1
PANGANIBAN vs. DAYRIT
G.R. No. 151235 | 2005-07-28
Tinga, J.:
This is a petition for review on certiorari seeking the partial
reversal of the Decision[1] and the Resolution[2] denying the
motion for reconsideration rendered by the Court of Appeals (CA)
Second Division in CA-G.R. CV No. 57148.
This case stemmed from a petition for cancellation of owner's
duplicate copy of Original Certificate of Title (OCT) No. 7864 of
the Registry of Deeds of Misamis Oriental and recovery of
damages filed by the heirs of Juan and Ines Panganiban, more
particularly Erlinda B. Pacursa, Ernesto P. Baconga, Asito P.
Baconga and Anita B. Fuentes, against Angelina N. Dayrit,
respondent herein, on 3 April 1992.[3] The petition was later
amended to add the heirs of Asito P. Baconga as petitioners upon
the latter's death and to include a prayer for quieting of title over
the property in dispute.[4]
The undisputed operative facts follow.
The property subject of controversy is a two thousand twenty-five
(2,025)-square meter portion of a lot denominated as Lot 1436,
situated at Kauswagan, Cagayan de Oro City. It constitutes three-
fourths (3/4) of Lot 1436, one of the three (3) lots covered by OCT
No. 7864, the other two being Lots 1441 and 1485. OCT No. 7864
was registered in the names of Juan Panganiban (Juan) and Ines
Panganiban (Ines), father and daughter respectively, on 17 April
1940.[5] Juan died sometime in June 1942[6] while Ines, his only
child, died in April 1944.[7]
In the amended complaint filed with the trial court, petitioners
alleged that they are the possessors and owners of Lot 1436
which they inherited from the late Juan and Ines. They
acknowledge that Lot 1436 was the only remaining lot covered by
OCT No. 7864, Lots 1485 and 1441 having been sold in 1949 to
Galo Sabanal and Pablo Dagbay respectively, by virtue of a deed
denominated as Extrajudicial Settlement of Estate Among Heirs
and Sale.[8]
The owner's duplicate copy of OCT No. 7864 covering Lot 1436
had been lost but upon petition with the trial court in 1977 by
Erlinda B. Pacursa (Erlinda), one of the heirs of Ines and a
petitioner herein, the trial court granted the petition.[9]
Accordingly, the Register of Deeds of Misamis Oriental issued an
owner's duplicate certificate of OCT No. 7864 to Erlinda.[10]
Petitioners further alleged that unknown to them, a certain
Cristobal Salcedo (Salcedo) asserted ownership over Lot 1436
and believing that it was unregistered, sold a portion of it to
respondent. The latter subsequently discovered that what she had
bought was registered land. Unable to annotate the deed of sale
at the back of OCT No. 7864, respondent fraudulently filed a
petition for issuance of the owner's copy of said title, docketed as
Misc. Case No. 90-018 in March 1990. This petition of the
respondent alleged that the copy issued to Erlinda was lost in the
fire that razed Lapasan, Cagayan de Oro City in 1981. While the
petition mentioned Erlinda as the last one in possession of the
alleged lost owner's duplicate copy of the title, she was not
notified of the proceedings.[11]
The petition in Misc. Case No. 90-018 was subsequently granted
and the Register of Deeds of Misamis Oriental issued an owner's
duplicate certificate of OCT No. 7864 to respondent.[12] This
second duplicate certificate issued to respondent contained Entry
No. 160180, the annotation of a Notice of Adverse Claim filed by
Erlinda.[13] The Notice of Adverse Claim[14] dated 24 February
1992 alleged in part that Erlinda is one of the lawful heirs of Juan
and Ines, the registered owners of the property, and as such, she
has a legitimate claim thereto.
Petitioners further alleged that the newly issued owner's duplicate
certificate of OCT No. 7864 to respondent was prejudicial to their
previously issued title which is still in existence. Thus, they prayed
among others that they be declared as the rightful owners of the
property in question and that the duplicate certificate of OCT No.
7864 in their possession be deemed valid and subsisting.[15]
In her answer to the amended complaint, respondent denied all
the material allegations of the complaint and set up affirmative
and special defenses. She alleged that Lot 1436 was actually sold
sometime in 1947 by the petitioners themselves and their father,
Mauricio Baconga. The sale was purportedly covered by a Deed
of Definite Sale. Salcedo then came into ownership, possession
and enjoyment of the property in question.[16] On 14 February
1978, Salcedo sold a portion of Lot 1436 with an area of two
thousand twenty- five (2,025) square meters, more or less, to
respondent. From then on, the property in question has been in
her actual and physical enjoyment, she added.[17]
Respondent further alleged that the complaint was barred by the
principles of estoppel and laches by virtue of the sales executed
by petitioners themselves and their father. The complaint,
according to her, also failed to include as defendants, the heirs of
Salcedo who are indispensable parties.[18]
On 10 August 1992, upon motion duly granted, respondent filed a
third-party complaint against the heirs of Salcedo alleging that as
such heirs, they carry the burden of warranting that their
predecessors in interest were the true, legal and rightful owners of
the property in question at the time of the sale. Hence, she prayed
therein that she be maintained in peaceful and legal ownership,
possession and enjoyment of the questioned property.[19]
Answering the third-party complaint, the heirs of Salcedo
effectively admitted the existence of the 1978 deed of sale in
favor of respondent by their parents and considered the sale as
within the personal and legal right of their parents and an act
outside their control.[20]
After due trial and consideration of the documentary and
testimonial evidence adduced by both parties, the trial court
rendered a decision against petitioners and in favor of
respondent. The dispositive portion of the decision provides:
WHEREFORE, premises considered judgment is hereby
rendered:
1. DISMISSING plaintiff's complaint, for lack of merit and cause of
action;
2. DECLARING defendant as the true and real owner of the lot in
question;
3. DECLARING the owner's duplicate copy of Original Certificate
of Title No. 7864 (plaintiff's Exh. "A") null and void same being
obtained by plaintiffs when they were not owners anymore of Lot
1436;
4. DECLARING the owner's duplicate copy of Original Certificate
of Title No. 7864 obtained by defendant (Exh. "1") as the one valid
to be given like faith and credit as the one that was lost and
declared null and void; and
5. ORDERING the Register of Deeds of Cagayan de Oro City to
issue a transfer certificate of title to Angela N. Dayrit, herein
defendant, for her 2,025 square meter portion of Lot 1436; to
Anita Baconga Fuentes for her 505 square meter portion of Lot
1436 and to Atty. Isabelo N. Pacursa or his heirs, he being
allegedly dead already, for his 170 square meter portion of Lot
1436 and after they shall have presented an approved subdivision
plan and an agreement to partition, to issue to each of them, their
respective transfer certificate of title with an area according to the
respective technical description corresponding to each of their
land.
Defendant's counterclaim and third-party complaint are hereby
dismissed.
SO ORDERED.[21]
The Regional Trial Court Decision was modified by the CA on
appeal by petitioners. The appellate court held that contrary to the
ruling of the trial court, the valid and subsisting duplicate
certificate of OCT No. 7864 was the one issued to Erlinda, not to
respondent, considering that respondent had failed to comply with
the mandatory jurisdictional requirements of law for the
reconstitution of title under Sec. 13 of Republic Act No. 26.[22]
The CA invoked the doctrine that a trial court does not acquire
jurisdiction over a petition for the issuance of a new owner's
duplicate certificate of title if the original is in fact not lost.
Citing Strait Times, Inc. v. Court of Appeals,[23] the CA held that
the reconstituted certificate is itself void once the existence of the
original is unquestionably demonstrated.[24]

Nonetheless, the CA affirmed in all other respects the ruling of the
trial court, including the critical holding that respondent was the
owner of the subject property. The decretal portion of the CA's decision
reads:
WHEREFORE, in view of the foregoing, and pursuant to applicable law and
jurisprudence on the matter and evidence on hand, judgment is hereby
rendered granting partly the instant appeal. Consequently, the decision of
the trial court is MODIFIED so as to order the cancellation of the owner's
duplicate copy of OCT No. 7864 issued to defendant Angelina Dayrit and
declaring the owner's duplicate copy of OCT No. 7864 (Exh. "A" and
sub-markings with SN No. 014439) to be still valid for all intents and
purposes and to be given like faith and credit as the original. All other
aspects are AFFIRMED. No costs.
SO ORDERED.[25] (Emphasis in the original.)
Petitioners now come before this Court seeking the partial reversal of the
decision rendered by the CA. They contend that the CA erred in finding that
the tax declarations and the alleged adverse possession of respondent and
her predecessor-in-interest are conclusive proofs of their ownership of Lot
1436. They further contend that the CA erred when it found them guilty of
laches.[26]
However, it is apparent that in order that the petition may be properly
resolved, we must ascertain first, who between petitioners and respondent
is the rightful owner of the property in dispute and second, whether
petitioners' right to recover the property is barred by laches assuming they
are the rightful owners thereof as they claim.
The resolution of the foregoing issues hinges on the question of which
owner's duplicate certificate of title is valid and subsisting, the one in
petitioners' possession or the one issued to respondent. What appears on
the face of the title is controlling in questions of ownership since the
certificate of title is an absolute and indefeasible evidence of ownership of
the property in favor of the person whose name appears therein.[27]
The CA correctly ruled that the duplicate certificate of title in petitioners'
possession is valid and subsisting. This Court had already ruled in Serra
Serra v. Court of Appeals[28] that if a certificate of title has not been lost
but is in fact in the possession of another person, the reconstituted title is
void and the court rendering the decision has not acquired jurisdiction over
the petition for issuance of a new title.[29] Since the owner's duplicate copy
of OCT No. 7864 earlier issued to Erlinda is still in existence, the lower
court did not acquire jurisdiction over respondent's petition for reconstitution
of title. The duplicate certificate of title subsequently issued to respondent is
therefore void and of no effect.
The registered owners of OCT No. 7864 on the face of the valid and
subsisting duplicate certificate of title are still Juan and Ines, petitioners'
predecessors in interest.[30] Per Section 46 of the Land Registration Act,
no title to registered land in derogation to that of the registered owner shall
be acquired by prescription or adverse possession. This rule taken in
conjunction with the indefeasibility of a Torrens title leads to the conclusion
that the rightful owners of the property in dispute are petitioners. They are
indisputably the heirs of the registered owners, both of whom are already
dead.
These premises considered, it was error on the part of the trial court to rule
that respondent was the owner of the subject property and for the CA to
have affirmed such holding. We rule instead that the successors-in-interest
of Juan and Ines are the legal owners of the subject property, namely
petitioners herein.
Petitioners' ownership of the property having been established, the
question now is whether they are entitled to its possession. On this point,
the Court rules in the negative. Petitioners are no longer entitled to recover
possession of the property by virtue of the equitable defense of laches.
Thus, petitioners' argument that laches is not applicable to them has no
merit. By laches is meant:
...the failure or neglect, for an unreasonable and unexplained length of
time, to do that which by exercising due diligence could or should have
been done earlier, it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it
either has abandoned it or declined to assert it. The defense of laches is an
equitable one and does not concern itself with the character of the
defendant's title but only with whether or not by reason of plaintiff's long
inaction or inexcusable neglect, he should be barred from asserting his
claim at all, because to allow him to do so would be inequitable and unjust
to defendant.[31]
In our jurisdiction, it is an enshrined rule that even a registered owner of
property may be barred from recovering possession of property by virtue of
laches.[32] Thus, in the case of Lola v. Court of Appeals,[33] this Court held
that petitioners acquired title to the land owned by respondent by virtue of
the equitable principles of laches due to respondent's failure to assert her
claims and ownership for thirty-two (32) years. In Miguel v. Catalino,[34]
this Court said that appellant's passivity and inaction for more than thirty-
four (34) years (1928-1962) justifies the defendant-appellee in setting up
the equitable defense of laches in his behalf. Likewise, in the case of Mejia
de Lucas v. Gamponia,[35] we stated that while the defendant may not be
considered as having acquired title by virtue of his and his predecessor's
long continued possession for thirty-seven (37) years, the original owner's
right to recover possession of the property and the title thereto from the
2
defendant has, by the latter's long period of possession and by patentee's
inaction and neglect, been converted into a stale demand.[36]
In this case, both the lower court and the appellate court found that contrary
to respondent's claim of possession, it was Salcedo, respondent's
predecessor-in-interest who had been in actual possession of the property.
In fact, when the lower court conducted an ocular inspection on the subject
premises sometime on 16 March 1993, the court-appointed Commissioner
elicited from the people residing near the subject property, more particularly
Celso Velez, Nieto Abecia and Paquito Nabe, that Salcedo was the owner
and the one in possession of the land until 1978 when respondent became
the possessor thereof.[37]
It was only in 1992 or forty-five (45) years from the time Salcedo took
possession of the property that petitioners made an attempt to claim it as
their own. Petitioners declared the property for tax purposes, registered
their adverse claim to respondent's title, and filed the instant case all in
1992.[38] These actuations of petitioners point to the fact that for forty-five
(45) years, they did nothing to assert their right of ownership and
possession over the subject property.
Given the circumstances in the case at bar, the application of the equitable
defense of laches is more than justified.
Petitioners claim that prescription and adverse possession can never
militate against the right of a registered owner since a title, once registered
cannot be defeated even by adverse, open and notorious possession.[39]
They are right in that regard. But their cause is defeated not by prescription
and adverse possession, but by laches.
This Court had occasion to distinguish laches from prescription in the case
of Heirs of BatiogLacamen v. Heirs of Laruan.[40] It was held therein that:
"Laches" has been defined as "such neglect or omission to assert a right,
taken in conjunction with lapse of time and other circumstances causing
prejudice to an adverse party, as will operate as a bar in equity." It is a
delay in the assertion of a right "which works disadvantage to another"
because of the "inequity founded on some change in the condition or
relations of the property or parties." It is based on public policy which, for
the peace of society, ordains that relief will be denied to a stale demand
which otherwise could be a valid claim. It is different from and applies
independently of prescription. While prescription is concerned with the fact
of delay, laches is concerned with the effect of delay. Prescription is a
matter of time; laches is principally a question of inequity of permitting a
claim to be enforced, this inequity being founded on some change in the
condition of the property or the relation of the parties. Prescription is
statutory; laches is not. Laches applies in equity, whereas prescription
applies at law. Prescription is based on a fixed time, laches is not.[41]
(Footnotes are omitted.)
Thus, it is the effect of delay in asserting their right of ownership over the
property which militates against petitioners, not merely the fact that they
asserted their right to the property too late in the day.
All the four (4) elements of laches prescribed by this Court in the case
of Go Chi Gun, et al. v. Co Cho, et al.[42] and reiterated in the cases
of Mejia de Lucas v. Gamponia,[43] Miguel v. Catalino[44] and Claverias v.
Quingco[45] are present in the case at bar, to wit:
(1) conduct on the part of the defendant, or of one under whom he claims,
giving rise to the situation of which complaint is made for which the
complaint seeks a remedy;
(2) delay in asserting the complainant's rights, the complainant having had
knowledge or notice, of the defendant's conduct and having been afforded
an opportunity to institute a suit;
(3) lack of knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his suit; and
(4) injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held to be barred.[46]
Petitioners' inaction for forty-five (45) years reduced their right to recover
the subject property into a stale demand.
In Mejia,[47] the Court held in essence that the principle of laches is one of
estoppel because it prevents people who have slept on their rights from
prejudicing the rights of third parties who have placed reliance on the
inaction of the original patentee and his successors in interest.[48] The
following pronouncement in the case of Claverias v. Quingco[49] is
therefore apropos to the case at bar:
...Courts cannot look with favor at parties who, by their silence, delay and
inaction, knowingly induce another to spend time, effort and expense in
cultivating the land, paying taxes and making improvements thereon for 30
long years, only to spring from ambush and claim title when the
possessor's efforts and the rise of the land values offer an opportunity to
make easy profit at his expense.[50]
WHEREFORE, the Petition is DENIED. The challenged decision of the
Court of Appeals is AFFIRMED insofar as it ruled that the claim of
petitioners is barred by laches. No pronouncement as to costs.
SO ORDERED.
 3

Case No. 301 of the Court of First Instance of Nueva Vizcaya) and Roque
Sanchez, to whom the land was adjudicated, sold the property for P800 to
the present defendant Andres Gamponia. All of these transfer from
Zacarias Ciscar to his heirs, to Roque Sanchez and to defendant Andres
Gamponia, acts which covered a period of 37 years, would all have to be
LUCAS vs. GAMPONIA
undone and the respective rights and obligations of the parties affected
G.R. No. L-9335 | 1956-10-31
adjusted, unless the defense is sustained.
LABRADOR, J.:
It is to be noted that all the above complications would never had been
Appeal from the judgment of the Court of First Instance of Nueva Vizcaya,
occasioned had the original patentee and his successors in interest not
Honorable Jose de Venecia, presiding, and appealed directly to this court
slept on their rights for more than a generation. Add to this the fact that the
as judgment was rendered on a stipulation of facts and only questions of
original conveyance made by the patentee is not absolutely null and void.
law are raised in the appeal.
The prohibition against the sale of free patents is for a period of seven
years (Section 35, Act No. 926); after that period of time a patentee would
By the stipulation of the parties it appears that on March 13, 1916, free
be free to dispose of the land. Within seven years from the conveyance the
patent No. 3699 was issued over the land subject of the action in the name
original patentee could have brought an action to recover back his property.
of Domingo Mejia. This patent was transcribed in the Office of the Register
Since nothing of this sort was done by him, it was certainly natural for the
of Deeds of Nueva Vizcaya on July 26, 1916 and certificate of title No. 380
purchase to have assumed that the original patentee gave up his right to
issued in the name of Domingo Mejia. On March 24, 1916, after the
recover back the property and acquiesced in vendee's right and title. The
issuance of the patent but before the registration of the same, patentee
successor in interest of the original purchaser must also have believed in
Domingo Mejia deeded the land to Zacarias Ciscar, who immediately took
good faith that the patentee and his successors in interest were reconciled
possession thereof and enjoyed its fruits. Upon his death the property was
to the idea of allowing the property to stay in the hands of the successors in
included in the distribution of his estate and adjudicated to Roque Sanchez.
interest. By this inaction for a period of 37 years to the consequent
Roque Sanchez in turn sold the land on January 21, 1940 to Andres
prejudice that annulment of the original sale would entail upon so many
Gamponia, defendant herein. Sanchez was in possession and enjoyment of
successive owners, the equitable principle now stands up as a bar.
the land from the time he acquired it by inheritance from Ciscar up to the
time he sold it to defendant Andres Gamponia, the latter has also
"The reason upon which the rule is based is not alone the lapse of time
possessed and enjoyed the property from the time he bought it to date.
during which the neglect to enforce the right has existed, but the changes
of condition which may have arisen during the period in which there has
Domingo Mejia, upon his death, left no descendants or ascendants and his
been neglect. In other words, where a court of equity finds that the position
only surviving kin was his brother Pedro Mejia. Pedro Mejia is now also
of the parties has to change that equitable relief cannot be afforded without
dead and is survived by his daughter Concordia Mejia de Lucas, plaintiff
doing injustice, or that the intervening rights of third persons may be
herein. Upon the above facts the court a quo held that the sale by the
destroyed or seriously impaired, it will not exert its equitable powers in
patentee to Zacarias Ciscar is null and void, as the sale was made only 11
order to save one from the consequences of his own neglect." (Penn
days after the issuance of a patent in violation of the provisions of section
Mutual Life Inc. Co., et al., vs. City of Austin et al., U. S. 962.)
35 of Act No. 926. The Court further held that since the land is registered
land no title in derogation to that of the registered owner could have been
In effect, the principle is one of estoppel because it prevents people who
acquired either by Zacarias Ciscar or his successors in interest, namely,
have slept on their rights from prejudicing the rights of third parties who
Roque Sanchez and defendant Andres Gamponia.
have placed reliance on the inaction of the original patentee and his
successors in interest.
The main defense presented in the answer, is that plaintiff's right of action
has already prescribed by virtue of the possession of the land by the
The equitable defense of laches has been held to exist in this jurisdiction
defendant and his predecessors in interest for a period of 37 years. This
for periods less than the period in the case at bar. Thus in the case of
defense was overruled by the court a quo on the ground that as the land is
Gonzales vs. Director of Lands, 52 Phil. 895, it was held in a cadastral case
registered, with a certificate of title in the name of patentee Domingo Mejia,
that the owner of a lot who failed to appear in the proceedings, as a result
title thereto may not be acquired by the defendant and his predecessors in
of which his land was declared public property, who brings an action 10
interest against said registered owner. This ruling is evidently based on
years later, is guilty of laches and inexcusable negligence and his action
Section 46 of the Land Registration Act, which provides that "no title to
under Section 513 of the Code of Civil Procedure can no longer be
registered land in derogation to that of the registered owner shall be
maintained. In another case where the plaintiff loaned money to a couple
acquired by prescription or adverse possession.
and when the wife died and the conjugal properties divided between her
heirs and her husband, the vendor did not present his claim against the
Upon a careful consideration of the facts and circumstances, we are
estate and only did so four years later against the widower, it was held that
constrained to find, however, that while no legal defense to the action lies,
the lender was guilty of laches in so far as the estate of the deceased
an equitable one lies in favor of the defendant and that is, the equitable
spouse is concerned because it would be inequitable and unjust to permit
defense of laches. No hold that the defense of prescription or adverse
him to revive any claims which he may have had, which claims he did not
possession in derogation of the title of the registered owner Domingo Mejia
present during the distribution of the estate of the deceased wife. (Yaptico
does not lie, but that of the equitable defense of laches. Otherwise, stated,
vs. Marina Yulo, et al., 57 Phil., 818). In a third case (Kambal vs. Director of
we hold that while defendant may not be considered as having acquired
Lands, 62 Phil., 293), cadastral proceedings for compulsory registration of
title by virtue of his and his predecessors' long continued possession for 37
certain parcels of land in Cotabato were instituted. These proceedings
years, the original owner's right to recover back the possession of the
included two lands belonging to the petitioner. Petitioner failed to claim said
property and the title thereto from the defendant has, by the long period of
lands in said proceedings and in 1917 the titles to the lands of the petitioner
37 years and by patentee's inaction and neglect, been converted into a
were cancelled. Petitioner alleges that he came to know by accident of the
stale demand.
cancellation of his titles in the year 1933 or 1935. It was held that because
of the lapse of 16 years from the date the decision was rendered in the said
In Go Chi Gun, et al., vs. Co Cho, et al., (96 Phil., 622) we held that the
registration case to the filing of the petition, no relief can be granted the
equitable defense of laches requires four elements: (1) conduct on the part
petitioner as he has been guilty of laches. In the three cases decided
of the defendant, or of one under whom he claims, giving rise to the
previously by this Court, the periods of inaction were from 10 to 16 years. In
situation of which complaint is made and for which the complaint seeks a
the case at bar it was a full period of 37 years.
remedy; (2) delay in asserting the complainant's rights, the complainant
having had knowledge or notice, of the defendant's conduct and having
The judgment appealed from is hereby reversed and one is hereby entered
been afforded an opportunity to institute a suit, (3) lack of knowledge or
absolving the defendant from the action. Without costs.
notice on the part of the defendant that the complainant would assert the
right on which he bases his suit; and (4) injury or prejudice to the defendant
in the event relief is accorded to the complainant, or the suit is not held to
be barred.

All the four elements mentioned above are present in the case at bar. The
first element is present because on March 24, 1916 Domingo Mejia sold the
land which was covered by a free patent title dated March 13, 1916 and
said sale or conveyance was made in violation of Section 35 of the Public
Land Act. The second element is also present because from the date of the
sale on March 24, 1916 the patentee and vendor Domingo Mejia could
have instituted the action to annul the conveyance and obtain back the
possession and ownership of the land, but notwithstanding the apparent
invalidity of the sale, neither patentee nor his successors in interest, his
brother, or the latter's daughter, plaintiff herein, who should have known of
the invalidity of the sale because it is a matter of law and had all the
opportunity to institute an action for the annulment of the sale, instituted no
suit to annul the sale or to recover the land for a period of 37 years. Again
the defendant and his predecessors in interest, the original vendee and
purchaser Zacarias Ciscar, as well as vendee's successors in interest,
Roque Sanchez, and later, Andres Gamponia, never expected or believed
that the original patentee or his successors in interest would bring an action
to annul the sale. These circumstances constitute the third element of
laches. The fourth element is also present, not only because Zacarias
Ciscar paid for the land but this same land was divided among the heirs of
Zacarias Ciscar in the proceedings for the settlement of his estate (Civil

LOLA vs. THE HONORABLE COURT OF APPEALS
G.R. No. L-46573 | 1986-11-13
GUTIERREZ, JR., J:
This petition for review on certiorari asks us to set aside the
resolution of the Court of Appeals which reversed its original
decision and ruled that the land in dispute, Lot No. 5517 belongs
to the private respondent as evidenced by the latter's original
certificate of title over the said property.
In a complaint for recovery of real property and damages filed
with the then Court of First Instance of Leyte, private respondent
Dolores S. Zabala alleged that she is the registered owner of a
parcel of land situated in Sto. Niño Street, Tacloban City, covered
by Original Certificate of Title (OCT) No. 10782, and more
particularly described as follows:
"Lot No. 5517 of the Cadastral Survey of Tacloban, with
improvements situated in the municipality of Tacloban Bounded
on the NE by Lot No. 4885; on the SE by Lots Nos. 5516 and
4884; on the SW by Lot No. 5519; and on the NW by Calle Sto.
Niño containing 164 square meters, more or less."
that by virtue of "Escritura de VentaAbsoluta" executed on June
29, 1936, the petitioners, Fr. Pablo B. Lola and his sister Maxima
B. Lola, bought from her Lot No. 5516 containing 474 square
meters and adjoining Lot 5517 to the East, which the petitioners
immediately occupied upon consummation of the sale; that well
aware of such alienation covering only Lot No. 5516, the
petitioners, with deliberate bad faith, also occupied Lot No. 5517
fronting Sto. Niño Street by constructing a balcony and part of
their main residential house thereon, depriving the respondent of
the use and employment of rentals; that the petitioners with full
knowledge that they bought only Lot No. 5516 from the
respondent maliciously caused her to sign an affidavit of transfer
of real property thereby unlawfully effecting the transfer of Tax
Declaration No. 16187 which covered another parcel of land in
the name of respondent to the petitioners alleging therein an
occupation of "About four years ago" before said transfer, when in
truth and in fact the sale took place barely one year six months
and twenty-nine days earlier and that inspite of demands made by
her, the petitioners have refused and still refuse to vacate Lot No.
5517.
In their answer, the petitioners denied specifically most of the
allegations of the complaint and averred that when the
respondent offered to petitioner Fr. Pablo B. Lola in writing the
sale of the residential lot located at Sto. Niño Street, Tacloban
City, she never mentioned any lot or lots; that when Lola asked
for the particular description of the subject of the sale, respondent
attached in her letter a sketch of the land being offered to him for
sale; that from the sketch he understood the offer to include any
lot or lots embodied in the sketch (which included Lot No. 5517);
that he, therefore, accepted the offer and sent the money to the
respondent through his notary public who ratified and
acknowledged the document of sale; that when the document of
sale was made and executed, only the respondent was present;
that if the latter did not knowingly include Lot No. 5517 when it
should have been included, she should be compelled to execute
the proper deed of conveyance in favor of the petitioners; that
more than thirty (30) years have elapsed since the document of
sale was executed and petitioner Pablo B. Lola has been in
possession thereof, as well as the land described in the
respondent's complaint, which formed part of the latter's offer,
peacefully, publicly, adversely, and in the concept of owner and
that the respondent should be estopped from asserting any right
or rights after she had slept on them for thirty (30) years.
After trial on the merits, the Court of First Instance of Leyte
rendered a decision dismissing the respondents' complaint. The
decision is based on the following findings of facts:
"On the witness stand, plaintiff Dolores Santillan Zabala declared
that she owned Lots 5516 and 5517 along Santo Niño Street of
this City; that through a deed of sale executed on June 29, 1936,
Exhibit "A" she sold only Lot No. 5516 which is in the interior and
this did not include Lot No. 5517 which adjoins Santo Niño Street;
that Lot No. 5517 is covered by O.C.T No. 1078 issued in her
name by the Register of Deed of Leyte on April 9, 1934, Exhibit
"B"; that Lot No. 5516 has an area of 474 square meters while Lot
No. 5517 has an area of only 164 square meters; that after the
execution of the deed of sale, Exhibit "A", defendant Fr. Lola took
possession of Lot No. 5516 while she (plaintiff) stopped living in
Santo Niño Street, Tacloban City, and transferred to Cebu City;
4
that Lot No. 5517 was left to the care of her brother; that her
brother notified her that a house was constructed on Lot No. 5517
by defendant Fr. Lola that because of this information, she came
to Tacloban City in 1958 and she discovered that defendant Fr.
Lola was occupying Lot No. 5517; that she saw said defendant
regarding the matter but the latter merely said: `You will not build
a house never mind, because I will have to pay you for the rental,'
that she did not agree to said proposition, and instead, said, `I will
have to stay here in Tacloban;' that she thereafter went back to
Cebu and, because she was very busy with her business in Cebu,
she did not anymore bother about her lot in Tacloban City; that in
1966, she came again to Tacloban, but she was not able to see
defendant Fr. Lola as there was nobody in his house and she did
not know where he was transferred; that she went back to Cebu
and came again to Tacloban in 1968 to see her lot and that she
could no longer insist on getting back Lot No. 5517 from
defendants so she decided to file the present action.
"On the other hand, defendant Fr. Lola testified that in 1936 while
he was the parish priest of Balangiga, Samar (now Eastern
Samar), he requested Atty. Joaquin Hacbang, his lawyer and
cousin, to look for him a residential lot in this city; that Atty.
Hacbang wired back to him that there was an offer of plaintiff for
the sale of her lot along Santo Niño Street of this city; that he
received two letters from plaintiff offering the sale of a lot along
Santo Niño, the first being dated May 20, 1936 and the second
one dated July 8, 1936 (Exhibits "1", "1-A", "4" and "4-A" English
translations, Exhibits "1-B" and "4-B"); that attached to the first
letter was the sketch, Exhibit "1-A", showing that the land offered
for sale was along Santo Niño Street on the North; that upon
receiving these letters, he sent by telegraphic transfer to Atty.
Hacbang the amount of P600.00 for the purchase of the land; that
it was only after plaintiff had filed the present case that he
discovered that the parcel of land of plaintiff along Santo Niño
Street as described in the sketch sent to him by her, Exhibit "1-A",
involves two lots, Nos. 5516 and 5517; that as offered to him by
plaintiff in her letters, he was of the impression that there was only
one lot of the plaintiff along Santo Niño Street; that after the
execution by plaintiff of the deed of sale in 1936, Exhibit "A", he
introduced improvements therein by starting to construct a house
in May, 1938 and this was completed in December of the same
year; that the balcony of the house as well as a portion of the
main house itself is constructed on lot 5517; and that since after
the execution of the deed of sale in 1936 until the filing of the
present complaint plaintiff had never disturbed him in his
possession of the parcel of land in question along Santo Niño
Street of this City.
"It would seem from the pleadings and the evidence submitted by
the parties that the principal issue involved in this case is whether
or not Lot No. 5517 was deemed to have been sold by plaintiff to
defendant Fr. Lola when the former executed on June 29, 1936,
the deed of sale in favor of the latter, Exhibit "A".
xxx xxxxxx
"In this connection it would appear to the Court that whether she
herself or somebody else in her stead had written the letters, the
fact remains that plaintiff sent to defendant Fr. Lola the letter
dated May 20, 1936, offering to sell the parcel of land located at
17 Sto. Niño Street, this city, Exhibits "4" and "4-A" (English
translation, Exhibit "4-B") and this was followed up by another
letter, Exhibit "1" (English translation, Exhibit "1-B") which was
accompanied by a sketch indicating that the land offered for sale
was along Santo Niño Street of this City, Exhibit "1-A".
"This is the observation of the Court from an examination of the
letters which are wanting of any indication of having been falsified
by defendant or probably made by them for self-serving reasons.
And now there seems to be no clear explanation from either side
why the deed of sale executed by the plaintiff on July 29, 1936,
Exhibit "A", mentions only Lot 5516. However, considering that
the sketch, Exhibit "1-A", had earlier been sent by the plaintiff to
defendant Fr. Lola, it would seem safe to conclude that both
plaintiff and defendant Fr. Lola were uniformly under the
impression that what was being sold by her to the latter was her
lot which was directly adjoining Santo Niño Street.
"The Court considers as a belated afterthought plaintiff's
protestation that what she really intended to sell to defendant Fr.
Lola was only the interior portion of her land for this is belied not
only by the sketch she sent to said defendant, Exhibit "1-A", but
also by her subsequent inaction regarding Lot No. 5517 after the
execution of the deed of sale, despite the fact that defendant Fr.

