1. SAN ROQUE REALTY DEVELOPMENT CORP V.
REPUBLIC Plaintiff alleged that the Republic of the Philippines is the absolute owner of Lot No. 933 of Cebu
THIRD DIVISION
G.R. No. 163130 September 7, 2007
SAN ROQUE REALTY AND DEVELOPMENT CORPORATION, petitioner,
vs.
REPUBLIC OF THE PHILIPPINES (through the Armed Forces of the Philippines), respondent.
DECISION
NACHURA, J.:
This is a petition for review on certiorari of a Decision1 of the Court of Appeals (CA) in CA-G.R. CV. No.
61758 ordering the cancellation of petitioner San Roque Realty Development Corporation's (SRRDC's)
Transfer Certificates of Title (TCT) Nos. 128197 and 128198, thereby reversing the Decision2 of the Regional
Trial Court (RTC) of Cebu City, Branch 12, in Civil Case No. CEB-1843.
The facts, as found by the CA, are as follows:
The subject parcels of land are located at Lahug, Cebu City and were part of Lot No. 933. Lot No.
933 was covered by Transfer Certificate of Title No. 11946. It was originally owned by Ismael D.
Rosales, Pantaleon Cabrera and Francisco Racaza. On 5 September 1938, subject parcels of land,
together with seventeen (17) others, were the subject of an expropriation proceeding initiated by
the then Commonwealth of the Philippines docketed as Civil Case No. 781. On 19 October 1938,
Judge Felix Martinez ordered the initial deposit of P9,500.00 as pre-condition for the entry on the
lands sought to be expropriated. On 14 May 1940, a Decision was rendered (Exhibit "D," Records,
pp. 204-214) condemning the parcels of land. However, the title of the subject parcel of land was
not transferred to the government.
Eventually, the land was subdivided and T.C.T. No. 11946 was cancelled and new titles were issued
by the Register of Deeds of Cebu. Two parcels covered by T.C.T. Nos. 128197 (Lot No. 933-B-3) and
128198 (Lot No. 933-B-4) were acquired by defendant-appellee. In 1995, defendant-appellee begun
construction of townhouses on the subject parcels of land.
On 22 February 1996, plaintiff-appellant filed the present case (Records, pp. 1-15) alleging that it is
the owner of the subject parcels of land by virtue of the 1938 Decision in the expropriation case,
thus, T.C.T. Nos. 128197 and 128198 are null and void. It argued that defendant-appellee, had no
right to possess the subject properties because it was not its lawful owner.
In its Answer (Records, pp. 28-38), defendant-appellee claimed that it was a buyer in good faith. It
also claimed that there was no valid expropriation because it was initiated by the executive branch
without legislative approval. It also alleged that the expropriation was never consummated because
the government did not actually enter the land nor were the owners paid any compensation.3
The appellate court then quotes, verbatim, the evidence and positions of the parties, as found by the trial
court, viz.:
Cadastre (covered by Transfer Certificate of Title 11946), a part and parcel of the Camp Lapu-lapu
military reservation; that said parcel of land was originally private property registered in the names
of Francisco Racaza, Pantaleon Cabrera and Josefina Martinez; that on October 19, 1938, plaintiff
(then Commonwealth now Republic of the Philippines) instituted condemnation proceeding against
the owners of eighteen (18) parcels of land including Lot 933 in Banilad Estate Lahug (Exhibits "A"
and "A-1") before the Court of First Instance of the Province of Cebu, 8th Judicial District, that the
purpose of expropriation was to carry out the development program of the Philippine Army as
provided in the National Defense Act, i.e., military reservation; that sometime in October 1938,
Judge Felix Martinez ordered plaintiff to make an initial deposit of P9,500.00 with any depository of
the latter payable to the Provincial Treasurer as pre-condition for the entry on the lands sought to
be expropriated (Exhibit "B"); that, accordingly, plaintiff deposited said amount with the Philippine
National Bank to the credit of the Provincial Treasurer (Exhibit "C"); that said amount was
subsequently disbursed in full but due to the destruction of the vouchers, journal and cash book in
the Office of the Provincial Treasurer during the last World War, the names of the payees could not
reasonably be ascertained (Exhibit "P"); that on May 14, 1940, Judge Martinez issued a Decision
condemning the properties in favor of plaintiffs and, at the same time, fixing the just compensation
thereof (Exhibits "D" and "E"); that defendant San Roque’s predecessors namely Ismael D. Rosales,
Pantaleon Cabrera and Francisco Racaza interposed and (sic) Exception and Notice of Intention to
Appeal and filed their corresponding appeal bond (Exhibits "N" & "O"); that naturally, the filing held
temporarily in abeyance the finality of the Decision and prevented plaintiff from recording the
Decision with the Register of Deeds; that plaintiffs, nonetheless, started using the expropriated
properties including Lot 933, devoting the properties to military use; that to show use of subject
properties, plaintiff submitted (1) the historical account of the National Historical Commission
embodied in a metal marker located in Lot 932 adjacent to Lot 933 (TSN, January 21, 1997, pp. 6-7;
9; Exhibits "I," "I-1," "I-2;" (2) the testimonial accounts of Sgt. Suralta, Barangay Captain Rosales,
Lt. Colonel Infante and Col. Reynaldo Correa; and, (3) the remnant of the Lahug Airport, particularly
its runway (originally devoted exclusively for military airport and landing field as can be gleaned
from Executive Orders 73, 75 and 154 dated December 3, 1936, August 12, 1947 and June 24,
1938, respectively) situated on Lot 933 itself; that survey maps of defendant and plaintiff have
shown the exact location of the runway; that Lot 933 was devoted to military use by plaintiff not
only for building structures but also military training of the Riverine Battalion (Lot 932, as per
testimony of M/Sgt. Renato Suralta); that these training continued up to the present (TSN, January
27, 1997, pp. 4-8); that the area where Park Vista is being built was used as training ground (TSN,
April 3, 1997, p. 2). Plaintiff further alleged that defendant San Roque secured Certificates of Title in
its favor to the prejudice of plaintiff specifically TCT Nos. 128197 and 128198 covering Lot No. 933-
B-3 of the subdivision plan Psd-114779 and Lot 933-B-4 of the subdivision plan Psd-27-023209,
respectively; that subject parcels of land belong to plaintiff and registration thereof in the name of
defendant San Roque is null and void. Consequently, defendant San Roque’s possession and
ownership over the subject property are without legal basis.
On the other hand, defendant San Roque alleged that subject parcels of land have been covered by
the Torrens System for decades and any transactions involving the same including the alleged
expropriation should have been registered and annotated on the Transfer Certificates of Title; that
there has been no registration much less annotation of said expropriation on TCTs issued to
defendant San Roque nor any [of] its predecessors-in-interest. (Exhibits "20" to "24," "25," "25-A" to
"25-C," Exhibits "2," "2-A" to "2-C," "3," "3-A" and "3-B"); that plaintiff never secured a title in its
name, never actually took possession of subject parcels of land from the date of the Decision in Civil
Case No. 781 up to the present; that despite the fact that defendant San Roque’s Park Vista Project
is within viewing and walking distance from Camp Lapu-lapu, it was able to introduce substantial
improvements (Exhibits "36," "36-A" to "36-Q") with no action being taken by plaintiff; that there
 are other developments on Lot 933 such as the Cebu Civic and Trade Center which include areas
within the military camp as well (Exhibits "36-R" to "36-V," "38," "38-A" to "38-R"); that plaintiff’s
only proof of its claim is the Camp Lapu-lapu Development Plan (Exhibit "F") which is a private
survey of plaintiff; that plaintiff knew and was fully aware of all transactions involving Lot No. 933
up to this date; that defendant San Roque is an innocent purchaser for value and, therefore, entitled
to the protection of the law as it has every right to rely on the correctness of the certificates of title
issued therefor; that defendant San Roque and its predecessors-in-interest have been in open,
notorious and continuous possession and enjoyment of subject property(ies) since 1930; that there
is a presumption of regularity in the issuance of subject TCT Nos. 128197 and 128198 by defendant
Register of Deeds; that the alleged Camp Lapu-lapu Development Plan, in the absence of any
Transfer Certificate of Title in plaintiff’s name, cannot prevail over defendant San Roque’s Transfer
Certificate of Title; that defendant San Roque’s (sic) commenced development of subject parcels of
land as early as 1993 and started construction in April 1994 upon issuance of titles in its name, two
and a half years prior to institution of the instant case; that it has been paying real taxes since the
acquisition of subject properties (Exhibits "4," "4-A" and "4-B," "5," "5-A" and "5-B," "26" to "35");
that all requirements for such development, such as securing permits and licenses from government
agencies were complied with (Exhibits "9" to "18-C"); that it was only on 24 July 1995 that plaintiff
initiated steps to recover possession starting with the letter dated 24 July 1995 (Exhibit "1," "6," "7"
and "8") and even addressed to a wrong entity; that it took plaintiff fifty-six (56) years (counted
from the Decision dated 14 May 1940) to take action to secure its "claimed" ownership and
possession; that private ownership of portions of Lot 933 have been affirmed by the appellate court
by ordering the City Government of Cebu to pay the private landowner for the portion used for the
expansion of Geongson Road in the case of Perpetua Magno, et al. versus City of Cebu, CA-G.R. No.
40604-CV (Exhibits "51" to "55," "55-A" to "55-C"); that in fact, the plaintiff paid rental for another
allegedly expropriated property in the case of another expropriated Lot 934 subject of the case of
Segura v. CAA, et al., CA-G.R. No. 12728-CV (Exh. "56," "56-A" to "56-B"); that the alleged
expropriation of Lot 933 was never consummated as plaintiff never entered, much less take
possession, of subject parcels of land and ever paid any compensation to the original owners despite
its being a requisite for valid exercise of the power of eminent domain; that there is nother (sic) on
record which will show that compensation for the expropriated lots was ever paid to, much less
received by the landowners/predecessors-in-interest of defendant San Roque; that plaintiff
abandoned the public use, much less did it do so within a reasonable time, the Lahug Airport had
long transferred to Mactan and the areas said airport used to occupy are now being developed by or
on long term lease to private entities; that alleged initial deposit of P9,500.00 payable to Provincial
Treasurer does not specify for which property the same was intended for; that if indeed plaintiff
actually entered subject property and introduced improvements thereon it would not have been
possible for defendant San Roque or its predecessors-in-interest to have actually possessed and
enjoyed the property from 1938 up to the present to the exclusion of plaintiff; that the expropriation
requires legislative action and thus the alleged expropriation of Lot 933 is null and void; that City
Ordinances have classified Lot 933 and neighboring lots initially as residential and presently as
commercial (Exhibits "39," "40," "41"); and, finally that the AFP-Viscom is not the proper party to
initiate much less institute suit even assuming the alleged expropriation is valid as the expropriated
lots were placed under the control and supervision of the Civil Aeronautics Board.4
On August 25, 1998, the RTC rendered a Decision5 dismissing the Republic's complaint and upholding
SRRDC's ownership over the subject properties as supported by SRRDC's actual possession thereof and its
unqualified title thereto. The RTC ruled that SRRDC's ownership is borne out by the original owner's title to
Lot No. 933 and the subsequent transferees’ respective titles all of which bore no annotation of the fact of
expropriation and did not indicate the Republic's favorable lien. It also found that there was no valid
expropriation since the records are bereft of a showing that consideration was paid for the subject
properties.6
Aggrieved, the Republic appealed the decision to the CA insisting on its absolute ownership over the subject
properties grounded on the following: (1) the CFI Decision in the expropriation case, Civil Case No. 781; (2)
the ruling of this Court in Valdehueza v. Republic;7 and (3) the expropriated properties, including Lot No.
933, are devoted to public use.
The CA reversed the RTC Decision on the finding that the appeal from the CFI Decision in the expropriation
case was never perfected by the original owners of the subject properties,8 and thus, the expropriation of
Lot No. 933 became final and binding on the original owners, and SRRDC, which merely stepped into the
latter's shoes, is similarly bound.9 The CA further held that laches and estoppel cannot work against the
Republic despite its failure from 1940 to register Lot No. 933 in its name, or to record the decree of
expropriation on the title.10 Accordingly, the CA found no necessity to rule on the applicability of Valdehueza
v. Republic in the case.11
Hence, the instant petition.
In this appeal, SRRDC assigned the following errors:
I.
THE COURT OF APPEALS ERRED IN HOLDING THAT THE VALIDITY OF THE EXPROPRIATION
PROCEEDINGS IN CIVIL CASE NO. 781 MAY NO LONGER BE QUESTIONED. RESPONDENT'S OWN
(REBUTTAL) EVIDENCE SHOWS THAT THE DECISION IN CIVIL CASE NO. 781 IS NOT YET FINAL.
FURTHERMORE, THE CONDUCT OF EXPROPRIATION PROCEEDINGS ALONE DOES NOT CONFER
TITLE UPON RESPONDENT.
II.
THE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT HAD A BETTER RIGHT TO THE
SUBJECT PROPERTIES. THE SUBJECT PROPERTIES BEING UNDER THE TORRENS SYSTEM,
PETITIONER'S RIGHT AS THE REGISTERED OWNER FAR OUTWEIGHS RESPONDENT'S. ASIDE
FROM THE FACT THAT ITS CLAIM IS OF DOUBTFUL VALIDITY, RESPONDENT, FOR SEVERAL
DECADES, FAILED TO REGISTER ITS INTEREST, IF ANY, OVER THE SUBJECT PROPERTIES.
III.
THE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT IS NOT GUILTY OF LACHES
DESPITE THE FACT THAT IT FAILED TO ASSERT ITS RIGHT, IF ANY, OVER THE SUBJECT
PROPERTIES FOR 56 LONG YEARS.
IV.
THE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER IS NOT A BUYER IN GOOD
FAITH.12
At the outset, we note that issues of ownership and possession of several lots included in the 18 parcels of
land covering the Banilad Friar Lands Estate had been the subject of earlier controversies which we already
had occasion to rule upon. Lot Nos. 932 and 939 were the subject of Valdehueza v. Republic13 which is
ubiquitously invoked by the Republic in this case. Republic v. Lim14 dealt with the special circumstances
surrounding the incomplete and ineffectual expropriation of Lot No. 932. On the other hand, Federated
Realty Corporation v. Court of Appeals15 preliminarily determined the state of ownership and possession of a
portion of Lot No. 933, particularly Lot 3, covered by TCT No. 119929.
In Valdehueza, we held that the registered lot owners were not entitled to recover possession of the
expropriated lots considering that the titles contained annotations of the right of the National Airports
Corporation (now CAA) to pay for and acquire said lots.16
In Republic v. Lim,17 we rejected the Republic’s invocation of our Decision in Valdehueza to retain ownership
over said lots, and upheld the principle that title to the expropriated property shall pass from the owner to
the expropriator only upon full payment of just compensation.18 We struck down the Republic’s claim of
ownership over Lot No. 932 in light of its blatant disregard of the explicit order in Valdehueza to effect
payment of just compensation.
19
In Federated Realty Corporation v. Court of Appeals we upheld Federated Realty Corporation’s (FRC’s)
clear and unmistakable right, as the title holder, to the lot in question, necessitating the issuance of a writ of
injunction to prevent serious damage to its interests.20 Even as the Republic invoked Valdehueza and the
CFI Decision in Civil Case No. 781 to defeat the rights of the registered owner and actual possessor, we
applied the settled principle in land registration that a certificate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of the person named therein.21
It is against this backdrop that we resolve the main issue at bench: the ownership of Lot Nos. 933-B-3 and
933-B-4. To do so, however, we must answer a number of fundamental questions.
First, was there a valid and complete expropriation of the 18 parcels of land, inclusive of subject Lot No.
933? Corollary thereto, did the CFI Decision in Civil Case No. 781 attain finality and, as such, now evade
review?
To these questions, the CA responded in the affirmative. It found that no timely appeal had been filed by
the original owners of Lot No. 933, and thus, the CFI Decision became final. Accordingly, the CA ruled that
the validity of the expropriation, including the authority to expropriate, was no longer open to question.
Therefore, the appellate court saw no necessity to delve into the applicability of Valdehueza.
We cannot subscribe to the CA’s ruling.
In its effort to simplify the issues, the CA disregarded relevant facts and ignored the evidence, noteworthy
among which is that when the Republic filed its complaint with the RTC, it alleged that the CFI Decision in
Civil Case No. 781 had long become final and executory. However, this assertion would compound the
Republic’s predicament, because the Republic could not adequately explain its failure to register its
ownership over the subject property or, at least, annotate its lien on the title. Trying to extricate itself from
this quandary, the Republic belatedly presented a copy of an Exception and Notice of Intention to Appeal
dated July 9, 1940, to show that an appeal filed by the original owners of Lot No. 933 effectively prevented
the Republic from registering its title, or even only annotating its lien, over the property.
The CA’s categorical pronouncement that the CFI Decision had become final as no appeal was perfected by
SRRDC’s predecessor-in-interest is, therefore, contradicted by the Republic’s own allegation that an appeal
had been filed by the original owners of Lot No. 933. Not only did the CA fail to resolve the issue of the
Republic’s failure to register the property in its name, it also did not give any explanation as to why title and
continuous possession of the property remained with SRRDC and its predecessors-in-interest for fifty-six
years. The CA ruling that disregards these established facts and neglects to reconcile the contradiction
mentioned above does not deserve concurrence by this Court.
Furthermore, as correctly pointed out by SRRDC, even if the appellate court adverted to our finding
in Valdehueza on the finality of the expropriation over the lots subject of that case, still, SRRDC and its
predecessors-in-interest would not be bound. The reference to the finality of the CFI Decision in Civil Case
No. 781 in Valdehueza applies to different parties and separate parcels of land. We confirmed this
in Federated Realty Corporation v. CA,22 and noted that our decision in Valdehueza and in Republic v.
Lim23 did not involve the ownership of Lot No. 933 which was not subject of those cases.
Second, assuming that the CFI Decision in Civil Case No. 781 is final and executory, and that the
expropriation proceedings before that court had been completed, did the Republic pay just compensation
for Lot No. 933?
Regrettably, the CA did not dispose of this issue.
The Republic submits that the P9,500.00 initial deposit it made was disbursed in full to the owners of the 18
lots subject of expropriation, and assumes that the owners of Lot No. 933 were among the recipients of
such disbursement. The Republic admits that records of payment were destroyed by fire during World War
II, and it cannot be ascertained who received the money. It would rely simply on the presumption that
official duty had been regularly performed in assuming that the owners of the 18 lots expropriated were
adequately paid.
We are not convinced.
The Republic’s bare contention and assumption cannot defeat SRRDC’s apparent ownership over the subject
properties. As we have previously found in Valdehueza, Republic v. Lim24 and Federated Realty Corporation
v. CA,25 by the very admission of the Republic, there was no record of payment of compensation to the land
owners.
In Republic v. Lim,26 we emphasized that no piece of land can be finally and irrevocably taken from an
unwilling owner until compensation is paid.27 Without full payment of just compensation, there can be no
transfer of title from the landowner to the expropriator.28 Thus, we ruled that the Republic’s failure to pay
just compensation precluded the perfection of its title over Lot No. 932.29 In fact, we went even further and
recognized the right of the unpaid owner to recover the property if within five years from the decision of the
expropriation court the expropriator fails to effect payment of just compensation.
Time and again, we have declared that eminent domain cases are to be strictly construed against the
expropriator.30 The payment of just compensation for private property taken for public use is an
indispensable requisite for the exercise of the State’s sovereign power of eminent domain. Failure to
observe this requirement renders the taking ineffectual, notwithstanding the avowed public purpose. To
disregard this limitation on the exercise of governmental power to expropriate is to ride roughshod over
private rights.
From the records of this case and our previous findings in the related cases, the Republic manifestly failed
to present clear and convincing evidence of full payment of just compensation and receipt thereof by the
property owners.31 Notably, the CFI Decision in Civil Case No. 781 makes no mention of the initial deposit
allegedly made by the Republic.32 Furthermore, based on the CFI Decision fixing the amount of just
compensation for some of the lots, the initial deposit, if it was indeed disbursed, would still not adequately
recompense all the owners of the 18 expropriated lots.33 More importantly, if the Republic had actually
made full payment of just compensation, in the ordinary course of things, it would have led to the
cancellation of title, or at least, the annotation of the lien in favor of the government on the certificate of
title covering Lot No. 933.34
In Federated Realty Corporation v. CA,35 we expounded on the registration requirement in expropriation
proceedings as provided in the law in force at the time of the CFI Decision, thus:
The registration with the Registry of Deeds of the Republic’s interest arising from the exercise of its
power of eminent domain is in consonance with Section 88 of Act No. 496 or the Land Registration
Act (now Section 85 of P.D. 1529 also known as the Property Registration Decree), to wit:
SEC. 88. Whenever any land of a registered owner, or any right or interest therein, is taken
by eminent domain, the Government or municipality or corporation or other authority
exercising such right shall file for registration in the proper province a description of the
registered land so taken, giving the name of such owner thereof, referring by number and
place of registration in the registration book to each certificate of title, and stating what
amount or interest in the land is taken, and for what purpose. A memorandum of the right
or interest taken, shall be made on each certificate of title by the register of deeds, and
where the fee simple is taken a new certificate shall be entered to the owner for the land
remaining to him after such taking, and a new certificate shall be entered to the
Government, municipality, corporation, or other authority exercising such right for the land
so taken. All fees on account of any memorandum of registration or entry of new certificate
shall be paid by the authority taking the land.
Furthermore, Section 251 of the Code of Civil Procedure, the law in force at the time of
the Commonwealth case likewise provides for the recording of the judgment of expropriation in the
Registry of Deeds. Said provision reads, to wit:
SEC. 251. Final Judgment, Its Record and Effect. – The record of the final judgment in such
action shall state definitely by metes and bounds and adequate description. The particular
land or interest in land condemned to the public use, and the nature of the public use. A
certified copy of the record of judgment shall be recorded in the office of the
registrar of deeds for the province in which the estate is situated, and its effect
shall be to vest in the plaintiff for the public use stated the land and estate so
described. (Emphasis supplied)
There is no showing that the Republic complied with the aforestated registration requirement.
Without such compliance, it cannot be said that FRC had notice of the Republic’s adverse claim
sufficient to consider the former in bad faith, for the law gives the public the right to rely on the face
of the Torrens title and to dispense with the need of further inquiry, except only when one has
actual knowledge of facts and circumstances that should impel a reasonably cautious man to inquire
further into its integrity. Such is the very essence of our Torrens system as ruled in Legarda v.
Saleeby, 31 Phil. 590, thus:
The real purpose of the system is to quiet title of land; to put a stop forever to any question
of the legality of the title, except claims which were noted at the time of registration, in the
certificate, or which may arise subsequent thereto. That being the purpose of the law, it
would seem that once a title is registered, the owner may rest secure, without the necessity
of waiting in the portals of the courts, or sitting in the "mirador de su casa," to avoid the
possibility of losing his land. x x x The certificate, in the absence of fraud, is the evidence of
title and shows exactly the real interest of its owner. The title once registered, with very few
exceptions, should not thereafter be impugned, except in some direct proceeding permitted
by law. Otherwise, all security in registered titles would be lost.36
From the foregoing, it is clear that it was incumbent upon the Republic to cause the registration of the
subject properties in its name or record the decree of expropriation on the title. Yet, not only did the
Republic fail to register the subject properties in its name, it failed to do so for fifty-six (56) years.
This brings us to the third question that begs resolution: Is the Republic, by its failure or neglect to assert
its claim, barred by laches?
Laches is 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.37
The general rule is that the State cannot be put in estoppel or laches by the mistakes or errors of its officials
or agents.38 This rule, however, admits of exceptions. One exception is when the strict application of the
rule will defeat the effectiveness of a policy adopted to protect the public39 such as the Torrens system.
In Republic v. Court of Appeals,40 we ruled that the immunity of government from laches and estoppel is not
absolute, and the government’s silence or inaction for nearly twenty (20) years (starting from the issuance
of St. Jude’s titles in 1966 up to the filing of the Complaint in 1985) to correct and recover the alleged
increase in the land area of St. Jude was tantamount to laches.
In the case at bench, the Republic failed to register the subject properties in its name and incurred in laches
spanning more than five-and-a-half (5 ½) decades. Even if we were to accede to the Republic’s contention
that the Exception and Notice of Intention to Appeal filed by the original owners of Lot No. 933 initially
prevented it from registering said property in its name, we would still be hard pressed to find justification
for the Republic’s silence and inaction for an excessively long time.
Very telling of the Republic’s silence and inaction, whether intentional or by sheer negligence, is the
testimony of Antonio L. Infante, the Republic’s witness in the proceedings before the RTC.41 On cross-
examination, he testified that several surveys42 were conducted on a number of expropriated lots, including
Lot No. 933.43 The results of these surveys showed that Lot No. 933 was still registered in the name of the
original owners.44 As such, Infante recommended in his report that legal action be taken.45 Yet, despite the
aforesaid recommendation, title to Lot No. 933 remained registered in the name of the original owners, and
subsequently its transferees. This silence and unexplained inaction by the Republic clearly constitute laches.
A fourth basic question is whether or not SRRDC is a buyer in good faith.
The CA found SRRDC wanting in good faith because it should be imputed with constructive knowledge, or at
least, sufficiently warned that the Republic had claims over the property in view of indications that the
subject land belonged to a military reservation.
Contrary to the CA’s findings, however, Infante testified that there were no facilities installed by the AFP on
Lot No. 933, although sometime in 1984 to 1985, there began some illegal construction thereon.46 He was
uncertain as to whether a criminal case was filed against those responsible for the illegal construction, and
simply referred to an arrangement between the AFP and an Amores Realty which prevented the former from
filing a case against the latter.47
Significantly, the records also reveal that the Republic’s possession of the 18 expropriated lots pertain only
to the lots adjacent to Lot No. 933. At most, the Lahug Airport runway traverses only a portion of Lot No.
933 situated in Lot No. 933-A, and not Lot No. 933-B which is the subject of this case. Even if these lots
were originally part of Lot No. 933, the lack of annotation on the title of the decree of expropriation, and its CONFIRMING AND DECLARING, SUBJECT TO CERTAIN EXCEPTIONS, THE VALIDITY OF EXISTING
eventual segregation into several lots covered by separate titles enabled SRRDC to purchase the subject TRANSFER CERTIFICATES OF TITLE AND RECONSTITUTED CERTIFICATES OF TITLE COVERING THE
properties, for value, free from any lien, and without knowledge of the Republic’s adverse claim of BANILAD FRIAR LANDS ESTATE, SITUATED IN THE FIRST DISTRICT OF THE CITY OF CEBU."52 The law
ownership. confirms and declares valid all existing TCTs and Reconstituted Certificates of Title duly issued by the
Register of Deeds of Cebu Province and/or Cebu City covering any portion of the Banilad Friar Lands
The trial court correctly held that title registered under the Torrens system is notice to the world.48 Every Estate.53 Thus, by legislative fiat, SRRDC’s titles covering Lot Nos. 933B-3 and 933B-4 must be recognized
person dealing with registered land may safely rely on the correctness of its certificate of title and the law as valid and subsisting.
will not oblige him to go beyond what appears on the face thereof to determine the condition of the
property.49 In fine, we hold that the operative facts in the case at bar, to wit: (1) the incomplete expropriation of Lot
No. 933 in view of Republic’s failure to prove payment in full of just compensation; (2) the registration
The conveyance history of the subject properties is clearly shown on the titles of SRRDC’s predecessors-in- under the Torrens system of the subject properties in the name of SRRDC and its predecessors-in-interest;
interest. Absent a showing that SRRDC had any participation, voluntary or otherwise, in the transfers by the (3) the estoppel and laches of the Republic for 56 years; (4) the status of SRRDC as an innocent purchaser
original owners of Lot No. 933, prior to its eventual acquisition of the same, we affirm that SRRDC is a buyer for value; and (5) the passage of R.A. No. 9443, all warrant the reversal of the CA Decision.
in good faith and an innocent purchaser for value.
WHEREFORE, premises considered, the petition is GRANTED. The August 15, 2003 Decision of the Court
An innocent purchaser for value is one who, relying on the certificate of title, bought the property from the of Appeals is hereby REVERSED and the August 25, 1998 Decision of the Regional Trial Court
registered owner, without notice that some other person has a right to, or interest in, such property, and is REINSTATED. TCT Nos. 128197 and 128198, in the name of petitioner San Roque Realty 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 Development Corporation, are upheld and declared valid.
interest of some other person in the property.50
SO ORDERED.
Likewise, Section 32 of Presidential Decree No. 152951 provides:
Ynares-Santiago, Chairperson, Austria-Martinez, Chico-Nazario, Reyes, JJ., concur.
SECTION 32. Review of decree of registration; Innocent purchaser for value. – The decree of
registration shall not be reopened or revised by reason of absence, minority, or other disability of
any person adversely affected thereby, nor by any proceeding in any court for reversing judgments,
subject, however, to the right of any person, including the government and the branches thereof,
deprived of land or of any estate or interest therein by such adjudication or confirmation of title
obtained by actual fraud, to file in the proper Court of First Instance a petition for reopening and
review of the decree of registration not later than one year from and after the date of the entry of
such decree of registration, but in no case shall such petition be entertained by the court where an
innocent purchaser for value has acquired the land or an interest therein, whose rights may be
prejudiced. Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in
this Decree, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for
value.

