C.

Cancellation Suit
Pajomayo v. Manipon
G.R. No. L-33676 June 30, 1971
Facts: On June 5, 1963, the plaintiffs filed in the Court of First Instance of a complaint alleging
that they are co-owners pro-indiviso of the parcel of land described in the complaint which is
covered by Original Certificate of Title No. 1089 in the name of Diego Pajomayo. That they had
acquired the land as an inheritance frin their late father Diego Pajomayo; that they and their
predecessor-in-interest had been in actual, peaceful, and uninterrupted possessSion of said
property in the concept of owners for a period of more than seventy (70) years until the early
part of the year 1956 when the defendants dispossessed them of said property, resulting in
their suffering of annual damages amounting to around P1,100 representing the value of the
crops of rice, mongo, corn, and vegetables that they failed to harvest.

The defendants alleged that they are the exclusive owners of a parcel of land covered by
Original Certificate of Title No. 14303 issued by the Office of the Register of Deeds of
Pangasinan, the said land having been adjudicated to them in the cadastral proceedings of the
Malasique. They also claim they had acquired the land by inheritance from their deceased
father Pioquinto Manipon, and that they and their predecessors-in-interest have been in actual,
peaceful, and adverse possession said land for more than seventy (70) years, to the exclusion of
plaintiffs.

The Court of First Instance of Pangasinan made a finding that Original Certificate of Title 1089
held by the plaintiffs was issued earlier than Original Certificate of Title 14034 held by the
defendants.

Issue: Whether or not the Original Certificate of Title issued in virtue of the homestead patent
or the Original Certificate of Title issued in connection with the cadastral proceedings should
prevail.
Held: The Supreme Court held that the Original Certificate of Title 1089 prevails over the
defendants Original Certificate of Title because the plaintiff’s Original Certificate of Title was
issued on November 27, 1931 or before the issuance of the defendants Original Certificate of
Title on April 1, 1957. The Court said that where two certificates of titles are issued to different
persons covering the same land in whole or in part, the earlier in date must prevail as between
the original parties, and in case of successive registration where, more than one certificate is
issued over the land the person holding under the prior certificate is entitled to the land as
against the person who relied on the second certificate.

Further, the Court said that once a homestead patent granted in accordance with the Public
Land Act registered pursuant to Section 122 of Act 496 or the Land Registration Act, the
certificate of title issued in virtue of said patent has the force and effect of a Torrens Title under
the Land Registration Act

D. Action for Damages

Gonzales v. Intermediate Appellate Court
G.R. No. L-69622 January 29, 1988
Facts: The spouses Asuncion Sustiguer and Dioscoro Buensuceso were the original owners of
the Lot No. 2161, the property subject of controversy. The land was sold at a public auction in
Iloilo in 1955 as a result of the delinquency of the real estate taxes due thereon. Hortencia
Buensuceso, the daughter of the spouses, discovered in the office of the Register of Deeds of
Iloilo that the Certificate of Title of the said land was still in the name of her parents. Hortencia
paid the back taxes on the land which resulted to the execution of a Deed of Repurchase by the
Provincial Treasurer.

On April 17, 1969, the Spouses Gaudisio Panzo and Hortencia Buensuceso bought the land from
the latter’s mother. Therefore, the Spouses Panzo filed a petition for reconstitution. The
petition was granted and by virtue of sale it was cancelled an issued in the name of Spouses
Panzo. The Spouses Panzo then mortgaged the said property to the Rural Bank of Pavia in which
they later failed to pay and said property was foreclosed.

On April 18, 1974, petitioner as judicial co-administratrix of the Intestate Estate of the later
Matias Yusay brought an action against the spouses Panzo and the respondent Bank for the
annulment and cancellation of the title in the name of spouses Panzo and the issuance of a new
title in favor of Yusay. Petitioner alleged that the subject property was first mortgaged to Yusay
on April 30, 1929 by the Spouses Sustiguer and Buensuceso; that sometime in November 1934,
said property was verbally sold to Yusay by the same spouses; that since Yusay bought the
property in 1948, he and his administrator have been in possession of the property through
their tent Elias Daguino until April 15, 1971; and that the defendant Rural Bank was not a
mortgagee in good faith for not having taken the necessary precaution before accepting the
subject property as collateral for the loan granted to the spouses Panzo.

Issue: Whether or not the respondent bank was an innocent mortgagee and subsequent buyer
for value in good faith of the property.

Held: Yes, the respondent bank was an innocent mortgagee and subsequent buyer for value in
good faith of the property.

When the certificate of title in the name of the spouses Panzo was submitted to the respondent
bank for purposes of their loan application, it was free from any lien and encumbrance. The
ejectment case which was filed by the petitioner against the spouses which petitioner claims
should have put the respondent bank on its guard was annotated at the back of the subject title
only on March 29, 1973. There was nothing on the face of the title of the spouses Panzos which
would arouse the suspicion of the respondent bank.

The well-known rule in this jurisdiction is that a person dealing with a registered land has a light
to rely upon the face of the Torrens certificate of title and to dispense with the need of
inquiring her except when the party concerned has actual knowledge of facts and
circumstances that would impel a reasonably cautious man to make inquiry. It has also been
held that a bank is not required, before accepting a mortgage, to make an investigation of the
title of the property being given as security.