Lola had constructed a house extending up to said lot along
Santo Niño Street of this City. Precisely the court fails to see any
reason why defendant Fr. Lola would have been satisfied to
acquire only the interior portion of the plaintiff's property and not
that one along Santo Niño Street.
"It is significant to note that on cross-examination, plaintiff's
brother Ramon Santillan admitted that at the time of the sale,
defendant Fr. Lola did not ask for a right of way to Santo Niño
Street. This is an indication that said vendee understood all the
time that what he was offered for sale and what he had purchased
was plaintiff's Street. On the other hand, the Court is of the
opinion that the preponderance of evidence indicates that,
contrary to her claim that she tried to approach defendant Fr. Lola
in 1958 and 1966 and complained about the encroachment of her
land by said defendant, plaintiff did not do anything at all
regarding the lot in question until she filed the present action last
year.
"As a matter of fact, from January 28, 1938, or almost two years
after the execution of the deed of sale Exhibit "A," plaintiff
executed a transferor's affidavit of the parcel of land in question in
favor of defendant Fr. Lola as covered by tax declaration No.
16187, Exhibit "2", and from an examination thereof, it is clear that
the land involved was declared in plaintiff's name and is the one
located in Santo Niño Street of this city as it is bounded on the
West by said street. This, in the mind of the Court, was
tantamount to a signification by plaintiff that what she had sold to
defendant Fr. Lola was her land along Santo Niño Street.
xxx xxxxxx
Respondent Zabala appealed to the Court of Appeals. The
appellate court initially affirmed the decision of the trial court with
the further modification that the respondent was ordered to
execute the necessary deed of conveyance covering Lot No.
5517 in favor of petitioner Fr. Pablo B. Lola. The appellate court
ruled that while it is true that the land in dispute is still registered
in the name of the respondent and title thereto may not be
acquired by the petitioners against the former as registered
owner, the equitable defense of laches, in lieu of prescription,
should be applied in their case.
The respondent filed a motion for reconsideration.
The appellate court reversed itself and held the respondent to be
the absolute owner of Lot No. 5517, covered by Original
Certificate of Title No. 10782. It ordered the petitioners to vacate
the disputed premises and demolish whatever improvements may
have encroached on it. The reversal was based on the following
conclusions: (1) There was no encumbrance on the title of the
disputed lot; (2) The deed of absolute sale, "Escritura de
VentaAbsoluta" should be the sole repository of the terms and
conditions of the agreement between petitioners and respondent
with the sketch relied upon by the petitioner being merely
evidence of "an offer to sell," (3) The deed was prepared by Atty.
Hacbang, the lawyer of petitioners; (4) It is improbable for the
petitioners not to have examined the deed of sale; and (5) The
Transferor's affidavit contains inaccurate statements.
The petitioners filed a motion for reconsideration but it was
denied. Hence, this petition.
The petitioners maintain that the appellate court should have
considered as evidence of the sale, the fact that the said sale was
perfected by a written offer, and the written offer which was
accepted by petitioner Fr. Lola never mentioned any lot or lots;
and the fact that the respondent sent another letter with a sketch
map showing the subject matter of the sale to be only one single
lot abutting Sto. Niño Street, Tacloban City. Furthermore, the
petitioners allege that the true intention on the parties to the
"Escritura de VentaAbsoluta" can be seen not only from the
aforementioned exhibits but also from the contemporaneous acts
of the respondent after the sale. Finally, the petitioners invoke the
doctrine of laches because of the unexplained delay, inaction, and
neglect on the part of the respondent to assert her claim over the
disputed lot for over thirty (30) years.
We agree with the petitioners and affirm the findings of the trial
court as well as the initial decision of the Court of Appeals.
The reasons relied upon by the appellate court in completely
reversing its previous decision are based on the strict application
of the parol evidence rule and sole reliance on what is written on
5
the "Escritura de VentaAbsoluta." A closer look at the
circumstances surrounding the execution of the deed of sale,
however, gives a better understanding of what actually transpired
between the parties and what was their real intention when they
entered into the contract of sale. We are constrained to apply the
exception to, rather than the general rule to parol evidence
following the case of Premiere Insurance & Surety Corporation v.
Intermediate Appellate Court (141 SCRA 423, 434) where we
ruled:
"While it is a general rule that parol evidence is not admissible for
the purpose of varying the terms of a contract, when an issue is
squarely presented that a contract does not express the true
intention of the parties, courts will, when a proper foundation is
laid there fore, hear evidence for the purpose of ascertaining the
true intention of the parties. Once the intent is clear, then it shall
prevail over what on its face the document appears to be.
(Labasan v. Lacuesta, 86 SCRA 16, 22). The court does not
reform the instrument. It remains as it was written. However, the
court receives evidence to find out how the parties really bound
themselves. The second exception to the parol evidence rule
enables the court to ascertain the intent of the parties."
In the present case, the petitioners specifically raise the issue that
the subject of the deed of sale which was finally drafted on the
basis of the title which respondent presented to petitioners did not
embody the whole lot which the parties previously agreed upon
on the basis of the written offer and acceptance by the parties, but
only a portion thereof. The petitioner's contention is substantiated
by the two letters of the respondent to petitioner Fr. Lola which
clearly show that what the respondent offered comprised not only
Lot No. 5516 but Lot No. 5517 as well, the latter being the exterior
portion of the whole land and which lot abuts Sto. Niño Street.
Aside from the respondent's two letters the authenticity of which
she did not even try to impugn, the circumstances after the sale
also clearly indicate that the respondent sold the whole parcel of
land, unmindful at that time of the fact that the lot was covered by
two titles. Again, in the case of Sy v. Court of Appeals (31 SCRA
116, 124), we ruled:
"It is a basic and fundamental rule in the interpretation of
contracts that if the terms thereof are clear and leave no doubt as
to the intention of the contracting parties, then the literal meaning
of the stipulations shall control but when the words appear
contrary to the evident intention of the parties, the latter shall
prevail over the former. (Labasan v. Lacuesta, supra). In order to
judge the intention of the parties, their contemporaneous and
subsequent acts shall be principally considered.
Likewise in the case of Philippine National Railways v. CIR of
Albay, Br. I, (83 SCRA 569, 576) we ruled:
"On the other hand, if the defendant set up the affirmative defense
that the contract mentioned in the complaint does not express the
true agreement of the parties, then parol evidence is admissible to
prove the true agreement of the parties (Enriquez v. Ramos, 116
Phil. 525, 531; Philippine Sugar E. D. Co. v. Philippines, 62 L. Ed.
1177, 247 U.S. 385; Heirs of De la Rama v. Talisay-Silay Milling
Co., 54 Phil. 580, 588; Land Settlement and Dev. Corp. v. Garcia
Plantation Co., Inc., 117 Phil. 761, 765)."
We apply the above rulings to the case at bar. As stated earlier,
aside from the letters which embody the true intention of the
parties, the records also show that after the consummation of the
sale, the respondent executed a transferor's affidavit which
included the lot in dispute. More important, the respondent moved
to Cebu City, leaving the petitioners in continuous, open, adverse,
and peaceful occupation of the disputed lot for thirty-two (32)
years. In all of these 32 years, the petitioners paid the taxes on
the entire property.
In the case of Samson v. Court of Appeals (41 SCRA 194, 205),
we ruled;
"The tax receipts accompanied by actual and continuous
possession of the subject parcels of land by the respondents and
their parents before them for more than thirty years qualify them
to register title to the said subject parcels of land. We ruled in the
case of Republic v. Court of Appeals, (131 SCRA 533) that:
"'While it is true that by themselves tax receipts and declarations
of ownership for taxation purposes are not incontrovertible
evidence of ownership they become strong evidence of ownership
 6

acquired by prescription when accompanied by proof of actual xxx xxxxxx

possession of the property.'"
The trial court also correctly found that the respondent's allegation
that she confronted or tried to confront petitioner Fr. Lola in 1958
and 1966 is unfounded and unsubstantiated. To our mind, even
assuming that the respondent really found that there was an
encroachment on her lot only in 1958, it is highly improbable that
she would let eight years pass before she would try to confront
petitioner again in 1966 and two more years before she actually
files an action for recovery of possession. Hence, the Court is
lead to the inevitable conclusion that what the respondent offered
to sell and what the petitioners accepted are Lot Nos. 1156 and
1157.
We also agree with the petitioners that laches effectively bars the
respondent from recovering the lot in dispute.
"This defense is an equitable one and does not concern itself with
the character of the defendant's title, but only with whether or not
by reason of the plaintiff's long inaction or inexcusable neglect he
should be barred from asserting this claim at all, because to allow
him to do so would be inequitable and unjust to the defendant. . . .
"
WHEREFORE, the petition is hereby GRANTED. The questioned
resolution of the Court of Appeals is REVERSED and SET ASIDE
and a NEW ONE is ENTERED ordering the respondent to
execute the necessary deed of conveyance covering Lot No.
5517 in favor of the petitioners. The temporary restraining order
issued in this case is made PERMANENT.
SO ORDERED.

Although the defense of prescription is unavailing to the

petitioners because, admittedly, the title to Lot No. 5517 is still
registered in the name of the respondent, still the petitioners have
acquired title to it by virtue of the equitable principle of laches due
to the respondent's failure to assert her claims and ownership for
thirty two (32) years.

There are precedents for this ruling. In the following cases, we

upheld the equitable defense of laches and ruled that the long
inaction and delay of the title holder in asserting his right over the
disputed lot bars him from recovering the same.

Miguel v. Catalino (26 SCRA 234, 238, 239) states:

"Appellants are likewise correct in claiming that the sale of the

land in 1928 by Bacaquio to CatalinoAgyapao, defendant's father,
is null and void ab initio, for lack of executive approval
(Mangayao, et al. v. Lasud, et al., L-19252, 29 May 1964). . . .

xxx xxxxxx

"Since the 1928 sale is technically invalid, Bacaquio remained, in

law, the owner of the land until his death in 1943, when his title
passed on, by the law on succession, to his heirs, the plaintiffs-
appellants.

"Notwithstanding the errors aforementioned in the appealed

decision, we are of the opinion that the judgment in favor of
defendant-appellee Florendo Catalino must be sustained. For
despite the invalidity of his sale to CatalinoAgyapao, father of
defendant-appellee, the vendor Bacaquio suffered the latter to
enter, possess and enjoy the land in question without protest,
from 1928 to 1943, when the seller died; and the appellants, in
turn, while succeeding the deceased, also remained inactive,
without taking any step to rein-vindicate the lot from 1944 to 1962,
when the present suit was commenced in court. Even granting
appellants' proposition that no prescription lies against their
father's recorded title, their passivity and inaction for more than 34
years (1928-1962) justifies the defendant-appellee in setting up
the equitable defense of laches in his own behalf. As a result, the
action of plaintiffs-appellants must be considered barred and the
Court below correctly so held. Courts can not look with favor at
parties who, by their silence, delay and inaction, knowingly induce
another to spend time, effort and expense in cultivating the land,
paying taxes and making improvements thereon for 30 long
years, only to spring from ambush and claim title when the
possessor's efforts and the rise of land values offer an opportunity
to make easy profit at his expense." . . .

Pabalete v. Echarri Jr. (37 SCRA 518, 521, 522) states:

"Upon a careful consideration of the facts and circumstances, we

are constrained to find, however, that while no legal defense to
the action lies, an equitable one lies in favor of the defendant and
that is, the equitable defense of laches. We hold that the defense
of prescription or adverse possession in derogation of the title of
the registered owner Domingo Mejia does not he, but that of the
equitable defense of laches. Otherwise stated, we hold that while
defendant may not be considered as having acquired title by
virtue of his and his predecessor's long continued possession for
37 years, the original owner's right to recover back the possession
of the property and the title thereto from the defendant has, by the
long period of 37 years and by patentee's inaction and neglect
been converted into a stale demand." (Quoting Mejia de Lucas v.
Gamponia, 100 Phil. 277).

AGGABAO vs. PARULAN, JR.
G.R. No. 165803 | 2010-09-01
BERSAMIN, J:
On July 26, 2000, the Regional Trial Court (RTC), Branch 136, in
Makati City annulled the deed of absolute sale executed in favor
of the petitioners covering two parcels of registered land the
respondents owned for want of the written consent of respondent
husband Dionisio Parulan, Jr. On July 2, 2004, in C.A.-G.R. CV
No. 69044,[1] the Court of Appeals (CA) affirmed the RTC
decision.
Hence, the petitioners appeal by petition for review on certiorari,
seeking to reverse the decision of the CA. They present as the
main issue whether the sale of conjugal property made by
respondent wife by presenting a special power of attorney to sell
(SPA) purportedly executed by respondent husband in her favor
was validly made to the vendees, who allegedly acted in good
faith and paid the full purchase price, despite the showing by the
husband that his signature on the SPA had been forged and that
the SPA had been executed during his absence from the country.
We resolve the main issue against the vendees and sustain the
CA's finding that the vendees were not buyers in good faith,
because they did not exercise the necessary prudence to inquire
into the wife's authority to sell. We hold that the sale of conjugal
property without the consent of the husband was not merely
voidable but void; hence, it could not be ratified.
Antecedents
Involved in this action are two parcels of land and their
improvements (property) located at No. 49 Miguel Cuaderno
Street, Executive Village, BF Homes, Parañaque City and
registered under Transfer Certificate of Title (TCT) No. 63376[2]
and TCT No. 63377[3] in the name of respondents Spouses Maria
Elena A. Parulan (Ma. Elena) and Dionisio Z. Parulan, Jr.
(Dionisio), who have been estranged from one another.
In January 1991, real estate broker Marta K. Atanacio (Atanacio)
offered the property to the petitioners, who initially did not show
interest due to the rundown condition of the improvements. But
Atanacio's persistence prevailed upon them, so that on February
2, 1991, they and Atanacio met with Ma. Elena at the site of the
property. During their meeting, Ma. Elena showed to them the
following documents, namely: (a) the owner's original copy of TCT
No. 63376; (b) a certified true copy of TCT No. 63377; (c) three
tax declarations; and (d) a copy of the special power of attorney
(SPA) dated January 7, 1991 executed by Dionisio authorizing
Ma. Elena to sell the property.[4] Before the meeting ended, they
paid P20,000.00 as earnest money, for which Ma. Elena executed
a handwritten Receipt of Earnest Money, whereby the parties
stipulated that: (a) they would pay an additional payment of
P130,000.00 on February 4, 1991; (b) they would pay the balance
of the bank loan of the respondents amounting to P650,000.00 on
or before February 15, 1991; and (c) they would make the final
payment of P700,000.00 once Ma. Elena turned over the property
on March 31, 1991.[5]
On February 4, 1991, the petitioners went to the Office of the
Register of Deeds and the Assessor's Office of Parañaque City to
verify the TCTs shown by Ma. Elena in the company of Atanacio
and her husband (also a licensed broker).[6] There, they
discovered that the lot under TCT No. 63376 had been
encumbered to Banco Filipino in 1983 or 1984, but that the
encumbrance had already been cancelled due to the full payment
of the obligation.[7] They noticed that the Banco Filipino loan had
been effected through an SPA executed by Dionisio in favor of
Ma. Elena.[8] They found on TCT No. 63377 the annotation of an
existing mortgage in favor of the Los Baños Rural Bank, also
effected through an SPA executed by Dionisio in favor of Ma.
Elena, coupled with a copy of a court order authorizing Ma. Elena
to mortgage the lot to secure a loan of P500,000.00.[9]
The petitioners and Atanacio next inquired about the mortgage
and the court order annotated on TCT No. 63377 at the Los
Baños Rural Bank. There, they met with Atty. Noel Zarate, the
bank's legal counsel, who related that the bank had asked for the
court order because the lot involved was conjugal property.[10]
Following their verification, the petitioners delivered P130,000.00
as additional down payment on February 4, 1991; and
P650,000.00 to the Los Baños Rural Bank on February 12, 1991,
7
which then released the owner's duplicate copy of TCT No. 63377
to them.[11]
On March 18, 1991, the petitioners delivered the final amount of
P700,000.00 to Ma. Elena, who executed a deed of absolute sale
in their favor. However, Ma. Elena did not turn over the owner's
duplicate copy of TCT No. 63376, claiming that said copy was in
the possession of a relative who was then in Hongkong.[12] She
assured them that the owner's duplicate copy of TCT No. 63376
would be turned over after a week.
On March 19, 1991, TCT No. 63377 was cancelled and a new
one was issued in the name of the petitioners.
Ma. Elena did not turn over the duplicate owner's copy of TCT No.
63376 as promised. In due time, the petitioners learned that the
duplicate owner's copy of TCT No. 63376 had been all along in
the custody of Atty. Jeremy Z. Parulan, who appeared to hold an
SPA executed by his brother Dionisio authorizing him to sell both
lots.[13]
At Atanacio's instance, the petitioners met on March 25, 1991 with
Atty. Parulan at the Manila Peninsula.[14] For that meeting, they
were accompanied by one Atty. Olandesca.[15] They recalled that
Atty. Parulan "smugly demanded P800,000.00" in exchange for
the duplicate owner's copy of TCT No. 63376, because Atty.
Parulan represented the current value of the property to be P1.5
million. As a counter-offer, however, they tendered P250,000.00,
which Atty. Parulan declined,[16] giving them only until April 5,
1991 to decide.
Hearing nothing more from the petitioners, Atty. Parulan decided
to call them on April 5, 1991, but they informed him that they had
already fully paid to Ma. Elena.[17]
Thus, on April 15, 1991, Dionisio, through Atty. Parulan,
commenced an action (Civil Case No. 91-1005 entitled Dionisio Z.
Parulan, Jr., represented by Jeremy Z. Parulan, as attorney in
fact, v. Ma. Elena Parulan, Sps. Rex and Coney Aggabao),
praying for the declaration of the nullity of the deed of absolute
sale executed by Ma. Elena, and the cancellation of the title
issued to the petitioners by virtue thereof.
In turn, the petitioners filed on July 12, 1991 their own action for
specific performance with damages against the respondents.
Both cases were consolidated for trial and judgment in the
RTC.[18]
Ruling of the RTC
After trial, the RTC rendered judgment, as follows:
WHEREFORE, and in consideration of the foregoing, judgment is
hereby rendered in favor of plaintiff Dionisio A. Parulan, Jr. and
against defendants Ma. Elena Parulan and the Sps. Rex and
Concepcion Aggabao, without prejudice to any action that may be
filed by the Sps. Aggabao against co-defendant Ma. Elena
Parulan for the amounts they paid her for the purchase of the
subject lots, as follows:
1. The Deed of Absolute Sale dated March 18, 1991 covering the
sale of the lot located at No. 49 M. Cuaderno St., Executive
Village, BF Homes, Parañaque, Metro Manila, and covered by
TCT Nos. 63376 and 63377 is declared null and void.
2. Defendant Mrs. Elena Parulan is directed to pay litigation
expenses amounting to P50,000.00 and the costs of the suit.
SO ORDERED.[19]
The RTC declared that the SPA in the hands of Ma. Elena was a
forgery, based on its finding that Dionisio had been out of the
country at the time of the execution of the SPA;[20] that NBI Sr.
Document Examiner Rhoda B. Flores had certified that the
signature appearing on the SPA purporting to be that of Dionisio
and the set of standard sample signatures of Dionisio had not
been written by one and the same person;[21] and that Record
Officer III Eliseo O. Terenco and Clerk of Court Jesus P.
Maningas of the Manila RTC had issued a certification to the
effect that Atty. Alfred Datingaling, the Notary Public who had
notarized the SPA, had not been included in the list of Notaries
Public in Manila for the year 1990-1991.[22]

The RTC rejected the petitioners' defense of being buyers in good
faith because of their failure to exercise ordinary prudence,
including demanding from Ma. Elena a court order authorizing her
to sell the properties similar to the order that the Los Baños Rural
Bank had required before accepting the mortgage of the
property.[23] It observed that they had appeared to be in a hurry
to consummate the transaction despite Atanacio's advice that
they first consult a lawyer before buying the property; that with
ordinary prudence, they should first have obtained the owner's
duplicate copies of the TCTs before paying the full amount of the
consideration; and that the sale was void pursuant to Article 124
of the Family Code.[24]
Ruling of the CA
As stated, the CA affirmed the RTC, opining that Article 124 of the
Family Code applied because Dionisio had not consented to the
sale of the conjugal property by Ma. Elena; and that the RTC
correctly found the SPA to be a forgery.
The CA denied the petitioners' motion for reconsideration.[25]
Issues
The petitioners now make two arguments: (1) they were buyers in
good faith; and (2) the CA erred in affirming the RTC's finding that
the sale between Mrs. Elena and the petitioners had been a nullity
under Article 124 of the Family Code.
The petitioners impute error to the CA for not applying the
"ordinary prudent man's standard" in determining their status as
buyers in good faith. They contend that the more appropriate law
to apply was Article 173 of the Civil Code, not Article 124 of the
Family Code; and that even if the SPA held by Ma. Elena was a
forgery, the ruling in Veloso v. Court of Appeals[26] warranted a
judgment in their favor.
Restated, the issues for consideration and resolution are as
follows:
1) Which between Article 173 of the Civil Code and Article 124 of
the Family Code should apply to the sale of the conjugal property
executed without the consent of Dionisio?
2) Might the petitioners be considered in good faith at the time of
their purchase of the property?
3) Might the ruling in Veloso v. Court of Appeals be applied in
favor of the petitioners despite the finding of forgery of the SPA?
Ruling
The petition has no merit. We sustain the CA.
1. Article 124, Family Code, applies to sale of conjugal properties
made after the effectivity of the Family Code
The petitioners submit that Article 173 of the Civil Code, not
Article 124 of the Family Code, governed the property relations of
the respondents because they had been married prior to the
effectivity of the Family Code; and that the second paragraph of
Article 124 of the Family Code should not apply because the other
spouse held the administration over the conjugal property. They
argue that notwithstanding his absence from the country Dionisio
still held the administration of the conjugal property by virtue of his
execution of the SPA in favor of his brother; and that even
assuming that Article 124 of the Family Code properly applied,
Dionisio ratified the sale through Atty. Parulan's counter-offer
during the March 25, 1991 meeting.
We do not subscribe to the petitioners' submissions.
To start with, Article 254[27] the Family Code has expressly
repealed several titles under the Civil Code, among them the
entire Title VI in which the provisions on the property relations
between husband and wife, Article 173 included, are found.
Secondly, the sale was made on March 18, 1991, or after August
3, 1988, the effectivity of the Family Code. The proper law to
apply is, therefore, Article 124 of the Family Code, for it is settled
that any alienation or encumbrance of conjugal property made
during the effectivity of the Family Code is governed by Article
124 of the Family Code.[28]
8
Article 124 of the Family Code provides:
Article 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. In case
of disagreement, the husband's decision shall prevail, subject to
recourse to the court by the wife for proper remedy, which must
be availed of within five years from the date of the contract
implementing such decision.
In the event that one spouse is incapacitated or otherwise unable
to participate in the administration of the conjugal properties, the
other spouse may assume sole powers of administration. These
powers do not include disposition or encumbrance without
authority of the court or the written consent of the other spouse. In
the absence of such authority or consent, the disposition or
encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting
spouse and the third person, and may be perfected as a binding
contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either
or both offerors.
Thirdly, according to Article 256[29] of the Family Code, the
provisions of the Family Code may apply retroactively provided no
vested rights are impaired. In Tumlos v. Fernandez,[30] the Court
rejected the petitioner's argument that the Family Code did not
apply because the acquisition of the contested property had
occurred prior to the effectivity of the Family Code, and pointed
out that Article 256 provided that the Family Code could apply
retroactively if the application would not prejudice vested or
acquired rights existing before the effectivity of the Family Code.
Herein, however, the petitioners did not show any vested right in
the property acquired prior to August 3, 1988 that exempted their
situation from the retroactive application of the Family Code.
Fourthly, the petitioners failed to substantiate their contention that
Dionisio, while holding the administration over the property, had
delegated to his brother, Atty. Parulan, the administration of the
property, considering that they did not present in court the SPA
granting to Atty. Parulan the authority for the administration.
Nonetheless, we stress that the power of administration does not
include acts of disposition or encumbrance, which are acts of
strict ownership. As such, an authority to dispose cannot proceed
from an authority to administer, and vice versa, for the two powers
may only be exercised by an agent by following the provisions on
agency of the Civil Code (from Article 1876 to Article 1878).
Specifically, the apparent authority of Atty. Parulan, being a
special agency, was limited to the sale of the property in question,
and did not include or extend to the power to administer the
property.[31]
Lastly, the petitioners' insistence that Atty. Parulan's making of a
counter-offer during the March 25, 1991 meeting ratified the sale
merits no consideration. Under Article 124 of the Family Code, the
transaction executed sans the written consent of Dionisio or the
proper court order was void; hence, ratification did not occur, for a
void contract could not be ratified.[32]
On the other hand, we agree with Dionisio that the void sale was
a continuing offer from the petitioners and Ma. Elena that Dionisio
had the option of accepting or rejecting before the offer was
withdrawn by either or both Ma. Elena and the petitioners. The
last sentence of the second paragraph of Article 124 of the Family
Code makes this clear, stating that in the absence of the other
spouse's consent, the transaction should be construed as a
continuing offer on the part of the consenting spouse and the third
person, and may be perfected as a binding contract upon the
acceptance by the other spouse or upon authorization by the
court before the offer is withdrawn by either or both offerors.
2. Due diligence required in verifying not only vendor's title, but
also agent's authority to sell the property
A purchaser in good faith is one who buys the property of another,
without notice that some other person has a right to, or interest in,
such property, and pays the full and fair price for it 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. He cannot close his
eyes to facts that should put a reasonable man on his guard and
still claim he acted in good faith.[33] The status of a buyer in good

faith is never presumed but must be proven by the person
invoking it.[34]
Here, the petitioners disagree with the CA for not applying the
"ordinary prudent man's standard" in determining their status as
buyers in good faith. They insist that they exercised due diligence
by verifying the status of the TCTs, as well as by inquiring about
the details surrounding the mortgage extended by the Los Baños
Rural Bank. They lament the holding of the CA that they should
have been put on their guard when they learned that the Los
Baños Rural Bank had first required a court order before granting
the loan to the respondents secured by their mortgage of the
property.
The petitioners miss the whole point.
Article 124 of the Family Code categorically requires the consent
of both spouses before the conjugal property may be disposed of
by sale, mortgage, or other modes of disposition. In Bautista v.
Silva,[35] the Court erected a standard to determine the good
faith of the buyers dealing with a seller who had title to and
possession of the land but whose capacity to sell was restricted,
in that the consent of the other spouse was required before the
conveyance, declaring that in order to prove good faith in such a
situation, the buyers must show that they inquired not only into
the title of the seller but also into the seller's capacity to sell.[36]
Thus, the buyers of conjugal property must observe two kinds of
requisite diligence, namely: (a) the diligence in verifying the
validity of the title covering the property; and (b) the diligence in
inquiring into the authority of the transacting spouse to sell
conjugal property in behalf of the other spouse.
It is true that a buyer of registered land needs only to show that
he has relied on the face of the certificate of title to the property,
for he is not required to explore beyond what the certificate
indicates on its face.[37] In this respect, the petitioners sufficiently
proved that they had checked on the authenticity of TCT No.
63376 and TCT No. 63377 with the Office of the Register of
Deeds in Pasay City as the custodian of the land records; and
that they had also gone to the Los Baños Rural Bank to inquire
about the mortgage annotated on TCT No. 63377. Thereby, the
petitioners observed the requisite diligence in examining the
validity of the TCTs concerned.
Yet, it ought to be plain enough to the petitioners that the issue
was whether or not they had diligently inquired into the authority
of Ma. Elena to convey the property, not whether or not the TCT
had been valid and authentic, as to which there was no doubt.
Thus, we cannot side with them.
Firstly, the petitioners knew fully well that the law demanded the
written consent of Dionisio to the sale, but yet they did not present
evidence to show that they had made inquiries into the
circumstances behind the execution of the SPA purportedly
executed by Dionisio in favor of Ma. Elena. Had they made the
appropriate inquiries, and not simply accepted the SPA for what it
represented on its face, they would have uncovered soon enough
that the respondents had been estranged from each other and
were under de facto separation, and that they probably held
conflicting interests that would negate the existence of an agency
between them. To lift this doubt, they must, of necessity, further
inquire into the SPA of Ma. Elena. The omission to inquire
indicated their not being buyers in good faith, for, as fittingly
observed in Domingo v. Reed:[38]
What was required of them by the appellate court, which we
affirm, was merely to investigate - as any prudent vendee should -
the authority of Lolita to sell the property and to bind the
partnership. They had knowledge of facts that should have led
them to inquire and to investigate, in order to acquaint themselves
with possible defects in her title. The law requires them to act with
the diligence of a prudent person; in this case, their only prudent
course of action was to investigate whether respondent had
indeed given his consent to the sale and authorized his wife to
sell the property.[39]
Indeed, an unquestioning reliance by the petitioners on Ma.
Elena's SPA without first taking precautions to verify its
authenticity was not a prudent buyer's move.[40] They should
have done everything within their means and power to ascertain
whether the SPA had been genuine and authentic. If they did not
investigate on the relations of the respondents vis-á -vis each
other, they could have done other things towards the same end,
like attempting to locate the notary public who had notarized the
9
SPA, or checked with the RTC in Manila to confirm the authority
of Notary Public Atty. Datingaling. It turned out that Atty.
Datingaling was not authorized to act as a Notary Public for
Manila during the period 1990-1991, which was a fact that they
could easily discover with a modicum of zeal.
Secondly, the final payment of P700,000.00 even without the
owner's duplicate copy of the TCT No. 63376 being handed to
them by Ma. Elena indicated a revealing lack of precaution on the
part of the petitioners. It is true that she promised to produce and
deliver the owner's copy within a week because her relative
having custody of it had gone to Hongkong, but their passivity in
such an essential matter was puzzling light of their earlier alacrity
in immediately and diligently validating the TCTs to the extent of
inquiring at the Los Baños Rural Bank about the annotated
mortgage. Yet, they could have rightly withheld the final payment
of the balance. That they did not do so reflected their lack of due
care in dealing with Ma. Elena.
Lastly, another reason rendered the petitioners' good faith
incredible. They did not take immediate action against Ma. Elena
upon discovering that the owner's original copy of TCT No. 63376
was in the possession of Atty. Parulan, contrary to Elena's
representation. Human experience would have impelled them to
exert every effort to proceed against Ma. Elena, including
demanding the return of the substantial amounts paid to her. But
they seemed not to mind her inability to produce the TCT, and,
instead, they contented themselves with meeting with Atty.
Parulan to negotiate for the possible turnover of the TCT to them.
3. Veloso v. Court of Appeals cannot help petitioners
The petitioners contend that the forgery of the SPA
notwithstanding, the CA could still have decided in their favor
conformably with Veloso v. Court of Appeals,[41] a case where
the petitioner husband claimed that his signature and that of the
notary public who had notarized the SPA the petitioner
supposedly executed to authorize his wife to sell the property had
been forged. In denying relief, the Court upheld the right of the
vendee as an innocent purchaser for value.
Veloso is inapplicable, however, because the contested property
therein was exclusively owned by the petitioner and did not
belong to the conjugal regime. Veloso being upon conjugal
property, Article 124 of the Family Code did not apply.
In contrast, the property involved herein pertained to the conjugal
regime, and, consequently, the lack of the written consent of the
husband rendered the sale void pursuant to Article 124 of the
Family Code. Moreover, even assuming that the property involved
in Veloso was conjugal, its sale was made on November 2, 1987,
or prior to the effectivity of the Family Code; hence, the sale was
still properly covered by Article 173 of the Civil Code, which
provides that a sale effected without the consent of one of the
spouses is only voidable, not void. However, the sale herein was
made already during the effectivity of the Family Code, rendering
the application of Article 124 of the Family Code clear and
indubitable.
The fault of the petitioner in Veloso was that he did not adduce
sufficient evidence to prove that his signature and that of the
notary public on the SPA had been forged. The Court pointed out
that his mere allegation that the signatures had been forged could
not be sustained without clear and convincing proof to
substantiate the allegation. Herein, however, both the RTC and
the CA found from the testimonies and evidence presented by
Dionisio that his signature had been definitely forged, as borne
out by the entries in his passport showing that he was out of the
country at the time of the execution of the questioned SPA; and
that the alleged notary public, Atty. Datingaling, had no authority
to act as a Notary Public for Manila during the period of 1990-
1991.
WHEREFORE, we deny the petition for review on certiorari, and
affirm the decision dated July 2, 2004 rendered by the Court of
Appeals in C.A.-G.R. CV No. 69044 entitled "Dionisio Z. Parulan,
Jr. vs. Ma. Elena Parulan and Sps. Rex and Concepcion
Aggabao" and "Sps. Rex and Concepcion Aggabao vs. Dionisio
Z. Parulan, Jr. and Ma. Elena Parulan."
Costs of suit to be paid by the petitioners.
SO ORDERED.