Upon the expiration of said period of one year, the decree of registration and the certificate of title
issued shall become incontrovertible. Any person aggrieved by such decree of registration in any
case may pursue his remedy by action for damages against the applicant or any other persons
responsible for the fraud.

In the instant case, the Republic’s adverse claim of ownership over the subject properties may have given
SRRDC’s predecessors-in-interest, the sellers, voidable title to the subject properties. However, we stress
that prior to SRRDC’s acquisition of the subject properties, Lot No. 933 had already been subdivided and
covered by separate titles of the subsequent transferees. These titles, including the titles to the subject
properties, had not been voided at the time of the sale to SRRDC in 1994. As such, SRRDC acquired good
title to the subject properties, having purchased them in good faith, for value, and without notice of the
seller’s defect of title, if any.

Finally, there is a recent development that has sealed the fate of the Republic in its claim of ownership over
the subject properties. This is the passage of Republic Act No. 9443 (RA 9443), entitled "AN ACT
2. VILLAGONZALO V. IAC
SECOND DIVISION
G.R. No. 71110 November 22, 1988
PAZ VILLAGONZALO, ESTELA VILLAGONZALO, AIDA VILLAGONZALO, HERMINIA
VILLAGONZALO, GWENDOLYN VILLAGONZALO, JENSINE VILLAGONZALO and LEONILA
VILLAGONZALO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and CECILIA A. VILLAGONZALO, respondents.
Julio L. Falcone and Makilito B. Mahinay for petitioners.
Adelino B. Sitoy for private respondent.
REGALADO, J.:
From a decision rendered in favor of herein petitioners, as plaintiffs, against herein private respondent, as
defendant, in an action for reconveyance in the then Court of First Instance of Leyte, 1 which reads:
Wherefore, decision is hereby rendered in favor of the plaintiffs and against defendant
declaring Lot No. 7429 of the Ormoc Cadastre, situated at Bo. Dolores, Ormoc City, with an
area of 97,213 square meters, more or less, as the conjugal property of the deceased
spouses, Juan Villagonzalo and Felicisima Abella Villagonzalo hereby ordering the
cancellation of Transfer Certificate of Title No. 4259 in the name of Cecilia A. Villagonzalo
and ordering the Register of Deeds of Ormoc City to issue another Transfer Certificate of
Title in the name of spouses Juan C. Villagonzalo and Felicisima A. Villagonzalo, Filipinos, of
legal age, residents of Cebu City now deceased and survived by the present plaintiffs and
defendants, each of whom upon payment of the inheritance taxes with the BIR, shall be
entitled to 1/9 share of the land, subject to claims by other heirs and creditors within a
period of two (2) years as provided for by the Rules of Court, and further ordering the
partition of the said land within a period of ninety (90) days from the finality of this decision
and if the parties cannot agree on the partition this Court may appoint a commissioner to
partition the same without pronouncement as to costs. 2
therein defendant appealed to the former Intermediate Appellate Court which, in a decision 3 of the Second
Civil Cases Division in AC-G.R. No. 65128, reversed the appealed judgment and dismissed the complaint for
reconveyance.
As found by the respondent Court—
The facts in this regard show that on February 22, 1961, Juan C. Villagonzalo, the
predecessor-in-interest of the parties, purchased Lot No. 7429 of the Ormoc Cadastre,
situated at Barrio Dolores, Municipality of Ormoc, containing an area of 97,213 sq. meters
covered by Transfer Certificate of Title No. 24611 of the Register of Deeds of Ormoc City,
from the Heirs of Roman Matuguina for Pl,500.00 (Exhibits A and 6, Folder of Exhibits, pp. 1,
15). It was made to appear however that the sale was in the name of his daughter,
defendant Cecilia Villagonzalo, who was single, since he borrowed from her the sum of
P500.00 to complete the full payment of the price of the lot. Consequently, TCT No. 4259
was issued in the name of defendant Cecilia A. Villagonzalo as the registered owner (Exhibit
5, Ibid., p. 15) on July 18, 1962. The complaint was filed on April 2, 1975 thirteen (13) years
after the issuance of Transfer Certificate of Title No. 4259 on the subject land in the name of
the defendant Cecilia Villagonzalo. 4
On such factual moorings, the respondent court, now the Court of Appeals, held that the right of action of
therein plaintiffs-appellees, petitioners herein, had prescribed for the reasons that follow. 5
It ratiocinated that when private respondent obtained Transfer Certificate of Title No. 4259 in her name she
thereby excluded herein petitioners from the estate of their deceased predecessor-in-interest and,
consequently, she set up a title to the land adverse to them. The registration of the deed of sale with the
Register of Deeds, so it opined, was constructive notice to the whole world of defendant's adverse claim to
the property, thereby repudiating any fiduciary or trust relationship involved. It anchored its conclusion on
doctrinal holdings that an action for reconveyance based on an implied or constructive trust prescribes in
ten years counted from the date when adverse title is asserted by the possessor of the property.
Prescinding therefrom into the field of laches, respondent court further noted that because of the neglect
and inaction of the present petitioners, the private respondent was thereby made to feel secure in her belief
that she had rightly acquired the controverted land and that no legal action would be filed against her. She
was thus induced to spend time, money and effort for the cultivation of the land and the payment of the
taxes thereon. It then further rested its conclusion on the established principle that inaction and neglect of a
party to assert a right can convert what could otherwise be a valid claim into a stale demand.
Petitioners have come before Us contending that their action was seasonably filed because private
respondent's registration of the land in her name was not a repudiation of the implied trust created between
her and their father; and, confusing extinctive for aquisitive prescription, that good faith and just title are
essential requisites in this case.
The respondent court is correct and certiorari must be denied.
It is now well settled that an action for reconveyance of real property to enforce an implied trust shall
prescribe after ten years, 6 since it is an action based upon an obligation created by law, 7 and there can be
no doubt as to its prescriptibility. 8
It is likewise established that said period of ten years is counted from the date adverse title to the property
is asserted by the possessor thereof. In the case at bar, that assertion of adverse title, which consequently
was a repudiation of the implied trust for the purpose of the statute of limitations, took place when Transfer
Certificate of Title No. 4259 was issued in the name of private respondent on July 18, 1962. As succinctly
but pithily resolved in Vda. de Pama vs. Pama, et al.: 9
... Considering the settled doctrine that an action for reconveyance of real property based
upon constructive or implied trust prescribes in ten (10) years counted from the date
adverse title is asserted by the possessor of the property (Diaz vs. Gorricho, 103 Phil. 261;
Candelaria vs. Romero, 109 Phil. 100; J. M. Tuazon vs. Magdangal, 114 Phil. 42); that when
respondent Guillermo Pama caused the registration on June 18, 1956 of the affidavit of
adjudication declaring himself to be the sole heir of the late Mateo Pama and obtained
Transfer Certificate of Title No. T-4006 in his own name, he thereby excluded petitioners
 from the estate of the deceased Mateo Pama and, consequently, set up a title adverse to
them; that such registration constitutes constructive notice to petitioners of the respondent's
adverse claim to the property (Carantes vs. Court of Appeals, 76 SCRA 514, 523; Gerona vs.
de Guzman, 11 SCRA 153, 157); and it appearing that petitioners filed their complaint for
reconveyance only on April 28, 1969, or twelve (12) years, ten (10) months and ten (10)
days after their cause of action had accrued on June 18, 1956; this Court resolved to dismiss
this petition and to affirm the questioned order dismissing petitioner's complaint ... 10
There is also evidence of record that as far back as 1961, private respondent refused to give any share in
the produce of the land to petitioners; that in 1963 she mortgaged the property in her own name; and that
in 1969, she leased the same to one Ramon Valera, without the petitioners taking preventive or retaliatory
legal action. 11
The rule in this jurisdiction is that an action to enforce an implied trust may be barred not only by
prescription but also by laches, in which case repudiation is not even required. 12 Whether the trust is
resulting or constructive, its enforcement may be barred by laches. 13 Petitioners were, therefore, correctly
faulted for their unjustified inaction.
WHEREFORE, the judgment of the respondent Court is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.
3. NEW REGENT SOURCES, INC. V. TANJATCO
SECOND DIVISION
G.R. No. 168800 April 16, 2009
NEW REGENT SOURCES, INC., Petitioner,
vs.
TEOFILO VICTOR TANJUATCO, JR., and VICENTE CUEVAS,* Respondents.
DECISION
QUISUMBING, J.:
Petitioner through counsel prays for the reversal of the Orders dated February 12, 20051 and July 1,
20052 of the Regional Trial Court (RTC) of Calamba City, Branch 37, in Civil Case No. 2662-98-C. The RTC
had granted the demurrer to evidence filed by respondent Tanjuatco, and then denied petitioner’s motion
for reconsideration.
The facts, as culled from the records, are as follows:
Petitioner New Regent Sources, Inc. (NRSI) filed a Complaint3 for Rescission/Declaration of Nullity of
Contract, Reconveyance and Damages against respondent Tanjuatco and the Register of Deeds of Calamba
before the RTC of Calamba, Laguna, Branch 37. NRSI alleged that in 1994, it authorized Vicente P. Cuevas
III, its Chairman and President, to apply on its behalf, for the acquisition of two parcels of land by virtue of
its right of accretion. Cuevas purportedly applied for the lots in his name by paying ₱82,400.38 to the
Bureau of Lands. On January 2, 1995, Cuevas and his wife executed a Voting Trust Agreement4 over their
shares of stock in the corporation. Then, pending approval of the application with the Bureau of Lands,
Cuevas assigned his right to Tanjuatco for the sum of ₱85,000.5 On March 12, 1996, the Director of Lands
released an Order,6 which approved the transfer of rights from Cuevas to Tanjuatco. Transfer Certificates of
Title Nos. T-3694067 and T-3694078 were then issued in the name of Tanjuatco.
In his Answer with Counterclaim,9 Tanjuatco advanced the affirmative defense that the complaint stated no
cause of action against him. According to Tanjuatco, it was Cuevas who was alleged to have defrauded the
corporation. He averred further that the complaint did not charge him with knowledge of the agreement
between Cuevas and NRSI.
Upon Tanjuatco’s motion, the trial court conducted a preliminary hearing on the affirmative defense, but
denied the motion to dismiss, and ordered petitioner to amend its complaint and implead Cuevas as a
defendant.10
Summons was served on respondent Cuevas through publication,11 but he was later declared in default for
failure to file an answer.12
After NRSI completed presenting evidence, Tanjuatco filed a Demurrer to Evidence,13 which the RTC
granted in an Order dated February 12, 2005. In dismissing NRSI’s complaint,14 the RTC cited the Order of
the Director of Lands and certain insufficiencies in the allegations in the complaint. The trial court further
held that Tanjuatco is an innocent purchaser for value.
NRSI moved for reconsideration, but it was denied by the trial court in an Order dated July 1, 2005, thus: In any event, we find that based on the examination of the evidence at hand, we are in agreement that the
trial court correctly dismissed NRSI’s complaint on demurrer to evidence.
WHEREFORE, the Motion for Reconsideration filed by the plaintiff on May 3, 2005 is DENIED for lack of
merit. Petitioner filed a complaint for rescission/declaration of nullity of contract, reconveyance and damages
against respondents. An action for reconveyance is one that seeks to transfer property, wrongfully
SO ORDERED. 15
registered by another, to its rightful and legal owner.22 In an action for reconveyance, the certificate of title
is respected as incontrovertible. What is sought instead is the transfer of the property, specifically the title
Hence, NRSI filed the instant petition for review on certiorari, raising the following issues: thereof, which has been wrongfully or erroneously registered in another person’s name, to its rightful and
legal owner, or to one with a better right.23
I.
To warrant a reconveyance of the land, the following requisites must concur: (1) the action must be brought
WHETHER OR NOT THE ALLEGED INSUFFICIENCY OF THE ALLEGATIONS IN THE COMPLAINT MAY BE in the name of a person claiming ownership or dominical right over the land registered in the name of the
USED AS A BASIS TO DISMISS THE SAME BY WAY OF A DEMURRER TO EVIDENCE; defendant; (2) the registration of the land in the name of the defendant was procured through fraud24 or
other illegal means;25 (3) the property has not yet passed to an innocent purchaser for value;26 and (4) the
action is filed after the certificate of title had already become final and incontrovertible27 but within four
II.
years from the discovery of the fraud,28 or not later than 10 years in the case of an implied
trust.29 Petitioner failed to show the presence of these requisites.
WHETHER OR NOT A COMPLAINT MAY BE DISMISSED ON DEMURRER TO EVIDENCE BASED ON A
DOCUMENT NOT PROPERLY IDENTIFIED, MARKED AND OFFERED IN EVIDENCE.16
Primarily, NRSI anchors its claim over the lands subjects of this case on the right of accretion. It submitted
in evidence, titles30 to four parcels of land, which allegedly adjoin the lots in the name of Tanjuatco.
In a nutshell, the issue for our determination is whether the trial court erred in dismissing the case on
demurrer to evidence.
But it must be stressed that accretion as a mode of acquiring property under Article 45731 of the Civil Code
requires the concurrence of the following requisites: (1) that the deposition of soil or sediment be gradual
NRSI argues that the supposed insufficiency of allegations in the complaint did not justify its dismissal on
and imperceptible; (2) that it be the result of the action of the waters of the river; and (3) that the land
demurrer to evidence. It contends that a dismissal on demurrer to evidence should be grounded on
where accretion takes place is adjacent to the banks of rivers.32 Thus, it is not enough to be a riparian
insufficiency of evidence presented at trial. NRSI contends that the sufficiency of its allegations was affirmed
owner in order to enjoy the benefits of accretion. One who claims the right of accretion must show by
when the trial court denied the motion to dismiss. It likewise asserts that the RTC erred in declaring
preponderant evidence that he has met all the conditions provided by law. Petitioner has notably failed in
Tanjuatco a buyer in good faith. It stressed that the Order of the Director of Lands, as the basis for such
this regard as it did not offer any evidence to prove that it has satisfied the foregoing requisites.
finding, was not formally offered in evidence. Hence, it should not have been considered by the trial court in
accordance with Section 34,17 Rule 132 of the Rules of Court.
Further, it is undisputed that Tanjuatco derived his title to the lands from Original Certificate of Title (OCT)
No. 245 registered in the name of the Republic of the Philippines. Said parcels of land formed part of the
Tanjuatco, for his part, maintains that NRSI failed to make a case for reconveyance against him. He insists
Dried San Juan River Bed,33 which under Article 502 (1)34 of the Civil Code rightly pertains to the public
that the complaint stated no cause of action, and the evidence presented established, rather than refuted,
dominion. The Certification35 issued by Forester III Emiliano S. Leviste confirms that said lands were verified
that he was an innocent purchaser. Tanjuatco adds that the RTC’s denial of the motion to dismiss, and
to be within the Alienable and Disposable Project No. 11-B of Calamba, Laguna per BFD LC Map No. 3004,
admission of evidence negated NRSI’s claim that it relied on the complaint alone to decide the case. Lastly,
certified and declared as such on September 28, 1981. Clearly, the Republic is the entity which had every
Tanjuatco argues that the Order of the Director of Lands was a matter of judicial notice. Thus, under
right to transfer ownership thereof to respondent.
Section 1,18 Rule 129 of the Rules of Court, there was no need to identify, mark, and offer it in evidence.
Next, petitioner sought to establish fraudulent registration of the land in the name of Tanjuatco. NRSI
After serious consideration, we find the instant petition utterly without merit.
presented before the trial court a copy of the Voting Trust Agreement which the spouses Cuevas executed
in favor of Pauline Co. However, nothing in said agreement indicates that NRSI empowered Cuevas to apply
In its petition, NRSI questions the trial court’s dismissal of its complaint upon a demurrer to evidence and for the registration of the subject lots on its behalf.
invites a calibration of the evidence on record to determine the sufficiency of the factual basis for the trial
court’s order. This factual analysis, however, would involve questions of fact which are improper in a
Neither did petitioner adduce evidence to prove that Cuevas was its President and Chairman. Even assuming
petition for review under Rule 45 of the Rules of Court. It is well established that in an appeal by certiorari,
that Cuevas was the president of NRSI, his powers are confined only to those vested upon him by the board
only questions of law may be reviewed.19 A question of law exists when there is doubt or difference as to
of directors or fixed in the by-laws.36 In truth, petitioner could have easily presented its by-laws or a
what the law is on a certain state of facts. A question of fact exists if the doubt centers on the truth or
corporate resolution37 to show Cuevas’s authority to buy the lands on its behalf. But it did not.
falsity of the alleged facts.20 There is a question of law when the issue does not call for an examination of
the probative value of evidence presented, the truth or falsehood of facts being admitted, and the doubt
Petitioner disagrees with the trial court’s finding that Tanjuatco was a buyer in good faith. It contends that
concerns the correct application of law and jurisprudence on the matter.21 Otherwise, there is a question of
the March 12, 1996 Order of the Director of Lands which declared that the lots covered by TCT Nos. T-
fact. Since it raises essentially questions of fact, the instant petition must be denied.
369406 and T-369407 were free from claims and conflicts when Cuevas assigned his rights thereon to
Tanjuatco. But petitioner’s claim is untenable because respondents did not formally offer said order in DANTE O. TINGA PRESBITERO J. VELASCO, JR.
evidence. Lastly, petitioner makes an issue regarding the "below-fair market value" consideration which Associate Justice Associate Justice
Tanjuatco paid Cuevas for the assignment of his rights to the lots. But it draws unconvincing conclusions
therefrom that do not serve to persuade us of its claims.
ARTURO D. BRION
Associate Justice
We note that Tanjuatco filed a demurrer to evidence before the RTC. By its nature, a demurrer to evidence
is filed after the plaintiff has completed the presentation of his evidence but before the defendant offers
ATTESTATION
evidence in his defense. Thus, the Rules provide that if the defendant’s motion is denied, he shall have the
right to present evidence. However, if the defendant’s motion is granted but on appeal the order of
I attest that the conclusions in the above Decision had been reached in consultation before the case was
dismissal is reversed, he shall be deemed to have waived the right to present evidence.38 It is
assigned to the writer of the opinion of the Court’s Division.
understandable, therefore, why the respondent was unable to formally offer in evidence the Order of the
Director of Lands, or any evidence for that matter.1avvphil.zw+
LEONARDO A. QUISUMBING
Associate Justice
More importantly, petitioner introduced in evidence TCT Nos. T-369406 and T-369407 in the name of
Chairperson
respondent Tanjuatco. These titles bear a certification that Tanjuatco’s titles were derived from OCT No.
245 in the name of no less than the Republic of the Philippines. Hence, we cannot validly and fairly rule that
in relying upon said title, Tanjuatco acted in bad faith. A person dealing with registered land may safely rely CERTIFICATION
upon the correctness of the certificate of title issued therefor and the law will in no way oblige him to go
behind the certificate to determine the condition of the property.39 This applies even more particularly when Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify
the seller happens to be the Republic, against which, no improper motive can be ascribed. The law, no that the conclusions in the above Decision had been reached in consultation before the case was assigned
doubt, considers Tanjuatco an innocent purchaser for value. An innocent purchaser for value is one who to the writer of the opinion of the Court’s Division.
buys the property of another, without notice that some other person has a right or interest in such property
and pays the full price for the same, at the time of such purchase or before he has notice of the claims or REYNATO S. PUNO
interest of some other person in the property.40 Chief Justice

As regards the consideration which Tanjuatco paid Cuevas for the assignment of rights to the lands, suffice
it to state that the assignment merely vested upon Tanjuatco all of Cuevas’s intangible claims, rights and
interests over the properties and not the properties themselves. At the time of the assignment, the lots
were still the subjects of a pending sales application before the Bureau of Lands. For, it was not until May
24, 1996, that titles were issued in Tanjuatco’s name. The assignment not being a sale of real property, it
was not surprising that Cuevas demanded from Tanjuatco only ₱85,000 for the transfer of rights.

From all the foregoing, it is plain and apparent that NRSI failed to substantiate its claim of entitlement to
ownership of the lands in Tanjuatco’s name. The trial court, therefore, correctly dismissed petitioner’s
complaint for reconveyance.

WHEREFORE, the petition is DENIED. The Orders dated February 12, 2005 and July 1, 2005 of the
Regional Trial Court of Calamba City, Branch 37, in Civil Case No. 2662-98-C are AFFIRMED. Costs against
petitioner.

SO ORDERED.

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

WE CONCUR:

