair to him. What is worse is that if this were permitted,
public confidence in the system would be eroded and land transactions would have to
be attended by complicated and not necessarily conclusive investigations and proof of
ownership. The further consequence would be that land conflicts could be even more

25
numerous and complex than they are now and possibly also more abrasive, if not even
violent. The Government, recognizing the worthy purposes of the Torrens system,
should be the first to accept the validity of titles issued thereunder once the conditions
laid down by the law are satisfied.[16]

Second, the foregoing rule notwithstanding, the non-bank respondents nevertheless physically
inspected the properties and inquired from the Register of Deeds to ascertain the absence of any
defect in the title of the property they were purchasing-an exercise of diligence above that required
by law.
Thus, respondent Aida Fernando Meeks, who bought Lot 5 for her son Dean, testified:
Q How did you come to live in Baguio City, particularly in Km. 2.5 San Luis, Baguio City?
A In one of my visits to my sister who has been residing here for twelve (12) years now, I got interested
in buying a property here.
Q How did you come to know of this property at Asin Road where you now reside?
A My sister, Ruth Ann Valdez, sir.
Q When this particular property was bought by you, when was that?
A I do not remember the exact date, but it was in early 1984, sir.
Q At the time when you went to see the place where you now reside, how did it look?
A This particular property that I bought was then a small one (1)-room structure, it is a two (2)-storey
one (1) bedroom structure.
Q What kind of structure with regards to material?
A It is a semi-concrete structure, sir.
Q And aside from this two (2)-storey one (1)-room structure, how did the surrounding area look like at
the time you visited?
A There were stone walls from the road and there were stone walls in front of the property and beside
the property.
Q At the time you went to see the property with your agent, rather, your sister Ruth Ann Valdez, did
you come to know the owner?
A We did because at the time we went there, Mr. Alcantara was there supervising the workers.
Q And who?
A Amado Cruz, sir.
Q After you saw this property, what else did you do?
A My first concern then was am I buying a property with a clean title.
Q In regards to this concern of yours, did you find an answer to this concern of yours?
A At first, I asked Mr. Alcantara and I was answered by him.
Q What was his answer?
A That it was a property with a clean title, that he has shown me the mother title and it is a clean title.
Q Aside from being informed that it is a property with a clean title, did you do anything to answer your
question?
A Yes, sir.
Q What did you do?
A Well, the first step I did was to go to the Land Registration Office.
Q Are you referring to the City Hall of Baguio?
A Yes, the City Hall of Baguio.

26
Q And what did you do in the Registry of Deeds?
A We looked for the title, the original title, sir.
Q When you say we, who was your companion?
A Mr. Alcantara and my present husband, sir.
Q The three (3) of you?
A Yes, sir.
Q What title did you see there?
A We saw the title that was made up in favor of Amado Cruz, sir.
Q And what was the result of your looking up for this title in the name of Amado Cruz?
A We had to be reassured that it was a genuine one, so we asked Atty. Diomampo who heads the
office. We showed him a copy of that title and we were also reassured by him that anything that
was signed by him was as good as it is.
Q Did this Atty. Diomampo reassure you that the title was good?
A He did.
Q After your conversation with the Register of Deeds, what did you do?
A The second step we did was to confer with our lawyer, a friend from RCBC Binondo, Manila, this is
Atty. Nelson Waje.
Q What is your purpose in going to this lawyer?
A We wanted an assurance that we were getting a valid title just in case we think of buying the property.
Q What was the result of your conference with this lawyer?
A He was absolutely certain that that was a valid title.
Q Mrs. Meeks, after looking at the place, going to the Register of Deeds, looking at the title and seeing
your lawyer friend, what decision did you finally make regarding the property?
A We wanted more reassurances, so we proceeded to Banaue, as advised by that same lawyer, there is
another office of the Bureau of Lands. I cannot recall the office but it has something to do with
registration of the old.
Q What is your purpose in going to this Office in Banaue?
A I wanted more reassurances that I was getting a valid title.
Q What was the result of your visit to the Banaue Office?
A We found the title of this property and there was reassurance that it was a clean title and we saw the
mother title under the Hilario family.
Q Mrs. Meeks, when you say Banaue, what particular place is this Banaue?
A It is in Banaue Street in Quezon City, sir.
Q And when you saw the title to this property and the mother title, what was the result of your
investigation, the investigation that you made?
A We were reassured that we were purchasing a valid title, we had a genuine title.
Q When you were able to determine that you had a valid, authentic or genuine title, what did you do?
A That is when I finally thought of purchasing the property.[17]
Telesforo Alfelor II, the purchaser of Lot 4, narrated going through a similar routine:
Q How did you come to know of this place as Asin Road where you are presently residing?
A It was actually through Mrs. Flory Recto who is presently the Branch Manager of CocoBank. She
informed my wife that there is a property for sale at Asin road, and she was the one who introduced
to us Mr. Alcantara, sir.

27
Q When you were informed by Mrs. Recto and when you met with Mr. Alcantara, did you see the
property that was being offered for sale?
A Yes, sir.
Q When did you specifically see the property, if you can recall?
A I would say it is around the third quarter of 1983, sir.
Q When you went to see the place, could you please describe what you saw at that time?
A When we went there the area is still being developed by Mr. Alcantara. As a matter of fact the road
leading to the property is still not passable considering that during that time it was rainy season and
it was muddy, we fell on our way going to the property and walked to have an ocular inspection
and physical check on the area, sir.
xxx
Q What was the improvement, if any, that was in that parcel which you are going to purchase?
A During that time, the riprap of the property is already there, the one-half of the riprap sir.
Q Do you know who was making this improvement at the time that you went there?
A I would understand that it was Marcial Alcantara, sir.
Q After you saw the place and you saw the riprap and you were in the course of deciding to purchase
this property, what else did you do?
A First, I have to consider that the property is clean.
Q How did you go about determining whether the title of the property is clean?
A Considering that Marcial Alcantara is a real estate broker, I went to his office and checked the
documents he has regarding the property.
Q And what was the result of your checking as to whether the title of the property is clean?
A He showed me the copy of the title and it was clean, sir.
Q Aside from going to Mr. Alcantara to check up the title of the property, what else did you do?
A Well, the next thing is I requested his wife to accompany me to the Bureau of Lands or rather the
Registry of Deeds, sir.
Q What registry of Deeds are you referring to?
A The Registry of Deeds of Baguio City, sir.
Q And were you able to see the Register of Deeds regarding what you would like to know?
A Yes, and we were given a certification regarding this particular area that it was clean, sir.
Q What Certification are you referring to?
A It is a Certification duly signed by the employee of the Registry of Deeds Adelina Tabangin, sir.
Q Do you have a copy of that Certification?
A Yes, I have, sir.[18]
The testimonies of Honorato Santos[19] and Josefina Pe[20] were to the same effect.
The non-bank respondents predecessor-in-interest, Marcial Alcantara, was no less thorough:
Q And will you give a brief description of what you do?
A I normally acquire land, quite big tract of land and subdivide it into smaller lots and sold it to some
interested parties.
Q Specifically, Mr. Alcantara, will you please inform the Court in what place in Baguio have you
acquired and subdivided and sold lots?
A Dominican Hill, Leonila Hill, Crystal Cave and Asin Road, sir.
Q You mentioned Asin Road, what particular place in Asin Road are you referring?

28
A That property I bought from Emelita Santiago, sir.
Q When you say you bought it from Emelita Santiago, how did you come to know that Emelita Santiago
is disposing of the property?
A Because of the father, he is the one who offered me the property, sir, Armando Gabriel.
Q Is he also a resident of Baguio?
A He is from Buyagan, La Trinidad, sir.
Q How did you come to know of this Armando Gabriel wanting to sell a property in Asin?
A He approached me in the house, sir. He has acquired a title from the Traders Royal Bank.
Q Can you inform the Honorable Court when you had this conversation with Armando Gabriel on the
sale of the property at Asin Road?
A Later part of March, 1983, sir.
Q Now, when this Armando Gabriel informed you that he wants his property to be sold, what did you
do?
A I went to the place with the agent, sir.
Q When you say you went to the place with the agent, what place?
A Kilometer 2, Asin Road, sir.
Q And when you went there to see the place, did you actually go there to see the place?
A By walking, I parked my car a kilometer away, sir.
Q Is it my understanding that when you went to see the property there were no roads?
A None, sir.
xxx
Q Mr. Alcantara, when you went to see this place at Asin Road last week of March, 1983, will you
please briefly describe how this place looked like at that time?
A The place was mountainous, grassy, there were cogon trees, some of the roads were eroding already,
so we cannot possibly enter the property, sir.
Q At the time you entered the place, was there any visible sign of claim by anyone?
A None, sir.
Q In terms of fence in the area?
A There is no such, sir.
xxx
Q Aside from looking or going to the property, what else did you do to this property prior to your
purchase?
A I investigated it with the Register of Deeds, sir.
Q What is your purpose in investigating it with the Register of Deeds?
A To see if the paper is clean and there are no encumbrances, sir.
Q To whom did you talk?
A To Atty. Ernesto Diomampo, sir.
Q And when you went to the Registry of Deeds to investigate and check, did you have occasion to talk
with Atty. Diomampo?
A Yes, sir.
Q And what was the result of your talk with Atty. Diomampo?
A The papers are clean except to the annotation at the back with the road right of way, sir.

29
Q After making this investigation with the Register of Deeds and talking with Atty. Diomampo, what
else transpired?
A We bought the property, sir.
Q After purchasing the property from Emelita Santiago, could you please tell the Honorable Court what
you did with that deed of sale?
A We registered it with the Register of Deeds for the Certificate of Title because at that time when we
bought the property, Emelita Santiago had it subdivided into six (6) lots, sir.
Q Is it our understanding that prior to your purchase the property was subdivided into six (6) parcels?
A Yes, sir.
Q Could you please inform the Honorable Court if you have any buyers in the subdivision of this
property prior to your purchase?
A Yes, I have.
Q This subdivision of this property, to what office was it brought for action?
A Bureau of Lands, San Fernando, La Union, sir.
Q Now, Mr. Alcantara, at the time that you had this property subdivided by the owner, could you please
inform the Court if there was any claim by any other party opposing the subdivision or claiming
the property?
A None, sir.
Q When the Deed of Sale was executed and you said that you presented it to the Register of Deeds and
after the subdivision already, what action did the Register of Deeds have regarding the matter?
A They approved it and registered it already in six (6) titles, sir.
Q In whose names?
A One (1) title under my name, Amado Cruz and Dr. Sanchez, sir.
Q Initially, Mr. Alcantara, you said that you are the sole purchaser of this entire area of One Thousand
Five Hundred Ninety One (1,591) Square Meters. Now, you are informing this Honorable Court
that one Amado Cruz and one Dr. Sanchez were also issued two (2) titles. Could you explain how
these titles came into their possession?
A Actually, two (2) are our co-owners, sir.
Q So, is it our understanding that the Deed of Sale from Emelita Santiago is in favor of these two (2)
Atty. Cruz and Dr. Sanchez?
A Yes, sir.[21]
Third, between two innocent persons, the one who made it possible for the wrong to be done
should be the one to bear the resulting loss.[22] The Capays filed the notice of lis pendens way back
on March 17, 1967 but the same was not annotated in TRBs title. The Capays and their counsel
Atty. Ramon A. Gonzales knew in 1968 of the extra-judicial foreclosure sale of the property to
TRB and the consolidation of title in the banks name following the lapse of the one-year period of
redemption. But in the next fifteen (15) years or so, they did not bother to find out the status of
their title or whether the liens noted on the original certificate of title were still existing considering
that the property had already been foreclosed. In the meantime, the subject property had undergone
a series of transfers to buyers in good faith and for value. It was not until after the land was
subdivided and developed with the buyers building their houses on the other lots when the Capays
suddenly appeared and questioned the occupants titles. At the very least, the Capays are guilty of
laches. Laches has been defined as the failure or neglect, for an unreasonable and unexplained
length of time, to do that which by exercising due diligence could nor should have been done
earlier; it is negligence or omission to assert a right within a reasonable time, warranting
presumption that the party entitled to it either has abandoned it or declined to assert it.[23]

Verily, the principle on prescription of actions is designed to cover situations such as


the case at bar, where there have been a series of transfers to innocent purchasers for

30
value. To set aside these transactions only to accommodate a party who has slept on
his rights is anathema to good order.

Independently of the principle of prescription of actions working against petitioners,


the doctrine of laches may further be counted against them, which latter tenet finds
application even to imprescriptible actions. x x x.[24]

In De La Calzada-Cierras vs. Court of Appeals,[25] we held:

While it is true that under the law it is the act of registration of the deed of conveyance
that serves as the operative act to convey the land registered under the Torrens System
(Davao Grains, Inc. vs. Intermediate Appellate Court, 171 SCRA 612), the petitioners
cannot invoke said dictum because their action to recover Lot 4362 is barred by the
equitable doctrine of laches.

The act of registering the conveyance to Rosendo was constructive notice to the whole
world of the fact of such conveyance (Heirs of Maria Marasigan vs. Intermediate
Appellate Court, 152 SCRA 253).

But the petitioners complaint to recover the title and possession of Lot 4362 was filed
only on July 21, 1981, twelve (12) years after the registration of the sale to
Rosendo. The petitioners failed and neglected for an unreasonably long time to assert
their right, if any, to the property in Rosendos possession.

Being guilty of laches, the Capays cannot invoke the ruling in Villasor vs. Camon, Levin vs.
Bass and Director of Lands vs. Reyes[26] to the effect that entry of the notice of lis pendens in the
day book (primary entry book) is sufficient to constitute registration and such entry is notice to all
persons of such adverse claim. Certainly, it is most iniquitous for the Capays who, after sleeping
on their rights for fifteen years, to assert ownership over the property that has undergone several
transfers made in good faith and for value and already subdivided into several lots with
improvements introduced thereon by their owners.
In the same vein, the cases cited by the Capays in their first two (2) assignment of errors do
not help them any, as the transferees In said cases were not innocent purchasers for value and in
good faith. In Tuazon vs. Reyes and Siochi,[27] where the land involved therein was sold by
Petronilo David to Vicente Tuazon, it was with a deed containing the recital that the land was in
dispute between the vendor and Roberto Siochi. Tuazon, who was merely subrogated to the rights
of the vendor was aware of the dispute and, furthermore, David did not warrant the title to the
same. In Rivera vs. Moran,[28] Rivera acquired interest in the land before the final decree was
entered in the cadastral proceedings. Rivera, the transferee, was aware of the pending litigation
and, consequently, could not have been considered a purchaser in good faith. Similarly, in Atun,
et al. vs. Nunez, et al.[29] and Laroza vs. Guia,[30] the buyers of the property at the time of their
acquisition knew of the existence of the notice of lis pendens. In contrast to the cited cases, the
non-bank respondents in the case at bar acquired their respective portions of the land with clean
title from their predecessors-in-interest.
II

We come now to TRBs liability towards the Capays.


The Bank unconvincingly tries to wash its hands off the present controversy, and attempts to
shift the blame on the Capays, thus:
xxx

23. The petitioner Bank, during all the time that it was holding the title for over
fourteen (14) years that there was no legal impediment for it to sell said property,

31
Central Bank regulations require that real properties of banks should not be held for
more than five (5) years;

24. The fault of the Register of Deeds in not carrying over the Notice of Lis
Pendens to the new title of the petitioner Bank should not be absorbed by the latter
considering that in all good faith, it was not aware of the existence of said annotation
during all the time that said title was in its possession for almost fourteen (14) years
before the property was sold to Emelita G. Santiago xxx.[31]

TRB concludes that (t)he inaction and negligence of private respondents, allowing ownership
to pass for almost 15 years constitute prescription of action and/or laches.[32]
Section 25 of the General Banking Act,[33] provides that no bank shall hold the possession of
any real estate under mortgage or trust, deed, or the title and possession of any real estate purchased
to secure any debt due to it, for a longer period than five years. TRB, however, admits holding on
to the foreclosed property for twelve (12) years after consolidating title in its name. The bank is,
therefore, estopped from invoking banking laws and regulations to justify its belated disposition
of the property. It cannot be allowed to hide behind the law which it itself violated.
TRB cannot feign ignorance of the existence of the lis pendens because when the property
was foreclosed by it, the notice of lis pendens was annotated on the title. But when TCT No. T-
6595 in the name of the Capay spouses was cancelled after the foreclosure, TCT No. T-16272
which was issued in place thereof in the name of TRB did not carry over the notice of lis pendens.
We do not find the Capays guilty of inaction and negligence as against TRB. It may be recalled
that upon the commencement of foreclosure proceedings by TRB, the Capays filed an action for
prohibition on September 22, 1966 against the TRB before the CFI to stop the foreclosure
sale. Failing in that attempt, the Capays filed a supplemental complaint for the recovery of the
property. The case reached this Court. Prescription or laches could not have worked against the
Capays because they had persistently pursued their suit against TRB to recover their property.
On the other hand, it is difficult to believe TRBs assertion that after holding on to the property
for more than ten (10) years, it suddenly realized that it was acting in violation of the General Bank
Act.What is apparent is that TRB took advantage of the absence of the notice of lis pendens at the
back of their certificate of title and sold the property to an unwary purchaser. This notwithstanding
the adverse decision of the trial court and the pendency of its appeal. TRB, whose timing indeed
smacks of bad faith, thus transferred caused the property without the lis pendens annotated on its
title to put it beyond the Capays' reach. Clearly, the bank acted in a manner contrary to morals,
good customs and public policy, and should be held liable for damages.[34]
Considering, however, that the mortgage in favor of TRB had been declared null and void for
want of consideration and, consequently, the foreclosure proceedings did not have a valid effect,
the Capays would ordinarily be entitled to the recovery of their property. Nevertheless, this remedy
is not now available to the Capays inasmuch as title to said property has passed into the hands of
third parties who acquired the same in good faith and for value. Such being the case, TRB is duty
bound to pay the Capays the fair market value of the property at the time it was sold to Emelita
Santiago, the transferee of TRB.
WHEREFORE, the decision of the Court of Appeals dated February 24, 1994 in CA-G.R.
CV No. 33920, as modified by its Resolution dated August 10, 1994 is hereby AFFIRMED. In
addition, Traders Royal Bank is ordered to pay the Capays the fair market value of the property at
the time it was sold to Emelita Santiago.
This Decision is without prejudice to whatever criminal, civil or administrative action against
the Register of Deeds and/or his assistants that may be taken by the party or parties prejudiced by
the failure of the former to carry over the notice of lis pendens to the certificate of title in the name
of TRB.
SO ORDERED.

32
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.

[1]
Said piece of land had been registered in the name of the Capay spouses since December 14, 1959 under TCT
No. T-6595 (Exh. J), and is more accurately described as follows:
A parcel of land (Lot 27-A-2-A of the subdivision plan (LRC) Psd-24029, being a portion of Lot 27-A-2, described
on plan LRC Psd-23299, LRC (GLRO) Record No.-Civ. Res. 211), situated in the Res. Sec. L, Baguio City, Island of
Luzon.Bounded on the SE., point 3 to 4, by Lot 27-C, (LRC) psd-10738; on the SW., points 4 to 5, by Lot 27-C (LRC)
psd-10738, and points 5 to 1 by Lot 27-A-2-B of the Subdivision plan; and on the NW., and NE., points 1 to 3, by Lot
27-A-2-B of the subdivision plan. x x x containing an area of ONE THOUSAND FIVE HUNDRED AND NINETY
ONE (1,591) SQUARE METERS, more or less.
[2]
Exhibit K.
[3]
Exhibit L.
[4]
TSN, March 29, 1989, p. 12.
[5]
Lot 27-A-2-A-1 with an area of 225 sq. meters was sold to Honorato Santos, who was issued TCT No. T-36177
(Exhibit M). The Santoses later mortaged said lot to the Development Bank of the Philippines.
Lot 27-A-2-A-2 with an area of 290 sq. meters was sold to Cecilio Pe, who was issued TCT No. 36707 (Exhibit N).
Lot 27-A-2-A-3 with an area of 330 sq. meters was sold to Flora Laron Escumbre, who was issued TCT. No. T-36051
(Exhibit O).
Lot 27-A-2-A-4 with an area of 280 sq. meters was sold to Telesforo Alfelor II who was issued TCT No. T-36147
(Exhibit P). The Alfelors later mortgaged the same to the Development Bank of the Philippines.
TCT No. T-36730 (Exhibit Q) covering Lot 27-A-2-A-5 with an area of 235 sq. meters was issued to Dean Roderick
Fernando.
Lot 27-A-2-A-6 with an area of 231 sq. meters was sold to Remedios Oca. TCT NO. T-37437 (Exhibit R) was issued
to the latter.
[6]
G. R. No. 62744.
[7]
Namely, Ruby Ann, Margarita, Rosario, Cynthia, Linda Joy, all surnamed Capay.
[8]
Branch 74, presided by Judge Leonardo M. Rivera.
[9]
Rollo, G.R. No. 118862, pp. 49-57.
[10]
89 Phil. 404 (1951).
[11]
91 Phil. 419 (1952).
[12]
68 SCRA 177 (1975).
[13]
Rollo, G.R. No. 114299, pp. 14-17.
[14]
Rollo, G.R. No. 118862, p. 63.
[15]
Id., at 240.
[16]
Tenio-Obsequio vs. Court of Appeals, 230 SCRA 550 (1994).
[17]
TSN, March 29, 1989, pp. 22-26.
[18]
TSN, March 30, 1989, pp. 3-4, 6-7.
[19]
Id., at 22-23.
[20]
TSN, June 1, 1989, pp. 4-5.
[21]
TSN, March 29, 1989, pp. 5-6; 8-9; 10-12.
[22]
Bacaltos Coal Mines vs. Court of Appeals, 245 SCRA 460 (1995).
[23]
Republic vs. Sandiganbayan, 255 SCRA 438 (1996); Catholic Bishops of Balanga vs. Court of Appeals, 264 SCRA
181 (1996).
[24]
Buenaventura vs. Court of Appeals, 216 SCRA 819 (1992).
[25]
212 SCRA 390 (1992).

33
[26]
See Notes 10, 11, and 12.
[27]
48 Phil. 844 (1926).
[28]
48 Phil. 836 (1976).
[29]
97 Phil. 762 (1955).
[30]
143 SCRA 341 (1985).
[31]
Rollo, G. R. No. 114299, p. 75.
[32]
Ibid.
[33]
Republic Act No. 337, as amended.
[34]
Article 21, Civil Code.

34
FIRST DIVISION

[G.R. No. 175485 : July 27, 2011]

CASIMIRO DEVELOPMENT CORPORATION, PETITIONER, VS. RENATO L. MATEO, RESPONDENT.

DECISION

BERSAMIN, J.:

The focus of this appeal is the faith that should be accorded to the Torrens title that the seller holds at the
time of the sale.

In its decision promulgated on August 31, 2006, [1] the Court of Appeals (CA) declared that the respondent
and his three brothers were the rightful owners of the land in litis, and directed the Office of the Register of
Deeds of Las Piñas City to cancel the transfer certificate of title (TCT) registered under the name of
petitioner Casimiro Development Corporation (CDC) and to issue in its place another TCT in favor of the
respondent and his three brothers. Thereby, the CA reversed the judgment of the Regional Trial Court (RTC)
rendered on May 9, 2000 (dismissing the respondent's complaint for quieting of title and reconveyance upon
a finding that CDC had been a buyer in good faith of the land in litis and that the respondent's suit had
already been time-barred).

Aggrieved, CDC brought its petition for review on certiorari.

Antecedents

The subject of this case is a registered parcel of land (property) with an area of 6,693 square meters, more
or less, located in Barrio Pulang Lupa, Las Piñas City, that was originally owned by Isaias Lara, [2]the
respondent's maternal grandfather. Upon the death of Isaias Lara in 1930, the property passed on to his
children, namely: Miguela, Perfecta and Felicidad, and a grandson, Rosauro (son of Perfecta who had
predeceased Isaias in 1920). In 1962, the co-heirs effected the transfer of the full and exclusive ownership
to Felicidad (whose married surname was Lara-Mateo) under an agreement denominated as Pagaayos Na
Gawa Sa Labas Ng Hukuman.

Felicidad Lara-Mateo had five children, namely: Laura, respondent Renato, Cesar, Candido, Jr. and
Leonardo. With the agreement of the entire Lara-Mateo family, a deed of sale covering the property was
executed in favor of Laura, who, in 1967, applied for land registration. After the application was granted,
Original Certificate of Title (OCT) No. 6386 was issued in Laura's sole name.

In due course, the property now covered by OCT No. 6386 was used as collateral to secure a succession of
loans. The first loan was obtained from Bacoor Rural Bank (Bacoor Bank). To repay the loan to Bacoor Bank
and secure the release of the mortgage, Laura borrowed funds from Parmenas Perez (Perez), who, however,
required that the title be meanwhile transferred to his name. Thus, OCT No. 6386 was cancelled and
Transfer Certificate of Title (TCT) No. 438959 was issued in the name of Perez. Subsequently, Laura
recovered the property by repaying the obligation with the proceeds of another loan obtained from Rodolfo
Pe (Pe), resulting in the cancellation of TCT No. 438595, and in the issuance of TCT No. S-91595 in Laura's
name. She later executed a deed of sale in favor of Pe, leading to the issuance of TCT No. S-91738 in the
name of Pe, who in turn constituted a mortgage on the property in favor of China Banking Corporation
(China Bank) as security for a loan. In the end, China Bank foreclosed the mortgage, and consolidated its
ownership of the property in 1985 after Pe failed to redeem. Thus, TCT No. (99527) T-11749-A was issued
in the name of China Bank.

In 1988, CDC and China Bank negotiated and eventually came to terms on the purchase of the property,
with China Bank executing a deed of conditional sale for the purpose. On March 4, 1993, CDC and China
Bank executed a deed of absolute sale over the property. Resultantly, on March 29, 1993, CDC was issued
TCT No. T-34640 in its own name.

