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LTD Q and A PDF
LTD Q and A PDF
There is a need to update the Land Registration Act and to codify the various
laws relative to registration of property, in order to facilitate effective
implementation of said laws. To strengthen the Torrens system, it is deemed
necessary to adopt safeguards to prevent anomalous titling of real property,
and to streamline and simplify registration proceedings and the issuance of
certificates of title. The decrees promulgated relative to the registration of
certificates of land transfer and emancipation patents issued pursuant to
Presidential Decree No. 27 to hasten the implementation of the land reform
program of the country form an integral part of the property registration
laws.
recorded under Section 113 of this Decree, until the land shall have been
brought under the operation of the Torrens system. (Illustrative Case)
FACTS:
On 20 February 1998, Mario Malabanan filed an application for land
registration before the RTC of Cavite-Tagaytay, covering a parcel of land
situated in Silang Cavite, consisting of 71,324 square meters. Malabanan
claimed that he had purchased the property from Eduardo Velazco, and that
he and his predecessors-in-interest had been in open, notorious, and
continuous adverse and peaceful possession of the land for more than thirty
(30) years. Velazco testified that the property was originally belonged to a
twenty-two hectare property owned by his great-grandfather, Lino Velazco.
Lino had four sons– Benedicto, Gregorio, Eduardo and Esteban–the fourth
being Aristedes‘s grandfather. Upon Lino‘s death, his four sons inherited
the property and divided it among themselves. But by 1966, Esteban‘s
wife,Magdalena, had become the administrator of all the properties
inherited by the Velazco sons from their father, Lino. After the death of
Esteban and Magdalena, their son Virgilio succeeded them in administering
the properties, includingLot9864-A, which originally belonged to his uncle,
Eduardo Velazco. It was this property that was sold by Eduardo Velazco to
Malabanan.
Among the evidence presented by Malabanan during trial was a
Certification dated 11 June 2001, issued by the Community Environment &
Natural Resources Office, Department of Environment and Natural
Resources (CENRO-DENR), which stated that the subject property was
―verified to be within the Alienable or Disposable land per Land
Classification Map No. 3013 established under Project No. 20-A and
3
FACTS:
•On 08 January 1998, petitioners filed with the trial court an application for
registration of land under Presidential Decree (PD) No. 1529, otherwise
known as the Property Registration Decree. The application covered a
6
•On 21 November 1995, the Tonido family sold the Subject Property to
petitioners, as evidenced by a Deed of Absolute Sale.
•In its appeal, the Republic alleged that the trial court erred in approving
the application for registration despite petitioners‘ failure to prove open,
continuous, exclusive and notorious possession and occupation of the
Subject Property since 12 June 1945, or earlier, as required by Section
48(b) of Commonwealth Act No. 141, otherwise known as the Public Land
Act, as amended by PD No. 1073.
•Petitioners filed this petition for review on certiorari under Rule 45 of the
Rules of Court praying that the decision of the Court of Appeals be set aside
and that the decision of the trial court, approving petitioners‘ application
for registration of the Subject Property, be reinstated.
ISSUE:
• Whether or not the CA erred in dismissing and setting aside the
decision of the trial court on approving the petitioner‘s application for
registration.
HELD:
•In the case at bar, the Court of Appeals correctly ruled that petitioners have
failed to comply with the period of possession and occupation of the Subject
Property, as required by both the Property Registration Decree and the
Public Land Act. In its decision, the Court of Appeals held that –
Indeed, the earliest period that the applicants could claim ownership over
the property is in 1958, which is the earliest date Justina Hintog, the
previous owner/occupant, declared the property for taxation purposes. This
is far later than June 12, 1945, the date prescribed by law that the
applicants‘ possession under claim of ownership should have begun at the
latest.
It has been the constant holding of this Court that repeals by implication are
not favored and will not be so declared unless it be manifest that the
legislature so intended. Such a doctrine goes as far back as United States v.
9
•The petition is hereby DENIED for lack of merit. The Court AFFIRMS the
assailed decision of the Court of Appeals in CA-G.R. CV No. 68546, which
reversed the decision of the lower court in LRC Case No. 98-133 (LRA
Record No. N-69787) and dismissed the application for land title of
petitioners.
10
Purposes:
EXCEPT when the party concerned has actual knowledge of facts and
circumstances that should imply a reasonably cautious man to make such
further inquiry.
NOTE:
Lands granted under Spanish Mortgage Law which are not yet covered by
certificate of title under Torrens System are considered as unregistered
lands. (Sec. 3 P.D. 1529) (Illustrative Case)
11
FACTS:
The plaintiffs and the defendant occupy, as owners, adjoining lots in
the district of Ermita in the city of Manila. There exists and has existed a
number of years a stone wall between the said lots. Said wall is located on
the lot of the plaintiffs. The plaintiffs, March 2, 1906, presented a petition in
the Court of Land Registration for the registration of their lot, which
decreed that the title of the plaintiffs should be registered and issued to them
the original certificate provided for under the Torrens system. Said
registration and certificate included the wall.
On December 13, 1912 the plaintiffs discovered that the wall which had
been included in the certificate granted to them had also been included in
the certificate granted to the defendant .They immediately presented a
petition in the Court of Land Registration for an adjustment and correction
of the error committed by including said wall in the registered title of each
of said parties.
The lower court however, without notice to the defendant, denied said
petition upon the theory that, during the pendency of the petition for the
registration of the defendant‘s land, they failed to make any objection to the
registration of said lot, including the wall, in the name of the defendant.
12
ISSUE: Who is the owner of the wall and the land occupied by it?
HELD:
The decision of the lower court is based upon the theory that the
action for the registration of the lot of the defendant was a judicial
proceeding and that the judgment or decree was binding upon all parties
who did not appear and oppose it
Granting that theory to be correct one , then the same theory should
be applied to the defendant himself. Applying that theory to him, he had
already lost whatever right he had therein, by permitting the plaintiffs to
have the same registered in their name, more than six years before. Having
thus lost hid right, may he be permitted to regain it by simply including it in
a petition for registration?
For the difficulty involved in the present case the Act (No. 496)
provides for the registration of titles under the Torrens system affords us no
remedy. There is no provision in said Act giving the parties relief under
conditions like the present. There is nothing in the Act which indicates who
should be the owner of land which has been registered in the name of two
different persons.
It would be seen to a just and equitable rule, when two persons have
acquired equal rights in the same thing, to hold that the one who acquired it
first and who has complied with all the requirements of the law should be
protected.
FACTS:
Filriters registered owner of Central Bank Certificate of Indebtedness
(CBCI). Filriters transferred it to Philfinance by one of its officers without
authorization from the company. Subsequently, Philfinance transferred same
CBCI to Traders Royal Bank (TRB) under a repurchase agreement. When
Philfinance failed to do so, The TRB tried to register in its name in the
CBCI. The Central Bank did not want to recognize the transfer.
Docketed as Civil Case No. 83-17966 in the Regional Trial Court of
Manila, Branch 32, the action was originally filed as a Petition for
Mandamus 5 under Rule 65 of the Rules of Court, to compel the Central
Bank of the Philippines to register the transfer of the subject CBCI to
petitioner Traders Royal Bank (TRB).
APPLICABLE LAWS:
ISSUES:
1. Whether the CBCI is negotiable instrument or not.
2. Whether the Assignment of registered certificate is valid or null
and void.
15
RULINGS:
1. NO. The CBCI is not a negotiable instrument, since the instrument
clearly stated that it was payable to Filriters, and the certificate lacked the
words of negotiability which serve as an expression of consent that the
instrument may be transferred by negotiation.
BAR QUESTION
ANSWER: The suit will prosper. While an adverse claim duly annotated at
the back of a title under Sec. 70 of PD 1529 is good only for 30 days,
cancellation thereof is still necessary to render it Ineffective, otherwise, the
inscription thereof will remain annotated as a lien on the property. While the
life of adverse claim is 30 days under PD 1529, it continuous to be effective
until it is cancelled by formal petition filed with the Register of Deeds. The
cancellation of the notice of levy is justified under Sec. 108 of PD 1529
considering that the levy on execution cannot be enforced against the buyer
17
whose adverse claim against the registered owner was recorded ahead of the
notice of levy on execution.
18
1. Public grant
Based on the Public Land Acts
Obtained through issuance of Spanish Government of Royal Grants
and concessions to discoverers and settlers.
2. Reclamation
Filling up of parts of the sea for conversion to land.
The SC has ruled that only the National Government may engage in
reclamation projects.
6. Accretion
3 Requisites for accretion:
a) deposition of soil or sediment be gradual and imperceptible;
b) result of the action of waters of the river;
19
7. Involuntary alienation
E.g. eminent domain/expropriation
8. Descent or devise
By descent, title is acquired when an heir succeeds the deceased
owner in testate or intestate.
By devise, person acquires land from one who may not be a relative,
if he is named in the deceased‘s will.
20
ADVERSE POSSESSION
BAR NOTES
OWNERSHIP / POSSESSION
An action for reconveyance of a parcel of land based on constructive or
implied trust prescribes in 10 years reckoned from the issuance of title or
date of registration. This rule applies only when plaintiff or party enforcing
21
FACTS:
Corazon Naguit filed a petition for registration of title which seeks
judicial confirmation of her imperfect title over a parcel of land in Nabas,
Aklan. It was alleged that Naguit and her predecessors-in-interest have
occupied the land openly and in the concept of owner without any objection
from any private person or even the government until she filed her
application for registration. The MCTC rendered a decision confirming the
title in the name of Naguit upon failure of Rustico Angeles to appear during
trial after filing his formal opposition to the petition.
22
ISSUE:
Whether or not it is necessary under Section 14 (1) of the Property
Registration Decree that the subject land be first classified as alienable and
disposable before the applicant‘s possession under a bona fide claim of
ownership could even start.
RULING:
Section 14 (1) merely requires that the property sought to be
registered as already alienable and disposable at the time the application
for registration of title is filed.
There are three requirements for registration of title, (1) that the
subject property is alienable and disposable; (2) that the applicants and
their predecessor-in-interest have been in open, continuous, and exclusive
possession and occupation, and; (3) that the possession is under a bona fide
claim of ownership since June 12, 1945.
BAR QUESTION
Angel filed a petition for registration of a parcel of land on June 22, 1994
claiming that he has been in actual, open, continuous and notorious
possession, in the concept of an owner over the same. It appears that he
likewise filed a foreshore lease application over the same land in 1977.
During the trial, the court ordered the LRA and the CENRO to file with it a
report on the status of the subject land. The court thereafter rendered a
decision on May 3 1995 granting the petition. The said decision became
final and executory. The Office of the Solicitor general subsequently filed a
petition for annulment of the above judgment on the ground that based on
24
the report of the LRA which was received by it on June 22, 1995, the land
applied for is foreshore land.
ANSWERS:
a) NO. Foreshore land is that strip of land that lies between the high and low
water marks and is alternatively wet and dry to the flow of the tide. It is that
part of the land adjacent to the sea, which is alternatively covered and left
dry by the ordinary flow of tides. It is part of the alienable land of the public
domain and may be disposed of only by lease and not otherwise. Foreshore
land remains part of the public domain and is outside the commerce of man.
It is not capable of private appropriation.
b) YES. Even if the decision of the RTC has become final and executory, the
action for annulment of judgment should be sustained since it is impressed
with public interest. The State has to protect its interests and cannot be
bound by, or estopped from, the mistakes or negligent acts of its officials or
agents, mush more, non-suited as a result thereof. Furthermore, Angel had in
fact filed a foreshore lease application in 1977 and paid the corresponding
fees thereon. There is therefore doubt to Angel‘s claim that he had been in
actual, open, notorious, and continuous possession in the concept of an
owner. (Republic vs Court of Appeals, GR No. 126316, June 25, 2004)
25
PRESCRIPTION
FACTS:
On 20 February 1998, Mario Malabanan filed an application for land
registration before the RTC of Cavite-Tagaytay, covering a parcel of land
26
ISSUES:
1. In order that an alienable and disposable land of the public domain
may be registered under Section 14(1) of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree, should the land be
classified as alienable and disposable as of June 12, 1945 or is it sufficient
that such classification occur at any time prior to the filing of the applicant
for registration provided that it is established that the applicant has been in
open, continuous, exclusive and notorious possession of the land under a
bona fide claim of ownership since June 12, 1945 or earlier?
RULING:
(a) Since Section 48(b) merely requires possession since 12 June 1945
and does not require that the lands should have been alienable and
disposable during the entire period of possession, the possessor is entitled to
secure judicial confirmation of his title thereto as soon as it is declared
alienable and disposable, subject to the timeframe imposed by Section 47 of
the Public Land Act.
(b) The right to register granted under Section 48(b) of the Public
Land Act is further confirmed by Section 14(1) of the Property Registration
Decree.
ACCRETION
Article 457 of the Revised Civil Code of the Philippines provides that to the
owners of lands adjoining the banks of rivers belong the accretion which
they gradually receive from the effects of the current of the waters.
Adopted from the ‖ Law of the waters‖ which provided that the accretion
resulting from the gradual deposit by or sedimentation from the waters
belongs to the owners of the land bordering on streams, torrents, lakes, or
rivers.
Three requisites—
That the deposit be gradual and imperceptible
That it be made through the effects of the current of the water
That the land where accretion takes place is adjacent to the banks of
rivers
In the absence of evidence that the change in the course of the river was
sudden or that it occurred through avulsion, the presumption is that the
change was gradual and caused by accretion and erosion.
(Illustrative Case)
31
FACTS:
Sinforoso Pascual sits in the midst of a land registration case. The
story begins on 1946 upon his desire to register land on the northern section
of his existing property. His current registered property is bounded on the
east by Talisay River, on the West by Bulacan River and on the North by the
Manila bay. Both rivers flow towards the Manila Bay. Because of constantly
flowing water, extra land of about 17hectares formed in the northern most
section of the property. It is this property he sought to register.
Then a new party surfaced Mr. Emiliano Navarro jumped into the fray
opposing the same application, stating the he leased part of the property
sought to be registered. He sought to protect his fishpond that rested on the
same property. Sinforoso was not amused and filed ejectment against Mr.
Navarro, claiming that Navarro used stealth force and strategy to occupy a
portion of his land. Pascual lost the case against Navarro so he appealed.
During the appeal, his original land registration case was consolidated and
tried jointly. (alas Pascual died) The heirs of Pascual took over the case.
On 1975, the court decided that the property was foreshore land and
therefore part of public domain. The RTC dismissed the complaint of
32
Pascual for ejectment against Navarro and also denied his land registration
request. Pascual‘s heirs appealed and the RTC was reversed by the IAC.
The Apellate court granted petition for registration! The reason? The
accretion was caused by the two rivers, not manila bay. Hence it wasn‘t
foreshore land. (BUT the confusion lies in the fact that the accretion formed
adjacent to Manila Bay… which is sea!) Aggrieved, the Director of Forestry
moved for reconsideration (Government insists it is foreshore and hence,
public domain). The Apellate court denied all motions of the Director and
the Government.
ISSUE:
Whether or not the accretion taking place on property adjacent to the sea
can be registered under the Torrens system.
RULING:
to the rivers Talisay and Bulacan. The law is clear on this. Accretion of land
along the river bank may be registered. This is not the case of accretion of
land on the property adjacent to Manila Bay.
Lands added to the shores by accretions and alluvial deposits caused by the
action of the sea, form part of the public domain. When they are no longer
washed by the waters of the sea and are not necessary for purposes of public
utility, or for the establishment of special industries, or for the coast-guard
service, the Government shall declare them to be the property of the owners
of the estates adjacent thereto and as increment thereof.
The IAC decision granting registration was reversed and set aside.
Registration cannot be allowed.
34
RECLAMATION
The scope and application except for reclamation projects where contracts
/agreements had been executed between the government entity concerned
and private sector proponent/s prior to the effectivity of EO No. 146, this
IRR shall apply to all reclamation projects and reclamation components of a
development / infrastructure project, and shall specify and enumerate the
requirements and procedures for the review, evaluation and approval of all
reclamation projects and reclamation components nationwide by the NEDA
Board.
Facts:
On February 4, 1977, then President Ferdinand E. Marcos issued
Presidential Decree No. 1084 creating PEA. PD No. 1084 tasked PEA "to
reclaim land, including foreshore and submerged areas," and "to develop,
improve, acquire, lease and sell any and all kinds of lands." On the same
date, then President Marcos issued Presidential Decree No. 1085
transferring to PEA the "lands reclaimed in the foreshore and offshore of
the Manila Bay" under the Manila-Cavite Coastal Road and Reclamation
Project (MCCRRP).
PEA and AMARI entered into the JVA through negotiation without public
bidding. On April 28, 1995, the Board of Directors of PEA, in its Resolution
No. 1245, confirmed the JVA. On June 8, 1995, then President Fidel V.
Ramos, through then Executive Secretary Ruben Torres, approved the JVA.
conclusions of their report are: (1) the reclaimed lands PEA seeks to
transfer to AMARI under the JVA are lands of the public domain which the
government has not classified as alienable lands and therefore PEA cannot
alienate these lands; (2) the certificates of title covering the Freedom
Islands are thus void, and (3) the JVA itself is illegal.
Issue:
The issues raised by petitioner, PEA and AMARI are as follows:
1. Whether the reliefs prayed for are moot and academic because of
subsequent events;
2. Whether the petition should be dismissed for failing to observe the
principle of governing the heirarchy of courts;
37
Held:
1. We rule that the signing and of the Amended JVA by PEA and AMARI and
its approval by the President cannot operate to moot the petition and divest
the Court of its jurisdiction.
PEA and AMARI have still to implement the Amended JVA. The prayer to
enjoin the signing of the Amended JVA on constitutional grounds necessarily
includes preventing its implementation if in the meantime PEA and AMARI
have signed one in violation of the Constitution. Petitioner's principal basis
in assailing the renegotiation of the JVA is its violation of the Section 3,
Article XII of the Constitution, which prohibits the government from
alienating lands of the public domain to private corporations. The Amended
JVA is not an ordinary commercial contract but one which seeks to transfer
title and ownership to 367.5 hectares of reclaimed lands and submerged
areas of Manila Bay to a single private corporation.
3. PEA was under a positive legal duty to disclose to the public the terms
and conditions for the sale of its lands. The law obligated PEA make this
public disclosure even without demand from petitioner or from anyone. PEA
failed to make this public disclosure because the original JVA, like the
Amended JVA, was the result of a negotiated contract, not of a public
bidding. Considering that PEA had an affirmative statutory duty to make the
public disclosure, and was even in breach of this legal duty, petitioner had
the right to seek direct judicial intervention.
The petitioner has standing to bring this taxpayer's suit because the
petition seeks to compel PEA to comply with its constitutional duties. There
are two constitutional issues involved here. First is the right of citizens to
information on matters of public concern. Second is the application of a
constitutional provision intended to insure the equitable distribution of
alienable lands of the public domain among Filipino Citizens.
The thrust of the second issue is to prevent PEA from alienating hundreds of
hectares of alienable lands of the public domain in violation of the
Constitution, compelling PEA to comply with a constitutional duty to the
nation.
We rule that since the instant petition, brought by a citizen, involves the
enforcement of constitutional rights — to information and to the equitable
diffusion of natural resources — matters of transcendental public
importance, the petitioner has the requisite locus standi.
Requiring a consummated contract will keep the public in the dark until
the contract, which may be grossly disadvantageous to the government or
even illegal, becomes a fait accompli.
However, the right to information does not compel PEA to prepare lists,
abstracts, summaries and the like relating to the renegotiation of the JVA.
34 The right only affords access to records, documents and papers, which
means the opportunity to inspect and copy them. One who exercises the right
must copy the records, documents and papers at his expense. The exercise of
the right is also subject to reasonable regulations to protect the integrity of
the public records and to minimize disruption to government operations, like
rules specifying when and how to conduct the inspection and copying.
Property devoted to public use referred to property open for use by the
public. In contrast, property devoted to public service referred to property
used for some specific public service and open only to those authorized to
use the property. Property of public dominion referred not only to property
devoted to public use, but also to property not so used but employed to
develop the national wealth. This class of property constituted property of
public dominion although employed for some economic or commercial
activity to increase the national wealth.
The 1987 Constitution continues the State policy in the 1973 Constitution
banning private corporations from acquiring any kind of alienable land of
the public domain. Like the 1973 Constitution, the 1987 Constitution allows
private corporations to hold alienable lands of the public domain only
through lease. As in the 1935 and 1973 Constitutions, the general law
governing the lease to private corporations of reclaimed, foreshore and
marshy alienable lands of the public domain is still CA No. 141.
However, the original JVA dated April 25, 1995 covered not only the
Freedom Islands and the additional 250 hectares still to be reclaimed, it
also granted an option to AMARI to reclaim another 350 hectares. The
original JVA, a negotiated contract, enlarged the reclamation area to 750
hectares. The failure of public bidding on December 10, 1991, involving
only 407.84 hectares, is not a valid justification for a negotiated sale of 750
hectares, almost double the area publicly auctioned.
Jurisprudence holding that upon the grant of the patent or issuance of the
certificate of title the alienable land of the public domain automatically
becomes private land cannot apply to government units and entities like
PEA.
7. Considering that the Amended JVA is null and void ab initio, there is
no necessity to rule on this last issue. Besides, the Court is not the trier of
facts, and this last issue involves a determination of factual matters.
Facts:
This is a Petition for Review on Certiorari praying that the assailed
Decision1 dated June 21, 2005 of the Court of Appeals in CA G.R. CV No.
80241 be reversed and set aside. In the alternative, it prays that certain
properties supposedly conveyed by respondent La Savoie Development
Corporation to petitioner Home Guaranty Corporation2 be excluded from
the rehabilitation plan of La Savoie Development Corporation, should its
Petition for Corporate Rehabilitation be given due course.
The assailed Decision of the Court of Appeals reversed and set aside the
Order3 dated October 1, 2003 of the Regional Trial Court, Makati City,
reinstated the Stay Order issued by the Regional Trial Court on June 4,
2003, gave due course to La Savoie's Petition for Corporate Rehabilitation,
and remanded the case to the Regional Trial Court for further proceedings.4
The Regional Trial Court's June 4, 2003 Stay Order stayed the enforcement
of all claims, monetary or otherwise, and whether in court or otherwise,
against La Savoie Development Corporation.
With the onset of the Asian financial crisis in 1997, the devaluation of the
Philippine peso and due to other factors such as lack of working capital;
high interest rates, penalties, and charges; low demand for real estate
properties; and poor peace and order situations in some of its project sites,
La Savoie found itself unable to pay its obligations to its creditors. Thus, on
April 25, 2003, La Savoie filed before the Regional Trial Court, Makati
47
The proceedings before the Regional Trial Court were initially held in
abeyance as La Savoie failed to attach to its Petition some of the
requirements under Rule 4, Section 2 of the Interim Rules.9 With La Savoie's
compliance and finding its "petition to be sufficient in form and
substance,"10 then Regional Trial Court Judge Estela Perlas-Bernabe
issued the Stay Order dated June 4, 2003 staying the enforcement of all
claims against La Savoie. The entirety of this Order reads:
ORDER
The initial hearing on the petition is set on July 22, 2003 at 8:30 o'clock in
the morning at the 3rd Floor, Gusali ng Katarungan, F. Zobel St., Makati
City.
All creditors and interested parties including the Securities and Exchange
Commission are directed to file and serve on petitioner a verified comment
on or opposition to the petition with supporting affidavits and documents,
not later than ten (10) days before the date of the initial hearing. Failure to
do so will bar them from participating in the proceedings. Copies of the
petition and its annexes may be secured from the court within such time as
to enable them to file their comment on or opposition to the petition and to
prepare for its initial hearing.
Mr. Rito C. Manzana with address at 26B One Lafayette Condominium cor.