PHILIPPINE NATIONAL BANKvs. THE HONORABLE COURT
OF APPEALS
G.R. No. L-57757 | 1987-08-31
GANCAYCO, J.:
Does the presumption of conjugality of properties acquired by the
spouses during coverture provided for in Article 160 of the Civil
Code apply to property covered by a Torrens certificate of title in
the name of the widow? This is the issue posed in this petition to
review on certiorari of the decision of the Court of Appeals in CA-
G.R. No. 60903 which is an action for reconveyance and
damages. *
On November 28, 1952, Donata Montemayor, through her son,
Salvador M. Vitug, mortgaged to the Philippine National Bank
(PNB) several parcels of land covered by Transfer Certificate of
Title (TCT) No. 2289 ---- Pampanga to guarantee the loan granted
by the PNB to Salvador Jaramilla and Pedro Bacani in the amount
of P40,900.00 which was duly registered in the Office of the
Register of Deeds of Pampanga. 1
On December 1, 1963, Donata Montemayor also mortgaged in
favor of PNB certain properties covered by TCT Nos. 2887 and
2888 ---- Pampanga to guarantee the payment of the loan
account of her son Salvador Vitug in the amount of P35,200.00,
which mortgage was duly registered in the Register of Deeds of
Pampanga. 2
The above-mentioned Transfer Certificates of Titles covering said
properties were all in the name of Donata Montemayor, of legal
age, Filipino, widow and a resident of Lubao, Pampanga at the
time they were mortgaged to PNB 3 and were free from all liens
and encumbrances. 4
Salvador Vitug failed to pay his account so the bank foreclosed
the mortgaged properties covered by TCT Nos. 2887 and 2888.
They were sold at public auction on May 20, 1968 in which the
PNB was the highest bidder. The titles thereto were thereafter
consolidated in the name of PNB.
Likewise, Salvador Jaramilla and Pedro Bacani failed to settle
their accounts with the PNB so the latter foreclosed the properties
covered by TCT No. 2889 which were sold at public auction and
likewise PNB was the buyer thereof. On August 30, 1968, a
certificate of sale was issued by the Register of Deeds covering
said properties in favor of the PNB. When the title of the PNB was
consolidated a new title was issued in its name. 5
On September 2, 1969, the PNB sold the properties covered by
TCT Nos. 2887 and 2888 ---- Pampanga to Jesus M. Vitug,
Anunciacion V. de Guzman, Prudencia V. Fajardo, Salvador Vitug
and Aurora V. Gutierrez in those names the corresponding titles
were issued. 6
During the lifetime of ClodualdoVitug he married two times. His
first wife was Gervacia Flores with whom he had 3 children,
namely, Victor, Lucina and Julio all surnamed Vitug. Victor now
dead is survived by his 6 children: Leonardo, Juan, Candido,
Francisco and Donaciano, all surnamed Vitug. Juan Vitug is also
dead and is survived by his only daughter Florencia Vitug.
The second wife of ClodualdoVitug was Donata Montemayor with
whom he had 8 children, namely, Pragmacio, Maximo, Jesus,
Salvador, Prudencio and Anunciacion, all surnamed Vitug, the
late Enrique Vitug represented by his wife Natalia Laquian, and
the late Francisco Vitug who is survived by 11 children, namely,
Antonio, Francisco, Aurora, Pedro, Honorio, Corazon, Anselmo,
Benigno, Eligio, Jesus and Luz.
ClodualdoVitug died intestate on May 20, 1929 so his estate was
settled and distributed in Special Proceeding No. 422 in the Court
of First Instance of Pampanga wherein Donata Montemayor was
the Administratrix. 7
Meanwhile, on May 12, 1958, Donata Montemayor executed a
contract of lease of Lot No. 24, which is covered by TCT No.
2887-R in favor of her children Pragmacio and Maximo both
surnamed Vitug. This lease was extended on August 31, 1963. By
virtue of a general power of attorney executed by Donata
Montemayor on Sept. 19, 1966 in favor of PragmacioVitug, the
latter executed a contract of lease on Sept. 19, 1967 of the said
lot in favor of Maximo Vitug. 8
10
On March 21, 1970 PragmacioVitug and Maximo Vitug filed an
action for partition and reconveyance with damages in the Court
of First Instance of Pampanga against Marcelo Mendiola, special
administrator of the intestate estate of Donata Montemayor who
died earlier, Jesus Vitug, Sr., Salvador, Natalia, Prudencia,
Anunciacion, all surnamed Vitug, Antonio, Francisco, Aurora,
Pedro, Honorio, Corazon, Anselmo, Benigno, Eligio, Jesus and
Luz, all surnamed Fajardo and the PNB.
The subject of the action is 30 parcels of land which they claim to
be the conjugal property of the spouses Donata Montemayor and
ClodualdoVitug of which they claim a share of 2/11 of 1/2 thereof.
They assailed the mortgage to the PNB and the public auction of
the properties as null and void. They invoked the case of Vitug vs.
Montemayor, L-5297 decided by this Court on Oct. 20, 1953
which is an action for partition and liquidation of the said 30
parcels of land wherein the properties were found to be conjugal
in nature.
In a decision of Sept. 15, 1975, the lower court dismissed the
complaint with costs against the plaintiffs and ordered them to pay
attorney's fees of P5,000.00 to the defendant's counsel. Plaintiffs
then interposed an appeal to the Court of Appeals, wherein in due
course a decision was rendered on May 20, 1981, the dispositive
part of which reads as follows:
"WHEREFORE, in the light of the foregoing, the decision
appealed from is hereby reversed and set aside, and another one
entered in accordance with the tenor of the prayer of appellant's
complaint with the modification that the sale at public auction of
the 22 parcels be considered valid with respect to the 1/2 thereof.
No costs."
Hence the herein petition for certiorari filed by the PNB raising the
following assignments of error:
"I
THE RESPONDENT COURT OF APPEALS ERRED IN
APPLYING TO THE CASE AT BAR THE RULING OF THIS
HONORABLE SUPREME COURT IN FLORENCIA VITUG VS.
DONATA MONTEMAYOR, ET AL., 91 PHIL. 286 (1953)
BECAUSE:
A. BETWEEN A PROVISION OF A SPECIAL LAW AND THE
JUDICIAL INTERPRETATION AND/OR APPLICATION OF A
PROVISION OF A GENERAL LAW, THE FORMER PREVAILS.
B. THE DOCTRINE OF STARE DECISIS IS NOT A
MECHANICAL FORMULA OF ADHERENCE.
C. PNB WAS NOT A PARTY, AND HAD NO KNOWLEDGE OF
THE ABOVECITED CASE.
D. SIMILARLY, PRAGMACIO VITUG AND MAXIMO VITUG
WERE NOT PARTIES IN SAID CASE.
II
THE RESPONDENT COURT OF APPEALS ERRED IN NOT
RECOGNIZING THE CONCLUSIVENESS OF THE
CERTIFICATE OF TITLE, AS PROVIDED IN ACT 496, AS
AMENDED (THE LAND REGISTRATION).
III
THE RESPONDENT COURT OF APPEALS ERRED IN
IGNORING THE CONCLUSIVENESS OF OWNERSHIP OF
DONATA MONTEMAYOR OVER THE PROPERTIES WHICH
WERE REGISTERED EXCLUSIVELY IN HER NAME WHEN
PRIVATE RESPONDENTS (PRAGMACIO VITUG AND MAXIMO
VITUG), AS LESSEES, ENTERED INTO A CONTRACT OF
LEASE WITH DONATA MONTEMAYOR AS THE OWNER-
LESSOR.
IV
THE RESPONDENT COURT OF APPEALS ERRED IN
CONCLUDING THAT PNB WAS A MORTGAGEE IN BAD
FAITH."
The petition is impressed with merit.
When the subject properties were mortgaged to the PNB they
were registered in the name of Donata Montemayor, widow.
Relying on the torrens certificate of title covering said properties
the mortgage loan applications of Donata were granted by the
 11

PNB and the mortgages were duly constituted and registered in
the office of the Register of Deeds.
In processing the loan applications of Donata Montemayor, the
PNB had the right to rely on what appears in the certificates of
title and no more. On its face the properties are owned by Donata
Montemayor, a widow. The PNB had no reason to doubt nor
question the status of said registered owner and her ownership
thereof. Indeed, there are no liens and encumbrances covering
the same.
The well-known rule in this jurisdiction is that a person dealing
with a registered land has a right to rely upon the face of the
torrens certificate of title and to dispense with the need of
inquiring further, except when the party concerned has actual
knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry. 9
A torrens title concludes all controversy over ownership of the
land covered by a final degree of registration. 10 Once the title is
registered the owner may rest assured without the necessity of
stepping into the portals of the court or sitting in the mirador de su
casa to avoid the possibility of losing his land. 11
Article 160 of the Civil Code provides as follows:
raised the conjugal nature of the property nor took issue as to the
ownership of their mother, Donata Montemayor, over the same.
Indeed private respondents were among the defendants in said
two cases wherein in their answers to the complaint they asserted
that the properties in question are paraphernal properties
belonging exclusively to Donata Montemayor and are not conjugal
in nature. 21 Thus they leased the properties from their mother
Donata Montemayor for many years knowing her to be the owner.
They were in possession of the property for a long time and they
knew that the same were mortgaged by their mother to the PNB
and thereafter were sold at public auction, but they did not do
anything. 22 It is only after 17 years that they remembered to
assert their rights. Certainly, the are guilty of laches. 23
Moreover, as correctly held by the lower court. Pragmacio and
Maximo Vitug as occupants and lessees of the property in
question cannot now dispute the ownership of their mother over
the same who was their lessor. 24
WHEREFORE, the subject decision of the respondent Court of
Appeals is hereby REVERSED and set aside and anther decision
is hereby rendered DISMISSING the complaint and ordering
private respondents to pay attorney's fees and expenses of
litigation to petitioner PNB in the amount of P20,000.00 and the
costs of the suit.

"Art. 160. All property of the marriage is presumed to belong to SO ORDERED.

the conjugal partnership, unless it be proved that it pertains
exclusively to the husband or to the wife."

The presumption applies to property acquired during the lifetime

of the husband and wife. In this case, it appears on the face of the
title that the properties were acquired by Donata Montemayor
when she was already a widow. When the property is registered
in the name of a spouse only and there is no showing as to when
the property was acquired by said spouse, this is an indication
that the property belongs exclusively to said spouse. 12 And this
presumption under Article 160 of the Civil Code cannot prevail
when the title is in the name of only one spouse and the rights of
innocent third parties are involved. 13

The PNB had a reason to rely on what appears on the certificates

of title of the properties mortgaged. For all legal purposes, the
PNB is a mortgagee in good faith for at the time the mortgages
covering said properties were constituted the PNB was not aware
to any flaw of the title of the mortgagor. 14

True it is that in the earlier cases decided by this Court, namely

Vitug vs. Montemayor decided on May 15, 1952, which is an
action for recovery of possession of a share in said parcels of
land, 15 and in the subsequent action for partition between the
same parties decided on Oct. 20, 1953, 16 this court found the 30
parcels of land in question to be conjugal in nature and awarded
the corresponding share to the property of Florencia Vitug, an heir
of the late ClodualdoVitug from the first marriage. In said cases
this Court affirmed the decision of the lower court. In the
dispositive part of the decision of the trial court it made the
observation that "but from the conduct of ClodualdoVitug and
Donata Montemayor during the existence of their marital life, the
inference is clear that Clodualdo had the unequivocal intention of
transmitting the full ownership of the 30 parcels of land to his wife
Donata Montemayor, thus considering the 1/2 of the funds of the
conjugal property so advanced for the purchase of said parcels of
land as reimbursible to the estate of ClodualdoVitug on his death."
17 That must be the reason why the property was registered in
the name of Donata Montemayor as widow after the death of
ClodualdoVitug. 18

At any rate, although actions for recovery of real property and for
partition are real actions, however, they are actions in personam
that bind only the particular individuals who are parties thereto. 19
The PNB not being a party in said cases is not bound by the said
decisions. Nor does it appear that the PNB was aware of the said
decisions when it extended the above described mortgage loans.
Indeed, if the PNB knew of the conjugal nature of said properties
it would not have approved the mortgage applications covering
said properties of Donata Montemayor without requiring the
consent of all the other heirs or co-owners thereof. Moreover,
when said properties were sold at public auction, the PNB was a
purchaser for value in good faith so its right thereto is beyond
question. 20

Pragmacio and Maximo Vitug are now estopped from questioning

the title of Donata Montemayor to the said properties. They never

CRUZvs. LEIS
G.R. No. 125233 | 2000-03-09
KAPUNAN, J.:
Private respondents, the heirs of spouses Adriano Leis and
Gertrudes Isidro,1 [Private respondents Eleuterio Leis, Raymundo
Leis, Anastacia Leis-Lagnada and Loreta Leis-Cayonda are the
children of spouses Adriano Leis and Gertrudes Isidro, while
private respondent Teresita Mandocdoc is the spouses'
grandchild.] filed an action before the Regional Trial Court (RTC)
of Pasig seeking the nullification of the contracts of sale over a lot
executed by Gertrudes Isidro in favor of petitioner Alexander
Cruz, as well as the title subsequently issued in the name of the
latter. Private respondents claimed that the contracts were vitiated
by fraud as Gertrudes was illiterate and already 80 years old at
the time of the execution of the contracts; that the price for the
land was insufficient as it was sold only for P39,083.00 when the
fair market value of the lot should be P1,000.00 per square meter,
instead of P390.00, more or less; and that the property subject of
the sale was conjugal and, consequently, its sale without the
knowledge and consent of private respondents was in derogation
of their rights as heirs.
The facts that gave rise to the complaint:
Adriano and Gertrudes were married on 19 April 1923. On 27
April 1955, Gertrudes acquired from the then Department of
Agriculture and Natural Resources (DANR) a parcel of land with
an area of one hundred (100) square meters, situated at Bo. Sto.
Niño, Marikina, Rizal and covered by Transfer Certificate of Title
(TCT) No. 42245. The Deed of Sale described Gertrudes as a
widow. On 2 March 1956, TCT No. 43100 was issued in the name
of "Gertrudes Isidro," who was also referred to therein as a
"widow."
On 2 December 1973, Adriano died. It does not appear that he
executed a will before his death.
On 5 February 1985, Gertrudes obtained a loan from petitioners,
the spouses Alexander and Adelaida Cruz, in the amount of
P15,000.00 at 5% interest, payable on or before 5 February 1986.
The loan was secured by a mortgage over the property covered
by TCT No. 43100. Gertrudes, however, failed to pay the loan on
the due date.
Unable to pay her outstanding obligation after the debt became
due and payable, on 11 March 1986, Gertrudes executed two
contracts in favor of petitioner Alexander Cruz. The first is
denominated as "Kasunduan," which the parties concede is a
pacto de retro sale, granting Gertrudes one year within which to
repurchase the property. The second is a "Kasunduan ng
TuwirangBilihan," a Deed of Absolute Sale covering the same
property for the price of P39,083.00, the same amount stipulated
in the "Kasunduan."
For failure of Gertrudes to repurchase the property, ownership
thereof was consolidated in the name of Alexander Cruz in whose
name TCT No. 130584 was issued on 21 April 1987, canceling
TCT No. 43100 in the name of Gertrudes Isidro.
On 9 June 1987, Gertrudes Isidro died. Thereafter, her heirs,
herein private respondents, received demands to vacate the
premises from petitioners, the new owners of the property. Private
respondents responded by filing a complaint as mentioned at the
outset.
On the basis of the foregoing facts, the RTC rendered a decision
in favor of private respondents. The RTC held that the land was
conjugal property since the evidence presented by private
respondents disclosed that the same was acquired during the
marriage of the spouses and that Adriano contributed money for
the purchase of the property. Thus, the court concluded,
Gertrudes could only sell to petitioner spouses her one-half share
in the property.
The trial court also ruled that no fraud attended the execution of
the contracts. Nevertheless, the "Kasunduan," providing for a sale
con pacto de retro, had superseded the "Kasunduan ng
TuwirangBilihan," the deed of absolute sale. The trial court did not
consider the pacto de retro sale an equitable mortgage, despite
the allegedly insufficient price. Nonetheless, the trial court found
for private respondents. It rationalized that petitioners failed to
comply with the provisions of Article 1607 of the Civil Code
12
requiring a judicial order for the consolidation of the ownership in
the vendee a retro to be recorded in the Registry of Property.
The dispositive portion of the RTC's Decision reads:
WHEREFORE, in the light of all the foregoing, judgment is hereby
rendered:
1. Declaring Exhibit G - "Kasunduan ng TuwirangBilihan" Null and
Void and declar[ing] that the title issued pursuant thereto is
likewise Null and Void;
2. Declaring the property in litigation as conjugal property;
3. Ordering the Registry of Deeds of Marikina Branch to reinstate
the title of Gertrudes Isidro;
4. Ordering the plaintiff[s] [sic] to comply with the provision[s] of
Article 1607 in relation to Article 1616 of the Civil Code;
5. Ordering the defendant[s] to pay plaintiff[s] P15,000.00 nominal
damages for the violation of plaintiffs' rights;
6. Ordering the defendant[s] to pay plaintiff[s] the sum of
P8,000.00 as and for attorney's fees;
7. Dismissing defendant[s'] counterclaim; and
8. Ordering defendant[s] to pay the cost of suit.
SO ORDERED.2 [Records, p. 276.]
Petitioners appealed to the Court of Appeals in vain. The Court of
Appeals affirmed the decision of the Regional Trial Court, holding
that since the property was acquired during the marriage of
Gertrudes to Adriano, the same was presumed to be conjugal
property under Article 160 of the Civil Code. The appellate court,
like the trial court, also noted that petitioner did not comply with
the provisions of Article 1607 of the Civil Code.
Petitioners are now before this Court seeking the reversal of the
decision of the Court of Appeals. First, they contend that the
subject property is not conjugal but is owned exclusively by
Gertrudes, who was described in the Deed of Sale between
Gertrudes and the DANR as well as in TCT No. 43100 as a
widow. Second, assuming the land was conjugal property,
petitioners argue that the same became Gertrudes' exclusively
when, in 1979, she mortgaged the property to the Daily Savings
Bank and Loan Association. The bank later foreclosed on the
mortgage in 1981 but Gertrudes redeemed the same in 1983.
The paraphernal or conjugal nature of the property is not
determinative of the ownership of the disputed property. If the
property was paraphernal as contended by petitioners, Gertrudes
Isidro would have the absolute right to dispose of the same, and
absolute title and ownership was vested in petitioners upon the
failure of Gertrudes to redeem the property. On the other hand, if
the property was conjugal, as private respondents maintain, upon
the death of Adriano Leis, the conjugal partnership was
terminated,3 [Civil Code, Article 175 (1).] entitling Gertrudes to
one-half of the property.4 [Civil Code, Article 185.] Adriano's rights
to the other half, in turn, were transmitted upon his death to his
heirs,5 [Civil Code, Article 777.] which includes his widow
Gertrudes, who is entitled to the same share as that of each of the
legitimate children.6 [Civil Code, Article 996.] Thus, as a result of
the death of Adriano, a regime of co-ownership arose between
Gertrudes and the other heirs in relation to the property.
Incidentally, there is no merit in petitioners' contention that
Gertrudes' redemption of the property from the Daily Savings
Bank vested in her ownership over the same to the exclusion of
her co-owners. We dismissed the same argument by one of the
petitioners in Paulmitan vs. Court of Appeals,7 [215 SCRA 866
(1992).] where one of the petitioners therein claimed ownership of
the entire property subject of the case by virtue of her redemption
thereof after the same was forfeited in favor of the provincial
government for non-payment of taxes. We held, however, that the
redemption of the land "did not terminate the co-ownership nor
give her title to the entire land subject of the co-ownership." We
expounded, quoting our pronouncement in Adille vs. Court of
Appeals:8 [157 SCRA 455 (1988).]
The petition raises a purely legal issue: May a co-owner acquire
exclusive ownership over the property held in common?
 13

The aforequoted article is intended to minimize the evils which the

Essentially, it is the petitioner's contention that the property
subject of dispute devolved upon him upon the failure of his co-
heirs to join him in its redemption within the period required by
law. He relies on the provisions of Article 1515 of the old Civil
Code, Article 1613 of the present Code, giving the vendee a retro
the right to demand redemption of the entire property.
There is no merit in this petition.
The right of repurchase may be exercised by a co-owner with
respect to his share alone (CIVL CODE, art. 1612; CIVIL CODE
(1889), art. 1514.). While the records show that petitioner
redeemed the property in its entirety, shouldering the expenses
therefor, that did not make him the owner of all of it. In other
words, it did not put to end the existing state of co-ownership
(Supra, Art. 489). There is no doubt that redemption of property
entails a necessary expense. Under the Civil Code:
Art. 488. Each co-owner shall have a right to compel the other co-
owners to contribute to the expenses of preservation of the thing
or right owned in common and to the taxes. Any one of the latter
may exempt himself from this obligation by renouncing so much
of his undivided interest as may be equivalent to his share of the
expenses and taxes. No such waiver shall be made if it is
prejudicial to the co-ownership.
pacto de retro sale has caused in the hands of usurers. A judicial
order is necessary in order to determine the true nature of the
transaction and to prevent the interposition of buyers in good faith
while the determination is being made.10 [Aquino, Civil Code, Vol.
3, 1990 ed., pp. 150-151.]
It bears stressing that notwithstanding Article 1607, the recording
in the Registry of Property of the consolidation of ownership of the
vendee is not a condition sine qua non to the transfer of
ownership. Petitioners are the owners of the subject property
since neither Gertrudes nor her co-owners redeemed the same
within the one-year period stipulated in the "Kasunduan." The
essence of a pacto de retro sale is that title and ownership of the
property sold are immediately vested in the vendee a retro,
subject to the resolutory condition of repurchase by the vendor a
retro within the stipulated period. Failure thus of the vendor a retro
to perform said resolutory condition vests upon the vendee by
operation of law absolute title and ownership over the property
sold. As title is already vested in the vendee a retro, his failure to
consolidate his title under Article 1607 of the Civil Code does not
impair such title or ownership for the method prescribed
thereunder is merely for the purpose of registering the
consolidated title.11 [De Guzman, Jr. vs. Court of Appeals, 156
SCRA 701 (1987). See also De Bayquen vs. Balaoro, 143 SCRA
412 (1986).]

The result is that the property remains to be in a condition of co-
ownership. While a vendee a retro, under Article 1613 of the
Code, "may not be compelled to consent to a partial redemption,"
the redemption by one co-heir or co-owner of the property in its
totality does not vest in him ownership over it. Failure on the part
of all the co-owners to redeem it entitles the vendee a retro to
retain the property and consolidate title thereto in his name
(Supra, art. 1607). But the provision does not give to the
redeeming co-owner the right to the entire property. It does not
provide for a mode of terminating a co-ownership.
WHEREFORE, the decision of the Court of Appeals is MODIFIED
in that the petitioners are deemed owners of the property by
reason of the failure of the vendor, Gertrudes Isidro, to
repurchase the same within the period stipulated. However,
Transfer Certificate of Title No. 130584, in the name of Alexander
M. Cruz, which was issued without judicial order, is hereby
ordered CANCELLED, and Transfer Certificate of Title No. 43100
in the name of Gertrudes Isidro is ordered REINSTATED, without
prejudice to compliance by petitioners with the provisions of
Article 1607 of the Civil Code.

It is conceded that, as a rule, a co-owner such as Gertrudes could SO ORDERED.

only dispose of her share in the property owned in common.
Article 493 of the Civil Code provides:

ART. 493. Each co-owner shall have the full ownership of his part
of the fruits and benefits pertaining thereto, and he may therefore
alienate, assign or mortgage it, and even substitute another
person in its enjoyment, except when personal rights are involved.
But the effect of the alienation or the mortgage, with respect to the
co-owners, shall be limited to the portion which may be allotted to
him in the division upon the termination of the co-ownership.

Unfortunately for private respondents, however, the property was

registered in TCT No. 43100 solely in the name of "Gertrudes
Isidro, widow." Where a parcel of land, forming part of the
undistributed properties of the dissolved conjugal partnership of
gains, is sold by a widow to a purchaser who merely relied on the
face of the certificate of title thereto, issued solely in the name of
the widow, the purchaser acquires a valid title to the land even as
against the heirs of the deceased spouse. The rationale for this
rule is that "a person dealing with registered land is not required
to go behind the register to determine the condition of the
property. He is only charged with notice of the burdens on the
property which are noted on the face of the register or the
certificate of title. To require him to do more is to defeat one of the
primary objects of the Torrens system."9 [Ibarra vs. Ibarra, Sr.,
156 SCRA 616 (1987), citing Paraiso vs. Camon 106 Phil. 187
(1959). Ibarra was wrongly cited in p.4 of the Petition (Rollo, p.6)
as "Vda. de Carcallas v. Judge Yancha, G.R. 46401, 18 Dec. 87,"
at 156 SCRA 608 (1987).]

As gleaned from the foregoing discussion, despite the Court of

Appeals' finding and conclusion that Gertrudes as well as private
respondents failed to repurchase the property within the period
stipulated and has lost all their rights to it, it still ruled against
petitioners by affirming the Regional Trial Court's decision on the
premise that there was no compliance with Article 1607 of the
Civil Code requiring a judicial hearing before registration of the
property in the name of petitioners. This provision states:

ART. 1607. In case of real property, the consolidation of

ownership in the vendee by virtue of the failure of the vendor to
comply with the provisions of article 1616 shall not be recorded in
the Registry of Property without a judicial order, after the vendor
has been duly heard.
 14

LEDESMA vs. THE MUNICIPALITY OF ILOILO
G.R. No. 26337 | 1926-12-17
JOHNSON, J.:
This action was commenced in the Court of First Instance of the
Province of Iloilo. Its purpose was to recover of the defendant the
municipality of Iloilo the sum of P15,780 as the value of two lots
Nos. 537 and 703 which, the plaintiff claimed, the defendant
municipality had illegally appropriated, together with the sum of
P5,000 as damages and costs. The recovery of said sums was
opposed by the defendants upon the ground that the plaintiff and
appellant was not and never had been the owner of said lots Nos.
537 and 703. The municipality of Iloilo contended that it had
purchased said lots from Concepcion Lopez on the 9th day of
March, 1925, for the purpose of widening the adjoining streets
and had paid therefor the sum of P25,000. The other defendants
answered the petition and supported the contention of the
municipality. After hearing the evidence upon the issue presented,
the Honorable Leopoldo Rovira reached the conclusion that a
preponderance of the evidence supported the contention of the
defendants, and rendered a judgment absolving them from all
liability under the complaint, without any finding as to costs. From
that judgment the plaintiff appealed.
In order that the facts in the present cause may be more clearly
understood, reference to the following map may be made:
contract of sale for street purposes. That fact was well known.
The said lots had been included as a part of the streets of the City
of Iloilo. They had been segregated from the lot formerly owned
by Concepcion Lopez. Said lots 537 and 703 had become a part
of a public highway established by law. The same were therefore
illegally included, ill accordance with the provisions of section 39
of Act No. 496, in the certificate of title issued to Concepcion
Lopez on the 10th day of November, 1915. That fact was
recognized by Concepcion Lopez as well as by each of the
subsequent purchasers of said lots. The simple possession of a
certificate of title, under the Torrens system, does not necessarily
make the possessor a true owner of all the property described
therein. If a person obtains a title, under the Torrens system,
which includes by mistake or oversight land which cannot be
registered under the Torrens system, he does not, by virtue of
said certificate alone, become the owner of the lands illegally
included. (Legarda and Prieto vs. Saleeby, 31 Phil., 590.)
The inclusion of public highways in a certificate of title does not
thereby necessarily give to the holder of such certificate said
public highways. The appellant, therefore, even though a part of
said streets (lots 537 and 703) had been included in the original
certificate of title and in the subsequent transfers of title, did not
become the owner of said lots and is not therefore entitled to
recover their value from the City of Iloilo nor the damages prayed
for.

EXHIBIT 2 OF THE DEFENDANTS For all of the foregoing reasons, the judgment of the lower court is
hereby affirmed, with costs. So ordered.
It appears from the documentary evidence found in the record
that prior to the 9th day of March, 1915, Concepcion Lopez was
the owner of lots 228-A, 228-B, 537, and 703 as seen in said
map, and that on said 9th day of March, 1915, all of said lots
constituted lot No. 228. On the 9th day of March, 1915,
Concepcion Lopez sold to the City of Iloilo a part of said lot, now
numbered 537 and 703 for the sum of P25,000. The City of Iloilo
promised to pay to Concepcion Lopez the said sum of P25,000
within a period of ten years (Exhibit 1). On the 11th day of
November 1915, after the presentation of a petition for the
registration of lot 228, a certificate of title (No. 464) was issued in
favor of Concepcion for said lot 228, including lots 537 and 703.
The inclusion of said lots (537 and 703) in said certificate of title
was evidently an error on the part of someone connected with the
office of the registrar of titles under the Torrens system.