In the meanwhile, on February 28, 1991, Felicidad died intestate.

On June 6, 1991, CDC brought an action for unlawful detainer in the Metropolitan Trial Court (MeTC) in Las
Piñas City against the respondent's siblings, namely: Cesar, Candido, Jr., and Leonardo, and the other
occupants of the property. Therein, the defendants maintained that the MeTC did not have jurisdiction over
the action because the land was classified as agricultural; that the jurisdiction belonged to the Department
of Agrarian Reform Adjudication Board (DARAB); that they had been in continuous and open possession of
the land even before World War II and had presumed themselves entitled to a government grant of the
land; and that CDC's title was invalid, considering that the land had been registered before its being
declared alienable. [3]

On October 19, 1992, the MeTC ruled in favor of CDC, viz:

The Court, after careful consideration of the facts and the laws applicable to this case[,] hereby resolves:

1.On the issue of jurisdiction.

The defendants alleged that the land in question is an agricultural land by presenting a Tax Declaration

35
Certificate classifying the land as "FISHPOND."The classification of the land in a tax declaration certificate as
a "fishpond" merely refers to the use of the land in question for the purpose of real property taxation. This
alone would not be sufficient to bring the land in question under the operation of the Comprehensive
Agrarian Reform Law.

2.On the issue of open and adverse possession by the defendants.

It should be noted that the subject land is covered by a Transfer Certificate of Title in the name of plaintiffs'
predecessor-in-interest China Banking Corporation. Certificates of Title under the Torrens System is
indefeasible and imprescriptible.As between two persons claiming possession, one having a [T]orrens title
and the other has none, the former has a better right.

3.On the issue of the nullity of the Certificate of Title.

The defense of the defendants that the subject property was a forest land when the same was originally
registered in 1967 and hence, the registration is void[,] is not for this Court to decide[,] for lack of
jurisdiction. The certificate of title over the property must be respected by this Court until it has been
nullified by a competent Court.

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff[,] ordering the
defendants

1.[sic] and all persons claiming right[s] under it to vacate the subject premises located at Pulang Lupa I, Las
Piñas, Metro Manila and surrender the possession of the same to herein plaintiff;

2.to pay the plaintiff reasonable compensation for the use and occupation of the subject premises hereby
fixed at (P100.00) one hundred pesos a month starting November 22, 1990 (the time when the demand
letter to vacate was given) until defendants actually vacate the property;

No pronouncement as to costs and attorney's fees.

SO ORDERED. [4]

The decision of the MeTC was assailed in the RTC via petition for certiorari and prohibition. The RTC resolved
against CDC, and held that the MeTC had acted without jurisdiction because the land, being a fishpond, was
agricultural; hence, the dispute was within the exclusive jurisdiction of the DARAB pursuant to Republic Act
No. 6657 (Comprehensive Agrarian Reform Law of 1988). [5]

CDC appealed to the CA, which, on January 25, 1996, found in favor of CDC, declaring that the MeTC had
jurisdiction. As a result, the CA reinstated the decision of the MeTC. [6]

On appeal (G.R. No. 128392), the Court affirmed the CA's decision in favor of CDC, ruling thusly:

WHEREFORE, the petition is DENIED and the Court of Appeals' Decision and Resolution in CA- G.R. SP No.
34039, dated January 25, 1996 and February 21, 1997 respectively, are AFFIRMED. No costs.

SO ORDERED.[7]

The decision in G.R. No. 128392 became final.

Nonetheless, on June 29, 1994, the respondent brought an action for quieting of title, reconveyance of four-
fifths of the land, and damages against CDC and Laura in the RTC in Las Piñas City entitled Renato L.
Mateo v. Casimiro Development Corporation and Laura Mateo de Castro. In paragraph 4 of his complaint, he
stated that he was "bringing this action to quiet title on behalf of himself and of his three (3) brothers -
Cesar, Leonardo, and Candido, Jr., all surnamed MATEO - in his capacity as one of the co-owners of a parcel
of land situated at Barrio Pulang Lupa, Municipality of Las Piñas, Metro Manila."

On May 9, 2001, the RTC held in favor of CDC, disposing:

WHEREFORE, and by strong preponderance of evidence, judgment is hereby rendered in favor of the
defendant Casimiro Development Corporation and against the plaintiff Renato L. Mateo by (1) Dismissing the
complaint, and upholding the validity and indefeasibility of Transfer Certificate of Title No. T-34640 in the
name of Casimiro Development Corporation; (2) Ordering the plaintiff Renato Mateo to pay defendant
Casimiro Development Corporation the sum of [a] P200,000.00 as compensatory damages; [b] P200,000.00
as attorney's fees; and [c] to pay the costs.

SO ORDERED.[8]

On appeal (C.A.-G.R. CV No. 71696), the CA promulgated its decision on August 31, 2006, reversing the
RTC and declaring CDC to be not a buyer in good faith due to its being charged with notice of the defects
and flaws of the title at the time it acquired the property from China Bank, and decreeing:

WHEREFORE, the Decision dated May 9, 2001 of Branch 225, Regional Trial Court, Las Piñas City in Civil
Case No. 94-2045 is hereby REVERSED and SET ASIDE and a new one rendered:

36
(1) Declaring appellant Renato Mateo and his brothers and co-owners Cesar, Candido, Jr., and Leonardo, all
surnamed Mateo as well as his sister, Laura Mateo de Castro as the rightful owners of the parcel of land,
subject of this case; and

(2) Ordering the Register of Deeds of Las Piñas City, Metro-Manila to cancel Transfer Certificate of Title No.
T-34640 under the name of appellee Casimiro Development Corporation, and that a new one be issued in
favor of the appellant and his co-heirs and siblings, mentioned above as co-owners pro indiviso of the said
parcel.

(3) No pronouncement as to cost.

SO ORDERED. [9]

The CA denied CDC's motion for reconsideration.

Hence, this appeal, in which CDC urges that the CA committed serious errors of law, [10]
as follows:

(A) xxx in failing to rule that the decree of registration over the Subject Property is incontrovertible and no
longer open to review or attack after the lapse of one (1) year from entry of such decree of registration in
favor of Laura Mateo de Castro.

(B) xxx in failing to rule that the present action is likewise barred by res judicata.

(C) xxx in failing to rule that the instant action for quieting of title and reconveyance under PD No. 1529
cannot prosper because the Subject Property had already been conveyed and transferred to third parties
who claimed adverse title for themselves.

(D) xxx in failing to rule that the action of respondent for "quieting of title, reconveyance and damages" is
barred by laches.

(E) xxx in ruling that the Subject Property must be reconveyed to respondent because petitioner Casimiro
Development Corporation is not a "purchaser in good faith."

CDC argues that it was a buyer in good faith; and that the CA did not rule on matters that fortified its title in
the property, namely: (a) the incontrovertibility of the title of Laura; (b) the action being barred by laches
and res judicata; and (c) the property having been conveyed to third parties who had then claimed adverse
title.

The respondent counters that CDC acquired the property from China Bank in bad faith, because it had actual
knowledge of the possession of the property by the respondent and his siblings; that CDC did not actually
accept delivery of the possession of the property from China Bank; and that CDC ignored the failure of
China Bank to warrant its title.

Ruling

We grant the petition.

1.
Indefeasibility of title in
the name of Laura

As basis for recovering the possession of the property, the respondent has assailed the title of Laura.

We cannot sustain the respondent.

There is no doubt that the land in question, although once a part of the public domain, has already been
placed under the Torrens system of land registration. The Government is required under the Torrens system
of registration to issue an official certificate of title to attest to the fact that the person named in the
certificate is the owner of the property therein described, subject to such liens and encumbrances as thereon
noted or what the law warrants or reserves. [11] The objective is to obviate possible conflicts of title by giving
the public the right to rely upon the face of the Torrens certificate and to dispense, as a rule, with the
necessity of inquiring further. The Torrens system gives the registered owner complete peace of mind, in
order that he will be secured in his ownership as long as he has not voluntarily disposed of any right over
the covered land. [12]

The Government has adopted the Torrens system due to its being the most effective measure to guarantee
the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and
recognized. If a person purchases a piece of land on the assurance that the seller's title thereto is valid, he
should not run the risk of being told later that his acquisition was ineffectual after all, which will not only be
unfair to him as the purchaser, but will also erode public confidence in the system and will force land
transactions to be attended by complicated and not necessarily conclusive investigations and proof of
ownership. The further consequence will be that land conflicts can be even more abrasive, if not even
violent. The Government, recognizing the worthy purposes of the Torrens system, should be the first to
accept the validity of titles issued thereunder once the conditions laid down by the law are satisfied. [13]

37
Yet, registration under the Torrens system, not being a mode of acquiring ownership, does not create or
vest title. [14] The Torrens certificate of title is merely an evidence of ownership or title in the particular
property described therein. [15] In that sense, the issuance of the certificate of title to a particular person
does not preclude the possibility that persons not named in the certificate may be co-owners of the real
property therein described with the person named therein, or that the registered owner may be holding the
property in trust for another person. [16]

Nonetheless, it is essential that title registered under the Torrens system becomes indefeasible and
incontrovertible. [17]

The land in question has been covered by a Torrens certificate of title (OCT No. 6386 in the name of Laura,
and its derivative certificates) before CDC became the registered owner by purchase from China Bank. In all
that time, neither the respondent nor his siblings opposed the transactions causing the various transfers. In
fact, the respondent admitted in his complaint that the registration of the land in the name of Laura alone
had been with the knowledge and upon the agreement of the entire Lara-Mateo family. It is unthinkable,
therefore, that the respondent, fully aware of the exclusive registration in her sister Laura's name, allowed
more than 20 years to pass before asserting his claim of ownership for the first time through this case in
mid-1994. Making it worse for him is that he did so only after CDC had commenced the ejectment case
against his own siblings.

Worthy of mention is that Candido, Jr., Leonardo, and Cesar's defense in the ejectment case brought by
CDC against them was not predicated on a claim of their ownership of the property, but on their being
agricultural lessees or tenants of CDC. Even that defense was ultimately rejected by this Court by observing
in G.R. No. 128392 as follows:

With regard to the first element, the petitioners have tried to prove that they are tenants or agricultural
lessees of the respondent corporation, CDC, by showing that the land was originally owned by their
grandfather, Isaias Lara, who gave them permission to work the land, and that CDC is merely a successor-
in-interest of their grandfather. It must be noted that the petitioners failed to adequately prove their
grandfather's ownership of the land. They merely showed six tax declarations. It has been held by this Court
that, as against a transfer certificate of title, tax declarations or receipts are not adequate proofs of
ownership. Granting arguendo that the land was really owned by the petitioners' grandfather, petitioners did
not even attempt to show how the land went from the patrimony of their grandfather to that of CDC.
Furthermore, petitioners did not prove, but relied on mere allegation, that they indeed had an agreement
with their grandfather to use the land.

As for the third element, there is apparently no consent between the parties. Petitioners were unable to
show any proof of consent from CDC to work the land. For the sake of argument, if petitioners were able to
prove that their grandfather owned the land, they nonetheless failed to show any proof of consent from their
grandfather to work the land. Since the third element was not proven, the fourth element cannot be present
since there can be no purpose to a relationship to which the parties have not consented. [18]

The respondent's attack against the title of CDC is likewise anchored on his assertion that the only purpose
for having OCT No. 6386 issued in the sole name of Laura was for Laura to hold the title in trust for their
mother. This assertion cannot stand, however, inasmuch as Laura's title had long ago become indefeasible.

Moreover, the respondent's suit is exposed as being, in reality, a collateral attack on the title in the name of
Laura, and for that reason should not prosper. Registration of land under the Torrens System, aside from
perfecting the title and rendering it indefeasible after the lapse of the period allowed by law, also renders
the title immune from collateral attack. [19] A collateral attack occurs when, in another action to obtain a
different relief and as an incident of the present action, an attack is made against the judgment granting the
title. This manner of attack is to be distinguished from a direct attack against a judgment granting the title,
through an action whose main objective is to annul, set aside, or enjoin the enforcement of such judgment if
not yet implemented, or to seek recovery if the property titled under the judgment had been disposed of. [20]

2.
CDC was an innocent purchaser for value

The CA found that CDC acquired the property in bad faith because CDC had knowledge of defects in the title
of China Bank, including the adverse possession of the respondent's siblings and the supposed failure of
China Bank to warrant its title by inserting an as-is, where-is clause in its contract of sale with CDC.

The CA plainly erred in so finding against CDC.

To start with, one who deals with property registered under the Torrens system need not go beyond the
certificate of title, but only has to rely on the certificate of title. [21] He is charged with notice only of such
burdens and claims as are annotated on the title. [22] The pertinent law on the matter of burdens and claims
is Section 44 of the Property Registration Decree, [23] which provides:

Section 44.Statutory liens affecting title. -- Every registered owner receiving a certificate of title in
pursuance of a decree of registration, and every subsequent purchaser of registered land taking
a certificate of title for value and in good faith, shall hold the same free from all
encumbrances except those noted on said certificate and any of the following encumbrances which may be
subsisting, namely:

38
First.Liens, claims or rights arising or existing under the laws and Constitution of the Philippines which are
not by law required to appear of record in the Registry of Deeds in order to be valid against subsequent
purchasers or encumbrances of record.

Second.Unpaid real estate taxes levied and assessed within two years immediately preceding the acquisition
of any right over the land by an innocent purchaser for value, without prejudice to the right of the
government to collect taxes payable before that period from the delinquent taxpayer alone.

Third.Any public highway or private way established or recognized by law, or any government irrigation
canal or lateral thereof, if the certificate of title does not state that the boundaries of such highway or
irrigation canal or lateral thereof have been determined.

Fourth.Any disposition of the property or limitation on the use thereof by virtue of, or pursuant to,
Presidential Decree No. 27 or any other law or regulations on agrarian reform.

In short, considering that China Bank's TCT No. 99527 was a clean title, that is, it was free from any lien or
encumbrance, CDC had the right to rely, when it purchased the property, solely upon the face of the
certificate of title in the name of China Bank. [24]

The CA's ascribing of bad faith to CDC based on its knowledge of the adverse possession of the respondent's
siblings at the time it acquired the property from China Bank was absolutely unfounded and unwarranted.
That possession did not translate to an adverse claim of ownership that should have put CDC on actual
notice of a defect or flaw in the China Bank's title, for the respondent's siblings themselves, far from
asserting ownership in their own right, even characterized their possession only as that of mere agricultural
tenants. Under no law was possession grounded on tenancy a status that might create a defect or inflict a
flaw in the title of the owner. Consequently, due to his own admission in his complaint that the respondent's
own possession was not any different from that of his siblings, there was really nothing - factually or legally
speaking - that ought to have alerted CDC or, for that matter, China Bank and its predecessors-in-interest,
about any defect or flaw in the title.

The vendee's notice of a defect or flaw in the title of the vendor, in order for it to amount to bad faith,
should encompass facts and circumstances that would impel a reasonably cautious person to make further
inquiry into the vendor's title, [25] or facts and circumstances that would induce a reasonably prudent man to
inquire into the status of the title of the property in litigation. [26] In other words, the presence of anything
that excites or arouses suspicion should then prompt the vendee to look beyond the certificate and to
investigate the title of the vendor appearing on the face of said certificate. [27]

And, secondly, the CA grossly erred in construing the as-is, where-is clause contained in the deed of
salebetween CDC (as vendee) and China Bank (as vendor) as proof or manifestation of any bad faith on the
part of CDC. On the contrary, the as-is, where-is clause did not affect the title of China Bank because it
related only to the physical condition of the property upon its purchase by CDC. The clause only placed on
CDC the burden of having the occupants removed from the property. In a sale made on an as-is, where-
is basis, the buyer agrees to take possession of the things sold "in the condition where they are found and
from the place where they are located," because the phrase as-is, where-is pertains solely "to the physical
condition of the thing sold, not to its legal situation" and is "merely descriptive of the state of the thing sold"
without altering the seller's responsibility to deliver the property sold to the buyer. [28]

What the foregoing circumstances ineluctably indicate is that CDC, having paid the full and fair price of the
land, was an innocent purchaser for value, for, according to Sandoval v. Court of Appeals: [29]

A purchaser in good faith is one who buys property of another, without notice that some other person has a
right to, or interest in, such property and pays a full and fair price for the same, at the time of such
purchase, or before he has notice of the claim or interest of some other persons in the property.He buys the
property with the belief that the person from whom he receives the thing was the owner and could convey
title to the property.A purchaser cannot close his eyes to facts which should put a reasonable man on his
guard and still claim he acted in good faith.

WHEREFORE, we grant the petition for review on certiorari; set aside the decision of the Court of Appeals
in CA-GR. CV No. 71696; dismiss the complaint in Civil Case No. 94-2045; and declare Transfer Certificate
of Title No. T-34640 in the name of Casimiro Development Corporation valid and subsisting.

The respondent shall pay the costs of suit.

SO ORDERED.

Corona, C.J, (Chairperson), Leonardo-De Castro, Del Castillo, and Villarama, Jr., JJ., concur.

Endnotes:

Rollo, pp. 55-76; penned by Associate Justice Arturo G. Tayag, with Associate Justice Remedios A.
[1]

Salazar-Fernando and Associate Justice Noel G. Tijam, concurring.

39
[2]
Spelled in the complaint of the respondent as Isayas.

[3]
Mateo v. Court of Appeals, G.R. No. 128392, April 29, 2005, 457 SCRA 549, 551.

[4]
Id., pp. 551-552.

[5]
Id., pp. 552-553.

[6]
Id., pp. 555-558.

[7]
Id., pp. 560-561.

[8]
Rollo, p. 89.

[9]
Id., p. 75.

[10]
Id., pp. 23-24.

Republic v. Guerrero, G.R. No. 133168, March 28, 2006,485 SCRA 424; citing Noblejas, Land Titles and
[11]

Deeds, 1986 ed., p. 32.

[12]
Republic v. Court of Appeals, G.R. Nos. L-46626-27, December 27, 1979, 94 SCRA 865, 874.

[13]
Tenio-Obsequio v. Court of Appeals, G.R. No. 107967, March 1, 1997, 230 SCRA 550.

[14]
Heirs of Teodoro Dela Cruz v. Court of Appeals, G.R. No. 117384, October 21, 1998, 298 SCRA 172, 180.

Development Bank of the Philippines v. Court of Appeals, G.R. No. 129471, April 28, 2000, 331 SCRA
[15]

267; Garcia v. Court of Appeals, G.R. No. 133140, August 10, 1999, 312 SCRA 180, 190; Rosario v. Court of
Appeals, G.R. No. 127005, July 19, 1999, 310 SCRA 464; Republic of the Philippines v. Court of Appeals,
G.R. No. 11611, January 21, 1999, 301 SCRA 366; Strait Times, Inc. v. Court of Appeals, G.R. No. 126673,
August 28, 1998, 294 SCRA 714, 726..

Heirs of Clemente Ermac v. Heirs of Vicente Ermac, G.R. No. 149679, May 30, 2003, 403 SCRA 291,
[16]

298; citing Lee Tek Sheng v. Court of Appeals, G.R. 115402, July 15, 1998, 292 SCRA 544, 548.

[17]
Natalia Realty Corporation v. Vallez, G.R. Nos. 78290-94, May 23, 1989, 173 SCRA 534, 542.

[18]
Mateo v. Court of Appeals, supra note 3, p. 560.

[19]
Madrid v. Mapoy, G. R. No. 150887, August 14, 2009, 596 SCRA 14, 26.

[20]
Madrid v. Mapoy, supra.

Sandoval v. Court of Appeals, G.R. No. 106657, August 1, 1996, 260 SCRA 283; Santosv. Court of
[21]

Appeals, G.R. No. 90380, September 13, 1990, 189 SCRA 550; Unchuanv. Court of Appeals, G.R. No. L-
78775, May 31, 1988, 161 SCRA 710; Bailon-Casilaov. Court of Appeals, G.R. No. L-78178, April 15, 1988,
160 SCRA 738; Director of Landsv. Abad, 61 Phil. 479, 487(1935); Quimsonv. Suarez, 45 Phil. 901, 906
(1924).

Agricultural and Home Extension Development Groupv. Court of Appeals, G.R. No. 92310, September 3,
[22]

1992, 213 SCRA 563; Unchuan v. Court of Appeals, supra.

Presidential Decree No. 1529 entitled Amending and Codifying the Laws Relative to Registration of
[23]

Property and for Other Purposes.

[24]
Seno v. Mangubat, G.R. No.L-44339, December 2, 1987, 156 SCRA 113, 128.

Santosv. Court of Appeals,supra, note 21;Gonzalesv. Intermediate Appellate Court, G.R. No.L-69622,
[25]

January 29, 1988, 157 SCRA 587.

State Investment House, Inc.v. Court of Appeals, G.R. No. 115548, March 5, 1996, 254 SCRA
[26]

368; Capitol Subdivisionv. Province of Negros Occidental, G.R. No. L-16257, January 31, 1963, 7 SCRA 60,
70, Mañacop, Jr.v. Cansino, G.R. No. L-13971, February 27, 1961, 1 SCRA 572, Leung Yeev. F.L. Strong
Machinery Co. & Williamson, 37 Phil. 644 (1918), Philippine National Bankv. Court of Appeals, G.R. No. L-
57757, August 31, 1987, 153 SCRA 435, 442; Gonzalesv. Intermediate Appellate Court, G.R. No. 69622,
January 29, 1988, 157 SCRA 587, 595.

Sandoval v. Court of Appeals, supra, note 21; Pinov. Court of Appeals, G.R. No. 94114, June 19, 1991,
[27]

198 SCRA 434; Centenov. Court of Appeals, G.R. No. L-40105, November 11, 1985, 139 SCRA 545,
555; Fulev. Legare, G.R. No. L-17951, February 28, 1963, 7 SCRA 351; William H. Anderson and Co.,v.
Garcia, 64 Phil. 506 (1937).

Asset Privatization Trust v. T.J. Enterprises, G.R. No. 167195, May 8, 2009, 587 SCRA 481, 487-
[28]

488; National Development Company v. Madrigal Wan Hai Lines Corporation, G.R. No. 148332, September
30, 2003, 412 SCRA 375, 387.

40
[29]
Supra, note 21, pp. 296-297.

41
FIRST DIVISION

[G.R. No. 101387. March 11, 1998]

SPOUSES MARIANO and ERLINDA LABURADA, represented by their


attorney-in-fact, MANUEL SANTOS, JR., petitioners, vs. LAND
REGISTRATION AUTHORITY, respondent.

DECISION
PANGANIBAN, J:

In an original land registration proceeding in which applicants have been adjudged to


have a registrable title, may the Land Registration Authority (LRA) refuse to issue a
decree of registration if it has evidence that the subject land may already be included in
an existing Torrens certificate of title? Under this circumstance, may the LRA be
compelled by mandamus to issue such decree?

The Case

These are the questions confronting this Court in this special civil action for
mandamus[1] under Rule 65 which asks this Court to direct the Land Registration Authority
(LRA) to issue the corresponding decree of registration in Land Registration Case (LRC)
No. N-11022.[2]

The Facts

Petitioners were the applicants in LRC Case No. N-11022 for the registration of Lot
3-A, Psd-1372, located in Mandaluyong City. On January 8, 1991, the trial court, acting
as a land registration court, rendered its decision disposing thus:[3]

WHEREFORE, finding the application meritorious and it appearing that the


applicants, Spouses Marciano [sic] and Erlinda Laburada, have a registrable
title over the parcel of land described as Lot 3A, Psd-1372, the Court
declares, confirms and orders the registration of their title thereto.

As soon as this decision shall become final, let the corresponding decree be
issued in the name of spouses Marciano [sic] and Erlinda Laburada, both of
legal age, married, with residence and postal address at No. 880 Rizal Ave.,
Manila.

After the finality of the decision, the trial court, upon motion of petitioners, issued an
order[4] dated March 15, 1991 requiring the LRA to issue the corresponding decree of
registration.However, the LRA refused. Hence, petitioners filed this action for
mandamus.[5]
Attached to the LRAs comment on the petition is a report dated April 29, 1992 signed
by Silverio G. Perez, director of the LRA Department of Registration, which explained
public respondents refusal to issue the said decree:[6]

42
In connection with the Petition for Mandamus filed by Petitioners through
counsel, dated August 27, 1991 relative to the above-noted case/record, the
following comments are respectfully submitted:

On March 6, 1990, an application for registration of title of a parcel of land, Lot


3-A of the subdivision plan Psd-1372, a portion of Lot 3, Block No. 159, Swo-
7237, situated in the Municipality of San Felipe Neri, Province of Rizal was
filed by Spouses Marciano [sic] Laburada and Erlinda Laburada;

After plotting the aforesaid plan sought to be registered in our Municipal Index
Sheet, it was found that it might be a portion of the parcels of land decreed in
Court of Land Registration (CLR) Case Nos. 699, 875 and 817, as per plotting
of the subdivision plan (LRC) Psd-319932, a copy of said subdivision plan is
Annex A hereof;

The records on file in this Authority show that CLR Case Nos. 699, 875 & 917
were issued Decree Nos. 240, 696 and 1425 on August 25, 1904, September
14, 1905 and April 26, 1905, respectively;

On May 23, 1991, a letter of this Authority was sent to the Register of Deeds,
Pasig, Metro Manila, a copy is Annex B hereof, requesting for a certified true
copy of the Original Certificate of Title No. 355, issued in the name of
Compania Agricola de Ultramar;

On May 20, 1991, a certified true copy of the Original Certificate of Title (OCT)
No. 355 was received by this Authority, a copy is Annex C hereof, per
unsigned letter of the Register of Deeds of Pasig, Metro Manila, a copy is
Annex D hereof;

After examining the furnished OCT NO. 355, it was found that the technical
description of the parcel of land described therein is not readable, that
prompted this Authority to send another letter dated April 15, 1992 to the
Register of Deeds of Pasig, Metro Manila, a copy is Annex E hereof,
requesting for a certified typewritten copy of OCT No. 355, or in lieu thereof a
certified copy of the subsisting certificate of title with complete technical
description of the parcel of land involved therein. To date, however, no reply
to our letter has as yet been received by this Authority;

After verification of the records on file in the Register of Deeds for the
Province of Rizal, it was found that Lot 3-B of the subdivision plan Psd-1372
being a portion of Lot No. 3, Block No. 159, Plan S.W.O. -7237, is covered by
Transfer Certificate of Title No. 29337 issued in the name of Pura Escurdia
Vda. de Buenaflor, a copy is attached as Annex F hereof. Said TCT No.
29337 is a transfer from Transfer Certificate of Title No. 6595. However, the
title issued for Lot 3-A of the subdivision plan Psd-1372 cannot be located
because TCT No. 6595 consisting of several sheets are [sic] incomplete.