Leviste and Cedeno Manor St., Salcedo Village, Makati City is appointed
Rehabilitation Receiver of Petitioner. He may discharge his duties and
functions as such after taking his oath to perform his duties and functions
faithfully and posting a bond in the amount of P100,000.00 to guarantee the
faithful discharge of his duties and obedience to the orders of the court.
SO ORDERED.
ESTELA PERLAS-BERNABE
[sgd.]
Judge11
Following the issuance of the June 4, 2003 Stay Order, La Savoie's creditors
— Planters Development Bank, Philippine Veterans Bank, and Robinsons
Savings Bank — filed their Comments and/or Oppositions.12
Home Guaranty Corporation noted that through the "La Savoie Asset Pool
Formation and Trust Agreement"16 (Trust Agreement), La Savoie obtained
financing for some of its projects through a securitization process in which
Planters Development Bank as nominal issuer issued PI50 million in asset
participation certificates dubbed as the "La Savoie Development
Certificates"17 (LSDC certificates) to be sold to investors. The projects
financed by these certificates consisted of the development of real properties
in General Trias, Cavite; Sto. Tomas, Batangas; Los Banos, Laguna; and
Quezon City. The same properties were conveyed in trust by La Savoie, as
trustor, to Planters Development Bank, as trustee, and constituted into the
La Savoie Asset Pool (Asset Pool).18
The redemption of the LSDC certificates upon maturity and the interest
payments on them were "backed/collateralized by the assets that were
conveyed by [La Savoie] to the Trust."19 Moreover, the LSDC certificates
were covered by a guaranty extended by Home Guaranty Corporation
50
Home Guaranty Corporation argued that it and the investors on the LSDC
certificates had "preferential rights"25 over the properties making up the
Asset Pool as these "were conveyed as security or collaterals for the
redemption of the [LSDC certificates]."26 Thus, they should be excluded
from the coverage of La Savoie's Petition for Rehabilitation.
claimed that the properties comprising the Asset Pool remained to be its
assets.28
Aggrieved, La Savoie filed an Appeal before the Court of Appeals. It filed its
Appellant's Brief on May 5, 2004.36
In the Decision43 dated June 21, 2005, the Court of Appeals Special Twelfth
Division reversed and set aside the Regional Trial Court's October 1, 2003
Order, reinstated the Stay Order, gave due course to the Petition for
Rehabilitation, and remanded the case to the trial court for further
proceedings.
The Court of Appeals characterized the inaccuracies noted by the trial court
as "minor" and "trivial,"44as well as insufficient to render as "false" the
allegations made by La Savoie in its Petition for Rehabilitation. It added
that La Savoie "convincingly showed that it could undertake to market its
projects through [the] Pag-Ibig Overseas Program, sell the existing
inventories of unsold subdivision lots and use the un-remitted collections
due to HGC which will be converted as additional loan to fund its on-going
projects."45 Regarding Home Guaranty Corporation's payment of the
guaranty call, the Court of Appeals noted that it was made after the Petition
for Rehabilitation had been brought by La Savoie and after the issuance of
the Stay Order; thus, Home Guaranty Corporation had no right to make
such payment.
53
On August 12, 2005, Home Guaranty Corporation filed before this court the
present Petition for Review on Certiorari under Rule 45 of the 1997 Rules of
Civil Procedure.46
So, too, this case falls squarely under Article 1456 of the Civil Code. Home
Guaranty Corporation acquired the properties comprising the Asset Pool by
54
Two key points are established from the preceding discussions. First, the
Court of Appeals' June 21, 2005 Decision restored La Savoie's status as a
corporation under receivership. Second, with all but a constructive trust
created between Home Guaranty Corporation and La Savoie, the properties
comprising the Asset Pool remain within the dominion of La Savoie.
BAR NOTES
―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:
FACTS:
Oh Cho, a Chinese citizen, purchased from the Lagdameos a parcel of
land in Tayabas, which they openly, continuously and adversely possessed
since 1880. On January 17, 1940, Oh Cho applied for registration of this
57
land. The Solicitor General opposed on the ground that Oh Cho lacked title
to said land and also because he was an alien.
ISSUES:
1. Whether or not Oh Cho had title
2. Whether or not Oh Cho is entitled to a decree of registration
RULINGS:
Oh Cho failed to show that he has title to the lot, which may be
confirmed under the Land Registration Act.
All lands that were not acquired from the Government, either by
purchase or by grant, belong to the public domain. An exception to the rule
would be any land that should have been in the possession of an occupant
and of his predecessors in interest since time immemorial, for such
possession would justify the presumption that the land had never been part
of the public domain or that it had been a private property even before the
Spanish conquest.
The applicant does not come under the exception, for the earliest
possession of the lot by his first predecessor in interest began in 1880.
since the latter is an alien, the possessory right could never ripen to
ownership by prescription. As an alien, Oh Cho is disqualified from
acquiring title over public land by prescription.
59
On February 11, 1913, the Cadastral Law Act (Act 2259) was enacted for
compulsory registration of land titles with private ownership. Under this
Act, registration of titles was judicial in nature.
The Court of Land Registration exercised jurisdiction over all applicants for
the registration of titles to land or building in the Philippines, with the power
to hear and determine all questions arising upon such applications.
When, in the opinion of the Governor-General (now the President), the
public interests require that the title to any lands be titled and adjudicated, he
may to this end order the Director of Lands to make a survey and plan
thereof. (As amended by Sec. 1850, Act No. 2711.)
The Director of Lands shall, thereupon, give notice to persons claiming an
interest in the lands, and to the general public, of the day on which such
survey will begin, giving as full and accurate a description as possible of the
lands to be surveyed. Such notice shall be published in two successive issues
of the Official Gazette, and a copy of the notice in the English and Spanish
languages shall be posted in a conspicuous place on the chief municipal
building of the municipality, township or settlement in which the lands, or
any portion thereof, are situated. A copy of the notice shall also be sent to
the president of such municipality, township, or settlement, and to the
provincial board. (As amended by Sec. 1851, Act No. 2711.)
The surveyor or other employees of the Bureau of Lands in charge of the
survey shall give reasonable notice to the day on which the survey of any
portion of such lands is to begin, and shall post such notice in the usual place
on the chief municipal building of such municipality, township, or
settlement in which the lands are situated, and shall mark the boundaries of
60
FACTS:
Two properties of Salvador N. Lopez Agri-Business Corp. (SNLABC) were
placed under the coverage of the Comprehensive Agrarian Reform Law
CARL). SNLABC sought exemption of their properties, arguing that due to
the ruling in the Luz Farms case, land devoted to livestock is outside the
coverage of the CARL. Upon ocular inspection, the Municipal Agrarian
Reform Officer (MARO) found that one of the parcels of land, the Lopez
land, were exempt from CARL coverage. The other parcel, the Limot land,
was not exempt. SNLABC appealed the finding with the Secretary of the
Department of Agriculture. The DAR, however, ruled that both Lopez and
Limot lands were subject to the CARL. SNLABC appealed the decision to the
Court of Appeals, which rendered the assailed decision. The CA affirmed the
findings of the MARO, that the Lopez land was exclusively used for
livestock. The MARO found that the Lopez lands were used for grazing, and
that such was its purpose even before the Luz Farms ruling. It was
sufficiently established by testimonies of the people thereabouts. Despite the
presence of coconut trees in the Lopez lands, it is still used primarily for
raising livestock. There are also structures meant for such a purpose. The
Limot lands, on the other hand, were used both for coconut and rubber
plantations. The MARO found that it was only used as an extension of
grazing land, inconsistently at best. Both the DAR and SNLABC appealed
the decision.
61
ISSUE:
Whether or not the Lopez and Limot Lands are under the coverage of CARL
HELD:
Both petitions are denied
Civil Law: The DAR argues that the tax declaration of the Lopez lands
classify it as agricultural land. Also, that the SNLABC was incorporated
after the implementation of the CARL shows that there is an attempt to
evade CARL coverage. It is, however, doctrine that tax declarations
themselves are not conclusive evidence as to the classification of land. Also,
it is the actual usage of the land, not its classification, which determines its
eligibility for CARL. As for the Lopez lands, it as inherited by the owner of
SNLABC as livestock land. Its use has been for raising livestock even before
the incorporation of SNLABC. Hence, the time of incorporation, and the tax
declaration are irillustrative.
As for the Limot lands, it is not enough that such are used as seasonal
extensions of grazing land. The livestock are not regularly situated in the
land in question, but are only brought there at times for grazing. It is land
actually devoted to coconut and rubber. Hence, it cannot be exempted.
62
Facts:
Sometime in May 1972, the Agoo Breeding Station (or ―breeding station‖)
was established by the Department of Agriculture, through the Bureau of
Animal Industry (BAI), Region I, for the purpose of breeding cattle that
would be distributed to the intended beneficiaries pursuant to the livelihood
program of the national government. In support of the said project,
plaintiffs6 executed four (4) documents denominated as Deed of Donation in
favor of defendant Republic of the Philippines (or ―Republic‖) donating to
the latter four (4) parcels of land, more particularly described in the
following Tax Declarations (TD):
These parcels of land are located at Barrio Nazareno, Agoo, La Union. The
donation was subject to the conditions that these parcels of land 1) shall be
used solely for the establishment of a breeding station, and 2) shall not be
used for any other purpose, except with the previous consent of the donors
or their heirs.
a. That the land herein mentioned shall be used for the establishment of
a breeding station and shall not be used for any other purpose, except
with the previous consent of the DONOR or his heirs;
xxxx
All in all, the petitioners in G.R. No. 197267 – Federico Daclan, Josefina
Collado, Teodoro Daclan, Jose Daclan (the Daclans) – and several others
donated around 13 hectares of land to the Republic. The uniform deeds of
donation covering these parcels of land contained the same conditions,
including the above stipulations relative to exclusive purpose/use and
automatic reversion.10
Sometime after the donations were made, the La Union Medical Center
(LUMC) was constructed on a 1.5-hectare portion of the 13-hectare donated
property.11
On March 28, 2005, the Daclans filed Civil Case No. A-2363 for specific
performance against the Republic and the Province of La Union. The case
was assigned to Branch 32 of the RTC of Agoo, La Union (Agoo RTC). The
Daclans essentially claimed in their Amended Complaint13 that pursuant to
the automatic reversion clause in the deeds of donation, they are entitled to
a return of their donated parcels of land after the Bureau of Animal Industry
(BAI) ceased operating the breeding station, but that the Republic and the
Province failed to honor the said clause and refused to return their land.
They thus prayed that the defendants be ordered to return to them the
donated land, with all improvements existing thereon.
In its Answer,14 the Province alleged that the Daclans have no cause of
action since the breeding station was still existing – although this time it is
65
In their Reply,16 the Daclans claimed that the donated land cannot be
assigned by the Republic to the Province as the deeds of donation did not
include the Republic‘s successors or assigns as intended beneficiaries; that
contrary to the Province‘s claim, the breeding station is not operational and
has been abandoned, and the existing heads of cattle found therein do not
belong to the government but to former officials of the BAI; and that with the
automatic reversion clause, they are granted the immediate right to occupy
the subject land, and no injunctive relief should issue against them.
At a distance of about 200 meters from the main entrance of the breeding
station, an office is located at the south of said lot. Beside the office is a
shed where six (6) young goats (kids) are housed. Another shed where goats
66
are housed is located at the northern side of the lot, fronting a water pump
station.
It was likewise gathered that at present, the breeding station has a total
number of fifty (50) goats. Also, there are six (6) cows roaming in the
pasture land. Four (4) of these cows are pregnant. It was clarified that
these cows belong to the Cross Australian Bi-Bhraman [sic] breed.
There are four (4) caretakers in the breeding station, all of whom are
employed by the provincial government of La Union. They receive salary
from the provincial government and they likewise submit monthly reports to
the Provincial Veterinarian. These four caretakers are Cresencia Isibido,
Manuel Daclan, Ruben Daclan (son of plaintiff Federico Daclan), and Tita
Fortes.
Issue:
I.
II.
67
Held:
The Court grants the Republic‘s Petition in G.R. No. 197115 and denies that
of the Daclans‘ in G.R. No. 197267.
The preponderance of evidence points to the fact that the breeding station
remained operational even after its transfer from the Republic to the
Province. The activities of the BAI did not cease even after it was dissolved
after the government adopted the policy of devolution under the Local
Government Code of 1991; these activities were merely transferred to the
Province. Thus, the witnesses for the Daclans and the Republic uniformly
declared that the breeding station remained operational even after the Local
Government Code of 1991 was put into effect. Particularly, Regional
Director Reinerio Belarmino, Jr. of the Department of Agriculture, Region 1
declared that after the breeding station was transferred to the Province, he
saw upon ocular inspection that there remained six cows and fifty goats on
the premises. Cresencia Isibido testified that as Farm Foreman, she
exercised supervision over her co-employees in the breeding station; that in
1989, there were six personnel assigned at the breeding station; that from
1974 until 1989, she received her salary from the BAI; that after devolution,
she started receiving her salary from the Province; and that even after
devolution, the operation of the Agoo Breeding Station continued, and goats,
cattle and swine were being maintained thereat. Dr. Nida Gapuz, La Union
Provincial Veterinarian, said that natural as well as artificial insemination
68
cases where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of law.‖ 34
Thus, as a general rule, rights and obligations derived from contract are
transmissible.
Thus, even if the BAI ceased to exist or was abolished as an office, its
activities continued when its functions were devolved to the local
government units such as the Province of La Union. It cannot be said that
the deeds of donation may be nullified just by the fact that the BAI became
defunct; its functions continued in the government offices/local government
units to which said functions were devolved.
70
Lastly, the CA cannot validly order the return to the Daclans of the donated
1.5-hectare portion where the LUMC is situated, because such portion was
not donated by them. They admitted that the 1.5-hectare portion where the
LUMC is constructed does not form part of the lands they donated to the
government, but belonged to other donors who are not parties to the
instant case. As far as the
Daclans are concerned, whatever they donated remains part of the breeding
station and so long as it remains so, no right of reversion accrues to them.
Only the original owner-donor of the 1.5-hectare portion where the LUMC
is constructed is entitled to its return.
71
BAR QUESTION
In August 1950, the Republic of the Philippines filed an application with the
cadastral court claiming ownership over certain properties which covered
Lot 4329. Guillermo filed an answer claiming therein a right over Lot 4329.
Guillermo died during the pendency of the case. Gregorio, who claimed to
be the only son of Guillermo, substituted the latter, and to him, Lot 4329 was
adjudicated by the court. The decision became final and executory. On July
8, 1985, OCT No. 0-6,151 was issued in the name of Gregorio. Sometime
thereafter, the brothers and sisters of Guillermo filed a complaint for
recovery of possession with damages against Gregorio, alleging that
Guillermo died single and without issue and that Gregorio obtained title to
the property through fraud deceit and gross misrepresentation. They prayed
that Gregorio‘s title be cancelled and the property be reconveyed to them.
After the trial, the court declared that Gregorio has not sufficiently proved
that he is the son of Guillermo but ruled that he has the right of possession of
the disputed property.
ANSWER:
YES. Gregorio was able to obtain a title in his name over the questioned
property after the cadastral proceedings instituted by the Republic. This
Torrens title is now a conclusive evidence of his ownership of the subject
land. After the expiration of the one-year period from the issuance of the
decree of registration, the said certificate of title became incontrovertible. In
fine, whether or not his title was obtained fraudulently is beyond the
competence of the Supreme Court to determine. The issue should have been
72
raised during the proceeding before the cadastral court. A Torrens title
cannot be collaterally attacked, the issue on the validity of title, i.e. whether
or not it was fraudulently issued can only be raised in an action expressly
instituted for that purpose. The prayer for the cancellation of Gregorio‘s title
and the reconveyance of the same to brothers and sisters of Guillermo is
legally impossible. To sustain the said action would be inconsistent with the
rule that the act of registration is the operative act that conveys a parcel of
land to its registered owner under the Torrens system. What we are
emphasizing is that, although Gregorio has not sufficiently proved his
filiation to the late Guillermo, the fact that he has a legal title over the
subject land entitles him to possession thereof, pending the final
determination of the validity of the title issued to him in an appropriate
proceeding.
73
Homestead Patent and Free Patent are some of the land patents granted by
the government under the Public Land Act. While similar, they are not
exactly the same.
A Homestead Patent is one issued to: any citizen of this country; over the
age of 18 years or the head of a family; who is not the owner of more than
twenty-four (24) hectares of land in the Philippines or has not had the benefit
of any gratuitous allotment of more than twenty- four (24) hectares of land
since the occupation of the Philippines by the United States. The applicant
must show that he has complied with the residence and cultivation
requirements of the law; must have resided continuously for at least one year
in the municipality where the land is situated; and must have cultivated at
least one-fifth of the land applied for.
On the other hand, a Free Patent may be issued where the applicant is a
natural-born citizen of the Philippines; not the owner of more than twelve
(12) hectares of land; that he has continuously occupied and cultivated,
either by himself or through his predecessors-in-interests, a tract or tracts of
agricultural public lands subject to disposition for at least 30 years prior to
the effectivity of Republic Act No. 6940; and that he has paid the real taxes
thereon while the same has not been occupied by any person.
(Illustrative Case)
74
FACTS:
Petitioner Rabaja Ranch Development Corporation is a domestic
corporation and a holder of TCT No. T-88513 covering the subject
property located at Barangay Conrazon, Bongabon, Oriental Mindoro.
Respondent Armed Forces of the Philippines Retirement and Separation
Benefits System (AFP-RSBS) is a government corporation, which
manages the pension fund of the Armed Forces of the Philippines (AFP),
and a holder of TCT No. T-51382 covering the same subject property.
On September 1, 1998, petitioner filed a Complaint for Quieting of Title
and/or Removal of Cloud from Title before the RTC. It averred that on
September 6, 1955, a Free Patent was issued in the name of Jose
Castromero, and on June 1, 1982, the Free Patent was registered, and an
OCT covering the subject property was issued in the name of the latter.
Sometime in 1982, Jose sold the subject property to Spouses Sigfriedo and
Josephine Veloso and TCT No. T-17104 was issued in favor of the
spouses. On January 17, 1997, Spouses Veloso, in turn, sold the subject
property to petitioner for the sum of P634,116.00 and TCT No. T-88513
was issued in petitioner‘s name. Petitioner alleged that it was the lawful
owner and possessor of the subject property.
In its Answer, respondent claimed that its title over the subject property
was protected by the Torrens system, as it was a buyer in good faith and
for value, and that it had been in continuous possession of the subject
property since November 1989, way ahead of petitioner's alleged
possession in February 1997.
Respondent stated that on April 30, 1966, a Homestead Patent was issued
in the name of Charles Soguilon, and upon registration, an OCT was
issued in Charles's name, covering the same property. On October 18,
75
ISSUES:
a. Whether or not respondent's title which originated from a fake and
spurious homestead patent, is superior to petitioner's title which
originated from a valid and existing free patent.
b. Who, between the petitioner and respondent, has a better right over the
subject property?
76
RULINGS:
a. The Supreme Court ruled that in our jurisdiction, fraud is never
presumed. Mere allegations of fraud are not enough. The intentional acts
to deceive and deprive another of his right, or in some manner, injure him
must be specifically alleged and proved. The burden of proof rests on
petitioner, and the petitioner in this case failed to discharge the burden.
Petitioner did not show that the Homestead Patent issued to Charles
Soguilon is indeed spurious. More importantly, petitioner failed to prove
that respondent took part in the alleged fraud which dated back as early
as 1966. Therefore, the petition was denied.
b. The Supreme Court held that respondent is an innocent purchaser in
good faith and for value. Thus, as far as respondent is concerned, TCT
No. 18529, shown to it by JMC, was free from any flaw or defect that
could give rise to any iota of doubt that it was fake and spurious, or that it
was derived from a fake or spurious Homestead Patent. Likewise,
respondent was not under any obligation to make an inquiry beyond the
TCT itself when, significantly, a foreclosure sale was conducted and
respondent emerged as the highest bidder.
Where innocent third persons, relying on the correctness of the certificate
of title thus issued, acquire rights over the property, the Court cannot
disregard such rights and order the cancellation of the certificate. The
effect of such outright cancellation will be to impair public confidence in
the certificate of title. The sanctity of the Torrens system must be
preserved; otherwise, everyone dealing with the property registered under
the system will have to inquire in every instance as to whether the title
had been regularly or irregularly issued, contrary to the evident purpose
of the law. Every person dealing with the registered land may safely rely
on the correctness of the certificate of title issued therefor, and the law
will, in no way, oblige him to go behind the certificate to determine the
condition of the property.
77
FACTS:
President Ferdinand E. Marcos promulgated PD 27 for the emancipation
of tenant-farmers from private agricultural lands they till that are
primarily devoted to rice and corn. DAR launched Operation Land
Transfer (OLT) to implement the law. When OLT was launched, Salud
Alvarez Aguila was the registered owner of the disputed lots. The TCTs
over the two lots were issued based on homestead patents. The first TCT
was transferred to Vic Aguila (who was then 14 yrs old), and the second
TCT was transferred to Josephine Taguinod. Both lots were placed under
coverage of OLT. Salud Aguila, on behalf of Vic Aguila, filed a notice for
retention. When Vic Aguila became of age, he filed a notice for
exemption. Taguinod alsofiled a notice for exemption.
Meanwhile, the two subject lots were surveyed and a subdivision plan of
the lots parceled to the farmer-beneficiaries was prepared and approved.
The DAR Municipal Agrarian Reform Officer (MARO) recommended to
the Provincial Agrarian Reform Officer (PARO) the approval of the
applications of Salud A. Aguila/Vic A. Aguila and Josephine A. Taguinod
for retention of rights. The PARO granted the application for retention
rights. Respondents-farmer-beneficiaries opposed the decision. The RD
affirmed the PARO‘s decision but stated that the transfer made by Salud
Aguila to petitioners is null and void, but that Salud Aguila should be
granted the retention rights. Private respondents opposed this decision.
Taguinod also filed a motion contending that Aguila was not the real
79
owner of the land as such was by Taguinod from her biological mother
and that the same was only mortgaged to Aguila which property she had
already redeemed. The DAR Secretary affirmed the decision of the RD
and denied Taguinod‘s motion. Upon motion for reconsideration, the
DAR Secretary ruled that Salud Aguila was disqualified in retention
rights because she owned several other properties. Petitioners appealed
to the Office of the President.
The OP ruled that the said lots, having stemmed from homestead patents,
are exempt from the coverage of PD 27. On appeal, the CA ruled in
favour of private respondents. The CA however agreed with the OP that
the rights of the homesteader and his/her heirs to own and cultivate
personally their land acquired under the "homestead laws" are superior
over those of tenants invoking the "agrarian reform laws‖. However, it
found that petitioners Taguinod and Aguila failed to discharge the burden
of adducing evidence to prove the identities of the original homestead
patentees and that they are the direct compulsory heirs of the original
patentees.
ISSUE:
Whether or not the subject lands are exempted from coverage of PD 27
HELD:
The petition is bereft of merit. Settled in this jurisdiction is the rule that
the rights of a holder of a homestead patent are superior over the rights
of the tenants guaranteed by the Agrarian Reform Law. We agree with the
petitioners in saying that P.D. 27 decreeing the emancipation of tenants
from the bondage of the soil and transferring to them ownership of the
land they till is a sweeping social legislation, a remedial measure
promulgated pursuant to the social justice precepts of the Constitution.
However, such contention cannot be invoked to defeat the very purpose of
the enactment of the Public Land Act or Commonwealth Act No. 141.
80
Thus, "The Homestead Act has been enacted for the welfare and
protection of the poor. The law gives a needy citizen a piece of land where
he may build a modest house for himself and family and plant what is
necessary for subsistence and for the satisfaction of life‘s other needs.