CONCHITA CARPIO MORALES

Associate Justice
4. PNB V. CA
THIRD DIVISION
G.R. No. 97995 January 21, 1993
PHILIPPINE NATIONAL BANK, petitioner,
vs.
COURT OF APPEALS AND B.P. MATA AND CO., INC., respondents.
Roland A. Niedo for petitioner.
Benjamin C. Santos Law Office for respondent.
ROMERO, J.:
Rarely is this Court confronted with a case calling for the delineation in broad strokes of the distinctions
between such closely allied concepts as the quasi-contract called "solutio indebiti" under the venerable
Spanish Civil Code and the species of implied trust denominated "constructive trusts," commonly regarded
as of Anglo-American origin. Such a case is the one presented to us now which has highlighted more of the
affinity and less of the dissimilarity between the two concepts as to lead the legal scholar into the error of
interchanging the two. Presented below are the factual circumstances that brought into juxtaposition the
twin institutions of the Civil Law quasi-contract and the Anglo-American trust.
Private Respondent B.P. Mata & Co. Inc. (Mata), is a private corporation engaged in providing goods and
services to shipping companies. Since 1966, it has acted as a manning or crewing agent for several foreign
firms, one of which is Star Kist Foods, Inc., USA (Star Kist). As part of their agreement, Mata makes
advances for the crew's medical expenses, National Seaman's Board fees, Seaman's Welfare fund, and
standby fees and for the crew's basic personal needs. Subsequently, Mata sends monthly billings to its
foreign principal Star Kist, which in turn reimburses Mata by sending a telegraphic transfer through banks
for credit to the latter's account.
Against this background, on February 21, 1975, Security Pacific National Bank (SEPAC) of Los Angeles which
had an agency arrangement with Philippine National Bank (PNB), transmitted a cable message to the
International Department of PNB to pay the amount of US$14,000 to Mata by crediting the latter's account
with the Insular Bank of Asia and America (IBAA), per order of Star Kist. Upon receipt of this cabled
message on February 24, 1975, PNB's International Department noticed an error and sent a service
message to SEPAC Bank. The latter replied with instructions that the amount of US$14,000 should only be
for US$1,400.
On the basis of the cable message dated February 24, 1975 Cashier's Check No. 269522 in the amount of
US$1,400 (P9,772.95) representing reimbursement from Star Kist, was issued by the Star Kist for the
account of Mata on February 25, 1975 through the Insular Bank of Asia and America (IBAA).
However, fourteen days after or on March 11, 1975, PNB effected another payment through Cashier's Check
No. 270271 in the amount of US$14,000 (P97,878.60) purporting to be another transmittal of
reimbursement from Star Kist, private respondent's foreign principal.
Six years later, or more specifically, on May 13, 1981, PNB requested Mata for refund of US$14,000
(P97,878.60) after it discovered its error in effecting the second payment.
On February 4, 1982, PNB filed a civil case for collection and refund of US$14,000 against Mata arguing that
based on a constructive trust under Article 1456 of the Civil Code, it has a right to recover the said amount
it erroneously credited to respondent Mata.1
After trial, the Regional Trial Court of Manila rendered judgment dismissing the complaint ruling that the
instant case falls squarely under Article 2154 on solutio indebiti and not under Article 1456 on constructive
trust. The lower court ruled out constructive trust, applying strictly the technical definition of a trust as "a
right of property, real or personal, held by one party for the benefit of another; that there is a fiduciary
relation between a trustee and a cestui que trust as regards certain property, real, personal, money or
choses in action."2
In affirming the lower court, the appellate court added in its opinion that under Article 2154 on solutio
indebiti, the person who makes the payment is the one who commits the mistake vis-a-vis the recipient who
is unaware of such a mistake.3 Consequently, recipient is duty bound to return the amount paid by mistake.
But the appellate court concluded that petitioner's demand for the return of US$14,000 cannot prosper
because its cause of action had already prescribed under Article 1145, paragraph 2 of the Civil Code which
states:
The following actions must be commenced within six years:
xxx xxx xxx
(2) Upon a quasi-contract.
This is because petitioner's complaint was filed only on February 4, 1982, almost seven years after
March 11, 1975 when petitioner mistakenly made payment to private respondent.
Hence, the instant petition for certiorari proceeding seeking to annul the decision of the appellate court on
the basis that Mata's obligation to return US$14,000 is governed, in the alternative, by either Article 1456
on constructive trust or Article 2154 of the Civil Code on quasi-contract.4
Article 1456 of the Civil Code provides:
If property is acquired through mistake or fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of the person from whom the
property comes.
On the other hand, Article 2154 states:
If something is received when there is no right to demand it, and it was unduly delivered
through mistake, the obligation to return it arises.
Petitioner naturally opts for an interpretation under constructive trust as its action filed on February 4, 1982
can still prosper, as it is well within the prescriptive period of ten (10) years as provided by Article 1144,
paragraph 2 of the Civil Code.5
If it is to be construed as a case of payment by mistake or solutio indebiti, then the prescriptive period for
quasi-contracts of six years applies, as provided by Article 1145. As pointed out by the appellate court,
petitioner's cause of action thereunder shall have prescribed, having been brought almost seven years after
the cause of action accrued. However, even assuming that the instant case constitutes a constructive trust
and prescription has not set in, the present action has already been barred by laches.
To recall, trusts are either express or implied. While express trusts are created by the intention of the
trustor or of the parties, implied trusts come into being by operation of law.6 Implied trusts are those which,
without being expressed, are deducible from the nature of the transaction as matters of intent or which are
superinduced on the transaction by operation of law as matters of equity, independently of the particular
intention of the parties.7
8
In turn, implied trusts are subdivided into resulting and constructive trusts. A resulting trust is a trust raised
by implication of law and presumed always to have been contemplated by the parties, the intention of which
is found in the nature of the transaction, but not expressed in the deed or instrument of
conveyance.9 Examples of resulting trusts are found in Articles 1448 to 1455 of the Civil Code.10 On the
other hand, a constructive trust is one not created by words either expressly or impliedly, but by
construction of equity in order to satisfy the demands of justice. An example of a constructive trust is Article
1456 quoted above.11
A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense 12 for in a typical trust,
confidence is reposed in one person who is named a trustee for the benefit of another who is called
the cestui que trust, respecting property which is held by the trustee for the benefit of the cestui que
trust.13 A constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary
relation. While in an express trust, a beneficiary and a trustee are linked by confidential or fiduciary
relations, in a constructive trust, there is neither a promise nor any fiduciary relation to speak of and the so-
called trustee neither accepts any trust nor intends holding the property for the beneficiary.14
In the case at bar, Mata, in receiving the US$14,000 in its account through IBAA, had no intent of holding
the same for a supposed beneficiary or cestui que trust, namely PNB. But under Article 1456, the law
construes a trust, namely a constructive trust, for the benefit of the person from whom the property comes,
in this case PNB, for reasons of justice and equity.
At this juncture, a historical note on the codal provisions on trust and quasi-contracts is in order.
Originally, under the Spanish Civil Code, there were only two kinds of quasi contracts: negotiorum
gestio and solutio indebiti. But the Code Commission, mindful of the position of the eminent Spanish jurist,
Manresa, that "the number of quasi contracts may be indefinite," added Section 3 entitled "Other Quasi-
Contracts."15
Moreover, even as Article 2142 of the Civil Code defines a quasi-contract, the succeeding article provides
that: "The provisions for quasi-contracts in this Chapter do not exclude other quasi-contracts which may
come within the purview of the preceding article."16
Indubitably, the Civil Code does not confine itself exclusively to the quasi-contracts enumerated from
Articles 2144 to 2175 but is open to the possibility that, absent a pre-existing relationship, there being
neither crime nor quasi-delict, a quasi-contractual relation may be forced upon the parties to avoid a case of
unjust enrichment.17 There being no express consent, in the sense of a meeting of minds between the
parties, there is no contract to speak of. However, in view of the peculiar circumstances or factual
environment, consent is presumed to the end that a recipient of benefits or favors resulting from lawful,
voluntary and unilateral acts of another may not be unjustly enriched at the expense of another.
Undoubtedly, the instant case fulfills the indispensable requisites of solutio indebiti as defined in Article 2154
that something (in this case money) has been received when there was no right to demand it and (2) the
same was unduly delivered through mistake. There is a presumption that there was a mistake in the
payment "if something which had never been due or had already been paid was delivered; but he from
whom the return is claimed may prove that the delivery was made out of liberality or for any other just
cause."18
In the case at bar, a payment in the corrected amount of US$1,400 through Cashier's Check No. 269522
had already been made by PNB for the account of Mata on February 25, 1975. Strangely, however, fourteen
days later, PNB effected another payment through Cashier's Check No. 270271 in the amount of US$14,000,
this time purporting to be another transmittal of reimbursement from Star Kist, private respondent's foreign
principal.
While the principle of undue enrichment or solutio indebiti, is not new, having been incorporated in the
subject on quasi-contracts in Title XVI of Book IV of the Spanish Civil Code entitled "Obligations incurred
without contract,"19 the chapter on Trusts is fairly recent, having been introduced by the Code Commission
in 1949. Although the concept of trusts is nowhere to be found in the Spanish Civil Code, the framers of our
present Civil Code incorporated implied trusts, which includes constructive trusts, on top of quasi-contracts,
both of which embody the principle of equity above strict legalism.20
In analyzing the law on trusts, it would be instructive to refer to Anglo-American jurisprudence on the
subject. Under American Law, a court of equity does not consider a constructive trustee for all purposes as
though he were in reality a trustee; although it will force him to return the property, it will not impose upon
him the numerous fiduciary obligations ordinarily demanded from a trustee of an express trust.21 It must be
borne in mind that in an express trust, the trustee has active duties of management while in a constructive
trust, the duty is merely to surrender the property.
Still applying American case law, quasi-contractual obligations give rise to a personal liability ordinarily
enforceable by an action at law, while constructive trusts are enforceable by a proceeding in equity to
compel the defendant to surrender specific property. To be sure, the distinction is more procedural than
substantive.22
Further reflection on these concepts reveals that a constructive "trust" is as much a misnomer as a "quasi-
contract," so far removed are they from trusts and contracts proper, respectively. In the case of a
constructive trust, as in the case of quasi-contract, a relationship is "forced" by operation of law upon the
parties, not because of any intention on their part but in order to prevent unjust enrichment, thus giving rise
to certain obligations not within the contemplation of the parties.23
Although we are not quite in accord with the opinion that "the trusts known to American and English equity
jurisprudence are derived from the fidei commissa of the Roman Law,"24 it is safe to state that their roots
are firmly grounded on such Civil Law principles are expressed in the Latin maxim, "Nemo cum alterius
detrimento locupletari potest," 25 particularly the concept of constructive trust.
Returning to the instant case, while petitioner may indeed opt to avail of an action to enforce a constructive
trust or the quasi-contract of solutio indebiti, it has been deprived of a choice, for prescription has
effectively blocked quasi-contract as an alternative, leaving only constructive trust as the feasible option.
Petitioner argues that the lower and appellate courts cannot indulge in semantics by holding that in Article
1456 the recipient commits the mistake while in Article 2154, the recipient commits no mistake. 26 On the
other hand, private respondent, invoking the appellate court's reasoning, would impress upon us that under
Article 1456, there can be no mutual mistake. Consequently, private respondent contends that the case at
bar is one of solutio indebiti and not a constructive trust.
We agree with petitioner's stand that under Article 1456, the law does not make any distinction since
mutual mistake is a possibility on either side — on the side of either the grantor or the grantee.27 Thus, it
was error to conclude that in a constructive trust, only the person obtaining the property commits a
mistake. This is because it is also possible that a grantor, like PNB in the case at hand, may commit the
mistake.
Proceeding now to the issue of whether or not petitioner may still claim the US$14,000 it erroneously paid
private respondent under a constructive trust, we rule in the negative. Although we are aware that only
seven (7) years lapsed after petitioner erroneously credited private respondent with the said amount and
that under Article 1144, petitioner is well within the prescriptive period for the enforcement of a constructive
or implied trust, we rule that petitioner's claim cannot prosper since it is already barred by laches. It is a
well-settled rule now that an action to enforce an implied trust, whether resulting or constructive, may be
barred not only by prescription but also by laches.28
While prescription is concerned with the fact of delay, laches deals with the effect of unreasonable
delay.29 It is amazing that it took petitioner almost seven years before it discovered that it had erroneously
paid private respondent. Petitioner would attribute its mistake to the heavy volume of international
transactions handled by the Cable and Remittance Division of the International Department of PNB. Such
specious reasoning is not persuasive. It is unbelievable for a bank, and a government bank at that, which
regularly publishes its balanced financial statements annually or more frequently, by the quarter, to notice
its error only seven years later. As a universal bank with worldwide operations, PNB cannot afford to commit
such costly mistakes. Moreover, as between parties where negligence is imputable to one and not to the
other, the former must perforce bear the consequences of its neglect. Hence, petitioner should bear the
cost of its own negligence.
WHEREFORE, the decision of the Court of Appeals dismissing petitioner's claim against private respondent is
AFFIRMED.
Costs against petitioner.
SO ORDERED.
Bidin, Davide, Jr. and Melo, JJ., concur.
Gutierrez, Jr., J., concurs in the result.
5. DECLAG C. MAGAHILIG
THIRD DIVISION
G.R. No. 159578 July 28, 2008
ROGELIA DACLAG and ADELINO DACLAG (deceased) Substituted by RODEL M. DACLAG and
ADRIAN M. DACLAG, Petitioners,
vs.
ELINO MACAHILIG, ADELA MACAHILIG CONRADO MACAHILIG, LORENZA HABER and BENITA
DEL ROSARIO, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to annul and set
aside the Decision1 dated October 17, 2001 and the Resolution2 dated August 7, 2003 of the Court of
Appeals (CA) in CA G.R. CV No. 48498.
The antecedent facts:
During their lifetime, the spouses Candido and Gregoria Macahilig were the owners of seven parcels of land,
all located in Numancia, Aklan. They had seven children, namely: Dionesio, Emeliano, Mario, Ignacio,
Eusebio, Tarcela and Maxima.
On March 18, 1982, Maxima, a daughter of Candido and Gregoria entered into a Deed of Extra-judicial
Partition3 with the heirs of her deceased brothers, Mario and Eusebio Macahilig, over the seven parcels of
land. The same deed stated that Dionesio was already deceased but was survived by his daughter, Susana
Briones; Emeliano was out of the country; Ignacio and Tarcela were also both deceased but were survived
by three children each.
One of the properties partitioned in the Deed was a parcel of irrigated riceland located at Poblacion,
Numancia, Aklan, with an area of 1,896 square meters declared in the name of Maxima under Tax
Declaration No. 644 which was denominated as "Parcel One." This Parcel One was divided between Vicenta
Macahilig Galvez for the heirs of Mario Macahilig, who was given the one half southern portion of the land;
and Adela Macahilig for the heirs of Eusebio Macahilig, who got the one half northern portion. The Deed
was notarized by Municipal Judge Francisco M. Ureta in his capacity as ex-officio notary public. The heirs of
Eusebio Macahilig are the herein respondents.
On March 19, 1982, Maxima executed a Statement of Conformity4 in which she confirmed the execution of
the Deed of Extra-judicial Partition and conformed to the manner of partition and adjudication made therein.
She also attested that five parcels of land in the deed were declared in her name for taxation purposes,
although said lands were actually the property of her deceased parents Candido and Gregoria Macahilig;
that she waived, renounced and relinquished all her rights to the land adjudicated to all her co-heirs in the
deed; and that she had already sold one parcel before the deed was executed, which was considered as her
advance share. Pedro Divison, Maxima's husband, also affixed his signature to the Statement of Conformity.
On May 23, 1984, Maxima sold Parcel One to spouses Adelino and Rogelia Daclag (petitioners) as evidenced
by a Deed of Sale5.
On July 17, 1984, OCT No. P-138736 was issued in the name of petitioner Rogelia M. Daclag by virtue of her
free patent application.
On December 16, 1991, Elino Macahilig, Adela Macahilig, Conrado Macahilig, Lorenza Haber and Benita del
Rosario (respondents) filed with the Regional Trial Court (RTC) of Kalibo, Aklan a complaint for recovery of
possession and ownership, cancellation of documents and damages against Maxima and petitioners,
docketed as Civil Case No. 4334.
Respondents alleged that they were the lawful owners and previous possessors of the one half northern
portion of Parcel One by virtue of a Deed of Extra-judicial Partition; that since they were all residents of
Caloocan City, their land was possessed by their first cousin, Penicula Divison Quijano, Maxima's daughter,
as tenant thereon, as she was also in possession of the one half southern portion as tenant of the heirs of
Mario Macahilig; that sometime in 1983, upon request of Maxima and out of pity for her as she had no
share in the produce of the land, Penicula allowed Maxima to farm the land; that without their knowledge,
Maxima illegally sold on May 23, 1984, the entire riceland to petitioners, who are now in possession of the
land, depriving respondents of its annual produce valued at ₱4,800.00.
In their Answer with Cross-Claim, petitioners contended that: petitioner Rogelia had been the registered
owner of the entire riceland since 1984 as evidenced by OCT No. P-13873; her title had become
incontrovertible after one year from its issuance; they purchased the subject land in good faith and for value
from co-defendant Maxima who was in actual physical possession of the property and who delivered and
conveyed the same to them; they were now in possession and usufruct of the land since then up to the
present; respondents were barred by laches for the unreasonable delay in filing the case. They also filed a