For this Authority to issue the corresponding decree of registration sought by


the petitioners pursuant to the Decision dated January 8, 1991 and Order
dated March 15, 1991, it would result in the duplication of titles over the same
parcel of land, and thus contravene the policy and purpose of the Torrens

43
registration system, and destroy the integrity of the same (G.R. No. 63189,
Pedro E. San Jose vs. Hon. Eutropio Migrio, et al.,); x x x.

In view of the foregoing explanation, the solicitor general prays that the petition be
dismissed for being premature.
After the filing of memoranda by the parties, petitioners filed an urgent motion, dated
September 4, 1995,[7] for an early resolution of the case. To this motion, the Court
responded with a Resolution, dated October 23, 1995, which ordered:[8]

x x x Acting on the urgent motion for early resolution of the case dated 04
September 1995 filed by petitioner Erlinda Laburada herself, the Court
resolved to require the Solicitor General to report to the Court in detail, within
fifteen (15) days from receipt of this Resolution, what concrete and specific
steps, if any, have been taken by respondent since 19 May 1993 (the date of
respondents Memorandum) to actually verify whether the lot subject of LRC
Case No. N-11022 (Regional Trial Court of Pasig, Branch 68), described as
Lot 3A, Psd-1372 and situated in Mandaluyong City, might be a portion of the
parcels of land decreed in Court of Land Registration Case (CLR) Nos. 699,
875 and 917.

On December 29, 1995, the solicitor general submitted his


compliance with the above resolution, to which was attached a letter dated November
27, 1997 of Felino M. Cortez, chief of the LRA Ordinary and Cadastral Decree Division,
which states:[9]
With reference to your letter dated November 13, 1995, enclosed herewith is a copy
of our letter dated 29 April 1992 addressed to Hon. Ramon S. Desuasido stating among
others that Lot 3-B, of the subdivision plan Psd-1372, a portion of Lot 3, Blk. 159, Swo-
7237 is really covered by Transfer Certificate of Title No. 29337 issued in the name of
Pura Escurdia Vda. de Bunaflor [sic] which was transfer[ed] from Transfer Certificate of
Title No. 6395, per verification of the records on file in the Register of Deeds of
Rizal. However, the title issued for the subject lot, Lot 3-A of the subdivision plan Psd-
1372, cannot be located because TCT #6595 is incomplete.
It was also informed [sic] that for this Authority to issue the corresponding decree of
registration sought by the petitioners pursuant to the decision dated January 9, 1991 and
order dated March 15, 1991, would result in the duplication of [the] title over the same
parcel of land, and thus contravene the policy and purposes of the torrens registration
system, and destroy the integrity of the same (O.R. No. 63189 Pedro K. San Jose vs.
Hon. Eutropio Migrio, et. al.).
Hence, this case will be submitted to the Court for dismissal to avoid duplication of
title over the same parcel of land.

Issue

Petitioners submit this lone issue:[10]

Whether or not Respondent Land Registration Authority can be compelled to


issue the corresponding decree in LRC Case No. N-11022 of the Regional
Trial Court of Pasig, Branch LXVIII (68).

The Courts Ruling

44
The petition is not meritorious.

Sole Issue: Is Mandamus the Right Remedy?

Petitioners contend that mandamus is available in this case, for the LRA unlawfully
neglect[ed] the performance of an act which the law specifically enjoins as a duty resulting
from an office x x x. They cite four reasons why the writ should be issued. First, petitioners
claim that they have a clear legal right to the act being prayed for and the LRA has the
imperative duty to perform because, as land registration is an in rem proceeding, the
jurisdictional requirement of notices and publication should be complied with. [11] Since
there was no showing that the LRA filed an opposition in this proceeding, it cannot refuse
to issue the corresponding decree. Second, it is not the duty of the LRA to take the
cudgels for the private persons in possession of OCT No. 355, TCT No. 29337 snf [sic]
TCT No. 6595. Rather, it is the sole concern of said private person-holders of said titles
to institute in a separate but proper action whatever claim they may have against the
property subject of petitioners application for registration. Third, petitioners contend that
they suffered from the delay in the issuance of their title, because of the failure of the
Register of Deeds of Pasig, Metro Manila to furnish LRA of [sic] the certified copies of
TCT No. 29337 and TCT No. 6595 notwithstanding the lack of opposition from the holders
of said titles.[12] Fourth, the State consented to its being sued in this case[;] thus, the
legislature must recognize any judgment that may be rendered in this case as final and
make provision for its satisfaction.[13]
On the other hand, the LRA, represented by the solicitor general, contends that the
decision of the trial court is not valid, considering that [the] Court of First Instance has no
jurisdiction to decree again the registration of land already decreed in an earlier land
registration case and [so] a second decree for the same land is null and void. [14] On the
question of whether the LRA can be compelled to issue a decree of registration, the
solicitor general cites Ramos vs. Rodriguez[15] which held:[16]

Nevertheless, even granting that procedural lapses have been committed in


the proceedings below, these may be ignored by the Court in the interest of
substantive justice. This is especially true when, as in this case, a strict
adherence to the rules would result in a situation where the LRA would be
compelled to issue a decree of registration over land which has already been
decreed to and titled in the name of another.

It must be noted that petitioners failed to rebut the LRA report and only
alleged that the title of the Payatas Estate was spurious, without offering any
proof to substantiate this claim. TCT No. 8816, however, having been issued
under the Torrens system, enjoys the conclusive presumption of validity. As
we declared in an early case, (t)he very purpose of the Torrens system would
be destroyed if the same land may be subsequently brought under a second
action for registration. The application for registration of the petitioners in this
case would, under the circumstances, appear to be a collateral attack of TCT
No. 8816 which is not allowed under Section 48 of P.D. 1529. (Underscoring
supplied.)

We agree with the solicitor general. We hold that mandamus is not the proper remedy
for three reasons.

First: Judgment Is Not Yet Executory

45
Contrary to the petitioners allegations, the judgment they seek to enforce in this petition
is not yet executory and incontrovertible under the Land Registration Law. That is, they
do not have any clear legal right to implement it. We have unambiguously ruled that a
judgment of registration does not become executory until after the expiration of one year
after the entry of the final decree of registration. We explained this in Gomez vs. Court
of Appeals:[17]

It is not disputed that the decision dated 5 August 1981 had become final and
executory. Petitioners vigorously maintain that said decision having become
final, it may no longer be reopened, reviewed, much less, set aside. They
anchor this claim on section 30 of P.D. No. 1529 (Property Registration
Decree) which provides that, after judgment has become final and executory,
the court shall forthwith issue an order to the Commissioner of Land
Registration for the issuance of the decree of registration and certificate of
title. Petitioners contend that section 30 should be read in relation to section
32 of P.D. 1529 in that, once the judgment becomes final and executory under
section 30, the decree of registration must issue as a matter of course. This
being the law, petitioners assert, when respondent Judge set aside in his
decision, dated 25 March 1985, the decision of 5 August 1981 and the order
of 6 October 1981, he clearly acted without jurisdiction.

Petitioners contention is not correct. Unlike ordinary civil actions, the


adjudication of land in a cadastral or land registration proceeding does not
become final, in the sense of incontrovertibility until after the expiration of one
(1) year after the entry of the final decree of registration. This Court, in several
decisions, has held that as long as a final decree has not been entered by the
Land Registration Commission (now NLTDRA) and the period of one (1) year
has not elapsed from date of entry of such decree, the title is not finally
adjudicated and the decision in the registration proceeding continues to be
under the control and sound discretion of the court rendering it.

Second: A Void Judgment Is Possible


That the LRA hesitates in issuing a decree of registration is understandable. Rather
than a sign of negligence or nonfeasance in the performance of its duty, the LRAs reaction
is reasonable, even imperative. Considering the probable duplication of titles over the
same parcel of land, such issuance may contravene the policy and the purpose, and
thereby destroy the integrity, of the Torrens system of registration.
In Ramos vs. Rodriguez,[18] this Court ruled that the LRA is mandated to refer to the
trial court any doubt it may have in regard to the preparation and the issuance of a decree
of registration. In this respect, LRA officials act not as administrative officials but as
officers of said court, and their act is the act of the court. They are specifically called upon
to extend assistance to courts in ordinary and cadastral land registration proceedings.
True, land registration is an in rem proceeding and, therefore, the decree of
registration is binding upon and conclusive against all persons including the government
and its branches, irrespective of whether they were personally notified of the application
for registration, and whether they filed an answer to said application. This stance of
petitioners finds support in Sec. 38 of Act 496 which provides:

SEC. 38. If the court after hearing finds that the applicant or adverse claimant
has title as stated in his application or adverse claim and proper for
registration, a decree of confirmation and registration shall be entered. Every
decree of registration shall bind the land, and quiet title thereto, subject only to

46
the exceptions stated in the following section. It 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 competent Court of First Instance a petition for review within
one year after entry of the decree, provided no innocent purchaser for value
has acquired an interest. Upon the expiration of said term of one year, every
decree or certificate of title issued in accordance with this section shall be
incontrovertible. If there is any such purchaser, the decree of registration shall
not be opened, but shall remain in full force and effect forever, subject only to
the right of appeal herein before provided: Provided, however, That no decree
or certificate of title issued to persons not parties to the appeal shall be
cancelled or annulled. But any person aggrieved by such decree in any case
may pursue his remedy by action for damages against the applicant or any
other person for fraud in procuring the decree. Whenever the phrase innocent
purchaser for value or an equivalent phrase occurs in this Act, it shall be
deemed to include an innocent lessee, mortgagee, or other encumbrancer for
value. (As amended by Sec. 3, Act No. 3621; and Sec. 1, Act No. 3630, and
PD 1529, Sec. 39).

However, we must point out that the letters of Silverio G. Perez and Felino M. Cortez,
dated April 29, 1992 and November 27, 1995, respectively, clearly stated that, after
verification from the records submitted by the Registry of Deeds of Rizal, the property
which petitioners are seeking to register -- Lot 3-A of Subdivision Plan Psd-1372 -- is a
portion of Lot No. 3, Block 159, Plan S.W.O.-7237, over which TCT No. 6595 has already
been issued. Upon the other hand, in regard to Lot 3-B of said Lot 3, TCT No. 29337 was
issued in lieu of TCT No. 6595.Thus, the LRAs refusal to issue a decree of registration is
based on documents which, if verified, may render the judgment of the trial court void.
It is settled that a land registration court has no jurisdiction to order the registration of
land already decreed in the name of another in an earlier land registration case. A second
decree for the same land would be null and void, [19] since the principle behind original
registration is to register a parcel of land only once.[20] Thus, if it is proven that the land
which petitioners are seeking to register has already been registered in 1904 and 1905,
the issuance of a decree of registration to petitioners will run counter to said principle. As
ruled in Duran vs. Olivia:[21]

As the title of the respondents, who hold certificates of title under the Land
Registration Act becomes indefeasible, it follows that the Court of First
Instance has no power or jurisdiction to entertain proceedings for the
registration of the same parcels of land covered by the certificates of title of
the respondents. Such has been our express ruling in the case of Rojas, et al.
v. The City of Tagaytay, et al., G.R. No. L-13333, prom. November 24, 1959,
in which this Court, through Mr. Justice Barrera, said:

As thus viewed, the pivotal issue is one of jurisdiction on the part of the lower
court. All the other contentions of respondent regarding possession in good
faith, laches or claims of better right, while perhaps valid in an appropriate
ordinary action, as to which we here express no opinion, can not avail in the

47
case at bar if the court a quo, sitting as land registration court, had no
jurisdiction over the subject matter in decreeing on June 30, 1957, the
registration, in favor of respondent city, of a lot already previously decreed
and registered in favor of the petitioners.

In a quite impressive line of decisions, it has been well-settled that a Court of


First Instance has no jurisdiction to decree again the registration of land
already decreed in an earlier land registration case and a second decree for
the same land is null and void. This is so, because when once decreed by a
court of competent jurisdiction, the title to the land thus determined is already
a res judicata binding on the whole world, the proceedings being in rem. The
court has no power in a subsequent proceeding (not based on fraud and
within the statutory period) to adjudicate the same title in favor of another
person. Furthermore, the registration of the property in the name of first
registered owner in the Registration Book is a standing notice to the world that
said property is already registered in his name. Hence, the latter applicant is
chargeable with notice that the land he applied for is already covered by a title
so that he has no right whatsoever to apply for it. To declare the later title valid
would defeat the very purpose of the Torrens system which is to quiet title to
the property and guarantee its indefeasibility. It would undermine the faith and
confidence of the people in the efficacy of the registration law.

Third: Issuance of a Decree Is Not a Ministerial Act


The issuance of a decree of registration is part of the judicial function of courts and is
not a mere ministerial act which may be compelled through mandamus. Thus, this Court
held in Valmonte and Jacinto vs. Nable: [22]

Moreover, after the rendition of a decision by a registration or cadastral court,


there remain many things to be done before the final decree can be issued,
such as the preparation of amended plans and amended descriptions,
especially where the decision orders a subdivision of a lot, the segregation
therefrom of a portion being adjudicated to another party, to fit the said
decision. As said by this Court in the case of De los Reyes vs. De Villa, 48
Phil., 227, 234:

Examining section 40, we find that the decrees of registration must be stated
in convenient form for transcription upon the certificate of title and must
contain an accurate technical description of the land. This requires trained
technical men. Moreover, it frequently occurs that only portions of a parcel of
land included in an application are ordered registered and that the limits of
such portions can only be roughly indicated in the decision of the court. In
such cases amendments of the plans and sometimes additional surveys
become necessary before the final decree can be entered. That can hardly be
done by the court itself; the law very wisely charges the chief surveyor of the
General Land Registration Office with such duties(Administrative Code,
section 177).

Furthermore, although the final decree is actually prepared by the Chief of the
General Land Registration Office, the administrative officer, the issuance of
the final decree can hardly be considered a ministerial act for the reason that
said Chief of the General Land Registration Office acts not as an

48
administrative officer but as an officer of the court and so the issuance of a
final decree is a judicial function and not an administrative one (De los
Reyes vs. De Villa, supra). x x x (Underscoring supplied.)

Indeed, it is well-settled that the issuance of such decree is not compellable by


mandamus because it is a judicial act involving the exercise of discretion.[23] Likewise,
the writ of mandamus can be awarded only when the petitioners legal right to the
performance of the particular act which is sought to be compelled is clear and
complete.[24] Under Rule 65 of the Rules of Court, a clear legal right is a right which is
indubitably granted by law or is inferable as a matter of law. If the right is clear and the
case is meritorious, objections raising merely technical questions will be
disregarded.[25] But where the right sought to be enforced is in substantial doubt or
dispute, as in this case, mandamus cannot issue.

A court may be compelled by mandamus to pass and act upon a question submitted
to it for decision, but it cannot be enjoined to decide for or against one of the parties.[26] As
stated earlier, a judicial act is not compellable by mandamus. [27] The court has to decide
a question according to its own judgment and understanding of the law. [28]
In view of the foregoing, it is not legally proper to require the LRA to issue a decree
of registration. However, to avoid multiplicity of suits and needless delay, this Court
deems it more appropriate to direct the LRA to expedite its study, to determine with finality
whether Lot 3-A is included in the property described in TCT No. 6595, and to submit a
report thereon to the court of origin within sixty (60) days from receipt of this Decision,
after which the said court shall act with deliberate speed according to the facts and the
law, as herein discussed.
WHEREFORE, the petition is hereby DISMISSED but the case is REMANDED to the
court of origin in Pasig City. The Land Registration Authority, on the other hand, is
ORDERED to submit to the court a quo a report determining with finality whether Lot 3-A
is included in the property described in TCT No. 6595, within sixty (60) days from
notice. After receipt of such report, the land registration court, in turn, is ordered to ACT,
with deliberate and judicious speed, to settle the issue of whether the LRA may issue the
decree of registration, according to the facts and the law as herein discussed.
SO ORDERED.
Davide, Jr. (Chairman), Bellosillo, Vitug and Quisumbing, JJ., concur.

[1]
This case was filed prior to the issuance of Revised Administrative Circular 1-95 which directs that
actions against quasi-judicial bodies in general should be filed in the Court of Appeals.
[2] Per decision of the Regional Trial Court of Pasig, Metro Manila (now Pasig City), Branch LXVIII.
[3] Rollo, p 5.
[4] Rollo, p 6.
[5]
The case was deemed submitted for resolution on March 25, 1997, upon this Courts receipt of the
public respondents reply in compliance with the Resolution of the Court dated July 10, 1996.
[6] Rollo, pp. 48-49.
[7] Rollo, pp. 83-84.
[8] Rollo, p 85; original text in upper case.
[9] Rollo, p 113.
[10] Rollo, p 70; petitioners memorandum, p 2.
[11] Rollo, p 71; petitioners memorandum, p 3

49
[12] Rollo, p 72; petitioners memorandum, p 4.
[13] Rollo, p 73; petitioners memorandum, p 5.
[14]
Rollo, p 63; the LRAs rejoinder, p 2; citing Rojas, et al., vs. City of Tagaytay and Hon. Jimenez, 106
Phil 512, November 24, 1959; Duran vs. Olivia, 3 SCRA 154, September 29, 1961.
[15] 244 SCRA 418, 423-424, May 29, 1995, per Romero, J.
[16] Rollo, p. 165; the LRAs reply, p. 5.
[17]
168 SCRA 503, December 15, 1988, per Padilla, J.; citing Section 32, PD 1529; Capio vs. Capio, 94
Phil 113; Valmonte vs. Nable, 85 Phil 256; Afalla and Pinanoc vs. Rosauro, 60 Phil 622; Roman Catholic
Bishops of Cebu vs. Phil Railway Co., 49 Phil 540; De los Reyes vs. De Villa, 48 Phil 227;
Pamintuan vs. San Agustin, 43 Phil 558, June 22, 1922; Director of Lands vs. Busuego, 12 SCRA 678.
[18] Supra, at 422.
[19]
Metropolitan Waterworks and Sewerage Systems vs. Court of Appeals, 215 SCRA 783, November 17,
1992, citing Pamintuan vs. San Agustin, 43 Phil 558, June 22, 1922.
[20] PD 1529 provides:
SEC. 14. Who may apply. -- The following persons may file in the proper Court of First Instance an
application for registration of title to land, whether personally or through their duly authorized
representatives:
(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of alienable and disposable lands of the public
domain under a bona fide claim of ownership since June 12, 1945, or earlier.
xxx xxx xxx
[21]
Supra, at pp 159-160, per Labrador, J; citing Pamintuan vs. San Agustin, supra; Timbol vs. Diaz, 44
Phil 587, 590, March 5, 1923; Perez vs. Bolbon, 50 Phil 791, 795, September 30, 1927;
Singian vs. Manila Railroad Co., 60 Phil 192, 203, June 19, 1934; Addison vs. Payatas Estate
Improvement Co., 60 Phil 673, September 27, 1934; Sideco, et al. vs. Aznar, 92 Phil 952, April 24, 1953.
[22] 85 Phil 256, 260-261, December 29, 1949, per Tuason, J.
[23] Go vs. Court of Appeals, 252 SCRA 564, 567, January 29, 1996.
[24]
Garces vs. Court of Appeals, 259 SCRA 99, July 17, 1996, University of San Agustin, Inc. vs. CA, 230
SCRA 761, March 7, 1994; Tamano vs. Manglapus, 214 SCRA 567, October 13, 1992;
Marcelo vs. Tantuico, Jr., 142 SCRA 439, July 7, 1986; Samson vs. Barrios, 63 Phil 198, July 20, 1936.
[25] Pelileo vs. Ruiz Castro, 85 Phil 272, December 29, 1949.
[26]
Mateo vs. Court of Appeals, 196 SCRA 280, 284, April 25, 1991; Diokno vs. Rehabilitation Finance
Corporation, 91 Phil 608, July 11, 1952.
[27] Go vs. Court of Appeals, supra.
[28] Lupisan vs. Alfonso and Arguieta, 78 Phil 842, July 31, 1947.

50
FIRST DIVISION

[G.R. No. 112905. February 3, 2000.]

THE HEIRS OF PEDRO LOPEZ, EUGENIO LOPEZ DE LEON, PASCUAL LOPEZ DE LEON, ANTONIO
GUICO LOPEZ, FORTUNATO GUICO LOPEZ, MIGUEL GUICO LOPEZ, ERLINDA LOCERO LOPEZ, TING
LOPEZ DE LEON, RUFINA LAYAO LOPEZ, LUISITA LOPEZ DE LEON, MACARIO LOPEZ DE LEON,
FELISA LOPEZ DE LEON, PRINTIS L. DE LEON, FLOVIANA LOPEZ VELASCO, LOURDES LOPEZ DE
LEON, LAGRIMAS LOPEZ DE LEON, ROSARIO LOPEZ DE LEON, RESURRECCION LOPEZ DE LEON
and RICARDA LOPEZ DE LEON, Petitioners, v. HONESTO C. DE CASTRO, MARIA SOCORRO DE
CASTRO married to ANTONIO PERIGRINA, FRANCISCO DE CASTRO, FAUSTINO DE CASTRO,
EPIFANIA C. VDA. DE CASTRO, and their successors-in-interest, Respondents.

DECISION

YNARES-SANTIAGO, J.:

In this case, the two applications for registration of the same parcel of land were filed twelve years apart in
different branches of the same Court of First Instance, but a certificate of title was issued in one case while
the other is still pending appeal.
chanro bles vi rt ual lawli bra ry

The applicants in the earlier case are now before this Court on a petition for review on certiorari. They assert
that the decision ordering the issuance of a decree of registration in their favor, while promulgated
subsequent to the issuance of the certificate of title in the names of the second applicants, should be
"executed" and that the certificate of title issued to the latter should be nullified.

The facts of the case are as follows: cha nro b1es vi rtua l 1aw lib ra ry

On July 25, 1956, Pedro Lopez, Et. Al. filed an application for the registration of a 69-hectare parcel of land
in Tagaytay City with the Court of First Instance of Cavite, Branch III under Land Registration Case No. 299
and LRC Record No. 11617. On January 29, 1957, the court issued an order of general default, excepting
only the Director of Lands.

On June 24, 1957, Assistant Fiscal Jose M. Legaspi, representing the Municipality of Silang, Cavite, filed a
motion to lift the order of general default and submitted an opposition on behalf of the municipality. The
opposition was later amended on September 16, 1966 alleging that a portion of the land applied for which
the municipality had leased to private persons had been its patrimonial property since 1930 or earlier. The
municipality further alleged that in a registration case entitled "Mariano Lopez de Leon v. Municipality of
Silang" (CA-G.R. No. 8161-R), the Court of Appeals found that the applicants had never been in possession
of the land sought to be registered.

In its answer to the amended opposition, the applicants claimed that a part of the whole tract of land they
sought to register was their inheritance, which includes Lot No. 2 of plan PSU-51901 with an area of 119
hectares. However, it had to be excluded in the application for registration of the 69-hectare land in Cavite
upon the recommendation of the Chief Surveyor of the General Land Registration Office because it is located
in the province of Laguna. Similarly, Lot No. 1 of PSU-51901 that lies within Tagaytay City had been
excluded from the registration proceedings under G.L.R.O. Rec. No. 53498 or Land Registration Case No.
2201 in the Court of First Instance of Laguna. 1

Nevertheless, the municipality filed a motion to dismiss the application for original registration of Lot No. 1
on the ground of res judicata. The applicants, on the other hand, contended that the principle of res judicata
is not applicable because the subject matter of CA-G.R. No. 8161-R (Mariano Lopez de Leon v. Municipality
of Silang) was Lot No. 2 or the portion of the land in Laguna.

On February 7, 1969, the lower court issued an order denying the motion to dismiss for lack of merit on the
ground that the oppositor municipality had no personality to intervene considering that Lot No. 1 was
outside of its territorial limits. The lower court held: jgc:cha nrob les.com .ph

". . . Even if said land was communal property of the Municipality of Silang, by virtue of its incorporation into
(the) city of Tagaytay it became the property of the latter. Hence, the Municipality of Silang has no
personality to appear in this (sic) proceedings. If any right of action exists, it accrues in favor of the City of
Tagaytay and the same should be pursued by the said city." 2

The oppositor municipality filed a motion for reconsideration of the said order. On July 23, 1970, the court
issued an order stating that "in order not to impede whatever action the movant" might take against the
order of February 7, 1969, said motion should be denied. On January 12, 1971, the applicants filed a motion
praying that the clerk of court be commissioned to receive evidence for them it appearing that the order of

51
July 23, 1970 had become final and executory "by virtue of which the Municipality of Silang no longer ha(d)
any personality to appear in these proceedings." 3 The court granted said motion and directed the clerk of
court to submit a report on the matter.