The right of the citizens to their homes and to the things necessary for
their subsistence is as vital as the right to life itself. They have a right to
live with a certain degree of comfort as x x x human beings, and the State
which looks after the welfare of the people‘s happiness is under a duty to
safeguard the satisfaction of this vital right." It is therefore incumbent
upon petitioners to identify substantial evidence on record to support the
OP‘s finding that their lots are excluded from the coverage of
Comprehensive Agrarian Reform Program. In fact, as aptly put by private
respondents, petitioners never averred before the DAR and OP that Salud
Aguila was the original homestead patentee or a direct compulsory heir
of the homestead patentee. Without any substantial evidence that would
show that petitioner Aguila or Salud Aguila was entitled to the exemption
pursuant to the homestead laws, the lot is indubitably under the coverage
of the OLT. More importantly, the records are bereft of any showing that
petitioner Taguinod had indeed repurchased or redeemed subject
property from landowner Salud Aguila. Thus, absent any evidence to the
contrary, the lot is still owned by the owner of record, Salud Aguila.
81
Where there is no showing that the deceased Free Patent Applicant availed
himself of a legal remedy to assail an adverse decision, his successors-in-
interest are bound by the same.
FACTS:
Noemi San Agustin and Zenaida San Agustin Gonzles, together with their
other siblings, entered into a Subdivision Agreement wherein they parted the
estate of their deceased parents. Subsequently, a Transfer Certificate Titles
were issued to Noemi and Zenaida.
After nine years, Gil Justalero and the heirs of his deceased brother, Jesus
Justalero (Jesus) filed a complaint against Zenaida and Noemi for quieting
of title and reconveyance with damages before the Regional Trial Court
(RTC) of Iloilo contending that the lots subject of the petition were falsely
claimed by Zenaida and Noemi. Gil added that Jesus in fact filed an
application for Free Patent over the subject lot. For their part, Zenaida and
Noemi aver that the lots were covered by an Original Certificate of Title
(OCT), which were owned by their deceased parent. The RTC ruled in favor
of Zenaida and Noemi. Gil and the heirs appealed to Court of Appeals which
affirmed the RTC decision.
ISSUE:
Whether or not the subject lot which is claimed by Gil and the heirs is
embraced in the transfer certificate titles of Noemi and Zenaida
HELD:
82
Moreover, almost two years before the filing of Justalero and the
heirs‗complaint, the Bureau of Lands, Iloilo City rendered a Decision in the
above-stated Free Patent application filed by Jesus J. Justalero, declaring
that the subject lot, Cadastral Lot No. 2596, is identical to Lot 8, Pcs-06-
000063 which is now titled in the name of Noemi.
EMANCIPATION PATENT
FACTS:
The property in dispute is a parcel of agricultural land consisting of 1.7467
hectares which is located in Pandayan, Meycauayan, Bulacan, and covered
under Transfer Certificate of Title (TCT) No. T-5926 in the name of
Victoriano Ipapo who died on 6 June 1976. This property was tenanted by
Alejandro Moraga, the deceased father of petitioner Enrique Moraga.
On 7 March 1973, Victoriano Ipapo sold the landholding to his daughters
Felicidad, Carmelita, and Herminigilda, and their respective spouses, Julian
Somo, Reynaldo Fernandez and Gil San Diego (respondents) for P10,000.00
per Bilihan Tuluyan of even date.
ISSUE:
Whether or not the CLT was issued in violation of respondents‘ retention
rights and that the tenants, the Moragas violated their obligations as tenants
HELD:
YES. Emancipation patent was issued not in accordance with Presidential
Decree No. 27 and the Moragas violated their obligations as tenants of the
subject landholding.
85
While the CA-G.R. SP No. 38445 was still pending before the Court of
Appeals, petitioner and Mercedes Moraga, on 6 April 1995, filed before the
Provincial Adjudicator of Malolos, Bulacan, a complaint for Redemption
against respondents which was docketed as DARAB Case No. 927-Bul 95.
The complaint alleged that upon Alejandro Moragas death, the Moragas
succeeded Alejandro Moraga as tenants over the parcel of land that is the
subject of the controversy. It was likewise averred that the sale entered into
between Victoriano Ipapo and respondents on 7 March 1973, involving the
said property, was made without the written notice given to Alejandro
Moraga and the DAR, in violation of Section 2 of Republic Act No. 3844, as
amended by Republic Act No. 6389. Within the purview of the said
provisions of law, the Moragas were exercising their right of redemption
over the said landholding.
On the other hand, the Sixth Division of the Court of Appeals, in resolving
the sole issue in CA-G.R. SP No. 70051 on whether or not the DARAB is
correct in ordering that the heirs of Alejandro Moraga remain as tenants in
the subject landholding, ruled for the respondents. It ratiocinated that the
DARAB committed palpable error in decreeing that Alejandro Moragas heir
shall remain as tenants entitled to security of tenure considering that the
said ruling alters the already final and executory decision of the Court of
Appeals in CA-G.R. SP No. 38445, enunciating that the Moragas are not
entitled to security of tenure for violating their obligations as tenants.
Facts:
This case involves 13 mining claims over the area located in Barrio Larap,
Municipality of Jose Panganiban, Camarines Norte, a portion of which was
owned and mined by Philippine Iron Mines, Inc. (PIMI), which ceased
operations in 1975 due to financial losses. PIMI‘s portion (known as the
PIMI Larap Mines) was sold in a foreclosure sale to the Manila Banking
Corporation (MBC) and Philippine Commercial and Industrial Bank (PCIB,
later Banco De Oro, or BDO).1
On August 31, 2007, Yinlu Bicol Mining Corporation (Yinlu) informed the
DENR by letter that it had acquired the mining patents of PIMI from
MBC/BDO by way of a deed of absolute sale, stating that the areas covered
by its mining patents were within the areas of Trans-Asia‘s MPSA. Based on
the documents submitted by Yinlu, four of the six transfer certificates of title
(TCTs) it held covered four mining claims under Patent Nos. 15, 16, 17 and
18 respectively named as Busser, Superior, Bussamerand Rescue Placer
Claims, with an aggregate area of 192 hectares. The areas covered occupied
more than half of the MPSA area of Trans-Asia.5
88
The matter was ultimately referred to the DENR Secretary, who directed the
MGB Regional Office V to verify the validity of the mining patents of Yinlu.
On November 29, 2007, the MGB Regional Office V informed the Office of
the DENR Secretary that there was no record on file showing the existence
of the mining patents of Yinlu. Accordingly, the parties were required to
submit their respective position papers.8
On May 21, 2009, DENR Secretary Jose L. Atienza, Jr. issued his order
resolving the issues in Yinlu‘s favor,10 finding that the mining patents had
been issued to PIMI in 1930 as evidenced by and indicated in PIMI‘s
certificates of title submitted by Yinlu; and that the patents were validly
transferred to and were now owned by Yinlu.11 He rejected Trans-Asia‘s
argument that Yinlu‘s patents had no effect and were deemed abandoned
because Yinlu had failed to register them pursuant to Section 101 of
89
Presidential Decree No. 463, as amended. He declared that the DENR did
not issue any specific order cancelling such patents. He refuted Trans-Asia‘s
contention that there was a continuing requirement under the Philippine Bill
of 1902 for the mining patent holder to undertake improvements in order to
have the patents subsist, and that Yinlu failed to perform its obligation to
register and to undertake the improvement, observing that the requirement
was not an absolute imposition. He noted that the suspension of PIMI‘s
operation in 1974 due to financial losses and the foreclosure of its
mortgaged properties by the creditor banks (MBC/PCIB) constituted force
majeure that justified PIMI‘s failure in 1974 to comply with the registration
requirement under P.D. No. 463; that the Philippine Bill of 1902, which was
the basis for issuing the patents, allowed the private ownership of minerals,
rendering the minerals covered by the patents to be segregated from the
public domain and be considered private property; and that the Regalian
doctrine, under which the State owned all natural resources, was adopted
only by the 1935, 1973 and 1987 Constitutions.12
Issue:
The issues presented for consideration and resolution by the DENR
Secretary were: (1) whether the mining patents held by Yinlu were issued
prior to the grant of the MPSA; and (2) whether the mining patents were still
valid and subsisting.
Held:
In Republic v. Court of Appeals,59 we stated that mining rights acquired
under the Philippine Bill of 1902 and prior to the effectivity of the 1935
Constitution were vested rights that could not be impaired even by the
Government. Indeed, the mining patents of Yinlu were issued pursuant to the
Philippine Bill of 1902 and were subsisting prior to the effectivity of the
1935 Constitution. Consequently, Yinlu and its predecessors-in-interest had
acquired vested rights in the disputed mineral lands that could not and
should not be impaired even in light of their past failure to comply with the
requirement of registration and annual work obligations.
provided the written notice and opportunity to Yinlu and its predecessors-in-
interest to that effect, it would really be inequitable to consider them to have
abandoned their patents, or to consider the patents as having lapsed. Verily,
as held in McDaniel and Gold Creek, supra, a mining patent obtained under
the Philippine Bill of 1902 was a protected private property. The protection
should be basic and guaranteed, for no less than Section 1, Article III of the
1987 Constitution decrees that no person shall be deprived of property
without due process of law.
BAR QUESTION
The spouses Zulueta obtained from GSIS various loans secured by real
estate mortgages over parcels of land. The spouses Zulueta failed to pay
their loans which prompted GSIS to foreclose the real estate mortgages.
During the auction sale, some of the mortgaged properties were awarded to
GSIS. However, some lots which were covered by the mortgaged titles were
expressly excluded from the auction since those that were sold were
sufficient to pay for all the mortgage debts. This notwithstanding, GSIS
included the excluded lots when it executed on November 25, 1975 an
Affidavit of Consolidation of Ownership on the basis of which, certificates
of title over the same were issued in the name of GSIS. Zulueta thereafter
transferred his rights over the excluded lots to Eduardo in 1989 who
consequently demanded from GSIS the return of the said excluded lots.
Eduardo then filed on May 7, 1990 a complaint for reconveyance of real
estate against the GSIS.
a) Can GSIS legally claim ownership over the excluded properties on the
basis of the certificates of title over the same which were issued in its name?
ANSWERS:
a) NO. Even if titles over the lots had been issued in the name of the GSIS,
still it could not legally claim ownership and absolute dominion over them
because indefeasibility of title under the Torrens system does not attach to
titles secured by fraud or misrepresentation. The fraud committed by GSIS
in the form of concealment of the existence of said lots and failure to return
the same to the real owners after their exclusion from the foreclosure sale
made GSIS holders in bad faith. It is well settled that a holder in bad faith of
93
a certificate of title is not entitled to the protection of the law for the law
cannot be used as a shield for fraud.
b) NO. Article 1456 of the Civil Code provides: If the 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. An action for reconveyance based on implied or
constructive trust prescribes in ten years from the alleged fraudulent
registration or date of issuance of the certificate of title over the property.
The general rule that the discovery of fraud is deemed to have taken place
upon the registration of real property because it is ―considered a constructive
notice to all persons‖ does not apply in this case. The case in point is
Samonte vs Court of Appeals where the Supreme Court reckoned the
prescriptive period for the filing of the action based on implied trust from the
actual discovery of the fraud. Santiago came know of GSIS‘ fraudulent acts
only in 1989 and the complaint was filed in 1990. Following the Court‘s
pronouncement in Samonte, the institution of the action for reconveyance
was thus well within the prescriptive period. (GSIS vs Santiago, GR No.
155206, October 28, 2003)
94
shall be under the full control and supervision of the State. This legal
doctrine recalls the time when all titles were valid only when it could be
shown that it originated from a grant or sale from the Crown, or its
conceptual heir, the State. Thus, even in those rare cases where indigenous
peoples communities have managed to secure documents of title to their
lands, they do not, by virtue of that title acquire ownership or control of the
natural resources found within the titled land. This problem is further
complicated by the fact that the government‘s awards of resource rights
through licenses, leases or permits, or current production sharing, joint-
venture or co-production agreements are given to persons, natural or
juridical, who are not residents of the area, thereby setting the stage for
social conflict at the community level. The declaration of ownership of the
State of all lands of the public domain and all natural resources, from the
1935 to the 1987 Constitution could not mean absolute ownership simply by
operation of law, as this would place such State in direct contradiction to the
guarantee of due process as against actual owners, as interpreted in Cariňo.
Thus, despite ancestral domains being now understood as including natural
resources, the application of the laws and the interpretation of the 1987
Constitution have limited the indigenous people‘s ownership of these natural
resources to mere preferential rights to exploit, develop and use.
FACTS:
Cruz, a noted constitutionalist, assailed the validity of the RA 8371 or the
Indigenous People‘s Rights Act on the ground that the law amount to an
unlawful deprivation of the State‘s ownership over lands of the public
domain as well as minerals and other natural resources therein, in violation
96
ISSUE:
Whether or not the IPRA law is unconstitutional.
RULING:
The Supreme Court deliberated upon the matter. After deliberation
they voted and reached a 7-7 vote. They deliberated again and the same
result transpired. Since there was no majority vote, Cruz‘s petition was
dismissed and the IPRA law was sustained. Hence, ancestral domains may
include natural resources.
BAR NOTES
Notice of all hearings of the petition for judicial reconstitution shall be given
to the Register of Deeds of the place where the land is situated and to the
Commissioner of Land Registration. No order or judgment ordering the
reconstitution of a certificate of title shall become final until the lapse of thirty
days from receipt by the Register of Deeds and by the Commissioner of Land
Registration of a notice of such order or judgment without any appeal having
been filed by any of such officials.
98
Facts:
On April 16, 2004, petitioner Ungay Malobago Mines, Inc. filed with the
Regional Trial Court (RTC) of Legaspi City, a verified petition seeking the
reconstitution of Original Certificate of Title (OCT) No. 4784 of the
Cadastral Survey of Albay, pursuant to the provisions of Republic Act (RA)
26 and Presidential Decree (PD) No. 1529. The case was docketed as LRA
Case No. RT-2720 and raffled off to Branch 4. In its petition, petitioner
alleged: that it is the registered owner of a mining patent covered by OCT
No. 4784 which was issued by then President Diosdado Macapagal on July
20, 1962 and entered in the Registry of Deeds of the Province of Albay on
September 4, 1962; that sometime in April 2004, it requested for a certified
true copy of OCT No. VH-4784 from the Register of Deeds of Albay, but
despite a diligent search, the said copy could not be located by the said
office leading one to believe that the same was permanently lost or
destroyed; that the property was free from all liens and encumbrances of
any kind whatsoever and there existed no deeds or instruments affecting the
same which had been presented for or pending registration with the Register
of Deeds of Albay; and that the owner's duplicate of OCT No. VH-4784
which would serve as a basis for the reconstitution was attached thereto.
On July 17, 2006, the RTC rendered its decision dismissing the petition.
The RTC found that there was no factual and legal basis to warrant the
reconstitution of petitioner's alleged lost certificate of title. It found that
100
Petitioner filed its appeal with the CA. After the parties had filed their
respective pleadings, the case was then submitted for decision.
On January 21, 2009, the CA issued its assailed decision, the dispositive
portion of which reads: WHEREFORE, in view of the foregoing, the 17 July
2006 decision of the Regional Trial Court of Legaspi City (Branch 4) in LRA
Case No. RT-2720 dismissing the petition of Ungay Malobago Mines, Inc.
for the reconstitution of OCT No. VH-4784 is AFFIRMED.
In so ruling, the CA found that since petitioner is not the registered owner of
the land covered by OCT No. VH-4784 and citing our earlier ruling in
Ungay Malobago Mines, Inc v. Intermediate Appellate Court (IAC) where
we declared that as a grantee of a mining patent, petitioner did not become
the owner of the land where the minerals are located, hence, it has no
personality to file for the reconstitution of lost or destroyed certificate of
101
title. The CA ruled that petitioner's mining patent did not qualify as an
interest in property as contemplated by RA No. 26 so as to give petitioner
the authority under the law to initiate a petition for the reconstitution of said
OCT. The CA affirmed the RTC's findings that the owner's duplicate of OCT
No. VH-4784 presented by petitioner was insufficient to serve as a basis for
the reconstitution of the original of said OCT because of the absence of the
signature of the Register of Deeds.
Issues:
Whether or not the petitioner possesses legal personality to institute petition
for judicial reconstitution
Held:
the right to extract or utilize, the minerals which may be found on or under
the surface.
NOTES:
Facts:
This is a petition for review on certiorari seeking to annul and set aside the
decision of CA.
Cortez alleged that the tax declarations were under the name of his mother
from which he inherited the land. A testimony was also submitted saying that
the family of Cortez have in fact occupied the land for over 60 years. RTC
granted Cortez the application for registration of the title.
Issue:
Held:
Petition is meritorious.
P.D. No. 1529, which pertinently provides that: 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:
xxxx
After a careful scrutiny of the records of this case, the Court finds that
Cortez failed to comply with the legal requirements for the registration of
the subject property under Section 14(1) and (2) of P.D. No. 1529.
The 1st requirement was not satisfied, the survey plan does not constitute
incontrovertible evidence to overcome the presumption that the subject
property remains part of the alienable public domain. To prove that the land
subject of an application for registration is alienable, an applicant must
establish the existence of a positive act of the government such as a
presidential proclamation or an executive order, an administrative action,
investigation reports of Bureau of Lands investigators, and a legislative act
106
1. Private Lands
a. At least 60% Filipino (Section 7, Article XII, 1987 Constitution)
b. Restricted as to extent reasonably necessary to enable it to carry out
purpose for which it was created
c. If engaged in agriculture, it is restricted to1,024 hectares.
2. Patrimonial Property of the State (Sec. 3, Article XII, 1987 Constitution)
a. Lease (CANNOT own land of the public domain) for 25 years
renewable
b. Limited to 1,000 hectares
c. Apply to both Filipinos and Foreign corporations
(See related case)
FACTS:
The subject matter of these proceedings for declaration of nullity of
title are parcels of land with a total area of 39.99 hectares, more or less,
known as the JUSMAG housing area in Fort Bonifacio where, military
108
officers, both in the active and retired services, and their respective families,
have been occupying housing units and facilities originally constructed by
the AFP.
ISSUE:
Was the JUSMAG area, during the period material, alienable or
inalienable, as the case may be, and, therefore, can or cannot be subject of a
lawful private conveyance?
RULING:
that the JUSMAG area is the private property of the government and
therefore removed from the concept of public domain per se its own
evidence themselves belie its posture as their evidence both the TCT and the
Deed of Sale technically described the property as situated in Jusmag area
located at Fort Bonifacio which is now renamed Fort Mckinley a declared a
military reservation.
The Republic has, since the filing of its underlying complaint, invoked
Proclamation No. 423. In the process, it has invariably invited attention to
the proclamation‘s specific area coverage to prove the nullity of TCT No.
15084, inasmuch as the title embraced a reserved area considered
inalienable, and hence, beyond the commerce of man.
2.Palad signed the supposed deed of sale in Manila, possibly at the LMB
office at Plaza Cervantes, Binondo. Even if he acted in an official capacity,
Palad nonetheless proceeded on the same day to Pasig City to appear before
the notarizing officer. The deed was then brought to the Rizal Registry and
there stamped ―Received‖ by the entry clerk. That same afternoon, or at
3:14 p.m. of October 30, 1991to be precise, TCT No. 15084 was issued. In
other words, the whole conveyance and registration process was done in
less than a day. The very unusual dispatch is quite surprising. Stranger still
is why a bureau head, while in the exercise of his functions as the bureau‘s
authorized contracting officer, has to repair to another city just to have a
deed notarized.
4. In its Answer as defendant a quo, respondent SHAI states that the ―deed
of sale specifically meritorious Official Receipt No. 6030203 as evidence of
full payment of the agreed purchase price‖ An official receipt (O.R.) is
doubtless the best evidence to prove payment. While it kept referring to O.R.
No. 6030203 as its evidence of the required payment, it failed to present and
offer the receipt in evidence. We can thus validly presume that no such OR
exists or, if it does, that its presentation would be adverse to SHAI.
A contract of sale is void where the price, which appears in the document
as paid has, in fact, never been paid.
5. The purchase price was, according to the witnesses for SHAI, paid in full
in cash to the cashier of the LMB the corresponding amount apparently
coming in a mix of P500 and P100 denominations. Albeit plausible, SHAI‘s
witnesses‘ account taxes credulity to the limit.
TCT No. 15084 of the Registry of Deeds of Rizal issued on the basis of
such Deed are declared void and cancelled.
114
FACTS:
After his mother's death Leoncio Lee Tek Sheng filed a complaint
against his father, Lee Tek Sheng to partition the conjugal properties of his
parents. Lee in his answer with counterclaim alleged that the four parcels of
land registered solely in petitioner's name under Transfer Certificate of Title
(TCT) 8278 are conjugal properties. It was registered in Leoncio‘s name
only as a trustee since he was then the only Filipino citizen in the family.
Accordingly, Lee prayed for the dismissal of the partition case and for the
reconveyance of the lots to its rightful owner — the conjugal regime.
To protect the interest of the conjugal regime during the pendency of
the case, Lee caused the annotation of a notice of lis pendens on TCT 8278.
Leoncio moved for the cancellation of said annotation which was denied by
the trial court ruling that (a) the notice was not for the purpose of molesting
or harassing petitioner and (b) also to keep the property within the power of
the court pending litigation. Leoncio appealed to CA, but to no avail.
Leoncio resort to the SC contending primarily that in the resolution of
an incidental motion for cancellation of the notice of lis pendens (a) it was
improper to thresh out the issue of ownership of the disputed lots since
ownership cannot be passed upon in a partition case, otherwise, (b) it would
amount to a collateral attack of his title obtained more than 28 years ago.
He argues that his sole ownership as shown in the TCT would be improperly
assailed in a partition case and should be done through a separate suit. On
the contrary, private respondent posits that evidence of ownership is
admissible in a partition case as this is not a probate or land registration
proceedings where the court's jurisdiction is limited.
116
ISSUE:
1. Whether or not the notice of lis pendens on TCT 8278 would
amount to a collateral attack to the Certificate of Title.
2. Whether the denial of motion to cancel the notice of lis pendens
is valid.
HELD:
1. No. The court held petitioner's claim is not legally tenable.
There is no dispute that a Torrens certificate of title cannot be collaterally
attacked, but that rule is not material to this case. The annotation of a notice
of lis pendens does not in any case amount nor can it be considered as
equivalent to a collateral attack of the certificate of title for a parcel of land.
The concept of no collateral attack of title is based on Section 48 of P.D.
1529 which states that:
Certificate not Subject to Collateral attack. — A certificate of title
shall not be subject to collateral attack. It cannot be altered, modified, or
cancelled except in a direct proceeding in accordance with law.
What cannot be collaterally attacked is the certificate of title and not
the title. The certificate referred to is that document issued by the Register of
Deeds known as the Transfer Certificate of Title (TCT). By title, the law
refers to ownership which is represented by that document. Ownership is
different from a certificate of title. The TCT is only the best proof of
ownership of a piece of land and cannot always be considered as conclusive
evidence of ownership. Mere issuance of the certificate of title in the name of
any person does not foreclose the possibility that the real property may be
under co-ownership with persons not named in the certificate or that the
registrant may only be a trustee or that other parties may have acquired
interest subsequent to the issuance of the certificate of title. To repeat,
registration is not the equivalent of title, but is only the best evidence
thereof. In this case petitioner's certificate of title is not being assailed by
private respondent. What the latter disputes is the former's claim of sole
ownership. Thus, although petitioner's certificate of title may have become
117
FACTS:
The respondents filed a motion for quieting the title and recovery of
possession and ownership against the petitioners. Apparently, they claim
they are the owners of the parcel of land by virtue of the deed of sale they
entered into with Roberto Marfori to whom the petitioners allegedly sold
their land to. The Egaos acquired their land title by virtue of a free patent
and transferred their ownership in favor of Marfori by virtue of a deed of
sale. However, the Certificate of Title was not transferred in Marfori‘s
favor. Upon purchase of the land from Marfori, the respondents introduced
improvements thereon and paid taxes for the property. However, the
petitioners illegally occupied portions of the land. Petitioner answers that
they are the true owner of the land by virtue of the Certificate of Title issued
by the Register of Deeds pursuant to their Free Patent. The lower court
ruled in favor of Egao. Upon appeal, the CA reversed the decision of the
lower court on grounds that the main issue should be whether Egao can
validly sell the land to Marfori who subsequently transferred the ownership
to the respondents. The CA holds both Egao and Marfori to be in pari
delicto for violating the 5-year restriction provided by Commonwealth 141
against encumbrance and alienation of public lands acquired thru free
patent or homestead patent. They cannot therefore obtain affirmative relief.