The title of Asuncion Sustiguer was obtained on February 26, 1971 while that of the Panzos on
March 3, 1971. The complaint in this act was filed only on April 18, 1974, clearly more than one
year from the date of the decree of registration. The disputed titles by then had become
indefeasible. Since the property had already been acquired by respondent bank at the
foreclosure sale, as an innocent purchaser for value, an action for reconveyance cannot
prosper. The only remedy of petitioner is an action for damages against the person whom she
claims procured the wrongful registration in his name.
 Estrellado v. Martinez
G.R. No. 23847 November 18, 2005

Facts: The plaintiff, Vivencia Estrellado, a minor, represented by her husband, Cornelio
Alcantara, as guardian, claiming one-tenth interest in the land described in the complaint. The
defendant is Proceso Martinez, the holder of the Torrens Title. The complaint presented the
plaintiff in the Court f of First Instance of Tayabas asked for judgment by way of damages in the
amount of two thousand pesos (P2,000.00) against the defendant. The answer was in the form
of a general denial. The well-reasoned decision in favor of the plaintiff and against the
defendant.

Issue: Whether or not the person who is wrongfully deprived of land or of any estate or interest
therein, without negligence on his part, by the registration of another person as owner of such
land, successfully maintain an action for damages.

Held: Yes, the law is clear, under Sections 101 and 102 of the Land Registration Law, especially
the provision to the last-mentioned section, in comparison with Sections 38 and 55 of the law
are directly applicable to facts and the issue. The first cited section of the Land Registration Law
provides that:

Section 101 of Land Registration Act 496

“Any person who without negligence on his part sustains loss or damage through any omission,
mistake, or misfeasance of the clerk, or register of deeds, or of any examiner of titles, or of any
deputy or clerk of the register of deeds in the performance of their respective duties under the
provisions of this Act, and any person who is wrongfully deprived of any land or any interest
therein, without negligence on his part, through the bringing of the same under the provisions
of this Act or by the registration of any other person as owner of such land, or by any mistake,
omission, or misdescription in any certificate or owner's duplicate, or in any entry or
memorandum in the register or other official book, or by any cancellation, and who by the
provisions of this Act is barred or in any way precluded from bringing an action for the recovery
of such land or interest therein, or claim upon the same, may bring in any court of competent
jurisdiction an action against the Treasurer of the Philippine Archipelago for the recovery of
damages to be paid out of the assurance fund.”
The next succeeding section after elaborating on the provisions of Section 101, ends within the
provision:
Section 102 of the Land Registration Act or Act 496
“xxx Provided, however, That nothing in this Act shall be construed to deprive the plaintiff of
any action which he may have against any person for such loss or damage or deprivation of land
or of any estate or interest therein without joining the Treasurer of the Philippine Archipelago
as a defendant therein.”
Section 38 of the same law, makes the provision for the opening of a decree obtained by fraud.
Section 55 contains a provision much to the same effect. For an action against any person for
damages for the wrongful deprivation of land to prosper, it must be established, first, that the
person is in reality wrongfully deprived of his land by the registration in the name of another of
the land by actual or constructive fraud; second, that there was no negligence on his part; third,
that he is not barred or in any way precluded from brining an action for the recovery of the land
or interest therein, and, fourth; that the action for compensation has not prescribed.
Setting the opposite each of these requisites the facts as they appear in the instant case, we
have as to the first requirement the express finding of Judge Imperial that the plaintiff is
entitled to a one-tenth of the land registered in the name of the defendant; as to the second,
the plaintiff has been diligent in prosecuting her action, this point being reinforced by her
infancy; as the third, that the plaintiff has made use of all the remedies provided by the Land
Registration Law; and as to the fourth, that the action for damages sustained is not barred by
the statute of limitations. A person who is wrongfully deprived of land or of any estate or
interest therein, without negligence on his part, by the registration in error of another person
as owner of such land, may successfully maintain an action for damages, begun before the
action is barred, against the person in whose favor the decree of registration was issued,
notwithstanding such decree was not obtained by actual fraud and notwithstanding a petition
for review in the ground of fraud has been denied.

Castillo v. Madrigal
G.R. No. 62650 June 27, 1991
Facts: Petitioners spouses Mariano and Pilar Castillo, in their own behalf and in representation
of the heirs of Eduardo Castillo, filed a verified complain before the Court of First Instance of
Manila for annulment of contract and transfer certificate of title and/or reconveyance with
damages against private respondents’ heirs of Vicente Madrigal and/or Susana Realty, Inc. and
public respondent Register of Deeds of the City of Manila.

Private respondents filed a motion to dismiss on the ground that: (a) the complaint states no
cause of action; and (b) the cause of action is barred by the statute of limitations.
Issue: Whether or not the petitioners’ action for annulment of contract and transfer certificate
of title and/or reconveyance with damages is subject to prescription.

Held: The action for reconveyance is likewise imprescriptible because it is the alleged void
contract of sale. However, the complaint for recovery of ownership and possession of a parcel
of land alleges that some of the defendants bought said land from their co-defendants who had
a defective title thereto but does not allege that the purchasers were purchasers in bad faith or
with notice of the defect in the title of their vendors, there is a failure to state a cause of action.

By reason of this failure, private respondent is presumed to be innocent purchaser for value
and in good faith, entitled to protection under the law.