In his report dated April 15, 1971, Clerk of Court Rolando D. Diaz stated that since time immemorial,
Micaela, Fernando, Ciriaco and Catalino, all surnamed De los Reyes, owned and possessed the parcel of land
in question. On November 3, 1870, they sold the land to Ambrocio Carrillo Trinidad and Francisco
Dimaranan. On September 15, 1892, the property passed in ownership to Pedro Lopez de Leon, Sr. and
Maxima Carrillo Trinidad, the daughter and sole heir of Ambrocio Carrillo Trinidad. Pedro and Maxima
remained in possession of the property until their death when their children, applicants Pedro Lopez,
Mariano Lopez de Leon, Pastor Lopez de Leon, Eulogio Lopez, Clara Lopez, Ricarda Lopez and Rosario Lopez
took over ownership and possession thereof. Upon their death, their respective heirs succeeded over the
property and, on February 25, 1971, they partitioned it. The agricultural property was under the supervision
of Domingo Opeña who planted portions thereof to rice and other agricultural products.

The clerk of court thus recommended that the court confirm its order of general default, approve his report,
and register the property in the names of the applicants in accordance with the extrajudicial partition of the
property. 4

On April 19, 1971, the court 5 accordingly rendered a decision approving the report of the clerk of court and
ordering that once the decision becomes final, the corresponding decree of registration of title be issued in
favor of the applicants. 6

The oppositor Municipality of Silang interposed an appeal from the said decision of the land registration
court to the Court of Appeals. On May 2, 1979, the Court of Appeals rendered a Decision 7 dismissing the
appeal "for lack of personality of the oppositor-appellant Municipality of Silang to interfere in the registration
proceedings below." 8 Undaunted, the oppositor municipality filed with this Court a petition for review
on certiorari docketed as G.R. No. 51054 (Municipality of Silang v. Court of Appeals) which was denied on
September 19, 1979. The municipality’s motion for reconsideration was likewise denied with finality for lack
of merit on October 24, 1979. 9 On November 9, 1979, judgment was entered in the said case. 10

Meanwhile, in the course of examining the records for the purpose of issuing the decree of registration in
favor of Pedro Lopez, Et Al., the Land Registration Commission discovered that Lot No. 1, plan Psu-51901
had been decreed in favor of private respondents Honesto de Castro, Et. Al. 11

Further investigation revealed that sometime in 1967, 12 Honesto de Castro, Et. Al. filed before the Court of
First Instance of Cavite, Branch IV in Tagaytay City, an application for the registration of the same parcel of
land under Land Registration Case No. TG-95 and LRC Rec. No. N-33292. The case was called for hearing on
March 18, 1968. Eight (8) days later or on March 26, 1968, the court 13 promulgated a decision
adjudicating the land located at Barrio Iruhin, Tagaytay City, more particularly described as Plan Psu-51901-
Amd., in favor of said applicants and directing that upon the finality of the decision, the corresponding
decree of registration be issued. 14 The ruling of the court was based on its finding that one Hermogenes
Orte, who originally owned the land sought to be registered, sold it in 1932 to Marciano de Castro. The deed
evidencing said sale was destroyed during the Japanese occupation. De Castro continued possession of the
land until his death on April 26, 1940. His wife Epifania and their children named Maria Socorro, Francisco,
Honesto, Romualdo, Felicitacion, Faustino and Felixberto continued possession of the property who declared
the land for assessment and taxation purposes in Cabuyao, Laguna. However, upon learning that the
property lies in Tagaytay City, the applicants declared it in their names in said city.chanrobles vi rt ual lawlibra ry

The cause of the conflicting claims over the same land was never explained because the head of the
geodetic engineers of the Land Registration Commission did not appear in court in Land Registration Case
No. 299. Hence, on August 19, 1981, the CFI of Cavite, Branch III 15 issued an order declaring that the
court had lost jurisdiction to hear the case, without, however, dismissing the case.

Seven (7) years later, or on June 28, 1988, the heirs of Pedro Lopez, Et. Al. filed a complaint "for execution
of judgment and cancellation of land titles of the defendants and their successors-in-interest" before the
Regional Trial Court of Cavite, Branch 18, at Tagaytay City. Docketed as Civil Case No. TG-1028, the
complaint named as defendants Honesto C. de Castro, Maria Socorro de Castro married to Antonio Perigrina,
Francisco de Castro "widow", Faustino de Castro, Felixberto de Castro, Epifania C. Vda. de Castro and their
successors-in-interest.

The complaint alleged the facts pertinent to enforce the judgment of April 19, 1971. The plaintiffs,
petitioners herein, alleged further that, upon the filing of their application for registration with the CFI of
Cavite, Branch III at Cavite City, said court acquired jurisdiction over the res because land registration
proceedings are in rem and therefore, the CFI of Cavite, Branch IV at Tagaytay City could not have acquired
jurisdiction over the same res by virtue of De Castros’ application for registration. They claimed that no less
than this Court had recognized the jurisdiction of Branch III in Cavite City when it passed upon the
correctness of the lower court’s ruling in favor of Pedro Lopez, Et. Al. Contending that the decision of Branch
III on April 19, 1971 declaring that title to the land belonged to Pedro Lopez, Et. Al. had become final and
executory on June 18, 1980, they asserted that they were the lawful owners of the land. However, they had
been unduly deprived ownership and possession thereof on account of its "wrongful registration" in the
name of the defendants "by means of fraud and misrepresentation." As a result of their undue deprivation of
ownership, possession and enjoyment of the property notwithstanding that the question of ownership had
been settled in their favor, plaintiffs claimed that they suffered actual and moral damages. Claiming that the
judgment sought to be executed had not been barred by the statute of limitations, they prayed as follows:
1aw libra ry
chan rob1es v irt ual

52
WHEREFORE, plaintiffs pray for the judgment to effect: chan rob1es v irt ual 1aw lib rary

1. Execution of judgment of the decision of the then Court of First Instance (CFI) Branch III, Cavite, dated
April 19, 1971 by the Hon. Judge Alfredo Catolico which became final on June 18, 1980;

2. Ordering the National Land Titles and Deeds Registration Administration and the Register of Deeds of
Tagaytay City to cancel the titles of the land in question under the names of the defendants and their
successors in interest and that new title to the same parcel of land be issued to plaintiffs;

3. Ordering all the occupants of the questioned land to vacate the premises and deliver possession thereof
to the plaintiffs;

4. Ordering the defendants and/or their successors in interest to pay plaintiffs or its (sic) heirs and/or
successors in interest actual damages (in) the amount of P200,000.00 or the amount that may be proven
during the hearing and trial of this case;

5. Ordering the defendants and/or their successors in interest to pay plaintiffs the sum of P200,000.00 for
and as attorney’s fees;

6. To pay plaintiffs exemplary damages in the amount of P100,000.00 or the sum that may be proven
during the trial;

7. Ordering the defendants to pay the costs of suit.

Plaintiffs further pray for such other reliefs just and proper under the premises. 16

In their answer with compulsory counterclaim, the defendants interposed the defenses of prescription,
laches and/or estoppel and failure to state a cause of action. They averred that they were no longer the
owners of the property as it had been sold "absolutely and unconditionally to innocent third parties for
valuable consideration and in good faith." They contended that in view of the indefeasibility of their title to
the property, even the title of their successors-in-interest can not be subject to collateral attack. They
claimed that Branch III of the CFI in Cavite should have "remanded" the records of LRC Case No. 299 or LRC
Record No. 11617 to the same CFI branch in Tagaytay City to which the "legal and proper jurisdiction to
hear and decide that particular case belonged." They asserted that the complaint should have been directed
by the plaintiffs against the Assurance Fund under the provisions of P.D. No. 1529. Alleging that the "very
precipitate and wrongful suit" caused them mental anguish, serious anxiety, social humiliation and similar
injury, they claimed moral damages of P500,000.00, nominal damages of P100,000.00 and attorney’s fees
of P300,000.00.

On May 21, 1990, the RTC of Cavite, Branch 18 in Tagaytay City 17 rendered the decision in Civil Case No.
TG-1028 dismissing the complaint for being "improper and premature." The court likewise dismissed the
defendants’ counterclaims for "their dearth of sufficient legal, factual and evidentiary support." 18

The lower court held that the decision of Branch III that became final on June 18, 1980, could not be
enforced against defendants considering that they were not parties in LRC Record No. 11617. Neither could
it order the cancellation of the titles issued to defendants because the LRC and/or the Register of Deeds of
Tagaytay City had not been impleaded as parties to the case and therefore the court did not acquire
jurisdiction over them.

The lower court held further that because the case was covered by Act No. 496 and/or P.D. No. 1529 which
are special laws, Section 6, Rule 39 of the Rules of Court on execution of judgment by independent action
cannot be invoked. The court also ruled that: chanrob 1es vi rtua l 1aw lib rary

Treating the second issue raised by plaintiffs, the then Court of First Instance of Cavite, Branch IV, or this
Court, validly acquired jurisdiction over the case filed by defendants Honesto de Castro, Et Al., in LRC Case
No. TG-95. The records show that herein defendants as petitioner(s) in that case, complied with all the
jurisdictional requirements of law, conferring jurisdiction upon this Court to try that case and lent validly
(sic) upon its proceedings. As admitted by the plaintiffs themselves, this Court was not aware of the
existence of LRC Record No. 11617, pending before the other Branch of this Court, in the same manner that
they, or the plaintiffs themselves, did not also know the existence of LRC Case No. TG-95 before this Court.
This Court is assured that good faith pervaded among the parties concerned, in the conduct of its
proceedings, all procedural requirements having been punctiliously complied with and no irregularity or
breach of law having been committed. So that the decision rendered by this Court in that case is valid and
subsisting, for all intents and purposes and can be nullified only under circumstances and through
procedures mandated by law. Hence, the corresponding decree of registration issued in TG-95 and the
original certificates of titles issued to defendants in consequence thereof, are all valid and binding until
declared otherwise, in a case directly assailing their validity, and of course, by a competent court. And by
express provision of law, the same are insulated from any collateral attack. 19

The court concluded that the complaint was in the nature of a collateral attack on the validity of the
certificate of title issued in favor of the defendants and their successors-in-interest because," (b)y its caption
and averments, the validity of the title in question, is not directly assailed." chan roble s.com : law lib ra ry

Petitioners filed a motion for reconsideration of said decision, which was denied on May 29, 1991. It
reiterated that the plaintiffs’ failure to implead the Administrator of the NLRDRA, the Register of Deeds of
Tagaytay City and the possessors of the property in question was a fatal procedural error because they were

53
indispensable parties over which the court should acquire jurisdiction. Their inclusion as defendants in the
case was necessary in order that their title to the property could be directly attacked. Petitioners should
have availed of the remedy provided by Section 32 of P.D. No. 1529 and their failure to observe that law
was a "colossal error" because once issued, a certificate of title becomes indefeasible, "completely insulated
from any form of collateral attack assailing its validity." 20

Petitioners sought recourse before the Court of Appeals, which dismissed the appeal on November 29, 1993.
21 Stressing the indefeasibility of title under the Torrens System of land registration, the Court of Appeals
echoed the lower court’s ruling that the decree of registration in favor of respondents cannot be reopened or
set aside in a "collateral proceeding such as the one in the case at bar which has for its objective the
execution of a judgment which apparently has become dormant, thus appellants’ insistence that it be
revived." Citing Article 1544 of the Civil Code on sale of property to different vendees which it opined had a
"persuasive influence" in the resolution of the appeal, it held that "in case land has been registered in the
name of two different persons, the earlier in date (of registration) shall prevail." Nonetheless, emphasizing
that the land in question has been transferred to a third person, the Court of Appeals ruled that the title
issued in favor of respondents should be "maintained in their status quo, until the proper court shall have
determined their priorities, and the equities resulting therefrom." 22

Consequently, petitioners filed the instant petition for review on certiorari under Rule 45 of the Rules of
Court, raising the following assignment of errors: chan rob1e s virtual 1aw l ibra ry

1. THE RESPONDENT COURT OF APPEALS COMMITTED A SERIOUS REVERSIBLE ERROR WHEN IT FAILED TO
RULE ON THE VITAL AND PIVOTAL ISSUE THAT THE TRIAL COURT (CFI TAGAYTAY CITY, BRANCH IV), HAS
NO JURISDICTION OVER THE SUBSEQUENT LAND REGISTRATION CASE FILED BY THE APPLICANTS BELOW,
PRIVATE RESPONDENTS HEREIN, AND IN DECREEING THE REGISTRATION OF TITLE OVER THE SAID LOTS
WHICH WERE ALREADY PREVIOUSLY THE SUBJECT OF REGISTRATION PROCEEDINGS BY ANOTHER COURT
(CFI CAVITE, BRANCH III) IN A PREVIOUS LAND REGISTRATION CASE IN FAVOR OF THE PETITIONERS
HEREIN WHICH WAS SUSTAINED BY THE COURT OF APPEALS AND EVEN BY THIS HONORABLE COURT.

2. THE RESPONDENT COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR WHEN IT LIKEWISE
FAILED TO RESOLVE THE ISSUE OF THE PROPRIETY OF THE INSTANT ACTION FILED BY THE PETITIONERS
FOR EXECUTION OF JUDGMENT OF CFI BRANCH III, WHICH IS EQUIVALENT TO A REVIVAL OF THE
JUDGMENT.

3. THE RESPONDENT COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN MERELY RELYING
ON THE DOCTRINE OF INDEFEASIBILITY OF TITLE, COLLATERAL ATTACK ON THE RESPONDENTS’ TITLES,
AND PRIORITY IN THE REGISTRATION AND ISSUANCE OF THE TITLES IN FAVOR OF THE RESPONDENTS,
WHICH RELIANCE ARE MISPLACED AND UNAVAILING IN VIEW OF THE LACK OF JURISDICTION OF THE
LOWER COURT TO TAKE COGNIZANCE OF THE LAND REGISTRATION CASE FILED BY THE PRIVATE
RESPONDENTS AND TO ISSUE THE DECREE OF REGISTRATION.

4. THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE PETITIONERS CANNOT
DIVEST PRIVATE RESPONDENTS OF THE DISPUTED LOTS BY FILING THE INSTANT ACTION FOR EXECUTION
OF JUDGMENT AND ASSAILING THE VALIDITY OF RESPONDENTS’ TITLES.

5. THE RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT THE PETITIONERS
ARE RIGHTFULLY AND LEGALLY ENTITLED TO THE LOTS IN QUESTION.

In all cases where the authority to proceed is conferred by a statute and the manner of obtaining jurisdiction
is mandatory, the same must be strictly complied with, or the proceedings will be utterly void. 23

When petitioners applied for the registration of Lot No. 1 before the CFI in Cavite City in 1956, the
governing law then as regards the matter of jurisdiction was the Judiciary Act of 1948 or Republic Act No.
296. Section 52 of that law providing for the permanent stations of district judges or judges of Courts of
First Instance stated that for the Seventh Judicial District that included the province of Cavite, there would
be two judges in Cavite City. 24 The law did not create other branches of the CFI in the province of Cavite
outside of the City of Cavite.

It was on June 22, 1963 when Republic Act No. 3749 took effect that a CFI branch in Tagaytay City was set
up. 25 That amendment to Republic Act No. 296 provided that four judges would preside "over the Courts of
First Instance of the Province of Cavite and the Cities of Cavite, Tagaytay and Trece Martires" who would be
"judges of the first, second, third and fourth branches" of that court. Because the rule has always been that
the court having territorial jurisdiction over the property should take cognizance of its registration, 26 upon
the creation of the Tagaytay City branch, petitioners’ application for registration should have been
transferred to that court inasmuch as the property involved is located in that city.

It appears, however, that the Cavite City branch remained the venue of petitioners’ application for
registration, apparently on account of the following provision of Rep. Act No. 3749: chanrob1e s virtual 1aw libra ry

SECTION 6. Wherever an additional branch or branches of the Court of First Instance is or are established in
this Act in the same place where there is an existing court or courts of first instance, all cases already filed
in the latter court or courts shall be heard, tried and decided by such latter court or courts.

Notably, the law is not clear on whether or not the phrase "in the same place" refers to the judicial
district/province or the place where a branch of the court is stationed. Hence, considering the general rule
that once a court acquires jurisdiction over a case it remains with that court until its full termination, 27 the

54
phrase "in the same place" should be interpreted as referring to the province of Cavite. The Cavite City
branch of the CFI of Cavite thus correctly retained jurisdiction over the application for registration because
there was no jurisdictional question involved in the proceedings in Land Registration Case No. 299. What
was in question was whether the Cavite City branch of the Cavite CFI was the proper venue for said case
upon the creation of the Tagaytay City branch. As this Court once said: chanro b1es vi rtua l 1aw li bra ry

Venue and jurisdiction are entirely distinct matters. Jurisdiction may not be conferred by consent or waiver
upon a court which otherwise would have no jurisdiction over the subject-matter of an action; but the venue
of an action as fixed by statute may be changed by the consent of the parties and an objection that the
plaintiff brought his suit in the wrong county may be waived by the failure of the defendant to make a timely
objection. In either case, the court may render a valid judgment. Rules as to jurisdiction can never be left to
the consent or agreement of the parties, whether or not a prohibition exists against their alteration. 28

Venue is procedural, not jurisdictional, and hence may be waived. It is meant to provide convenience to the
parties, rather than restrict their access to the courts as it relates to the place of trial. 29 Thus, the last
paragraph of Section 51 of Rep. Act No. 296 provided that in land registration cases, the Secretary of
Justice, who was then tasked with the administration and supervision of all courts, may transfer land
registration courts "to any other place more convenient to the parties." This implied that Land Registration
Case No. 299 could be retained in the Cavite City branch of the CFI if it would be convenient to the
applicants who had been used to transacting business with that branch; the case did not have to be
transferred to Tagaytay City. Parenthetically, Circular No. 46 dated July 3, 1963 that then Secretary of
Justice Juan R. Liwag addressed to all CFI judges and clerks of court in line with the enforcement of Rep. Act
No. 3947, merely quotes Section 6 thereof. Said circular does not elucidate on whether cases should be
transferred to the branches that had territorial jurisdiction over them.

Petitioners’ claim that this Court had "sustained" the jurisdiction of the Cavite City branch of the CFI over
Land Registration Case No. 299 in G.R. No. 51054 is incorrect. To be sure, the principal issue raised in the
petition for review on certiorari in G.R. No. 51054 was the personality of the Municipality of Silang to file an
opposition to the application for land registration. While this Court upheld the lower court’s ruling on that
issue, such affirmance in no way implied that the issue of jurisdiction was likewise resolved. It is only now
that the same issue is brought to light for resolution.

As regards the jurisdiction of the Tagaytay City branch over the land registration proceedings instituted by
private respondents, the order of general default issued in Land Registration Case No. 299 is of relevance.
When the Cavite City branch of the CFI issued an order of default, it is presumed to have regularly
performed its task in accordance with law especially with regard to notice requirements. Act No. 496
provided that after the court shall have set the application for initial hearing the following procedure should
be observed: c han rob1es v irt ual 1aw l ibra ry

SECTION 31. Upon receipt of the order of the court setting the time for initial hearing of the application from
the clerk of the Court of First Instance, the Chief of the General Land Registration Office shall cause a notice
thereof to be published twice, in successive issues of the Official Gazette, in the English language. The notice
shall be issued by order of the court, attested by the Chief of the General Land Registration Office, and shall
be in form substantially as follows: . . . 30

The general order of default of January 29, 1957 stated as follows: chan rob1es v irt ual 1aw l ibra ry

It appearing from the certificate of the Chief of the General Land Registration Office and the return of the
Sheriff, attached to the record of this case, that the notice relative to the application in said case was duly
published, posted, and served in accordance with law; and that the time allowed for entering appearance
and filing answers expired at 9:30 A.M. on the 29th day of January, 1957, for which date said case was duly
set for hearing by the Court;

And it further appearing from said record that no person has appeared as respondent in the case filed an
answer within the time for that purpose allowed, with the exception of the Director of Lands represented by
Asst. Provincial Fiscal Jose M. Legaspi;

All persons, except those herein above named, are hereby declared to be in default in the above-entitled
case, and it is ordered that a general default be recorded in said case, and that the application therein be
taken as confessed by all the world, except the persons hereinabove named.

It is so ordered. 31

On January 24, 1957, the Municipality of Silang filed a motion to lift said general order of default and to
admit its opposition to the registration. 32 This fact supports the presumption that the officials concerned
performed their duties regularly because it implies notice, whether actual or constructive, on the part of said
municipality that a land registration proceedings had been filed with respect to Lot No. 1.

Compliance with the requirement of notice and publication had the effect of notifying all persons interested
in the proceedings including the herein private respondents. As this Court said in Aguilar v. Caoagdan: chanrob1e s virtual 1aw l ib rary

. . . it is true that appellants were not personally notified of the pendency of the present registration case
even if they were actually occupying, as they claim, portions of the land, but such procedural defect cannot
affect the jurisdiction of the court because registration proceedings have the nature of actions in rem. . . .
33

55
A proceeding in rem, such as land registration proceedings, requires constructive seizure of the land as
against all persons, including the state, who have rights to or interests in the property. 34 Constructive
seizure of the land for registration is effected through publication of the application for registration and
service of notice to affected parties. 35 Consequently, when private respondents filed their own application
for registration of the same parcel of land, strictly speaking, the Tagaytay City branch could no longer
entertain the application for registration as the res involved had been constructively seized by the Cavite
City branch of the same court. In hindsight, this complication of two applications for registration having
been filed for one and the same tract of land could have been avoided had Land Registration Case No. 299
been transferred to the Tagaytay City branch of the same court where it rightfully belonged, upon the
effectivity of Rep. Act No. 3947.

Be that as it may, the Court is not persuaded that the registration proceedings instituted by private
respondents should be nullified by reason of the fact that the Cavite City branch of the same court was
already proceeding with another registration case for the same piece of land. chanro bles vi rtua l lawli bra ry

In land registration proceedings, all interested parties are obliged to take care of their interests and to
zealously pursue their objective of registration on account of the rule that whoever first acquires title to a
piece of land shall prevail. To illustrate, where more than one certificate of title is issued over the land, the
person holding a prior certificate is entitled to the land as against a person who relies on a subsequent
certificate. 36 It should be stressed that said rule refers to the date of the certificate of title and not to the
date of filing of the application for registration of title. Hence, even though an applicant precedes another,
he may not be deemed to have priority of right to register title. As such, while his application is being
processed, an applicant is duty-bound to observe vigilance and to take care that his right or interest is duly
protected.

Petitioners failed to exercise the due diligence required of them as applicants for land registration. In the
same way that publication of their application for registration was supposed to have rendered private
respondents on constructive notice of such application, the publication of notice in the land registration
proceedings initiated by private respondents had the same effect of notice upon petitioners. Petitioners were
thus presumed to have been notified of the land registration proceedings filed by private respondents in the
Tagaytay City branch of the Cavite CFI thereby providing them with the opportunity to file an opposition
thereto.

The fact that an interlocutory matter in Land Registration Case No. 299 had to be resolved by both the Court
of Appeals and this Court did not in any way mean that petitioners should no longer exercise due diligence
to protect their right or interest in the said proceedings. On the contrary, they were bound to exercise such
diligence with vigor especially because as early as April 19, 1971, they already had a judgment in their
favor. The record does not show why petitioners did not have actual knowledge of the registration
proceedings instituted by private respondents. However, the lack of such knowledge in fact raises a doubt as
to the veracity of their claim that they were in possession of the land. If indeed they possessed the property,
even if through an administrator, as diligent owners, the threat to their ownership could not have escaped
them considering that the property is in a rural community where news travels fast.

Even granting that petitioners did not really have actual knowledge of private respondents’ application for
registration, yet after discovering that the land was already registered in the name of private respondents,
petitioners should have immediately sought recourse in law to protect their rights. As it turned out, they let
almost seven (7) years to pass from such discovery before they acted to revive what already was a dormant
judgment. Hence, they filed the separate action "for execution of judgment and cancellation of titles" of
private respondents because more than five (5) years had elapsed since the promulgation of the decision
directing the issuance of a decree of registration. 37 Under these circumstances, the inevitable conclusion is
that petitioners neglected for an unreasonable and unexplained length of time to do that which, by
exercising due diligence, they could or should have done earlier. They neglected or omitted to assert a right
within a reasonable time, warranting the presumption that they either had abandoned or declined to assert
it. 38 In short, they were guilty of laches.

The doctrine of stale demands or laches is based on grounds of public policy which requires, for the peace of
society, the discouragement of stale claims and is principally a question of the inequity or unfairness of
permitting a right or claim to be enforced or asserted. 39 Land registration proceedings entails a race
against time and non-observance of time constraints imposed by law exposes an applicant to the loss of
registration rights if not to the deleterious effects of the application of the doctrine of laches. An applicant
for registration has but a one-year period from the issuance of the decree of registration in favor of another
applicant, within which to question the validity of the certificate of title issued pursuant to such decree. Once
the one-year period has lapsed, the title to the land becomes indefeasible. While the law grants the
aggrieved applicant certain remedial measures, these are designed to make up for his failure to register his
title to the property and not necessarily to restore ownership and/or title that he had allowed by inaction to
be vested in another person. In Javier v. Court of Appeals, 40 the Court set out these remedies as follows:
1aw libra ry
chan rob1e s virtual

. . . The basic rule is that after the lapse of one (1) year, a decree of registration is no longer open to review
or attack although its issuance is attended with actual fraud. This does not mean however that the
aggrieved party is without a remedy at law. If the property has not yet passed to an innocent purchaser for
value, an action for reconveyance is still available. The decree becomes incontrovertible and can no longer
be reviewed after one (1) year from the date of the decree so that the only remedy of the landowner whose
property has been wrongfully or erroneously registered in another’s name is to bring an ordinary action in
court for reconveyance, which is an action in personam and is always available as long as the property has
not passed to an innocent third party for value. If the property has passed into the hands of an innocent
purchaser for value, the remedy is an action for damages. . .