It also declares the respondents as innocent purchasers for value who the
obtained the duplicate of the OCT still in the name of the Egaos from
Marfori and ownership was transferred to them by physical possession of
119
ISSUE:
Whether or not the petitioners validly transferred their ownership to
Marfori to resolve the rights of the respondents over the land in dispute?
RULING:
The Supreme Court holds that based on the adduced evidence, the
Egao sold the lot to Marfori within the 5-year restriction period provided by
law on Free Patent based on the Deed of Sale entered into by the parties.
Although the petitioners denied the validity of the Deed of Sale the court
held that it was notarized and a notarial document has in its favor the
presumption of regularity. When the land was sold to the respondents, they
know that the OCT is still registered under the name of the petitioners. Thus,
they are not considered to be innocent purchaser as contrary to the ruling of
the CA. Where a purchaser neglects to make the necessary inquiries and
closes his eyes to facts which should put a reasonable man on his guard as
to the possibility of the existence of a defect in his vendor's title, and relying
on the belief that there was no defect in the title of the vendor, purchases the
property without making any further investigation, he cannot claim that he is
a purchaser in good faith for value.
A private individual cannot bring an action for reversion or any
action which would have an effect of canceling a free patent and the
certificate of title issued on the basis thereof since the land covered will form
part again of the public domain. Sec. 124 of the Public Land Act provides
that deeds of sale of patented lands, perfected within the prohibited five (5)
year period are null and void thus the Egaos have no title to pass to Marfori
and nobody can dispose that which does not belong to him. The respondents
120
are not innocent purchasers for value with no standing to question the rights
of the petitioners over the land and to file an action to quiet the title. The
petitioners remained to be the registered owners and entitled to remain in
physical possession of the disputed property. Respondents are ordered to
deliver the OCT to the petitioners without prejudice to an action for
reversion of the land to be instituted by the Solicitor General for the State.
FACTS:
Jose Ching et al and the Spouses Cesar and Araceli Alvarado were
disputing possession over a parcel of land. Ching averred that the Alvarados
encroached upon their land. An ejectment case was filed and the MTC
(Municipal Trial Court) took cognizance thereof. The Municipal Trial Court
ruled in favor of Ching. Alvarado appealed before the RTC (Regional Trial
Court) and Judge Antonio Malaya held that the MTC has no jurisdiction
over the case because the issue between the two parties was not a mere
possession case. The two parties actually adduced evidence of ownership:
i.e. Deed of Sale presented by Ching and inheritance claims by Alvarado.
Judge Malaya ruled that MTCs have no jurisdiction over ownership cases.
ISSUE:
Whether or not Ching is the rightful owner?
HELD:
121
FACTS:
The petitioner spouses and respondent spouses are first cousins in
dispute of land ownership. Apparently, their grandfather owns a 12,508
sq.m. land that was surveyed by Turner Land Surveying Co. for him which
he promised to pay for after the approval of Bureau of Lands. He failed to
pay for the costs and to elude foreclosure of the land he sold said land to his
daughter Rosa who assumed payment for the property tax. Rosa
subsequently sold the land to her nephew Santiago Fontanilla, herein
respondent, under a notarized deed of sale that was not registered to the
Register of Deeds. Fontanilla constructed a house and lived there. In 1978
they went to the US to visit their daughter. While out of the country,
petitioners Enriquito Serna applied a land registration of said lot which was
successfully registered in their name on Jan. 10, 1980. On May 27, 1981,
respondents filed an action for reconveyance and damages against
petitioners. Petitioners contend that when their grandfather failed to pay the
surveying company they took the property in question but it was redeemed
later on and sold to their father but they could not produce evidence. The
court ruled in favor to the respondents as true owners of the said lot hence
this petition to the S.C.
ISSUE:
Whether or not the lower court erred in rendering its decision and
appreciation of facts and application of law?
123
RULING:
The Supreme Court upholds the lower court‘s ruling declaring that
the respondents are the rightful owners of the said lot. Petitioners claim
ownership based on a deed of sale executed between their grandfather and
father which they could not produce. This is a question of facts that the SC
cannot review on appeal. Respondents however have been paying taxes and
enjoying continuous possession of the land for over 60 years tacking the
possession of its predecessor grandfather and Aunt Rosa. These are
circumstances and period sufficient for prescription. They also filed the
action for reconveyance within the prescribed 10 years period from the
issuance of Torrens title to the property for the petitioners.
124
FACTS:
On October 27, 1988, Arturo Pacificador, the Chairman of the Board
of the National Shipyard and Steel Corporation, was charged before the
Sandiganbayan with the crime of violation of RA3019 aka Anti-Graft and
Corrupt Practices Act. During the period of December 6, 1975 to January 6,
1976, together with Jose Marcelo, the President of Philippine Smelters
Corporation, he caused the sale, transfer and conveyance of the rights, titles
and interests over parcels of land owned by National Shipyard and Steel
Corporation to Jose Panganiban, Camarines Norte where Jose Panganiban
Plant is located. National Shipyard and Steel Corporation is a government-
owned corporation and received only P85,144.50 as consideration for the
sale. This caused injury to the Government because real fair market value of
the lands were P862,150.00. The Deed of Sale for was executed on
December 29, 1975. Pacificador stated that the prosecution of the crime has
already prescribed since counting from the registration of the Deed of Sale
(or execution of such), the filing of action against him should have
prescribed. He further contends that during December 29, 1975, there was a
constructive notice to the world of such registration and this should be
tantamount to concealing his crime during that day and not on May 13,
1988 when the complaint was filed by the Solicitor General with the PCGG.
125
ISSUE:
Whether or not the prescription of the offense committed by
Pacificador shall run from
the date the Deed of Sale was executed.
RULING:
YES. The date of prescription shall run from the day the crime was
committed and if
that date is unknown, the date of discovery should be used as the reckoning
point. In this case,
since the land was transferred and presumably registered on December 29,
1975 when the perpetrators are already aware of their own crimes, the
reckoning point should be that day. The
Deed of Sale when registered constitutes a notice to the whole world,
including the petitioner, of
its contents, as well as all interests, legal and equitable. All persons are
126
FACTS:
The respondents filed a motion for quieting the title and recovery of
possession and ownership against the petitioners. Apparently, they claim
they are the owners of the parcel of land by virtue of the deed of sale they
entered into with Roberto Marfori to whom the petitioners allegedly sold
their land to. The Egaos acquired their land title by virtue of a free patent
and transferred their ownership in favor of Marfori by virtue of a deed of
sale. However, the Certificate of Title was not transferred in Marfori‘s
favor. Upon purchase of the land from Marfori, the respondents introduced
improvements thereon and paid taxes for the property. However, the
petitioners illegally occupied portions of the land. Petitioner answers that
they are the true owner of the land by virtue of the Certificate of Title issued
by the Register of Deeds pursuant to their Free Patent. The lower court
ruled in favor of Egao. Upon appeal, the CA reversed the decision of the
lower court on grounds that the main issue should be whether Egao can
validly sell the land to Marfori who subsequently transferred the ownership
to the respondents. The CA holds both Egao and Marfori to be in pari
delicto for violating the 5-year restriction provided by Commonwealth 141
against encumbrance and alienation of public lands acquired thru free
patent or homestead patent. They cannot therefore obtain affirmative relief.
It also declares the respondents as innocent purchasers for value who the
obtained the duplicate of the OCT still in the name of the Egaos from
Marfori and ownership was transferred to them by physical possession of
127
ISSUE:
Whether or not the petitioners validly transferred their ownership to
Marfori to resolve the rights of the respondents over the land in dispute?
RULING:
The Supreme Court holds that based on the adduced evidence, the
Egao sold the lot to Marfori within the 5-year restriction period provided by
law on Free Patent based on the Deed of Sale entered into by the parties.
Although the petitioners denied the validity of the Deed of Sale the court
held that it was notarized and a notarial document has in its favor the
presumption of regularity. When the land was sold to the respondents, they
know that the OCT is still registered under the name of the petitioners. Thus,
they are not considered to be innocent purchaser as contrary to the ruling of
the CA. Where a purchaser neglects to make the necessary inquiries and
closes his eyes to facts which should put a reasonable man on his guard as
to the possibility of the existence of a defect in his vendor's title, and relying
on the belief that there was no defect in the title of the vendor, purchases the
property without making any further investigation, he cannot claim that he is
a purchaser in good faith for value.
A private individual cannot bring an action for reversion or any
action which would have an effect of canceling a free patent and the
certificate of title issued on the basis thereof since the land covered will form
part again of the public domain. Sec. 124 of the Public Land Act provides
that deeds of sale of patented lands, perfected within the prohibited five (5)
year period are null and void thus the Egaos have no title to pass to Marfori
and nobody can dispose that which does not belong to him. The respondents
128
are not innocent purchasers for value with no standing to question the rights
of the petitioners over the land and to file an action to quiet the title. The
petitioners remained to be the registered owners and entitled to remain in
physical possession of the disputed property. Respondents are ordered to
deliver the OCT to the petitioners without prejudice to an action for
reversion of the land to be instituted by the Solicitor General for the State.
129
The rules on quieting of title expressly provide that any declaration in a suit
to quiet title shall not prejudice persons who are not parties to the action.
FACTS
Spouses Simeon Doronio and Cornelia Gante deceased,were the registered
owners of a parcel of land located.
Marcelino Doronio and Fortunato Doronio, deceased, were the children of
the spouses and the parties in this case aretheir heirs.
Petitioners are the heirs of Marcelino Doronio, while respondents are the
heirs of Fortunato Doronio.
Eager to obtain the entire property, the heirs of Marcelino Doronio and
Veronica Pico filed before the RTC inUrdaneta, Pangasinana petition "For
the Registration of a Private Deed of Donation"docketed as Petition Case
No. U-920.
No respondents were named in the said petition although notices of hearing
were posted on the bulletin boards of Barangay Cabalitaan, Municipalities
of Asingan and Lingayen. During the hearings, no one interposed an
objection tothe petition. After
the RTC ordered a general default, the petition was eventually granted on
September 22, 1993.
This led to the registration of the deed of donation, cancellation of OCT No.
352 and issuance of anew TransferCertificate of Title (TCT) No. 44481 in
the names of Marcelino Doronio and Veronica Pico. Thus, the entire
property was titled in the names of petitioners‘ predecessors.
130
ISSUE:
Can respondents be bound by the decision in Petition Case No. U-920 even
if they were not made parties in the said case?
HELD:
Petitioners cannot use the finality of the RTC decision in Petition Case No.
U-920 as a shield against the verification of the validity of the deed of
donation. According to petitioners, the said final decision is one for quieting
of title. In other words, it is a case for declaratory relief under Rule 64 (now
Rule 63) of the Rules of Court. Suits to quiet title are not technically suits in
rem nor are they, strictly speaking, in personam, but being against the
person in respect of the res, these proceedings are characterized as quasi in
rem. The judgment in such proceedings is conclusive only between the
parties. Thus, respondents are not bound by the decision in Petition Case
No. U-920 as they were not made parties in the said case.The rules on
quieting of title expressly provide that any declaration in a suit to quiet title
shall not prejudice persons who are not parties to the action. That
respondents filed a subsequent pleading in the same Petition Case No. U-
920 after the decision there had become final did not change the fact that
said decision became final without their being impleaded in the case. Said
subsequent pleading wasdismissed onthe ground of finality of the decision.
131
FACTS:
Petitioner Yolanda O. Alfonso (Alfonso), then the register of deeds of
Caloocan City, was found administratively liable for allegedly
―acquiescing‖ to the change of the date of the registration of OCT No. 994
from May 3, 1917 to April 19, 1917, and for making it appear that there
were two OCT Nos. 994. Consequently, she was dismissed from government
service for grave misconduct and dishonesty.
Alfonso was investigated by the Land Registration Authority (LRA) upon the
request of Phil-Ville Development Corporation (Phil-Ville) who purchased
some parts of the land. Phil-Ville‗s letter-complaint led to the conduct of an
inquiry by the Senate Committees on Justice and Human Rights, and on
Urban Planning, Housing and Resettlement which finds that Alfonso acted
maliciously, fraudulently and in bad faith recommending the filing of
administrative cases against her and her conspirators. On the other hand,
LRA finds her guilty of Grave Misconduct and recommended her dismissal.
The Office of the President subsequently dismissed Alfonso. The Court of
132
ISSUE:
Whether or not the Court of Appeals erred in upholding decision of the
Office of the President because Alfonso‗s right to due process was violated.
Held:
In the landmark case of Ang Tibay v. Court of Industrial Relations, this
Court laid down the cardinal primary requirements of due process in
administrative proceedings. Foremost of these requisites is the right to a
hearing, including the right to present one‗s case and submit evidence in
support thereof. The essence of due process in administrative proceedings is
the opportunity to explain one‗s side or to seek a reconsideration of the
action or ruling complained of.
As aptly observed by the CA, Alfonso was given every opportunity to explain
her side and to present evidence in her defense during the administrative
investigation conducted by the LRA. Records sufficiently show that in
compliance with the ―show-cause‖ letter of the LRA Administrator, she
submitted her written explanation, and that during the pre-trial conferences,
she presented documentary evidence.
―certification on the date of issuance of OCT No. 994; and (2) for making
it appear that there were two OCT Nos. 994. Thus, her protestations that she
had no hand in the alteration are unavailing.
FACTS:
Rita sold to respondents Spouses Lumbao denominated as ―Bilihan ng
Lupa‖ the subject property which is a part of her share in the estate of her
deceased mother Maria. After acquiring the subject property, respondents
Spouses Lumbao took actual possession thereof and erected thereon a house
which they have been occupying as exclusive owners up to the present. As
the exclusive owners of the subject property, respondents Spouses Lumbao
made several verbal demands upon Rita, during her lifetime, and thereafter
upon herein petitioners, for them to execute the necessary documents to
effect the issuance of a separate title in favor of respondents Spouses
Lumbao insofar as the subject property is concerned.
Respondents Spouses Lumbao alleged that prior to her death, Rita informed
respondent Proserfina Lumbao she could not deliver the title to the subject
property because the entire property inherited by her and her co-heirs from
Maria had not yet been partitioned. Spouses Lumbao claimed that
petitioners, acting fraudulently and in conspiracy with one another, executed
a Deed of Extrajudicial Settlement, adjudicating and partitioning among
135
themselves and the other heirs, the estate left by Maria, which included the
subject property already sold to respondents Spouses Lumbao. Respondents
Spouses Lumbao, through counsel, sent a formal demand letter to petitioners
but despite receipt of such demand letter, petitioners still failed and refused
to reconvey the subject property to the respondents Spouses Lumbao.
Consequently, the latter filed a Complaint for Reconveyance with Damages
before the RTC of Pasig City. Petitioners filed their Answer denying the
allegations that the subject property had been soldto the respondents
Spouses Lumbao. Petitioners filed their Answer denying the allegations that
the subject property had been sold to the respondents Spouses Lumbao. They
likewise denied that the Deed of Extrajudicial Settlement had been
fraudulently executed because the same was duly published as required by
law. The RTC rendered a decision in favor of the petitioners. Aggrieved,
respondents Spouses Lumbao appealed to the Court of Appeals. Which
reversed the ruling of the trial court and ordered the reconveyance of the
property to the respondents. The petitioners questioned the decision, hence
this petition.
ISSUE:
Whether or not a co-owner can alienate, mortgage or assign his aliquot or
undivided share in the property.
HELD:
It is noteworthy that at the time of the execution of the documents
denominated as "Bilihan ng Lupa," the entire property owned by Maria, the
mother of Rita, was not yet divided among her and her co-heirs and so the
description of the entire estate is the only description because the exact
metes and bounds of the subject property sold to respondents Spouses
Lumbao could not be possibly determined at that time. Nevertheless, that
does not make the contract of sale between Rita and respondents Spouses
Lumbao invalid because both the law and jurisprudence have categorically
held that even while an estate remains undivided, co-owners have each full
136
In the case at bar, when the estate left by Maria had been partitioned on 2
May 1986 by virtue of a Deed of Extrajudicial Settlement, the 107- square
meter lot sold by the mother of the petitioners to respondents Spouses
Lumbao should be deducted from the total lot, inherited by them in
representation of their deceased mother, which in this case measures 467
square meters. The 107-square meter lot already sold to respondents
Spouses Lumbao can no longer be inherited by the petitioners because the
same was no longer part of their inheritance as it was already sold during
the lifetime of their mother
137
The Torrens system was adopted in this country to guarantee the integrity of
land titles. If a person purchases a parcel of land with a torrens title that is
clean and free from all liens and encumbrances, he should be assured that
the title cannot be defeated or denied force and effect in some proceeding
not provided by law for the express purpose of attacking it.
(Illustrative Case)
Facts:
Petitioners spouses Jose O. Gatuslao and Ermila Leonila Limsiaco-
Gatuslao (petitioners) are assailing the December 8, 20091 Order of the
Regional Trial Court (RTC) of Bacolod City, Branch 49 in Cad. Case No.
09-2802 which granted respondent Leo Ray2 Yanson‘s (respondent) Ex
Parte Motion for the Issuance of Writ of Possession over the properties
being occupied by petitioners, as well as the February 26, 2010 RTC Order3
denying petitioners‘ motion for reconsideration thereto.
Factual Antecedents
Limsiaco mortgaged the said lots along with the house standing thereon to
Philippine National Bank (PNB). Upon Limsiaco‘s failure to pay, PNB
extrajudicially foreclosed on the mortgage and caused the properties‘ sale
at a public auction on June 24, 1991 where it emerged as the highest bidder.
When the one-year redemption period expired without Limsiaco‘s estate
redeeming the properties, PNB caused the consolidation of titles in its name.
Ultimately, the Registry of Deeds of Bacolod City cancelled TCT Nos. T-
33429 and T-24331 and in lieu thereof issued TCT Nos. T-3088186 and T-
3088197 in PNB‘s name on October 25, 2006.
the said civil suit bars the issuance of the writ of possession and that
whatever rights and interests respondent may have acquired from PNB by
virtue of the sale are still subject to the outcome of the said case.
The RTC granted the issuance of the writ of possession in an Order16 dated
December 8, 2009. It cited the Court‘s pronouncement in China Banking
Corporation v. Lozada,17viz:
The Court recognizes the rights acquired by the purchaser of the foreclosed
property at the public auction sale upon the consolidation of his title when
no timely redemption of the property was made, x x x.
It is thus settled that the buyer in a foreclosure sale becomes the absolute
owner of the property purchased if it is not redeemed during the period of
one year after the registration of the sale. As such, he is entitled to the
possession of the said property and can demand it at any time following the
consolidation of ownership in his name and the issuance to him of a new
transfer certificate of title. x x x Possession of the land then becomes an
absolute right of the purchaser as confirmed owner. Upon proper
application and proof of title, the issuance of the writ of possession becomes
a ministerial duty of the court.
SO ORDERED.19
Petitioners moved for reconsideration20 which was denied in an Order21
dated February 26, 2010, thus:
SO ORDERED.22
Issues:
142
Held:
Preliminarily, we note that petitioners‘ direct resort to this Court from the
assailed Orders of the RTC violates the rule on hierarchy of courts. Their
remedy lies with the Court of Appeals. Considering however the length of
time this case has been pending and in view of our January 26, 2011
Resolution26 giving due course to the Petition, we deem it proper to
adjudicate the case on its merits.
The Court rules in the negative. BPI Family Savings Bank, Inc. v. Golden
Power Diesel Sales Center, Inc.27 reiterates the long-standing rule that:
This is in line with the ministerial character of the possessory writ. Thus, in
Bank of the Philippine Islands v. Tarampi,28 it was held:
To stress the ministerial character of the writ of possession, the Court has
disallowed injunction to prohibit its issuance, just as it has held that its
issuance may not be stayed by a pending action for annulment of mortgage
or the foreclosure itself.
Section 7 of Act No. 3135, as amended, sets forth the following procedure in
the availment of and issuance of a writ of possession in cases of
extrajudicial foreclosures, viz:
SECTION 7. In any sale made under the provisions of this Act, the
purchaser may petition the Court of First Instance (Regional Trial Court) of
the province or place where the property or any part thereof is situated, to
give him possession thereof during the redemption period, furnishing bond
in an amount equivalent to the use of the property for a period of twelve
months, to indemnify the debtor in case it be shown that the sale was made
without violating the mortgage or without complying with the requirements
of this Act. Such petition shall be made under oath and filed in form of an ex
parte motion in the registration or cadastral proceedings if the property is
registered, or in special proceedings in the case of property registered under
the Mortgage Law or under section one hundred and ninety-four of the
Administrative Code, or of any other real property encumbered with a
mortgage duly registered in the office of any register of deeds in accordance
with any existing law, and in each case the clerk of the court shall, upon the
filing of such petition, collect the fees specified in paragraph eleven of
section one hundred and fourteen of Act Numbered Four hundred and
ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-
six, and the court shall, upon approval of the bond, order that a writ of
possession issue, addressed to the sheriff of the province in which the
property is situated, who shall execute said order immediately.
145
It is thus settled that the buyer in a foreclosure sale becomes the absolute
owner of the property purchased if it is not redeemed during the period of
one year after the registration of the sale. As such, he is entitled to the
possession of the said property and can demand it at any time following the
consolidation of ownership in his name and the issuance to him of a new
transfer certificate of title. The buyer can in fact demand possession of the
land even during the redemption period except that he has to post a bond in
accordance with Section 7 of Act No. 3135, as amended. No such bond is
required after the redemption period if the property is not redeemed. x x x32
(Emphasis supplied)
Upon the expiration of the period to redeem and no redemption was made,
the purchaser, as confirmed owner, has the absolute right to possess the
land and the issuance of the writ of possession becomes a ministerial duty of
the court upon proper application and proof of title.33
the possession of a third party, the property must also be held by the third
partyadversely to the judgment debtor or mortgagor,36 such as a co-owner,
agricultural tenant or usufructuary.37
In this case, petitioners do not fall under any of the above examples of such
a third party holding the subject properties adversely to the mortgagor; nor
is their claim to their right of possession analogous to the foregoing
situations. Admittedly, they are the mortgagor Limsiaco‘s heirs. It was
precisely because of Limsiaco‘s death that petitioners obtained the right to
possess the subject properties and, as such, are considered transferees or
successors-in-interest of the right of possession of the latter. As Limsiaco‘s
successors-in-interest, petitioners merely stepped into his shoes and are,
thus, compelled not only to acknowledge but, more importantly, to respect
the mortgage he had earlier executed in favor of respondent.38 They cannot
effectively assert that their right of possession is adverse to that of Limsiaco
as they do not have an independent right of possession other than what they
acquired from him.39 Not being third parties who have a right contrary to
that of the mortgagor, the trial court was thus justified in issuing the writ
and in ordering its implementation.