Later and on the 27th day of April, 1918, Concepcion Lopez sold
to Maximo M. Kalaw and wife said lot 228, including lots 537 and
703 evidently by mistake (see transfer certificate No. 617 and
Exhibits B and 6). It is said that the inclusion of said lots 537 and
703 was a mistake because Concepcion Lopez as well as
Maximo M. Kalaw and wife were ignorant of the fact that said lots
were included in their transfer certificate of title. Later and on the
11th day of August, 1919, Concepcion Lopez, representing
Maximo M. Kalaw, sold said lots (228, 537, and 703) to Julio
Ledesma, which sale was ratified by Maximo M. Kalaw and his
wife on the 15th day of August, 1919 (see Exhibit D.) Later a
transfer certificate of title No. 908 was issued in favor of Julio
Ledesma (Exhibit H). According to the admissions of Julio
Ledesma lots 537 and 703 were included by mistake.

On the 15th day of September, 1919, Julio Ledesma sold a

portion of lot No. 228 to Tomas Locsin et al. Later a subdivision of
lot 228 was made into two lots 228-A and 228-B. Lot 228-A
remained the property of Julio Ledesma (see transfer certificate of
title No. 1131, Exhibit I). Said lots 537 and 703, according to said
transfer certificate, remained the property of Julio Ledesma.

On the 2nd day of August, 1922, Julio Ledesma sold to the

appellant herein lots Nos. 228-A, 537, and 703 (see transfer
certificate 1989 in favor of Celso Ledesma, Exhibit J). Again,
according to Julio Ledesma, lots 537 and 703 were included in
the transfer of lot No. 228-A to Celso Ledesma by mistake.

The theory of the appellant is that, by reason of the fact that said
lots 537 and 703 had been included in the registered title (title No.
464) of Concepcion Lopez in November, 1915, and Concepcion
included in each succeeding transfer of title to him said lots, that
he was the indisputable owner thereof, and because the City of
Iloilo had appropriated said lots, that he was entitled to recover
the value of said lots together with damages.

With reference to the theory of the appellant, an examination of

the record shows that as early as April, 1915, said lots had been
turned over by Concepcion Lopez to the City of Iloilo under a

IGLESIA NI CRISTOvs. COURT OF FIRST INSTANCE OF
NUEVA ECIJA
G.R. No. L-35273 | 1983-07-25
GUTIERREZ, JR., J.:
This is a petition for review on certiorari which seeks to reverse
the decision of the respondent Court of First Instance of Nueva
Ecija, Branch I, in Civil Case No. 4742 entitled Development Bank
of the Philippines v. Iglesiani Cristo, Register of Deeds of Nueva
Ecija, and the National Treasurer of the Philippines. The decision
of the respondent court upheld the primacy of the respondent
bank's title and ordered the cancellation of the petitioner's title.
The petitioner has come to this Court on the sole issue of:
WHICH OF THE TWO TITLES IS SUPERIOR, AN EARLIER
TITLE SECURED ADMINISTRATIVELY OR A LATTER TITLE
SECURED THRU JUDICIAL PROCEEDINGS?
The facts of the case are not disputed. They are summarized by
the respondent court as follows:
This is an action filed by the plaintiff Development Bank of the
Philippines against the defendant IglesianiKristo, Register of
Deeds of Nueva Ecija and the National Treasurer of the
Philippines.
As a first cause of action, the complaint states among other things
that plaintiff acquired a certain parcel of land located at Sagana,
Laur, Nueva Ecija, with an area of 19 hectares, more or less; that
it acquired the same thru a sheriff's sale held on April 2, 1952 on
account of a foreclosure of mortgage securing an agricultural loan
of P4,500.00 granted to one Emilio Libunao; that on July 18, 1953
after the expiration of one year from and after the date of the
registration of the certificate of sale, and after the mortgagor,
Emilio Libunao failed to exercise his right to redemption, the
plaintiff caused the consolidation in its favor the exclusive and
absolute ownership thereof, and was issued T.C.T. No. NT-14302
in its name; that said parcel of land was originally owned by Mr.
Emilio Libunao, who obtained a Homestead Patent on June 19,
1937, which was registered as O.C.T. No. 5482 on January 19,
1938; that on August 2, 1966 plaintiff sold to its former owner
Emilio Libunao the said property for the sum of P10,953.23 under
a Deed of Conditional Sale; that plaintiff learned that the
defendant IglesianiKristo thru its followers and with its full
knowledge and consent is occupying the said parcel of land since
October 3, 1966, and claiming the same to be a portion of that
certain parcel of land known as Lot B-2, Psd-47351, covered by
T.C.T. No. NT-53573 in the name of defendant IglesianiKristo was
originally registered on June 1, 1964 as O.C.T. No. 0918 under
Decree No. N-11506, Rec. No. 55081, Case No. 3244 of the
Court of First Instance of Nueva Ecija, issued on May 25, 1954;
that despite repeated demands by plaintiff, defendant
IglesianiKristo and all persons claiming it failed and refused and
still fail and refuse to vacate the said parcel of land to the damage
and prejudice of the plaintiff.
The second cause of action is against the defendant National
Treasurer, the depositary and legal custodian of the Assurance
Fund under Act No. 496 against which plaintiff would proceed for
reimbursement of the purchase price of the property in question in
case of an adverse judgment.
Defendant National Treasurer of the Philippines filed its answer
on July 17, 1967 denying the material allegations of the
complaint, and alleging that the action is premature, since the
plaintiff may still recover damages from other persons.
Defendant IglesianiKristo filed its answer on July 25, 1967
denying the material allegations of the complaint, and stating by
way of affirmative defenses that it purchased in good faith from
Victoria Maravilla certain parcels of land situated at Barrio Cebu,
Laur, Nueva Ecija, which included the land in question; that these
parcels of land purchased were covered by certificates of title;
that immediately after the purchase, defendant IglesianiKristo
took possession of the property, that granting that plaintiff's land is
within the titled property; of the defendant, it has superior title over
it. On July 25, 1967 defendant IglesianiKristo filed a motion to
bring in a third party defendant in the person of Victoria Maravilla,
from whom it acquired the property in question. Then on July 2,
1968 it filed an amended third party complaint wherein the original
third party defendant was substituted by her heirs represented by
Dra. Mercedes M. Oliver. This was granted by the Court in its
order dated July 9, 1968. On September 12, 1968, the third party
defendant filed an opposition to the admission of the amended
15
third party complaint praying that the same be dismissed for being
a money claim. The Court in its order dated September 19, 1969
dismissed the third party complaint. The parties have agreed to
submit a stipulation of facts upon which the decision of the Court
will be based.
From the stipulations of facts submitted by the parties on January
16, 1970, the following facts are admitted; to wit: that the property
in question is covered by T.C.T. No. NT-14302 in the name of the
plaintiff, and T.C.T. No. NT-53573 in the name of defendant
IglesianiKristo; that said property was acquired by the plaintiff in a
foreclosure sale on April 2, 1962 from Emilio Libunao in whose
name the same was previously registered on January 10, 1938 by
virtue of a homestead patent of June 19, 1937; that defendant
acquired the said property from Victoria Maravilla who was the
registered owner of a parcel of land including the land in question
under O.C.T. No. O-918 by virtue of a decree/decision, Rec. No.
56018, Reg. Case No. 3244 of the CFI of Nueva Ecija on March
24, 1954; and registered in the Register of Deeds on June 1,
1954; that the land covered by O.C.T. No. O-918 was subdivided
into four lots with separate titles; that the lot in question falls within
Lot B-2, Psd-47351 which defendant acquired from Victoria
Maravilla on November 5, 1964, and now covered by T.C.T. No.
NT-53573 in its name.
The dispositive portion of the questioned decision reads:
". . . the Court hereby declares the title of the defendant
IglesianiKristo, T.C.T. No. NT-53573 to be null and void, and
orders the Register of Deeds to cancel the aforementioned title.
The Court likewise orders the defendant IglesianiKristo to deliver
the possession of the said property to the plaintiff or to its duly
authorized representative, and to pay the costs."
The petitioner filed a motion for reconsideration but the
respondent Court denied it. Failing to obtain a reversal of the
decision, the petitioner filed this petition for review on certiorari
raising the following assignments of errors:
I
THE RESPONDENT COURT ERRED IN HOLDING THAT TITLE
ACQUIRED EARLIER BY HOMESTEAD IS SUPERIOR TO
THAT SECURED IN A SUBSEQUENT LAND REGISTRATION
PROCEEDINGS.
II
THAT RESPONDENT COURT ERRED IN HOLDING THAT
ASSUMING THE LAND IN QUESTION WAS ALREADY OF
PRIVATE OWNERSHIP, PETITIONER OR HER
PREDECESSOR SHOULD HAVE FILED A PETITION FOR
REVIEW WITHIN ONE YEAR FROM THE ISSUANCE OF THE
HOMESTEAD PATENT.
III
THE RESPONDENT COURT ERRED IN NULLIFYING
PETITIONER'S TITLE AND CONSEQUENTLY IN ORDERING IT
TO DELIVER TO RESPONDENT BANK THE POSSESSION OF
THE LAND IN DISPUTE.
The errors raised by the petitioner are grounded on one main
allegation, that the property in question was already of private
ownership when the homestead patent was issued in favor of
Emilio Libunao, the respondent bank's predecessor. The
petitioner contends that the land covered by the conflicting titles
had been possessed by Victoria Maravilla and her predecessor
Mariano Padilla even several years before the Revolution of 1896
and that is why it was adjudicated as private land and ordered
registered in her name in Land Registration Case No. 3244, LRC,
Record No. 55081. With this as factual background, the petitioner
attacks the validity of the homestead patent and title issued to the
respondent bank's predecessor, Emilio Libunao.
The petitioner cites the case of Vital v. Anore (90 Phil. 855, 858)
to support its contention that the homestead patent and the
consequent title are void. According to him, we should apply the
rule in Vital v. Anore that:
The rule that a homestead patent, once registered under the
Registration Act, becomes indefeasible as a Torrens Title is only
true and correct if the parcel of agricultural land patented or
granted as homestead by the government after the requirements
of the law had been complied with was a part of the public
domain. If it is not but a private land the patent or homestead
patent are a nullity.

The rule in Vital is not applicable to this case. This Court
remanded the Vital case to the lower court for the taking of
evidence because of the following factual considerations:
A torrens title issued upon a free patent may not be cancelled
after the lapse of ten years from the date of its registration
because the statute of limitations bars such cancellation. But if the
registered owner, be he the patentee or his successor-in-interest
to whom the free patent was transferred or conveyed, knew that
the parcel of land described in the patent and in the Torrens title
belonged to another who together with his predecessor's-in-
interest has been in possession thereof, and if the patentee and
his successor-in-interest were never in possession thereof, then
the statute barring an action to cancel a Torrens title issued upon
a free patent does not apply, and the true owner may bring an
action to have the ownership or title to the land judicially settled,
and if the allegations of the plaintiff that he is the true owner of the
parcel of land granted as free patent and described in the Torrens
title and that the defendant and his predecessor-in-interest were
never in possession of the parcel of land and knew that the
plaintiff and his predecessor-in-interest have been in possession
thereof be established, then the court in the exercise of its equity
jurisdiction, without ordering the cancellation of the Torrens title
issued upon the patent, may direct the defendant, the registered
owner, to reconvey the parcel of land to the plaintiff who has been
found to be the true owner thereof. (Philippine Reports, Vol. 90,
pp. 858-859)
In the instant case, the situation is reversed. Emilio Libunao was
given a homestead patent in 1937 and the Torrens Title in 1938.
Victoria Maravilla registered her supposed title to the property
only in 1954 or seventeen years later. It is therefore, the title of
Maravilla, the petitioner's predecessor-in-interest, which should be
declared a nullity. She filed an application for land registration
over property which had already been awarded by the State to
Emilio Libunao 17 years earlier and a title to which had already
been registered, 16 years before the registration of her title.
Insofar as the private respondent and its predecessor are
concerned, the allegations of ownership since before the
Revolution of 1896 are purely self-serving and without probative
value. There was no formal hearing on this allegation in the court
a quo because the parties stipulated the facts upon which the
decision would be rendered and this is not one of them. The
private respondent was not given an opportunity to refute or
impugn the veracity of the allegation.
Maravilla could not legally claim that she owned the lot as her
private property prior to its registration in her name in 1954 and
even prior to 1938 when title was registered in the name of
Libunao pursuant to a homestead patent.
The contention in the comments of the Iglesiani Cristo (its lawyer
did not file any brief) that the two lots are private lands, following
the rule laid down in Susi vs. Razon and Director of Lands, 48
Phil. 424, is not correct. What was considered private land in the
Susi case was a parcel of land possessed by a Filipino citizen
since time immemorial, as in Carmo vs. Insular Government, 212
U.S. 449, 53 L. ed. 594, 41 Phil. 935 and 7 Phil. 132. The lots
sought to be registered in this case do not fall within that
category. They are still public lands. A land registration
proceeding under section 48 (b) "presupposes that the land is
public" (Mindanao vs. Director of Lands, L-19535, July 10, 1967,
20 SCRA 641, 644).
As held in Oh Cho vs. Director of Lands, 75 Phil. 890, "all lands
that were not acquired from the Government, either by purchase
or by grant, belong to the public domain. An exception to the rule
would be any land that should have been in the possession of an
occupant and of his predecessors-in-interest since time
immemorial, for such possession would justify the presumption
that the land had never been part of the public domain or that it
had been a private property even before the Spanish conquest."
In Uy Un vs. Perez, 71 Phil. 508, it was noted that the right of an
occupant of public agricultural land to obtain a confirmation of his
title under section 48 (b) of the Public Land Law is a "derecho
dominical incoativo" and that before the issuance of the certificate
of title the occupant is not in the juridical sense the true owner of
the land since it still pertains to the State. (Republic v. Villanueva,
114 SCRA 875 and Republic v. Gonong, 118 SCRA 729).
16
There is absolutely no showing in this case that the exceptional
circumstances mentioned in Cariño v. Insular Government and
Oh Cho v. Director of Lands are present. Even assuming that the
land was not yet registered in another's name when Maravilla filed the
registration proceedings, the land would have been public land in the strict
legal sense before 1954 as far as she was concerned.
The petitioner cannot assail the validity of the title of respondent Bank's
predecessor after 29 years from its registration. Our Land Registration Law
provides that upon the expiration of one year from and after the date of the
entry of the decree of registration, the said decree and the certificate of title
shall become incontrovertible and indefeasible (P.D. 1529, Section 32).
This provision is equally applicable to titles acquired through homestead
patents. In the case of Lahora v. Dayang-hirang (37 SCRA 346; see also
Lopez, et al. v. Padilla, et al.; 45 SCRA 44; Ramirez v. CA 30 SCRA 297)
this Court held:
"The rule in this jurisdiction, regarding public patents and the character of
the certificate of title that may be issued by virtue thereof, is that where land
is granted by the government to a private individual, the corresponding
patent therefor, is recorded and the certificate of title is issued to the
grantee; thereafter, the land is automatically brought within the operation of
the Land Registration Act, the title issued to the grantee becoming entitled
to all the safeguards provided in Section 38 of said Act. In other words,
upon the expiration of one year from its issuance, the certificate of title
becomes irrevocable and indefeasible like a certificate issued in a
registration proceeding."
In the case of Pajomayo, et al. v. Manipon, et al., (39 SCRA 676) we held
that once a homestead patent granted in accordance with the Public Land
Act is registered pursuant to Section 122 of Act 496, the certificate of title
issued in virtue of said patent has the force and effect of a Torrens Title
under the Land Registration Act. We should add that the Director of
Patents, being a public officer, has in his favor the presumption of regularity
in issuing the questioned homestead patent.
As a ground for setting up the second assignment of error, the petitioner
refutes the relevancy of the above rule to the case at bar asserting that
where the action is not for the revision of the decree of registration on the
ground of fraud but rather for the cancellation of the patent and certificate of
title on the ground that they are void because the Bureau of Lands had no
jurisdiction to issue the patent, the one-year period provided for in section
38 of Act 496 does not apply. It cites Director of Lands v. Court of Appeals,
et al. (17 SCRA 71-76). It adds that a certificate of title based on a patent is
still subject to certain restrictions even after the expiration of one year from
its issuance pursuant to our resolution in Nieto v. Quinez (6 SCRA 74).
Petitioner forgets that it was the defendant in this case. In other words,
what was sought to be cancelled was its Torrens Title and not that of the
respondent Bank. In raising such an argument, the petitioner relies on the
premise that the homestead patent and its corresponding title are void for
lack of jurisdiction of the Bureau of Lands to issue the said patent for the
main reason that the land covered by the homestead patent was already of
private ownership when it was issued. In fine, petitioner belatedly attacks
the validity of the respondent Bank's title after it had become
incontrovertible for twenty eight (28) years already. To reiterate, the rule on
the incontrovertibility and indefeasibility of a Torrens Title after one year
from entry of the decree of registration does not sanction this procedure.
Considering the circumstances of this case, we follow the general rule that
where two certificates of title are issued to different persons covering the
same land in whole or in part, the earlier date must prevail as between the
original parties, and in case of successive registration where more than one
certificate is issued over the land, the person holding under the prior
certificate is entitled to the land as against the person who relies on the
second certificate. (Director of Lands v. Court of Appeals, (102 SCRA 370);
Pajomayo et al. v. Manipon et al. (39 SCRA 676); Legarda v. Saleeby (31
Phil. 590); De Villa v. Trinidad (22 SCRA 1167, 1174); Hodges v. Dy Buncio
(6 SCRA 287); Register of Deeds v. PNB (13 SCRA 46); Alzate v. PNB (20
SCRA 422); Garcia v. Court of Appeals (95 SCRA 380); Gatioan v. Gaffud
(27 SCRA 706).
The resolution of the first and second assignments of errors disposes of the
third alleged error. We apply the ruling in Pajomayo, et al. v. Manipon, et al.
(39 SCRA 676) that where the same parcel of land is covered by two titles,
necessarily when one of the two titles is held to be superior over the other,
the latter should be declared null and void and should be cancelled.
Petitioner claims that it is an innocent purchaser for value and as such is
entitled to the protections provided by law particularly the guarantee of
indefeasibility and incontrovertibility of a Torrens Title after the expiration of
one year within which to file a petition for review. The respondent Bank is
the innocent purchaser for value in this case and is more entitled to the
protection claimed by the petitioner. The rule or successive registration
controls. The Land Registration Court had no jurisdiction to decree anew
the registration of a land already decreed and titled. It had no power to
bestow validity upon the second decree. (Singian v. MRR Co. (60 Phil. 192,
203); Mabuhay Development Co. v. Ronquillo (38 SCRA 439); Lahora v.
Dayang-hirang (37 SCRA 346)
WHEREFORE, the decision appealed from is hereby affirmed with costs
against the petitioner.
SO ORDERED.

SALAMAT VDA. DE MEDINA vs. CRUZ
G.R. No. L-39272 | 1988-05-04
PARAS, J.:
This is a petition for review on certiorari and injunction with prayer
for restraining order, seeking to annul and to set aside the writ of
demolition issued by order of the respondent judge of the Court of
First Instance of Rizal, Branch XII, Caloocan City, in Civil Case
No. C-120 entitled "Benedicta Mangahas, et al. vs. The Philippine
Realty Corporation, et al.," dated April 4, 1974, with prayer for a
restraining order "enjoining the enforcement of said writ of
demolition." The aforementioned order reads:
"Acting on the 'Motion for Demolition Removal of Improvements,'
filed by defendant on March 11, 1974, to which plaintiff filed no
opposition, the Court finds that the same should be as it is hereby
granted, and plaintiff Mangahas is hereby given twenty (20) days
from receipt of this order within which to remove the
improvements introduced by her on the Lot in question and
thereafter surrender possession of the premises to the defendant.
"Should the plaintiff fail to do so, let the corresponding writ of
demolition be issued.
"SO ORDERED."
The antecedent facts of the case are as follows:
This case stemmed from Civil Case No. C-120 of the court below.
The questioned Lot 6, Grace Park Subdivision in Caloocan City
had been brought since the year 1916 under the operation of the
Land Registration Act No. 496, covered by Original Certificate of
Title No. 868, G.L.R. Record No. 11267 which had been issued
pursuant to Decree No. 20302 in the name of predecessor-in-
interest of the Philippine Realty Corporation. In 1949 Benedicta
Mangahas and Francisco Ramos occupied the said lot and built
their houses without the consent of the Philippine Realty
Corporation, the then registered owner of the lot. On April 27,
1959, the owner, Philippine Realty Corporation executed a
Contract to Sell of said lot in favor of Remedios Magbanua for
P19,500.00 on installment. On February 3, 1964, Mangahas and
Ramos instituted Civil Case No. C120 of the court below against
the Philippine Realty Corporation and Remedios Magbanua for
annulment of the sale and for execution of another in their favor.
On July 18, 1969, Civil Case No. C-120 was decided by the court
below in favor of defendants Philippine Realty Corporation and
Remedios Magbanua, dismissing the complaint and ordering
Mangahas and Ramos "to vacate the lot and surrender
possession thereof to Remedios Magbanua."
On August 6, 1969, aforesaid decision was appealed by the
plaintiffs to the Court of Appeals and docketed as G.R. CA No.
44769, which was later dismissed on March 2, 1973. On March
24, 1973, the case was elevated to this Court by petition for
review on certiorari and was docketed as SC-G.R. No. L-36542.
The aforesaid petition was denied on April 26, 1973. Three
motions for reconsideration filed by Mangahas and Ramos were
all denied by this Court; the last motion for leave to file fourth
motion for reconsideration was EXPUNGED from the records of
the case by resolution of this Court dated August 2, 1973. Final
judgment was entered on May 28, 1973 and on August 22, 1973,
the records of the case were remanded to the court below for
execution. Thus, on November 9, 1973 after all the installments
had been fully paid, the Philippine Realty Corporation executed
the Deed of Sale of Lot 6 in favor of Remedios Magbanua and
TCT No. 52262 (Caloocan City) was issued in the name of the
latter (Memo for Respondent, pp. 5-9; Rollo, pp. 309-313).
On October 16, 1973, petitioner, Eugenia Salamat vda. de
Medina purchased from the Heirs of Don Mariano San Pedro y
Esteban, the same parcel of land described as Lot 6, Block No.
116, Grace Park Subdivision, Grace Park, Caloocan City. A deed
of Absolute Sale was executed in her favor by the Heirs of the
Estate of Don Mariano San Pedro y Esteban represented by its
Administrator and Attorney-in-fact, Prudencio G. Falcis (Rollo, p.
13).
On November 29, 1973, a petition for a writ of execution was filed
in the court below by the defendant Remedios Magbanua
(hereinafter referred to as private respondent), and the petition
was granted in an Order dated December 14, 1973. The aforesaid
writ of execution was issued on December 20, 1973, and was
served by the sheriff on the plaintiff Mangahas and Ramos on
January 14 and 16, 1979, respectively. The sheriff returned the
17
writ to the court below upon plaintiffs' refusal to vacate the lot and
to affix their signatures on the original copy of the writ (Rollo, p.
314).
Meanwhile, on January 21, 1974, petitioner purchased six (6)
houses, standing on the land subject matter of the
aforementioned sale for P7,600.00 from Ricardo de Guzman and
Eufrocinia de Guzman. A Deed of Absolute Sale was therefore
issued in her behalf (Rollo, p. 15).
But on January 22, 1974, petitioner having received information
that the houses purchased were involved in a litigation, docketed
as Civil Case No. C-120, and entitled Benedicta Mangahas and
Francisco Ramos (Plaintiffs in Civil Case No. C-120) versus the
Philippine Realty Corporation and Remedios Magbanua in the
Court of First Instance of Rizal, Branch XII, Caloocan City, filed an
affidavit and notice of third party claim (Rollo, p. 17).
Impeded by the refusal of Mangahas and Ramos to vacate the lot,
Remedios Magbanua filed a motion for demolition and removal of
improvements alleging that the questioned lot is a registered
property in the name of defendant Remedios Magbanua, under
Transfer Certificate of Title No. 52262 (Caloocan City Registry of
Deeds) which was derived from Transfer Certificate of Title No.
22104 (of same Registry of Deeds) in the name of the Philippine
Realty Corporation and from Original Certificate of Title No. 0-
868. At the hearing Mangahas and Ramos moved for and were
granted a period of five (5) days to file their opposition. On March
25, 1974, it was Eugenia Salamat vda. de Medina, herein
petitioner who filed her opposition attaching thereto; (1 ) copy of
the alleged Deed of Sale of Lot 6 in question; (2) Tax Declaration
No. 19114; (3) Tax Declaration No. 19115; and (4) alleged Deed
of Assignment of Rights to the houses existing on said lot.
Petitioner alleged that she is the present owner of the questioned
lot and the six houses sought to be demolished.
On March 30, 1974, private respondent Remedios Magbanua
filed an answer to the opposition dated March 25, 1974 (Rollo, p.
150).
On April 5, 1974, the respondent Judge issued an Order granting
the writ of demolition (Rollo, p. 24).
On May 9, 1974, petitioner filed a Motion for Reconsideration of
the order (Rollo, p. 25) reiterating therein that she is the owner by
purchase in good faith and for value of the six (6) houses on Lot
6, Block 116. On the same date, petitioner filed a complaint for
recovery of ownership entitled Eugenia Salamat Vda. de Medina
vs. The Philippine Realty Corporation and Remedios Magbanua
before the Court of First Instance of Rizal, Branch XXXIII,
Caloocan City docketed therein as Civil Case No. 3174 (Rollo, p.
29). The complaint alleged that by virtue of the intestacy of the
late Don Mariano San Pedro y Esteban or upon his death in 1903,
the abovenamed plaintiffs-heirs succeeded, inherited and became
legal owners and the present possessors and actual occupants of
his estate embraced in Titulo de Composicion Con El Estado
Num 4136, dated April 29, 1894 which has been described as a
vast tract of agricultural lands, being a gratuitous composicion title
granted to Don Mariano San Pedro y Esteban by the Spanish
Government in the Philippines; that sometime in June, 1972,
spouses Ricardo de Guzman and Eufrocinia de Guzman acquired
by purchase the houses erected on said Lot 6, Block 116 from
Benedicta Mangahas and Francisco Ramos, who in turn sold it to
the plaintiff Eugenia Salamat Vda. de Medina and that sometime
in October 1973, plaintiffs heirs sold to plaintiff Eugenia Salamat
vda. de Medina the above-mentioned Lot 6, Block 116, 8th
Avenue, Grace Park, Caloocan City, evidenced by the deed of
sale executed by the Heirs of the Estate of Don Mariano.
A voluntary execution and/or vacation dated May 17, 1974, was
executed by plaintiffs Benedicta Mangahas and Francisco Ramos
(Plaintiff in Civil Case No. C-120) in favor of Eugenia Salamat
vda. de Medina (Rollo, p. 165).
A manifestation and ex parte motion dated June 3, 1974, was
filed by the private respondent (defendant) informing the Court
that despite the Order of April 4, 1974 Mangahas and Ramos
have not removed their houses and improvements and praying
that a writ of demolition be issued, followed by a memorandum
dated June 26, 1974 in support of the aforesaid manifestation and
ex parte petition (Rollo, p. 170) and an Opposition dated July 16,
1974 to Motion for Reconsideration dated May 9, 1974 (Rollo, p.
170).

On July 17, 1974, an order was issued by respondent Judge,
denying the Motion for Reconsideration dated May 9, 1974 for
lack of merit (Rollo, p. 184).
On July 29, 1974, respondent Judge an order directing the sheriff
to demolish the improvements on the lot in question (Rollo, p. 39).
The dispositive portion of the aforementioned Order reads:
"WHEREAS, the plaintiffs are given 10 days from receipt thereof
to remove the improvements on the lot in question and should
they fail to do so, the sheriff is hereby ordered to demolish the
same.
"SO ORDERED."
Oppositor movant, Eugenia Salamat Vda. de Medina (petitioner
herein) filed a Second Motion to quash the writ of execution and
order of demolition (dated April 4, 1974 and July 29, 1974), dated
August 6, 1974 (Rollo, p. 150). The petitioner alleged that the
court did not acquire jurisdiction over the herein petitioner,
claiming that she is not a party to the original Action, and that
consequently, she cannot be considered "a person claiming
under" the plaintiff Francisco Ramos and Benedicta Mangahas."
On August 12, 1974, a sheriff s return was executed by the Ex-
Officio City Sheriff Emma C. Ona, declaring that the order dated
July 29, 1974 was duly served, but unsatisfied (Rollo, p. 185). On
the same date, respondent Remedios Magbanua filed an Ex-parte
motion for the immediate issuance of the writ of demolition (Rollo,
p. 40).
Thereafter, on August 28, 1974, the respondent Judge issued an
order for the immediate issuance of the writ of demolition (Rollo,
p. 43). Accordingly, on August 30, 1974, pursuant to the court
order, the Branch Clerk of Court, Branch XII, of the Court of First
Instance of Caloocan City issued a writ of demolition (Rollo, p.
44), and on August 31, 1974, a Notice of Demolition issued,
addressed to Benedicta Mangahas and Francisco Ramos and
other occupants of the houses Nos. 142 and 144 Maria Clara St.,
Grace Park, Caloocan City and directing them to vacate the land
and remove the improvements or constructions on the premises,
voluntarily within seven (7) days, otherwise they would be
demolished (Rollo, pp. 43-45).
Hence, this petition.
On September 16, 1974, this Court issued a temporary restraining
order (Rollo, p. 47).
Respondents filed their memorandum on October 21, 1975 (Rollo,
p. 255) while petitioner filed her memorandum on November 10,
1975 (Rollo, p. 356).
On December 3, 1975, this Court resolved to consider this case
submitted for decision (Rollo, p. 350).
In her memorandum petitioner raised the following issues, to wit:
MAY THE DECISION IN CIVIL CASE NO. C-120 FOR
CANCELLATION OF A SALE, NOT FOR EJECTMENT,
"DISMISSING THE COMPLAINT AND ORDERING THE
PLAINTIFFS OP ANYBODY OCCUPYING THE LOT IN
QUESTION IN PLAINTIFFS' BEHALF, TO VACATE THE SAME
TO SURRENDER POSSESSION THEREOF TO THE
DEFENDANT . . .' BE ENFORCED AGAINST THE PETITIONER
WHO IS NOT A PARTY THEREIN AND WHO:
a) PURCHASED THE IMPROVEMENTS SIX (6) HOUSES ON
THE LOT IN GOOD FAITH, FOR VALUE AND WITHOUT
NOTICE, FROM THE PLAINTIFFS.
b) PURCHASED THE SAID LOT ALSO IN GOOD FAITH FOR
VALUE AND WITHOUT NOTICE FROM A THIRD PERSON
WHO CLAIMED OWNERSHIP OF THE LOT.
The crucial issue in this case is whether or not the decision in
Civil Case No. C-120 which has long become final and executory,
can be enforced against the petitioner who is not a party to the
aforementioned case.
Petitioner alleged in her memorandum that she is not affected by
the decision rendered in Civil Case No. C-120 as persons who
are not parties to a suit are not bound by the judgment and that
18
she purchased the lot in good faith from an entirely different
person ---- the Heirs of Don Mariano San Pedro y Esteban and
not from either the plaintiffs or defendants in the aforesaid case.
It is a generally accepted principle "that no man shall be affected
by any proceeding to which he is a stranger" (Ed. A. Keller & Co.
v. Edlerman&BuckmallStratemship Co., 38 Phil. 514, 520;
Gatchalian v. Arlegui, 75 SCRA 234 [1977], and strangers to a
case are not bound by judgment rendered by the court (Bien V.
Suñga, 117 SCRA 249 [1982]). In the same manner an execution
case can be issued only against a party and not against one who
did not have this day in court (Galang et al. v. Uytiepo, 92 Phil.
344; Castañeda v. de Leon, 55 O.G. 625; Martinez et al. v.
Villacete, et al., G.R. No. L-18696, August 31, 1962. In the case
of Lorenzana v. Cayetano, 78 SCRA 485 [1977]), this Court held
that only real parties in interest in an action are bound by
judgment therein and by writs of execution and demolition issued
pursuant thereto.
It will be noted, however, as contended by respondent, that the
houses existing on Lot 6 in question were formerly owned by
Benedicta Mangahas and Francisco Ramos who sold the same to
the spouses Ricardo de Guzman and Eufrocina de Guzman who
in turn finally sold them to the herein petitioner. Under the
circumstances, there is no question that the petitioner is privy to
the two judgment debtors Mangahas and Ramos, and being a
privy, the petitioner car. be reached by the order of execution and
Writ of Demolition.
Finally, Remedios Magbanua is the registered owner under the
Torrens System of the questioned lot. Undeniably, a Torrens Title
is generally a conclusive evidence of the ownership of the land
referred to therein (Section 49, Act 496); and a strong
presumption exists that Torrens Titles were regularly issued and
that they are valid (Salao v. Salao, 70 SCRA 65 [1976]). A
Torrens Title is incontrovertible against any
"informacionpossessoria" or title existing prior to the issuance
thereof not annotated on the title (J.M. Tuason and Co. Inc. v.
Jurillo, 76 SCRA 346 [1977]). It is a well settled role 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 (Centeno v. C.A., 139 SCRA 545 [1985]).
In the case at bar, petitioner further claims ownership of the lot in
question because of the payment of taxes. It must be noted
however, that payment of the land tax is not an evidence of
ownership of a parcel of land for which payment is made (Reyes
v. Sierra, 93 SCRA 472 [1979]; Director of Lands v. C.A., 133
SCRA 701 [1984]; Ferrer v. Lopez, 150 SCRA 393 [1987])
especially when the parcel of land is covered by a Torrens Title in
the name of another (Masaganda v. Argamora, 109 SCRA 53
[1981]).
PREMISES CONSIDERED, the petition is DISMISSED for lack of
merit, and the assailed judgment of the Court of First Instance of
Rizal, Branch XII, Caloocan City is hereby AFFIRMED. This
decision is immediately executory, and the restraining order
previously issued is hereby LIFTED. Let the demolition be carried
out immediately.
SO ORDERED.