56
In Spouses Eduarte v. Court of Appeals, 41 the Court also said: chan rob1es v irt ual 1aw l ibra ry

. . . it has been held that the proper recourse of the true owner of the property who was prejudiced and
fraudulently dispossessed of the same is to bring an action for damages against those who caused or
employed the fraud, and if the latter are insolvent, an action against the Treasurer of the Philippines may be
filed for recovery of damages against the Assurance Fund.

In filing the action for execution of judgment and cancellation of titles, petitioners must have realized that
only the remedy of filing an action for damages was available to them. Otherwise, they could have filed an
action for reconveyance of the property. Of course, petitioners cleverly clothed their complaint as one for
execution of judgment under the provisions of the Rules of Court. Clearly, such procedural strategy was a
bid to revive the decision of the lower court ordering the issuance of a decree of registration in their names.
In other words, petitioners availed of procedural remedies provided for by the Rules of Court as it appeared
that because of the lapse of time, they would not benefit from remedies prescribed by land registration laws.

The wrong appellation of petitioners’ complaint shall not mislead this Court as, in the determination of the
nature of a complaint, its averments rather than its title, are the proper gauges. 42 A reading of the
allegations of the complaint in Civil Case No. TG-1028 betrays petitioners’ true intention in filing the case. In
paragraph 15 of the complaint, petitioners alleged that they were "unduly deprived of their ownership and
lawful possession of the land . . . due to the wrongful registration of the subject land in the name of the
defendants by means of fraud and misrepresentations." Except for this general statement, the issue of fraud
or misrepresentation is not alleged with particularity in the complaint. 43 This is unfortunate because, if filed
within the time set by law, a complaint with the proper allegation of fraud coupled with proof thereof could
cause the loss of the indefeasibility of private respondents’ title to the property. It is established that if fraud
attended the acquisition of title under the Torrens System, such title cannot be used as a means to
perpetuate fraud against the rightful owner of real property. 44

We take note of petitioners’ allegation in their reply memorandum that in the registration proceedings filed
by private respondents, "what was published in the Official Gazette was the description of a bigger tract of
land that includes the smaller lot actually applied for by respondents." 45 That factual allegation could have
had its impact before the trial court in an action for reconveyance on the ground of fraud in the acquisition
of title but not before this Court where factual issues may no longer be raised.

The inevitable conclusion therefore is that petitioners were cognizant all the while of the futility of their
attempt to cancel the title of private respondents under the law. Hence, they indirectly and collaterally
attacked the land title duly issued to private respondents on the theory that the revival of the dormant
judgment in their favor could result in the realization of their objective of nullifying such title. However,
aggrieved applicants for land registration cannot seek protection under the provisions of the Rules of Court
which are merely suppletory to special laws governing land registration proceedings.

The resolution of the instant petition cannot be complete without a word on the manner by which officials of
the then Land Registration Commission ignored the lower court’s order to explain the conflicting claims of
ownership over the same property. Particularly, there is a need for an explanation why they caused the
publication of the notice of hearing in private respondents’ application for registration notwithstanding that
the same office had already published the notice of hearing as regards petitioners’ application for
registration of the same parcel of land. It is within the power of these officials to determine whether or not
the same parcel of land is the subject of two applications for registration. The indefeasibility of private
respondents’ title over the property should not get in the way of an administrative investigation of possible
omission or neglect of official duty. This Court cannot let such malfeasance or misfeasance in office pass
unnoticed lest the integrity of the Torrens System of land registration be undermined.

WHEREFORE, the instant petition for review is DENIED, and the dismissal of Civil Case No. TG-1028 is
AFFIRMED. Let a copy of this Decision be furnished the Department of Justice so that an investigation
against officials who were responsible for the publication of two notices of hearing of an application for
registration of the same parcel of land may be conducted and the guilty officials duly sanctioned.

SO ORDERED. chanrobles. com : virt uallawl ibra ry

Davide, Jr., C.J., Puno, Kapunan and Pardo, JJ., concur.

Endnotes:

1. Rollo, p. 67.

2. Ibid., p. 68.

3. Decision in CA-G.R. No. 49053-R, p. 4; Rollo of G.R. No. 51054 (Municipality of Silang v. Court of
Appeals), p. 52.

4. Record, pp. 20-21.

5. Presided by Judge Alfredo Catolico.

57
6. Rollo, pp. 74-80.

7. Penned by Associate Justice Milagros A. German and concurred in by Associate Justices B.S. de la Fuente
and Pedro D. Cenzon.

8. Rollo, pp. 66-71.

9. Ibid., p. 73.

10. Rollo of G.R. No. 51054, p. 102.

11. Rollo, p. 19.

12. Record, p. 83.

13. Presided by Judge Jose C. Colayco.

14. Rollo, pp. 82-84.

15. Presided by Judge Hector C. Fule.

16. Rollo, pp. 64-65.

17. Presided by Judge Julieto P. Tabiolo.

18. Rollo, pp. 89-94.

19. Ibid., p. 93.

20. Ibid., pp. 95-97.

21. The Decision was penned by Associate Justice Quirino D. Abad Santos, Jr. and concurred in by Associate
Justices Emeterio C. Cui and Alfredo J. Lagamon.

22. Rollo, pp. 105-106.

23. Dordas v. Court of Appeals, 337 Phil. 59, 67 (1997).

24. 44 O.G. 4757, 4775.

25. 59 O.G. 8553.

26. Aguilar v. Caoagdan, 105 Phil. 661, 665 (1959).

27. Secretary of Health v. Court of Appeals, 311 Phil. 803, 812 (1995).

28. Santos III v. Northwest Orient Airlines, G.R. No. 101538, June 23, 1992, 210 SCRA 256, 265-266.

29. Philippine Banking Corporation v. Tensuan, G.R. No. 104649, February 28, 1994, 230 SCRA 413, 416-
417.

30. As amended by Sec. 1 of Rep. Act No. 96 and Rep. Act No. 1151.

31. Record on Appeal in CA-G.R. No. 49053-R, pp. 10-11; Rollo of G.R. No. 51054, p. 76.

32. Ibid., p. 11; supra.

33. Supra., at p. 666.

34. Director of Lands v. Court of Appeals, 342 Phil. 239, 248 (1997).

35. Republic v. Court of Appeals, 327 Phil. 852, 868 (1996).

36. Margolles v. Court of Appeals, G.R. No. 109490, February 14, 1994, 230 SCRA 97, 114.

37. Sec. 6, Rule 39 of the Rules of Court provided for the filing of an action to enforce a judgment after the
lapse of the 5-year period.

38. Catholic Bishop of Balanga v. Court of Appeals, 332 Phil. 206, 218 (1996).

39. Ibid., at pp. 219-220.

40. G.R. No. 101177, March 28, 1994, 231 SCRA 498, 504.

41. 323 Phil. 462, 477 (1996).

58
42. Heirs of Jacob v. Court of Appeals, 347 Phil. 752, 763 (1997).

43. In Heirs of Manuel A. Roxas v. Court of Appeals (337 Phil. 41, 52 [1997]), the Court held that there is
"fraudulent concealment and misrepresentation in the application" for registration where it is alleged that
"no other persons had any claim or interest in the said land."
cralaw virtua1aw l ibra ry

44. Bornales v. Intermediate Appellate Court, G.R. No. 75336, October 18, 1988, 166 SCRA 516, 524-525.

45. Rollo, p. 186.

59
SECOND DIVISION

[G.R. No. 156117. May 26, 2005]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. JEREMIAS AND DAVID


HERBIETO, respondents.

DECISION
CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari, under Rule 45 of the 1997
Rules of Civil Procedure, seeking the reversal of the Decision of the Court of Appeals in
CA-G.R. CV No. 67625, dated 22 November 2002,[1] which affirmed the Judgment of the
Municipal Trial Court (MTC) of Consolacion, Cebu, dated 21 December 1999,[2] granting
the application for land registration of the respondents.
Respondents in the present Petition are the Herbieto brothers, Jeremias and David,
who filed with the MTC, on 23 September 1998, a single application for registration of two
parcels of land, Lots No. 8422 and 8423, located in Cabangahan, Consolacion, Cebu
(Subject Lots). They claimed to be owners in fee simple of the Subject Lots, which they
purchased from their parents, spouses Gregorio Herbieto and Isabel Owatan, on 25 June
1976.[3] Together with their application for registration, respondents submitted the
following set of documents:

(a) Advance Survey Plan of Lot No. 8422, in the name of respondent
Jeremias; and Advance Survey Plan of Lot No. 8423, in the name of
respondent David; [4]

(b) The technical descriptions of the Subject Lots; [5]

(c) Certifications by the Department of Environment and Natural Resources


(DENR) dispensing with the need for Surveyors Certificates for the
Subject Lots; [6]

(d) Certifications by the Register of Deeds of Cebu City on the absence of


certificates of title covering the Subject Lots; [7]

(e) Certifications by the Community Environment and Natural Resources


Office (CENRO) of the DENR on its finding that the Subject Lots are
alienable and disposable, by virtue of Forestry Administrative Order No.
4-1063, dated 25 June 1963; [8]

(f) Certified True Copies of Assessment of Real Property (ARP) No.


941800301831, in the name of Jeremias, covering Lot No. 8422, issued
in 1994; and ARP No. 941800301833, in the name of David, covering
Lot No. 8423, also issued in 1994; and
[9]

(g) Deed of Definite Sale executed on 25 June 1976 by spouses Gregorio


Herbieto and Isabel Owatan selling the Subject Lots and the
improvements thereon to their sons and respondents herein, Jeremias and

60
David, for P1,000. Lot No. 8422 was sold to Jeremias, while Lot No.
8423 was sold to David. [10]

On 11 December 1998, the petitioner Republic of the Philippines (Republic) filed an


Opposition to the respondents application for registration of the Subject Lots arguing that:
(1) Respondents failed to comply with the period of adverse possession of the Subject
Lots required by law; (2) Respondents muniments of title were not genuine and did not
constitute competent and sufficient evidence of bona fide acquisition of the Subject Lots;
and (3) The Subject Lots were part of the public domain belonging to the Republic and
were not subject to private appropriation.[11]
The MTC set the initial hearing on 03 September 1999 at 8:30 a.m. [12] All owners of
the land adjoining the Subject Lots were sent copies of the Notice of Initial Hearing. [13] A
copy of the Notice was also posted on 27 July 1999 in a conspicuous place on the Subject
Lots, as well as on the bulletin board of the municipal building of Consolacion, Cebu,
where the Subject Lots were located.[14] Finally, the Notice was also published in the
Official Gazette on 02 August 1999[15] and The Freeman Banat News on 19 December
1999.[16]
During the initial hearing on 03 September 1999, the MTC issued an Order of Special
Default,[17] with only petitioner Republic opposing the application for registration of the
Subject Lots. The respondents, through their counsel, proceeded to offer and mark
documentary evidence to prove jurisdictional facts. The MTC commissioned the Clerk of
Court to receive further evidence from the respondents and to submit a Report to the
MTC after 30 days.
On 21 December 1999, the MTC promulgated its Judgment ordering the registration
and confirmation of the title of respondent Jeremias over Lot No. 8422 and of respondent
David over Lot No. 8423. It subsequently issued an Order on 02 February 2000 declaring
its Judgment, dated 21 December 1999, final and executory, and directing the
Administrator of the Land Registration Authority (LRA) to issue a decree of registration
for the Subject Lots.[18]
Petitioner Republic appealed the MTC Judgment, dated 21 December 1999, to the
Court of Appeals.[19] The Court of Appeals, in its Decision, dated 22 November 2002,
affirmed the appealed MTC Judgment reasoning thus:

In the case at bar, there can be no question that the land sought to be registered has
been classified as within the alienable and disposable zone since June 25, 1963.
Article 1113 in relation to Article 1137 of the Civil Code, respectively provides that
All things which are within the commerce of men are susceptible of prescription,
unless otherwise provided. Property of the State or any of its subdivisions of
patrimonial character shall not be the object of prescription and that Ownership and
other real rights over immovables also prescribe through uninterrupted adverse
possession thereof for thirty years, without need of title or of good faith.

As testified to by the appellees in the case at bench, their parents already acquired the
subject parcels of lands, subject matter of this application, since 1950 and that they
cultivated the same and planted it with jackfruits, bamboos, coconuts, and other trees
(Judgment dated December 21, 1999, p. 6). In short, it is undisputed that herein
appellees or their predecessors-in-interest had occupied and possessed the subject land
openly, continuously, exclusively, and adversely since 1950. Consequently, even
assuming arguendo that appellees possession can be reckoned only from June 25,
1963 or from the time the subject lots had been classified as within the alienable and
disposable zone, still the argument of the appellant does not hold water.

61
As earlier stressed, the subject property, being alienable since 1963 as shown by
CENRO Report dated June 23, 1963, may now be the object of prescription, thus
susceptible of private ownership. By express provision of Article 1137, appellees are,
with much greater right, entitled to apply for its registration, as provided by Section
14(4) of P.D. 1529 which allows individuals to own land in any manner provided by
law. Again, even considering that possession of appelless should only be reckoned
from 1963, the year when CENRO declared the subject lands alienable, herein
appellees have been possessing the subject parcels of land in open, continuous, and in
the concept of an owner, for 35 years already when they filed the instant application
for registration of title to the land in 1998. As such, this court finds no reason to
disturb the finding of the court a quo. [20]

The Republic filed the present Petition for the review and reversal of the Decision of
the Court of Appeals, dated 22 November 2002, on the basis of the following arguments:
First, respondents failed to establish that they and their predecessors-in-interest had
been in open, continuous, and adverse possession of the Subject Lots in the concept of
owners since 12 June 1945 or earlier. According to the petitioner Republic, possession
of the Subject Lots prior to 25 June 1963 cannot be considered in determining compliance
with the periods of possession required by law. The Subject Lots were classified as
alienable and disposable only on 25 June 1963, per CENROs certification. It also alleges
that the Court of Appeals, in applying the 30-year acquisitive prescription period, had
overlooked the ruling in Republic v. Doldol,[21] where this Court declared that
Commonwealth Act No. 141, otherwise known as the Public Land Act, as amended and
as it is presently phrased, requires that possession of land of the public domain must be
from 12 June 1945 or earlier, for the same to be acquired through judicial confirmation of
imperfect title.
Second, the application for registration suffers from fatal infirmity as the subject of the
application consisted of two parcels of land individually and separately owned by two
applicants. Petitioner Republic contends that it is implicit in the provisions of Presidential
Decree No. 1529, otherwise known as the Property Registration Decree, as amended,
that the application for registration of title to land shall be filed by a single applicant;
multiple applicants may file a single application only in case they are co-owners. While
an application may cover two parcels of land, it is allowed only when the subject parcels
of land belong to the same applicant or applicants (in case the subject parcels of land are
co-owned) and are situated within the same province. Where the authority of the courts
to proceed is conferred by a statute and when the manner of obtaining jurisdiction is
mandatory, it must be strictly complied with or the proceedings will be utterly void. Since
the respondents failed to comply with the procedure for land registration under the
Property Registration Decree, the proceedings held before the MTC is void, as the latter
did not acquire jurisdiction over it.
I

Jurisdiction

Addressing first the issue of jurisdiction, this Court finds that the MTC had no
jurisdiction to proceed with and hear the application for registration filed by the
respondents but for reasons different from those presented by petitioner Republic.
A. The misjoinder of causes of action and parties does not affect the jurisdiction of the
MTC to hear and proceed with respondents application for registration.

62
Respondents filed a single application for registration of the Subject Lots even though
they were not co-owners. Respondents Jeremias and David were actually seeking the
individual and separate registration of Lots No. 8422 and 8423, respectively.
Petitioner Republic believes that the procedural irregularity committed by the
respondents was fatal to their case, depriving the MTC of jurisdiction to proceed with and
hear their application for registration of the Subject Lots, based on this Courts
pronouncement in Director of Lands v. Court of Appeals,[22] to wit:

. . . In view of these multiple omissions which constitute non-compliance with the


above-cited sections of the Act, We rule that said defects have not invested the Court
with the authority or jurisdiction to proceed with the case because the manner or mode
of obtaining jurisdiction as prescribed by the statute which is mandatory has not been
strictly followed, thereby rendering all proceedings utterly null and void.

This Court, however, disagrees with petitioner Republic in this regard. This procedural
lapse committed by the respondents should not affect the jurisdiction of the MTC to
proceed with and hear their application for registration of the Subject Lots.
The Property Registration Decree[23] recognizes and expressly allows the following
situations: (1) the filing of a single application by several applicants for as long as they
are co-owners of the parcel of land sought to be registered;[24] and (2) the filing of a single
application for registration of several parcels of land provided that the same are located
within the same province.[25] The Property Registration Decree is silent, however, as to the
present situation wherein two applicants filed a single application for two parcels of land,
but are seeking the separate and individual registration of the parcels of land in their
respective names.
Since the Property Registration Decree failed to provide for such a situation, then this
Court refers to the Rules of Court to determine the proper course of action. Section 34 of
the Property Registration Decree itself provides that, [t]he Rules of Court shall, insofar as
not inconsistent with the provisions of this Decree, be applicable to land registration and
cadastral cases by analogy or in a suppletory character and whenever practicable and
convenient.
Considering every application for land registration filed in strict accordance with the
Property Registration Decree as a single cause of action, then the defect in the joint
application for registration filed by the respondents with the MTC constitutes a misjoinder
of causes of action and parties. Instead of a single or joint application for registration,
respondents Jeremias and David, more appropriately, should have filed separate
applications for registration of Lots No. 8422 and 8423, respectively.
Misjoinder of causes of action and parties do not involve a question of jurisdiction of
the court to hear and proceed with the case.[26] They are not even accepted grounds for
dismissal thereof.[27] Instead, under the Rules of Court, the misjoinder of causes of action
and parties involve an implied admission of the courts jurisdiction. It acknowledges the
power of the court, acting upon the motion of a party to the case or on its own initiative,
to order the severance of the misjoined cause of action, to be proceeded with separately
(in case of misjoinder of causes of action); and/or the dropping of a party and the
severance of any claim against said misjoined party, also to be proceeded with separately
(in case of misjoinder of parties).
The misjoinder of causes of action and parties in the present Petition may have been
corrected by the MTC motu propio or on motion of the petitioner Republic. It is regrettable,
however, that the MTC failed to detect the misjoinder when the application for registration
was still pending before it; and more regrettable that the petitioner Republic did not call
the attention of the MTC to the fact by filing a motion for severance of the causes of action
and parties, raising the issue of misjoinder only before this Court.

63
B. Respondents, however, failed to comply with the publication requirements mandated
by the Property Registration Decree, thus, the MTC was not invested with jurisdiction
as a land registration court.
Although the misjoinder of causes of action and parties in the present Petition did not
affect the jurisdiction of the MTC over the land registration proceeding, this Court,
nonetheless, has discovered a defect in the publication of the Notice of Initial Hearing,
which bars the MTC from assuming jurisdiction to hear and proceed with respondents
application for registration.
A land registration case is a proceeding in rem,[28] and jurisdiction in rem cannot be
acquired unless there be constructive seizure of the land through publication and service
of notice.[29]
Section 23 of the Property Registration Decree requires that the public be given
Notice of the Initial Hearing of the application for land registration by means of (1)
publication; (2) mailing; and (3) posting. Publication of the Notice of Initial Hearing shall
be made in the following manner:

1. By publication.

Upon receipt of the order of the court setting the time for initial hearing, the
Commissioner of Land Registration shall cause a notice of initial hearing to be
published once in the Official Gazette and once in a newspaper of general circulation
in the Philippines: Provided, however, that the publication in the Official Gazette shall
be sufficient to confer jurisdiction upon the court. Said notice shall be addressed to all
persons appearing to have an interest in the land involved including the adjoining
owners so far as known, and to all whom it may concern. Said notice shall also require
all persons concerned to appear in court at a certain date and time to show cause why
the prayer of said application shall not be granted.

Even as this Court concedes that the aforequoted Section 23(1) of the Property
Registration Decree expressly provides that publication in the Official Gazette shall be
sufficient to confer jurisdiction upon the land registration court, it still affirms its declaration
in Director of Lands v. Court of Appeals[30] that publication in a newspaper of general
circulation is mandatory for the land registration court to validly confirm and register the
title of the applicant or applicants. That Section 23 of the Property Registration Decree
enumerated and described in detail the requirements of publication, mailing, and posting
of the Notice of Initial Hearing, then all such requirements, including publication of the
Notice in a newspaper of general circulation, is essential and imperative, and must be
strictly complied with. In the same case, this Court expounded on the reason behind the
compulsory publication of the Notice of Initial Hearing in a newspaper of general
circulation, thus

It may be asked why publication in a newspaper of general circulation should be


deemed mandatory when the law already requires notice by publication in the Official
Gazette as well as by mailing and posting, all of which have already been complied
with in the case at hand. The reason is due process and the reality that the Official
Gazette is not as widely read and circulated as newspaper and is oftentimes delayed in
its circulation, such that the notices published therein may not reach the interested
parties on time, if at all. Additionally, such parties may not be owners of neighboring
properties, and may in fact not own any other real estate. In sum, the all
encompassing in rem nature of land registration cases, the consequences of default
orders issued against the whole world and the objective of disseminating the notice in
as wide a manner as possible demand a mandatory construction of the requirements
for publication, mailing and posting. [31]

64
In the instant Petition, the initial hearing was set by the MTC, and was in fact held, on
03 September 1999 at 8:30 a.m. While the Notice thereof was printed in the issue of the
Official Gazette, dated 02 August 1999, and officially released on 10 August 1999, it was
published in The Freeman Banat News, a daily newspaper printed in Cebu City and
circulated in the province and cities of Cebu and in the rest of Visayas and Mindanao,
only on 19 December 1999, more than three months after the initial hearing.
Indubitably, such publication of the Notice, way after the date of the initial hearing,
would already be worthless and ineffective. Whoever read the Notice as it was published
in The Freeman Banat News and had a claim to the Subject Lots was deprived of due
process for it was already too late for him to appear before the MTC on the day of the
initial hearing to oppose respondents application for registration, and to present his claim
and evidence in support of such claim. Worse, as the Notice itself states, should the
claimant-oppositor fail to appear before the MTC on the date of initial hearing, he would
be in default and would forever be barred from contesting respondents application for
registration and even the registration decree that may be issued pursuant thereto. In fact,
the MTC did issue an Order of Special Default on 03 September 1999.
The late publication of the Notice of Initial Hearing in the newspaper of general
circulation is tantamount to no publication at all, having the same ultimate result. Owing
to such defect in the publication of the Notice, the MTC failed to constructively seize the
Subject Lots and to acquire jurisdiction over respondents application for registration
thereof. Therefore, the MTC Judgment, dated 21 December 1999, ordering the
registration and confirmation of the title of respondents Jeremias and David over Lots No.
8422 and 8423, respectively; as well as the MTC Order, dated 02 February 2000,
declaring its Judgment of 21 December 1999 final and executory, and directing the LRA
Administrator to issue a decree of registration for the Subject Lots, are both null and void
for having been issued by the MTC without jurisdiction.
II

Period of Possession

Respondents failed to comply with the required period of possession of the Subject Lots
for the judicial confirmation or legalization of imperfect or incomplete title.
While this Court has already found that the MTC did not have jurisdiction to hear and
proceed with respondents application for registration, this Court nevertheless deems it
necessary to resolve the legal issue on the required period of possession for acquiring
title to public land.
Respondents application filed with the MTC did not state the statutory basis for their
title to the Subject Lots. They only alleged therein that they obtained title to the Subject
Lots by purchase from their parents, spouses Gregorio Herbieto and Isabel Owatan, on
25 June 1976. Respondent Jeremias, in his testimony, claimed that his parents had been
in possession of the Subject Lots in the concept of an owner since 1950. [32]
Yet, according to the DENR-CENRO Certification, submitted by respondents
themselves, the Subject Lots are within Alienable and Disposable, Block I, Project No. 28
per LC Map No. 2545 of Consolacion, Cebu certified under Forestry Administrative Order
No. 4-1063, dated June 25, 1963. Likewise, it is outside Kotkot-Lusaran Mananga
Watershed Forest Reservation per Presidential Proclamation No. 932 dated June 29,
1992.[33] The Subject Lots are thus clearly part of the public domain, classified as alienable
and disposable as of 25 June 1963.
As already well-settled in jurisprudence, no public land can be acquired by private
persons without any grant, express or implied, from the government; [34] and it is
indispensable that the person claiming title to public land should show that his title was
acquired from the State or any other mode of acquisition recognized by law. [35]

65
The Public Land Act, as amended, governs lands of the public domain, except timber
and mineral lands, friar lands, and privately-owned lands which reverted to the State.[36] It
explicitly enumerates the means by which public lands may be disposed, as follows:

(1) For homestead settlement;


(2) By sale;
(3) By lease;
(4) By confirmation of imperfect or incomplete titles;

(a) By judicial legalization; or


(b) By administrative legalization (free patent). [37]

Each mode of disposition is appropriately covered by separate chapters of the Public


Land Act because there are specific requirements and application procedure for every
mode.[38] Since respondents herein filed their application before the MTC, [39] then it can be
reasonably inferred that they are seeking the judicial confirmation or legalization of their
imperfect or incomplete title over the Subject Lots.
Judicial confirmation or legalization of imperfect or incomplete title to land, not
exceeding 144 hectares,[40] may be availed of by persons identified under Section 48 of
the Public Land Act, as amended by Presidential Decree No. 1073, which reads

Section 48. The following-described citizens of the Philippines, occupying lands of


the public domain or claiming to own any such lands or an interest therein, but whose
titles have not been perfected or completed, may apply to the Court of First Instance
of the province where the land is located for confirmation of their claims and the
issuance of a certificate of title thereafter, under the Land Registration Act, to wit:

(a) [Repealed by Presidential Decree No. 1073].