Petitioners‘ claim that their right to due process was violated by the mere
issuance of the writ of possession must likewise fail. As explained,
petitioners were not occupying the properties adversely to the mortgagor,
hence, a writ of possession may be issued ex parte. And precisely because of
thisex parte nature of the proceedings no notice is needed to be served40
upon them. It has been stressed time and again that ―the ex parte nature of
the proceeding does not deny due process to the petitioners because the
issuance of the writ of possession does not prevent a separate case for
annulment of mortgage and foreclosure sale.‖41 Consequently, the RTC
may grant the petition even without petitioners‘ participation. Nevertheless,
even if the proceedings in this case was supposed to be ex parte, the records
of the case would show that petitioners‘ side on this controversy was
147
Petitioners insist that respondent is not entitled to the issuance of the writ of
possession under Section 7 of Act No. 3135 as he is only a buyer of the
subject properties in a contract of sale subsequently executed in his favor by
the actual purchaser, PNB. To them, it is only the actual purchaser of a
property at the public auction sale who can ask the court and be granted a
writ of possession.
3. The Vendor is selling only whatever rights and title to, interests and
participation it has acquired over the Property, and the Vendee hereby
acknowledges full knowledge of the nature and extent of the Vendor‘s rights
and title to, [and] interests and participation in the Property.
4. x x x The Vendee further agrees to undertake, at its/his/her expense,
the ejectment of any occupant of the Property.47 (Emphases in the original)
Verily, one of the rights that PNB acquired as purchaser of the subject
properties at the public auction sale, which it could validly convey by way of
its subsequent sale of the same to respondent, is the availment of a writ of
possession. This can be deduced from the above-quoted stipulation that
―[t]he [v]endee further agrees to undertake, at xxx his expense, the
ejectment of any occupant of the [p]roperty.‖ Accordingly, respondent filed
the contentious ex parte motion for a writ of possession to eject petitioners
therefrom and take possession of the subject properties.
petitioner‘s claim for rent was insufficient as the latter, during the period for
which payment of rent was being demanded, was still the owner of the
foreclosed property. This is because at that time, the period of redemption
has not yet expired. Thus, petitioner was still entitled to the physical
possession thereof subject, however, to the purchaser‘s right to petition the
court to give him possession and to file a bond pursuant to the provisions of
Section 7 of Act No. 3135, as amended. However, after the expiration of the
redemption period without redemption having been made by petitioner,
respondent became the owner thereof and consolidation of title becomes a
right. Being already then the owner, respondent became entitled to
possession. Consequently, petitioner‘s ejectment suit was held to have been
rendered moot by the expiration of the period of redemption without
petitioner redeeming the properties. This is considering that petitioner
already lost his possessory right over the property after the expiration of the
said period.
Although the main issue in Ermitaño was whether respondent was correct in
refusing to pay rent to petitioner on the basis of her having bought the
latter‘s foreclosed property from whom it was mortgaged, the case is
enlightening as it acknowledged respondent‘s right, as a subsequent buyer
of the properties from the actual purchaser of the same in the public auction
sale, to possess the property after the expiration of the period to redeem
sans any redemption. Verily, Ermitañodemonstrates the applicability of the
provisions of Section 7 of Act No. 3135 to such a subsequent purchaser like
respondent in the present case.
All told, the Court affirms the RTC‘s issuance of the Writ of Possession in
favor of respondent.chanrobleslaw
Facts:
This petition for certiorari under Rule 65 of the Rules of Court seeks a
reversal of the decision of the respondent court nullifying the judgment of
the municipal court in a forcible entry case on the ground of lack of
jurisdiction.
The petitioners had alleged in their complaint for ejectment that the private
respondents had forced their way into the disputed premises without any
right whatsoever and had refused to vacate the same despite repeated
demands. These demands were based on the petitioners‘ case that they were
the owners of the said property, having acquired it by virtue of a valid sale.
The private respondents, in their answer, had challenged the claimed sale,
arguing that the property belonged to them by right of inheritance. At any
rate, they had argued, as the basic question was one of ownership and not of
mere possession, the municipal court had no jurisdiction and should dismiss
the complaint.
As the original complaint was filed on January 6, 1979, the question before
us should be examined under the provisions of R.A. No. 296, as amended,
which was the law then in force. That law allowed the municipal court to
receive evidence upon the question of ownership in ejectment cases, but only
whenever it was necessary to do so for the purpose of determining the
character and extent of possession and damages for detention.
Sec. 88. Original jurisdiction in civil cases. -In all civil actions, including
those mentioned in Rules fifty-nine and sixty-two (now Rule 57 and 60) of
the Rules of Court, arising in his municipality or city, and not exclusively
cognizable by the Court of First Instance, the justice of the peace (now
municipal judge) and the judge of a municipal court (now city court) shall
have exclusive original jurisdiction … . In forcible entry and detainer
proceedings, the justice of the peace or judge of the municipal court shall
have original jurisdiction, but the said justice or judge may receive evidence
upon the question of title therein, whatever may be the value of the property,
solely for the purpose of determining the character and extent of possession
and damages for detention.
case being one for forcible entry, it should normally come under the
jurisdiction of the municipal court, before which it was in fact filed. There
was a complication, however, as in their respective primary pleadings, the
parties both injected the issue of ownership to support their adversary
claims to the possession of the property. This issue of ownership, in view of
the respondent court, had removed the case from the jurisdiction of the
municipal court.
There is one exception, however, and that is where it appears during the
trial that, by the nature of the evidence presented, the issue of possession
cannot be decided without deciding the issue of ownership. In such a case,
the jurisdiction of the municipal court is lost and the action should be
dismissed.8 An illustration is the case of Teodoro v. Balatbat, where the
defendant claimed possession by virtue of a deed of sale allegedly executed
by the plaintiff, who in turn denied its authenticity. As there was no
153
indication that the defendant‘s claim was unfounded, the municipal court
could not continue with the case because it had lost the competence to
decide it.9
After examining the facts of this present case, the Court finds that it does not
come under the exception to the rule.
It is true that petitioner Cesar Alvarado had filed a complaint in the court of
first instance of Laguna against the petitioners and several others for the
annulment of the deed of sale invoked by the petitioners.13 However, that
fact alone could not divest the municipal court of jurisdiction to continue
trying the question of possession, more so since the question of ownership
was appropriately being litigated in the annulment suit. Significantly, the
deed of sale being challenged in that action was different from the contract
involved in the exception just cited.
In the Balatbat case, the deed of sale invoked by the defendant was allegedly
executed by the plaintiff, who denied its authenticity. In other words, the
transaction in question was purportedly between the plaintiff and the
defendant as vendor and vendee. In the instant case, the private respondents
154
were not a party to the contract of sale invoked by the petitioners. It was
being challenged by respondent Cesar Alvarado only as an alleged heir of
Brigido Alvarado, who had transferred it to Felix Carpio, who in turn had
sold it to the petitioners.
RELIANCE ON TITLE
FACTS:
Lucena de los Reyes (petitioner's mother) sold two lots to Fortunato
Amorin. Amorin took possession of such properties. Later, however, Pacific
Bank demanded that the Amorins vacate the properties, claiming that such
property had been foreclosed by such Bank. As it turned out De Los Reyes
was deceived by a certain Benjamin Valenzuela, to whom she entrusted the
documents evidencing her rights over the lots, the latter fraudulently
transferred the rights over the lots to his name. Valenzuela mortgaged such
properties to Pacific Bank. Respondent Bank foreclosed and bought the
properties. The Amorins filed an action for Recovery of Ownership with
Damages. CA declared respondent Bank an innocent purchaser for value
entitled to the protection of the law with a better right over the lots than the
Amorins.
ISSUE:
Whether or not the Bank is an innocent purchaser for value whose
title must be upheld.
RULING:
No. While, it is a familiar doctrine that a forged or fraudulent
document may become the root of a valid title, if the property has already
been transferred from the name of the owner to that of the forger, the same
is not true. This doctrine serves to emphasize that a person who deals with
registered property in good faith will acquire good title from a forger and be
absolutely protected by a Torrens title.
156
Two years after the death of Dianson, Walstrom filed a motion for
reconsideration, claiming that Dianson is her predecessor in interest, the
motion for reconsideration resulted in setting aside the decision of the
Regional land officer. Mapa then appealed to the Department of Agriculture
and Natural Resources reinstated the decision of the Regional land officer,
then Gabriela Walstrom filed for motion for reconsideration but was denied.
While Walstrom filed for a second motion for reconsideration of the order of
158
DANR, Mapa filed a motion for execution. DANR granted the motion for
execution. Walstrom then filed a petition for relief with the DANR but then
pending the petition, she died. The heirs of Mapa pursued the case. This
petition of Walstrom remained unresolved, according to petitioner Hilda
Walstrom, daughter of Gabriela Walstrom, she was compelled to file an
action in the court because the 1 year prescriptive period provided for in Sec
38 of Land Registration act was about to lapse.
ISSUE:
1. Whether or not Walstrom‘s civil complaint against the respondents
praying for nullification of the Mapa‘s sales patent and certificates of
title issued by the register of deeds under Section 38 of Act 496 or the
Land Registration Act is valid.
RULING:
SEC. 38 of Act 496 or the Land Registration Act provides that a
decree of registration may bereopened or reviewed by the proper Regional
Trial Court upon the concurrence of five essentialrequisites, to wit:
(a) that the petitioner has a real and a dominical right;
(b) that he has been deprived thereof;
(c) through fraud;
(d) that the petition is filed within one year from the issuance
of the decree; and
(e) that the property has not as yet been transferred to an innocent
purchaser
for value.
petitioner's Free Patent Application shall exclude the disputed portion "A"
of Lot No. 1, which, instead, shall be included in the Mapas' Miscellaneous
Sales Application.
The second element is also absent, the petitioner cannot aver that she
was deprived of property because she did not have a real right over portion
"A". As to the third element, the records are bereft of any indication that
there was fraud in the issuance of the certificates of title.
The court also finds that the lower court was correct in holding that the case
does not fall under
any of the exceptions to the rule on exhaustion of administrative remedies.
Instead of invoking
Section 38, the petitioner should have pressed for the speedy resolution of
her petition with the
DANR. The petitioner‘s fear that since the one-year prescriptive period for
seeking judicial relief
provided for in Sec. 38 of the Land Registration Act was about to lapse, she
was compelled to
file the action to nullify said patent is not correct.
ISSUE:
Whether or not Petitioner is correct.
RULING:
161
NO. First of all, the redemption by Petitioner benefited all so that the
ownership did not transfer to him alone. The other heirs only need to
reimburse him.
BAR NOTES
IN CASE OF FRAUD
Generally, a forged deed is void but it can be the root of a valid title if
registered in the name of the forger then transferred to an innocent purchaser
for value absent any showing that the buyer had any part in the anomaly.
Hence, the rights of the innocent purchaser for value must be respected. The
proper recourse of the true owner is to bring an action for damages against
the party who caused the fraud. (Eduarte vs. CA, 253 SCRA 391).
Red Notes in Civil Law Actual fraud or extrinsic fraud proceeds from the
intentional deception produced by means of misrepresentation or
concealment of a material fact. Extrinsic fraud prevents the party from
163
presenting his entire case to the court. (Heirs of Manuel Roxas and Trinidad
De Leon vs. CA, 270 SCRA 309).
EFFECT OF FORGERY
FACTS:
In 1969, sisters Antonia Torres and Emeteria Baring entered into a
joint venture agreement with Manuel Torres. Under the agreement, the
sisters agreed to execute a deed of sale in favor Manuel over a parcel of
land, the sisters received no cash payment from Manuel but the promise of
profits (60% for the sisters and 40% for Manuel) – said parcel of land is to
be developed as a subdivision.
Manuel then had the title of the land transferred in his name and he
subsequently mortgaged the property. He used the proceeds from the
mortgage to start building roads, curbs and gutters. Manuel also contracted
an engineering firm for the building of housing units. But due to adverse
claims in the land, prospective buyers were scared off and the subdivision
project eventually failed.
The sisters then filed a civil case against Manuel for damages
equivalent to 60% of the value of the property, which according to the
sisters, is what‘s due them as per the contract.
The lower court ruled in favor of Manuel and the Court of Appeals
affirmed the lower court.
The sisters then appealed before the Supreme Court where they
argued that there is no partnership between them and Manuel because the
joint venture agreement is void.
165
ISSUE:
RULING:
Yes. The joint venture agreement the sisters entered into with Manuel
is a partnership agreement whereby they agreed to contribute property
(their land) which was to be developed as a subdivision. While on the other
hand, though Manuel did not contribute capital, he is an industrial partner
for his contribution for general expenses and other costs. Furthermore, the
income from the said project would be divided according to the stipulated
percentage (60-40). Clearly, the contract manifested the intention of the
parties to form a partnership. Further still, the sisters cannot invoke their
right to the 60% value of the property and at the same time deny the same
contract which entitles them to it.
At any rate, the failure of the partnership cannot be blamed on the sisters,
nor can it be blamed to Manuel (the sisters on their appeal did not show
evidence as to Manuel‘s fault in the failure of the partnership). The sisters
must then bear their loss (which is 60%). Manuel does not bear the loss of
the other 40% because as an industrial partner he is exempt from losses.
166
EFFECT OF LOSS
FACTS:
Mary Ann Arede was the adopted daughter of appellant Mercedes
Arede. In 1972, appellant purchased a parcel of land in Cavite, and was
registered by appellant in Mary Ann Arede‘s name and the corresponding
title was issued by the Register of Deeds of Cavite as TCT No. T-56225.
It appeared however that prior to the second mortgage, the subject lot
was sold by Mary Ann Arede to appellant Mercedes Arede as evidenced by a
Deed of Sale. Unfortunately, this sale was not registered by appellant.
Judgment was rendered by the lower court against defendant Mary Ann
Arede, decreeing, among others, that the mortgage lien in favor of defendant
FlordelizaCabuhat is rendered valid and binding.
167
Mercedes appealed to the CA arguing that the mortgage lien was invalid
because: (1) the registration was procured through the presentation of a
forged owner‘s duplicate certificate of title, in violation of Section 53 of
Presidential Decree 1529; and (2) the mortgage constituted when Mary Ann
was no longer the absolute owner of the subject property contravened
Article 2085 of the New Civil Code.
CA relied solely on the provisions of Article 2085 of the New Civil Code,
which states, in part, that for a mortgage to be valid, the persons
constituting the pledge or mortgage should have the free disposal of their
property, and in the absence thereof, they should be legally authorized for
the purpose. It also cited the 1954 case of Parqui v. PNB,[3] wherein the
mortgage was declared null and void since the registration thereof was
procured by the presentation of a forged deed.
ISSUE:
Whether or not the mortgage lien, in favor of Cabuhat, over the
subject property is valid.
RULING:
Yes. It is well-settled that even if the procurement of a certificate of title
was tainted with fraud and misrepresentation, such defective title may be the
source of a completely legal and valid title in the hands of an innocent
purchaser for value.
168
Just as an innocent purchaser for value may rely on what appears in the
certificate of title, a mortgagee has the right to rely on what appears in the
title presented to him, and in the absence of anything to excite suspicion, he
is under no obligation to look beyond the certificate and investigate the title
of the mortgagor appearing on the face of the said certificate. Furthermore,
it is a well-entrenched legal principle that when an innocent mortgagee who
relies upon the correctness of a certificate of title consequently acquires
rights over the mortgaged property, the courts cannot disregard such rights.
Article 2085 of the Civil Code, which requires that the mortgagor must
have free disposal of the property, or at least have legal authority to do so,
admits of exceptions. In quite a number of instances, this Court has ruled
that the said provision does not apply where the property involved is
registered under the Torrens System.
This Court has uniformly held that when a mortgagee relies upon what
appears on the face of a Torrens title and loans money in all good faith on
the basis of the title in the name of the mortgagor, only thereafter to learn
that the latter‘s title was defective, being thus an innocent mortgagee for
value, his or her right or lien upon the land mortgaged must be respected
and protected, even if the mortgagor obtained her title thereto through
fraud.
that had been issued by the Register of Deeds. The title was neither forged
nor fake. Petitioner had every right to rely on the said title which showed on
its face that Mary Ann was the registered owner. There was no reason to
suspect that Mary Ann‘s ownership was defective. Besides, even if there had
been a cloud of doubt, Flordeliza would have found upon verification with
the Register of Deeds that Mary Ann was the titled owner and that the
original title on file with the said office was free from any lien or
encumbrance, and that no adverse claim of ownership was annotated
thereon.
The Decision of the CA is SET ASIDE, and the Decision of the RTC of
Cavite City, is REINSTATED in all aspects.
170
DOUBLE TITLES
FACTS:
This case is about the issuance of two or more transfer certificates of
title to different persons for the same lot, or subdivisions thereof, due to the
fact that the original title was allegedly not cancelled when the first transfer
certificates of title were issued to replace the original title.
A deed of sale for lots E and G of Hacienda Maysilo and covered by OCT
No. 983 was executed in favor of Ismael Lapus, a bona fide occupant
thereof. The deed of sale was presented for registration and contained
entries showing that it was annotated on the back of the OCT. Contrary to
SOP however, the deed of sale was not annotated on the OCT and that
consequently, that title was apparently not cancelled.
As a result of the registration of the deed of sale, TCT No. 4910 (―Lapus
Title‖) was issued to Lapus. Upon his death, the two lots were inherited by
his daughter Carolina Lapuz-Gozon, who had the land subdivided into 55
lots and sold some to her now co-respondents. Lapus and successors-in-
interest have been in possession of the lands even before 1910 of more than
70 years.
In 1962, the Riveras, alleged heirs of the late Maria de la Concepcion Vidal
filed a motion in land registration cases, alleging that they were deprived of
their participation in the Hacienda Maysilo. Since per the OCT the land
seemed unencumbered, the court adjudicated the land in their favor. The
OCT was then cancelled and TCT No. 112235 (―Rivera Title‖) was issued
to the Riveras. Lots 5 and 7 (E and G) were then assigned to Bartolome
171
Rivera to Sergio Cruz and Pacifico Garcia, and subsequent TCTs were
issued in their behalf.
Garcia had Lot 7 (G) subdivided into lots A and B, retained lot A and
assigned B to Antonio Munoz. Munoz mortgaged lot B to Associated
Banking Corp.
On the other hand, Cruz sold Lot 5 (E) to Santiago Go. Go mortgaged Lot 5
to Philippine National Bank. Both Munoz and Go did not pay their mortgage
debts, hence the two banks foreclosed the properties. PNB bought the
mortgaged Lot 5 at the auction, but notice of lis pendens was already
annotated on the title.
Riveras and their successors-in-interest have never set foot on the disputed
lots.
Gozon finally learned about the Riveras and others acquiring the land, had
her adverse claims registered on the titles of lots 5 and 7 and filed an action
to quiet title and damages.
The trial court ruled in favor of Gozon and co-plaintiffs and voided the
TCTs issued to the Riveras, others. CA affirmed the decision. Garcia and
PNB appealed.
ISSUE:
Whether or not the 1920 Lapus title prevails over the 1963 Rivera title and
subsequent titles derived from it?
RULING:
Yes, Lapus title prevails. Lapus was an innocent purchaser for value
who validly transmitted to his successors-in-interest his indefeasible title or
172
ownership over the disputed lots. That title could not be nullified or defeated
by the issuance 43 years later to other persons of another title over the same
lots due to the failure of the register of deeds to cancel the title preceding the
title issued to Lapus. This must be so considering that Lapus and his
successors-in-interest remained in possession of the disputed lots and the
rival claimants never possessed the same.
The general rule is that in the case of two certificates of title, purporting to
include the same land, the earlier in date prevails. It is settled that in this
jurisdiction the maxim prior est in tempore, potior est in jure (he who is first
in time is preferred in right) is followed in land resgistration matters.
The contention of PNB that it was a buyer in good faith has no merit
because the deed of sale in favor of Lapus and the titles issued to him and
his successors-in-interest are all a matter of public record in the registry of
deeds. When a conveyance has been properly recorded, such record is a
constructive notice of its contents and all interests, legal and equitable,
included therein. Under the rule of notice, it is presumed that the purchaser
has examined every instrument of record affecting the title. This presumption
cannot be overcome by proof of innocence and good faith otherwise the very
purpose of the law requiring a record would be destroyed. The bank should
have made an on-the-spot investigation of the lot mortgaged.
Decision affirmed.
FACTS:
Angeles spouses filed a criminal complaint for estafa against
Mercado, their brother-in-law claimed that Mercado convinced them to
enter into a contract of antichresis, to last for 5 years, covering 8 parcels of
land planted with fruit-bearing lanzones trees in Nagcarlan, Laguna and
owned by Juan Sanzo. The parties agreed that Mercado would administer
the ands and complete the necessary paperwork. After 3 years, the Angeles
spouses asked for an accounting from Mercado, and they claim that only
after this demand for an accounting did thy discover that Mercado had put
the contract of antichresis over the subject land under Mercado and his
spouse‘s names. Mercado denied the Angeles spouses‘ allegations claimed
that there exists an industrial partnership, colloquially known as sosyo
industrial, between him and his spouse as industrial partners and the
Angeles spouses as financiers, and that this had existed since 1991, before
the contract of antichresis over the subject land Mercado used his and his
spouse‘s earnings as part of the capital in the business transactions which
he entered into in behalf of the Angeles spouses. It was their practice to
enter into business transactions with other people under the name of
Mercado because the Angeles spouses did not want to be identified as the
financiers
attached bank receipts showing deposits in behalf of Emerita Angeles and
contracts under his name for the Angeles spouses.
ISSUES:
175
RULING:
1. Angeles spouses fail to convince that the Secretary of Justice
committed grave abuse of discretion when he dismissed their appeal.
Moreover, they committed a procedural error when they failed to file a
motion for reconsideration of the Sec. of Justice‘s resolution, which is
already enough reason to dismiss the case.
FACTS:
Petitioners are co-owners of a parcel of land in Barrio Wawa,
Binangonan, Rizal (area: 19,061 sq m). Petitioners allege that in October
1981, without their knowledge or consent, Lorenzo Cadiente, a private
contractor and the Provincial Engineer of Rizal constructed a road 9 meters
wide and 128.70 meters long occupying 1,165 sq m of their parcel of land.
Aside from the road, an artificial creek 23.20 meters wide and 128.69 meters
long was also constructed, occupying an area of 2,906 sq m of their
property. Constructed in a zigzag manner, the creak meandered through
their property
ISSUE:
Whether or not the consolidated actions, as suits against the State,
can be maintained
RULING:
178
FACTS:
Petitioner Adoracion Rufloe is the wife of Angel Rufloe, now deceased, while
co-petitioners Alfredo and Rodrigo are their children. During the marriage
of Adoracion and Angel, they acquired a 371-square meter parcel of land
located at Barangay Bagbagan, Muntinlupa, which is the subject of the
present controversy. Sometime in 1978, respondent Elvira Delos Reyes
forged the signatures of Adoracion and Angel in a Deed of Sale dated to
make it appear that the disputed property was sold to her by the spouses
Rufloe. On the basis of the said deed of sale, Delos Reyes succeeded in
obtaining a title in her name. IThe Rufloes filed a complaint for damages
against Delos Reyes alleging that Angel Rufloe died in 1974, which was four
(4) years before the alleged sale in favor of Delos Reyes.
During the pendency of the case, Delos Reyes sold the subject property to
respondent siblings Anita, Angelina, Angelito and Amy (Burgos siblings). A
new title was then issued in their names. The Burgos siblings, in turn, sold
the same property to their aunt, Leonarda Burgos. However, the sale in
favor of Leonarda was not registered. Thus, no title was issued in her name.
The subject property remained in the name of the Burgos siblings who also
continued paying the real estate taxes thereon.