SACDALAN vs. COURT OF APPEALS
G.R. No. 128967 | 2004-05-20
AUSTRIA-MARTINEZ, J.:
Before this Court is a petition for review under Rule 45 of the
Rules of Court, seeking the reversal of the decision of the Court of
Appeals (CA for brevity) in CA-G.R. SP No. 39315 dated June 28,
1996[1] and its resolution dated April 23, 1997 denying petitioners'
motion for reconsideration.[2]
The facts of the case as found by the CA are as follows:
Belen Lopez Vda. de Guia is the owner of two parcels of
agricultural land in Sta. Barbara, Baliwag, Bulacan covered by
TCT No. 209298 with an area of 197,594 square meters. Without
her knowledge, her son Carlos de Guia forged a deed of sale on
March 19, 1975 and made it appear that she sold the land to him.
As a result, TCT No. 209298 was cancelled and a new title, TCT
No. T-210108, was issued in his name. The following day, Carlos
sold the property to Ricardo San Juan who immediately registered
the deed of sale with the Register of Deeds of Bulacan.
Consequently, TCT No. 210338 was issued in his name. Later,
Ricardo mortgaged the two parcels of land to Simeon Yangco.
Upon learning of the said incidents, Belen filed an adverse claim
with the Register of Deeds of Bulacan and a civil case for
cancellation of sale, reconveyance and damages against her son
Carlos de Guia, Ricardo San Juan and Simeon Yangco with the
Court of First Instance of Baliwag, Bulacan (CFI for brevity) which
was docketed as Civil Case No. 655-B.[3] On January 20, 1981,
the CFI dismissed the complaint, the dispositive portion of which
is quoted verbatim, as follows:
WHEREFORE, judgment is hereby rendered dismissing the
complaint and affirming the deed of sale executed by plaintiff in
favor of her son defendant Carlos de Guia, and Carlos de Guia's
sale in favor of Ricardo San Juan.
That plaintiff reimburses the palay withdrawn by her and in the
event of failure, the supersedeas bond be declared confiscated
and forfeited in favor of defendant San Juan.
That plaintiff pays defendants attorney's fees in the sum of
P1,000.00 plus costs.
SO ORDERED.[4]
Belen's motion for reconsideration was denied through an Order
dated September 9, 1981.[5] She then appealed to the then
Intermediate Appellate Court (IAC for brevity), docketed as AC-
G.R. CV No. 5524-UDK. The IAC dismissed the appeal per its
Resolution dated April 19, 1983 for non-payment of docket fees.
The dismissal became final and executory on May 17, 1983[6]
and an Entry of Judgment was issued on June 21, 1983. The
records of the case were remanded to the court of origin on July
6, 1983. A writ of execution was issued by the CFI on motion of
Ricardo San Juan.[7]
The tenants-lessees of the property, namely: Romeo Garcia,
Numeriano Bautista together with Paulino, Leonardo and
Santiago, all surnamed Sacdalan, (petitioners for brevity), invoked
their right to redeem the landholdings pursuant to Section 12 of
Republic Act No. 3844, as amended.[8] Accordingly, Ricardo San
Juan executed a Deed of Reconveyance dated October 24, 1983
in favor of said tenants-lessees. Upon registration of the
document, TCT No. T-210338 was cancelled and TCT No. T-
301375 was issued in the names of the said tenants. The land
was later subdivided into several lots and individual titles were
issued in their names.[9]
Belen's counsel sent a letter of inquiry to the Clerk of Court of the
IAC dated January 11, 1984 and learned for the first time that
their appeal docketed as AC-G.R. CV No. 5524-UDK has been
dismissed for non-payment of docket fees.[10] She filed with the
IAC a motion to reinstate the appeal,[11] and on May 21, 1984,
the IAC issued a Resolution granting her motion, thus:
WHEREFORE, in the interest of justice, the motion to re-instate
appeal is hereby GRANTED and the Clerk of Court of the Court of
Origin is hereby ordered to elevate the records of Civil Case No.
655-B to this Court for purposes of the appeal.
SO ORDERED.[12]
19
Acting on the reinstated appeal, docketed as AC-G.R. CV No.
02883, the IAC promulgated its decision on February 20,
1986,[13] the dispositive portion of which reads:
WHEREFORE, the decision appealed from is hereby REVERSED
and SET ASIDE and another one entered:
(1) declaring as null and void and without any effect whatsoever
the deed of sale executed by and between appellant Belen Lopez
Vda. de Guia and defendant Carlos de Guia, Exhibit 'A';
(2) declaring defendant-appellee Ricardo San Juan as a
purchaser in bad faith and ordering him to reconvey to appellant
the two (2) parcels of land described in the complaint;
(3) ordering the Register of Deeds of Bulacan to cancel and/or
annul TCT No. T-210338 in the name of defendant-appellee
Ricardo San Juan as well as TCT No. T-210108 in the name of
defendant-appellee Carlos de Guia for being null and void and to
reinstate TCT No. 209298 in the name of appellant as the true
and valid title over the lands described therein; and
(4) ordering the defendants-appellees to pay the costs.
SO ORDERED.[14]
The decision became final on March 15, 1986 and on November
7, 1986,[15] the records of the case were remanded to the former
CFI now Regional Trial Court (RTC for brevity).
On December 18, 1986, Belen filed with the RTC a motion for
execution which was granted. However, before the writ could be
executed, she found that Ricardo San Juan had sold the two
parcels of land to petitioners. She then filed with the RTC a
motion to declare San Juan, petitioner and other tenants of the
land in contempt of court for circumventing the final and executory
judgment of the Court of Appeals[16] in AC-G.R. CV No. 02883.
In an Order dated October 12, 1987, the RTC declared San Juan,
petitioners and all the other tenants concerned in contempt of
court, and ordered each of them to pay a fine of P200.00,
reconvey and deliver to Belen her two parcels of land and her
share in the harvest. The fallo reads:
WHEREFORE, defendant Ricardo San Juan and his co-
defendants Mariano Bautista, Numeriano Bautista, Pelagio
Bautista, Hermogenes Dimaapi, Romeo Garcia, Bonifacio
Sacdalan, Crispin Sacdalan, Santiago Sacdalan, Santos
Leonardo, Felipe Leonardo, Leonardo Fajardo, and Emilio
Victoria, are hereby declared in contempt of Court for utterly
disregarding and circumventing the decision of the Court of
Appeals which is final and executory and are fined P200.00 each;
ordering the defendants Mariano Bautista, et al., to reconvey the
litigated landholding to the plaintiff Belen de Guia and to deliver to
the latter or her duly authorized representative her share in the
palay and mongo harvest in the next harvest season.
SO ORDERED.[17]
Herein petitioners filed with the CA, a petition for certiorari,
docketed as CA-G.R. SP. No. 14783, assailing the RTC Order
dated October 12, 1987 as having been issued with grave abuse
of discretion.
On July 6, 1989, the CA promulgated its decision holding that
while herein petitioners should not have been considered in
contempt of court by the RTC, it did not commit any error in
ordering them to reconvey the parcels of land to Belen de Guia. It
held that:
Ricardo San Juan was not the owner of the land and therefore he
had no right or title which he could legally convey to anyone, a
fact even admitted by petitioners (Petition, p.7). It must also be
said that while petitioners were not parties to Civil Case No. 655-
B, they could not have been unaware of the dispute over the land.
They claim to be tenants thereof. The inevitable conclusion is the
sale to petitioners was void from the beginning.
Respondent Judge therefore did not commit any error in ordering
the petitioner to reconvey the lands to Belen de Guia. As a matter
of fact, such was not even necessary. The cancellation of the
titles of Carlos and San Juan and the reinstatement of Belen's title
by virtue of the appellate decision carried with them as a logical
consequence the cancellation of petitioners' title and any

pretended right over the land. Petitioners cannot claim refuge
behind their title; to permit them to do so would be to put a
premium on bad faith. Such is never the aim of the torrens
system.
...
WHEREFORE, except for the portion holding petitioners in
contempt and ordering them to pay a fine of P200.00 each, which
is eliminated, the order of respondent Judge dated October 12,
1987 is AFFIRMED.
No costs.
SO ORDERED.[18] (Emphasis supplied)
The decision became final and executory on July 31, 1989. [19]
Eight months before said date, or on November 8, 1988, Belen,
through her attorney-in-fact, Melba G. Valenzuela, had filed with
the DARAB, Region III at Malolos, Bulacan, a complaint for
ejectment and collection of rentals against herein petitioners.[20]
Belen alleged that they are her tenants-lessees who have been
cultivating the subject property since 1970 up to the present; that
starting 1981, they have not been paying their rent; and that
despite demands to pay the rent and vacate the premises, they
failed and refused to do so.[21] Petitioners contend that they are
the registered owners of the landholdings, having acquired the
same from Ricardo San Juan. As such, they no longer have any
obligation to pay rentals to Belen whose title thereto has long
been cancelled.[22]
On March 16, 1993, almost five years from the filing of the
complaint for ejectment and four years after the CA decision in
CA-G.R. SP No. 14783 had become final, Atty. Jose V. Reyes,
Provincial Adjudicator, rendered a decision denying Belen's
complaint for ejectment and collection of rent. The dispositive
portion reads:
WHEREFORE, premises considered, the Board finds the instant
case wanting of merit, the same is hereby dismissed.
Consequently, the Transfer Certificate of Title Nos. T-307845, T-
307846, T- 307856, T-307857, T-307869, T-307870, T-307871,
T-307873, and T-307874 issued in the names of Numeriano
Bautista, Romeo Garcia, Leonardo Sacdalan, PaulinoSacdalan
and Santiago Sacdalan, respectively, are hereby AFFIRMED. The
plaintiff and all other persons acting in her behalf are hereby
ordered to permanently cease and desist from committing any
acts tending to oust or eject the defendants or their heirs or
assign from the landholding in question.
SO ORDERED.[23]
Upon appeal, the DARAB affirmed the decision. Complainant filed
a motion for reconsideration but was denied by DARAB.[24]
Belen then appealed to the CA, docketed as CA-G.R. SP No.
39315. The CA reversed the DARAB in its decision dated June
28, 1996,[25] ruling as follows:
At this juncture, it is pertinent to state that nothing is more settled
in the law than when a final judgment becomes executory, the
same becomes immutable and unalterable, can no longer be
modified in any respect and that all the issues in between the
parties are deemed resolved and laid to rest. Likewise, it is a well-
enshrined principle that litigation must at some time be
terminated, even at the risk of occasional errors, for public policy
dictates that once a judgment becomes final, executory and
unappealable, the prevailing party should not be denied the fruits
of his victory by some subterfuge devised by the losing party.
Consequently, We deem it appropriate to write finis to the case at
bench considering that the title to the property in controversy has
already been adjudicated by this Court to herein petitioner in AC-
G.R. CV No. 02883 and CA-G.R. SP No. 14783, hence she has
the right to eject herein private respondents for their failure to pay
rents since 1981.
WHEREFORE, the petition is hereby GRANTED. The decision of
respondent DARAB affirming the decision of the Provincial
Adjudicator is REVERSED and SET ASIDE and another one is
entered ordering private respondents to vacate immediately the
two parcels of land covered by T.C.T. No. T-209298 and to deliver
possession thereof to the petitioner, as well as the rentals due
20
corresponding to the period from 1981 up to the time they shall
have left the landholdings. Considering that the amount of rentals
have not been determined, let this matter be threshed out in a
proper hearing before another Provincial Adjudicator who should
conduct the same with dispatch.
COSTS against the private respondents.
SO ORDERED.[26]
A subsequent motion for reconsideration filed by petitioners was
denied by the CA on April 23, 1997.[27]
Hence, the present petition for review, raising the following
issues:
1. WHETHER OR NOT, UNDER EXISTING LAW AND
JURISPRUDENCE, PETITIONERS AS TENANTS-LESSEES IN
THE EXERCISE OF THEIR RIGHTS OF REDEMPTION UNDER
SECTION 12 OF REPUBLIC ACT NO. 3844 ARE PURCHASERS
IN GOOD FAITH;
2. CAN THE INTERMEDIATE APPELLATE COURT IN AC-G.R.
CV NO. 02883 REINSTATE THE APPEAL AND RENDER A
SECOND DECISION AFTER ITS DECISION DISMISSING THE
APPEAL IN AC-G.R. CV NO. 5524-UDK BECAME FINAL AND
EXECUTORY, WHICH DECISION WAS REMANDED TO THE
LOWER COURT FOR EXECUTION, AND IN FACT, BEEN
EXECUTED; AND
3. WHETHER OR NOT, PETITIONERS, WHO ARE HOLDERS
OF TRANSFER CERTIFICATES OF TITLES BOUND BY THE
SECOND DECISION OF THE INTERMEDIATE APPELLATE
COURT IN AC-G.R. CV NO. 02883. [28]
While petitioners raise three issues, as quoted above, only two
questions are actually crucial for the resolution of the present
petition: (1) Was the reinstatement of Belen de Guia's appeal
valid? and (2) Are petitioners bound by the decision rendered by
the Court of Appeals on July 6, 1989 in CA-G.R. SP No. 14783?
After reviewing the records of the case, we find the present
petition to be devoid of merit.
Belen's appeal from the decision of the CFI was dismissed on
April 19, 1983 for non-payment of docket fees which becAme final
and executory. However, upon her motion, the appeal was
reinstated on May 21, 1984 by the IAC explaining that:
After weighting (sic) the respective arguments of the parties, this
Court finds that justice and equity must play a heavy role in the
determination of the motion to reinstate the appeal.
As gleaned from the records, from the filing of the notice of
appeal, appeal bond and record on appeal, plaintiff-appellant had
been in earnest effort to elevate her case to this Court. This is
indicated by her having engaged the services of a second lawyer
to pursue her appeal.
While, it is true that notice to counsel is binding upon the client the
said rule is not here applicable. The notice was not actually
received by the counsel to whom it was sent. And although the
notice was re-sent to the party herself, still the same was not
returned to this Court with the notation "moved out". Since the
records indicate the presence of a corroborating counsel for the
plaintiff-appellant, the notice should have been re-sent to this
counsel, if only to give justice to the parties who have exerted
efforts to perfect their appeal only to be lost by technicality.
"while the rule is that mistake or negligence of the lawyer binds
the client, in the interest of justice and because the appellee itself
also failed to file its comment on the instant motion despite receipt
of the resolution of this Court on October 16, 1983, the entry of
judgment is set aside." ...
WHEREFORE, in the interest of justice, the motion to re-instate
appeal is hereby GRANTED and the Clerk of Court of the Court of
origin is hereby ordered to elevate the records of Civil Case No.
655-B to this Court for purposes of the appeal.
SO ORDERED.[29] (citations omitted)
Petitioners, citing Perfecto Fabular vs. Court of Appeals,[30]
argue that since the judgment of the CFI had long become final

and had in fact been executed, it was already beyond the power
of the appellate court to modify the same;[31] and therefore, the
IAC erred in reinstating Belen de Guia's appeal. The Court is not
persuaded to grant their petition.
The Court has recognized instances when reinstatement of an
appeal was deemed just and proper considering the greater
interest of justice.[32] This case is one of them. The IAC, on April
19, 1983, dismissed Belen de Guia's appeal for non-payment of
docket fees. It is settled however that failure to pay the appeal
docket fee confers on the court a mere directory power to dismiss
an appeal which must be exercised with sound discretion and with
a great deal of circumspection considering all attendant
circumstances. Dismissal of an appeal based on this ground is
discretionary with the appellate court and should be exercised
wisely and prudently with a view to substantial justice.[33]
As noted by the IAC in its decision dated May 21, 1984 in AC-
G.R. CV No. 5524-UDK, Belen failed to pay the appeal docket
fee, not because of lack of interest, but because of lack of proper
notice. It was only upon the inquiry of Belen's corroborating
counsel that they found out, for the first time, the dismissal of her
appeal. The Court is aware of its ruling in Arambulo vs. Court of
Appeals[34] that failure of the counsel to inquire from either the
trial or the appellate court the status of their appeal particularly as
to the payment of docket fees, constitutes negligence sufficient to
merit the dismissal of the appeal.[35] However, the fact that the
appeal of Belen involved her claim that her own son Carlos de
Guia forged her signature in a deed of sale transferring to him the
ownership of her two parcels of land, the IAC did not commit any
reversible error nor grave abuse of discretion in reinstating the
appeal. The interest of substantial justice far outweighs whatever
negligence Belen and her counsel might have committed.
Significantly, it must be emphasized that petitioners' purported
predecessor-in-interest did not question the reinstatement of the
appeal and allowed the same to be final and executory. Thus, for
all legal interests and purposes, the reinstatement of the appeal is
valid and binding upon the parties and their successors-in-
interest, including herein petitioners.
Petitioners further claim that they are purchasers in good faith
since Ricardo San Juan was the registered owner when they
bought the subject landholdings on October 10, 1983 from
him.[36] They likewise argue that while there was a second
decision rendered by the IAC in AC-G.R. CV No. 02883, said
decision does not bind them since they were not parties in said
action and said proceeding was in personam and not in rem, thus,
a direct action should have been instituted against them for the
lower court to acquire jurisdiction over their persons.[37]
Here enters the importance of the second issue, i.e., whether or
not petitioners are bound by the CA's decision in CA-G.R. SP. No.
14783 dated July 6, 1989.
As borne by the records, petitioners filed before the CA a petition for
certiorari, docketed as CA-G.R. SP. No. 14783, from the order of the RTC
dated October 12, 1987 holding them in contempt of court and ordering
them to reconvey the property to Belen. Except as to the findings that
petitioners were in contempt of court, the CA affirmed the trial court in its
decision dated July 6, 1989 and declared in no uncertain terms that Ricardo
San Juan was not the owner of the land and therefore he had no right or
title which he could legally convey to anyone, a fact even admitted by
petitioners; that while petitioners were not parties to Civil Case No. 655-B,
they could not have been unaware of the dispute over the land because
they claim to be tenants thereof; that the sale to petitioners was void from
the beginning; that respondent Judge therefore did not commit any error in
ordering the petitioner to reconvey the lands to Belen de Guia; that the
cancellation of the titles of Carlos and San Juan and the reinstatement of
Belen's title by virtue of the appellate decision carried with them as a logical
consequence the cancellation of petitioners' title and any pretended right
over the land; that petitioners cannot claim refuge behind their title; and that
to permit them to do so would be to put a premium on bad faith which is
never the aim of the torrens system.
Again, petitioners did not appeal from the CA decision in CA-G.R. SP No.
14783. It became final and executory on July 31, 1989.[38] And it is this
final decision which was totally and erroneously ignored by the DAR
Provincial Adjudicator and the DARAB.
As petitioners themselves espouse, well settled is the principle that a
decision that has acquired finality becomes immutable and unalterable and
may no longer be modified in any respect even if the modification is meant
to correct erroneous conclusions of fact or law and whether it will be made
by the court that rendered it or by the highest court of the land.[39]
The reason for this is that litigation must end and terminate sometime and
somewhere, and it is essential to an effective and efficient administration of
21
justice that, once a judgment has become final, the winning party be not
deprived of the fruits of the verdict. Courts must guard against any scheme
calculated to bring about that result and must frown upon any attempt to
prolong the controversies.[40]
The only exceptions to the general rule are the correction of clerical errors,
the so-called nunc pro tunc entries which cause no prejudice to any party,
void judgments,[41] and whenever circumstances transpire after the finality
of the decision rendering its execution unjust and inequitable.[42] Since the
present case does not fall under any of the recognized exceptions, it is
clear that petitioners are bound by the finality of the CA decision in CA-G.R.
SP. No. 14783 which they themselves instituted.
Unlike Belen who appealed the CFI decision in AC-G.R. CV No. 5524-UDK
and never lost interest in pursuing her appeal, petitioners in this case never
appealed the decision in CA-G.R. SP. No. 14783. They cannot therefore
successfully raise before another tribunal, as the DARAB, the issues they
could have raised through an appeal or a motion for reconsideration within
the reglementary period.
Petitioners also claim that their titles are unassailable having acquired the
same pursuant to law.[43] Again the Court does not agree. The principle of
indefeasibility of a Torrens Title does not apply where fraud attended the
issuance of the title,[44] as is conclusively established in this case. The
Torrens Title does not furnish a shield for fraud.[45]
As a final note, the Court reiterates and hereby adopts the observations
made by the CA speaking through Justice Angelina Sandoval- Gutierrez in
CA-G.R. SP No. 39315, anent the DAR Provincial Adjudicator and the
DARAB:
Just why the Provincial Adjudicator and the DARAB itself relied on this
Court's Resolution dated April 19, 1983 issued in AC-G.R. No. 5524-UDK
dismissing petitioner's appeal disturbs Us no end. They intentionally
disregarded the fact that petitioner's appeal was reinstated as shown by
this Court's Resolution dated May 21, 1984 in AC-G.R. No. 5524-UDK.
They cannot disclaim knowledge of the existence of this Resolution.
Petitioner's various pleadings and papers submitted to the Provincial
Adjudicator and her brief filed with the DARAB repeatedly mentioned and
reproduced the same. Yet they simply closed their eyes and refused to take
cognizance that petitioner's appeal was reinstated (docketed as CA-G.R.
CV No. 02883) and was decided by this Court reversing the CFI decision in
Civil Case No. 655-B dismissing the petitioner's complaint, declaring as null
and void Ricardo San Juan' title from which private respondents' titles were
derived; and reinstating T.C.T. No. 209298 in the name of petitioner Belen
Lopez Vda. de Guia.
Worse, said adjudicators likewise did not recognize and practically
impugned the Decision of this Court in CA-G.R. SP. No. 14783 holding inter
alia that "Ricardo San Juan was not the owner of the land and, therefore,
he had no right or title which could regally (sic) convey to anyone, a fact
even admitted by petitioners x xx" (referring to herein private respondents).
Let it be stressed at this point that the Provincial Adjudicator and the
DARAB are bound by the findings of fact and conclusion of law of this
Court.
Indeed, in disposing of the case at bench in defiance of the clear and
categorical ruling of this Court in AC-G.R. CV No. 02883 and CA-G.R. SP
No. 14783, both the Provincial Adjudicator and the DARAB committed
gross error. Not only that, they manifested their utter disrespect to the
Judiciary. Without doubt, their egregious conduct engendered doubt on
their honesty and caused serious injustice to herein petitioner.
They should have remembered that they owe it to the public to know the
law or jurisprudence to be applied in a particular controversy; and that the
conduct of those dispensing justice should be circumscribed with the heavy
burden or responsibility, comporting themselves in a manner that will not
raise any suspicion about their integrity.[46]
Indeed, the DAR Provincial Adjudicator and the DARAB should have been
more circumspect in the disposition of this case. Instead of facilitating the
administration of justice, their obstinate refusal to obey a valid final
judgment of the Court of Appeals, further delayed the resolution of this case
and added valuable irretrievable years to a case that has already dragged
on for decades. It blatantly questioned the wisdom of a higher court by
stating that:
...this Board cannot comprehend how the Honorable Court of Appeals
reverse itself in its Decision dated February 20, 1986 in AC-G.R. CV No.
02883, after its Decision has already become final and executory from April
19, 1983 in AC-G.R. No. 5524-UDK[47]. (Emphasis supplied)
which statement manifest not only a superficial grasp of the rules, but more
disappointingly, a contumacious attitude which this Court cannot
countenance.
WHEREFORE, the petition is hereby DENIED for lack of merit and the
decision of the Court of Appeals in CA-G.R. SP No. 39315 dated June 28,
1996, is hereby AFFIRMED IN TOTO.
Costs against petitioners.
SO ORDERED.

WIDOWS AND ORPHANS ASSOCIATION, INC., vs. COURT OF
APPEALS
G.R. No. 91797 | 1991-08-28
BIDIN, J.:
From the decision rendered by respondent court dated November
27, 1989, declaring respondent Ortigas and Company Limited
Partnership (Ortigas) as the registered owner of the disputed
parcel of land, petitioner Widows and Orphans Association, Inc.
(Widora), interposes this petition for review seeking to annul the
aforesaid judgment and prays that the case be remanded to the
trial court and there be tried on the merits.
The facts, as found by respondent court, are as follows:
"On August 27, 1974, respondent Widora filed LRC Case No. Q-
336 before the respondent (trial) court an application for
registration of title of a parcel of land as shown in Plan LRC
(SWO)-15352. Widora alleged that the parcel of land is covered
by Titulo de PropriedadNumero 4136, dated April 25, 1894,
issued in the name of the deceased Mariano San Pedro y
Esteban. Later, on June 14, 1978, Widora filed an amended
application for registration of the said parcel of land. It alleged that
the parcel of land is situated at Malitlit-Uoogong, Quezon City,
with an area of 156 hectares, more or less, described in plan No.
LRC (SWO)-15352; and that the applicant acquired said property
from the heirs of Don Mariano San Pedro on December 12, 1954.
The amended application prayed that said parcel of land be
ordered registered in the name of Widora.
"On August 25, 1978, respondent Dolores Molina filed an
opposition, claiming ownership over 12 to 14 hectares of Lot 8
(LRC) SWO-15352, and praying for a decree of registration over
said portions of Lot 8.
"On October 24, 1978, petitioner Ortigas filed a motion to dismiss
the case alleging, among others, that respondent court had no
jurisdiction over the case, the land being applied for having been
already registered under the Torrens System and in the name of
Ortigas under TCT 77652 and TCT 77653.
"On April 20, 1979, the respondent (trial) court issued an order
directing the applicant to prove its contention that TCT 77652 and
TCT 77653 are not proper derivatives of the original certificates of
titles from which they were purportedly issued, and setting the
case for hearing on June 28, 1979, at 8:30 a.m.
"On June 27, 1979, petitioner Ortigas filed a motion for
reconsideration of said order of April 20, 1979, alleging that a
Torrens title becomes indefeasible after a year and that the same
becomes conclusive upon the entire world; that the Land
Registration Commission itself has advised the court that the 156
hectare property sought to be registered is covered by valid and
subsisting titles in the name of Ortigas; that Courts of First
Instance and the appellate courts in previous cases had sustained
the Ortigas titles over the land in question.
"On October 3, 1979, the motion for reconsideration of petitioner
Ortigas was denied by the respondent (trial) court, but the latter
set the motion to dismiss for hearing on October 18 and 19, 1979
at 8:30 a.m., for the purpose of enabling the applicant to prove its
contention that TCT Nos. 77652 and 77653 are not proper
derivatives of the original certificates of title from which they were
purportedly issued.
"The parties presented their testimonial and documentary
evidence before the respondent (trial) court in support of their
respective positions.
"On March 30, 1988, the respondent (trial) court denied the
motion to dismiss of petitioner Ortigas, holding, among others,
that TCT 77652 and TCT 77653 on their face show that they were
derived from OCT 337,19,336,334, pursuant to Decree 1425; that
if there was error in the correct number of OCT on said titles, no
step or measure to rectify the same was taken; that Decree No.
1425 shows that it covers a total area of only 17 hectares, more
or less, located in Sta. Ana, Manila, which was four kilometers
away from the land subject of the application for registration which
covers an area of 156 hectares, more or less, described in plan
No. LRC SWO-15352 situated at Malitlit-Uoogong, Quezon City;
that the contention of Ortigas that Decree No. 1425 covers an
area in Manila and also a part of Rizal is not credible, f or if this
were true then the area of said Rizal portion should appear on the
face of said decree of registration, which is not the case; that TCT
77652 and TCT 77653 were not derived from any decree of
22
registration, and that the said TCTs, being null and void, cannot
be used as basis to contest the right of the applicant to apply for
registration over the subject land. The order of March 30, 1988, in
its dispositive portion stated:
'WHEREFORE, premises considered, the Omnibus Motion dated
October 4, 1978 and Motion to Dismiss, dated, October 23, 1978
filed by oppositor Ortigas & Company, Limited Partnership are
both DENIED for lack of merit; while this Court's order of
September 15, 1978 directing the City Assessor of Quezon City to
issue a separate tax declaration corresponding to the 12 or 14
hectares which is an undivided portion of the land applied for
registration and now belonging to the said Dolores V. Molina;
further, authorizing the City Treasurer of Quezon City to accept
the corresponding realty taxes due thereon; and further the said
Dolores V. Molina is a]lowed to intervene in this proceedings, is
hereby affirmed; likewise, the City Treasurer is directed to accept
the whole of the taxes due on the property subject of the instant
petition from applicants Widows & Orphans Association, Inc., as
prayed for in its Manifestation With Motion subject to the right of
the oppositor Dolores V. Molina as contained in this Court's order
of September 15, 1978.
"On April 26, 1988, petitioner Ortigas filed a motion for
reconsideration of the said order of March 30, 1988, taking
exception to the ruling that TCT No. 77652 AND 77653 are null
and void, and alleging, among others, that respondent (trial) court
had no jurisdiction to hear an application for registration of a
previously registered land; that the parcels of land applied for are
covered by TCT 77652 and TCT 77653 in the name of Ortigas;
that the parcels of land covered by TCT 77652 and 77653 are
within the parcel of land covered by OCT 351; and that OCT 351
is a copy of Decree No. 1425 issued on April 26, 1905. The
motion for reconsideration prayed the respondent court to
reconsider its order of March 30, 1988 on the ground that it had
no jurisdiction over the application for registration, the parcels of
land subject thereof being already covered by Torrens Certificates
of Title.
"On May 19, 1989, the respondent (trial) court issued an order,
denying the motion for reconsideration of Ortigas, and setting the
hearing on the merits on July 26, 1989, . . . for the 'eventual
presentation of the parties' respective evidence respecting their
alleged ownership of the property subject of this petition." (Rollo,
pp. 24-26).
Not satisfied, respondent Ortigas instituted an action for certiorari,
prohibition and mandamus before respondent court praying for
the annulment of the March 30, 1988 and May 19, 1989 orders of
the trial court. It also prayed that the trial court be ordered to
dismiss the land registration case.
On November 27, 1989, respondent court rendered the decision
sought to be reviewed, the decretal portion of which reads:
"WHEREFORE, the petition for certiorari, prohibition and
mandamus of petitioner Ortigas & Company Limited Partnership
is GRANTED. The orders of March 30, 1988 and May 19, 1989 of
the Regional Trial Court of Quezon City, Branch 83, in LRC Case
No. Q-336, are REVERSED and ANNULLED, and said LRC Case
No. Q-336 is DISMISSED. The injunction issued by the Court, per
Resolution of August 8, 1989, is made permanent." (Rollo, p. 35)
Based on the plan and other evidence submitted by respondent
Ortigas at the hearing of its application for preliminary injunction
to enjoin the trial court from proceeding with the hearing of LRC
Case No. Q-336, respondent court held that TCT Nos. 77652 and
77653, albeit reflecting their origins as OCT Nos. 337,19, 336,
and 334, are actually derivatives of OCT No. 351, the latter
having been issued pursuant to Decree 1425 and that since OCT
351 is allegedly a copy of Decree 1425, the mere fact that the
original copy of Decree 1425, or a certified copy thereof, can no
longer be located or produced, does not mean that Decree 1425
covering the lots embraced in TCT Nos. 77652 and 77653 was
not issued. Concluding, respondent court said:
"It may be that TCT 77652 and 77653 do not show on their face
(sic) that they were derived from OCT 351. But the fact remains,
as shown above, that the parcel of land covered by OCT 351
embraced the parcels of land, Lots 7 and 8, of TCT 77652 and
77653. There was, therefore, a mistake in the entries in TCT
77652 and 77653 when the same referred to OCTs 337,19, 336,
337 (sic) and 334, as their source, for the correct OCT, insofar as
Lots 7 and 8 are concerned, should be OCT 351." (Rollo, p. 27)