cross-claim against Maxima for whatever charges, penalties and damages that respondents may demand
from them; and they prayed that Maxima be ordered to pay them damages for the fraud and
misrepresentation committed against them.
Respondents subsequently filed an Amended Complaint, upon learning that petitioners were issued OCT No.
13873 by virtue of their free patent application, and asked for the reconveyence of the one half northern
portion of the land covered by such title.
The land in question was delimited in the Commissioner's Report and sketch submitted by Bernardo G.
Sualog as the one half northern portion, which had an area of 1178 sq. meters. The Report and the sketch
were approved by the RTC on June 22, 1991.
For failure of Maxima to file an answer, the RTC declared her in default both in the complaint and cross-
claim against her.
After trial, the RTC rendered its Decision7 dated November 18, 1994, the dispositive portion of which reads:
WHEREFORE, finding preponderance of evidence in favor of plaintiffs [respondents], judgment is hereby
rendered as follows:
1. The deed of sale dated May 23, 1984, executed by Maxima Divison in favor of Adelino Daclag and
Rogelia Daclag before Notary Public Edgar R. Peralta and docketed in his notarial register as Doc.
No. 137, Page No. 30, Book No. VII, Series of 1984 is declared NULL and VOID;
2. The plaintiffs are hereby declared the true and lawful owners and entitled to the possession of
the northern one-half (1/2) portion of the land described under paragraph 2 of the amended
complaint and designated as Exhibit "F-1" in the commissioners’ sketch with an area of 1,178 square
meters;
3. The defendants-spouses Adelino and Rogelia Daclag [petitioners] are hereby ordered and directed
to vacate the land described in the preceding paragraph and restore and deliver the possession
thereof to the plaintiffs;
4. The defendants are ordered to execute a deed of reconveyance in favor of the plaintiffs over the
land described in paragraph 2 hereof;
5. The defendants are ordered, jointly and severally, to pay the plaintiffs ten (10) cavans of palay
per annum beginning the second cropping of 1984 until the time the possession of the land in
question is restored to the plaintiffs; and
6. The defendants are ordered, jointly and severally, to pay the plaintiffs reasonable attorney’s fees
in the amount of ₱3,000.00 plus cost of the suit.8
The RTC found that respondents were able to establish that Parcel One was divided between the heirs of
Mario and the heirs of Eusebio, with the former getting the one half southern portion and the latter the one
half northern portion embodied in a Deed of Extra-judicial partition, which bore Maxima's thumbmarks; that
nobody questioned the Deed's validity, and no evidence was presented to prove that the document was not
validly and regularly executed; that Maxima also executed a duly notarized Statement of Conformity dated
March 19, 1982 with the conformity of her husband, Pedro. The RTC concluded that when Maxima executed
the Deed of Sale in favor of petitioners on May 23, 1984, Maxima had no right to sell that land as it did not
belong to her; that she conveyed nothing to petitioners; and that the deed of sale should be declared null
and void.
In disposing the issue of whether petitioners could be considered innocent purchasers for value, the RTC
ruled that petitioners could not even be considered purchasers, as they never acquired ownership of the
land since the sale to them by Maxima was void; and that petitioners' act of reflecting only the price of
₱5,000.00 in the Deed of Sale to avoid paying taxes to the BIR should be condemned for defrauding the
government and thus should not be given protection from the courts.
The RTC further ruled that since petitioners were able to obtain a free patent on the whole land in petitioner
Rogelia's name, reconveyance to respondents of the 1,178 sq. meter northern portion of the land was just
and proper; that the respondents were entitled to a share in the harvest at two croppings per year after
deducting the share of the tenant; that since Maxima died in October 1993, whatever charges and claims
petitioners may recover from her expired with her.
Aggrieved, petitioners filed their appeal with the CA.
On October 17, 2001, the CA dismissed the appeal and affirmed the RTC decision.
The CA ruled that since Maxima had no right to sell the land as she was not the rightful owner thereof,
nothing was conveyed to petitioners; that a person who acquired property from one who was not the owner
and had no right to dispose of the same, obtained the property without right of title, and the real owner
may recover the same from him.
The CA found that since respondents were unaware of the sale, it was not a surprise that they did not
question petitioners' application for a free patent on the subject land; that the possession by Maxima of the
subject land did not vest ownership in her, as her possession was not in the concept of an owner; and that
petitioners were not purchasers in good faith. It also found that the right to enjoy included the right to
receive the produce of the thing; that respondents as true owners of the subject land were deprived of their
property when Maxima illegally sold it to petitioners; and thus, equity demanded that respondents be given
what rightfully belonged to them under the principle that a person cannot enrich himself at the expense of
another.
Hence, herein petition on the following grounds:
A. THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR WHEN IT DECLARED
THAT HEREIN PETITIONERS HAD NO VALID TITLE OVER THE LAND IN QUESTION.
B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONERS ARE
NOT PURCHASERS OR BUYERS IN GOOD FAITH.
C. THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT AFFIRMED THE DECISION OF
THE LOWER COURT IN ORDERING THE DEFENDANTS-PETITIONERS JOINTLY AND SEVERALLY TO
PAY PER ANNUM BEGINNING THE SECOND CROPPING OF 1984 UNTIL THE TIME THE POSSESSION
OF THE LAND IN QUESTION IS RESTORED TO THE PLAINTIFFS [respondents].9
The issues for resolution are (1) whether Maxima was the previous owner of Parcel One, which included
respondents' one half northern portion, now covered by OCT No. P-13873; 2) whether petitioners could
validly invoke the defense of purchasers in good faith; and (3) whether reconveyance is the proper remedy.
Preliminarily, we would like to state the inescapable fact that the Extra-judicial partition of the estate of
Candido Macahilig involving the seven parcels of land was made only between Maxima and the heirs of her
two deceased brothers Mario and Eusebio.
Section 1 of Rule 74 of the Rules of Court provides:
Section 1. Extrajudicial settlement by agreement between heirs. - If the decedent left no will and no debts
and the heirs are all of age, or the minors are represented by their judicial or legal representatives duly
authorized for the purpose, the parties may, without securing letters of administration, divide the estate
among themselves as they see fit by means of a public instrument filed in the office of the register of deeds,
and should they disagree, they may do so in an ordinary action for partition. x x x
The fact of the extrajudicial settlement or administration shall be published in a newspaper of general
circulation in the manner provided in the next succeeding section; but no extrajudicial settlement shall be
binding upon any person who has not participated therein or had no notice thereof.
Records do not show that there has been any case filed by the other heirs who had not participated in the
Deed of Extra-judicial Partition and were questioning the validity of such partition. Thus, the resolution of
the present case concerns only the issues between the parties before us and will not in any way affect the
rights of the other heirs who have not participated in the partition.
The first two issues raised for resolution are factual. It is a settled rule that in the exercise of the Supreme
Court's power of review, the Court is not a trier of facts and does not normally undertake the re-
examination of the evidence presented by the contending parties during the trial of the case, considering
that the findings of facts of the CA are conclusive and binding on the Court.10 While jurisprudence has
recognized several exceptions in which factual issues may be resolved by this Court, namely: (1) when the
findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in
making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions
of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8)
when the findings are conclusions without citation of specific evidence on which they are based; (9) when
the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the
respondent; (10) when the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; and (11) when the CA manifestly overlooked certain relevant facts
not disputed by the parties, which, if properly considered, could justify a different conclusion,11 none of
these exceptions has been shown to apply to the present case and, hence, this Court may not review the
findings of fact made by the lower courts.
We find no cogent reason to depart from the findings of both the trial court and the CA that Maxima was
not the owner of the land she sold to petitioners, and that the one half northern portion of such land was
owned by the respondents; that Maxima had no right to dispose of the land and, thus, she had no right to
convey the same.
To repeat, records show that Maxima entered into a Deed of Extra-judicial Partition with the heirs of her two
deceased brothers, namely: Mario and Eusebio, over seven parcels of land owned by Candido and Gregoria
Macahilig. One of these lands was the irrigated riceland with an area of 1,896 sq. meters which, per the
Deed of Partition, was divided between the heirs of Mario and Eusebio; and the former got the one half
southern portion, while the latter got the one half northern portion. Maxima affixed her thumbmark to the
Deed. This parcel of riceland was sold by Maxima to petitioners. However, Maxima, at the time of the
execution of the Deed of Sale over this parcel of land in favor of petitioner on May 23, 1984, had no right to
sell the same as she was not the owner thereof.
In fact, Maxima, with the conformity of her husband Pedro, had even executed a Statement of Conformity,
in which she affirmed the execution of the Deed of Extra-judicial Partition and conformed to the manner of
the partition of shares therein. She attested to the fact that the five parcels of land subject of the Deed of
Extra-judicial Partition, which were declared in her name under different tax declarations, were actually
properties of her deceased parents; and that she waived all her rights over the lands or portions thereof
adjudicated to all her co-heirs.
Neither Maxima nor any of her heirs ever questioned the validity of these two above-mentioned documents
to which she affixed her thumbmarks. Notably, when the instant complaint was filed by respondents against
Maxima and petitioners in 1991, in which respondents claimed as basis of their ownership of the one half
northern portion of the riceland was the Deed of Extra-judicial Partition, Maxima, while still living at that
time, as she died in 1993, never denied the same. As already stated, she failed to file an answer and was
declared in default.
In a contract of sale, it is essential that the seller is the owner of the property he is selling.12 Under Article
1458 of the Civil Code, the principal obligation of a seller is to transfer the ownership of the property
sold.13 Also, Article 1459 of the Civil Code provides that the thing must be licit and the vendor must have a
right to transfer the ownership thereof at the time it is delivered. Maxima's execution of the Deed of Sale
selling Parcel One, part of which is respondents' one half northern portion, was not valid and did not
transfer ownership of the land to petitioners, as Maxima had no title or interest to transfer. It is an
established principle that no one can give what one does not have -- nemo dat quod non habet.
Accordingly, one can sell only what one owns or is authorized to sell, and the buyer can acquire no more
than what the seller can transfer legally.14
Petitioners insist that Maxima owned the subject land as shown by her actual and continuous possession of
the same; that it was declared in her name for taxation purposes; that throughout the time that Maxima
and her children were in possession of the property, she never gave any share of the produce to
respondents; and that Maxima even mortgaged the land to a bank.
We are not persuaded.
Maxima's possession of the subject land was by reason of her request to her daughter Penicula, who was
installed by respondents as tenant after the execution of the Deed of Extra-judicial Partition, as Maxima
wanted to farm the land so that she could have a share in the produce, to which Penicula acceded out of
pity.15 It was also established that after the execution of the Deed of Extra-judicial Partition, Penicula as
tenant was able to farm the subject land for one cropping year before she allowed her mother Maxima to
farm the land thereafter; and, at that time, Penicula gave the corresponding share of the produce of that
one crop year to Adela,16 one of herein respondents, thus establishing respondents' ownership of the
subject land. Evidently, Maxima's possession of the land was not in the concept of an owner.
While the land was declared in Maxima's name for taxation purposes, it did not establish Maxima's
ownership of the same. We have held that a tax declaration, by itself, is not considered conclusive evidence
of ownership.17 It is merely an indicium of a claim of ownership.18 Because it does not by itself give title, it is
of little value in proving one's ownership.19 Petitioners' reliance on Maxima's tax declaration in assuming that
she owned Parcel One is an erroneous assumption that should not prejudice the rights of the real owners.
The fact that a mortgage was constituted on the land while the same was in Maxima's name would not
make Maxima the owner thereof. Maxima's non-ownership of Parcel One was clearly established by the
Deed of Extra-judicial Partition and the Statement of Conformity, wherein she categorically declared that the
land was actually owned by her deceased parents, to which she separately affixed her thumbmarks. Both
documents showed declarations against her interest in the land. A declaration against interest is the best
evidence which affords the greatest certainty of the facts in dispute.20
While petitioners were able to secure a certificate of title covering Parcel One in petitioner Rogelia's name,
their possession of a certificate of title alone does not necessarily make them the true owners of the
property described therein. Our land registration laws do not give the holder any better title than what he
actually has.21
In Naval v. Court of Appeals,22 we held:
Registration of a piece of land under the Torrens System does not create or vest title, because it is not a
mode of acquiring ownership. A certificate of title is merely an evidence of ownership or title over the
particular property described therein. It cannot be used to protect a usurper from the true owner; nor can it
be used as a shield for the commission of fraud; neither does it permit one to enrich himself at the expense
of others. Its issuance in favor of a particular person does not foreclose the possibility that the real property
may be co-owned with persons not named in the certificate, or that it may be held in trust for another
person by the registered owner.
x x x notwithstanding the indefeasibility of the Torrens title, the registered owner may still be compelled to
reconvey the registered property to its true owners. The rationale for the rule is that reconveyance does not
set aside or re-subject to review the findings of fact of the Bureau of Lands. In an action for reconveyance,
the decree of registration is respected 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 the one with a better right.23
We find that reconveyance of the subject land to respondents is proper. The essence of an action for
reconveyance is that the free patent and certificate of title are respected as incontrovertible. What is sought
is the transfer of the property, which has been wrongfully or erroneously registered in another person's
name, to its rightful owner or to one with a better right.24
Respondents have specifically prayed that petitioners be ordered to restore and reconvey to them the
subject land. In an action for reconveyance, the issue involved is one of ownership; and for this purpose,
evidence of title may be introduced. Respondents had sufficiently established that Parcel One, covered by
OCT No. P-13873, of which respondents' northern one half portion formed a part, was not owned by
Maxima at the time she sold the land to petitioners. We have earlier discussed the evidence presented by
respondents establishing that Maxima had no claim of ownership over the land sold by her to petitioners.
An action for reconveyance prescribes in 10 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.25 Records show that while the
land was registered in the name of petitioner Rogelia in 1984, the instant complaint for reconveyance was
filed by the respondents in 1991, and was thus still within the ten-year prescriptive period.
Petitioners claim that they were innocent buyers in good faith and for value; that there was no evidence
showing that they were in bad faith when they purchased the subject land; that Article 526 of the Civil Code
provides that he is deemed a possessor in good faith who is not aware that there exists in his title or mode
of acquisition any flaw which invalidates it; and that good faith is always presumed, and upon him who
alleges bad faith on the part of a possessor rests the burden of proof.
Notably, petitioners bought the property when it was still an unregistered land. The defense of having
purchased the property in good faith may be availed of only where registered land is involved and the buyer
had relied in good faith on the clear title of the registered owner.26
In Ong v. Olasiman27 in which a claim of good faith was raised by petitioner who bought an unregistered
land, we held:
Finally, petitioners' claim of good faith does not lie too as it is irrelevant:
[T]he issue of good faith or bad faith of the buyer is relevant only where the subject of the sale is registered
land and the purchaser is buying the same from the registered owner whose title to the land is clean x x x
in such case the purchaser who relies on the clean title of the registered owner is protected if he is a
purchaser in good faith for value. Since the properties in question are unregistered lands, petitioners as
subsequent buyers thereof did so at their peril. Their claim of having bought the land in good faith, i.e.,
without notice that some other person has a right to or interest in the property, would not protect them if it
turns out, as it actually did in this case, that their seller did not own the property at the time of the sale. 28
Petitioners claim that the subject land is a public land, and that petitioners were issued title over this land in
1984; that respondents did not present any evidence to prove that the subject land was already a private
land prior to their acquisition and the issuance of a free patent title to them; that the presumption that the
subject land was formerly part of the mass of alienable lands of public domain under the Regalian doctrine,
and was regularly granted to petitioners by way of free patent and certificate of title, remains CERTIFICATION
incontrovertible in favor of petitioner.1avvphi1
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it is
This issue was only raised for the first time in petitioners' Memorandum filed with us. Well-settled is the rule hereby certified that the conclusions in the above Decision had been reached in consultation before the case
that issues not raised and/or ventilated in the trial court cannot be raised for the first time on appeal and was assigned to the writer of the opinion of the Court’s Division.
cannot be considered for review — to consider questions belatedly raised tramples on the basic principles of
fair play, justice and due process.29 REYNATO S. PUNO
Chief Justice
Finally, we find no error committed by the CA in affirming the RTC's order for petitioners to pay respondents
their corresponding share in the produce of the subject land from the time they were deprived thereof until
the possession is restored to them. As aptly stated by the CA, thus:

It is said that one of the attributes of ownership is the right to enjoy and dispose of the the thing owned,
The right to enjoy included the right to receive the produce of the thing. The plaintiffs-appellees, as true
owners of the subject land were deprived of their property when Maxima Divison illegally sold it to spouses
Daclags. As such, equtiy demands that the plaintiff-appeellees be given what rightfully belonged to them
under the time honored principle that a person cannot enrich himself at the expense of another.

WHEREFORE, the petition for review is DENIED. The Decision dated October 17, 2001 and Resolution
dated August 7, 2003 of the Court of Appeals are AFFIRMED.

Costs against petitioners.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MINITA V. CHICO-NAZARIO ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

RUBEN T. REYES
Associate Justice

ATTESTATION

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

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
6. CLADO-REYES V. LIMPE
SECOND DIVISION
G.R. No. 163876 July 9, 2008
ROSALINA CLADO-REYES, ALICIA REYES-POTENCIANO, ANTONIO C. REYES, BERNARDO C.
REYES, JOVITO C. REYES, MARIA REYES-DIZON, BERNARDA REYES-LLANZA, deceased
represented by BONG R. LLANZA and REYNALDO C. REYES (deceased), represented by NINO R.
REYES, Petitioners,
vs.
SPOUSES JULIUS and LILY LIMPE, Respondents.
DECISION
QUISUMBING, J.:
This petition for review seeks to set aside the Decision1 dated February 20, 2004 and the Resolution2 dated
June 9, 2004, of the Court of Appeals in CA-G.R. CV No. 70170, which had affirmed the Decision3 dated
January 9, 2001 of the Regional Trial Court (RTC), Branch 81, of Malolos, Bulacan in Civil Case No. 61-M-95
for quieting of title, reconveyance and damages.
Subject of the present controversy is a 2,445-square meter portion of a certain lot in Guiguinto, Bulacan
covered by Transfer Certificate of Title (TCT) No. RT-32498 (T-199627),4 having a total lot area of 20,431
square meters, more or less.
On February 1, 1995,5 petitioners filed an action to quiet title, reconveyance and damages against
respondents and alleged that they have been occupying the disputed lot since 1945 through their
predecessor-in-interest, Mamerto B. Reyes. They claimed that during his lifetime, Mamerto had accepted a
verbal promise of the former lot owner, Felipe Garcia, to give the disputed lot to him in exchange for the
surrender of his tenancy rights as a tiller thereof. To prove that Mamerto was a former tenant of Felipe; that
during his lifetime he had worked on the lot; and that he owned and possessed the same,6 petitioners
presented two documents, namely: (1) Certification7 dated October 12, 1979 and (2)
"Pagpapatunay"8 dated November 17, 1982 allegedly executed by Simeon I. Garcia, the eldest son of Felipe,
attesting to such facts. Petitioners also alleged that whenever respondents visited the lot, respondent Julius
Limpe would promise to deliver the certificate of title to them. However, sometime in October 1994,
petitioners received a letter9 from respondents asserting ownership over the disputed lot.
In their answer, respondents contended that they are the legal owners of the lot by virtue of a Deed of
Exchange of Real Estate10 and Deed of Absolute Sale11 executed on July 5, 1974 and February 28, 1974,
respectively, between them and Farm-Tech Industries, Incorporated. To further assert ownership over the
lot, they presented TCT No. T-199627, Tax Declaration Nos. 1517212 and 952913 and realty tax receipts14 of
the lot, which were all registered and declared in their names.
In its Decision dated January 9, 2001, the trial court ruled in favor of respondents and held that the
certificate of title, tax declarations and realty tax receipts presented in court indisputably established
respondents’ ownership over the lot. The certificate of title was registered in respondents’ names and the
realty tax receipts showed that respondents consistently paid the corresponding real property taxes. These
pieces of evidence, said the trial court, prevail over petitioners’ allegation of an "undocumented promise" by
the former lot owner, which in itself, is ineffective or unenforceable under the law. Accordingly, the trial
court ordered petitioners to reconvey the disputed lot to respondents.
On February 20, 2004, the Court of Appeals affirmed the trial court’s ruling and held that petitioners have
no title whatsoever upon which respondents’ title could cast a cloud, as they were the ones casting doubt
on respondents’ title.15 It held that the documents allegedly executed by Simeon I. Garcia showed
no indicia that the alleged owner, Felipe Garcia, donated the disputed lot to them. It further held that
Simeon I. Garcia was not the real owner of the lot; thus, he could not make an effective conveyance
thereof. Consequently, it upheld respondents’ title over the disputed lot. The decretal portion of the decision
reads,
WHEREFORE, the appeal is hereby DISMISSED. The decision of the Regional Trial Court of Malolos, Bulacan,
Branch 81, dated January 9, 2001 is AFFIRMED.
SO ORDERED.16
Petitioners now before this Court raise the sole issue of:
WHETHER THE [PETITIONERS] HAVE A CAUSE OF ACTION TO QUIET TITLE, RECONVEYANCE AND
DAMAGES AGAINST RESPONDENTS.17
Petitioners cite Section 418 of Article XIII of the 1987 Constitution and Section 219 of the Comprehensive
Agrarian Reform Law and state that their title was founded upon those provisions, which were enacted for
the benefit of farmers, majority of whom are educationally deficient, if not uneducated. Next, they contend
that respondents are not purchasers in good faith because they were fully aware of petitioners’ actual
possession of the lot when they purchased the same. Conformably, according to petitioners, respondents
are liable for damages under Article 1920 of the Civil Code of the Philippines.
Respondents counter that they are the true and lawful owners of the disputed lot as evidenced by TCT No.
RT-32498 (T-199627), Tax Declaration Nos. 15172 and 9529 and realty tax receipts, all registered and
declared in their names. They claim that they are buyers in good faith when they purchased the lot from
Farm-Tech Industries, Incorporated, free from all liens and encumbrances. They aver that they are not
obliged to go beyond the face of a TCT in the absence of any cloud therein.
Respondents also argue that petitioners’ cause of action must fail because they failed to prove (1) that their
predecessor-in-interest, Mamerto B. Reyes, was a farmer; (2) that the lot was agricultural and not a
commercial lot; and (3) that they are qualified beneficiaries under the agrarian reform law. They point out
that Simeon I. Garcia, who allegedly executed the Certification and "Pagpapatunay," was not presented in
court to prove the veracity of the contents of those two documents. They also aver that the property
mentioned in the document "Pagpapatunay" was not specifically described as the property litigated herein.
Thus, according to respondents, those documents have no binding effect on third persons, are hearsay, and
have no probative value.
After considering the submissions of the parties and the issue before us, we are in agreement that the
petition lacks merit.
To begin with, an action for quieting of title originated in equity jurisprudence to secure an adjudication that
a claim of title to or an interest in property, adverse to that of the complainant, is invalid, so that the
complainant and those claiming under him may be forever free from any danger of hostile claim. Thus, our
courts are tasked to determine the respective rights of the contending parties, not only to put things in their
proper places, but also to benefit both parties, so that he who has the right would see every cloud of doubt LEONARDO A. QUISUMBING
over the property dissipated, and he could afterwards without fear introduce the improvements he may Associate Justice
desire, to use and even to abuse the property as he may deem best.211avvphi1
WE CONCUR:
Under Articles 47622 and 47723 of the New Civil Code, there are two indispensable requisites in order that an
action to quiet title could prosper: (1) that the plaintiff or complainant has a legal or an equitable title to or ANTONIO T. CARPIO*
interest in the real property subject of the action; and (2) that the deed, claim, encumbrance or proceeding Associate Justice
claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.24 CONCHITA CARPIO MORALES DANTE O. TINGA
Associate Justice Associate Justice
To prove their case, petitioners merely cited Section 4 of Article XIII of the 1987 Constitution and Section 2
of the Comprehensive Agrarian Reform Law and stated that their title was founded upon those provisions.
PRESBITERO J. VELASCO, JR.
They hardly argued on the matter. Neither was there positive evidence (1) that their predecessor had legal
Associate Justice
title, i.e., a certificate of land transfer;25 (2) that the lot was an agricultural lot and not a commercial one as
contended by respondents; and (3) that they are qualified beneficiaries under the Agrarian Reform Law.
Time and again we have held that a mere allegation is not evidence, and he who alleges has the burden of ATTESTATION
proving the allegation with the requisite quantum of evidence.26
I attest that the conclusions in the above Decision had been reached in consultation before the case was
Next, the documentary evidence petitioners presented, namely, the "Certification" and "Pagpapatunay," did assigned to the writer of the opinion of the Court’s Division.
not confirm their title over the disputed lot. First, original copies of those documents were not presented in
court.27 Second, as the appellate court pointed out, Simeon I. Garcia, the declarant in those documents, was LEONARDO A. QUISUMBING
not presented in court to prove the veracity of their contents.28 Third, even a cursory examination of those Associate Justice
documents would not show any transfer or intent to transfer title or ownership of the disputed lot from the Chairperson
alleged owner, Felipe Garcia, to petitioners or their predecessor-in-interest, Mamerto B. Reyes. Fourth,
petitioners did not bother to adduce evidence that Simeon I. Garcia, as the eldest son of the late Felipe CERTIFICATION
Garcia, inherited the entire lot as to effectively convey title or ownership over the disputed lot, i.e. thru
extrajudicial settlement of the estate of the late Felipe Garcia. Accordingly, we agree that the documents Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify
allegedly executed by Simeon I. Garcia are purely hearsay and have no probative value. that the conclusions in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.
In contrast, respondents presented evidence which clearly preponderates in their favor. First, the transfer
certificate of title, tax declarations and realty tax receipts were all in their names. Second, pursuant to the REYNATO S. PUNO
Torrens System, TCT No. RT-32498 (T-199627) enjoys the conclusive presumption of validity and is the best Chief Justice
proof of ownership of the lot.29 Third, although tax declarations or realty tax receipts are not conclusive
evidence of ownership, nevertheless, they are good indicia of possession in the concept of an owner, for no
one in his right mind would be paying taxes for a property that is not in his actual or at least constructive
possession. As we previously held, such realty tax payments constitute proof that the holder has a claim of
title over the property.30