The trial court rendered its decision declaring that the Deed of Sale in favor
of Delos Reyes was falsified as the signatures of the spouses Rufloe had
180
been forged. The trial court ruled that Delos Reyes did not acquire
ownership over the subject property. Said decision had become final and
executory. Respondents interposed an appeal to the CA. In their appeal,
respondents maintained that they bought the property in good faith after
they were shown a genuine copy of the title of the disputed property by
Delos Reyes. They also insisted that they were innocent purchasers in good
faith and for value. The CA reversed and set aside the ruling of the trial
court, declaring in the process that respondents were purchasers in good
faith and for value.
ISSUE:
(1) Whether the sale of the subject property by Delos Reyes to the Burgos
siblings and the subsequent sale by the siblings to Leonarda were valid and
binding; and (2) Whether respondents were innocent purchasers in good
faith and for value despite the forged deed of sale of their transferor Delos
Reyes.
RULING:
It is undisputed that the forged deed of sale was null and void and conveyed
no title. It is a well-settled principle that no one can give what one does not
have, nemo dat quod non habet. One can sell only what one owns or is
authorized to sell, and the buyer can acquire no more right than what the
seller can transfer legally. Due to the forged deed of sale, Delos Reyes
acquired no right over the subject property which she could convey to the
Burgos siblings. All the transactions subsequent to the falsified sale between
the spouses Rufloe and Delos Reyes are likewise void, including the sale
made by the Burgos siblings to their aunt, Leonarda.
As a general rule, every person dealing with registered land, as in this case,
may safely rely on the correctness of the certificate of title issued therefor
and will in no way oblige him to go beyond the certificate to determine the
181
FACTS:
Marta, Simplicio, Melquiades, Rustico, Visitacion and Catalina, all
surnamed Valles, were siblings. Simplicio and Marta were the registered
182
searched for the title of the property in the Registry of Deeds of Capiz. They
averred that the purported Deed of Absolute Sale dated October 28, 1968 is
a forgery because Marta and Simplicio were long dead when the said
document was executed. They averred that the purported Deed of Absolute
Sale dated October 28, 1968 is a forgery because Marta and Simplicio were
long dead when the said document was executed. Consequently, all titles
emanating therefrom including the titles covering the subdivided lots of Lot
835 registered in the names of spouses Manguardia, Leonardo and Rebecca,
and Adelaida, are all null and void. Respondents, therefore, prayed that
petitioners be ordered to remove the improvements introduced on the
disputed lot and vacate the same, and that a new title be issued over Lot 835
in the names of Marta and Simplicio as owners.
In their Answer, the heirs of spouses Manguardia averred that their
predecessors-in-interest were innocent purchasers in good faith and for
value, having acquired Lots 835-B and 835-C in 1980 from their registered
owners and occupants, Pedro and Soledad. They further averred that their
parents had been in possession of the lots since they purchased them in
1980, and had since then constructed four buildings thereon for their poultry
business, without opposition from anyone, including Graciano who occupies
the adjacent Lot 835-A. They maintained that the titles in the names of the
spouses Manguardia are valid and legal. In addition, since the documents
of sale and Torrens titles were duly registered in the Registry of Deeds, and
that actual possession by the different transferees spanning a period of over
30 years were known to the respondents and their predecessors without any
complaint or opposition, the claim of respondents is barred by prescription,
estoppel and laches. The heirs of the spouses Manguardia moreover
asserted that the Complaint against them fails to allege a cause of action
and that the same was not brought by the real parties-in-interest.
ISSUE:
184
HELD:
The petition lacks merit.
Well entrenched is the principle that factual findings of the trial court, when
adopted and confirmed by the CA, are final and conclusive and may not be
reviewed on appeal by this Court. The Court‘s ―role in a petition under Rule
45 is limited to reviewing or reversing errors of law allegedly committed by
the appellate court.‖ This rule, however, is not without well-defined
exceptions. ―Findings of fact of the trial court and the CA may be set aside
when such findings are not supported by the evidence or where the lower
courts' conclusions are based on a misapprehension of facts.‖ Considering
the contention of petitioners that misinterpretation of facts was committed,
this Court embarked on the task of reviewing the facts of this case.
185
INNOCENT PURCHASER
FACTS:
The spouses Florentino Leong and Carmelita Leong used to own the
property located at No. 539–41 Z.P. De Guzman Street, Quiapo, Manila.
Petitioner Elena Leong (Elena) is Florentino's sister-in-law. She had stayed
with her in-laws on the property rental-free for over two decades until the
building they lived in was razed by fire. They then constructed makeshift
houses, and the rental-free arrangement continued.
Florentino and Carmelita immigrated to the United States and eventually
had their marriage dissolved in Illinois. A provision in their marital
settlement agreement states that ―Florentino shall convey and quitclaim all
of his right, title and interest in and to 540 De Guzman Street, Manila,
Philippines . . . to Carmelita.‖
On November 14, 1996, Carmelita sold the land to Edna. In lieu of
Florentino's signature of conformity in the deed of absolute sale, Carmelita
presented to Edna and her father, witness Ernesto See, a waiver of interest
notarized on March 11, 1996 in Illinois. In this waiver, Florentino reiterated
his quitclaim over his right, title, and interest to the land. Consequently, the
land‘s title, covered by TCT No. 231105, was transferred to Edna's name.
On April 1, 1997, Edna filed a complaint for recovery of possession against
Elena and the other relatives of the Leong ex-spouses. The complaint
alleged that in 1995 after the fire had razed the building on the land, Elena
erected makeshift houses on the land without Carmelita‘s knowledge or
consent.
On April 23, 1997, Florentino filed a complaint for declaration of nullity of
contract, title, and damages against Carmelita Leong, Edna C. See, and the
186
Manila Register of Deeds, alleging that the sale was without his consent.
The two cases were consolidated.
The Regional Trial Court, in its decision ruled in favor of Edna which was
affirmed by CA.
Thus, a petition for review was filed.
Petitioners contend that the principle of indefeasibility of Torrens titles does
not apply when fraud exists, and respondent was a buyer in bad faith.
Respondent knew at the time of the purchase that Elena had actual
possession of the property, thus, she should have made inquiries on their
right to the property.
Petitioners argue the conjugal nature of the property, evidenced by the title
in the names of Florentino and Carmelita Leong, and the waiver relied upon
by respondent. They cite Articles 3 and 15 of the Civil Code, and Articles 87
and 134of the Family Code, to support their contention that respondent
should have demanded Florentino‘s consent to the sale. Petitioners submit
that Florentino‘s waiver is void since donations between spouses are void.
Petitioners argue that respondent should bear the loss of her negligence in
purchasing the property without Florentino‘s consent. They cite at length
Aggabao v. Parulan, Jr. to support their argument that respondent failed to
exercise the required due diligence in the purchase of the property.
Consequently, petitioners submit that the lower courts erred in ruling that
respondent was entitled to possession of the property.
In any event, the lower courts correctly found that respondent is a purchaser
in good faith for value who exercised the necessary diligence in purchasing
the property.
187
ISSUE:
Whether or not the CA erred in its decision affirming in to the trial court's
decision granting Edna possession and ownership over the land upon
finding her to be a buyer in good faith and for value, and resolution denying
reconsideration.
RULING:
Petition lacks merit.
The Torrens system was adopted to ―obviate possible conflicts of title by
giving the public the right to rely upon the face of the Torrens certificate and
to dispense, as a rule, with the necessity of inquiring further.‖
One need not inquire beyond the four corners of the certificate of title when
dealing with registered property. Section 44 of Presidential Decree No.
1529 known as the Property Registration Decree recognizes innocent
purchasers in good faith for value and their right to rely on a clean title. An
innocent purchaser for value refers to someone who ―buys the property of
another without notice that some other person has a right to or interest in it,
and who pays a full and fair price at the time of the purchase or before
receiving any notice of another person‘s claim.‖ One claiming to be an
innocent purchaser for value has the burden of proving such status.
Generally, factual findings of lower courts are deemed conclusive and
binding upon this court. No cogent reason exists to overturn the findings of
both lower courts.
Even assuming the procurement of title was tainted with fraud and
misrepresentation, ―such defective title may still be the source of a
completely legal and valid title in the hands of an innocent purchaser for
value.‖
Respondent, an innocent purchaser in good faith and for value with title in
her name, has a better right to the property than Elena. Elena‘s possession
was neither adverse to nor in the concept of owner.
188
FACTS:
This case involves the conflicting titles to the same parcels of land (subject
lots) of petitioner Barstowe Philippines Corporation (BPC) and the
respondent Republic of the Philippines (Republic). Due to the fire that
gutted the Office of the Quezon City Register of Deeds on 11 June 1988 and
destroyed many certificates of title kept therein, Antonio sought the
administrative reconstitution of the original copies and owner‘s duplicate
copies of 2 TCTs. The Republic applied for administrative reconstitution of
the same with the LRA. It was then that the Republic came to know that
another party had applied for reconstitution which also covered the same
lots. The RTC rendered judgment declaring both BPC and Republic as
buyers in good faith. But it upheld BPC‘s rights over the republic since it
was registered earlier. The Ca ruled for the Republic.
ISSUE:
Who between BPC and the Republic has a better title over the subject lots?
HELD:
189
Ultimately, this Court is called upon to determine which party now has
superior title to the subject lots: the Republic, BPC, the intervenors
Abesamis, Nicolas-Agbulos, and spouses Santiago, or Servando‘s heirs?
Relying on the findings of the LRA, it was established that TCTs No. 200629
and 200630 were forged and spurious, their reconstitution was also
attended with grave irregularities. BPC was unable to attack the authenticity
and validity of the titles of the Republic to the subject lots, and could only
interpose the defense that it was a buyer in good faith. It points out that it
purchased the subject lots from Servando and registered the same, way
before the titles of Servando were declared null by the RTC. Under Section
55 of the Land Registration Act, as amended by Section 53 of Presidential
Decree No. 1529, an original owner of registered land may seek the
annulment of a transfer thereof on the ground of fraud. However, such a
remedy is without prejudice to the rights of any innocent holder for value
with a certificate of title.
A purchaser in good faith and for value is one who buys the property of
another, without notice that some other person has a right to or interest in
such property, and pays a full and fair price for the same at the time of such
purchase or before he has notice of the claim or interest of some other
person in the property.
It has been consistently ruled that a forged deed can legally be the root of a
valid title when an innocent purchaser for value intervenes. A deed of sale
190
executed by an impostor without the authority of the owner of the land sold
is a nullity, and registration will not validate what otherwise is an invalid
document. However, where the certificate of title was already transferred
from the name of the true owner to the forger and, while it remained that
way, the land was subsequently sold to an innocent purchaser, the vendee
had the right to rely upon what appeared in the certificate and, in the
absence of anything to excite suspicion, was under no obligation to look
beyond the certificate and investigate the title of the vendor appearing on
the face of said certificate.
BPC cannot really claim that it was a purchaser in good faith which relied
upon the face of Servando‘s titles. It should be recalled that the Quezon City
Register of Deeds caught fire on 11 June 1988. Presumably, the original
copies of TCTs were burnt in the said fire. Servando‘s heirs sought the
administrative reconstitution of the TCTs. If BPC bought the subject lots
after TCTs were destroyed when the Quezon City Register of Deeds burned
down, but before the said certificates were reconstituted, then on the face of
what titles did BPC rely on before deciding to proceed with the purchase of
the subject lots? There was no showing that there were surviving owner‘s
duplicate copies of TCTs.
Without the original copies and owner‘s duplicate copies of TCTs, BPC had
to rely on the reconstituted certificates. Under section 7 of Republic Act No.
26,57 "Reconstituted titles shall have the same validity and legal effect as
the originals thereof" unless the reconstitution was made extrajudicially.58
In this case, TCTs were reconstituted administratively, hence,
extrajudicially. In contrast to the judicial reconstitution of a lost certificate
191
The fact that the TCTs were reconstituted should have alerted BPC and its
officers to conduct an inquiry or investigation as might be necessary to
acquaint themselves with the defects in the titles of Servando. This Court
cannot declare BPC an innocent purchaser for value, and it acquired no
better titles to the subject lots than its predecessors-in-interest, Servando
and Antonio.
The general rule is that the State cannot be put in estoppel by the mistakes
or errors of its officials or agents. However, like all general rules, this is
also subject to exceptions, viz:
"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
192
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."
xxxx
FACTS:
•Villafania sold a house and lot located Pangasinan and Tigno-Salazar and
Cave-Go covered by a tax declaration. ‗Unknown, however to Tigno-Salazar
and a Cave-Go, Villafania obtained a free patent over the parcel of land
involved. The said free patent was later on cancelled by a TCT.
•On Oct 16, 1997, Tigno-Salazar and Cave-Go, sold the house and lot to
the Spouses Abrigo.
•On Oct 23, 1997, Villafania sold the same house and lot to de Vera. De
Vera registered the sale and as a consequence a TCT was issued in her
name.
193
•De Vera filed an action for Forcible Entry and Damages against Spouses
Abrigo before the MTC.
•Spouses Abrigo filed a case with the RTC for the annulment of documents,
injunction, preliminary injunction, restraining order and damages
Villafania.
•Not contented with the assailed Decision, both parties [appealed to the
CA].
•In its original Decision, the CA held that a void title could not give rise to a
valid one and hence dismissed the appeal of Private Respondent de Vera.
Since Villafania had already transferred ownership to Rosenda Tigno-
Salazar and Rosita Cave-Go, the subsequent sale to De Vera was deemed
void. The CA also dismissed the appeal of Petitioner-Spouses Abrigo and
194
found no sufficient basis to award them moral and exemplary damages and
attorney‘s fees.
ISSUE:
HELD:
•The petition is denied, and the assailed decision affirmed. The present case
involves what in legal contemplation was a double sale. Gloria Villafania
first sold the disputed property to Tigno-Salazar and Cave-Go, from whom
petitioners, in turn, derived their right. Subsequently a second sale was
executed by Villafania with Respondent de Vera.
•Article 1544 of the Civil Code states the law on double sale thus:
―Art. 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken
possession thereof in good faith, if it should be movable property.
•In the instant case, both Petitioners Abrigo and respondent registered the
sale of the property. Since neither petitioners nor their predecessors (Tigno-
Salazar and Cave-Go) knew that the property was covered by the Torrens
system, they registered their respective sales under Act 3344 For her part,
respondent registered the transaction under the Torrens system because,
during the sale, Villafania had presented the transfer certificate of title
(TCT) covering the property.
•Soriano v. Heirs of Magali held that registration must be done in the proper
registry in order to bind the land. Since the property in dispute in the present
case was already registered under the Torrens system, petitioners‘
registration of the sale under Act 3344 was not effective for purposes of
Article 1544 of the Civil Code.
NOTES:
196
•The principle in Article 1544 of the Civil Code is in full accord with Section
51 of PD 1529 which provides that:
•―The case of Carumba vs. Court of Appeals is a case in point. It was held
therein that Article 1544 of the Civil Code has no application to land not
registered under Act No. 496. Like in the case at bar, Carumba dealt with a
double sale of the same unregistered land. The first sale was made by the
original owners and was unrecorded while the second was an execution sale
that resulted from a complaint for a sum of money filed against the said
original owners. Applying [Section 33], Rule 39 of the Revised Rules of
Court, this Court held that Article 1544 of the Civil Code cannot be invoked
to benefit the purchaser at the execution sale though the latter was a buyer
in good faith and even if this second sale was registered. It was explained
that this is because the purchaser of unregistered land at a sheriff‘s
execution sale only steps into the shoes of the judgment debtor, and merely
acquires the latter‘s interest in the property sold as of the time the property
was levied upon.‘
197
•Good-Faith Requirement
We have consistently held that Article 1544 requires the second buyer to
acquire the immovable in good faith and to register it in good faith. Mere
registration of title is not enough; good faith must concur with the
registration. We explained the rationale in Uraca v. Court of Appeals, which
we quote:
―Under the foregoing, the prior registration of the disputed property by the
second buyer does not by itself confer ownership or a better right over the
property. Article 1544 requires that such registration must be coupled with
good faith. Jurisprudence teaches us that the governing principle is primus
tempore, potior jure (first in time, stronger in right). Knowledge gained by
the first buyer of the second sale cannot defeat the first buyer‘s rights except
where the second buyer registers in good faith the second sale ahead of the
first, as provided by the Civil Code. Such knowledge of the first buyer does
not bar her from availing of her rights under the law, among them, to
register first her purchase as against the second buyer. But in converso,
knowledge gained by the second buyer of the first sale defeats his rights even
if he is first to register the second sale, since such knowledge taints his prior
registration with bad faith. This is the price exacted by Article 1544 of the
Civil Code for the second buyer being able to displace the first buyer; that
before the second buyer can obtain priority over the first, he must show that
he acted in good faith throughout (i.e. in ignorance of the first sale and of
the first buyer‘s rights) —- from the time of acquisition until the title is
transferred to him by registration, or failing registration, by delivery of
possession.‘
198
BAR NOTES
One who deals with property covered by the Torrens system of registration
need not go beyond the title to determine the condition of the property.
(Legarda vs. CA, 280 SCRA 642).
A person dealing with registered land has the right to rely on the Torrens
certificate of title without the need of inquiring further. Hence, a purchaser
who buys property without notice that some other person has a right to or
interest in such property and pays a full fair price for the property is a buyer
in good faith. (Sandoval vs. CA, 260 SCRA 283).
A person in good faith and for value is defined as one who buys property of
another without notice that some other person has a right to, or interest in,
such property and pays a full and fair price of the time of the purchase or
before he has notice that other person has a right to, or interest in, the
199
property. As a rule, he who asserts the status of a purchaser in good faith and
for value has the burden of proving said assertion. As is the common
practice in the real estate industry, an ocular inspection of the premises is a
safeguard a cautious and prudent purchaser usually takes and should he find
out that the land is occupied by anybody else other than the seller who is not
in actual possession, it is incumbent upon the purchaser to verify the extent
of the occupants' possessory rights. (Spouses Sonya Mathay and Ismael
Mathay, Jr. vs. CA, 295 SCRA 356).
An RTC court sitting as a land registration court may determine the validity
of an adverse claim. Purchaser in good faith and for value is one who buys
the property of another without notice that some other person has a right to
or interest in such property and pays a full and fair price for the same on the
time of the purchase or before he has notice of the claims or interest of some
other person in the property. (GSIS vs. CA, 240 SCRA 737).
200
QUIETING OF TITLE
Art. 476. Whenever there is a cloud on title to real property or any interest
therein, by reason of any instrument, record, claim, encumbrance or
proceeding which is apparently valid or effective but is in truth
and in fact invalid, ineffective, voidable, or unenforceable, and may
be prejudicial to said title, an action may be brought to remove such cloud
or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title
to real property or any interest therein.
EXISTENCE OF A CLOUD
The cloud on title exists because
1. Of an instrument or record or claim or encumberance or
proceeding
2. Which is apparently valid or effective
3. But is in truth and in fact, invalid, ineffective, voidable or
unenforceable or extinguished or barred by extinctive prescription
4. And may be prejudicial to the title
201
Adlawan v. Adlawan
G.R. No. 161916 January 20, 2006
FACTS:
The instant ejectment suit stemmed from the parties dispute over Lot 7226
and the house built thereon, covered by Transfer Certificate of Title No.
8842, registered in the name of the late Dominador Adlawan and located at
Barrio Lipata, Municipality of Minglanilla, Cebu. In his complaint,
petitioner claimed that he is an acknowledged illegitimate child of
Dominador without any other issue. Claiming to be the sole heir of
Dominador, he executed an affidavit adjudicating to himself Lot 7226 and
202
the house built thereon. Out of respect and generosity to respondents who
are the siblings of his father, he granted their plea to occupy the subject
property provided they would vacate the same should his need for the
property arise. Sometime in January 1999, he verbally requested
respondents to vacate the house and lot, but they refused and filed instead
an action for quieting of title with the RTC. Finally, upon respondents
refusal to heed the last demand letter to vacate dated August 2, 2000,
petitioner filed the instant case on August 9, 2000.
On the other hand, respondents denied that they begged petitioner to allow
them to stay on the questioned property and stressed that they have been
occupying Lot 7226 and the house standing thereon since birth. They
alleged that Lot 7226 was originally registered in the name of their
deceased father, Ramon Adlawan and the ancestral house standing thereon
was owned by Ramon and their mother, Oligia Maacap Adlawan. The
spouses had nine children including the late Dominador and herein
surviving respondents Emeterio and Narcisa. During the lifetime of their
parents and deceased siblings, all of them lived on the said property.
Dominador and his wife, Graciana Ramas Adlawan, who died without issue,
also occupied the same. Petitioner, on the other hand, is a stranger who
never had possession of Lot 7226.
ISSUE:
Whether or not petitioner can maintain the instant case for ejectment
HELD:
203
NO. RTC lost sight of the fact that the theory of succession invoked by
petitioner would end up proving that he is not the sole owner of Lot 7226.
This is so because Dominador was survived not only by petitioner but also
by his legal wife, Graciana. By intestate succession, Graciana and petitioner
became co-owners of Lot 7226. The Court of Appeals thus correctly held
that petitioner has no authority to institute the instant action as the sole
owner of Lot 7226.
In the instant case, it is not disputed that petitioner brought the suit for
unlawful detainer in his name alone and for his own benefit to the exclusion
of the heirs of Graciana as he even executed an affidavit of self-
adjudication over the disputed property. It is clear therefore that petitioner
cannot validly maintain the instant action considering that he does not
recognize the co-ownership that necessarily flows from his theory of
succession to the property of his father, Dominador.
Indeed, respondents not less than four decade actual physical possession of
the questioned ancestral house and lot deserves to be respected especially so
that petitioner failed to show that he has the requisite personality and
authority as co-owner to file the instant case. Justice dictates that
respondents who are now in the twilight years of their life be granted
possession of their ancestral property where their parents and siblings lived
during their lifetime, and where they, will probably spend the remaining
days of their life.
204
FACTS:
Meanwhile, petitioner entered into a contract of lease for one door of the
building with Ronald Vargas, son of Dr. Vargas, who represented himself as
the absolute owner of the property. Dr. Vargas sold the property to
respondent, evidenced by a deed of absolute sale. TCT No. 949 in the name
of the respondent was subsequently issued. Petitioner again entered into a
new contract with Ronald Vargas extending the term of the original contract
and included the remaining door of the building. Petitioner sought to
register the contract of lease with the Register of Deeds of Iriga City.
However, the contract was entered only in the primary book because it could
not be registered for several reasons: (a) the requisite tax had not been paid
(b) the contract lacked a documentary stamp and (c) the tax declaration of
the property was not in the name of the lessor.
the CA. The CA held that petitioner‘s possession of the property from the
date of purchase by respondent was merely by tolerance. Such possession
became unlawful from the time respondent made a demand on petitioner to
vacate it.
ISSUE:
Whether or not the petitioner‘s argument that both lease agreements were
valid therefore he cannot be held an unlawful detainer and that he did not
possess the property by mere tolerance
HELD:
NO. The first premise of petitioners argument, that both lease agreements
were valid, is erroneous. As correctly observed by the RTC and the CA,
Ronald Vargas was not the owner of the property and had no authority to let
it.
Although the lessor need not be the owner of the property being leased, he
should have a right (e.g., either as a usufructuary or a lessee) or at least an
authority (e.g., as an agent of the owner, usufructuary, or lessee) to lease it
out. Here, Ronald Vargas had neither the right nor the authority to grant
petitioner the lease of the property.
Dr. Vargas is deemed to have ratified the first lease because he never
objected to it and in fact allowed petitioner to occupy the property for five
years despite his knowledge of his son Ronald‘s misdeed. Thus, we consider
the first lease valid. But the same cannot be said of the second lease. Under
the principle of relativity of contracts, the sale of the property by Dr. Vargas
to respondent bound Ronald Vargas as an heir of the seller. Neither did
respondent authorize him to enter into a new lease contract with petitioner.
Thus, Ronald Vargas could not have validly executed the second lease
206
agreement upon which petitioner now bases his right to the continued
possession of the property.