(b) Those who by themselves or through their predecessors-in-interest 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 June 12, 1945, or earlier,
immediately preceding the filing of the applications for confirmation of
title, except when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under the
provisions of this chapter.

(c) Members of the national cultural minorities who by themselves or through


their predecessors-in-interest have been in open, continuous, exclusive and
notorious possession and occupation of lands of the public domain suitable
to agriculture whether disposable or not, under a bona fide claim of
ownership since June 12, 1945 shall be entitled to the rights granted in
subsection (b) hereof.

Not being members of any national cultural minorities, respondents may only be
entitled to judicial confirmation or legalization of their imperfect or incomplete title under
Section 48(b) of the Public Land Act, as amended. Section 48(b), as amended, now
requires adverse possession of the land since 12 June 1945 or earlier. In the present
Petition, the Subject Lots became alienable and disposable only on 25 June 1963. Any
period of possession prior to the date when the Subject Lots were classified as alienable
and disposable is inconsequential and should be excluded from the computation of the

66
period of possession; such possession can never ripen into ownership and unless the
land had been classified as alienable and disposable, the rules on confirmation of
imperfect title shall not apply thereto.[41] It is very apparent then that respondents could not
have complied with the period of possession required by Section 48(b) of the Public Land
Act, as amended, to acquire imperfect or incomplete title to the Subject Lots that may be
judicially confirmed or legalized.
The confirmation of respondents title by the Court of Appeals was based on the
erroneous supposition that respondents were claiming title to the Subject Lots under the
Property Registration Decree. According to the Decision of the Court of Appeals, dated
22 November 2002, Section 14(4) of the Property Registration Decree allows individuals
to own land in any other manner provided by law. It then ruled that the respondents,
having possessed the Subject Lots, by themselves and through their predecessors-in-
interest, since 25 June 1963 to 23 September 1998, when they filed their application,
have acquired title to the Subject Lots by extraordinary prescription under Article 1113, in
relation to Article 1137, both of the Civil Code.[42]
The Court of Appeals overlooked the difference between the Property Registration
Decree and the Public Land Act. Under the Property Registration Decree, there already
exists a title which is confirmed by the court; while under the Public Land Act, the
presumption always is that the land applied for pertains to the State, and that the
occupants and possessors only claim an interest in the same by virtue of their imperfect
title or continuous, open, and notorious possession.[43] As established by this Court in the
preceding paragraphs, the Subject Lots respondents wish to register are undoubtedly
alienable and disposable lands of the public domain and respondents may have acquired
title thereto only under the provisions of the Public Land Act.
However, it must be clarified herein that even though respondents may acquire
imperfect or incomplete title to the Subject Lots under the Public Land Act, their
application for judicial confirmation or legalization thereof must be in accordance with the
Property Registration Decree, for Section 50 of the Public Land Act reads

SEC. 50. Any person or persons, or their legal representatives or successors in right,
claiming any lands or interest in lands under the provisions of this chapter, must in
every case present an application to the proper Court of First Instance, praying that the
validity of the alleged title or claim be inquired into and that a certificate of title be
issued to them under the provisions of the Land Registration Act. [44]

Hence, respondents application for registration of the Subject Lots must have
complied with the substantial requirements under Section 48(b) of the Public Land Act
and the procedural requirements under the Property Registration Decree.
Moreover, provisions of the Civil Code on prescription of ownership and other real
rights apply in general to all types of land, while the Public Land Act specifically governs
lands of the public domain. Relative to one another, the Public Land Act may be
considered a special law[45] that must take precedence over the Civil Code, a general law.
It is an established rule of statutory construction that between a general law and a special
law, the special law prevails Generalia specialibus non derogant.[46]
WHEREFORE, based on the foregoing, the instant Petition is GRANTED. The
Decision of the Court of Appeals in CA-G.R. CV No. 67625, dated 22 November 2002, is
REVERSED. The Judgment of the MTC of Consolacion, Cebu in LRC Case No. N-75,
dated 21 December 1999, and its Order, dated 02 February 2000 are declared NULL
AND VOID. Respondents application for registration is DISMISSED.
SO ORDERED.
Puno, Acting C.J., (Chairman), Austria-Martinez, and Callejo, Sr., JJ., concur.
Tinga, J., out of the country.

67
[1]
Penned by Associate Justice Mercedes Gozo-Dadole with Associate Justices B.A. Adefuin-De La Cruz
and Mariano C. Del Castillo concurring, Rollo, pp. 52-58.
[2]
Penned by Judge Wilfredo A. Dagatan, Records, pp. 100-108.
[3]
Records, pp. 1-6.
[4]
Ibid., pp. 7-8.
[5]
Ibid., pp. 9-10.
[6]
Ibid., pp. 11-12.
[7]
Ibid., pp. 13-14.
[8]
Ibid., pp. 15-18.
[9]
Ibid., pp. 19-20.
[10]
Ibid., p. 21.
[11]
Ibid., pp. 27-29.
[12]
Order, dated 29 April 1999, penned by Judge Wilfredo A. Dagatan, Ibid., p. 41.
[13]
Ibid., p. 59.
[14]
Ibid., p. 52.
[15]
Ibid., p. 58.
[16]
Ibid., pp. 96-97.
[17]
Penned by Judge Wilfredo A. Dagatan, Ibid., 62-65.
[18]
Penned by Judge Wilfredo A. Dagatan, Records, p. 109.
[19]
CA Rollo, pp. 20-38.
[20]
Supra, note 1, pp. 57-58.
[21]
G.R. No. 132963, 10 September 1998, 295 SCRA 359.
[22]
G.R. No. L-45168, 27 January 1981, 102 SCRA 370, 438, also quoted and/or reiterated in subsequent
cases of Alabang Development Corporation v. Valenzuela, G.R. No. L-54094, 30 August 1982, 116
SCRA 261, 271; Tahanan Development Corporation v. Court of Appeals, G.R. No. L-55771, 15
November 1982, 118 SCRA 273, 309; Register of Deeds of Malabon, G.R. No. 88623, 05 February
1990, 181 SCRA 788, 791; Allama v. Republic, G.R. No. 88226, 26 February 1992, 206 SCRA 600,
605.
[23]
Presidential Decree No. 1529.
[24]
Section 14 of the Property Registration Decree provides that, Where the land is owned in common, all
the co-owners shall file the application jointly.
[25]
Section 18 of the Property Registration Decree reads
SEC. 18. Application covering two or more parcels. An application may include two or more
parcels of land belonging to the applicant/s provided they are situated within the same province or
city. The court may at any time order an application to be amended by striking out one or more of
the parcels or by a severance of the application.
[26]
Katipunan v. Zandueta, 60 Phil 220 (1934).
[27]
Significant provisions of the Rules of Court are quoted below
RULE 2, SEC. 6. Misjoinder of causes of action. Misjoinder of causes of action is not a ground for dismissal
of an action. A misjoined cause of action may, on motion of a party or on the initiative of the court,
be severed and proceeded with separately.
RULE 3, SEC. 11. Misjoinder and non-joinder of parties. Neither misjoinder nor non-joinder of
parties is ground for dismissal of action. Parties may be dropped or added by order of the court on
motion of any party or on its own initiative at any stage of the action and on such terms as are just.
Any claim against a misjoined party may be severed and proceeded with separately.

68
[28]
Section 2 of the Property Registration Decree.
[29]
Republic v. Court of Appeals, G.R. No. 113549, 05 July 1996, 258 SCRA 223, 236.
[30]
G.R. No. 102858, 28 July 1997, 276 SCRA 276.
[31]
Ibid., p. 286.
[32]
TSN, 24 September 1999, p. 28.
[33]
Records, pp. 15, 17.
[34]
Padilla v. Reyes, 60 Phil 967, 969 (1934).
[35]
Lee Hong Hok v. David, G.R. No. L-30389, 27 December 1972, 48 SCRA 372, 379.
[36]
Section 2.
[37]
Section 11.
[38]
Del Rosario-Igtiben v. Rebublic, G.R. No. 158449, 22 October 2004, p. 11.
[39]
Section 34 of Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980,
as amended, allows the inferior courts (i.e., Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts), duly assigned by the Supreme Court, to hear and determine
cadastral and land registration cases covering lots where there is no controversy or opposition, or
contested lots with values not exceeding P100,000. Decisions of the inferior courts in such cases
shall be appealable in the same manner as decisions of the Regional Trial Courts. Accordingly, the
Supreme Court issued Administrative Circular No. 6-93-A, dated 15 November 1995, authorizing
the inferior courts to hear and decide the cadastral or land registration cases as provided for by the
Judiciary Reorganization Act of 1980, as amended.
[40]
Section 47 of the Public Land Act, as amended.
[41]
Almeda v. Court of Appeals, G.R. No. 85322, 30 April 1991, 196 SCRA 476; Vallarta v. Intermediate
Appellate Court, G.R. No. L-74957, 30 June 1987, 151 SCRA 679; Republic v. Court of Appeals,
G.R. No. L-40402, 16 March 1987, 148 SCRA 480.
[42]
The complete text of these provisions are reproduced below, for reference
ART. 1113. All things which are within the commerce of men are susceptible of prescription, unless
otherwise provided. Property of the State or any of its subdivisions not patrimonial in character shall
not be the object of prescription.
ART. 1137. Ownership and other real rights over immovables also prescribe through uninterrupted
adverse possession thereof for thirty years, without need of title or of good faith.
[43]
Aquino v. Director of Lands, 39 Phil 850, 858 (1919).
[44]
Now the provisions of the Property Registration Decree.
[45]
This Court is not unaware that there are decisions by this Court declaring the Public Land Act as a
general law [Republic v. Court of Appeals, G.R. No. 106673, 09 May 2001, 357 SCRA 608, 616;
Oliva v. Lamadrid, 128 Phil 770, 775 (1967)]. These cases, however, involve the Public Land Act
in relation to statutes other than the Civil Code. The pronouncement made in the present Petition
is particular to the nature of the Public Land Act vis--vis the Civil Code.
[46]
Manila Railroad Co. v. Rafferty, 40 Phil 224 (1919).

69
Republic of the Philippines
Supreme Court
Manila
EN BANC

THE SECRETARY OF THE G.R. No. 167707


DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, THE
REGIONAL EXECUTIVE Present:
DIRECTOR, DENR-REGION VI,
REGIONAL TECHNICAL PUNO, C.J.,
DIRECTOR FOR LANDS, QUISUMBING,
LANDS MANAGEMENT BUREAU, YNARES-SANTIAGO,
REGION VI PROVINCIAL CARPIO,
ENVIRONMENT AND NATURAL AUSTRIA-MARTINEZ,
RESOURCES OFFICER OF KALIBO, CORONA,*
AKLAN, REGISTER OF DEEDS, CARPIO MORALES,
DIRECTOR OF LAND AZCUNA,
REGISTRATION AUTHORITY, TINGA,
DEPARTMENT OF TOURISM CHICO-NAZARIO,
SECRETARY, DIRECTOR OF VELASCO, JR.,
PHILIPPINE TOURISM NACHURA,**
AUTHORITY, REYES,
Petitioners, LEONARDO-DE CASTRO, and
BRION, JJ.
- versus -

MAYOR JOSE S. YAP, LIBERTAD


TALAPIAN, MILA Y. SUMNDAD, and
ANICETO YAP, in their behalf and Promulgated:
in behalf of all those similarly situated,
Respondents. October 8, 2008

x--------------------------------------------------x

DR. ORLANDO SACAY and G.R. No. 173775


WILFREDO GELITO, joined by
THE LANDOWNERS OF
BORACAY SIMILARLY
SITUATED NAMED IN A LIST,
ANNEX A OF THIS PETITION,
Petitioners,

- versus -

70
THE SECRETARY OF THE
DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, THE
REGIONAL TECHNICAL
DIRECTOR FOR LANDS, LANDS
MANAGEMENT BUREAU,
REGION VI, PROVINCIAL
ENVIRONMENT AND NATURAL
RESOURCES OFFICER, KALIBO,
AKLAN,
Respondents.
x--------------------------------------------------x
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]

71
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 PTACircular 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
72
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:

73
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,

74
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

75
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, onlyagricultural 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]
76
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 under 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
77
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.

78
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

79
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.

xxxx

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

80
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

81
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]

82
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)

83
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
[110]
Authority 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)

84
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.

85
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
86
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.

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).

87
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.

88
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
89
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.

RUBEN T. REYES
Associate Justice

90
WE CONCUR:

REYNATO S. PUNO
Chief Justice

LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO


Associate Justice Associate Justice

ANTONIO T. CARPIO MA. ALICIA AUSTRIA-MARTINEZ


Associate Justice Associate Justice

(On official leave)


RENATO C. CORONA CONCHITA CARPIO MORALES
Associate Justice Associate Justice

ADOLFO S. AZCUNA DANTE O. TINGA


Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO PRESBITERO J. VELASCO, JR.


Associate Justice Associate Justice

(No part)
ANTONIO EDUARDO B. NACHURA TERESITA J. LEONARDO-DE CASTRO
Associate Justice Associate Justice

ARTURO D. BRION
Associate Justice

91
CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO
Chief Justice

*
On official leave per Special Order No. 520 dated September 19, 2008.
**
No part. Justice Nachura participated in the present case as Solicitor General.
[1]
Rollo (G.R. No. 167707), pp. 37-43. CA-G.R. CV No. 71118, promulgated on December 9, 2004. Penned by
Associate Justice Isaias P. Dicdican, with Associate Justices Sesinando E. Villon and Ramon M. Bato, Jr., concurring.
[2]
Id. at 47-54; Annex C. Spl. Civil Case No. 5403. Penned by Judge Niovady M. Marin, RTC, Kalibo, Branch 5.
[3]
Rollo (G.R. No. 173775), pp. 101-114. Annex F. Classifying Boracay Island Situated in the Municipality of Malay,
Province of Aklan Into Forestland (Protection Purposes) and Into Agricultural Land (Alienable and Disposable)
Pursuant to Presidential Decreee No. 705 (Revised Forestry Reform Code of the Philippines). Issued on May 22, 2006.
[4]
As of the year 2000. http://www.nscb.gov.ph/ru6/boracay.htm.
[5]
Manoc-Manoc, Balabag, and Yapak. http://www.nscb.gov.ph/ru6/boracay.htm.
[6]
Under Survey Plan No. NR-06-000001.
[7]
Rollo (G.R. No. 167707), p. 49.
[8]
Id. at 21-23; Annex B. Declaring Certain Islands, Coves, and Peninsulas in the Philippines as Tourist Zones and
Marine Reserves Under the Administration and Control of the Philippine Tourism Authority.
[9]
Id. at 24-27. Rules and Regulations Governing Activities at Boracay Island Tourist Zone.
[10]
Records, pp. 13-32; Annexes A to A-18.
[11]
Issued on May 19, 1975.
[12]
Records, p. 148.
[13]
Id.
[14]
RULES OF COURT, Rule 129, Sec. 2.
[15]
Records, p. 148.
[16]
Id. at 177, 178.
[17]
Rollo (G.R. No. 167707), p. 54.
[18]
Id. at 51.
[19]
Id.; PTA Circular No. 3-82, Rule VIII, Sec. 1(3) states:
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.
[20]
Sec. 87. If all the lands included in the proclamation of the President are not registered under the Land Registration
Act, the Solicitor-General, if requested to do so by the Secretary of Agriculture and Natural Resources, shall proceed
in accordance with the provisions of section fifty-three of this Act.
[21]
Sec. 53. It shall be lawful for the Director of Lands, whenever in the opinion of the President the public interests
shall require it, to cause to be filed in the proper Court of First Instance, through the Solicitor General or the officer
acting in his stead, a petition against the holder, claimant, possessor, or occupant of any land who shall not have
voluntarily come in under the provisions of this chapter or of the Land Registration Act, stating in substance that the
title of such holder, claimant, possessor, or occupant is open to discussion; or that the boundaries of any such land
which has not been brought into court as aforesaid are open to question; or that it is advisable that the title to such land
be settled and adjudicated, and praying that the title to any such land or the boundaries thereof or the right to occupancy
thereof be settled and adjudicated. The judicial proceedings under this section shall be in accordance with the laws on
adjudication of title in cadastral proceedings.
[22]
Rollo (G.R. No. 167707), p. 51.
[23]
Id. at 211-121.
[24]
Id. at 42.
[25]
Id. at 45-46.
[26]
Supra note 3.
[27]
Owner of Waling-Waling Beach Resort and Chairman of the Board of Boracay Foundation, Inc.
[28]
Owner of Willys Beach Resort.
[29]
Rollo (G.R. No. 173775), p. 20; Annex A.

92
[30]
Petitioners in G.R. No. 173775 claim that they are also petitioners in the declaratory case filed in November 1997
before the RTC in Kalibo, Aklan, docketed as Sp. Civil Case No. 5403 and now before this Court as G.R. No. 167707.
[31]
Rollo (G.R No. 173775), pp. 4-5.
[32]
Id. at 4.
[33]
Id. at 143.
[34]
Rollo (G.R. No. 167707), p. 26.
[35]
Rollo (G.R. No. 173775), pp. 280-281.
[36]
An Act Temporarily to Provide for the Administration of the Affairs of Civil Government in the Philippine Islands,
and for Other Purposes. Issued on July 1, 1902.
[37]
An Act to Amend and Compile the Laws Relative to Lands of the Public Domain. Approved on December 1, 1936.
[38]
See note 8.
[39]
See note 3.
[40]
CONSTITUTION (1935), Art. XIII, Sec. 1.
[41]
CONSTITUTION (1973), Art. XIV, Sec. 10.
[42]
Bernas, S.J., The Intent of the 1986 Constitution Writers, 1995 ed., p. 830.
[43]
CONSTITUTION (1987), Art. XII, Sec. 3.
[44]
Id.
[45]
Zarate v. Director of Lands, G.R. No. 131501, July 14, 2004, 434 SCRA 322; Reyes v. Court of Appeals, 356 Phil.
606, 624 (1998).
[46]
Chavez v. Public Estates Authority, G.R. No. 133250, July 9, 2002, 384 SCRA 152.
[47]
Zarate v. Director of Lands, supra; Collado v. Court of Appeals, G.R. No. 107764, October 4, 2002, 390 SCRA
343; Director of Lands v. Intermediate Appellate Court, G.R. No. 73246, March 2, 1993, 219 SCRA 339.
[48]
Republic v. Estonilo, G.R. No. 157306, November 25, 2005, 476 SCRA 265; Zarate v. Director of Lands, supra.
[49]
De los Reyes v. Ramolete, G.R. No. L-47331, June 21, 1983, 122 SCRA 652, citing Gonzaga v. Court of
Appeals, G.R. No. L-27455, June 28, 1973, 51 SCRA 381.
[50]
Collado v. Court of Appeals, supra, citing Chavez v. Public Estates Authority, supra.
[51]
Id., citing separate opinion of then Justice Reynato S. Puno in Cruz v. Secretary of Environment and Natural
Resources, G.R. No. 135385, December 6, 2000, 347 SCRA 128, and Chavez v. Public Estates Authority, supra note
46.
[52]
Collado v. Court of Appeals, supra note 47.
[53]
Effective February 13, 1894.
[54]
De Aldecoa v. The Insular Government, 13 Phil. 159 (1909).
[55]
A valid title based upon adverse possession or a valid title based upon prescription. Noblejas, A.H. and Noblejas,
E.H., Registration of Land Titles and Deeds, 1986 ed., p. 39, citing Cruz v. De Leon, 21 Phil. 199 (1912).
[56]
Ten (10) years, according to Archbishop of Manila v. Arnedo, 30 Phil. 593 (1915).
[57]
Noblejas, A.H. and Noblejas, E.H., Registration of Land Titles and Deeds, supra at 8.
[58]
Id. at 9; Director of Forest Administration v. Fernandez, G.R. Nos. 36827, 56622 & 70076, December 10, 1990,
192 SCRA 121, 137.
[59]
Id. at 5-11.
[60]
See note 36.
[61]
Director of Forestry v. Villareal, G.R. No. L-32266, February 27, 1989, 170 SCRA 598, 601.
[62]
Noblejas, A.H. and Noblejas, E.H., Registration of Land Titles and Deeds, supra note 55, at 347.
[63]
The provisions relevant to the definition are:
Sec. 13. That the Government of the Philippine Islands, subject to the provisions of this Act and except as
herein provided, shall classify according to its agricultural character and productiveness, and shall
immediately make rules and regulations for the lease, sale, or other disposition of the public lands other
than timber or mineral lands, but such rules and regulations shall not go into effect or have the force of law
until they have received the approval of the President, and when approved by the President they shall be
submitted by him to Congress at the beginning of the next ensuing session thereof and unless disapproved
or amended by Congress at said session they shall at the close of such period have the force and effect of
law in the Philippine Islands: Provided, That a single homestead entry shall not exceed sixteen hectares in
extent.
Sec. 14. That the Government of the Philippine Islands is hereby authorized and empowered to enact rules
and regulations and to prescribe terms and conditions to enable persons to perfect their title to public lands
in said Islands, who, prior to the transfer of sovereignty from Spain to the United States, had fulfilled all or
some of the conditions required by the Spanish laws and royal decrees of the Kingdom of Spain for the
acquisition of legal title thereto, yet failed to secure conveyance of title; and the Philippine Commission is
authorized to issue patents, without compensation, to any native of said Islands, conveying title to any tract
of land not more than sixteen hectares in extent, which were public lands and had been actually occupied
by such native or his ancestors prior to and on the thirteenth of August, eighteen hundred and ninety-eight.
Sec. 15. That the Government of the Philippine Islands is hereby authorized and empowered, on such terms
as it may prescribe, by general legislation, to provide for the granting or sale and conveyance to actual
occupants and settlers and other citizens of said Islands such parts and portions of the public domain, other
than timber and mineral lands, of the United States in said Islands as it may deem wise, not exceeding
sixteen hectares to any one person and for the sale and conveyance of not more than one thousand and
twenty-four hectares to any corporation or association of persons: Provided, That the grant or sale of such
lands, whether the purchase price be paid at once or in partial payments, shall be conditioned upon actual
and continued occupancy, improvement, and cultivation of the premises sold for a period of not less than

93
five years, during which time the purchaser or grantee can not alienate or encumber said land or the title
thereto; but such restriction shall not apply to transfers of rights and title of inheritance under the laws for
the distribution of the estates of decedents.
[64]
10 Phil. 175 (1908).
[65]
Id. at 182.
[66]
Collado v. Court of Appeals, supra note 47.
[67]
Noblejas, A.H. and Noblejas, E.H., Registration of Land Titles and Deeds, supra note 55.
[68]
Sec. 54, par. 6.
[69]
Sec. 45(b); Public Estates Authority v. Court of Appeals, G.R. No. 112172, November 20, 2000, 345 SCRA
96; Director of Lands v. Buyco, G.R. No. 91189, November 27, 1992, 216 SCRA 78.
[70]
Collado v. Court of Appeals, supra note 47, see separate opinion of Justice Puno in Cruz v. Secretary of
Environment and Natural Resources, supra note 51, and Chavez v. Public Estates Authority, supra note 46.
[71]
Sec. 2.
[72]
An Act to Amend Subsection (b) of Section Forty-Eight of Commonwealth Act Numbered One Hundred Forty-
One, Otherwise Known as the Public Land Act. Approved on June 22, 1957.
[73]
Extending the Period of Filing Applications for Administrative Legislation (Free Patent) and Judicial Confirmation
of Imperfect and Incomplete Titles to Alienable and Disposable Lands in the Public Domain Under Chapter VII and
Chapter VIII of Commonwealth Act No. 141, As Amended, For Eleven (11) Years Commencing January 1,
1977. Approved on January 25, 1977.
[74]
Republic v. Doldol, G.R. No. 132963, September 10, 1998, 295 SCRA 359.
[75]
Discontinuance of the Spanish Mortgage System of Registration and of the Use of Spanish Titles as Evidence in
Land Registration Proceedings (Issued February 16, 1976).
[76]
Director of Forest Administration v. Fernandez, supra note 58, citing Director of Lands v. Rivas, G.R. No. L-
61539, February 14, 1986, 141 SCRA 329.
[77]
Lands which were not recorded under the Maura Law and were not yet covered by Torrens titles.
[78]
Presidential Decree No. 1529, Preamble; Director of Lands v. Intermediate Appellate Court, supra note 47.
[79]
Pea, N. and Pea, Jr., N., Registration of Land Titles and Deeds, 1988 ed., p. 9.
[80]
Republic v. Court of Appeals, G.R. No. 48227, August 21, 1991, 201 SCRA 1; Director of Lands v. Court of
Appeals, G.R. No. 83609, October 26, 1989, 178 SCRA 708.
[81]
Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic, G.R. No.
151312, August 30, 2006, 500 SCRA 209; Director of Lands v. Intermediate Appellate Court, supra note 47,
citing Director of Lands v. Aquino, G.R. No. 31688, December 17, 1990, 192 SCRA 296.
[82]
Chavez v. Public Estates Authority, supra note 46.
[83]
Republic v. Lao, G.R. No. 150413, July 1, 2003; 405 SCRA 291; Director of Lands v. Intermediate Appellate
Court, supra note 47, citing Director of Lands v. Aquino, supra.
[84]
Republic v. Lao, supra; Pagkatipunan v. Court of Appeals, 429 Phil. 377, 389-390 (2002).
[85]
Republic of the Philippines v. Muoz, G.R. No. 151910, October 15, 2007.
[86]
Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v.
Republic, supra; Gutierrez Hermanos v. Court of Appeals, G.R. Nos. 54472-77, September 28, 1989, 178 SCRA 37.
[87]
Republic v. Naguiat, G.R. No. 134209, January 24, 2006, 479 SCRA 585.
[88]
40 Phil. 10 (1919).
[89]
Supra note 54.
[90]
Ankron v. Government of the Philippine Islands, supra at 16.
[91]
Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic, supra note 81.
[92]
Id. at 76.
[93]
Id. at 219-223.
[94]
Ankron v. Government of the Philippine Islands, supra note 88, at 16.
[95]
Id. at 15-16.
[96]
Act No. 2874, Sec. 8; Republic v. Court of Appeals, G.R. No. 155450, August 6, 2008; Republic v. Court of
Appeals, G.R. No. 127245, January 30, 2001.
96-a
Bureau of Forestry v. Court of Appeals, G.R. No. L-37995, August 31, 1987, 153 SCRA 351, 357.
[97]
Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic, supra note 81.
[98]
The records do not show the manner in which title was issued to the Heirs of Ciriaco Tirol.
[99]
Records, p. 179.
[100]
79 Phil. 461 (1947).
[101]
Supra note 64.
[102]
Supra note 54.
[103]
Supra note 88.
[104]
Art. XIII, Sec. 1.
[105]
Krivenko v. Register of Deeds of Manila, supra note 100, at 468-469.
[106]
Act No. 926, Sec. 54, par. 6 states:
SEC. 54. The following described persons or their legal successors in right, occupying lands in the
Philippines, or claiming to own any such land or interest therein but whose titles to such land have not been
perfected may apply to the Court of Land Registration of the Philippine Islands for confirmation of their
claims and the issuance of a certificate of title therefor to wit
xxxx
(6) All persons who by themselves or their predecessors in interest have been in the open, continuous
exclusive, and notorious possession and occupation of agricultural public lands, as defined by said Act of