Worth stressing, in civil cases, the plaintiff must establish his cause of action by preponderance of evidence;
otherwise, his suit will not prosper.31 After carefully considering the arguments of the parties, as well as
their respective evidence, we unanimously agree that the petitioners were not able to prove that they have
any legal or equitable title over the disputed lot. Thus, we find no reversible error in the assailed decisions
of the courts below.

WHEREFORE, the instant petition is DENIED for utter lack of merit. The Decision dated February 20, 2004
and the Resolution dated June 9, 2004, of the Court of Appeals in CA-G.R. CV No. 70170 are AFFIRMED.
Costs against petitioners.

SO ORDERED.
7. YUJUICO V. REPUBLIC
SECOND DIVISION
G.R. No. 168661 October 26, 2007
ESTATE OF THE LATE JESUS S. YUJUICO, represented by ADMINISTRATORS BENEDICTO V.
YUJUICO and EDILBERTO V. YUJUICO; and AUGUSTO Y. CARPIO, Petitioners,
vs.
REPUBLIC OF THE PHILIPPINES and the COURT OF APPEALS, Respondents.
DECISION
VELASCO, JR., J.:
In 1973, Fermina Castro filed an application for the registration and confirmation of her title over a parcel of
land with an area of 17,343 square meters covered by plan (LRC) Psu-964 located in the Municipality of
Parañaque, Province of Rizal (now Parañaque City), in the Pasig-Rizal Court of First Instance (CFI), Branch
22. The application was docketed LRC Case No. N-8239. The application was opposed by the Office of the
Solicitor General (OSG) on behalf of the Director of Lands, and by Mercedes Dizon, a private party. Both
oppositions were stricken from the records since the opposition of Dizon was filed after the expiration of the
period given by the court, and the opposition of the Director of Lands was filed after the entry of the order
of general default. After considering the evidence, the trial court rendered its April 26, 1974 Decision. The
dispositive portion reads:
____________________________
* As per September 3, 2007 raffle.
WHEREFORE, the Court hereby declares the applicant, Fermina Castro, of legal age, single, Filipino and a
resident of 1515 F. Agoncillo St., Corner J. Escoda St., Ermita, Manila, the true and absolute owner of the
land applied for situated in the Municipality of Parañaque, Province of Rizal, with an area of 17,343 square
meters and covered by plan (LRC) Psu-964 and orders the registration of said parcel of land in her name
with her aforementioned personal circumstances.
Once this decision becomes final and executory, let the corresponding order for the issuance of the decree
be issued.
SO ORDERED.1
The Director of Lands and Mercedes Dizon did not appeal from the adverse decision of the Pasig-Rizal CFI.
Thus, the order for the issuance of a decree of registration became final, and Decree No. N-150912 was
issued by the Land Registration Commission (LRC).2 Original Certificate of Title (OCT) No. 10215 was issued
in the name of Fermina Castro by the Register of Deeds for the Province of Rizal on May 29, 1974.3
The land was then sold to Jesus S. Yujuico, and OCT No. 10215 was cancelled. On May 31, 1974,4 Transfer
Certificate of Title (TCT) No. 445863 was issued in Yujuico’s name, who subdivided the land into two lots.
TCT No. 4463865 over Lot 1 was issued in his name, while TCT No. S-293616 over Lot 2 was issued in the
name of petitioner Augusto Y. Carpio.
Annotations at the back of TCT No. 446386 show that Yujuico had, at one time or another, mortgaged the
lot to the Philippine Investments System Organization (PISO) and Citibank, N.A. Annotations in the title of
petitioner Carpio reveal the lot was mortgaged in favor of Private Development Corporation (PDC), Rizal
Commercial Banking Corporation (RCBC) and then Philippine Commercial and Industrial Bank (PCIB) and the
Development Bank of the Philippines (DBP) to secure various loans.
Sometime in 1977, Presidential Decree No. (PD) 1085 entitled Conveying the Land Reclaimed in the
Foreshore and Offshore of the Manila Bay (The Manila-Cavite Coastal Road Project) as Property of the Public
Estates Authority as well as Rights and Interests with Assumptions of Obligations in the Reclamation
Contract Covering Areas of the Manila Bay between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines (1977) was issued. Land reclaimed in the foreshore and
offshore areas of Manila Bay became the properties of the Public Estates Authority (PEA), a government
corporation that undertook the reclamation of lands or the acquisition of reclaimed lands. On January 13,
1989, OCT No. SP 02 was issued in favor of PEA. The PEA also acquired ownership of other parcels of land
along the Manila Bay coast, some of which were subsequently sold to the Manila Bay Development
Corporation (MBDC), which in turn leased portions to Uniwide Holdings, Inc.7
The PEA undertook the construction of the Manila Coastal Road. As this was being planned, Yujuico and
Carpio discovered that a verification survey they commissioned showed that the road directly overlapped
their property, and that they owned a portion of the land sold by the PEA to the MBDC.
On July 24, 1996, Yujuico and Carpio filed before the Parañaque City Regional Trial Court (RTC), a
complaint for the Removal of Cloud and Annulment of Title with Damages docketed as Civil Case No. 96-
0317 against the PEA. On May 15, 1998 the parties entered into a compromise agreement approved by the
trial court in a Resolution dated May 18, 1998. On June 17, 1998, the parties executed a Deed of Exchange
of Real Property, pursuant to the compromise agreement, where the PEA property with an area of 1.4007
hectares would be conveyed to Jesus Yujuico and petitioner Carpio in exchange for their property with a
combined area of 1.7343 hectares.
On July 31, 1998, the incumbent PEA General Manager, Carlos P. Doble, informed the OSG that the new
PEA board and management had reviewed the compromise agreement and had decided to defer its
implementation and hold it in abeyance following the view of the former PEA General Manager, Atty. Arsenio
Yulo, Jr., that the compromise agreement did not reflect a condition of the previous PEA Board, requiring
the approval of the Office of the President. The new PEA management then filed a petition for relief from
the resolution approving the compromise agreement on the ground of mistake and excusable negligence.
The petition was dismissed by the trial court on the ground that it was filed out of time and that the
allegation of mistake and excusable negligence lacked basis.
The PEA fared no better in the Court of Appeals (CA), as the petition was dismissed for failure to pay the
required docket fees and for lack of merit.
The matter was raised to the Supreme Court in Public Estates Authority v. Yujuico8 but PEA’s petition was
denied, upholding the trial court’s dismissal of the petition for relief for having been filed out of time. The
allegation of fraud in the titling of the subject property in the name of Fermina Castro was not taken up by
the Court.
On June 8, 2001, in a Complaint for Annulment and Cancellation of Decree No. N-150912 and its Derivative
Titles, entitled Republic of the Philippines v. Fermina Castro, Jesus S. Yujuico, August Y. Carpio and the
Registry of Deeds of Parañaque City docketed as Civil Case No. 01-0222, filed with the Parañaque City RTC,
respondent Republic of the Philippines, through the OSG, alleged that when the land registered to Castro The dispositive portion of the CA decision reads,
was surveyed by Engr. H. Obreto on August 3, 1972 and subsequently approved by the LRC on April 23,
1973, the land was still a portion of Manila Bay as evidenced by Namria Hydrographic Map No. 4243, WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Order dated
Surveys to 1980; 1st Ed/. January 9/61: Revised 80-11-2; that Roman Mataverde, the then OIC of the August 7, 2002 of the trial court in Civil Case No. 01-0222 is hereby REVERSED and SET ASIDE. The case is
Surveys Division, Bureau of Lands, informed the OIC of the Legal Division that "[w]hen projected on hereby REMANDED to said court for further proceedings and a full-blown trial on the merits with utmost
Cadastral Maps CM 14 deg. 13’ N-120 deg, 59’E, Sec.2-A of Parañaque Cadastre (Cad. 299), (LRC) Psu-964 dispatch.15
falls inside Manila Bay, outside Cad. 299"; that then Acting Regional Lands Director Narciso V. Villapando
issued a Report dated November 15, 1973 stating that plan (LRC) Psu-964 is a portion of Manila Bay; that Hence, this petition.
then Officer-in-Charge, Assistant Director of Lands, Ernesto C. Mendiola, submitted his Comment and
Recommendation re: Application for Registration of Title of FERMINA CASTRO, LRC Case No. N-8239, dated The Issues
Dec. 1, 1977, praying that the instant registration case be dismissed; and that Fermina Castro had no
registrable rights over the property.
Petitioners now raise the following issues before this Court:

More significantly, respondent Republic argued that, first, since the subject land was still underwater, it
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR AND DECIDED A QUESTION OF SUBSTANCE IN
could not be registered in the name of Fermina Castro. Second, the land registration court did not have
A WAY NOT IN ACCORDANCE WITH LAW AND THE APPLICABLE DECISIONS OF THE HONORABLE COURT
jurisdiction to adjudicate inalienable lands, thus the decision adjudicating the subject parcel of land to
AND HAS DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS
Fermina Castro was void. And third, the titles of Yujuico and Carpio, being derived from a void title, were
NECESSITATING THE HONORABLE COURT’S EXERCISE OF ITS POWER OF SUPERVISION CONSIDERING
likewise void.9
THAT:

On September 13, 2001, Yujuico and Carpio filed a Motion to Dismiss (With Cancellation of Notice of Lis
I. THE REVERSAL BY THE COURT OF APPEALS OF THE TRIAL COURT’S APPLICATION OF THE PRINCIPLE
Pendens),10 on the grounds that: (1) the cause of action was barred by prior judgment; (2) the claim had
OF RES JUDICATA IN THE INSTANT CASE IS BASED ON ITS ERRONEOUS ASSUMPTION THAT THE
been waived, abandoned, or otherwise extinguished; (3) a condition precedent for the filing of the
SUBJECT LAND IS OF PUBLIC DOMAIN, ALLEGEDLY PART OF MANILA BAY.
complaint was not complied with; and (4) the complaint was not verified and the certification against forum
shopping was not duly executed by the plaintiff or principal party.
A. IN THE FIRESTONE CASE, THE HONORABLE COURT APPLIED THE PRINCIPLE OF RES
JUDICATA NOTWITHSTANDING ALLEGATIONS OF LACK OF JURISDICTION OF A LAND
On November 27, 2001, respondent Republic filed an Opposition11 to the motion to dismiss to which
REGISTRATION COURT, FORECLOSING ANY FURTHER ATTEMPT BY RESPONDENT
defendants filed a Reply12 on January 14, 2002, reiterating the grounds for the motion to dismiss. THEREIN, AS IN THE INSTANT CASE, TO RESURRECT A LONG-SETTLED JUDICIAL
DETERMINATION OF REGISTRABILITY OF A PARCEL OF LAND BASED ON THE SHEER
In the August 7, 2002 Order of the RTC,13 Civil Case No. 01-0222 was dismissed. The trial court stated that ALLEGATION THAT THE SAME IS PART OF THE PUBLIC DOMAIN.
the matter had already been decided in LRC Case No. N-8239, and that after 28 years without being
contested, the case had already become final and executory.1âwphi1 The trial court also found that the
B. THE LAND REGISTRATION COURT HAD JURISDICTION TO DETERMINE WHETHER THE
OSG had participated in the LRC case, and could have questioned the validity of the decision but did not.
SUBJECT LAND WAS PART OF THE PUBLIC DOMAIN.
Civil Case No. 01-0222 was thus found barred by prior judgment.
C. RESPONDENT’S REVERSION CASE SEEKS TO RETRY THE VERY SAME FACTUAL ISSUES
On appeal to the CA, in CA-G.R. CV No. 76212, respondent Republic alleged that the trial court erred in
THAT HAVE ALREADY BEEN JUDICIALLY DETERMINED OVER THIRTY (30) YEARS AGO.
disregarding that appellant had evidence to prove that the subject parcel of land used to be foreshore land
of the Manila Bay and that the trial court erred in dismissing Civil Case No. 01-0222 on the ground of res
D. THE JURISPRUDENTIAL BASES APPLIED BY THE COURT OF APPEALS IN ITS
judicata.14
QUESTIONED DECISION ARE MISPLACED, CONSIDERING THAT THEY ARE ALL
PREDICATED ON THE ERRONEOUS PREMISE THAT IT IS UNDISPUTED THAT THE SUBJECT
The CA observed that shores are properties of the public domain intended for public use and, therefore, not
LAND IS PART OF THE PUBLIC DOMAIN.
registrable and their inclusion in a certificate of title does not convert the same into properties of private
ownership or confer title upon the registrant.
II. RESPONDENT IS BARRED BY JURISDICTIONAL ESTOPPEL AND LACHES FROM QUESTIONING THE
JURISDICTION OF THE LAND REGISTRATION COURT.
Further, according to the appellate court res judicata does not apply to lands of public domain, nor does
possession of the land automatically divest the land of its public character.
III. RELIANCE BY THE COURT OF APPEALS ON THE ISOLATED PRONOUNCEMENT OF THE HONORABLE
COURT IN THE PEA CASE IS UNWARRANTED AND MISLEADING CONSIDERING THAT THE MATTER OF
The appellate court explained that rulings of the Supreme Court have made exceptions in cases where the
WHETHER RES JUDICATA APPLIES WITH RESPECT TO THE LAND REGISTRATION COURT’S DECISION IN
findings of the Director of Lands and the Department of Environment and Natural Resources (DENR) were
1974 WAS NOT IN ISSUE IN SAID CASE.
conflicting as to the true nature of the land in as much as reversion efforts pertaining foreshore lands are
embued with public interest.
 A. THE INSTANT REVERSION CASE IS NOT THE PROPER RECOURSE.
B. THE VALIDITY OF THE COURT-APPROVED COMPROMISE AGREEMENT 15 MAY 1998 HAS
ALREADY BEEN AFFIRMED BY THE HONORABLE COURT IN THE PEA CASE.
IV. EQUITABLE CONSIDERATIONS MANDATE THE APPLICATION OF THE RULE ON ORDINARY ESTOPPEL
AND LACHES IN THE INSTANT CASE AGAINST RESPONDENT.
V. RESPONDENT CANNOT BE GIVEN SPECIAL CONSIDERATION AND EXCUSED FOR TRANSGRESSING
RULES OF PROCEDURE.16
Essentially, the issues boil down to three: (1) Is a reversion suit proper in this case? (2) Is the present
petition estopped by laches? (3) Did the CA erroneously apply the principle of res judicata?
An action for reversion seeks to restore public land fraudulently awarded and disposed of to private
individuals or corporations to the mass of public domain.17 This remedy is provided under Commonwealth
Act (CA) No. 141 (Public Land Act) which became effective on December 1, 1936. Said law recognized the
power of the state to recover lands of public domain. Section 124 of CA No. 141 reads:
SEC. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or executed in violation
of any of the provisions of Sections one hundred and eighteen, one hundred and twenty, one hundred and
twenty one, one hundred and twenty-two, and one hundred twenty-three of this Act shall be unlawful and
null and void from its execution and shall produce the effect of annulling and cancelling the grant, title,
patent, or permit originally issued, recognized or confirmed, actually or presumptively, and cause the
reversion of the property and its improvements to the State. (Emphasis supplied.)
Pursuant to Section 124 of the Public Land Act, reversion suits are proper in the following instances, to wit:
1. Alienations of land acquired under free patent or homestead provisions in violation of Section 118,
CA No. 141;
2. Conveyances made by non-Christians in violation of Section 120, CA No. 141; and
3. Alienations of lands acquired under CA No. 141 in favor of persons not qualified under Sections
121, 122, and 123 of CA No. 141.
From the foregoing, an action for reversion to cancel titles derived from homestead patents or free patents
based on transfers and conveyances in violation of CA No. 141 is filed by the OSG pursuant to its authority
under the Administrative Code with the RTC. It is clear therefore that reversion suits were originally utilized
to annul titles or patents administratively issued by the Director of the Land Management Bureau or the
Secretary of the DENR.
While CA No. 141 did not specify whether judicial confirmation of titles by a land registration court can be
subject of a reversion suit, the government availed of such remedy by filing actions with the RTC to cancel
titles and decrees granted in land registration applications.
The situation changed on August 14, 1981 upon effectivity of Batas Pambansa (BP) Blg. 129 which gave the
Intermediate Appellate Court the exclusive original jurisdiction over actions for annulment of judgments of
RTCs.
When the 1997 Rules of Civil Procedure became effective on July 1, 1997, it incorporated Rule 47 on
annulment of judgments or final orders and resolutions of the RTCs. The two grounds for annulment under
Sec. 2, Rule 47 are extrinsic fraud and lack of jurisdiction. If based on extrinsic fraud, the action must be
filed within four (4) years from its discovery, and if based on lack of jurisdiction, before it is barred by laches
or estoppel as provided by Section 3, Rule 47. Thus, effective July 1, 1997, any action for reversion of public
land instituted by the Government was already covered by Rule 47.
The instant Civil Case No. 01-0222 for annulment and cancellation of Decree No. N-150912 and its
derivative titles was filed on June 8, 2001 with the Parañaque City RTC. It is clear therefore that the
reversion suit was erroneously instituted in the Parañaque RTC and should have been dismissed for lack of
jurisdiction. The proper court is the CA which is the body mandated by BP Blg. 129 and prescribed by Rule
47 to handle annulment of judgments of RTCs.
In Collado v. Court of Appeals,18 the government, represented by the Solicitor General pursuant to Section
9(2) of BP Blg. 129, filed a petition for annulment of judgment with the CA. Similarly in the case of Republic
v. Court of Appeals,19 the Solicitor General correctly filed the annulment of judgment with the said appellate
court.
This was not done in this case. The Republic misfiled the reversion suit with the Parañaque RTC. It should
have been filed with the CA as required by Rule 47. Evidently, the Parañaque RTC had no jurisdiction over
the instant reversion case.
Assuming that the Parañaque RTC has jurisdiction over the reversion case, still the lapse of almost three
decades in filing the instant case, the inexplicable lack of action of the Republic and the injury this would
cause constrain us to rule for petitioners. While it may be true that estoppel does not operate against the
state or its agents,20 deviations have been allowed. In Manila Lodge No. 761 v. Court of Appeals, we said:
Estoppels against the public are little favored. They should not be invoked except in rare and unusual
circumstances, and may not be invoked where they would operate to defeat the effective operation of a
policy adopted to protect the public. They must be applied with circumspection and should be applied only
in those special cases where the interests of justice clearly require it. Nevertheless, the government must
not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do
a shabby thing; and subject to limitations x x x, the doctrine of equitable estoppel may be invoked against
public authorities as well as against private individuals.21 (Emphasis supplied.)
Equitable estoppel may be invoked against public authorities when as in this case, the lot was already
alienated to innocent buyers for value and the government did not undertake any act to contest the title for
an unreasonable length of time.
In Republic v. Court of Appeals, where the title of an innocent purchaser for value who relied on the clean
certificates of the title was sought to be cancelled and the excess land to be reverted to the Government,
we ruled that "[i]t is only fair and reasonable to apply the equitable principle of estoppel by laches against
the government to avoid an injustice to innocent purchasers for value (emphasis supplied)."22 We explained:
Likewise time-settled is the doctrine that where innocent third persons, relying on the correctness of the
certificate of title, acquire rights over the property, courts cannot disregard such rights and order the
cancellation of the certificate. Such cancellation would impair public confidence in the certificate of title, for
everyone dealing with property registered under the Torrens system would have to inquire in every instance
whether the title has been regularly issued or not. This would be contrary to the very purpose of the law,
which is to stabilize land titles. Verily, all persons dealing with registered land may safely rely on the
correctness of the certificate of title issued therefore, and the law or the courts do not oblige them to go
behind the certificate in order to investigate again the true condition of the property. They are only charged
with notice of the liens and encumbrances on the property that are noted on the certificate.23
xxxx
But in the interest of justice and equity, neither may the titleholder be made to bear the unfavorable effect
of the mistake or negligence of the State’s agents, in the absence of proof of his complicity in a fraud or of
manifest damage to third persons. First, the real purpose of the Torrens system is to quiet title to land to
put a stop forever to any question as to the legality of the title, except claims that were noted in the
certificate at the time of the registration or that may arise subsequent thereto. Second, as we discussed
earlier, estoppel by laches now bars petitioner from questioning private respondents’ titles to the subdivision
lots. Third, it was never proven that Private Respondent St. Jude was a party to the fraud that led to the
increase in the area of the property after its subdivision. Finally, because petitioner even failed to give
sufficient proof of any error that might have been committed by its agents who had surveyed the property,
the presumption of regularity in the performance of their functions must be respected. Otherwise, the
integrity of the Torrens system, which petitioner purportedly aims to protect by filing this case, shall forever
be sullied by the ineptitude and inefficiency of land registration officials, who are ordinarily presumed to
have regularly performed their duties.24
Republic v. Court of Appeals is reinforced by our ruling in Republic v. Umali,25 where, in a reversion case, we
held that even if the original grantee of a patent and title has obtained the same through fraud, reversion
will no longer prosper as the land had become private land and the fraudulent acquisition cannot affect the
titles of innocent purchasers for value.
Considering that innocent purchaser for value Yujuico bought the lot in 1974, and more than 27 years had
elapsed before the action for reversion was filed, then said action is now barred by laches.
While the general rule is that an action to recover lands of public domain is imprescriptible, said right can be
barred by laches or estoppel. Section 32 of PD 1592 recognized the rights of an innocent purchaser for
value over and above the interests of the government. Section 32 provides:
SEC. 32. Review of decree of registration; Innocent purchaser for value.—The decree of registration shall
not be reopened or revised by reason of absence, minority, or other disability of any person adversely
affected thereby, nor by any proceeding in any court for reversing judgments, subject, however, to the right
of any person, including the government and the branches thereof, deprived of land or of any estate or
interest therein by such adjudication or confirmation of title obtained by actual fraud, to file in the proper
Court of First Instance a petition for reopening and review of the decree of registration not later than one
year from and after the date of the entry of such decree of registration, but in no case shall such petition be
entertained by the court where an innocent purchaser for value has acquired the land or an interest therein,
whose rights may be prejudiced. Whenever the phrase "innocent purchaser for value" or an equivalent
phrase occurs in this Decree, it shall be deemed to include an innocent lessee, mortgagee, or other
encumbrances for value. (Emphasis supplied.)
In this petition, the LRC (now LRA), on May 30, 1974, issued Decree No. N-150912 in favor of Fermina
Castro and OCT No. 10215 was issued by the Rizal Registrar of Deeds on May 29, 1974. OCT No. 10215
does not show any annotation, lien, or encumbrance on its face. Relying on the clean title, Yujuico bought
the same in good faith and for value from her. He was issued TCT No. 445863 on May 31, 1974. There is no
allegation that Yujuico was a buyer in bad faith, nor did he acquire the land fraudulently. He thus had the
protection of the Torrens System that every subsequent purchaser of registered land taking a certificate of
title for value and in good faith shall hold the same free from all encumbrances except those noted on the
certificate and any of the x x x encumbrances which may be subsisting.26 The same legal shield redounds to
his successors-in-interest, the Yujuicos and Carpio, more particularly the latter since Carpio bought the lot
from Jesus Y. Yujuico for value and in good faith.
Likewise protected are the rights of innocent mortgagees for value, the PISO, Citibank, N.A., PDC, RCBC,
PCIB, and DBP. Even if the mortgagor’s title was proved fraudulent and the title declared null and void, such
declaration cannot nullify the mortgage rights of a mortgagee in good faith.27
All told, a reversion suit will no longer be allowed at this stage.
More on the issue of laches. Laches is 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
thereto has either abandoned or declined to assert it.28
When respondent government filed the reversion case in 2001, 27 years had already elapsed from the time
the late Jesus Yujuico purchased the land from the original owner Castro. After the issuance of OCT No.
10215 to Castro, no further action was taken by the government to question the issuance of the title to
Castro until the case of Public Estates Authority, brought up in the oral argument before this Court on
September 6, 2000.29 We then held that allegation of fraud in the issuance of the title was not proper for
consideration and determination at that stage of the case.
From the undisputed facts of the case, it is easily revealed that respondent Republic took its sweet time to
nullify Castro’s title, notwithstanding the easy access to ample remedies which were readily available after
OCT No. 10215 was registered in the name of Castro. First, it could have appealed to the CA when the
Pasig-Rizal CFI rendered a decision ordering the registration of title in the name of applicant Castro on April
26, 1974. Had it done so, it could have elevated the matter to this Court if the appellate court affirms the
decision of the land registration court. Second, when the entry of Decree No. N-150912 was made on May
29, 1974 by the Rizal Register of Deeds, the Republic had one (1) year from said date or up to May 28,
1975 to file a petition for the reopening and review of Decree No. N-150912 with the Rizal CFI (now RTC)
on the ground of actual fraud under section 32 of PD 1592. Again, respondent Republic did not avail of such
remedy. Third, when Jesus Yujuico filed a complaint for Removal of Cloud and Annulment of Title with
Damages against PEA before the Parañaque RTC in Civil Case No. 96-0317, respondent could have
persevered to question and nullify Castro’s title. Instead, PEA undertook a compromise agreement on which
the May 18, 1998 Resolution30 was issued. PEA in effect admitted that the disputed land was owned by the
predecessors-in-interest of petitioners and their title legal and valid; and impliedly waived its right to contest
the validity of said title; respondent Republic even filed the petition for relief from judgment beyond the
time frames allowed by the rules, a fact even acknowledged by this Court in Public Estates Authority. Lastly,
respondent only filed the reversion suit on June 8, 2001 after the passage of 27 years from the date the
decree of registration was issued to Fermina Castro.
Such a Rip Van Winkle, coupled with the signing of the settlement with PEA, understandably misled
petitioners to believe that the government no longer had any right or interest in the disputed lot to the
extent that the two lots were even mortgaged to several banks including a government financing institution.
Any nullification of title at this stage would unsettle and prejudice the rights and obligations of innocent
parties. All told, we are constrained to conclude that laches had set in.
Even granting arguendo that respondent Republic is not precluded by laches from challenging the title of
petitioners in the case at bar, still we find that the instant action for reversion is already barred by res
judicata.
Petitioners relying on Firestone Ceramics, Inc. v. Court of Appeals31 as a precedent to the case at bar
contend that the instant reversion suit is now barred by res judicata.
We agree with petitioners.
The doctrine on precedents is expressed in the latin maxim—Stare decisis et non quieta movere. Follow past
precedents and do not disturb what has been settled.32 In order however that a case can be considered as a
precedent to another case which is pending consideration, the facts of the first case should be similar or
analogous to the second case.
A perusal of the facts of the Firestone case and those of the case at bar reveals that the facts in the two (2)
cases are parallel. First, in Firestone and in this case, the claimants filed land registration applications with
the CFI; both claimants obtained decrees for registration of lots applied for and were issued OCTs. Second,
in Firestone, the Republic filed a reversion case alleging that the land covered by the OCT was still
inalienable forest land at the time of the application and hence the Land Registration Court did not acquire
jurisdiction to adjudicate the property to the claimant. In the instant case, respondent Republic contend that
the land applied for by Yujuico was within Manila Bay at the time of application and therefore the CFI had
no jurisdiction over the subject matter of the complaint. Third, in Firestone, the validity of the title of the
claimant was favorably ruled upon by this Court in G.R. No. 109490 entitled Patrocinio E. Margolles v. CA. In
the case at bar, the validity of the compromise agreement involving the disputed lot was in effect upheld
when this Court in Public Estates Authority v. Yujuico dismissed the petition of PEA seeking to reinstate the
petition for relief from the May 18, 1998 Resolution approving said compromise agreement. With the
dismissal of the petition, the May 18, 1998 Resolution became final and executory and herein respondent
Republic through PEA was deemed to have recognized Castro’s title over the disputed land as legal and
valid. In Romero v. Tan,33 we ruled that "a judicial compromise has the effect of res judicata." We also
made clear that a judgment based on a compromise agreement is a judgment on the merits, wherein the
parties have validly entered into stipulations and the evidence was duly considered by the trial court that
approved the agreement. In the instant case, the May 18, 1998 Resolution approving the compromise
agreement confirmed the favorable decision directing the registration of the lot to Castro’s name in LRC
Case No. N-8239. Similarly, in Firestone, the Margolles case confirmed the decision rendered in favor of
Gana in Land Registration Case No. 672 ordering the issuance of the decree to said applicant. Fourth, in
Firestone, the Supreme Court relied on the letter of then Solicitor General Francisco Chavez that the
evidence of the Bureau of Lands and the LRC was not sufficient to support an action for cancellation of OCT
No. 4216. In the instant case, both the Solicitor General and the Government Corporate Counsel opined that
the Yujuico land was not under water and that "there appears to be no sufficient basis for the Government
to institute the action for annulment." Fifth, in Firestone, we ruled that "the Margolles case had long become
final, thus the validity of OCT No. 4216 should no longer be disturbed and should be applied in the instant
case (reversion suit) based on the principle of res judicata or, otherwise, the rule on conclusiveness of
judgment."34
Clearly from the above, Firestone is a precedent case. The Public Estates Authority had become final and
thus the validity of OCT No. 10215 issued to Castro could no longer be questioned.
While we said in Public Estates Authority that the court does not foreclose the right of the Republic from
pursuing the proper recourse in a separate proceedings as it may deem warranted, the statement was
obiter dictum since the inquiry on whether or not the disputed land was still under water at the time of its
registration was a non-issue in the said case.
Even granting for the sake of argument that Firestone is not squarely applicable, still we find the reversion
suit already barred by res judicata.
For res judicata to serve as an absolute bar to a subsequent action, the following requisites must concur:
(1) there must be a final judgment or order; (2) the court rendering it must have jurisdiction over the
subject matter and the parties; (3) it must be a judgment or order on the merits; and (4) there must be
between the two cases, identity of parties, subject matter and causes of action.35
There is no question as to the first, third and last requisites. The threshold question pertains to the second
requisite, whether or not the then Pasig-Rizal CFI, Branch 22 had jurisdiction over the subject matter in LRC
Case No. N-8239. In Civil Case No. 01-0222, the Parañaque City RTC, Branch 257 held that the CFI had
jurisdiction. The CA reversed the decision of the Parañaque City RTC based on the assertion of respondent
Republic that the Pasig-Rizal CFI had no jurisdiction over the subject matter, and that there was a need to
determine the character of the land in question.
The Parañaque City RTC Order dismissing the case for res judicata must be upheld.
The CA, in rejecting the dismissal of the reversion case by the Parañaque RTC, relied on two cases, namely:
Municipality of Antipolo v. Zapanta36 and Republic v. Vda. De Castillo.37
In Municipality of Antipolo, we held that the land registration court had no jurisdiction to entertain any land
registration application if the land was public property, thus:
Since the Land Registration Court had no jurisdiction to entertain the application for registration of public
property of ANTIPOLO, its Decision adjudicating the DISPUTED PROPERTY as of private ownership is null
and void. It never attained finality, and can be attacked at any time. It was not a bar to the action brought
by ANTIPOLO for its annulment by reason of res judicata.
"[x x x] the want of jurisdiction by a court over the subject matter renders the judgment void and a mere
nullity, and considering that a void judgment is in legal effect no judgment, by which no rights are divested,