In this petition, petitioner WIDORA avers that the respondent
Court of Appeals has decided question of substance contrary to
law and the applicable decisions of this Court because:
I upon, or fully heard by the trial or respondent Court. The law
"THE COURT OF APPEALS INSISTED IN UPHOLDING THE
EXISTENCE OR VALIDITY OF TCTs 77652 and 77653 DESPITE
THE ABSENCE OF A SUPPORTING DECREE OF
REGISTRATION.
II
"THE QUESTIONED DECISION UTILIZED SECONDARY
EVIDENCE DESPITE THE EXISTENCE AND AVAILABILITY OF
THE ORIGINAL DOCUMENT.
III
"THE RESPONDENT COURT HAS NO POWER OR
AUTHORITY TO ENJOIN THE TRIAL ON THE MERITS OF LRC
NO. Q-336 SINCE JURISDICTION RESIDES WITH THE RTC
ACTING AS A LAND REGISTRATION COURT."
In essence, it is the contention of petitioner that respondent
court's grounds and reasoning in support of its findings that
respondent Ortigas is the registered owner of the disputed
property are baseless in law and fact.
Petitioner argues that respondent court erred in sustaining the
validity of TCTs Nos. 77652 and 77653 despite the absence of a
supporting decree of registration and instead utilized secondary
evidence, OCT 351 which is supposedly a copy of decree 1425.
Petitioner maintains that Decree 1425 is itself existing and
available at the Register of Deeds of Manila and on its face shows
that it covers a parcel of land with an area of only 17 hectares in
Sta. Ana, Manila while the parcel of land applied for contains an
area of 156 hectares, located at Malitlit-Uoogong, Quezon City,
four (4) kilometers away from Sta. Ana, Manila and is certified by
the Bureau of Lands and the Bureau of Forestry as alienable and
disposable.
Respondent Ortigas claims that respondent court committed no
error in rectifying the mistake in the entries in TCT Nos. 77652
and 77653 as regards their sources and or origins arguing that
the correction was justified by the fact that the plan of OCT 351
coincides with the parcels of land covered by TCT Nos. 77652
and 77653; that OCT 351 was issued pursuant to Decree 1425
and that OCT 351 is a copy of the Decree itself.
We find the petition impressed with merit.
Undoubtedly, the evidence (i.e., plan submitted by respondent
Ortigas, testimony of its surveyor and OCT 351) adduced by
private respondent to prove the contents of Decree 1425 and
admitted by respondent court is merely secondary and should not
have been admitted in the first place.
Before secondary evidence may be admitted, there must be 1)
proof of the execution of the original writing and 2) that it has
been lost or destroyed or cannot be produced in court or that it is
in the possession of the adverse party who has failed to produce
it after reasonable notice (Michael and Co. v. Enriquez, 33 Phil.
87 [1915]; Republic v. Court of Appeals, 73 SCRA 146 [1976]).
Private respondent has not shown compliance with the above
requisites which would justify the admission of the secondary
evidence used and erroneously relied upon by respondent court.
Furthermore, the unilateral action of respondent court in
substituting its own findings regarding the extent of the coverage
of the land included in TCT Nos. 77652 and 77653, ostensibly to
correct the error in, and conform with, the technical description
found in OCT 351 based on the plan and other evidence
submitted by respondent Ortigas cannot be sustained. That
function is properly lodged with the office of the trial court sitting
as a land registration court and only after a full-dress investigation
of the matter on the merits. It is before the land registration court
that private respondent must adduce the proof that the disputed
parcels of land is legally registered in its favor.
In Dioquino v. Intermediate Appellate Court (179 SCRA 163
[1989], this Court held that "(w)hile it is true that the Court of
Appeals is vested with the 'power to try cases and conduct
hearings, receive evidence and perform any and all acts
necessary to resolve factual issues raised . . .' (Sec. 9 [3], BP
129), there was not even a request for evidentiary hearing filed in
this case. The Court of Appeals therefore should not have
23
admitted said evidence without giving the adverse party
opportunity to present counter evidence, if any. Besides,
"evidence necessary in regards to factual issues raised in cases
falling within the Appellate Court's original and appellate
jurisdiction contemplates incidental facts which were not touched
could not have intended that the Appellate Court would hold an
original and full trial of a main factual issue in a case, which
properly pertains to trial courts" (citing Lingner& Fisher GMBH v.
IAC, 125 SCRA 522 [1983]). In the case at bar, it appears that the
parties have yet to fully present their respective evidence in
support of their claims before the trial court. As a matter of fact,
the trial court had set the case for hearing on the merits in its
order dated May 19, 1989. What is more, the case involves a vast
tract of land consisting of 156 hectares, separately situated in two
outlaying localities (i.e., Quezon City and Sta. Ana, Manila). The
resolution of this controversy calls for a full-blown trial on the
merits if only to afford the contending parties their respective days
in court. Further, a ground for dismissal based on disputed facts,
as in this case is not proper in a motion to dismiss (Spouses
Jayme and Solidarios v. Alampay, 62 SCRA 131 [1975]).
In the case at bar, respondent Ortigas alleges that Decree 1425
embraces the lots covered by its TCT Nos. 77652 and 77653
which are identical to the lots applied for by petitioner. On the
other hand, petitioner maintains that Decree 1425 covers a 17-
hectare lot located at Sta. Ana, Manila while the lot applied for is
alienable and disposable as certified by the Bureau of Lands and
by the Bureau of Forestry and has an area of 156 hectares
located in Quezon City four (4) kilometers away from Sta. Ana,
Manila. Hence, the necessity of a trial on the merits to ascertain
the disputed facts, i.e., whether the lot applied for is covered by
Decree No. 1425 or is alienable and disposable. Under Act 496, it
is the decree of registration issued by the Land Registration
Commission which is the basis for the subsequent issuance of the
certificate of title by the corresponding Register of Deeds that
quiets the title to and binds the land (De la Merced v. Court of
Appeals, 5 SCRA 240 [1962]. Consequently, if no decree of
registration had been issued covering the parcel of land applied
for, then the certificate of title issued over the said parcel of land
does not quiet the title to nor bind the land and is null and void.
Besides, an order denying a motion to dismiss is merely
interlocutory and, unless it constitutes clearly a grave abuse of
discretion or was issued without or in excess of jurisdiction, the
error, if any, should be corrected by appeal in due time, after trial
and judgment on the merits and not by the extraordinary writ of
prohibition (Moreno v. Macadaeg, 7 SCRA 700 [1963]; National
Investment and Development Corporation v. Aquino, 163 SCRA
53 [1988]).
Furthermore, on grounds of pre-maturity, interlocutory orders
cannot be decided by the appellate courts until the lower court
shall have decided the merit of the case. Thus, in Villegas v.
Fernando (27 SCRA 1119 [1969], this Court held:
"This first assigned error (assailing the personality of the
appellees to ask for a review of the decision and decree in the
registration case) is actually directed at an earlier order dated 26
April 1961 denying appellants heirs' motion to dismiss the
petitions for review filed by the present appellees. And inasmuch
as said order of 26 April 1961 is interlocutory, there being as yet
no trial and decision on the merits of the petition for review, it is
premature to raise said assigned error in appellants heirs' instant
appeal. We shall rule thereon only when the proper time comes,
i.e., after the lower court shall have settled not only the still
unresolved status and rights of the parties, particularly those of
petitioners (sic) for review, now appellees herein, almost all of
whom are claiming that they are not mere homestead or free
patent applicants but patent or title holders, but also whether the
original decision should be maintained or not. For the court below,
after receiving and hearing the parties, may still conclude in favor
of appellants herein. (Emphasis supplied).
But not only that. Respondent court committed a procedural lapse
in correcting the alleged error in the questioned TCTs. A
certificate of title cannot be altered, amended or cancelled except
in a direct proceeding in accordance with law (Sec. 48, PD 1529;
Natalia Realty Corp. v. Vallez, 173 SCRA 534 [1989]; Legarda v.
Saleeby, 31 Phil. 590 [1915]). Also, no correction of certificate of
title shall be made except by order of the court in a petition filed
for the purpose and entitled in the original case in which the
decree of registration was entered (Sec. 112, Act 496; now Sec.
108, PD 1529). While the law fixes no prescriptive period therefor,
 24

the court, however, is not authorized to alter or correct the are hereby REINSTATED insofar as the denial of oppositor
certificate of title if it would mean the reopening of the decree of Ortigas' motion to dismiss and motion for reconsideration,
registration beyond the period allowed by law (Rodriguez, v. respectively, are concerned and the case remanded to the trial
Tirona, 68 Phil. 264 [1939]). court for trial and adjudication on the merits.

Respondent Ortigas, on the other hand, argues that this Court SO ORDERED.
has already recognized the fact that the parcel of land under TCT
No. 227758 from which TCT Nos. 77652 and 77653 were issued,
are covered by, among others, Decree 1425 issued in GLRO
Record No. 917 (Rollo, p. 94).

The argument is without merit. True this Court declared in Ortigas

& Company, Limited Partnership v. Ruiz (148 SCRA 326 [1987]
that "petitioner is the duly registered owner of the land * (then) in
dispute as evidenced by OCT Nos. 13, 33, 334, and 337 by virtue
of Decrees Nos. 240, 1942 and 1925 issued in GLRO Record
Nos. 699, 875 and 917 . . . ." Nowhere in said decision, however,
is a pronouncement that TCT Nos. 77652 and 77653 were issued
from TCT No. 227758. On the contrary, it is not disputed by the
parties that TCT Nos. 77652 and 77653 themselves show that
they were derived from OCT No. 337, 19, 336 and 334 and not
from OCT 351 or TCT 227758. If indeed, the real origin thereof is
OCT No. 351, what respondent Ortigas should have done was to
file a petition for the correction of the TCTs in question as stated
earlier.

While it may be true, as respondent Ortigas argues, that a land

registration court has no jurisdiction over parcels of land already
covered by a certificate of title, it is nevertheless true that the
aforesaid rule only applies where there exists no serious
controversy as to the certificate's authenticity vis-a-vis the land
covered therein. In the case at bar, the claimed origin of the
questioned TCTs evidently appear to be different from what is
stated therein. It does not appear indubitable that the disputed
parcels of land are properly reflected in the TCTs relied upon by
private respondent. Off-hand, and as the parties admit, the TCTs
do not show that they are actually derivatives of OCT 351.

Such being the case, the rule relied upon cannot therefore apply.
One who relies on a document evidencing his title to the property
must prove not only the genuineness thereof but also the identity
of the land therein referred to (Cf. Lasam v. Director of lands, 65
Phil. 637 [1938]). In the case at bar, private respondent's TCT
Nos. 77652 and 77653 trace their origins from OCT Nos. 337, 19,
336 and 334 and not from OCT 351 as it is now claimed by
respondent Ortigas.

The trial court cannot be faulted for not having granted

respondent Ortigas' motion to dismiss simply because the TCTs
relied upon by the latter do not accurately reflect their supposed
origin. Thus, in Ledesma v. Municipality of Iloilo (49 Phil. 769
[1926]) this Court held that the "simple possession of a certificate
of title, under the Torrens System, does not make the possessor
the true owner of all the property described therein. If a person
obtains a title, under the Torrens System, which includes by
mistake or oversight land which cannot be registered under the
Torrens System, he does not, by virtue of said certificate alone,
become the owner of the lands illegally included (citing Legarda
and Prieto v. Saleeby, 31 Phil. 590 [1915])." This pronouncement
was reiterated by the Court in Caragay-Layno v. Court of Appeals
(133 SCRA 718 [1984]; Coronel v. Intermediate Appellate Court
(155 SCRA 270 [1987]; Goloy v. Court of Appeals (173 SCRA 26
[1989]; and Miranda v. Court of Appeals (177 SCRA 303 [1989]).
As it is in this case, a certificate of title cannot be considered
conclusive evidence of ownership where the certificate itself is
faulty as to its purported origin.

Further, the fact that respondent Ortigas' motion to dismiss was

denied does not mean that it could no longer participate in the
resolution of the case and factual determination of the parties'
allegations. As correctly stated by the trial court, "(i)t is to be
stressed, however, that the denial of oppositor Ortigas' instant
motion for reconsideration does not necessarily mean that it is
deprived of any participation in the instant petition. For as already
stated, what follows after its denial is the eventual presentation of
all the parties' respective evidence respecting their alleged
ownership of the property subject of this petition." (Rollo, p. 65).

WHEREFORE, the assailed judgment of respondent court is SET

ASIDE and the orders of the trial court in LRC Case No. Q-336
entitled, "In Re Application for Registration of Title, WIDOWS and
ORPHANS ASSOCIATION, Inc., Applicant, ORTIGAS &
COMPANY LIMITED PARTNERSHIP and DOLORES V.
MOLINA, Oppositors", dated March 30, 1988 and May 19, 1989

REALTY SALES ENTERPRISE, INC. vs. INTERMEDIATE
APPELLATE
G.R. No. 67451 | 1987-09-28
CORTES, J p:
The litigation over the ownership of the parcels of land which are
the subject of this petition started in 1927 when an application for
their registration under the Torrens System was first filed. In the
present petition for review Realty Sales Enterprise, Inc. (hereafter
referred to as Realty) and Macondray Farms, Inc. (hereafter
referred to as Macondray) seek a reversal of the Resolution of
May 2, 1984 of the Intermediate Appellate Court, and an
affirmance of the Court of Appeals Decision of December 29,
1982.
Two (2) adjacent parcels of land located in Almanza, Las Piñas,
Metro Manila, having an aggregate area of 373,868 sq. m.,
situated in the vicinity of the Ayala Alabang Project and BF
Homes Parañaque are covered by three (3) distinct sets of
Torrens titles to wit:
1) TCT No. 20408, issued on May 29, 1975 in the name of Realty
Sales Enterprise, Inc., which was derived from OCT No. 1609,
issued on May 21, 1958, pursuant to Decree No. N-63394 in LRC
Cases Nos. 657, 758 and 976, GLRO Record Nos. N-29882, N-
33721 and N-43516, respectively.
2) TCT No. 303961 issued on October 13, 1970 in the name of
Morris G. Carpo, which was derived from OCT No. 8629, issued
on October 13, 1970 pursuant to decree No. N-131349 in LRC
Case No. N-11-M (N-6217), GLRO Record No. N-32166.
3) TCTs Nos. 333982 and 333985, issued on July 27, 1971 in the
name of Quezon City Development and Financing Corporation,
derived from OCT No. 8931 which was issued on July 27, 1971
pursuant to LRC Case No. P-206, GLRO Record No. N-31777.
On December 29, 1977, Morris Carpo filed a complaint with the
Court of First Instance of Rizal, Branch XXIII, presided over by
Judge Rizalina Bonifacio Vera thereafter referred to as Vera
Court), for "declaration of nullity of Decree No. N-63394 and TCT
No. 20408." Named defendants were Realty Sales Enterprise,
Inc., Macondray Farms, Inc. and the Commissioner of Land
Registration. Subsequently, however, Carpo withdrew his
complaint as against the last named defendant, and the answer
filed on behalf of said government official was ordered stricken off
the record. The complaint alleged that TCT No. 20408, as well as
OCT No. 1609 from which it was derived, is a nullity as the CFI of
Rizal, Branch VI, then presided over by Judge Andres Reyes
thereafter referred to as the Reyes Court) which issued the order
dated May 21, 1958 directing the issuance of a decree of
registration, was not sitting as a land registration court, but as a
court of ordinary jurisdiction. It was further alleged that the original
records of LRC Case No. 657, GLRO Record No. 29882 which
was the basis for the issuance of said order of May 21, 1958,
were lost and/or destroyed during World War II and were still
pending reconstitution; hence, the Reyes Court had no authority
to order the issuance of a certificate of title.
Realty and Macondray alleged in their answer that the Reyes
Court was acting as a court of land registration and in issuing the
order of May 21, 1958, was actually performing a purely
ministerial duty for the registration court in Case No. 657, GLRO
Record No. 29882 (and the two other cases, Cases Nos. 758 and
976, with which said case had been jointly tried and decided)
which on August 19, 1935 had rendered a decision adjudicating
the two (2) lots in question to EstanislaoMayuga (father of
DominadorMayuga, predecessor-in-interest of Realty and
Macondray), which decision was upheld by the Court of Appeals.
It was alleged that it is the title of Carpo which is null and void,
having been issued over a parcel of land previously registered
under the Torrens System in favor of another.
With leave of court, Realty and Macondray filed a third-party
complaint against the Quezon City Development and Financing
Corporation (hereafter referred to as QCDFC) and the
Commissioner of Land Registration alleging that TCTs Nos.
333982 and 333985 in the name of QCDFC also covered the
same parcels of land subject of the dispute between Carpo and
the two corporations, Realty and Macondray. They thus prayed
that Decree No. N-135938 issued on July 22, 1971, OCT No.
8931 issued on July 27, 1971, as well as TCTs Nos. 333982 and
333985 derived from OCT No. 8931 be declared null and void.
25
In its answer to the third-party complaint, QCDFC asserted the
validity of its own title alleging that it is the title in the name of
Realty which is null and void. QCDFC also filed a fourth-party
complaint against CarmelinoAlvendia, Esperanza Alvendia,
FelicisimoAlvendia, Josefina Alvendia, Jacinto G. Miranda, Rosa
G. Miranda, Isabel G. Miranda, and Feliciano G. Miranda, alleging
that it bought said parcels of land from them. It prayed that in the
event of an unfavorable judgment against it, fourth party
defendants be ordered to reimburse the purchase price which the
corporation paid to them. However, QCDFC failed to prosecute its
case, and the fourth-party complaint was dismissed for lack of
interest.
After hearing, the Vera Court rendered judgment on January 20,
1981, sustaining the title of Morris G. Carpo to the two (2) lots in
question and declaring the titles of Realty Sales Enterprise, Inc.
and QCDFC null and void.
On March 20, 1981, Realty filed a Petition for Certiorari with this
Court docketed as G.R. No. L-56471 questioning the decision of
the lower court. It also asked that it be allowed to appear directly
to this Court as it was raising only questions of law. After
respondents filed their comments to said petition, this Court
passed a resolution dated October 19, 1981 referring the case to
the Court of Appeals "in aid of its appellate jurisdiction for proper
determination on the merits of the appeal."
In its decision dated December 29, 1982, the Court of Appeals,
through its Ninth Division, with Justice Patajo as ponente,
concurred in by Justices Gopengco and Kapunan, set aside the
decision of the trial court and rendered a new one upholding the
validity of the title in the name of Realty Sales Enterprise, Inc. and
declaring null and void the titles in the name of Calpo and
QCDFC.
Carpo filed a motion for reconsideration with the appellate court.
In the meantime, by virtue and pursuant to Batas Pambansa Blg.
129, or the Judiciary Reorganization Act of 1980, the Court of
Appeals was reorganized into the Intermediate Appellate Court
(IAC). As a consequence, there was a reraffling of cases and the
case was assigned to the Second Special Cases Division which,
however, returned the records of the case for another re-raffling to
the Civil Cases Divisions as it deemed itself without authority to
act on a civil case in view of the allocation of cases to the different
divisions of the IAC under Section 8 of BP 129. The case was
then assigned to the Third Civil Cases Division, composed of
Justices de la Fuente, Coquia, Zosa and Bartolome.
Justices Coquia and Bartolome inhibited themselves, and
Justices Camilon and Bidin were assigned to the Third Civil
Cases Division.
On May 2, 1984, the IAC, through its Special Third Civil Cases
Division, with Justice Zosa as ponente, concurred in by Justices
Camilon and Bidin, promulgated its Resolution granting Carpo's
motion for reconsideration, reversing and setting aside the
decision of December 29, 1982, and affirming the decision of the
trial court. Hence, this petition docketed as G.R. No. 67451.
Petitioners assign the following errors:
I.
The SPECIAL THIRD CIVIL CASES DIVISION of the
Intermediate Appellate Court (for brevity, referred to herein as
SPECIAL DIVISION) which promulgated the disputed
RESOLUTION of May 2, 1984 had no legal standing under the
provisions of Batas Pambansa Blg. 129 and, as such, not vested
with jurisdiction and adjudicatory power to pronounce any
decision of final resolution for the Court.
II.
On the assumption that the SPECIAL DIVISION is legally vested
with jurisdiction and adjudicatory powers under the provisions of
BP 129, it decided questions of substance contrary to law and the
applicable decisions of the Supreme Court because:
(a) The SPECIAL DIVISION's Resolution of May 2, 1984
amounted to a denial to the Petitioners of their right to appeal and
judicial review over fundamental issues of law duly raised by them
in their Petition for Review on Certiorari (G.R. No. 56471), as
authorized by the Constitution (Art. X, sec. 5 (2) (e), the

provisions of the Judiciary Act of 1948 and Rule 42, Sec. 2 of the
Rules of Court; and
(b) By its RESOLUTION of May 2, 1984, it ruled that the decision
of the Court of Appeals could not have gained the nature of a
proper and valid judgment" as the latter had no power to pass
upon the appealed judgment of the Court of First Instance of Rizal
(the Vera Court), as appeal and not certiorari was the proper
remedy;
Furthermore, the said SPECIAL DIVISION grossly departed from
the accepted and usual course of judicial proceedings by giving a
perverted and obviously unjustified and illogical interpretation of
the RESOLUTION of July 25, 1983, of the Ninth Division of the
Court of Appeals, holding and declaring that "it has in effect
erased or cancelled the validity of (the DECISION of December
29, 1982), when the said RESOLUTION merely "RESOLVED to
return the records of the case . . . for reraffling and reassignment .
. . in view of the allocation of cases to the different Divisions of the
Intermediate Appellate Court under Section 8 of BP 129."
III.
The SPECIAL DIVISION by confirming the appealed judgment of
the lower court in effect sanctioned the contemptible disregard of
law and jurisprudence committed by Judge Vera, which call for an
exercise of the power of supervision;
IV.
The SPECIAL DIVISION did state in its RESOLUTION of May 2,
1984 a deliberate falsehood, namely, that Morris G. Carpo is a
purchaser in good faith and for value when there is absolutely no
evidence, whether written or testimonial, that was presented by
Carpo, or by anyone else that he was, in fact, a purchaser for
value and in good faith a material matter which was neither
alleged nor referred to in the complaint and in all the pleadings,
nor covered by any of the exhibits presented by all of the parties
herein and solely on the bases of which the case at bar was
submitted by the parties for consideration and decision.
1. To support their contention that the Special Third Civil Cases
Division of the Intermediate Appellate Court which promulgated
the Resolution of May 2, 1984 had no legal standing under the
provisions of BP 129 and, as such, not vested with jurisdiction
and adjudicatory power, petitioners cite Sections 4 and 8 of BP
129, to wit:
Sec. 4. Exercise of powers and functions. The Intermediate
Appellate Court shall exercise its powers, functions and duties,
through ten (10) divisions, each composed of five members. The
Court may sit en banc only for the purpose of exercising
administrative, ceremonial or other non-adjudicatory functions.
Sec. 8. Grouping of Divisions. Of the ten (10) divisions of the
Court, four (4) divisions, to be known as Civil Cases Divisions,
shall take cognizance of appeals in civil cases originating from the
Regional Trial Court; two (2) divisions, to be known as Criminal
Cases Divisions, of appeals in criminal cases originating from the
Regional Trial Courts: and four (4) divisions, to be known as
Special Cases Divisions, of original actions or petitions, petitions
for review, and appeals in all other cases, including those from
administrative agencies, except as provided in Section 9 hereof.
Except with respect to the Presiding Appellate Justice, the
appointment of a member of the court shall specifically indicate
whether it is for the Civil Cases Divisions, the Criminal Cases
Divisions, or the Special Cases Divisions of the Court. No
member of the Court appointed to any of the three classes of
divisions shall be assigned to any of the other classes of
divisions, except when authorized by the Supreme Court, upon
recommendation of the Intermediate Appellate Court en banc, if
the exigencies of the service so require. . . . (emphasis supplied)
As officially constituted, the Third Civil Cases Division was
composed of Justice B.S. de la Fuente, as Chairman. Justices
Jorge Coquia, Mariano Zosa, and Floreliana Bartolome, as
Members. In view, however, of the voluntary inhibition of Justices
Coquia and Bartolome from taking part in the case, Justices Bidin
and Camilon were reassigned to the Third Civil Cases Division to
form the Special Third Civil Cases Division.
Petitioners argue that the so-called Special Third Civil Cases
Division, not being one of the ten (10) Divisions of the Court duly
26
vested with jurisdiction, had no adjudicatory powers. It is also
alleged that the reassignment of Justices Bidin and Camilon is
violative of the injunction against appointment of an appellate
Justice to a class of divisions other than that to which he is
appointed. (Petition, pp. 21-26.)
This contention has no merit. A reading of the law will readily
show that what BP 129 prohibits is appointment from one class of
divisions to another class. For instance, a Justice appointed to the
Criminal Cases Divisions cannot be assigned to the Civil Cases
Divisions.
Justice Bidin was reassigned from the Fourth Civil Cases
Division, while Justice Camilon was reassigned from the Second
Civil Cases Division. The two therefore come from the same class
of divisions to which they were appointed.
Thus, the reassignment of Justices Bidin and Camilon to form the
Special Third Civil Cases Division in view of the voluntary
inhibition of two (2) "regular" members, is still within legal bounds.
Otherwise, a situation would have arisen where a regular division
could not decide a particular case because some members
thereof inhibited themselves from participating in said case.
2. The second assigned error involves a determination of the
correctness of the ruling of the IAC that the CA Decision of
December 29, 1982 could not have gained the nature of a proper
and valid judgment (since appeal and not certiorari was the
proper remedy) and that the Resolution of July 25, 1983 had in
effect erased or cancelled the validity of said Decision.
The IAC said in its Resolution of May 2, 1984:
Said resolution of July 25, 1983, to Our view, was effectively an
acknowledgment by the Division that promulgated it that the
earlier Decision dated December 29, 1983 rendered in a Special
Civil Action case for certiorari, CA-G.R. No. SP-13530, was not
appropriate and beyond the authority of the Ninth Division of the
Court of Appeals to promulgate. The said Resolution was actually
a statement that the Ninth Division of the Court of Appeals had
over-stepped its bounds by reviewing in certiorari proceedings a
decision in a purely civil case that should have passed through
the processes of an ordinary appeal. We are not aware of any
legal doctrine that permits an appellate court to treat a petition for
review on certiorari upon purely questions of law, such as that
filed by petitioners herein, as an ordinary appeal. Neither can we
find any legal basis or justification for the elimination by the
appellate court of the essential requisites then prescribed for the
validity of an appeal, such as the submission of a formal notice of
appeal, an appeal bond and approved record on appeal. Without
any of these mandatory requisites, the appeal could not have
been deemed perfected and ought to have been dismissed
outright.
The Court does not agree.
There are two modes by which cases decided by the then Courts
of First Instance in their original jurisdiction may be reviewed: (1)
an ordinary appeal either to the Supreme Court or to the Court of
Appeals, or (2) an appeal on certiorari to the Supreme Court. To
the latter category belong cases in which only errors or questions
of law are involved. Each of these modes have different
procedural requirements.
As stated earlier, Realty originally filed a Petition for Certiorari
with this Court docketed as G.R. No. L-56471 questioning the
decision of the Vera Court, and asking that it be allowed to appeal
directly to this Court as it was raising only questions of law.
However, this Court referred the case to the Court of Appeals "in
aid of its appellate jurisdiction for proper determination on the
merits of the appeal."
It may thus be observed that even this Court treated the petition
first filed as an appeal, and not as a special civil action for
certiorari. After all, a petition for review by certiorari is also a form
of appeal. (People v. Resuello, L-30165, August 22, 1969, 69
SCRA 35).
This mode of appeal under Rule 42 is in the form and procedure
outlined in Rule 45 which, unlike ordinary appeals, does not
require a notice of appeal, an appeal bond and a record on
appeal.