94
Congress of July first, nineteen hundred and two, under a bona fide claim of ownership except as against
the Government, for a period of ten years next preceding the taking effect of this act, except when prevented
by war, or force majeure, shall be conclusively presumed to have performed all the conditions essential to
a Government grant and to have received the same, and shall be entitled to a certificate of title to such land
under the provisions of this chapter.
[107]
Supra note 47.
107-a
G.R. No. 135385, December 6, 2000, 347 SCRA 128.
[108]
Collado v. Court of Appeals, id. at 356.
[109]
Records, p. 101; Annex A.
[110]
Id. at 106; Exhibit 1-a.
[111]
Rollo (G.R. No. 173775), p. 5.
[112]
CONSTITUTION (1987), Art. XII, Sec. 3; CONSTITUTION (1973), Art. XIV, Sec. 10, as amended;
and CONSTITUTION (1935), Art. XIII, Sec. 1.
[113]
Republic v. Naguiat, supra note 87.
[114]
G.R. No. L-27873, November 29, 1983, 126 SCRA 69.
[115]
Heirs of Amunategui v. Director of Forestry, id. at 75.
[116]
Republic v. Court of Appeals, G.R. No. L-56948, September 30, 1987, 154 SCRA 476, 482-483.
[117]
Sec. 3 provides:
Establishment of or low-density human settlements in private lands, or subdivisions, if any, subject to prior
approval by the Ministry of Human Settlements, PTA and local building officials; Provided, that no
structures shall be constructed within 30 meters from the shorelines.
[118]
Sec. 5 states:
Subsistence farming, in areas declared as alienable and disposable by the Bureau of Forest Development.
[119]
Pars. 3-4.
[120]
SEC. 6. The President, upon recommendation of the Secretary of Agriculture and Commerce (now the Secretary
of the Department of Environment and Natural Resources), shall from time to time classify 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
administration and disposition.
SEC. 7. For the purposes of administration and disposition of alienable or disposable public lands, the President, upon
recommendation by the Secretary of Agriculture and Commerce (now the Secretary of the Department of Environment
and Natural Resources), shall from time to time declare what lands are open to disposition or concession under this
Act.
[121]
Director of Lands v. Intermediate Appellate Court, supra note 47; Manalo v. Intermediate Appellate Court, G.R.
No. 64753, April 26, 1989, 172 SCRA 795.
[122]
Republic v. Register of Deeds of Quezon, G.R. No. 73974, May 31, 1995, 244 SCRA 537; Director of Lands v.
Intermediate Appellate Court, supra note 47.
[123]
Director of Lands v. Intermediate Appellate Court, supra note 47, citing Yngson v. Secretary of Agriculture and
Natural Resources, G.R. No. L-36847, July 20, 1983, 123 SCRA 441; Republic v. Court of Appeals, G.R. No. L-
45202, September 11, 1980, 99 SCRA 742.
[124]
Supra note 81.
[125]
Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic, id. at 222-223.
[126]
Reconsideration of DOJ Opinion No. 169, s. 1993, on the DOJ affirmative stand on whether the prohibition against
the reclassification of forest lands applies to unclassified public forest.
[127]
Rollo (G.R. No. 173775), p. 139.
[128]
Del Rosario-Igtiben v. Republic, G.R. No. 158449, October 22, 2004, 441 SCRA 188; Republic v. Lao, supra note
83.
[129]
Public Land Act, Sec. 48(b).
[130]
Public Estates Authority v. Court of Appeals, supra note 69.
[131]
Commonwealth Act No. 141, Chapter IV.
[132]
Id., Chapter V.
[133]
House Bill No. 1109. Declaring Certain Parcels of the Public Domain Within Boracay Island, Malay, Aklan as
Agricultural Land Open to Disposition.
[134]
G.R. No. L-24796, June 28, 1968, 23 SCRA 1183, cited in Lepanto Consolidated Mining Company v.
Dumyung, G.R. Nos. L-31666-68, April 30, 1979, 89 SCRA 532.
[135]
Director of Forestry v. Muoz, id. at 1214.

95
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. Nos. L-21703-04 August 31, 1966

MATEO H. REYES and JUAN H. REYES, petitioners and appellants,


vs.
MATEO RAVAL REYES, respondent and appellee.

Harold M. Hernando for petitioners and appellants.


Rafael Ruiz for respondent and appellee.

REYES, J.B.L., J.:

Direct appeal on pure question of law from an order of the Court of First Instance of Ilocos Norte, in
its Cadastral Cases Nos. 31, L. R. C. Rec. No. 1188, and 42, L. R. C. Rec. No. 1994, denying
petitioners' motion to compel respondent to surrender their owners' duplicates of Original Certificates
of Title Nos. 22161 and 8066, as well as from a subsequent order of the same court, refusing, upon
petitioners' motion, to reconsider the first order of denial.

The undisputed facts are: three brothers, Mateo H., Juan H., and Francisco H., all surnamed Reyes,
are the registered owners of several parcels of land, to wit; Lots Nos. 15891, 15896, 15902 and
15912, of the Laoag (Ilocos Norte) Cadastre, embraced in and covered by Original Certificate of Title
No. 22161, and also Lots Nos. 20481 and 20484, of the same cadastral survey, embraced in and
covered by Original Certificate of Title No. 8066, both of the Registry of Deeds of Ilocos Norte.
These titles were issued pursuant to a decree of registration, dated 31 May 1940.

On 17 July 1962, petitioners Mateo H. Reyes and Juan H. Reyes filed, in the above stated cadastral
cases, a motion for issuance of writs of possession over all the lots covered by both Certificates of
Title above referred to.

Respondent Mateo Raval Reyes opposed the motion, admitting that he is only in possession of the
lots covered by Original Certificate of Title No. 22161, but denying that he possesses the lots
covered by Original Certificate of Title No. 8066; however, he claimed that he has been in, and is
entitled to, the possession thereof (i.e., Lots Nos. 20481 and 20484), having acquired by way of
absolute sale (not recorded) from petitioners' brother, Francisco H. Reyes, the latter's undivided one-
third (1/3) share, interest and participation to these disputed lots.

After due hearing of this appellant, the court a quo issued, on 20 December 1962, the writ of
possession with respect to Lot Nos. 15891 and 15896, which writ was, upon petitioners' motion for
reconsideration, amended, on 7 January 1963, to include all the other lots covered by both titles.

Respondent did not appeal from this order amending the writ of possession.

Subsequently, petitioners in the above cadastral cases, as plaintiffs, commenced, on 15 January


1963, before the same court of first instance, an ordinary civil action seeking to recover the products
of the disputed lots, or their value, and moral damages against respondent Mateo Raval Reyes, as
defendant. This case was docketed as its Civil Case No. 3659.

Defendant therein (now respondent M. Raval Reyes) answered the complaint and pleaded a
counterclaim for partition of all the disputed lots, alleging the same ground he had heretofore raised
in his answer and/or opposition to the motion for issuance of writ of possession, i.e., he is their
(plaintiffs') co-owner, he having bought from plaintiffs' brother, Francisco H. Reyes, the latter's
undivided one-third (1/3) share, interest and participation to these disputed lots.

Pending trial on this ordinary civil case (No. 3659), petitioners presented, on 25 February 1963, in
the cadastral cases aforementioned, a motion to compel respondent Mateo Raval Reyes to
surrender and deliver to them the owners' duplicates of Original Certificates of Title Nos. 22161 and
8066. Respondent opposed this motion.

96
The court a quo denied petitioners' motion, on the ground that the parcels of land covered by both
titles are subjects of litigation in Civil Case No. 3659 and the same has not yet been decided on the
merits by it. Petitioners subjected the foregoing order to a motion for reconsideration, but without
success; hence, the present appeal.

Petitioners-appellants dispute the above ruling of the trial court contending that, since the subject
matter of Civil Case No. 3659 are not the lots covered by the titles in question but their products or
value, and moral damages, these lots are not in litigation in this ordinary civil case; and that since
respondent had already raised the issue of ownership and possession of these lots in his opposition
to the (petitioners') motion for issuance of writ of possession and, despite this opposition, the court a
quo granted the writ, without any appeal being taken, respondent is barred and estopped from
raising the same issue in the ordinary civil case, under the principle of res judicata.1äw phï1.ñët

On the other hand, respondent-appellee maintains that, having pleaded a counterclaim for partition
of the lots in question in said Civil Case No. 3659, the trial court correctly held that these lots are
subjects of litigation in this ordinary civil case. He also maintains that petitioners not having
impleaded their brother, Francisco H. Reyes, or his heirs, as parties in their motion for issuance of
writ of execution, and because these heirs have not intervened in this particular incident, the writ of
possession issued by the trial court is, at most, valid only with respect to their (petitioners) undivided
two-thirds (2/3) share and participation in these disputed lots; hence, he concludes that he is not
barred and estopped from raising the issue of ownership and possession of the undivided one-third
(1/3) share and participation of petitioners' brother, Francisco H. Reyes, which share respondent
allegedly bought from the latter.

In their reply brief, petitioners-appellants refute the latter argument of respondent-appellee by


showing that they had previously obtained special authority from the heirs of their deceased brother
to represent them in the proceedings had in the court below.

The sole issue to be resolved in the instant appeal is: who between petitioners-appellants or
respondent-appellee has a better right to the possession or custody of the disputed owners'
duplicates of certificates of title.

While we agree with the court a quo that the disputed lots are subjects of litigation in Civil Case No.
3659, it appearing that respondent, as defendant therein, had presented a counterclaim for partition
of the lots covered by the titles, we see no valid and plausible reason to justify, on this ground, the
withholding from the registered owners, such as the petitioners-appellants herein, the custody and
possession of the owners' duplicates of certificates of title. In a decided case, this Court has already
held that the owner of the land in whose favor and in whose name said land is registered and
inscribed in the certificate of title has a more preferential right to the possession of the owners'
duplicate than one whose name does not appear in the certificate and has yet to establish his right
to the possession thereto. Thus, this Court said:

Como acertadamente dijo el Juzgado, lo unico que se suscita es si Ana Umbao de Carpio
tiene derecho a la possession del duplicado para el dueno del Certificado de Titulo Original
No. 698, con preferencia a la opositora-apelante. A nuestro juicio, la solucion es clara e
ineludible. Hallandose admitido que el decreto final que se dicto en el expediente catastral
en 28 de mayo de 1936, en relacion con el lote No. 778, fue a favor de Ana Umbao y que el
duplicado para el dueño del Certificado de Titulo Original No. 698 se expidio por el
Registrador de Titulos a favor de la misma es obvious que quien tiene derecho a poseer el
certificado de titulo es ella y no la apelante (art. 41 de la Ley No. 496, tal como ha sido
reformado).

Alega la apelante que ella tiene tanto derecho como la apelada a poseer el titulo porque el
terreno a que se refiere es de la propiedad de las tres hermanas. La pretension no es
meritoria Segun el articulo 41 de la Ley No. 496, conforme ha sido enmendado, el duplicado
para el dueno debe expedirse por el Registrador a nombre de la persona a cuyo favor se ha
decretado el terreno y dispone, ademas, que dicho duplicado debe entregarsele al dueño
inscrito. Si la apelante cree que tiene derecho a participar en el lote No. 778, como
coheredera, debe ejercitar una accion independiente, encaminada a obtener su
participacion. (El Director de Terrenos contra Abacahin 72 Phil. 326).

It being undisputed that respondent had already availed of an independent civil action to recover his
alleged co-owner's share in the disputed lots by filing a counterclaim for partition in said Civil Case
No. 3659, his rights appear to be amply protected; and considering that he may also avail of, to

97
better protect his rights thereto, the provision on notice of lis pendens under Section 24, Rule 14, of
the Revised Rules of Court, for the purpose of recording the fact that the lots covered by the titles in
question are litigated in said Civil Case No. 3659, we again see no justifiable reason for respondent
to retain the custody of the owners' duplicates of certificates of titles.

In view of the above considerations, we deem it unnecessary to pass on the merits of the second
contention of petitioners-appellants.

Wherefore, the orders appealed from should be, as they are hereby, reversed; and, in accordance
with this opinion, respondent Mateo Raval Reyes is hereby ordered to deliver to petitioners the
owners' duplicates of Original Certificates of Title No. 22161 and 8066. With costs against
respondent-appellee, Mateo Raval Reyes.

Concepcion, C.J., Barrera, Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ.,
concur.
Regala, J., took no part.

98
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-68741 January 28, 1988

NATIONAL GRAINS AUTHORITY, plaintiff-appellee,


vs.
INTERMEDIATE APPELLATE COURT, MELECIO MAGCAMIT, NENA COSICO and EMELITA
MAGCAMIT, defendants-appellants.

PARAS, J.:

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

99
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

100
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]).

101
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.

102
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.

Teehankee, C.J., Narvasa, Cruz and Gancayco, JJ., concur.

Footnotes

* IAC, 4th Civil Cases Division, penned by Justice Porfirio V. Sison,with the
concurrence of Justices Abdulwahid A. Bidin, Mareelino R. Veloso and Desiderio P.
Jurado.

** Presided by Judge Conrado T. Limcaoco.

103
THIRD DIVISION

FLAVIANA LIM CAJAYON and G.R. No. 149118


CARMELITA LIM CONSTANTINO,
Petitioners,
Present:

QUISUMBING, J.,
Chairman,
- versus - CARPIO,
CARPIO-MORALES, and
TINGA, JJ.

SPOUSES SANTIAGO and Promulgated:


FORTUNATA BATUYONG,
Respondents.
February 16, 2006
x------------------------------------------------------------------------------------x

DECISION

TINGA, J.:

This petition for review on certiorari challenges the two rulings of the Court
of Appeals in CA G.R. SP. No. 50952. The first decision dated 27 November
2000[1]upheld the ruling of the Regional Trial Court (RTC) affirming the
Metropolitan Trial Court (MeTC) order for ejectment, while the Resolution
dated 5 July 2001[2]denied the motion for reconsideration.

104
First, the factual background of the case.

Flaviana Lim Cajayon and Carmelita Lim Constantino (petitioners) and Isagani
P. Candelaria (Candelaria) were co-owners of a 260-square meter lot, then
covered by Transfer Certificate of Title (TCT) No. C-10870. On 1 February
1995, a partition agreement[3] was entered into by petitioners and Candelaria,
wherein Lot 6-A, Psd 00-034294, containing an area of 100 square meters,
more or less, was adjudicated to Candelaria, while Lot 6-B, Psd 00-034294,
containing an area of 160 square meters, more or less, was given to
petitioners. TCT No. C-10870 was cancelled and TCT No. 288500 was issued in
the name of petitioners.

On 30 May 1995, Candelaria sold his property, including the improvements


thereon, to Spouses Santiago and Fortunata Batuyong (respondents). TCT No.
294743 was issued in their names over the said parcel of land.[4]

On 21 May 1996, petitioners started the construction of a seven (7)-door


bungalow-type building that allegedly intruded into the lot of respondents. At
the instance of respondents, petitioners were summoned by barangay
officials to a meeting on the matter. It was then agreed upon that petitioners
would defer the construction work pending the result of a relocation survey
to be conducted by a government surveyor.

A verification survey was conducted by Geodetic Engineer Florentina C.


Valencia. She submitted a report dated 12 November 1996 which yielded the
findings that Lot 6-A (Candelarias) and Lot 6-B (petitioners) were not correctly
positioned geographically on the ground with respect to TCT No.
294743. Thus, as per survey, sub-lot B with an area of 10.43 square meters
serves as right of way of Lot 6-B (petitioners lot) while sub-lot C with an area
of 10.18 square meters was the portion of Lot 6-A (respondents lot) presently
occupied by petitioners.[5]

Despite the delineation of said boundaries, petitioners proceeded with the


forestalled construction, allegedly occupying at least 20.61 square meters of
respondents lot, including the portion being used as right of way for
petitioners tenants.

105
After respondents secured a permit from the barangay and the Caloocan City
Building Official to fence their lot, they made demands to petitioners to
vacate the encroached portion but to no avail. Respondents brought the
matter to the barangay but no amicable settlement was reached. A Certificate
to File Action was issued to them by the Barangay Lupon Tagapayapa. A final
demand was made through a letter dated 20 May 1997 upon petitioners to
vacate the encroached premises.Petitioners, however, vehemently refused to
vacate and surrender the premises.

On 14 April 1997, respondents filed an ejectment case against petitioners


before the Metropolitan Trial Court[6] (MeTC) of Caloocan City, docketed as
Civil Case No. 23359. In a Decision[7] dated 2 July 1998, the MeTC ordered
petitioners to vacate and surrender possession of a portion of respondents
lot and to pay P500.00 per month as fair rental value from May 1996 until the
premises is finally vacated, plus P5,000.00 as attorneys fees and costs of the
suit.[8]

On appeal, the RTC[9] affirmed the judgment of the MeTC.[10] In doing so, the
RTC debunked the three (3) arguments posed by petitioners. First, contrary
to petitioners submission, the RTC ruled that the MeTC had jurisdiction over
the instant complaint. The RTC noted that the issue of jurisdiction was never
raised in the court a quo while on the other hand, petitioners actively
participated in the proceedings therein by filing their Answer and Position
Paper. Evidently, petitioners raised the question of jurisdiction as a mere
afterthought as he did so only after he obtained an adverse
judgment. Second, the allegations of the complaint sufficiently averred a case
for ejectment which the RTC found to be within the jurisdiction of the court a
quo. Third, the trial court ruled that petitioners categorically recognized the
validity of the verification
survey done by Engineer Valencia, as shown by the presence of petitioner
Flaviana Cajayon during the verification survey and setting of monuments per
survey report.[11]

Petitioners filed a motion for new trial and/or reconsideration but it was
denied in an Order[12] dated 12 January 1999 of the RTC. They elevated the
case to the Court of Appeals by way of petition for review under Rule 42 of
the Rules of Court. On 27 November 2000, the appellate court rendered a
Decision[13] dismissing the petition. Holding that the exclusive jurisdiction to
try unlawful detainer cases is vested with the MeTC, the appellate court
ratiocinated, thus:

106
The complaint in the instant case establishes jurisdictional facts necessary
to sustain the action for unlawful detainer and the remedy it seeks is merely
to obtain possession of the controverted lot from respondents. Specifically,
it alleges that sometime on May 21, 1996, petitioners started construction
works in the area which intruded into a portion of respondents property;
that the parties eventually agreed to stop the construction subject to the
result of a survey to be conducted thereon; that a survey was conducted in
the presence of the parties and a report was submitted by Engr. Valencia
on November 12, 1996, showing an encroachment of about 20.61 square
meters of respondents lot including that portion being used as a right of
way for petitioners tenants; that even after the boundaries had been
verified, petitioners resumed the construction on the area; that despite
verbal and written demands, the last of which was made on March 20,
1999, petitioners refused to vacate and surrender the encroached
area. Surely, respondents resort to unlawful detainer when petitioners
failed to leave the controverted premises upon demand is in order.[14]

The appellate court also held that the fact that petitioners houses already
stood on the controverted lot long before the purchase of the land by
respondents failed to negate the case for ejectment.[15] The appellate court
emphasized that prior physical possession is not a condition sine qua non in
unlawful detainer cases. The court likewise sustained the RTC findings on the
validity of the verification survey conducted by Engineer Valencia that
petitioners have encroached on a 20.61 square meter portion of respondents
lot.

On 5 July 2001, the Court of Appeals issued a Resolution[16] denying


petitioners Motion for Reconsideration.

Petitioners now come to us via the present petition, submitting as issues the
question of jurisdiction and the weight to be accorded to the verification
survey results.[17]

Petitioners anchor their petition on the court a quos lack of jurisdiction over
the instant suit. The averments in the complaint do not make out a case for
ejectment, they claim, as their entry into the disputed lot was not made by
force, intimidation, threat, strategy or stealth. Neither was their possession

107
of the disputed property by virtue of the tolerance of respondents or the
latters predecessor-in-interest.
Respondents counter that the jurisdictional elements necessary to maintain
an action for unlawful detainer clearly obtain in the case at bar, namely: (a)
after the parties agreed to the conduct of a survey by a government surveyor
and after the survey, it was determined that the structures introduced by
herein petitioners have encroached a portion of herein respondents lot; (b)
notices to vacate and surrender of possession of the encroached portion were
made to petitioners, the last being on March 20, 1997; and (c) the suit was
instituted on April 11, 1997 or within one (1) year from date of last demand.[18]

Respondents also stress that possession of the premises by petitioners


took place more than one year before the filing of the complaint and the
absence of an allegation in the complaint that such possession of the disputed
portion was merely by virtue of respondents tolerance does not deprive the
lower court of its original and exclusive jurisdiction nor will it negate
respondents action for unlawful detainer.[19]

It is settled that jurisdiction of the court in ejectment cases is determined by


the allegations of the complaint and the character of the relief sought.[20]

The Complaint[21] filed by respondents (plaintiffs therein) alleged these


material facts:

2. That defendants and Isagani P. Candelaria were the former co-


owners of a certain piece of land located in
Maypajo, Caloocan City containing an area of 260 square meters, more or
less, under TCT No. C-10870 issued by the Register of Deeds of Caloocan
City;

3. That on February 1, 1995, said co-owners subdivided this parcel of


land by virtue of a Partition Agreement wherein Lot 6-A, Psd 00-034294,
containing an area of 100 square meters, more or less, was given to Isagani
P. Candelaria, while Lot 6-B, Psd 00-034294, containing an area of 160
square meters, more or less, was given to defendants. A copy of said
Partition Agreement is hereto attached as Annex A;

108
xxx xxx xxx

5. That on May 30, 1995, Isagani P. Candelaria sold his share to the
herein plaintiffs, including the improvements thereon, in the sum
of P100,000.00, under a Deed of Absolute Sale x x x;

xxx xxx xxx

7. That sometime in May 21, 1996, defendants started construction


works in the area and intruded into the lot owned by the plaintiffs causing
the latter to protest and report the matter to the barangay authorities;

8. That on the same day, the parties were summoned to appear


before the Barangay Chairman wherein defendants agreed to stop the
construction works, and in a subsequent conference on June 7, 1996, they
agreed to defer the matter pending the result of a survey to be conducted
by a government surveyor;

xxx xxx xxx

11. That the following day, September 5, 1996, Geodetic Engineer


Florentina C. Valencia conducted a survey of the aforesaid property and
placed the concrete monuments thereon in the presence of plaintiffs and
defendants;

12. That on November 12, 1996, a verification survey report was


submitted by Geodetic Engineer Florentina C. Valencia together with the
survey verification plan xxx;

13. That despite defendants knowledge of the property boundary,


and despite repeated serious objections from plaintiffs, defendants
proceeded to construct a seven-door bungalow-type semi-concrete
building, occupying at least 10.18 square meters and another 10.43 square
meters for the right of way, thus encroaching upon at least 20.61 square
meters of plaintiffs lot, and further demolishing plaintiffs wall.

xxx xxx xxx

109
20. That despite repeated and continuous demands made by
plaintiffs upon defendants, both oral and written, the last being on March
20, 1997, defendants in manifest bad faith, wanton attitude, and in a
malevolent and oppressive manner and in utter disregard of the property
rights of plaintiffs, have failed and refused, and still fail and refuse to
vacate the same up to the present time x x x.[22]

From the above-quoted allegations taken in tandem with the textbook


distinctions between forcible entry and unlawful detainer, it is clear that the
complaint makes out a case for forcible entry, as opposed to unlawful
detainer. The distinctions between the two forms of ejectment suits, are:
first, in forcible entry, the plaintiff must prove that he was in prior physical
possession of the premises until he was deprived thereof by the defendant,
whereas, in unlawful detainer, the plaintiff need not have been in prior
physical possession; second, in forcible entry, the possession of the land by
the defendant is unlawful from the beginning as he acquires possession
thereof by force, intimidation, threat, strategy or stealth, while in unlawful
detainer, the possession of the defendant is inceptively lawful but it becomes
illegal by reason of the termination of his right to the possession of the
property under his contract with the plaintiff; third, in forcible entry, the law
does not require a previous demand for the defendant to vacate the
premises, but in unlawful detainer, the plaintiff must first make such demand,
which is jurisdictional in nature.[23]

Respondents had been in prior physical possession of the property in


the concept of owner prior to petitioners intrusion on 21 May 1996. When
petitioners encroached upon respondents lot and started construction works
thereon the latter was dispossessed of the area involved. Despite various
demands by respondents to vacate, petitioners obstinately refused to do
so. Clearly, petitioners entry into the said property was illegal from the
beginning, precluding an action for unlawful detainer.