The river cannot rise higher than its source. Where the purported lessor is
bereft of any right or authority to lease out the property, then his supposed
lessee does not acquire any right to the possession or enjoyment of the
property.
Suffice it to say that the second lease contract was legally inexistent for lack
of an object certain. Under Arts. 1318 and 1409 (3) of the Civil Code,
contracts the cause or object of which did not exist at the time of the
transaction are inexistent and void ab initio.
When petitioner presented the second lease contract to the Register of Deeds
a day after its execution, his attention was called to the fact that the lessor
207
Facts:
Sometime in 1980, Serafin de Guzman (Serafin) and Josefino de Guzman3
(Josefino) applied for, and were granted, authority to distribute oil and
lubricating products manufactured and marketed by Filipinas Shell
Petroleum Corporation (FSPC). In the course of their business, Serafin and
Josefino purchased on credit oil and lubricating products from FSPC, but
they eventually failed to pay for their credit purchases from FSPC. Thus,
FSPC filed before the RTC of Manila a complaint for sum of money against
Serafin and Josefino, docketed as Civil Case No. 120680. After trial, RTC-
Manila rendered judgment ordering Serafin and Josefino to pay their
outstanding obligations to FSPC. Since Serafin and Josefino no longer
appealed, the judgment of RTC-Manila in Civil Case No. 120680 became
final and executory. RTC-Manila granted the motion of FSPC and ordered
the issuance of a writ of execution on May 3, 1983. On June 30, 1983, FSPC
levied upon a parcel of land, with an area of 74,415 square meters, situated
in Sta. Cruz de Malabon, Trece Martires City, Cavite Province (subject
property), covered by Transfer Certificate of Title (TCT) No. 3531 in the
name of spouses Serafin and Amelia de Guzman (spouses De Guzman).
According to the Sheriff‘s Certificate of Sale dated February 4, 1988, the
subject property was sold, after due publication and notice, at a public
auction, in favor of respondent, which gave the highest bid of P70,000.00.
The Sheriff‘s Certificate of Sale was annotated on TCT No. 3531 on April
13, 1988. The spouses De Guzman did not redeem the subject property
208
within one year from registration of the Sherifff‘s Certificate of Sale on TCT
No. 3531.
Manila, Br. XX, copy on file in this Registry. Date of instrument - June 30,
1983. Date of Inscription - July 01, 1983.
c.Entry No. 1487 - Certificate of Sale - In favor of TABANGAO REALTY
INCORPORATED - Covering the parcel of land described in this title, by
virtue of the sheriff‘s certificate of sale exec. by Jose R. Bawalan, Clerk of
Court & Ex-Officio Sheriff of Cavite and approved by PROCESO P.
SILANGCRUZ, acting etc. Judge of Branch 23, TMC. Date of instrument -
Feb. 4, 1988. Date of Inscription - April 13, 1988.
d.Entry No. 1488 - BIR certification - In favor of TABANGAO REALTY
INCORPORATED - That SERAFIN DE GUZMAN as per certification
issued by the BIR. Date of instrument - April 13, 1988. Date of Inscription -
April 13, 1988.
7. The foregoing entries/encumbrances are apparently valid and subsisting
but in fact and in law, they are void and ineffective or otherwise had been
terminated and extinguished or barred by prescription, estoppel and laches.
8. Specifically, the Certificate of Sale, annotated on TCT No. 3531 (T-
95734) as Entry No. 1487, which supposedly emanated from the Execution
(Entry No. 8616-23 [sic]) and Notice of Levy (Entry No. 8619-23) is void for
the following reasons:
a. The Sheriff‘s Certificate of Sale dated February 4, 1988 (copy is attached
as Annex ―B‖) recites that ―on June 30, 1983 LEVY was made upon the
right, titles, interests and participation of defendants SERAFIN and
JOSEFINO DE GUZMAN and sold at public auction sale in front of the
Capitol Building of Cavite situated at Trece Martires City, after due
publication of the Sheriff‘s Sale in the Record Newsweekly, and after the
Notice of Sheriff‘s Sale was posted in three (3) conspicuous places and later
sold in favor of Tabangao Realty Incorporated, x x x as the highest bidder
for the amount of SEVENTY THOUSAND PESOS (P70,000) Philippine
Currency, x x x
xxxx
210
The truth is there was no such Sheriff‘s Sale conducted on June 30, 1983
and it was legally impossible to do the levy and execution sale on the same
date.
b. Assuming an execution sale was indeed conducted on any other date the
same was void for lack of the required notice and publication.
c. Assuming an execution sale was indeed conducted with due notice and
publication, still [respondent‘s] acquisition was void because [respondent]
was not and up to now is not capacitated to own and acquire agricultural
land and its aggregate area of landholding exceeds the retention limit fixed
by law. Being legally incapacitated to own this agricultural land the
execution of the Certificate of Sale in its favor was void and did not create
any legal effect.
9. Assuming there was a valid execution sale conducted, the Sheriff‘s
Certificate of Sale has lost its effectivity as it had been terminated and
extinguished by prescription, laches and estoppel, more than 13 years
having elapsed from its registration on 13 April 1988 without the buyer,
[respondent] herein, taking any step to consolidate its ownership and/or
take possession of the property. In the meantime [petitioners] and their
predecessors have introduced on the land improvements of considerable
value and are the ones paying the real property taxes and performing all the
tasks and paying all the expenses of preserving the land and protecting it
from intruders.
10. Assuming there was a valid execution sale executed, [respondent] is
guilty of fraud and bad faith in suspending indefinitely the consolidation of
title in its name. Its motive is to conceal its acquisition of the land from the
public and the government, particularly the Department of Agrarian Reform,
and project in the public records the [petitioners‘] title, who are otherwise
qualified under the law to retain it, and thereby evade its obligation to strip
itself of this landholding within the period required by law and thus
indefinitely keep the land away from the coverage of agrarian reform laws.
Being guilty of fraud and bad faith [respondent] cannot under the principle
of ―in pari delicto‖ recover the land from the [petitioners], especially after
211
Respondent filed a Motion for Extension of Time to File Answer, which the
RTC granted in an Order dated January 4, 2002. However, instead of filing
an answer, respondent filed a Motion to Dismiss based on two grounds: (a)
the Complaint failed to comply with the requirements on certification
against forum shopping; and (b) the Complaint failed to state a cause of
action.
Respondent averred that the Certification against Forum Shopping attached
to the Complaint did not comply with the mandatory requirements set forth
in Rule 7, Section 5 of the 1997 Rules of Court. Assuming that all petitioners
are indeed the children and only heirs of the spouses De Guzman who
inherited the subject property by intestate succession, as alleged in the
Complaint, then all 11 petitioners should have executed the Certification
against Forum Shopping, but only Herminio signed said Certification. Since
it was not indicated in the Certification that Herminio was authorized by his
co-petitioners to execute the same on their behalf, then the said Certification
was Herminio‘s sole act.
Respondent also argued that the Complaint did not state any cause of
action. Petitioners did not have any existing right or interest over the subject
property as to entitle them to the relief prayed for in the Complaint. The
subject property had long been levied upon and sold to respondent at an
execution sale. The only remaining right of petitioners‘ predecessors-in-
interest over the subject property was the right to redeem the same within a
period of one year from the date of registration of the Sheriff‘s Certificate of
Sale with the Registry of Deeds on April 13, 1988. When petitioners‘
predecessors-in-interest failed to redeem the subject property within the
one-year period, they were divested of their rights, title, and interest over the
subject property, which were then acquired by respondent. Respondent
further asserted that its acquisition of the subject property at the execution
sale conducted on June 30, 1983 was valid and legal; a civil action to
consolidate ownership was not necessary before title to the subject property
completely vested in respondent; the real right of respondent over the
subject property would prescribe only after thirty years; there were no legal
213
Held:
The Court reiterates that all rights, title, interest, and claim of the spouses
De Guzman to the subject property was already acquired by respondent
upon the expiration of the one-year redemption period without redemption
being made. The execution of the final deed of sale and/or conveyance to
respondent is a mere formality and confirmation of the title already vested in
respondent. Rule 39, Section 33 of the 1997 Rules of Court states that ―[t]he
deed [of conveyance] shall be executed by the officer making the sale or by
his successor in office,‖ who, in the present case, is the Sheriff of RTC-Trece
Martires. There is nothing in the Rules requiring the institution of a separate
action for execution of such a deed, therefore, no prescriptive period for any
action has begun to run. Respondent will only have to seek recourse from
the courts if the Sheriff refuses to execute the deed, and only then will there
be a cause of action for respondent to compel the Sheriff to execute the deed
and the prescriptive period for such an action begin to run.
It is settled that execution is enforced by the fact of levy and sale. The result
of such execution was that title over the subject property was vested
immediately in the purchaser subject only to the Spouses Ching‘s right to
redeem the property within the period provided for by law. The right
acquired by the purchaser at an execution sale is inchoate and does not
become absolute until after the expiration of the redemption period without
the right of redemption having been exercised. But inchoate though it be, it
is, like any other right, entitled to protection and must be respected until
extinguished by redemption. Since, the Spouses Ching failed to redeem the
subject property within the period allowed by law, they have been divested
of their rights over the property.
Verily, the Bank‘s ―Motion to Retrieve Records, for Issuance of Final Deed
of Conveyance, to Order the Register of Deeds of Makati City to Transfer
Title and for Writ of Possession‖ was merely a consequence of the execution
215
of the summary judgment as the judgment in Civil Case No. 142309 had
already been enforced when the lot was levied upon and sold at public
auction, with the Bank as the highest bidder.16
Given that neither of the two requisites for an action to quiet title could be
gleaned from the allegations in petitioners‘ Complaint, said Complaint was
properly dismissed by RTC-Trece Martires for failure to state a cause of
action.
WHEREFORE, the Petition is DENIED and the Orders dated March 4, 2002
and May 21, 2002 of the RTC, Branch 23, Trece Martires City in Civil Case
No. TM-1118 are AFFIRMED.
Nestor Bracero vs. Rodulfo Arcelo and The Heirs Of Victoriano Monisit,
G.R. No. 212496, March 18, 2015
Facts:
Nestor Bracero filed this Petition1 for Review assailing the Court of
Appeals' (a) August 28, 2013 Decision2 affirming in toto the Regional Trial
Court Order3 denying his Urgent Motion to Vacate Order for the Issuance
of the Writ of Execution Against Defendants Spouses Nestor and Lilia
Bracero and to Furnish Copy of the Decision to their Counsel4 (Urgent
Motion to Vacate the Writ of Execution) and (b) April 14, 2014 Resolution5
denying the motion for its reconsideration.
Nestor Bracero prays that this court nullify the assailed Court of Appeals
Decision and Resolution, as well as the Regional Trial Court's February 11,
2010 Order; compel the trial court to furnish his counsel with a copy of its
Decision so he may appeal this Decision within the 15-day period from
counsel's receipt; prohibit the execution of the Regional Trial Court
216
During Victoriano Monisit's lifetime, 5,000 square meters of the land was
mortgaged to Rodulfo Arcelo's grandmother, Damiana Mendoza. Damiana
Mendoza's death was followed by her son's death, and Rodulfo Arcelo
inherited the right over the mortgaged portion of the property.11cralawred
Sometime in 1993, Victoriano Monisit sued Nestor Bracero for the recovery
of the property he cultivated for his failure to share the products.13 Nestor
Bracero countered that the land he cultivated belonged to Rodulfo Arcelo.14
Both complaint and counterclaim were dismissed.15cralawred
Victoriano Monisit died single on August 3, 1995, and his legal heirs extra-
judicially partitioned his properties. His heirs Lourdes Menchavez, Rogelio
Ruelo, and Martiniana Apor inherited Lot No. 4327 as their share and
immediately took possession.16cralawred
217
Rodulfo Arcelo filed an Answer20 denying that Nestor Bracero was his
tenant.21 He claimed he was only impleaded as respondent to help the heirs
oust Nestor Bracero from the property.22 Rodulfo Arcelo did not claim
ownership23 of the 5,000-square-meter portion.24cralawred
The trial court denied Nestor Bracero's Motion to Dismiss and also denied
reconsideration.26 The Court of Appeals dismissed his Petition for
Certiorari and/or Prohibition and also denied reconsideration.27cralawred
On April 16, 2009, the trial court ruled in favor of the heirs of Victoriano
Monisit.29 On May 4, 2009, the trial court served Nestor Bracero with a
copy of its Decision.30cralawred
The period to appeal lapsed. The heirs of Victoriano Monisit filed a motion
for execution and furnished the counsels of Nestor Bracero and Rodulfo
Arcelo with copies. The trial court issued the Writ of Execution on October
7, 2009 without opposition.31cralawred
218
The Regional Trial Court, in its February 11, 2010 Order, denied Urgent
Motion to Vacate the Writ of Execution.36cralawred
The Court of Appeals, in its August 28, 2013 Decision, affirmed in toto the
Regional Trial Court Order.37 It also denied reconsideration.38cralawred
Petitioner's counsel alleges that even if the motion for execution indicated
that he was furnished a copy, he never received such copy. Respondent heirs
did not present a post office certification to prove they furnished counsel
with a copy.39cralawred
Petitioner's counsel raises that the Regional Trial Court's Clerk of Court
departed from usual procedure by sending a copy of the Decision directly to
petitioner. He explains that his client is a poor farmer who lives in the
remote mountain barangay of Lubo with no telephone connection, and these
circumstances made it easy to defeat his client's right to appeal.41cralawred
Lastly, he argues that even if he received a copy of the motion for execution,
"to require undersigned counsel to verify the existence of the cision with the
219
In their Comment,44 respondent heirs argue that petitioner has no legal aim
on the property.45Petitioner did not file an answer to the Complaint or a
motion to set aside the Order declaring him in default.46cralawred
Respondent heirs submit that Barangay Lubo is along the national highway
from Sogod, has electricity, and is "accessible to all kinds of transportation
and communications."49 Thus, petitioner's counsel's claim that petitioner is
a poor farmer who is barely literate and lives in the remote barangay of
Lubo lacks merit.50 Respondent heirs submit that petitioner hired a private
counsel who had been legally assisting him since 1985.51 Also, "petitioner
could not be considered so naive not to be able to comprehend the
importance of a decision to his case for purposes of informing his counsel
immediately upon receipt thereof in the same manner that he informed his
counsel on the same day, January 8, 2010 when he was served by the Sheriff
the Writ of Execution of the decision."52cralawred
Petitioner's counsel was also served a copy of the motion for execution on
September 11, 2009, with notice to submit the motion fDr court approval on
September 15, 2009. Thus, petitioner's counsel had actual notice of the
Decision, yet he did not file an opposition.56 Respondent heirs argue that
petitioner is now in estoppel to assail the Regional Trial Court Order dated
February 11, 2010.57cralawred
For his part, respondent Rodulfo Arcelo filed the Manifestation59 dated
September 10, 2014 waiving his right to file a Comment to the Petition.
Issue:
Held:
The foregoing notwithstanding, the Court of Appeals ruled, and rightly so,
that although Atty. Estaniel was not officially sent a copy of the trial court's
January 31, 1996 decision, he was however, put on effective official notice
thereof on April 1, 1996. He must, therefore, be mad accountable for his
failure to seek, within the reglementary period counted from April 1, 1996, a
review of said decision. . . .
....
....
lawyer is retained until his effective release from the case or final
disposition of the whole subject of the litigation, is the duty to safeguard his
client's interest with the vigilance and attention of a good father of the
family. In line with his duty as defined in Canon 18 of the Code, it behooved
Atty. Estaniel, upon receipt of Atty. Datukon's manifestation, to posthaste
inquire from the trial court or even from Atty. Datukon himself, about the
status of petitioner's case since the manifestation, a copy of which he has
thus been furnished, already made specific reference to a motion for
execution filed by the counsel of his clients' adversary. Atty. Estaniel must
thus be held to task for his failure to exercise due diligence in the discharge
of his duties as counsel. Petitioners, too, must suffer the consequence of such
failure because a client is bound by the conduct, negligence or mistakes of
his counsel.69 (Emphasis m the original, citations omitted)
The explanation of petitioner's counsel that his client only finished Grade 6
and lives in a remote mountain barangay77 fails to convince. Petitioner
223
This court has held that "[r]elief will not be granted to a party who seeks
avoidance from the effects of the judgment when the loss of the remedy at
law was due to his own negligence."82 Petitioner, through his counsel, did
not file an answer to the Complaint. After the trial court declared petitioner
in default for failure to file an answer, his counsel did not file an opposition
to or motion to lift the Order declaring him in default. After petitioner's
counsel was furnished a copy of the motion for execution, he did not
immediately file an opposition to the motion or raise the ground that he was
not furnished a copy of the Decision.
Petitioner Nestor Bracero, through his counsel Atty. Danilo Pilapil, had
several opportunities to argue his position before the courts but failed to
take them. Petitioner should now be considered in estoppel from assailing
the Regional Trial Court Order dated February 11, 2010 denying
petitioner's Urgent Motion to Vacate the Writ of Execution, affirmed by the
Court of Appeals. Also, "[t]o frustrate the winning party's right through
224
dilatory schemes is to frustrate all the efforts, time and expenditure of the]
courts, which thereby increases the costs of litigation.
225
FACTS:
Petitioners Angelita and Preciosa are the applicants for registration of title
over the subject property. They are the heirs of spouses Amado
Buenaventura and Irene Flores (spouses Buenaventura) from whom they
acquired the subject property. The subject property was acquired by the
spouses Buenaventura from the Heirs of Lazaro de Leon, before World War
II. However, it was only on 30 January 1948 that the corresponding Deed of
Sale4 was executed in favor of the spouses Buenaventura.
An Application for Registration of Title on 5 June 2000 were filed before the
RTC of Paranaque wherein petitioners presented witnesses in order to
establish the fact that petitioners and their predecessors have acquired
vested right over the subject property in the manner and for the period
required by law; likewise, to prove the alienable and disposable character of
the property since 3 January 1968 as certified by the DENR. RTC granted
the petition.
ISSUES:
226
I. Whether or not the Court of Appeals erred in nullifying the Decision of the
trial court confirming petitioners‘ title over the subject property for not
being allegedly supported by substantial evidence as required by law. (YES)
II. Whether or not the Court of Appeals gravely erred in declaring the
subject property as public land and ignoring petitioners‘ evidence of over 30
year possession in the concept of an owner and completely unmolested by
any adverse claim. (YES)
HELD:
FACTS:
Petitioners filed a motion to lift order of default and attached their position
paper attributing the delay in construction to the 1997 Asian financial crisis.
228
Petitioners sought relief from the Court of Appeals through a petition for
review under Rule 43 containing the same arguments they raised before the
HLURB and the Office of the President:
229
On 30 July 2008, the Court of Appeals denied the petition for review for lack
of merit. The appellate court echoed the HLURB Arbiters ruling that a buyer
for a condominium/subdivision unit/lot unit which has not been developed in
accordance with the approved condominium/subdivision plan within the
time limit for complying with said developmental requirement may opt for
reimbursement under Section 20 in relation to Section 23 of Presidential
Decree (P.D.) 957. The appellate court supported the HLURB Arbiters
conclusion, which was affirmed by the HLURB Board of Commission and
the Office of the President, that petitioners failure to develop the
condominium project is tantamount to a substantial breach which warrants
a refund of the total amount paid, including interest. The appellate court
pointed out that petitioners failed to prove that the Asian financial crisis
constitutes a fortuitous event which could excuse them from the performance
of their contractual and statutory obligations. The appellate court also
affirmed the award of moral damages in light of petitioners unjustified
refusal to satisfy respondents claim and the legality of the administrative
fine, as provided in Section 20 of Presidential Decree No. 957.
ISSUES:
Whether or not the Asian financial crisis constitute a fortuitous event which
would justify delay by petitioners in the performance of their contractual
obligation
Assuming that petitioners are liable, whether or not 12% interest was
correctly imposed on the judgment award
Whether the award of moral damages, attorneys fees and administrative fine
was proper.
230
HELD:
The Court of Appeals decision is affirmed with the modification that the
legal interest to be paid is SIX PERCENT (6%) on the amount due computed
from the time of respondents' demand for refund on 8 October 1998.
This petition did not present any justification for us to deviate from the
rulings of the HLURB, the Office of the President and the Court of Appeals.
shall be forfeited in favor of the owner or developer when the buyer, after
due notice to the owner or developer, desists from further payment due to
the failure of the owner or developer to develop the subdivision or
condominium project according to the approved plans and within the time
limit for complying with the same. Such buyer may, at his option, be
reimbursed the total amount paid including amortization interests but
excluding delinquency interests, with interest thereon at the legal rate.
Notably, the issues had already been settled by the Court in the case of Fil-
Estate Properties, Inc. v. Spouses Go promulgated on 17 August 2007,
where the Court stated that the Asian financial crisis is not an instance
ofcaso fortuito. Bearing the same factual milieu as the instant case, G.R. No.
165164 involves the same company, Fil-Estate, albeit about a different
condominium property. The company likewise reneged on its obligation to
respondents therein by failing to develop the condominium project despite
substantial payment of the contract price. Fil-Estate advanced the same
argument that the 1997 Asian financial crisis is a fortuitous event which
justifies the delay of the construction project. First off, the Court classified
the issue as a question of fact which may not be raised in a petition for
review considering that there was no variance in the factual findings of the
HLURB, the Office of the President and the Court of Appeals. Second, the
Court cited the previous rulings of Asian Construction and Development
Corporation v. Philippine Commercial International Bank and Mondragon
Leisure and Resorts Corporation v. Court of Appeals holding that the
1997Asian financial crisis did not constitute a valid justification to renege
on obligations. The Court expounded: Also, we cannot generalize that the
Asian financial crisis in 1997 was unforeseeable and beyond the control of a
business corporation. It is unfortunate that petitioner apparently met with
232
considerable difficulty e.g. increase cost of materials and labor, even before
the scheduled commencement of its real estate project as early as 1995.
However, a real estate enterprise engaged in the pre-selling of condominium
units is concededly a master in projections on commodities and currency
movements and business risks. The fluctuating movement of the Philippine
peso in the foreign exchange market is an everyday occurrence, and
fluctuations in currency exchange rates happen everyday, thus, not an
instance of caso fortuito.
In said case, the Court ordered the refund of the total amortizations paid by
respondents plus 6% legal interest computed from the date of demand. The
Court also awarded attorneys fees. We follow that ruling in the case before
us.
The resulting modification of the award of legal interest is, also, in line with
our recent ruling in Nacar v. Gallery Frames, embodying the amendment
introduced by the Bangko Sentral ng Pilipinas Monetary Board in BSP-MB
Circular No. 799 which pegged the interest rate at 6% regardless of the
source of obligation.
Mijares vs. CA
330 SCRA
FACTS:
Several years later, or on May 12, 1933, OCT No. 633 was cancelled, and,
in lieu thereof, Transfer Certificate of Title No. 23377 was issued. Nine (9)
years later, or sometime in 1942, the heirs of Francisco and Hermogenes
adjudicated among themselves the same 3,181.74 hectares and transferred
the one-half (1/2) portion thereof to Jose A. Rojas, predecessor-in-interest of
the [respondents] Rojases. Allegedly, the adjudication was formalized by the
heirs of Francisco and Hermogenes only on December 17, 1973, when they
purportedly executed an Extra-Judicial Settlement of Estate With Quitclaim.
Confusingly, some few months thereafter, or on August 20, 1974, the heirs of
Don Buenaventura Guido y Santa Ana, represented by their lawyer,
requested the then Land Registration Commission to issue the
corresponding original certificate of title based on Decreto No. 6145,
evidently because OCT No. 633 which was earlier issued on the basis of the
same Decreto was previously cancelled. The request, however, was denied
by the said office on January 8, 1976.