Thus it was error for the IAC to hold that the Decision of the Vera
Court "cannot be passed upon anymore in the Court of Appeals
decision because appeal and not certiorari was the proper
remedy." Precisely, petitioners brought the case to this Court on
appeal, albeit by way of certiorari.
Respondent Carpo cited authorities holding that certiorari is not a
substitute for appeal. Those cases are not in point. They refer to
the special civil action of certiorari under Rule 65, and not to
appeal by way of certiorari under Rule 45.
Similarly, the IAC Special Civil Cases Division erred in interpreting
the Resolution dated July 25, 1983 of the Second Special Cases
Division (to which the case was assigned after the reorganization
under BP 129) as having "erased or cancelled" the validity of the
Decision of the Ninth Division, A perusal of said Resolution shows
that it merely made clarification about the nature of the case and
why it should be reassigned to the Civil Cases Division of the IAC.
There was not the slightest implication that it "erased or
cancelled" the validity of the Decision of the Ninth Division.
Even the IAC Special Third Civil Cases Division impliedly
admitted the validity of the Decision of the Ninth Division when it
granted Carpo's motion for reconsideration. It would have been
incongruous to grant a motion to reconsider a decision, reverse
and set it aside, if in the first place it did not have any validity. It
would have been necessary only to declare its invalidity.
3. In the third assigned error, Petitioners contend that the Vera
Court, and the IAC Special Third Civil Cases Division, erred in
upholding the validity of the title in the name of Carpo and
declaring null and void the titles in the values of Realty and of
QCDFC.
The basis of the complaint filed by Carpo, which was the same
basis for the rulings of the Vera Court and the IAC Special
Division, is that the Reyes Court had no authority to issue the
order of May 21, 1958 directing the issuance of a decree of
registration in favor of Mayuga, predecessor-in-interest of Realty,
as it was not sitting as a land registration court and also because
the original records of LRC Case No 657, Record No. N-29882
were lost and/or destroyed during World War II and were still
pending reconstitution.
Under Act No. 496, Land Registration Act, (1902) as amended by
Act No. 2347 (1914), jurisdiction over all applications for
registration of title to land was conferred upon the Courts of First
Instance of the respective provinces in which the land sought to
be registered is situated.
Jurisdiction over land registration cases, as in ordinary actions, is
acquired upon the filing in court of the application for registration,
and is retained up to the end of the litigation. The issuance of a
decree of registration is but a step in the entire land registration
process; and as such, does not constitute a separate proceeding.
In the case at bar, it appears that it was EstanislaoMayuga, father
of DominadorMayuga, predecessor-in-interest of Realty, who
originally filed on June 24, 1927 a registration proceeding
docketed as LRC Case No. 657, GLRO Record No. N-29882 in
the Court of First Instance of Rizal to confirm his title over parcels
of land described as Lots 1, 2, and 3, Plan Psu-47035. (Lots 2
and 3 are the subject of the instant litigation among Carpo, Realty
and QCDFC.) Case No. 657 was jointly tried with two other cases,
LRC Case No. 976, GLRO Record No. 43516 filed by Eduardo
Guico and LRC Case No. 758, GLRO Record No. 33721 filed by
Florentino Baltazar, as the three cases involved identical parcels
of land, and identical applicants/oppositors.
On August 19, 1935 the CFI-Rizal acting as a land registration
court issued a consolidated decision on the three cases, the
dispositive portion of which reads:
Enmeritos de todo lo expuesto, se ordena el registro de los lotes,
1, 2 y 3 del plano Psu-47035 a nombre de EstanislaoMayuga,
desestimandooposicion de Florentino Baltazar y Eduardo Guico
con respecto a dichoslotes . . .
On appeal, the above decision of the CFI was affirmed by the
Court of Appeals in its decision dated November 17, 1939 the
dispositive portion of which reads:
Por todas las consideracionesexpuestas, confirmamos la decision
apeladaencuantoadjudicaaEstanislaoMayuga los lotes, 1, 2 y 3
27
de suplano y que equivalen a los lotes, 4, 5 y 6 del plano de
Baltazar y 4 y 5 del plano de Guico.
xxx xxxxxx
Guico filed a petition for review on certiorari before this Court, but the
petition was dismissed and the Court of Appeals decision was affirmed
(See Guico v. San Pedro, 72 Phil. 415 [1941]).
Before he could secure a decree of registration in his name, Estanislao
died.
On May 13, 1958 DominadorMayuga, son of Estanislao, filed a petition with
the Reyes Court docketed as Case No. 2689 alleging that he was the only
heir of the deceased EstanislaoMayuga and praying for the issuance of a
decree of registration over the property adjudicated in favor of Estanislao.
At this point, it cannot be overemphasized that the petition filed by
Dominador is NOT a distinct and separate proceeding from, but a
continuation of, the original land registration proceedings initiated by
EstanislaoMayuga, Florentino Baltazar and Eduardo Guico. In the same
vein, the Reyes Court, as Branch VI of the Court of First Instance of Rizal,
was continuing in the exercise of jurisdiction over the case, which
jurisdiction was vested in the CFI-Rizal upon filing of the original
applications.
On May 21, 1958 the Reyes Court issued an order granting the petition of
DominadorMayuga and directing the Commissioner of Land Registration to
issue a decree of registration over Lots 1, 2 and 3 of Plan Psu-47035,
substituting therein as registered owner DominadorMayuga in lieu of
Estanislao.
Respondent Carpo, however, contends, that since the records of LRC Case
No. 657 were not properly reconstituted, then there was no pending land
registration case. And since the Reyes Court was acting without a pending
case, it was acting without jurisdiction. (Respondent Carpo's Memorandum,
pp. 2-8.)
He cites the case of Villegas v. Fernando (L-27347, April 29, 1969, 27
SCRA 1119) where this Court said that upon failure to reconstitute pursuant
to law, "the parties are deemed to have waived the effects of the decision
rendered in their favor and their only alternative is to file an action anew for
the registration in their names of the lots in question," citing the case of
Ambat v. Director of Lands, (92 Phil. 567 [1953]) and other cases. The
basis of said ruling is Section 29 of Act No. 3110, An Act to provide an
adequate procedure for the reconstitution of the records of pending judicial
proceedings and books, documents, and files of the office of the register of
deeds, destroyed by fire or other public calamities, and for other purposes.
However, the Ambat case, in so far as it ruled on the effect of failure to
reconstitute records on the status of the case in its entirety, was modified in
the cage of Nacua v. de Beltran, (93 Phil. 595 [1953]), where this Court
said:
(W)e are inclined to modify the ruling (in the Ambat case) in the sense that
Section 29 of Act No. 3110 should be applied only where the records in the
Court of First Instance as well as in the appellate court were destroyed or
lost and were not reconstituted, but not where the records of the Court of
First Instance are intact and complete, and only the records in the appellate
court were lost or destroyed, and were not reconstituted. One reason for
this view is that section 29 of Act 3110 is found among the sections and
provisions dealing with the reconstitution of records in the Court of First
Instance in pending civil cases, special proceedings, cadastral cases and
criminal cases. A study of Act (No.) 3110 . . . will show that there are
separate procedures for the reconstitution of records in the Justice of the
Peace Courts, from Sec. 48 to Sec. 53; for the reconstitution of records in
the Supreme Court, now including the Court of Appeals, from Sec. 54 to
Sec. 74; for the reconstitution of records in the office of the Register of
Deeds, from Sec. 75 to Sec. 90 and for the reconstitution of destroyed
records in the Courts of First Instance, from Sec. 1 to Sec. 47, under which
sections, Sec. 29 is obviously comprehended.
The whole theory of reconstitution is to reproduce or replace records lost or
destroyed so that said records may be complete and court proceedings
may continue from the point or stage where said proceedings stopped due
to the loss of the records. The law contemplates different stages for
purposes of reconstitution. . . .
. . . (S)ection 4 covers the stage were a civil case was pending trial in the
Court of First Instance at the time the record was destroyed or lost; section
6 evidently refers to the stage where the case had been tried and decided
but was still pending in the Court of First Instance at the time the record
was destroyed or lost; section 6 covers the stage where the case was
pending in the Supreme Court (or Court of Appeals) at the time the record
was destroyed or lost. **
If the records up to a certain point or stage are lost and they are not
reconstituted, the parties and the court should go back to the next
preceding stage where records are available, but not beyond that;
otherwise to ignore and go beyond the stage next preceding would be
voiding and unnecessarily ignoring proceedings which are duly recorded
and documented, to the great prejudice not only of the parties and their
witnesses, but also of the court which must again perforce admit pleadings,
rule upon them and then try the case and decide it anew, all of these, when
the records up to said point or stage are intact and complete, and
uncontroverted.

xxx xxxxxx
. . . (T)o require the parties to file their action anew and incur the expenses
and (suffer) the annoyance and vexation incident to the filing of pleadings
and the conduct of hearings, aside from the possibility that some of the
witnesses may have died or left the jurisdiction, and also to require the
court to again rule on the pleadings and hear the witnesses and then
decide the case, when all along and all the time the record of the former
pleadings of the trial and evidence and decision are there and are not
disputed, all this should appear to be not exactly logical or reasonable, or
fair and just to the parties, including the trial court which has not committed
any negligence or fault at all.
The ruling in Nacua is more in keeping with the spirit and intention of the
reconstitution law. As stated therein, "Act 3110 was not promulgated to
penalize people for failure to observe or invoke its provisions. It contains no
penal sanction. It was enacted rather to aid and benefit litigants, so that
when court records are destroyed at any stage of judicial proceedings,
instead of instituting a new case and starting all over again, they may
reconstitute the records lost and continue the case. If they fail to ask for
reconstitution, the worst that can happen to them is that they lose the
advantages provided by the reconstitution law" (e.g. having the case at the
stage when the records were destroyed).
Applying the doctrine in the Nacua decision to LRC Case No. 657, the
parties thereto did not have to commence a new action but only had to go
back to the preceding stage where records are available. The land
registration case itself remained pending and the Court of First Instance of
Rizal continued to have jurisdiction over it.
The records were destroyed at that stage of the case when all that
remained to be done was the ministerial duty of the Land Registration
Office to issue a decree of registration (which would be the basis for the
issuance of an Original Certificate of Title) to implement a judgment which
had become final (See Government v. Abural, 39 Phil. 996 [1919l at 1002;
Sta. Ana v. Menla, 111 Phil. 947 [1961], 1 SCRA 1294; Heirs of Cristobal
Marcos v. De Banuvar, 134 Phil. 257 [1968], 25 SCRA 316). There are
however authentic copies of the decisions of the CFI and the Court of
Appeals adjudicating Lots 1, 2 and 3 of Plan Psu-47035 to
EstanislaoMayuga. Moreover, there is an official report of the decision of
this Court affirming both the CFI and the CA decisions. A final order of
adjudication forms the basis for the issuance of a decree of registration.
Considering that the Reyes court was actually in the exercise of its
jurisdiction as a land registration court when it issued the order directing the
issuance of a decree of registration, "substituting therein as registered
owner DominadorMayuga, in lieu of the original adjudicates,
EstanislaoMayuga, based on the affidavit of self-adjudication, subject to the
provisions of Sec. 4, Rule 74 of the Rules of Court," which order is in
consonance with the ruling of this Court in the Guico decision, and the
decisions of the CFI-Rizal and the CA dated August 19, 1935 and
November 17, 1939, respectively, We uphold the validity of said order and
rule that Judge Vera was without jurisdiction to set it aside.
4. In upholding the title of Carpo as against those of Realty and QCDFC,
the Special Division also relied on Carpo's being an innocent purchaser for
value.
Whether or not Carpo is an innocent purchaser for value was never raised
as an issue in the trial court. A perusal of the records of the case reveals
that no factual basis exists to support such a conclusion. Even Carpo
himself cites no factual proof of his being an innocent purchaser for value.
He merely relies on the presumption of good faith under Article 527 of the
Civil Code.
It is settled that one is considered an innocent purchaser for value only if,
relying on the certificate of title, he bought the property from the registered
owner, "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." (Cui v. Henson, 51 Phil. 606 [1928], Fule v. De
Legare, 117 Phil. 367 [1963], 7 SCRA 351.) He is not required to explore
farther than what the Torrens title upon its face indicates. (Fule v. De
Legare, supra.)
Carpo bought the disputed property from the Baltazars, the original
registered owners, by virtue of a deed executed before Iluminada Figueroa,
Notary Public of Manila dated October 9, 1970. However, it was only later,
on October 13, 1970, that the decree of registration in favor of the Baltazars
was transcribed in the Registration Book for the Province of Rizal and that
an Original Certificate of Title was issued. It was on the same day October
13, 1970, that the deed evidencing the sale between the Baltazars and
Carpo was inscribed in the Registry of Property, and the Original Certificate
of Title was cancelled as Transfer Certificate of Title No. 303961 in the
name of Carpo was issued. (Exhibit 12, Rollo, pp. 270-273.)
Thus, at the time of sale there was as yet no Torrens title which Carpo
could have relied upon so that he may qualify as an innocent purchaser for
value. Not being a purchaser for value and in good faith, he is in no better
position than his predecessors-in-interest.
The Baltazars, predecessors-in-interest of Carpo are heirs of Florentino
Baltazar, an oppositor in the original application filed by EstanislaoMayuga
in 1927. As stated earlier, the CFI-Rizal confirmed the title of Estanislao to
Lots 1, 2 and 3 of Plan Psu-47035 "desestimandooposicion de Florentino
28
Baltazar . . . con respeto a dichoslotes . . ." As such successors of
Florentino, they could not pretend ignorance of the land registration
proceedings over the disputed parcels of land earlier initiated by Eduardo
Guico, Florentino Baltazar and EstanislaoMayuga, as well as the decisions
rendered therein.
Moreover, it is not disputed that the title in the name of DominadorMayuga,
from whom Realty derived its title, was issued in 1958, or twelve years
before the issuance of the title in the name of the Baltazars in 1970.
In this jurisdiction, it is settled that "(t)he general rule is that in the case of
two certificates of title, purporting 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 .."
(Legarda and Prieto v. Saleeby, 31 Phil. 590 [1915] at 595-596; Garcia v.
CA, Nos. L-48971 and 49011, January 22, 1980, 95 SCRA 380.)
TCT No. 20408, derived from OCT 1609, is therefore superior to TCT No.
303961, derived from OCT 8629.
5. For its part, respondent Quezon City Development and Financing
Corporation (QCDFC) alleges that it has been improperly impleaded as
thirty-party defendant inasmuch as Realty's alleged cause of action against
it is neither for contribution, indemnity, subrogation or any other relief in
respect of Carpo's claim against Realty. It likewise alleges that Realty had
no cause of action against it since the third party complaint did not allege
that QCDFC violated any legal right of Realty, QCDFC also assails the
Vera Court decision in that it declares QCDFC directly liable to Carpo and
not to Realty.
In the first place, QCDFC did not appeal from the decision of the Vera
Court, nor from the decision of the Court of Appeals dated December 29,
1982, nor from the resolution of the IAC Special Third Civil Cases Division
dated May 2, 1984 all of which voided QCDFC's title to the disputed
property. Hence, said decisions/resolution have become final and
executory as regards QCDFC.
Moreover, even as this Court agrees with QCDFC that the third-party
complaint filed against it by Realty was procedurally defective in that the
relief being sought by the latter from the former is not in respect of Carpo's
claim, policy considerations and the factual circumstances of the case
compel this Court now to rule as well on QCDFC's claim to the disputed
property. *** To rule on QCDFC's claim now is to avoid multiplicity of suits
and to put to rest these conflicting claims over the property. After all,
QCDFC was afforded full opportunity, and exercised its right, to prove its
claim over the land. It presented documentary as well as testimonial
evidence. It was even permitted to file a fourth-party complaint which,
however, was dismissed since it failed to prosecute its case.
QCDFC derived its title from CarmelinoAlvendia et. al., the original
registered owners. Original Certificate of Title No. 8931 in the name of
Spouses CarmelinoAlvendia, et. al. was issued on July 27, 1971, or thirteen
(13) years after the issuance of Mayuga's title in 1958.
Since Realty is claiming under TCT No. 1609 which was issued earlier than
OCT No. 8931 from which QCDFC's title was derived, Realty's title must
prevail over that of QCDFC.
6. During the pendency of this case, Petitioners filed a manifestation
alleging that the case at bar is closely connected with G.R. No. L-46953,
Jose N. Mayuga et al. v. The Court of Appeals, Macondray Farms, Inc.,
Realty Sales Enterprise, Inc., et. al., and moved for consolidation of the two
cases involving as they do the same property. By Resolution of August 29,
1984, this Court denied the motion for consolidation.
In this connection, it must be emphasized that the action filed by Carpo
against Realty is in the nature of an action to remove clouds from title to
real property. By asserting its own title to the property in question and
asking that Carpo's title be declared null and void instead, and by filing the
third-party complaint against QCDFC, Realty was similarly asking the court
to remove clouds from its own title. Actions of such nature are governed by
Articles 476 to 481, Quieting of Title, Civil Code (Republic Act No. 386),
and Rule 64, Declaratory Relief and Similar Remedies, Rules of Court.
Suits to quiet title are not technically suits in rem, nor are they, strictly
speaking, in personam, but being against the person in respect of the res,
these proceedings are characterized as quasi in rem. (McDaniel v. McElvy,
108 So. 820 [1926].) The judgment in such proceedings is conclusive only
between the parties. (Sandejas v. Robles, 81 Phil. 421 [1948]).
The ruling in this case is therefore without any prejudice to this Court's final
determination of G.R. No. L-46953.
WHEREFORE, the Resolution of May 2, 1984 of the Intermediate Appellate
Court and the Decision of January 20, 1981 of the CFI-Rizal Branch XXIII,
are SET ASIDE and the Decision of December 29, 1982 of the Court of
Appeals is AFFIRMED.
SO ORDERED.

LEYSON vs. BONTUYAN
G.R. No. 156357 | 2005-02-18
CALLEJO, SR., J.:
This is a petition for review on certiorari of the Decision[1] of the
Court of Appeals (CA), as well as its Resolution in CA-G.R. CV
No. 64471 denying the motion for reconsideration of the said
decision.
The Antecedents
Calixto Gabud was the owner of a parcel of land located in
Barangay Adlawon, Mabolo, Cebu City, which was declared for
taxation purposes under Tax Declaration (T.D.) No. 03276-R in
1945[2] with the following boundaries:
North Calixto Gabud East Marcelo Cosido
South Pedro Bontuyan West Asuncion Adulfo.[3]
Because of the construction of a provincial road, the property was
divided into two parcels of land covered by T.D. No. 03276-R and
T.D. No. 01979-R. On February 14, 1948, Gabud executed a
Deed of Absolute Sale[4] over the property covered by T.D. No.
03276-R, as well as the other lot covered by T.D. No. 01979-R, in
favor of ProtacioTabal, married to LeodegariaBontuyan. On the
basis of the said deed, T.D. No. 03276-R was cancelled by T.D.
No. 13615-R in the name of ProtacioTabal effective 1949.[5] On
January 5, 1959, Tabal executed a Deed of Sale[6] over the
property covered by T.D. No. 13615-R in favor of Simeon Noval,
married to VivenciaBontuyan, daughter of Gregorio Bontuyan, for
P800.00. T.D. No. 13615-R was cancelled by T.D. No. 100356 in
the names of the spouses Noval.[7] Gregorio Bontuyan received a
copy of the said tax declaration in behalf of the spouses Noval.[8]
The latter tax declaration was then cancelled by T.D. No. 008876
under the same names effective 1967.[9]
Subsequently, the property was surveyed by Cadastral Land
Surveyor Mauro U. Gabriel on January 22, 1964. The plan survey
was approved on September 30, 1966.[10] The property covered
by T.D. No. 008876 was identified as Lot No. 17150 of Cebu
Cadastre No. 12, while the property covered by T.D. No. 01979-R
was identified as Lot No. 13272. On May 22, 1968, the spouses
Noval executed a Deed of Absolute Sale[11] over the two lots
covered by T.D. No. 008876 in favor of Lourdes V. Leyson for
P4,000.00. Lourdes Leyson took possession of the property and
had it fenced. Despite the said sale, T.D. No. 008876 was
cancelled by T.D. No. 21267 effective 1974.[12] Thereafter, T.D.
No. 21267 was cancelled by T.D. No. 23821[13] which, in turn,
was cancelled by T.D. No. 01-17455 effective 1980.[14] In 1989,
the latter was cancelled by a new tax declaration, T.D. No. 01-
001-00646. All these tax declarations were in the names of the
spouses Noval.[15]
Meanwhile, Lourdes Leyson paid for the realty taxes over the
property. However, the tax declaration issued thereon continued
to be under the names of the spouses Noval.[16]
Despite his knowledge that the property had been purchased by
his son-in-law and daughter, the spouses Noval, Gregorio
Bontuyan, who was then 91 years old, filed an application with the
Bureau of Lands for a free patent over Lot No. 17150 on
December 4, 1968. He alleged therein that the property was
public land and was neither claimed nor occupied by any
person,[17] and that he first entered upon and began cultivating
the same in 1918. Thus, on November 19, 1971, Free Patent No.
510463 was issued over Lot No. 17150 in his favor, on the basis
of which Original Certificate of Title (OCT) No. 0-1619 was issued
to and under his name on March 21, 1974.[18] Another parcel of
land, Lot No. 13272, was also registered under the name of
Gregorio Bontuyan under OCT No. 0-1618. He then declared Lot
No. 17150 for taxation purposes under T.D. No. 13596 effective
1974.[19] On February 20, 1976, Gregorio Bontuyan executed a
Deed of Absolute Sale[20] over Lot No. 17150 in favor of his son,
NaciansinoBontuyan.
On April 28, 1980, Gregorio Bontuyan, then 103 years old,
executed another Deed of Absolute Sale[21] over Lot Nos. 13272
and 17150, covered by OCT No. 0-1618 and OCT No. 0-1619,
respectively, in favor of NaciansinoBontuyan for P3,000.00. On
the basis of the said deed, OCT No. 0-1619 was cancelled by
TCT No. 1392 in the name of NaciansinoBontuyan on December
2, 1980.[22] Gregorio Bontuyan died intestate on April 12,
1981.[23]
29
On March 30, 1981, the spouses Bontuyan executed a Real
Estate Mortgage over Lot No. 17150 covered by OCT No. 0-1619
in favor of the Development Bank of the Philippines (DBP) as
security for a loan of P11,200.00.[24] NaciansinoBontuyan had
earlier executed an affidavit that the property was not tenanted.
Shortly thereafter, the spouses Bontuyan left the Philippines and
resided in the United States. Meanwhile, Lourdes Leyson died
intestate.
The spouses Bontuyan returned to the Philippines in 1988 to
redeem the property from DBP only to discover that there were
tenants living on the property installed by Engineer Gabriel
Leyson, one of the late Lourdes Leyson’s children. Despite being
informed that the said spouses owned the property, the tenants
refused to vacate the same. The tenants also refused to deliver
to the spouses the produce from the property. The spouses
Bontuyan redeemed the property from DBP on September 22,
1989.
On February 12, 1993, Jose Bontuyan, Nieves Atilano,
PacificoBontuyan, VivenciaNoval and NaciansinoBontuyan, the
surviving heirs of Gregorio Bontuyan, executed an Extrajudicial
Settlement[25] of the latter’s estate and adjudicated Lot No.
13272 in favor of Naciansino. Based on the said deed, T.D. No.
01-001-00877 was issued to and under the name of Naciansino
over the said property starting 1994.
On June 24, 1993, NaciansinoBontuyan, through counsel, wrote
Engr. Gabriel Leyson, demanding that he be furnished with all the
documents evidencing his ownership over the two lots, Lots Nos.
17150 and 13272.[26] Engr. Leyson ignored the letter.
The spouses Bontuyan, thereafter, filed a complaint against Engr.
Leyson in the Regional Trial Court (RTC) of Cebu City for quieting
of title and damages. They alleged that they were the lawful
owners of the two lots and when they discovered, upon their
return from the United States, that the property was occupied and
cultivated by the tenants of Engr. Leyson, they demanded the
production of documents evidencing the latter’s ownership of the
property, which was ignored.
The spouses Bontuyan prayed that, after due proceedings,
judgment be rendered in their favor, thus:
WHEREFORE, premises considered, it is most respectfully
prayed of this Honorable Court to render judgment against the
defendant and in favor of the plaintiffs, to wit:
(a) Confirming the ownership of the plaintiffs on the lots in
question;
(b) Ordering defendant to pay the plaintiffs the amount of Twenty
Thousand Pesos (P20,000.00) as the share of the plaintiffs of the
produce of the lots in question;
(c) Ordering defendant to pay plaintiffs the sum of P50,000.00 as
reimbursement of attorney’s fees and the further sum of P500.00
as appearance fee every time the case is called for trial;
(d) Ordering the defendant to pay plaintiffs the sum of P50,000.00
as moral damages and exemplary damages may be fixed by the
court;
(e) Ordering defendant to pay plaintiffs the sum of P5,000.00 as
actual expenses for the preparation and filing of the complaint;
(f) Ordering defendant to pay the costs; and
(g) Granting to plaintiffs such other reliefs and remedies just and
equitable in the premises.[27]
In his answer to the complaint, Engr. Leyson averred, by way of
affirmative defenses, that the two lots were but portions of a
parcel of land owned by Calixto Gabud, covered by T.D. No.
03276-R, and was subdivided into two parcels of land because of
the construction of a provincial road on the property; Gabud later
sold the two lots to ProtacioTabal, who sold the same to Simeon
Noval, married to VivenciaBontuyan, one of the children of
Gregorio Bontuyan; Simeon Noval later sold the property to
Lourdes Leyson on May 22, 1968 who, forthwith, took possession
thereof as owner; and Gregorio Bontuyan was issued a free
patent over the property through fraud. Engr. Leyson concluded
that the said patent, as well as OCT No. 0-1619 and TCT No.

1392, were null and void and that the plaintiffs acquired no title
over the property.
Engr. Leyson interposed a counterclaim against the spouses
Bontuyan and repleaded as an integral part thereof all the
material allegations in his affirmative defense. He prayed that,
after due proceedings, judgment be rendered in his favor, thus:
a) Dismissing Plaintiffs’ complaint for failure to include
indispensable parties;
b) Declaring the Defendant and his four (4) sisters, namely, Dr.
Josefina L. Poblete, Mrs. Fe L. Qua, Esperanza Leyson and
Caridad Leyson as the true and legal owners and possessors of
the parcels of land in issue;
c) Declaring OCT No. 0-1619 in the name of Gregorio Bontuyan
and TCT No. 1392 in the name of NaciansinoBontuyan null and
void and to order the Register of Deeds to cancel the same and
issue new ones in favor of the Defendant Gabriel V. Leyson and
his four (4) sisters, namely: Dr. Josefina L. Poblete, Mrs. Fe L.
Qua, Esperanza V. Leyson and Caridad V. Leyson;
d) And on the Counterclaim, to order Plaintiffs to pay the
Defendant the following sums:
d-1) P50,000.00 as attorney’s fees and appearance fee of
P1,000.00 per hearing;
d-2) P500,000.00 as moral damages;
d-3) P20,000.00 as exemplary damages;
d-4) P10,000.00 as expenses of litigation.
Defendant further prays for such other reliefs just and equitable in
the premises.[28]
In due course, the other children of Lourdes Leyson, namely, Dr.
Josefina L. Poblete, Fe Leyson Qua, Caridad V. Leyson and
Esperanza V. Leyson, were allowed to intervene as defendants.
They filed their answer-in-intervention wherein they adopted, in
their counterclaim, paragraphs 7 to 26 of the answer of their
brother, Engr. Leyson, the original defendant. They prayed that,
after due hearing, judgment be rendered in their favor as follows:
Wherefore, this Honorable Court is prayed to render judgment in
favor of the Defendant and the Defendants-in-Intervention and
against the Plaintiffs as follows:
a) Promissory Plaintiffs’ complaint for failure to include
indispensable parties and for lack of cause of action;
b) Declaring the Defendant and his four (4) sisters, namely: Dr.
Josefina L. Poblete; Mrs. Fe L. Qua, Esperanza Leyson and
Caridad Leyson as the true and legal owners and possessors of
the parcels of land in issue;
c) Declaring OCT No. 0-1619 in the name of Gregorio Bontuyan
and TCT No. 1392 in the name of NaciansinoBontuyan null and
void and to order the Register of Deeds to cancel the same and
issue new ones in favor of the Defendant Gabriel V. Leyson and
his four (4) sisters, namely: Dr. Josefina L. Poblete, Mrs. Fe L.
Qua, Esperanza V. Leyson and Caridad V. Leyson;
d) On the Counterclaim, Plaintiffs should pay the Defendants the
following sums:
d-1) P50,000.00 as attorney’s fees and appearance fee of
P1,000.00 per hearing;
d-2) P500,000.00 as moral damages to each Intervenor;
d-3) P50,000.00 as exemplary damages;
d-4) P15,000.00 as expenses of litigation.
Defendant further prays for such other reliefs just and equitable in
the premises.[29]
In their reply, the spouses Bontuyan averred that the counterclaim
of the defendants for the nullity of TCT No. 1392 and the
reconveyance of the property was barred by laches and
prescription.
On January 21, 1999, the trial court rendered judgment in favor of
the Leyson heirs and against the spouses Bontuyan. The fallo of
the decision reads:
30
WHEREFORE, foregoing considered judgment is hereby
rendered dismissing plaintiff’s complaint for dearth of evidence
declaring the defendant and the intervenors as the true and legal
owners and possessors of the subject parcels of land; declaring
OCT No. 0-1619 in the name of Gregorio Bontuyan and TCT No.
1392 in the name of NaciansinoBontuyan null and void; ordering
the Register of Deeds to cancel OCT No. 0-1619 and TCT No.
1392 and issue new ones in favor of defendant Gabriel Leyson
and intervenors Josefina Poblete, Fe Qua, Esperanza Leyson and
Caridad Leyson; ordering plaintiff to pay defendant and
intervenors the following:
a) P50,000.00 attorney’s fees;
b) 1,000.00 per appearance;
c) 100,000.00 moral damages for defendant and
intervenors;
d) 10,000.00 exemplary damages; and
e) 10,000.00 litigation expenses.
SO ORDERED.[30]
The trial court held that Simeon Noval had sold the lots to
Lourdes Leyson on May 22, 1968, who thus acquired title over the
property.
The spouses Bontuyan appealed the decision to the CA which
affirmed, with modification, the decision of the RTC. The
appellate court held that the Leyson heirs were the owners of Lot
No. 13273, while the spouses Bontuyan were the owners of Lot
No. 17150. The CA ruled that the answer of the Leyson heirs to
the complaint constituted a collateral attack of OCT No. 0-1619
which was proscribed by law. The Leyson heirs filed a motion for
reconsideration of the decision insofar as Lot No. 17150 was
concerned, contending that their counterclaim for the nullification
of OCT No. 0-1619 contained in their answer constituted a direct
attack on the said title. The CA denied the motion.
The Leyson heirs then filed a petition for review with this Court
and made the following assignments of error:
First Assignment of Error
THE HONORABLE COURT OF APPEALS COMMITTED ERROR
WHEN IT RULED THAT THE NULLITY OR THE VALIDITY OF
OCT NO. 0-1619 CANNOT BE RULED UPON IN THESE
PROCEEDINGS BROUGHT BY THE RESPONDENTS FOR THE
QUIETING OF THEIR TITLE.
Second Assignment of Error
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
WHEN IT RULED THAT PETITIONERS’ ANSWER WITH
COUNTERCLAIM, PRAYING FOR THE CANCELLATION OF
PLAINTIFFS’ TORRENS CERTIFICATE IS A MERE
COLLATERAL ATTACK ON THE TITLE.[31]
Third Assignment of Error
THE APPELLATE COURT GRAVELY ERRED WHEN IT
MODIFIED THE DECISION OF THE REGIONAL TRIAL COURT
DATED JANUARY 21, 1999 BY RULING THAT PETITIONERS
ARE DECLARED THE OWNERS OF LOT 13273 BUT
RESPONDENTS ARE DECLARED THE OWNERS OF LOT
17150 UNDER OCT NO. 0-1619 AND PRESENTLY COVERED
BY TCT NO. 1392 IN THE NAME OF NACIANSINO BONTUYAN,
DESPITE THE APPELLATE COURT’S AFFIRMING THE
FINDINGS OF THE TRIAL COURT THAT FRAUD WAS
COMMITTED BY GREGORIO BONTUYAN (RESPONDENTS’
PREDECESSOR-IN-INTEREST) IN ACQUIRING TITLE OVER
THE SUBJECT PROPERTIES.[32]
Fourth Assignment of Error
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
WHEN IT RULED THAT RECONVEYANCE OF TITLE OF LOT
17150 COVERED BY OCT NO. 0-1619 AND PRESENTLY
COVERED BY TCT NO. 1392, IN FAVOR OF PETITIONERS
HAD PRESCRIBED.[33]
Fifth Assignment of Error
THE APPELLATE COURT GRAVELY ERRED IN NOT
GRANTING ATTORNEY’S FEES AND APPEARANCE FEES