On the other hand, to establish a case of forcible entry, the complaint


must allege that one in physical possession of a land or building has been
deprived of that possession by another through force, intimidation, threat,
strategy or stealth.[24] It is not essential, however, that the complaint should
expressly employ the language of the law. It would be sufficient that facts are
set up showing that dispossession took place under said conditions.[25]
110
The words "by force, intimidation, threat, strategy or stealth" include
every situation or condition under which one person can wrongfully enter
upon real property and exclude another, who has had prior possession
thereof. To constitute the use of "force" as contemplated in the above-
mentioned provision, the trespasser does not have to institute a state of war.
Nor is it even necessary that he use violence against the person of the party
in possession. The act of going on the property and excluding the lawful
possessor therefrom necessarily implies the exertion of force over the
property, and this is all that is necessary.[26] In the case at bar, petitioners
encroachment into respondents property in an oppressive and malevolent
manner, coupled with their refusal to vacate the premises despite knowledge
of the proper boundaries and heedless of respondents serious objections,
indelibly connotes force within the meaning of the law.

Petitioners contend that while they concede they might have intruded
on respondents property, the action is barred by prescription because it was
filed more than one (1) year after the occurrence of the alleged intrusion. The
contention is baseless. Section 1, Rule 70 of the Rules of Court allows a
plaintiff to bring an action in the proper inferior court for forcible entry or
unlawful detainer within one (1) year, respectively, after such unlawful
deprivation or withholding of possession. In forcible entry, the one-year
period is counted from the date of actual entry on the land.[27]

Records show that the ejectment suit was instituted on 11 April


1997. Petitioners actual entry into the property, according to the complaint,
took place on 21 May 1996. Thus, the suit was filed well within the one (1)-
year period mandated by law.

As a collateral issue, petitioners claim that they are at least entitled to


the rights of a builder in good faith on the premise that they are not the
owners of the property encroached upon.

This contention is not tenable. Good faith consists in the belief of the builder
that the land he is building on is his and his ignorance of any defect or flaw in
his title.[28] In the instant case, when the verification survey report came to
petitioners knowledge their good faith ceased. The survey report is a
professionals field confirmation of petitioners encroachment of respondents

111
titled property. It is doctrinal in land registration law that possession of titled
property adverse to the registered owner is necessarily tainted with bad
faith. Thus, proceeding with the construction works on the disputed lot
despite knowledge of respondents ownership put petitioners in bad faith.

Now, the second issue. Petitioners question the evidentiary weight of the
verification survey report. They point out that since the survey was a
unilateral act of respondents, done as it was without their consent, they
should not be bound by its findings.[29]

In raising the issue, petitioners are in effect asking this Court to reassess the
factual findings of the courts below, a task which is beyond this Courts
domain. Factual matters cannot be raised in a petition for review on
certiorari. This Court at this stage is limited to reviewing errors of law that
may have been committed by the lower courts.[30] We find no ample reason
to depart from this rule, more so in this case where the Court of Appeals has
affirmed the factual findings of the RTC and the MeTC.

Moreover, there is a presumption that official duty is regularly


performed,[31] i.e., government officials who perform them are clothed with
the presumption of regularity,[32] as the courts below pointed out.[33] In this
case, the verification survey was conducted by a government functionary.

Even prescinding from the presumption of regularity, what appears on


record is that the verification survey was conducted with the agreement of
both parties and in their presence. That was the finding made by the courts
below and affirmed by the appellate court without any wrinkle.[34]

WHEREFORE, based on the foregoing, this Petition is DENIED and the assailed
Decision AFFIRMED. Costs against petitioners.

SO ORDERED.

DANTE O. TINGA Associate


Justice

112
WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
Chairman

ANTONIO T. CARPIO CONCHITA CARPIO-MORALES


Associate Justice Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of
the Courts Division.

LEONARDO A. QUISUMBING
Associate Justice
Chairman, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairmans Attestation, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.

113
ARTEMIO V. PANGANIBAN
Chief Justice

[1]
Penned by Associate Justice Rebecca De Guia-Salvador and concurred in by Associate Justices Ruben T.
Reyes and Mariano M. Umali.

[2]
Penned by Associate Justice Rebecca De Guia-Salvador and concurred in by Associate Justices Oswaldo
D. Agcaoili and Bienvenido L. Reyes.
[3]
Rollo, p. 64.
[4]
Id. at 68-69.
[5]
Id. at 127.
[6]
Presided by Judge Belen B. Ortiz.
[7]
Rollo, pp. 126-130.
[8]
Id. at 130.
[9]
Presided by Acting Judge Adoracion G. Angeles.
[10]
Rollo, pp. 152-156. Decision dated 9 October 1998.
[11]
Id. at 72.
[12]
Id. at 168-169.
[13]
Id. at 7-16.
[14]
Id. at 11-12.
[15]
Id. at 13.
[16]
Id. at 29-30.
[17]
Id. at 40-41.
[18]
Id. at 276.

[19]
Id. at 237.
[20]
Ross Rica Sales Center v. Spouses Ong, G.R. No. 132197, 16 August 2005, citing Caniza v. Court of
Appeals, 335 Phil. 1107 (1997) and Ten Forty Realty and Development Corp. v. Cruz, G.R. No. 151212, 10 September
2003, 410 SCRA 484; Ganila, et. al. v. Court of Appeals, G.R. No. 150755, 28 June 2005, citing Heirs of Demetrio
Melchor v. Melchor, G.R. No. 150633, 12 November 2003, 415 SCRA 726, 732; Tecson v. Gutierrez, G.R. No.
152978, 4 March 2005.
[21]
Rollo, pp. 58-62.
[22]
Id. at 58-61. Emphasis supplied.

[23]
Muoz v. Court of Appeals, G.R. No. 102693, 23 September 1992, 214 SCRA 216 citing Dikit v. Icasiano,
89 Phil. 44 (1951); Medel v. Militante, 41 Phil. 44 (1921); Maddamu v. Judge, 74 Phil. 230 (1944); Aguilar v. Cabrera,

114
74 Phil. 666 (1944); Banayos v. Susana Realty, Inc. L-30336, 30 June 1976, 71 SCRA 557; Pharma Industries, Inc.
v. Pajarillaga, et al., No. L-53788, 17 October 1980, 100 SCRA 339.
[24]
RULES OF COURT, Rule 70, Sec. 1.
[25]
O. HERRERA, REMEDIAL LAW, Vol. III 406 (1999 ed.).
[26]
David v. Cordova, G.R. No. 152992, 28 July 2005, citing Mediran v. Villanueva, 37 Phil. 752
(1918); Joven v. Court of Appeals, G.R. No. 80739, 2 August 1992, 212 SCRA 700.
[27]
Varona v. Court of Appeals, G.R. No. 124148, 20 May 2004, 428 SCRA 577; Gener v. De Leon, G.R. No.
130730, 19 October 2001, 367 SCRA 631, citing Sps. Pedro Ong and Veronica Ong v. Socorro Parel and Hon. Court
of Appeals, G.R. No. 143173, 28 March 2001; Sarona v. Villegas, 131 Phil. 365 (1968).
[28]
Evadel Realty and Development Corp. v. Soriano, G.R. No. 14429, 20 April 2001, 357 SCRA 395.
[29]
Rollo, p. 52.
[30]
Filinvest Land v. Court of Appeals, G.R. No. 138980, 20 September 2005, citing Alvarez v. Court of
Appeals, G.R. No. 142843, 6 August 2003, 408 SCRA 419.
[31]
RULES OF COURT, Rule 131, Sec. 3(m).
[32]
Republic v. Nolasco, G.R. No. 155108, 27 April 2005; People v. De La Cruz, G.R. No. 148730, 26 June
2003, 405 SCRA 112.

[33]
Said the MeTC:

As rightly pointed out by the plaintiffs in their position statement, there is no law that
prohibits the conduct of a verification survey. Indeed, a survey enjoys the
presumption of accuracy until it can be proven otherwise. (Rollo, p. 129)

On appeal, the RTC further elucidated, thus:

Anent the conclusion of the court a quo that indeed the defendants-
appellants have encroached upon a portion of the plaintiffs-appellees lot, this Court
finds no reason to disturb the same.

It must be pointed out that there was already an admission at the barangay
level that the defendants-appellants have encroached on the lot of the plaintiffs-
appellees as evidenced by Exhibit R which was not controverted.

This fact stems from a verification survey conducted by no less than a


representative from the DENR, a government entity. The rule is that: Government
officials are presumed to perform their functions with regularity and strong evidence is
necessary to rebut this presumption. Moreover, it has been held that: Absent a strong
showing to the contrary, the Court must accept the presumption of regularity in the
performance of official duty. (Rollo, p. 155, citations omitted).
[34]
Rollo, p. 14.

115
FIRST DIVISION

[G.R. No. 172611 : July 09, 2010]

SPS. FEDERICO VALENZUELA AND LUZ BUENA-VALENZUELA PETITIONERS, SPS. JOSE MANO, JR.
AND ROSANNA REYES-MANO RESPONDENTS.

DECISION

DEL CASTILLO, J.:

The rule that a Torrens Certificate of Title is conclusive evidence of ownership of the land described
therein[1] does not apply when such land, or a portion thereof, was illegally or erroneously included in said
title.

This Petition for Review on Certiorari[2] assails the Decision[3] dated January 16, 2006 of the Court of Appeals
(CA) in CA-G.R. CV No. 83577, which reversed and set aside the Decision[4] dated March 10, 2004 issued by
the Regional Trial Court (RTC) of Bulacan, Branch 14, in Civil Case No. 1065-M-99. Also assailed is the
Resolution[5] dated May 3, 2006 denying the motion for reconsideration.

Factual Antecedents

Petitioner Federico Valenzuela (Federico) is the son of Andres Valenzuela (Andres) who was the owner and
possessor of a parcel of land with an area of 938 square meters, more or less, located at Dampol 1st, Pulilan,
Bulacan. The property was declared in the name of Andres under Declaration of Real Property No.
7187[6] which described the property as follows:

Location: Dampol 1st, Pulilan, Bulacan


Boundaries:
North: Camino Provincial
East: Felisa Calderon
South: Aurea Caleon
West: Benita Bailon
Kind of Land: Residential Lot
Area: 938 square meters

Andres died on October 10, 1959, and the possession of said property was transferred to Federico. On
August 5, 1980, a document denominated as Pagmamana sa Labas ng Hukuman at Pagpaparaya o
Pagkakaloob[7] was executed by the heirs of Andres who waived all their rights to the property in favor of
Federico.

Meanwhile, on February 7, 1991, a Deed of Conditional Sale[8] was executed between Feliciano Geronimo
(Feliciano) and herein respondent Jose Mano, Jr. (Jose), wherein the former agreed to sell to the latter a
2,056-square meter parcel of land located at Dampol 1st, Pulilan, Bulacan. The corresponding Deed of
Sale[9] was subsequently executed in March 1991.

On March 4, 1992,[10] Jose applied for a Free Patent and on April 10, 1992, Original Certificate of Title (OCT)
No. P-351[11] was issued in his name. This time, the property was indicated as covering an area of 2,739
square meters.

Sometime in 1997, Federico declared in his name under Tax Declaration No. 97-19005-01105[12] the
property covered by Declaration of Real Property No. 7187 in the name of Andres.

Subsequently, Jose sold a portion of the land covered by OCT No. P-351 to Roberto S. Balingcongan
(Balingcongan). On January 8, 1998, Transfer Certificate of Title (TCT) No. T-112865[13] was issued in the
name of Balingcongan covering 2,292 square meters. On the same date, TCT No. T-112864[14] was also
issued in the name of Jose covering 447 square meters.

Federico transferred his residence to Malabon and so he left the care of the property to his nephew, Vicente
Joson (Vicente). Sometime in 1999, Federico instructed Vicente to construct a perimeter fence on his
property but he was prevented by Jose, claiming that the 447 square meters was his property as reflected in
his TCT No. T-112864. On the other hand, Federico is claiming it as part of the property he inherited from
his father, Andres.

When the matter could not be settled amicably, the petitioners lodged a Complaint[15] for Annulment of Title
and/or Reconveyance, Damages with the RTC of Malolos, Bulacan. The case was set for pre-trial
conference[16] on March 27, 2000. Thereafter, trial ensued.

Ruling of the Regional Trial Court

The RTC found that even before Jose purchased the 2,056 square meters lot from Feliciano on February 7,
1991, he had already caused the survey of a 2,739-square meter lot on January 30, 1991. The document of
sale expressly stated that the area sold was 2,056 square meters and that the same is located in Dampol
1st, Pulilan, Bulacan. However, in March, 1991, Jose filed his application for free patent using the survey on
the 2,739 square meters. He also indicated therein that the property is located in Dampol II, Pulilan,

116
Bulacan and that the land described and applied for is not claimed or occupied by any person. He further
claimed that the property was public land which was first occupied and cultivated by Feliciano.

Thus, the trial court found that the preponderance of evidence showed that the disputed area of 447 square
meters rightfully belongs to Federico. This was a part of Lot No. 1306 originally owned and possessed by
Andres as identified and described in the Declaration of Real Property No. 7187.

On March 10, 2004, the trial court rendered a Decision, the decretal portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants, as follows:

1. Ordering the defendants to return to the plaintiffs the disputed portion consisting of 447 square meters
and now covered by TCT No. T-112864 of the Registry of Deeds of Bulacan, in the name of Jose Mano, Jr.
married to Rosanna Reyes;

2. Ordering defendants to immediately demolish and/or remove the concrete fence erected on the
premises;

3. Ordering the defendants to pay plaintiffs the amounts of P50,000.00 for moral damages; P30,000.00 for
exemplary damages and P50,000.00 for attorney's fees;

4. Ordering the Register of Deeds of Bulacan to cancel said TCT No. T-112864 of the Registry of Deeds of
Bulacan;

5. Defendants to pay costs of this suit.

SO ORDERED.[17]

Ruling of the Court of Appeals

Respondents went to the CA on appeal. In a Decision[18] dated January 16, 2006, the CA reversed and set
aside the ruling of the RTC and dismissed the complaint. According to the CA, respondents satisfactorily
proved their ownership over the disputed property. The Free Patent No. 031418-92-463 and the TCT No. T-
112864, as well as the tax declaration offered in evidence by respondents are more convincing than the
evidence presented by the petitioners. Also, petitioners failed to prove by clear and convincing evidence the
fact of fraud allegedly committed by Jose in obtaining title to the disputed property.

The Motion for Reconsideration filed by petitioners was denied by the CA through its Resolution[19] dated May
3, 2006.

Issues

Hence, this petition raising the following issues:

I.

Whether the CA gravely abused its discretion when it declared that petitioners were unable to prove
ownership of the disputed portion notwithstanding evidence introduced and admitted.

II.

Whether the CA gravely abused its discretion, amounting to lack of jurisdiction, when it reversed the
decision of the lower court finding fraud committed by the respondent in obtaining title to the property in
question.

Simply put, the issues raised are: (1) Did the CA err in holding that the respondents are the owners of the
disputed 447 square meter property? and (2) Did the CA err in finding that no fraud was committed by the
respondents in obtaining title to the disputed property?

Petitioners' Arguments

Petitioners argue that the CA erred in not holding that they are the rightful owners as Federico inherited the
property from his father Andres, who died on October 10, 1959. Jose purchased a parcel of land from
Feliciano measuring only 2,056 square meters but his application for free patent indicated a lot with a total
area of 2,739 square meters. Moreover, he indicated the same to be located at Dampol II, Pulilan, Bulacan;
however, it is actually located at Dampol 1st. He also declared that the said property is not claimed or
occupied by any person but the truth is that the 447 square meters is owned and possessed by Federico.

Respondents' Arguments

Respondents, on the other hand, contend that they have a better title to the property. The certificate of title
issued in their name is an absolute and indefeasible evidence of ownership of the property. It is binding and
conclusive upon the whole world. There was also no proof or evidence presented to support the alleged
fraud on the part of Jose, nor was there any allegation of specific acts committed by him which constitute
fraud.

117
Our Ruling

After serious consideration, we find petitioners' arguments to be meritorious.

There is preponderance of evidence that


Federico is the owner of the disputed
property.

We rule that Federico is the owner of the disputed 447 square meter lot. The Deed of Conditional Sale
described the property purchased by Jose as follows:

A part of parcel of land (T.D. No. 14312) situated at Dampol 1st, Pulilan, Bulacan. Bounded on the North- Lot
6225; East- Lot 1306 & 1311; South- Lot 1307 and 1308 and West- Lot 1304 & 1299. Containing an area of
Two Thousand Fifty Six (2,056) square meters, more or less. (Bulacan)."

Feliciano sold a portion of Lot 1305 to Jose. After the sale was made, a Sketch/Special Plan[20] was prepared
by Geodetic Engineer Fortunato E. Chavez. It is clear from such document that Lot 1305-A representing the
upper portion with an area of 1,112 square meters was retained by Feliciano and what was sold was the
lower portion thereof which became Lot No. 1305-B with a total area of 2,292 square meters. This exceeds
the area of 2,056 square meters indicated in the above sale transaction.

In another Sketch/Special Plan[21] prepared by Geodetic Engineer Norberto C. Chavez, it is shown that Lot
No. 10176-B with an area of 2,292 square meters with a right of way going to Camino Provincial Highway
was the one sold to Jose and which was also sold by him to the Balingcongan spouses. This is also known
as Lot No. 1305-B. TCT No. T-112865 was issued in the name of the spouses Balingcongan. Lot No. 10175
which represents the upper portion of Lot No. 1305 was retained by Feliciano. This is also known as Lot No.
1305-A. However, what is surprising is that the said plan showed that Lot No. 10176-A with an area of 447
square meters had been made to appear as part of the lot sold by Feliciano to Jose. TCT No. T-112864 was
issued in the name of Jose. If indeed this disputed area is part of Lot No. 1305 then it should have been
part of Lot No. 1305-A which was retained by Feliciano as it is at the East side of the said property.

Moreover, during the ocular inspection,[22] it was observed that all the neighboring lots are either square or
rectangle. There is an old fence, measuring about 40 meters long (abutting the newly constructed fence),
which bounds the true and actual area purchased by Jose. Thus, if the old fence is followed, the land
purchased would either be square or rectangular like the adjoining lots. However, if the disputed 447
square meters would be included in the land purchased by Jose, the same would slant remarkably to the
right, to the extent of covering the entire area fronting the provincial road, which as per tax declaration of
Federico, is the boundary of his land on the north.

Furthermore, Feliciano, the owner of Lot No. 1305 from whom Jose acquired the property through sale,
testified that his lot is only about 2,000 square meters and that Andres owns the adjoining lot which is
enclosed by a fence. Part of his testimony is copied verbatim to wit:

ATTY. NATIVIDAD:

Q. But before they caused the measuring of the lot in question, do you
have any idea how much is the area of the lot?
A. About 2,000 plus, sir.

Q. This property measuring about 2,000 plus, as you mentioned a while


ago before it was surveyed by them, who is the present owner of
this property?
A. Jose Mano, sir.

Q. How did Jose Mano become the owner of the property?


A. I sold it to him in 1991, sir.

xxxx

118
Q. Mr. Geronimo, I withdraw the manifestation.
May we further request that the description of the land indicated in
the first page thereof particularly the boundary and the area be
bracketed and be marked as Exhibit D-3, your Honor.

Do you know your boundary owners of this lot located at Dampol 1st,
Pulilan, Bulacan?

A. Teresa and Andres Valenzuela, sir.

Q. Who else if you know?


A. It is all that I could remember of, sir.

Q. At the time that the property was acquired from you by Jose Mano or
by the defendants, do you have any fence erected on your property?
A. None, sir. The adjacent lot has, sir.

COURT:On all sides?

A. On Teresa and Andres Valenzuela's side, sir.

Q. They were fenced?


A. Yes, there is, sir. [23]
The testimony of Feliciano from whom Jose purchased the property coincides with the observation made
during the ocular inspection conducted by the RTC that there is an old fence, measuring about 40 meters
which encloses the true and actual area purchased by Jose. Feliciano retained the upper portion of Lot No.
1305 which eventually became Lot No. 1305-A because it is along the national highway. The disputed 447
square meters property is located at the eastern side of Lot No. 1305-A. He gave Jose a right of way at the
western side[24] of the lot he retained for himself. This supports the theory that Feliciano was fully aware
that the property at the eastern part of his property belonged to Andres from whom Federico inherited the
said lot. This is the reason why a right of way going to the national highway was given to Jose between Lot
No. 1305-A and Lot No. 1304. If the disputed property is part of the sale as claimed by Jose then Feliciano
would not have given the said right of way but would rather keep it to himself.

"Settled is the rule that a person, whose certificate of title included by mistake or oversight the land owned
by another, does not become the owner of such land by virtue of the certificate alone. The Torrens System
is intended to guarantee the integrity and conclusiveness of the certificate of registration but is not intended
to perpetrate fraud against the real owner of the land. The certificate of title cannot be used to protect a
usurper from the true owner."[25]

Jose committed fraud in obtaining the


title to the disputed property.

Anent the second issue, we rule that Jose committed fraud in obtaining title to the disputed property. The
chain of events leading to the issuance of title in his name shows beyond cavil the bad faith or a fraudulent
pattern on his part. The evidence on record disclosed that even before Jose purchased the 2,056 square
meters from Feliciano, he had already caused on January 30, 1991 the survey of a 2,739 square meters
lot. Although the document of sale expressly stated that the area sold was 2,056 square meters and is
located at Dampol 1st, Pulilan, Bulacan, however, when he filed his application for free patent in March 1991,
he used the survey on the 2,739 square meters and indicated the same to be located at Dampol II, Pulilan,
Bulacan. Also, in his application, he stated that the land described and applied for is not claimed or occupied
by any person when in reality the same is owned and possessed by Federico.

Petitioners are entitled to an award


of moral and exemplary damages.

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Article 2217[26] of the Civil Code defines what are included in moral damages while Article 2219 enumerates
the cases where they may be recovered. Moral damages are in the category of an award designed to
compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer.[27] "The
person claiming moral damages must prove the existence of bad faith by clear and convincing evidence for
the law always presumes good faith. It is not enough that one merely suffered sleepless nights, mental
anguish, serious anxiety as the result of the actuations of the other party. Invariably such action must be
shown to have been willfully done in bad faith or with ill motive."[28] In the same fashion, to warrant the
award of exemplary damages, the wrongful act must be accompanied by bad faith, and an award of
damages would be allowed only if the guilty party acted in wanton, fraudulent, reckless or malevolent
manner.[29] As regards attorney's fees, the law is clear that in the absence of stipulation, attorney's fees
may be recovered as actual or compensatory damages under any of the circumstances provided for in
Article 2208[30] of the Civil Code.

Having ruled that Jose committed fraud in obtaining title to the disputed property then he should be liable
for both moral and exemplary damages. Likewise, since petitioners were compelled to litigate to protect
their rights and having proved that Jose acted in bad faith, attorney's fees should likewise be awarded.

WHEREFORE, the instant petition for review on certiorari is GRANTED. The assailed Decision of the Court
of Appeals in CA-G.R. CV No. 83577 dated January 16, 2006 and its May 3, 2006 Resolution are REVERSED
and SET ASIDE. The Decision of the Regional Trial Court of Bulacan, Branch 14 in Civil Case No. 1065-M-99
dated March 10, 2004 is reinstated and AFFIRMED.

SO ORDERED.

Corona, (Chairperson), Brion,* Abad, **


and Perez, JJ., concur.

Endnotes:

*
Per Special Order No. 856 dated July 1, 2010.

**
Per Special Order No. 869 dated July 5, 2010.

[1]
See Carvajal v. Court of Appeals, 345 Phil. 582, 594 (1997).

[2]
Rollo, pp.12-31.

Id. at 46-60; penned by Associate Justice Jose L. Sabio, Jr. and concurred in by Associate Justices Jose C.
[3]

Mendoza (now a Member of this Court) and Arturo G. Tayag.

[4]
Id. at 32-44; penned by Judge Petrita Braga Dime.

[5]
Id. at 67-68.

[6]
Records, Vol. I, p.9.

[7]
Id. at 6-8.

[8]
Id. at 11-12.

[9]
Id. at 13.

[10]
Id. at 86.

[11]
Id. at 153.

[12]
Id. at 10.

[13]
Id. at 156.

[14]
Id. at 155.

[15]
Id. at 1-5.

[16]
Id. at 50.

[17]
Rollo, pp. 43-44.

[18]
Id. at 46-60.

[19]
CA rollo, pp. 109-110.

[20]
Records, Vol. I, p. 201.

[21]
Id. at 205.

120
[22]
Id. at 237-241.

[23]
TSN, September 18, 2001, pp. 4-11.

[24]
Records, Vol. I, p. 201.

[25]
Heirs of Toribio Waga v. Sacabin, G.R. No. 159131, July 27, 2009, 594 SCRA 41, 45.

Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
[26]

reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's
wrongful act or omission.

[27]
ABS-CBN Broadcasting Corp. v. Court of Appeals, 361 Phil 499, 529 (1999).

[28]
Ace Haulers Corp. v. Court of Appeals, 393 Phil 220, 230 (2000).

[29]
Francisco v. Ferrer, Jr., 405 Phil. 741, 750 (2001).

[30]
It reads as follows:

ART. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs,
cannot be recovered, except:

(1) When exemplary damages are awarded;


(2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur
expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly
valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of
litigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must be reasonable.

121