Meanwhile, on March 29, 1976, Alfredo Guido, Sr., representing the other
heirs, filed with the Registry of Deeds of Morong a petition for
reconstitution of TCT No. 23377, alleging that the original of the same title
could not be located in the files of the Registry of Deeds of Rizal when he
and his co-heirs sought the registration of their aforementioned [Extra]-
Judicial Settlement of Estate With Quitclaim. The petition was supported by
the owner‘s duplicate copy of the title sought to be reconstituted. On the
same date that Guido, Sr. filed the petition for reconstitution, the same was
granted and a reconstituted certificate of title – TCT (23377) RT-M-0002 –
was issued.
ISSUES:
HELD:
(Illustrative Case)
FACTS:
The petitioners spouses Manuel Chu, Sr. and Catalina Chu were the
registered owners of five (5) parcels of land situated in Barrio Saguin, San
Fernando, Pampanga. They executed a deed of sale on Sept. 30, 1986 with
assumption of mortgage in favor of Trinidad N. Cunanan. It was made to
appear in the deed of sale that the total consideration had been fully paid to
enable Cunanan to have the parcels of land registered in her name so that
she could mortgage the same to secure a loan and thereupon pay from the
proceeds of the loan.
Their agreement, however, was that the ownership of the properties shall
remain with the petitioners until full payment of the balance of the total
purchase price.
Cunanan failed to pay the balance of the total purchase price to the
petitioners. Without the knowledge of the petitioners, Cunanan sold the three
237
(3) parcels of land to Cool Town Realty and Development Corporation, and
the two (2) other parcels of land to the spouses Amado and Gloria Carlos.
The spouses Carlos, in turn, sold these two (2) properties to the respondent
Benelda Estate Development Corporation.
The respondent filed its answer with a motion to dismiss on the ground that
the amended complaint states no cause of action against respondent. It
alleged that respondent corporation, through its officers, acted in good faith
in buying the properties inasmuch as it exerted all efforts to verify the
authenticity of the titles and that no defect was found.
After the petitioner filed an opposition to the motion to dismiss, the trial
court rendered a decision denying the motion to dismiss.
The respondent filed a petition for certiorari under Rule 65 of the Rules of
Court before the Court of Appeals alleging that the trial court committed
grave abuse of discretion in denying its motion to dismiss the amended
complaint. The Court of Appeals reversed the order of the trial court and
dismissed the case as against the respondent on the ground of lack of cause
of action and for failure of the petitioners to include the spouses Carlos as
indispensable parties in the complaint.
ISSUES:
a) Whether the spouses Amado E. Carlos and Gloria A. Carlos (sellers of
the subject titled parcels of land to respondent) are real and indispensable
parties in the case at bar.
238
RULING:
A cause of action is defined as an act or omission by which a party violates
a right of another. The test of the sufficiency of the facts found in a petition
as constituting a cause of action is whether or not, admitting the facts
alleged, the court can render a valid judgment upon the same in accordance
with the prayer thereof.
In land title cases, the court held that a person dealing with registered land
may safely rely on the correctness of the certificate of title issued and the
law will in no way oblige him to go behind the certificate to determine the
condition of the property.
Thus, a title procured through fraud and misrepresentation can still be the
source of a completely legal and valid title if the same is in the hands of an
innocent purchaser for value.
In a case for annulment of title, therefore, the complaint must allege that the
purchaser was aware of the defect in the title so that the cause of action
against him will be sufficient. Failure to do so, as in the case at bar, is fatal
for the reason that the court cannot render a valid judgment against the
purchaser who is presumed to be in good faith in acquiring the said
property. Failure to prove, much less impute, bad faith on said purchaser
who has acquired a title in his favor would make it impossible for the court
to render a valid judgment thereon due to the indefeasibility and
conclusiveness of his title.
The appellate court therefore was correct in entertaining the petition for the
reason that the trial court committed a grave abuse of discretion when it
refused to dismiss the case against the respondent, despite the obvious
240
FACTS:
The Sajonas couple are before us, on a Petition for Review on
Certiorari, praying inter alia to set aside the CA‘s decision, and to reinstate
that of the RTC
ISSUE:
1. THE LOWER COURT ERRED IN HOLDING THAT THE RULE
ON THE 30-DAY PERIOD FOR ADVERSE CLAIM UNDER SECTION 70
243
RULING:
ACCORDINGLY, the assailed decision of the respondent CA dated
October 17, 1991 is hereby REVERSED and SET ASIDE. The decision of the
RTC finding for the cancellation of the notice of levy on execution from
Transfer Certificate of Title No. N-109417 is hereby REINSTATED. The
inscription of the notice of levy on execution on TCT No. N-109417 is hereby
CANCELLED.
The question may be posed, was the adverse claim inscribed in the
TCT still in force when private respondent caused the notice of levy on
execution to be registered and annotated in the said title, considering that
more than thirty days had already lapsed since it was annotated (Pilares
argues that the adverse claim ceases to have any legal force and effect (30)
days after August 27, 1984 pursuant to Section 70 of P.D. 1529)
In construing the law aforesaid, care should be taken that every part
thereof be given effect and a construction that could render a provision
inoperative should be avoided, and inconsistent provisions should be
reconciled whenever possible as parts of a harmonious whole. For taken in
solitude, a word or phrase might easily convey a meaning quite different
from the one actually intended and evident when a word or phrase is
considered with those with which it is associated. In ascertaining the period
of effectivity of an inscription of adverse claim, we must read the law in its
entirety. Sentence three, paragraph two of Section 70 of P.D. 1529 provides:
―The adverse claim shall be effective for a period of thirty days from
the date of registration.‖
244
After the lapse of said period, the annotation of adverse claim may be
cancelled upon filing of a verified petition therefor by the party in interest.
If the rationale of the law was for the adverse claim to ipso facto lose
force and effect after the lapse of thirty days, then it would not have been
necessary to include the foregoing caveat to clarify and complete the rule.
For then, no adverse claim need be cancelled. If it has been automatically
terminated by mere lapse of time, the law would not have required the party
in interest to do a useless act. The law, taken together, simply means that the
cancellation of the adverse claim is still necessary to render it ineffective,
otherwise, the inscription will remain annotated and shall continue as a lien
upon the property.
The party applying for the order must thereafter give a bond executed to the
adverse party in the amount fixed by the court in its order granting the
246
issuance of the writ, conditioned that the latter will pay all the costs which
may be adjudged to the adverse party and all damages which he may sustain
by reason of the attachment, if the court shall finally adjudged that hte
applicant was not entitled there to.
FACTS:
In her complaint, Ligon alleged, that Rosario Baladjay enticed her to extend
a short–term loan in the amount of P3,000,000.00, payable in a month‘s
time and secured by an Allied Bank post–dated check for the same amount.
Ligon likewise claimed that Rosario, as further enticement for the loan
extension, represented that she and her husband Saturnino were in the
process of selling their property in Ayala Alabang Village, Muntinlupa City,
covered by a clean title, i.e., TCT No. 8502 and that the proceeds of the said
sale could easily pay–off the loan. Allied Bank check was dishonored upon
presentment and, despite assurances to replace it with cash, Rosario failed
to do so. Moreover, Ligon discovered that the subject property had already
been transferred to Polished Arrow, alleged to be a dummy corporation of
Sps. Baladjay and the individual defendants . As a result, TCT No. 8502 was
cancelled and replaced on October 11, 2002 by TCT No. 9273 in the name
of Polished Arrow. Thus, Ligon prayed that all defendants be held solidarily
liable to pay her the amount of P3,000,000.00, with interest due, as well as
247
Meanwhile, in the pending Quezon City Case, Polished Arrow and the
individual defendants (with the exception of Marasigan) were successively
after it was established that they had no ownership over the property. The
248
Quezon City Case proceeded only against Sps. Baladjay and Marasigan
and, after due proceedings, the Quezon City RTC rendered a decision
directing Sps. Baladjay to pay Ligon the amount of P3,000,000.00 with
interest, as well as attorney‘s fees and costs of suit.
Decision of the Quezon City RTC became final and executory. However,
when Ligon sought its execution, she discovered that the December 3, 2002
attachment annotation had been deleted from TCT No. 9273 when the
subject property was sold by way of public auction on September 9, 2005 to
the highest bidder, respondent Ting, for the amount of P9,000,000.00 during
the execution proceedings in the Makati City Case, as evidenced by the
Officer‘s Final Deed of Sale issued by Sheriff Alejo. In this regard, Ligon
learned that the Makati City RTC had issued its first assailed order directing
Atty. Garing, as the Register of Deeds of Muntinlupa City, to: (a) register
the Officer‘s Final Deed of Sale on the official Record Book of the Register
of Deeds of Muntinlupa City; and (b) cancel TCT No. 8502 in the name of
Sps. Baladjay and issue a new title in the name of Ting, free from any liens
and encumbrances.
Atty. Garing manifested before the Makati City RTC that it submitted the
matter en consulta to the Land Registration Authority (LRA) as he was
uncertain whether the annotations on TCT No. 9273 should be carried over
to TCT No. 8502. In response to the manifestation, the Makati City RTC
issued its second assailed order directing Atty. Garing to comply with the
First Assailed Order under pain of contempt. It explained that it could not
allow the LRA to carry over all annotations previously annotated on TCT
No. 9273 in the name of Polished Arrow as said course of action would run
counter to its decision which specifically ordered the cancellation of said
TCT and the restoration of TCT No. 8502 in its previous condition.
249
Separately, Ting filed a motion before the Makati City RTC on account of
Atty. Garing‘s letter requiring him to comply with certain documentary
requirements and to pay the appropriate fees before a new title could be
issued in his name. In its third assailed order the Makati City RTC directed
Ting to pay the aforesaid taxes and ordered Atty. Garing to immediately
cancel TCT No. 8502 and issue a new title in the former‘s name.
In June 7, 2007, Atty. Garing issued TCT No. 19756 in the name of Ting,
free from any liens and encumbrances. Later, Ting sold the subject property
to respondent Benito G. Techico (Techico), resulting in the cancellation of
TCT No. 19756 and the issuance of TCT No. 31001 in Techico‘s name.
ISSUES:
250
(a) whether or not the CA erred in ruling that the Makati City RTC did
not gravely abuse its discretion in issuing the Assailed Orders; and
(b) whether or not Judge Laigo should be cited in contempt and penalized
administratively.
HELD:
The Court finds that the CA erred in holding that the RTC did not gravely
abuse its discretion in issuing the Assailed Orders as these issuances
essentially disregarded, inter alia, Ligon‘s prior attachment lien over the
subject property patently anathema to the nature of attachment proceedings
which is well–established in law and jurisprudence.
The Court finds that Ligon failed to sufficiently show how the acts of each of
the respondents, or more specifically, Judge Laigo, constituted any of the
acts punishable under the foregoing section tending towards a willful
disregard or disobedience of a public authority. In issuing the Assailed
Orders, Judge Laigo merely performed his judicial functions pursuant to the
decision in the Makati City Case which had already attained finality. Thus,
without Ligon‘s proper substantiation, considering too that Judge Laigo‘s
official acts are accorded with the presumption of regularity, the Court is
constrained to dismiss the indirect contempt charges in this case.
251
NOTE: notice of lis pendens may be cancelled in the following cases before
final judgment upon order of the court:
1. when it is shown that the notice is for the purpose of molesting the
adverse party
2. when it is shown that it is not necessary to protect the right of the party
who caused the registration thereof
3. where the evidence so far presented by the plaintiff does not bear out the
main allegations of the complaint
4. where the continuances of the trial are unnecessarily delaying the
determination of the case to the prejudice of the defendant
252
5. upon verified petition of the party who caused the registration thereof
6. it is deemed cancelled after final judgment in favor of defendant, or other
disposition of the action such as to terminate all rights of the plaintiff to
property involved.
(Illustrative Case)
Homeowners Savings and Loan Bank vs. Asuncion P. Felonia and Lydia
C. De Guzman G.R. No. 189477 February 26, 2014
FACTS:
Delgado elevated the case to the CA where it affirmed the RTC decision. CA
decision became final and executory.
Inspite of the pendency of the Reformation case in which she was the
defendant, Delgado filed a ―Petition for Consolidation of Ownership of
Property Sold with an Option to Repurchase and Issuance of a New
Certificate of Title‖ in the RTC of Las Piñas and the latter ordered the
issuance of a new title under Delagado‘s name.
Felonia and De Guzman elevated the case to the CA through a Petition for
Annulment of Judgment.
CA annulled and set aside the decision of the RTC, Las Piñas City in the
Consolidation case. The decision of the CA, declaring Felonia and De
Guzman as the absolute owners of the subject property and ordering the
cancellation of Delgado‘s title, became final and executor
HSLB asserted that Felonia and De Guzman are barred from laches as they
had slept on their rights to timely annotate, by way of Notice of Lis Pendens,
the pendency of the Reformation case. HSLB also claimed that it should not
254
RTC ruled in favor of Felonia and De Guzman as the absolute owners of the
subject property.
ISSUE:
RULING:
When the property was mortgaged to HSLB, the registered owner of the
subject property was Delgado who had in her name TCT No. 44848. Thus,
HSLB cannot be faulted in relying on the face of Delgado‘s title. The
records indicate that Delgado was at the time of the mortgage in possession
of the subject property and Delgado‘s title did not contain any annotation
that would arouse HSLB‘s suspicion. HSLB, as a mortgagee, had a right to
rely in good faith on Delgado‘s title, and in the absence of any sign that
might arouse suspicion, HSLB had no obligation to undertake further
investigation.
However, in the case at bar, HSLB utterly failed to take the necessary
precautions. At the time the subject property was mortgaged, there was yet
no annotated Notice of Lis Pendens. However, at the time HSLB purchased
255
the subject property, the Notice of Lis Pendens was already annotated on the
title.
FACTS:
On May 23, 2002, Macaria Berot (Macaria) and spouses Rodolfo A. Berot
(appellant) and Lilia P. Berot (Lilia) obtained a loan from Felipe C. Siapno
(appellee) in the sum of P250,000.00, payable within one year together with
interest thereon at the rate of 2% per annum from that date until fully paid.
Tax Declaration No. 1123 in the names of Macaria and her husband Pedro
Berot (or "Pedro"), deceased. On June 23, 2003, Macaria died.
Because of the mortgagors‘ default, appellee filed an action against them for
foreclosure of mortgage and damages on July 15, 2004 in the Regional Trial
Court of Dagupan City (Branch 42). The action was anchored on the
averment that the mortgagors failed and refused to pay the abovementioned
sum of P250,000.00 plus the stipulated interest of 2% per month despite
lapse of one year from May 23, 2002.
In answer, appellant and Lilia alleged that the contested property was the
inheritance of the former from his deceased father, Pedro; that on said
property is their family home; that the mortgage is void as it was constituted
over the family home without the consent of their children, who are the
beneficiaries thereof; that their obligation is only joint; and that the lower
court has no jurisdiction over Macaria for the reason that no summons was
served on her as she was already dead.
With leave of court, the complaint was amended by substituting the estate of
Macaria in her stead. Thus, the defendants named in the amended complaint
are now the estate of Macaria, represented by the appellant and Lilia.
After trial, the lower court rendered a decision: WHEREFORE, the Court
hereby renders judgment allowing the foreclosure of the subject mortgage.
Accordingly, the defendants are hereby ordered to pay to the plaintiff within
ninety (90) days from notice of this Decision the amount of P250,000.00
representing the principal loan, with interest at two (2%) percent monthly
from February, 2004 the month when they stopped paying the agreed
interest up to satisfaction of the claim and 30% of the amount to be collected
as and for attorney‘s fees. Defendants are also assessed to pay the sum of
257
Appellant filed a motion for reconsideration of the decision but it was denied
per order dated September 8, 2006. Hence, this appeal interposed by
appellant imputing errors to the lower court in:
3. Not finding the mortgage null and void, which was entered into without
the written consent of the beneficiaries of the family home who were of legal
age;
Appellant contends that the substitution of the estate of Macaria for her is
improper as the estate has no legal personality to be sued.
ISSUES:
1. Holding that the intestate estate of Macaria Berot could be a proper party
by waiver expressly or impliedly by voluntary appearance;
HELD:
Petitioners were correct that upon Macaria Berot‘s death her legal
personality ceased, and she could no longer be impleaded as respondent in
the foreclosure suit. It is also true that her death opened to her heirs the
succession of her estate, which in this case was an intestate succession. The
CA, in fact, sustained petitioners‘ position that a deceased person‘s estate
has no legal personality to be sued and does not have such legal entity as is
necessary to bring action so much so that a motion to substitute cannot lie
and should be denied by the court. An action begun by a decedent‘s estate
cannot be said to have been begun by a legal person, since an estate is not a
legal entity; such an action is a nullity and a motion to amend the party
259
plaintiff will not, likewise, lie, there being nothing before the court to amend.
Considering that capacity to be sued is a correlative of the capacity to sue,
to the same extent, a decedent does not have the capacity to be sued and may
not be named a party defendant in a court action.
Indeed, the defense of lack of jurisdiction over the person of the defendant is
one that may be waived by a party to a case. In order to avail of that
defense, one must timely raise an objection before the court. Further, the
lack of jurisdiction over the person of the defendant may be waived either
expressly or impliedly. When a defendant voluntarily appears, he is deemed
to have submitted himself to the jurisdiction of the court. If he does not wish
to waive this defense, he must do so seasonably by motion, and object
thereto.
Since respondents failed to correct their error (they did not amend the
erroneous caption of their complaint to include the real parties-in interest),
they cannot be insulated from the confusion which it engendered in the
proceedings below. But at any rate, notwithstanding the erroneous caption
and the absence of a formal substitution of parties, jurisdiction was acquired
over the heirs of Avelino and Pedro who voluntarily participated in the
proceedings below. This Court has ruled that formal substitution of parties
is not necessary when the heirs themselves voluntarily appeared,
participated, and presented evidence during the proceedings.
Under Article 1207 of the Civil Code of the Philippines, the general rule is
that when there is a concurrence of two or more debtors under a single
obligation, the obligation is presumed to be joint: The concurrence of two or
more creditors or of two or more debtors in one and the same obligation
260
does not imply that each one of the former has a right to demand, or that
each one of the latter is bound to render, entire compliance with the
prestations. There is a solidary liability only when the obligation expressly
so states, or when the law or the nature of the obligation requires solidarity.
A solidary obligation is one in which each of the debtors is liable for the
entire obligation, and each of the creditors is entitled to demand the
satisfaction of the whole obligation from any or all of the debtors. On the
other hand, a joint obligation is one in which each debtors is liable only for
a proportionate part of the debt, and the creditor is entitled to demand only
a proportionate part of the credit from each debtor. The well entrenched
rule is that solidary obligations cannot be inferred lightly. They must be
positively and clearly expressed. A liability is solidary "only when the
obligation expressly so states, when the law so provides or when the nature
of the obligation so requires."
The trial court expressly ruled that the nature of petitioners‘ obligation to
respondent was solidary. It scrutinized the real estate mortgage and arrived
at the conclusion that petitioners had bound themselves to secure their loan
obligation by way of a real estate mortgage in the event that they failed to
settle it. But such pronouncement was not expressly stated in its 30 June
2006 Decision. This was probably the reason why, when the trial court
Decision was appealed to it, the CA did not squarely address the issue when
the latter ruled that:
closer scrutiny of the records would reveal that the RTC expressly
pronounced that the obligation of petitioners to the respondent was solidary.
The trial court categorically ruled that: Defendants obligation with plaintiff
is solidary. A careful scrutiny of the Real Estate Mortgage will show that all
the defendants, for a single loan, bind themselves to cede, transfer, and
convey by way of real estate mortgage all their rights, interest and
participation in the subject parcel of land including the improvements
thereon in favor of the plaintiff, and warrant the same to be free from liens
and encumbrances, and that should they fail to perform their obligation the
mortgage will be foreclosed. From this it can be gleaned that each of the
defendants obligated himself/herself to perform the said solidary obligation
with the plaintiff. We do not agree with this finding by the trial court.
LACHES
FACTS:
In 1973, Fermina Castro filed an application for the registration and
confirmation of her title over a parcel of land with anarea of 17,343 square
meters covered by plan (LRC) Psu-964 located in Parañaque City, in the
Pasig-Rizal Court of First Instance (CFI).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. Trial court ruled in favor of
Castro.2. 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 a Decree was issued by the
Land Registration Commission (LRC).An Original Certificate of Title was
issued in the name of Fermina Castro by the Register of Deeds.
263
Land was then sold to Jesus Yujuico. The OCT of Castro was cancelled and
a TCT was issued in Yujuico‘s name over Lot1 while another TCT was
issued in favor of herein co-petitioner Augusto Carpio. Meanwhile, PD no.
1085 was issued and asserts that 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. Thus, an OCT was issued in
favor of PEA. The PEA also acquired ownership of other parcels of land
along the Manila Bay coast which were subsequently sold to the Manila Bay
Development Corporation (MBDC). 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.6. 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.7. Respondent Republic argued
that, first, since the subject land was still underwater, it could not be
registered in the name of Fermina Castro. Second, the land registration
court did not have jurisdiction to adjudicate inalienable lands, thus the
decision adjudicating the subject parcel of land to Fermina Castro was void.
And third, the titles of Yujuico and Carpio, being derived from a void title,
were likewise void.8. Trial Court ruled in favor of the petitioner and states
that after 28 years without being contested, the case had already become
final and executory. The trial court also found that the OSG had
participated in the LRC case, and could havequestioned the validity of the
decision but did not.9. On appeal, reversed the decision of the lower court
asserting that shores are properties of the public domain intended for public
use and, therefore, not 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. 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.
264
ISSUE:
Whether CA‘s decision was correct.
HELD:
PETITION GRANTED.
While it may be true that estoppel does not operate against the state or its
agents, however, Equitable estoppel maybe 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.
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.
265
In this petition, the LRA, issued Decree No. N-150912 in favor of Fermina
Castro and OCT No. 10215 was issued by the Rizal Registrar of Deeds.
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. 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 encumbrances which may be
subsisting. 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. Another contention of the
respondent Republic:
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
266
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.
BAR QUESTION
(I) Louie, before leaving the country to train as a chef in a fivestar hotel in
New York, USA, entrusted to his first-degree cousin Dewey an application
for registration, under the Land Registration Act, of a parcel of land located
in Bacolod City. A year later, Louie returned to the Philippines and
discovered that Dewey registered the land and obtained an Original
Certificate of Title over the property in his (Dewey‘s) name. Compounding
the matter, Dewey sold the land to Huey, an innocent purchaser for value.
Louie promptly filed an action for reconveyance of the parcel of land against
Huey.
ANSWERS:
A. An action for reconveyance against Huey is not the proper remedy,
because Huey is an innocent purchaser for value. The proper recourse is for
Louie to go after Dewey for damages by reason of the fraudulent registration
and subsequent sale of the land. If Dewey is insolvent, Louie may file a
claim against the Assurance Fund (Heirs of Pedro Lopez vs. De Castro 324
SCRA 591 [2000] citing Sps. Eduarte vs. CA, 323 Phil 462 [1996]).
B. Yes, the remedy will prosper because the action prescribes in ten (10)
years, not within one (1) year when a petition for the reopening of the
registration decree may be filed. The action for reconveyance is distinct
from the petition to reopen the decree of registration (Grey Alba vs. Dela
Cruz, 17 Phil 49 [1910]). There is no need to reopen the registration
proceedings, but the property should just be reconveyed to the real owner.
The action for reconveyance is based on implied or constructive trust, which
prescribes in ten (10) years from the date of issuance of the original
certificate of title. This rule assumes that the defendant is in possession of
the land. Where it is the plaintiff who is in possession of the land, the action
for reconveyance would be in the nature of a suit for quieting of title which
action is imprescriptible (David vs. Malay, 318 SCRA 711 [1999]).