from which no rights can be obtained, which neither binds nor bars any one, and under which all acts
performed and all claims flowing out of are void, and considering, further, that the decision, for want of
jurisdiction of the court, is not a decision in contemplation of law, and hence, can never become executory,
it follows that such a void judgment cannot constitute a bar to another case by reason of res judicata."
xxxx
"It follows that ‘if a person obtains a title under the Public Land Act which includes, by oversight, lands
which cannot be registered under the Torrens System, or when the Director of Lands did not have
jurisdiction over the same because it is a public forest, the grantee does not, by virtue of the said certificate
of title alone, become the owner of the land illegally included’ (Republic vs. Animas, 56 SCRA 499, 503;
Ledesma vs. Municipality of Iloilo, 49 Phil. 769)."
[x x x x]
"Under these circumstances, the certificate of title may be ordered cancelled (Republic vs. Animas, et al.,
supra), and the cancellation maybe pursued through an ordinary action therefore. This action cannot be
barred by the prior judgment of the land registration court, since the said court had no jurisdiction over the
subject matter. And if there was no such jurisdiction, then the principle of res judicata does not apply. [x x
x] Certainly, one of the essential requisites, i.e., jurisdiction over the subject matter, is absent in this case."
(Italics supplied).38
The plain import of Municipality of Antipolo is that a land registration court, the RTC at present, has no
jurisdiction over the subject matter of the application which respondent Republic claims is public land. This
ruling needs elucidation.
Firmly entrenched is the principle that jurisdiction over the subject matter is conferred by
law.39 Consequently, the proper CFI (now the RTC) under Section 14 of PD 152940 (Property Registration
Decree) has jurisdiction over applications for registration of title to land.
Section 14 of PD 1592 provides:
SEC. 14. Who may apply.—The following persons may file in the proper Court of First Instance an
application for registration of title to land, whether personally or through their duly authorized
representatives:
(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of alienable and disposable lands of the public domain
under a bona fide claim of ownership since June 12, 1945, or earlier. (Emphasis supplied.)
Conformably, the Pasig-Rizal CFI, Branch XXII has jurisdiction over the subject matter of the land
registration case filed by Fermina Castro, petitioners’ predecessor-in-interest, since jurisdiction over the
subject matter is determined by the allegations of the initiatory pleading¾the application.41 Settled is the
rule that "the authority to decide a case and not the decision rendered therein is what makes up jurisdiction.
When there is jurisdiction, the decision of all questions arising in the case is but an exercise of
jurisdiction."42
In our view, it was imprecise to state in Municipality of Antipolo that the "Land Registration Court [has] no
jurisdiction to entertain the application for registration of public property x x x" for such court precisely has
the jurisdiction to entertain land registration applications since that is conferred by PD 1529. The applicant
in a land registration case usually claims the land subject matter of the application as his/her private
property, as in the case of the application of Castro. Thus, the conclusion of the CA that the Pasig-Rizal CFI
has no jurisdiction over the subject matter of the application of Castro has no legal mooring. The land
registration court initially has jurisdiction over the land applied for at the time of the filing of the application.
After trial, the court, in the exercise of its jurisdiction, can determine whether the title to the land applied for
is registrable and can be confirmed. In the event that the subject matter of the application turns out to be
inalienable public land, then it has no jurisdiction to order the registration of the land and perforce must
dismiss the application.
Based on our ruling in Antipolo, the threshold question is whether the land covered by the titles of
petitioners is under water and forms part of Manila Bay at the time of the land registration application in
1974. If the land was within Manila Bay, then res judicata does not apply. Otherwise, the decision of the
land registration court is a bar to the instant reversion suit.
After a scrutiny of the case records and pleadings of the parties in LRC Case No. N-8239 and in the instant
petition, we rule that the land of Fermina Castro is registrable and not part of Manila Bay at the time of the
filing of the land registration application.
The trial court’s Decision in 1974 easily reveals the basis for its conclusion that the subject matter was a dry
land, thus:
On February 1, 1974, the applicant presented her evidence before the Deputy Clerk of this Court and among
the evidence presented by her were certain documents which were marked as Exhibits D to J, inclusive. The
applicant testified in her behalf and substantially declared that: she was 62 years old, single, housekeeper
and residing at 1550 J. Escoda, Ermita, Manila; that she was born on June 3, 1911; that she first came to
know of the land applied for which is situated in the Municipality of Parañaque, province of Rizal, with an
area of 17,343 square meters and covered by plan (LRC) Psu-964 while she was still ten (10) years old or
sometime in 1921; that when she first came to know of the land applied for, the person who was in
possession and owner of said land was her father, Catalino Castro; that during that time her father used to
plant on said land various crops like pechay, mustard, eggplant, etc.; that during that time, her father built
a house on said land which was used by her father and the other members of the family, including the
applicant, as their residential house; that the land applied for was inherited by her father from her
grandfather Sergio Castro; that Catalino Castro continuously possessed and owned the land in question
from 1921 up to the time of his death in 1952; and that during that period of time nobody ever disturbed
the possession and ownership of her father over the said parcel of land; that after the death of her father in
1952 she left the place and transferred her place of residence but she had also occasions to visit said land
twice or thrice a week and sometimes once a week; that after she left the land in question in 1952, she still
continued possessing said land, through her caretaker Eliseo Salonga; that her possession over the land in
question from the time she inherited it up to the time of the filing of the application has been continuous,
public, adverse against the whole world and in the concept of an owner; that it was never encumbered,
mortgaged, or disposed of by her father during his lifetime and neither did she ever encumber or sell the
same; that it was declared for taxation purposes by her father when he was still alive and her father also
paid the real estate taxes due to the government although the receipt evidencing the payment of said real
estate taxes for the property applied for have been lost and could no longer be found inspite of diligent
effort exerted to locate the same.
The other witness presented by the applicant was Emiliano de Leon, who declared that he was 70 years old,
married, farmer and residing at San Jose, Baliwag, Bulacan; that he knew Catalino Castro, the father of the
applicant because said Catalino Castro was his neighbor in Tambo, Parañaque, Rizal, he had a house
erected on the land of Catalino Castro; that he was born in 1903 and he first came to know of the land in
question when in 1918 when he was about 18 years old; that the area of the land owned and possessed by
Catalino Castro where he constructed a residential house has an area of more than one and one-half (1 ½)
hectares; that the possession of Catalino Castro over the land in question was peaceful, continuous,
notorious, adverse against the whole world and in the concept of an owner; that during the time that
Catalino Castro was in possession of the land applied for he planted on said parcel of land mango, coconut
and banana, etc.; that Catalino Castro continuously possessed and owned said parcel of land up to the year
1952 when he died; that during the time that Catalino Castro was in possession of said land, nobody ever
laid claim over the said property; that said land is not within any military or naval reservation; that upon the
death of Catalino Castro, the applicant took possession of the land applied for and that up to the present
the applicant is in possession of said land; that he resided in the land in question from 1918 up to the time
he transferred his place of residence in Baliwag, Bulacan in the year 1958.
On February 11, 1974, the Court, pursuant to the provision of Presidential Decree No. 230 issued by his
Excellency, Ferdinand E. Marcos dated July 9, 1973 held in abeyance the rendition of a decision in this case
and directed the applicant to submit a white print copy of plan (LRC) Psu-964 to the Director of lands who
was directed by the Court to submit his comment and recommendation thereon.
The property in question is declared for taxation purposes under Tax Declaration No. 51842 (Exhibit G) and
real estate taxes due thereon have been paid up to the year 1973 (Exhibit H).
In compliance with the Order of this Court February 11, 1974, the Director of Lands, thru Special Attorney
Saturnino A. Pacubas, submitted a report to this Court dated April 25, 1974, stating among other things,
that upon ocular inspection conducted by Land Inspector Adelino G. Gorospe and the subsequent joint
ocular inspection conducted by Geodetic Engineer Manuel A. Cervantes and Administrative Assistant Lazaro
G. Berania, it was established that the parcel of land covered by plan (LRC) Psu-964 no longer forms part of
the Manila Bay but is definitely solid and dry land.
In this connection, it should be noted that Administrative Assistant Lazaro G. Berania and Geodetic Engineer
Manuel A. Cervantes, in their report dated March 22, 1974 have also stated that the land applied for cannot
be reached by water even in the highest tide and that the said land is occupied by squatter families who
have erected makeshift shanties and a basketball court which only prove that the same is dry and solid land
away from the shores of Manila Bay.
Furthermore, Land Inspector Adelino G. Gorospe in his letter-report dated November 28, 1973 has also
stated that there is a house of pre-war vintage owned by the applicant on the land in question which in
effect corroborates the testimony of the applicant and her witness that they have lived on the land in
question even prior to the outbreak of the second world war and that the applicant has been in possession
of the land in question long time ago.43
To counter the evidence of applicant Castro, and bolster its claim that she has no valid title, respondent
Republic relies on the July 18, 1973 Office Memorandum44 of Roman Mataverde, OIC, Surveys Division, to
the OIC, Legal Division, of the Bureau of Lands, stating that "when projected on cadastral maps CM 14º
13’N - 120º 59’ E., Sec. 3-D and CM 14º 30’N - 120º 59’E., Sec. 2-A of Paranaque [sic] Cadastre (Cad-299),
(LRC) Psu-964 falls inside Manila Bay, outside Cad-299."45
The same conclusion was adopted in a November 15, 1973 letter of Narciso Villapando, Acting Regional
Lands Director to the Chief, Legal Division, Bureau of Lands and in the Comment and Recommendation of
Ernesto C. Mendiola, Assistant Director, also of the Bureau of Lands.
Respondent likewise cites Namria Hydrographic Map No. 4243 Revised 80-11-2 to support its position that
Castro’s lot is a portion of Manila Bay.
The burden of proving these averments falls to the shoulders of respondent Republic. The difficulty is
locating the witnesses of the government. Roman Mataverde, then OIC of the Surveys Division retired from
the government service in 1982. He should by this time be in his 90s. Moreover, Asst. Regional Director
Narciso Villapando and Asst. Director Ernesto C. Mendiola are no longer connected with the Bureau of Lands
since 1986.
Assuming that OIC Roman Mataverde, Asst. Regional Director Narciso Villapando and Assistant Director
Ernesto C. Mendiola are still available as witnesses, the projections made on the cadastral maps of the then
Bureau of Lands cannot prevail over the results of the two ocular inspections by several Bureau of Lands
officials that the disputed lot is definitely "dry and solid land" and not part of Manila Bay. Special Attorney
Saturnino A. Pacubas, Land Inspector Adelino G. Gorospe, Geodetic Engineer Manuel A. Cervantes and
Administrative Asst. Lazaro A. Berana, all officials of the Bureau of Lands, were positive that the disputed
land is solid and dry land and no longer forms part of Manila Bay. Evidence gathered from the ocular
inspection is considered direct and firsthand information entitled to great weight and credit while the
Mataverde and Villapando reports are evidence weak in probative value, being merely based on theoretical
projections "in the cadastral map or table surveys."46 Said projections must be confirmed by the actual
inspection and verification survey by the land inspectors and geodetic engineers of the Bureau of Lands.
Unfortunately for respondent Republic, the bureau land inspectors attested and affirmed that the disputed
land is already dry land and not within Manila Bay.
On the other hand, the Namria Hydrographic Map No. 4243 does not reveal what portion of Manila Bay was
Castro’s lot located in 1974. Moreover, a hydrographic map is not the best evidence to show the nature and
location of the lot subject of a land registration application. It is derived from a hydrographic survey which is
mainly used for navigation purposes, thus:
Surveys whose principal purpose is the determination of data relating to bodies of water. A hydrographic
survey may consist of the determination of one or several of the following classes of data: depth water;
configuration and nature of the bottom; directions and force of currents; heights and times of tides and
water stages; and location of fixed objects for survey and navigation purposes.47
Juxtaposed with finding of the ocular inspection by Bureau of Lands Special Attorney Pacubas and others
that Castro’s lot is dry land in 1974, Namria Hydrographic Map No. 4243 is therefore inferior evidence and
lacking in probative force.
Moreover, the reliability and veracity of the July 18, 1973 report of Roman Mataverde based on the alleged
projection on cadastral maps and the Villapando report dated November 15, 1973 are put to serious doubt
in the face of the opinion dated October 13, 1997 of the Government Corporate Counsel, the lawyer of the
PEA, which upheld the validity of the titles of petitioners, thus:
We maintain to agree with the findings of the court that the property of Fermina Castro was registrable
land, as based on the two (2) ocular inspections conducted on March 22, 1974 by Lands Administrative
Assistant Lazaro G. Berania and Lands Geodetic Engr. Manuel Cervantes, finding ‘… the same no longer
forms part of Manila Bay but is definitely solid land which cannot be reached by water even in the highest of
tides’. This Berania-Cervantes report based on ocular inspections literally overturned the findings and
recommendations of Land Director Narciso V. Villapando dated November 15, 1973, and that of Director
Ernesto C. Mendiola dated December 1, 1977, and the fact that the Villapando-Mendiola reports were
merely based on projections in the cadastral map or table surveys.
xxxx
A. The Legal prognosis of the case is not promising in favor of PEA.
4.1 LRC Case No. N-8239 has already become final and executory and OCT No. 10215 was already
issued in favor of Fermina Castro. Any and all attempts to question its validity can only be
entertained in a quo warranto proceedings (sic), assuming that there are legal grounds (not factual
grounds) to support its nullification. Subjecting it to a collateral attack is not allowed under the
Torrens Title System. In Calalang vs. Register of Deeds of Quezon City, 208 SCRA 215, the Supreme
Court held that the present petition is not the proper remedy in challenging the validity of
certificates of titles since the judicial action required is a direct and not a collateral attack (refer also
to: Toyota Motor Philippine Corporation vs. CA, 216 SCRA 236).
 4.2 OCT No. 10215 in favor of Fermina Castro was issued pursuant to a cadastral proceeding, hence
is a rem proceedings which is translated as a constructive notice to the whole world, as held in Adez
Realty Incorporated vs. CA, 212 SCRA 623.
4.3 From the cursory and intent reading of the decision of Judge Sison in LRC Case No. N-8239, we
cannot find any iota of fraud having been committed by the court and the parties. In fact, due
process was observed when the Office of the Solicitor General represented ably the Bureau of
Lands. In Balangcad vs. Justices of the Court of Appeals, 206 SCRA 169, the Supreme Court held
that title to registered property becomes indefeasible after one-year from date of registration except
where there is actual fraud in which case it may be challenged in a direct proceeding within that
period. This is also the ruling in Bishop vs. CA, 208 SCRA 636, that to sustain an action for
annulment of a torrens certificate for being void ab initio, it must be shown that the registration
court had not acquired jurisdiction over the case and there was actual fraud in securing the title.
4.4 As to priority of torrens title, PEA has no defense, assuming that both PEA and Yujuico titles are
valid, as held in Metropolitan Waterworks and Sewerage System vs. CA, 215 SCRA 783, where two
(2) certificates purport to include the same land, the earlier in date prevails.
4.5 The documents so far submitted by the parties to the court indicate that the mother title of the
Yujuico land when registered in 1974 was not underwater. This was shown in the two (2) ocular
inspections conducted by the officials of the Land Bureau.
4.6 The provision of P.D. 239 that no decree of registration may be issued by the court unless upon
approval and recommendation of the Bureau of Lands was substantially complied with in the Report
of Lands Special Attorney Saturnino Pacubas, submitted to the court.48
Even the counsel of respondent Republic, the OSG, arrived at the conclusion that there is no sufficient legal
basis for said respondent to institute action to annul the titles of petitioners, thus:
It may be stated at the outset that a petition for annulment of certificate of title or reconveyance of land
may be based on fraud which attended the issuance of the decree of registration and the corresponding
certificate of title.
Based on the decision in the LRC Case No. N-8239 involving the petition for registration and confirmation of
title filed by Fermina Castro, there is no showing that fraud attended the issuance of OCT No. 10215. it
appears that the evidence presented by Fermina Castro was sufficient for the trial court to grant her
petition.
The testimony of Fermina Castro, which was corroborated by Emiliano de Leon, that she and her
predecessors-in-interest had been in possession of the land for more than thirty (30) years sufficiently
established her vested right over the property initially covered by OCT No. 10215. The report dated April 25,
1974 which was submitted to the trial court by the Director of Lands through Special Attorney Saturnino
Pacubas showed that the parcel of land was solid and dry land when Fermina Castro’s application for
registration of title was filed. It was based on the ocular inspection conducted by Land Inspector Adelino
Gorospe and the joint circular inspection conducted by Geodetic Engineer Manuel A. Cervantes and
Administrative Assistant Lazaro Berania on November 28, 1973 and March 22, 1974 respectively.
The aforesaid report must be requested unless there is a concrete proof that there was an irregularity in the
issuance thereof. In the absence of evidence to the contrary, the ocular inspection of the parcel of land,
which was made the basis of said report, is presumed to be in order.
Based on the available records, there appears to be no sufficient basis for the Government to institute an
action for the annulment of OCT No. 10215 and its derivative titles. It is opined that a petition for
cancellation/annulment of Decree No. N-150912 and OCT No. 10215 and all its derivative titles will not
prosper unless there is convincing evidence to negate the report of the then Land Management Bureau
through Special Attorney Pacubas. Should the Government pursue the filing of such an action, the possibility
of winning the case is remote.49
More so, respondent Government, through its counsel, admits that the land applied by Fermina Castro in
1973 was solid and dry land, negating the nebulous allegation that said land is underwater. The only
conclusion that can be derived from the admissions of the Solicitor General and Government Corporate
Counsel is that the land subject of the titles of petitioners is alienable land beyond the reach of the reversion
suit of the state.
Notably, the land in question has been the subject of a compromise agreement upheld by this Court in
Public Estates Authority.50 In that compromise agreement, among other provisions, it was held that the
property covered by TCT Nos. 446386 and S-29361, the land subject of the instant case, would be
exchanged for PEA property. The fact that PEA signed the May 15, 1998 Compromise Agreement is already
a clear admission that it recognized petitioners as true and legal owners of the land subject of this
controversy.
Moreover, PEA has waived its right to contest the legality and validity of Castro’s title. Such waiver is clearly
within the powers of PEA since it was created by PD 1084 as a body corporate "which shall have the
attribute of perpetual succession and possessed of the powers of the corporations, to be exercised in
conformity with the provisions of this Charter [PD 1084]."51 It has the power "to enter into, make, perform
and carry out contracts of every class and description, including loan agreements, mortgages and other
types of security arrangements, necessary or incidental to the realization of its purposes with any person,
firm or corporation, private or public, and with any foreign government or entity."52 It also has the power to
sue and be sued in its corporate name.53 Thus, the Compromise Agreement and the Deed of Exchange of
Real Property signed by PEA with the petitioners are legal, valid and binding on PEA. In the Compromise
Agreement, it is provided that it "settles in full all the claims/counterclaims of the parties against each
other."54 The waiver by PEA of its right to question petitioners’ title is fortified by the manifestation by PEA
in the Joint Motion for Judgment based on Compromise Agreement that
4. The parties herein hereto waive and abandon any and all other claims and counterclaims which they may
have against each other arising from this case or related thereto.55
Thus, there was a valid waiver of the right of respondent Republic through PEA to challenge petitioners’
titles.
The recognition of petitioners’ legal ownership of the land is further bolstered by the categorical and
unequivocal acknowledgment made by PEA in its September 30, 2003 letter where it stated that: "Your
ownership thereof was acknowledged by PEA when it did not object to your membership in the CBP-IA
Association, in which an owner of a piece of land in CBP-IA automatically becomes a member
thereof."56 Section 26, Rule 130 provides that "the act, declaration or omission of a party as to a relevant
fact may be given in evidence against him." The admissions of PEA which is the real party-in-interest in this
case on the nature of the land of Fermina Castro are valid and binding on respondent Republic.
Respondent’s claim that the disputed land is underwater falls flat in the face of the admissions of PEA
against its interests. Hence, res judicata now effectively precludes the relitigation of the issue of
registrability of petitioners’ lot.
In sum, the Court finds that the reversion case should be dismissed for lack of jurisdiction on the part of the
Parañaque RTC. Even if we treat said case as a petition for annulment of judgment under Rule 47 of the
1997 Rules of Civil Procedure, the dismissal of the case nevertheless has to be upheld because it is already
barred by laches. Even if laches is disregarded, still the suit is already precluded by res judicata in view of
the peculiar facts and circumstances obtaining therein.

WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Court of Appeals in CA-
G.R. CV No. 76212 is REVERSED and SET ASIDE, and the August 7, 2002 Order of the Parañaque City RTC,
Branch 257 in Civil Case No. 01-0222 entitled Republic of the Philippines v. Fermina Castro, et al. dismissing
the complaint is AFFIRMED.

No costs.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CONCHITA CARPIO MORALES DANTE O. TINGA

Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

ATTESTATION

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

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

CERTIFICATION

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

REYNATO S. PUNO
Chief Justice