DESPITE RESPONDENTS’ FRAUD IN ACQUIRING TITLE
OVER THE SUBJECT PROPERTIES.[34]
On the first two assignments of errors, the petitioners aver that
the counterclaim in their answer to the complaint constituted a
direct attack of the validity of OCT No. 0-1619. They maintain
that the appellate court’s reliance on the ruling of this Court in
Cimafrancia v. Intermediate Appellate Court[35] was misplaced.
They assert that what is controlling is the ruling in Pro Line Sports
Center, Inc. v. Court of Appeals[36] wherein this Court held that
the counterclaim of the petitioners therein constituted a direct
attack on a certificate of title. The petitioners, likewise, cited
Section 55 of Act No. 496, as amended, to buttress their stance.
They plead that their answer to the complaint should be liberally
construed so as to afford them substantial justice.
On the other hand, the respondents assert that the decision of the
CA is correct. They claim that Lot No. 17150 was still public land
when Lourdes Leyson purchased the same from Simeon Noval,
and that the property became private land only when Free Patent
No. 510463 was issued to and under the name of Gregorio
Bontuyan.
We agree with the contention of the petitioners that the CA erred
in not nullifying OCT No. 0-1619 and TCT No. 1392 and ordering
the respondents to reconvey the property covered by the said title
to the petitioners.
The respondents, as plaintiffs in the court a quo, were burdened
to prove their claim in their complaint that Gregorio Bontuyan was
the owner of Lot No. 17150 and that they acquired the property in
good faith and for valuable consideration from him.[37] However,
the respondents failed to discharge this burden. The evidence on
record shows that Calixto Gabud sold the property to
ProtacioTabal on February 14, 1948,[38] and that the latter sold
the property to Simeon Noval on January 5, 1959.[39] Simeon
Noval then sold the property to Lourdes Leyson on May 22,
1968.[40] The respondents failed to adduce any evidence to
prove that Lourdes Leyson, or even Simeon Noval, sold the
property to Gregorio Bontuyan, or to any of the respondents for
that matter. Since Gregorio Bontuyan was not the owner of the
property, he could not have sold the same to his son
NaciansinoBontuyan and the latter’s wife, the respondents herein.
As the Latin adage goes: NEMO DAT QUOD NON HABET.
Gregorio Bontuyan could not feign ignorance of Simeon Noval’s
ownership of the property, considering that the latter was his son-
in-law, and that he (Gregorio Bontuyan) was the one who
received the owner’s copy of T.D. No. 100356 covering the
property under the name of Simeon Noval.[41] At the dorsal
portion of the said tax declaration, there was even an annotation
that the property was transferred to Simeon Noval as shown by
the deed of sale executed before Notary Public Gregorio A.
Uriarte who notarized the deed of sale over the property executed
by ProtacioTabal in favor of Simeon Noval on January 5,
1959.[42] We note that the respondents failed to adduce in
evidence any receipts of real property tax payments made on the
property under their names, which would have fortified their claim
that they were the owners of the property. We agree with the
findings of the CA, thus:
This case involves two parcels of land – Lot 17150 and Lot
13273. Lot 17150 is registered under the Torrens System under
the names of plaintiffs-appellants, while Lot 13273 remained to be
unregistered.
In this case, records show that defendant-appellee and
intervenors-appellees are the true owners of the subject lots.
They have in their favor tax receipts covering the subject lots
issued since 1945.
While, indeed, tax receipts and declarations are not
incontrovertible evidence of ownership, such, however, if
accompanied with open, adverse, continuous possession in the
concept of an owner, as in this case, constitute evidence of great
weight that person under whose name the real taxes were
declared has a claim of right over the land.
Further, defendant-appellee and intervenors-appellees presented
before the trial court the Deed of Absolute Sale dated February
14, 1948, executed by Calixto Gabud, conveying the subject lots
in favor of ProtacioTabal. The deed is a notarial document.
Likewise presented is the Deed of Absolute Sale of the subject
lots dated January 5, 1959, executed by ProtacioTabal in favor of
31
spouses Simeon Noval and VivenciaBontuyan. The document is,
likewise, a notarial document.
Defendant-appellee and intervenors-appellees also presented the
Deed of Absolute Sale of the subject lots dated May 22, 1968,
executed by spouses Simeon Noval and VivenciaBontuyan in
favor of Lourdes Leyson. The deed is a notarial document.
A notarial document is evidence of the facts in clear, unequivocal
manner therein expressed. It has in its favor the presumption of
regularity. It is admissible in evidence without necessity of
preliminary proof as to its authenticity and due execution.
There exist (sic) no trace of irregularity in the transfers of
ownership from the original owner, Calixto Gabud, to defendant-
appellee and intervenors-appellees.
Plaintiffs-appellants, on the other hand, offered no convincing
evidence as to how their predecessor-in-interest, Gregorio
Bontuyan, acquired the subject lots. Plaintiffs-appellants
presented only the Free Patent and OCT No. 0-1619, covering
Lot No. 17150, issued in the name of Gregorio Bontuyan.
As to Lot No. 13273, We find no sufficient reason why defendant-
appellee and intervenors-appellees should be disturbed in their
ownership and possession of the same.[43]
As copiously shown by the record, Gregorio Bontuyan filed his
application for a free patent with the Bureau of Lands on
December 4, 1968 in gross bad faith, thereby defrauding Lourdes
Leyson of the said property through deceit. Gregorio Bontuyan
falsely declared in the said application: (a) that he entered upon
and cultivated the property since 1918 and that the property was
not claimed or occupied by any person; and (b) that Lot No.
17150 was located in Sirao, Cebu City, when, in fact, the property
was located in Adlawon, Cebu City. Lourdes Leyson was not
notified of the said application and failed to file any opposition
thereto. Gregorio Bontuyan was then able to secure Free Patent
No. 510463 on November 19, 1971 and OCT No. 0-1619 on
March 21, 1974. It appears in the said title that the property’s
location was indicated as “Sirao, Cebu City.”[44] Indeed, the CA
declared that Gregorio Bontuyan had acquired title to the property
through fraud:
However, as to Lot No. 17150, We find that despite the fraud
committed by Gregorio Bontuyan (plaintiffs-appellants’
predecessor-in-interest) in acquiring his title over the said lot,
ownership over the said lot should be adjudged in favor of
plaintiffs-appellants.
Records, indeed, show that, at the time when Gregorio Bontuyan
applied for Free Patent, Gregorio Bontuyan was living with his
daughter, VivenciaBontuyan (defendant-appellee’s predecessor-
in-interest). Thus, Gregorio Bontuyan must have known that at
the time when he applied for free patent on December 1968, the
subject lots were already sold on May 1968 by his daughter
VivenciaBontuyan in favor of Lourdes Leyson, predecessor-in-
interest of defendants-appellees.
Moreover, records further show that Gregorio Bontuyan sold twice
Lot [No.] 17150 to plaintiffs-appellants. The first was in 1976 and
the other was in 1980. Plaintiffs-appellants offered no reasonable
explanation why Gregorio Bontuyan have (sic) to sell twice Lot
No. 17150 in favor of plaintiffs-appellants.
As found by the trial court, these are badges of bad faith which
affect the validity of the title of Gregorio Bontuyan over the subject
lots.
We are aware that the torrens system does not create or vest title.
It only confirms and records title already existing and vested. It
does not protect a usurper from the true owner. It cannot be a
shield for the commission of fraud. It does not permit one to
enrich himself at the expense of another. Where one does not
have any rightful claim over a real property, the torrens system of
registration can confirm or record nothing.[45]
The findings of the CA affirmed the findings of the trial court in its
decision, thus:
After having thoroughly analyzed the records and the evidences
adduced during the trial of this case, this Court is convinced and
sincerely believes that the lots in question were originally owned
by Calixto Gabud as evidenced by T.D. [No.] 03276R marked as

Exh. “1.” In 1945, this consisted of only one lot in Adlawon, Cebu
City, as there was no provincial road yet. However in 1948, the
said parcel of land was divided into two because a provincial road
was constructed passing through it. Hence, T.D. [No.] 03276R
and T.D. [No.] 01979-R were issued to Calixto Gabud. On
February 16, 1948, Calixto Gabud sold the said parcels of land to
spouses ProtacioTabal and Ludegaria (sic) Bontuyan as
evidenced by an Absolute Deed of Sale, Exh. “2.” On January 5,
1959, spouses ProtacioTabal and Ludegaria (sic) Bontuyan, in
turn, sold the same parcels of land to spouses Simeon Noval and
VivenciaBontuyan as evidenced by a Deed of Sale, Exh. “4.” It is
noteworthy to mention at this point in time that VivenciaBontuyan
is one of the daughters of Gregorio Bontuyan, the father of herein
plaintiff NaciansinoBontuyan. In May 1968, spouses Simeon
Noval and VivenciaBontuyan sold the subject parcels of land to
Lourdes vs. (sic) Leyson, the mother of herein defendant as
evidenced by a Deed of Sale marked as Exh. “6.” It is quite
perplexing for the court to imagine that Gregorio Bontuyan, father
of herein plaintiff, who was then residing with spouses Simeon
Noval and VivenciaBontuyan at 179 C San Jose dela Montaña,
Mabolo, Cebu City, as reflected in his application for Free Patent
(Exhs. “8” & “26”) dated December 4, 1968 was unaware of the
sale of the subject parcels of land made by his daughter
VivenciaBontuyan and spouse Simeon Noval to Lourdes Leyson.
It is evident that, after the sale from spouses Noval to Lourdes
Leyson in May 1968, Gregorio Bontuyan applied for Free Patent
for the same parcels of land in December 1968 claiming to have
cultivated the land since 1918, stating therein the location as
Sirao and not Adlawon which is the true and correct location.
Sirao and Adlawon are two different barangays which are not
even adjacent to each other. In fact, as borne out by Exh. “25,” it
is separated by Barangay Guba. In 1974, Free Patent No.
510463 and OCT# 0-1619 was issued to Gregorio Bontuyan
covering subject property, the location of which is in Barangay
Sirao in consonance to his application. Gregorio Bontuyan’s
application for Free Patent over subject parcels of land had raised
in the mind of this Court reasonable badges of bad faith on his
part as the subject parcels of land were already sold by his
daughter VivenciaBontuyan and spouse Simeon Noval to Lourdes
Leyson. Another badge of bad faith is raised in the mind of this
Court when he (Gregorio) sold the subject parcels of land twice to
his son NaciansinoBontuyan in 1976 and 1980, respectively,
wherein both Deeds of Sale were notarized by different Notary
Publics, (Exhs. “10” & “16”).[46]
Considering that Lourdes Leyson was in actual possession of the
property, the respondents cannot, likewise, claim that they were in
good faith when Gregorio Bontuyan allegedly sold the property to
them on April 28, 1980.
Anent the third and fourth assignments of error, we do not agree
with the ruling of the CA that the petitioners failed to directly
attack the validity of OCT No. 0-1619. The CA failed to consider
the fact that, in their respective answers to the complaint, the
petitioners inserted therein a counterclaim wherein they repleaded
all the material allegations in their affirmative defenses, that
Gregorio Bontuyansecured OCT No. 0-1619 through fraud and
deceit and prayed for the nullification thereof.
While Section 47 of Act No. 496 provides that a certificate of title
shall not be subject to collateral attack, the rule is that an action is
an attack on a title if its object is to nullify the same, and thus
challenge the proceeding pursuant to which the title was decreed.
The attack is considered direct when the object of an action is to
annul or set aside such proceeding, or enjoin its enforcement. On
the other hand, an attack is indirect or collateral when, in an
action to obtain a different relief, an attack on the proceeding is
nevertheless made as an incident thereof.[47] Such action to
attack a certificate of title may be an original action or a
counterclaim in which a certificate of title is assailed as void. A
counterclaim is considered a new suit in which the defendant is
the plaintiff and the plaintiff in the complaint becomes the
defendant. It stands on the same footing and is to be tested by
the same rules as if it were an independent action.[48]
Furthermore, since all the essential facts of the case for the
determination of the title’s validity are now before the Court, to
require the party to institute cancellation proceedings would be
pointlessly circuitous and against the best interest of justice.[49]
The CA, likewise, erred in holding that the action of the petitioners
to assail OCT No. 0-1619 and TCT No. 1392 and for the
reconveyance of the property covered by the said title had already
prescribed when they filed their answer to the complaint.
32
Case law has it that an action for reconveyance prescribes in ten
years, the point of reference being the date of registration of the
deed or the date of issuance of the certificate of title over the
property. In an action for reconveyance, the decree of registration
is highly regarded as incontrovertible. What is sought instead is
the transfer of the property or its title, which has been wrongfully
or erroneously registered in another person’s name, to its rightful
or legal owner, or to one who has a better right.[50]
However, in a series of cases, this Court declared that an action
for reconveyance based on fraud is imprescriptible where the
plaintiff is in possession of the property subject of the acts. In
Vda. de Cabrera v. Court of Appeals,[51] the Court held:
... [A]n action for reconveyance of a parcel of land based on
implied or constructive trust prescribes in ten years, the point of
reference being the date of registration of the deed or the date of
the issuance of the certificate of title over the property, but this
rule applies only when the plaintiff or the person enforcing the
trust is not in possession of the property, since if a person
claiming to be the owner thereof is in actual possession of the
property, as the defendants are in the instant case, the right to
seek reconveyance, which in effect seeks to quiet title to the
property, does not prescribe. The reason for this is that one who
is in actual possession of a piece of land claiming to be the owner
thereof may wait until his possession is disturbed or his title is
attacked before taking steps to vindicate his right, the reason for
the rule being, that his undisturbed possession gives him a
continuing right to seek the aid of a court of equity to ascertain
and determine the nature of the adverse claim of a third party and
its effect on his own title, which right can be claimed only by one
who is in possession.
Similarly, in the case of David v. Malay,[52] the same
pronouncement was reiterated by the Court:
... There is settled jurisprudence that one who is in actual
possession of a piece of land claiming to be owner thereof may
wait until his possession is disturbed or his title is attacked before
taking steps to vindicate his right, the reason for the rule being,
that his undisturbed possession gives him a continuing right to
seek the aid of the court of equity to ascertain and determine the
nature of the adverse claim of a third party and its effect on his
own title, which right can be claimed only by one who is in
possession. No better situation can be conceived at the moment
for Us to apply this rule on equity than that of herein petitioners
whose ... possession of the litigated property for no less than 30
years and was suddenly confronted with a claim that the land she
had been occupying and cultivating all these years, was titled in
the name of a third person. We hold that in such a situation the
right to quiet title to the property, to seek its reconveyance and
annul any certificate of title covering it, accrued only from the time
the one in possession was made aware of a claim adverse to his
own, and it is only then that the statutory period of prescription
commences to run against such possessor.
The paramount reason for this exception is based on the theory
that registration proceedings could not be used as a shield for
fraud.[53] Moreover, to hold otherwise would be to put premium
on land-grabbing and transgressing the broader principle in
human relations that no person shall unjustly enrich himself at the
expense of another.[54]
In the present case, Lourdes Leyson and, after her death, the petitioners,
had been in actual possession of the property. The petitioners were still in
possession of the property when they filed their answers to the complaint
which contained their counterclaims for the nullification of OCT No. 0-1619
and TCT No. 1392, and for the consequent reconveyance of the property to
them. The reconveyance is just and proper in order to put a stop to the
unendurable anomaly that the patentees should have a Torrens title for the
land which they and their predecessors never possessed and which has
been possessed by another in the concept of an owner.[55]
On the fifth assignment of error, we rule for the petitioners. The award of
attorney’s and appearance fees is better left to the sound discretion of the
trial court, and if such discretion is well exercised, as in this case, it will not
be disturbed on appeal.[56] With the trial and the appellate courts’ findings
that the respondents were in bad faith, there is sufficient basis to award
attorney’s and appearance fees to the petitioners. Had it not been for the
filing of a baseless suit by the respondents against the petitioners, the latter
would not have sought the services of counsel to defend their interests and
represent them in this case.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The
Decision of the Court of Appeals declaring the respondents the owners of
Lot No. 17150 covered by OCT No. 0-1619 and TCT No. 1392; and setting

aside the award of attorney’s fees in favor of the petitioners by the Regional
Trial Court are REVERSED AND SET ASIDE.
The Court hereby AFFIRMS the ownership of the petitioners of Lot No.
17150. OCT No. 0-1619 and TCT No. 1392 covering the said lot are
hereby nullified. The Register of Deeds is ORDERED to cancel TCT No.
1392 and to issue another title over the property in favor of the petitioners
as co-owners thereof. The trial court’s award of P50,000.00 for attorney’s
fees to the petitioners is AFFIRMED. No pronouncement as to costs.
SO ORDERED.
BORBAJO vs. HIDDEN VIEW HOMEOWNERS, INC.
G.R. No. 152440 | 2005-01-31
TINGA, J.:
Before this Court is a Rule 45 petition assailing the Decision[1]
dated 21 September 2001 of the Court of Appeals which reversed
the Decision[2] dated 14 September 1999 of the Regional Trial
Court (RTC) of Cebu City, Branch 58.
The factual antecedents are as follows:
Jose C. Bontuyan (Bontuyan), Lucy Solon, Georgina Solon, Helen
Solon and Vicente Solon, Jr. (the Solons) were the registered
owners of a parcel of agricultural land (Lot 10183-A), covering an
area of 13,910 square meters situated at Barangay Bacayan,
Cebu City as evidenced by Transfer Certificate of Title (TCT) No.
73709 of the Register of Deeds of Cebu City.[3] At the instance of
Bontuyan, the property was surveyed on 19 May 1991 to convert
it into a subdivision. On 6 June 1991, the corresponding
subdivision plan, showing three (3) road lots as such, was
submitted to the Cebu Office of the Department of Environment
and Natural Resources (DENR). On 24 July 1991, the Regional
Technical Director of the DENR, Lands Management Sector,
Region Office VII, in Cebu, approved the subdivision plan.[4]
Meanwhile, in his own behalf and as attorney-in-fact of the Solons
and following the subdivision scheme in the plan, Bontuyan sold
the resulting lots to different individuals,[5] as evidenced by the
Deed of Absolute Sale[6] dated 18 June 1991.
Among the lots sold are the ones which later became the subject
of this case, the three (3) road lots. The road lots were sold to
petitioner Felicitacion B. Borbajo, married to Danilo S. Borbajo,
and Prescillana B. Bongo (Bongo), married to Patricio P.
Bongo.[7] However, they obtained the titles to the lots more than
a month later on 30 July 1991.[8]
Using the advance payments of his lot purchasers, Bontuyan
proceeded to develop a subdivision which was later named
Hidden View Subdivision I by its residents and homeowners.[9]
Later, he applied for and secured from the Housing and Land Use
Regulatory Board (HLURB) a License to Sell[10] dated 29 July
1991.
Borbajo also decided to develop into a subdivision the other
properties adjacent to Hidden View Subdivision I which she
acquired. Thus, she applied for and received SSA 674-5-94
issued by the Cebu City Planning and Development Department,
covering the parcel of land embraced by TCT No. 127642, to be
subdivided into twenty-three (23) lots.[11] She named this new
subdivision ST Ville Properties. On 29 July 1994, she secured
Certificate of Registration No. 05005 for the ST Ville Properties
project and a License to Sell the same from the HLURB. She also
secured a Certificate of Registration dated 18 August 1994 for
another subdivision project called Hidden View Subdivision II from
the HLURB, with the corresponding License to Sell issued on 16
August 1994. The two new subdivision projects were located at
the back of Hidden View Subdivision I.
The residents and homeowners of Hidden View Subdivision I
heard reports to the effect that Borbajo had purchased the entire
subdivision from Bontuyan through an oral agreement. They also
heard that they have no right to use the road lots, since the lots
have already been registered in Borbajo’s name. As a
consequence, the Hidden View Homeowners, Inc. invited Borbajo
to a meeting. When confronted by the homeowners about her
claim that she had bought the subdivision from Bontuyan, Borbajo
confirmed her claim of ownership over the subdivision and the
road lots. She also told them that they have “no right regarding
the road right-of-way.”[12]
The incident prompted the homeowners of Hidden View
Subdivision I to inquire with the HLURB about the validity of the
registration of the subdivision road lots in the name of Borbajo.
33
They also asked whether she had the necessary documents for
the development of Hidden View Subdivision II and ST Ville
Properties. In a letter[13] dated 17 March 1997, HLURB Regional
Officer Antonio Decatoria, Sr. replied that under the law the owner
or developer of the subdivision should have legal title or right over
the road lots of the subdivision and that if the title or right is in the
name of other persons it follows that there is failure to comply with
the requirements of the law. The HLURB Officer pointed out that
Hidden View Subdivision II and ST Ville Properties had not filed
an application for registration and license to sell with the
HLURB.[14]
On 10 August 1997, the homeowners caused the construction of
a guardhouse at the entrance of Hidden View Subdivision I and
hired the services of a security guard to prevent unauthorized
persons and construction vehicles from passing through their
subdivision. The measures adversely affected the residents of the
subdivisions at the back, as well as Borbajo herself since her
delivery trucks and heavy equipment used in the construction of
her housing projects then on-going had been effectively
prevented from passing through the road lots.[15]
On 28 August 1997, Borbajo filed before the RTC of Cebu City,
Branch 58, an action for damages and injunction against Hidden
View Homeowners, Inc., spouses Marcelina A. Sarcon and Ely D.
Sarcon, Roberto Alvarez and Corazon Nombrado and Gilbert
Andrales (respondents herein). Borbajo prayed for the issuance of
a temporary restraining order (TRO) directing respondents to
maintain the status quo and to desist from preventing her delivery
trucks and other construction vehicles, and her construction
workers, from passing through the road lots, and, after hearing on
the merits, that judgment be rendered making the restraining
order or preliminary injunction permanent and ordering the
defendants to pay damages.[16]
The trial court issued a TRO effective for seventy-two (72) hours.
After due hearing, it also granted Borbajo’s application for a writ of
preliminary injunction. It denied respondents’ motion to dismiss on
the ground that it is the HLURB which has jurisdiction over the
case.[17]
After trial, the trial court rendered its decision dated 14 September
1999, the dispositive portion of which reads:
“WHEREFORE, premises considered, judgment is hereby
rendered enjoining the defendants to close [sic] the road lots in
question, hence, making the injunction permanent, subject to the
right of the defendants to regulate the passage thereof by the
plaintiff and the general public; and directing the plaintiff to donate
the road lots in question to the government of Cebu City. No
pronouncement as to any damages and as to costs.
SO ORDERED.”[18]
On appeal, the Court of Appeals reversed the lower court
decision. The decretal portion of the appellate court’s decision
dated 21 September 2001 reads:
WHEREFORE, premises considered, the present appeal is
hereby GRANTED. The appealed Decision in Civil Case No.
CEB-20796 is hereby REVERSED and SET ASIDE and a new
one is hereby rendered DISMISSING the complaint. The
counterclaim of defendants-appellants is likewise dismissed for
lack of legal and factual bases.
No pronouncement as to costs.
SO ORDERED.”[19]
Undaunted, Borbajo elevated the case to this Court.
In her petition, Borbajo imputes error to the appellate court (a) in
reversing the decision of the trial court which declared her to be
the developer of Hidden View Subdivision I, (b) in finding that she
had fraudulently secured the registration of the three (3) road lots,
and (c) in declaring that she is not entitled to the injunctive
relief.[20]
Borbajo contends that the appellate court erred in reversing the
finding of the RTC that she is the developer of Hidden View
Subdivision I. According to her, and as borne out by her testimony
before the RTC, she was the true developer of Hidden View
Subdivision I even though the License to Sell was issued in the
name of Bontuyan. The appellate court allegedly violated prevailing
 34

jurisprudence when it held that she fraudulently secured the As a registered co-owner of the road lots, Borbajo is entitled to avail of all
registration of the three (3) road lots since a certificate of title the attributes of ownership under the Civil Code–jus utendi, fruendi,
cannot be collaterally attacked except in direct proceedings abutendi, disponendi et vindicandi.[32] Article 428 of the New Civil Code is
explicit that the owner has the right to enjoy and dispose of a thing, without
instituted for that purpose. In fact, Hidden View Homeowners, Inc.
other limitations than those established by law. A co-owner, such as
has filed a separate case for annulment of title against Borbajo Borbajo, is entitled to use the property owned in common under Article 486
which is now pending before Branch 9 of the RTC of Cebu City. of the Civil Code. Therefore, respondents cannot close the road lots to
Further, she claims that she is entitled to the injunctive relief prevent Borbajo from using the same.
considering that she is the registered owner of these road lots in
question and, hence, she has a right in esse which deserves legal The Court of Appeals ruled that the road lots cannot be sold to any person
protection.[21] pursuant to P.D. No. 957, as amended. It also pointed out that fraud is
manifest in the acquisition of titles thereto. However, it is a settled rule that
a Torrens title cannot be collaterally attacked.
On the other hand, respondents argue that the sale of the road
lots made by Bontuyan in favor of Borbajo was illegal and It is a well-known doctrine that the issue as to whether title was procured by
contrary to the provisions of Presidential Decree (P.D.) No. 957 falsification or fraud can only be raised in an action expressly instituted for
which requires that the road lots in a subdivision development the purpose. A Torrens title can be attacked only for fraud, within one year
shall be in the name of the developer or owner, of which Borbajo after the date of the issuance of the decree of registration. Such attack
is neither.[22] They aver that Borbajo fraudulently obtained her must be direct, and not by a collateral proceeding. The title represented by
the certificate cannot be changed, altered, modified, enlarged, or
titles to the road lots through a falsified deed of sale which was
diminished in a collateral proceeding.[33] The certificate of title serves as
the document presented to the Office of the Register of evidence of an indefeasible title to the property in favor of the person
Deeds.[23] They also point out that the use by Borbajo of the road whose name appears therein.[34]
lots for the ingress and egress of heavy equipment has
continuously resulted in the rapid deterioration of the roads. However, in upholding the efficiency value of the disputed titles for
Moreover, the road lots are not the nearest point between the purposes of the present petition, we are not foreclosing any future
development project of Borbajo and the provincial road.[24] determination by appropriate forum on the legality of Borbajo’s titles over
the road lots. Verily, a separate case for annulment of titles over the road
Finally, they assert that they are merely exercising acts of
lots is now pending before the court. There are serious allegations that the
ownership which include the right to prevent others from enjoying issuance of the TCTs over the road lots was tainted with fraud as
the thing owned by them. Respondents oppose the issuance of a evidenced by alterations made on the face of the certificates and
preliminary injunction because notwithstanding the registration of discrepancies in the records of the contract of absolute sale filed before the
the subject road in Borbajo’s name, her title thereto is tainted by Office of the Register of Deeds and the Notarial Division of the RTC of
the discovery of fraud she allegedly perpetrated in securing the Cebu City.[35] If the court finds that the titles of Borbajo were obtained
questioned titles.[25] fraudulently, her right to the road lots ceases as well as her right-of-way by
virtue of said titles.
The result which Borbajo seeks to achieve which is to reinstate the
In the meantime, however, we are bound by the value in law and the
preliminary injunction issued by the lower court has to be granted, but not
evidentiary weight of the titles in the name of Borbajo. As long as the titles
for the reasons which she has raised nor for the grounds which the lower
are not annulled, Borbajo remains registered a co-owner and therefore her
court relied upon.
right to use the road lots subsists.
The ultimate question for resolution is whether respondents may legally
Likewise, with Borbajo as a registered co-owner of the road lots, it is utterly
prevent Borbajo from using and passing through the three (3) road lots
pointless to discuss whether she is entitled to the easement of right of way.
within Hidden View Subdivision I. It is worthy of note that the right of
Both from the text of Article 649[36] of the Civil Code and the perspective of
respondents to use the road lots themselves is not in dispute.
elementary common sense, the dominant estate cannot be the servient
estate at the same time. One of the characteristics of an easement is that it
In resolving the controversy, the lower court addressed only the issue of
can be imposed only on the property of another, never on one’s own
whether respondents have the right to close the road lots, and the question
property. An easement can exist only when the servient and the dominant
of damages.[26] It concluded that respondents cannot legally close the
estates belong to different owners.[37]
road lots because these are intended for public use. It opted not to resolve
the question pertaining to the validity of Borbajo’s acquisition of the road
Borbajo, being a registered co-owner of the three (3) road lots, is entitled to
lots and her title thereto on the ground that a Torrens title cannot be
the injunctive relief.
collaterally attacked.[27]
The requisites to justify an injunctive relief are: (a) the existence of a right in
For its part, the Court of Appeals addressed the trial court’s errors assigned
esse or the existence of a right to be protected; and (b) the act against
by the respondents herein. The trial court allegedly erred in: (a) finding that
which injunction is to be directed as a violation of such right.[38] A
Borbajo was the developer of Hidden View Subdivision I; (b) finding that the
preliminary injunction order may be granted only when the application for
manner by which Borbajo acquired the road lots is irrelevant to the
the issuance of the same shows facts entitling the applicant to the relief
resolution of the issues in this case; (c) finding that the road lots are open
demanded.[39] A preliminary injunction is not proper when its purpose is to
to the public and the only right of the residents therein is to regulate its use;
take the property out of the possession or control of one party and transfer
(d) not finding that the elements of an easement of a right-of-way are not
the same to the hands of another who did not have such control at the
present; (e) finding that the injunction was properly issued and the court
inception of the case and whose legal title has not clearly been
ordered Borbajo to donate the road lots in favor of the local government
established.[40]
unit; and (f) failing to award damages to the respondents.[28]
One final note. Respondents in their Answer[41] neither claimed nor asked
The appellate court found that the injunctive writ was erroneously issued as
for the right to regulate the use of the road lots or that the road lots be
the same was not based on an actual right sought to be protected by law.
donated to the Cebu City Government. Thus, there was utterly no basis for
The fact that Borbajo was the developer of Hidden View Subdivision I was
the trial court to include as it did its disposition along these lines in the
not clearly established by evidence. Although Borbajo has claimed that she
decretal portion of its decision.
was the developer of the subdivision and that Bontuyan’s name was
indicated in the License to Sell, such claim carried scant weight in the
WHEREFORE, the Decision of the Court of Appeals dated 21 September
absence of a certificate of registration of the subdivision project issued in
2001 is REVERSED and SET ASIDE and the writ of preliminary injunction
her name by the HLURB and other documents which prove that she was
issued by the Regional Trial Court of Cebu City, Branch 58, is made
indeed the developer.[29] Further, the appellate court ruled that the fact of
permanent, subject to the final outcome of Civil Case No. 21239 pending
registration of the road lots in Borbajo’s name was insufficient to defeat the
before the Regional Trial Court of Cebu City, Branch 9.
right of the homeowners of the subdivision and preclude them from
regulating their use and administration thereof in accordance with existing
No costs.
laws and regulations.[30] It likewise held that Borbajo had not complied
with the requisites of a compulsory easement of right-of-way and pointed
SO ORDERED.
out the general rule that mere convenience for the dominant estate is not
what is required by law as the basis for setting up a compulsory
easement.[31] Hence, this instant judicial recourse.

Noticeably, the appellate court dwelt at length on the question of whether

Borbajo was the developer of the Hidden View Subdivision I as she
claimed. Apparently, Borbajo submitted this point, with her focus set on the
provisions of P.D. No. 957, as amended, ordaining that road lots may be
titled only in the name of the owner of the subdivision or its developer. In
the process, however, the Court of Appeals lost sight of the settled and
decisive fact that Borbajo is one of the registered co-owners of the road lots
along with Bongo. The evidence reveals that Borbajo and Bongo were
issued TCTs, all dated 30 July 1991, for the three (3) road lots situated
within the Hidden View Subdivision I. These titles were issued pursuant to
the Deed of Absolute Sale dated 18 June 1991 which also mentioned the
road lots as such.
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