KEY CONCEPTS OF THE TORRENS SYSTEM 1. DECREE BINDS THE LAND MANOTOK REALTY vs. CLT REALTY: SEC. 42.

The certificate first registered in pursuance of the decree of registration in regard to any parcel of land shall be entitled in the registration book Original certificate of title, entered pursuant to decree of the Court of Land Registration, dated at¶ (stating time and place of entry of decree and the number of case). This certificate shall take effect upon the date of the transcription of the decree. Subsequent certificates relating to the same land shall be in like form, but shall be entitled µTransfer from number (the number of the next previous certificate relating to the same land), and also the words µOriginally registered¶ (date, volume, and page of registration) xxx«xxx« Otherwise stated, what is actually issued by the register of deeds is the certificate of title itself, not the decree of registration, as he is precisely the recipient from the land registration office of the decree for transcription to the certificate as well as the transcriber no less. Since what is now acknowledged as the authentic OCT No. 994 indicates that it was received for transcription by the Register of Deeds of Rizal on 3 May 1917, it is that date that is the date of registration since that was when he was able to transcribe the decree in the registration book, such entry made in the book being the original certificate of title. Moreover, it is only after the transcription of the decree by the register of deeds that the certificate of title is to take effect.

MANOTOK VS HEIRS OF HOMER BARQUE YNARES-SANTIAGO, J.:

These consolidated petitions for review assail, in G.R. No. 162335, the February 24, 2004 Amended Decision[1] of the Third Division of the Court of Appeals in CA-G.R. SP No. 66642, ordering the Register of Deeds of Quezon City to cancel petitioners¶ TCT No. RT-22481 and directing the Land Registration Authority (LRA) to reconstitute respondents¶ TCT No. 210177; and in G.R. No. 162605, the November 7, 2003 Amended Decision[2] of the Special Division of Five of the Former Second Division in CA-G.R. SP No. 66700 directing the Register of Deeds of Quezon City to cancel petitioners¶ TCT No. RT-22481, and the LRA to reconstitute respondents¶ TCT No. T-210177 and the March 12, 2004 Resolution[3] denying the motion for reconsideration. The facts as found by the Court of Appeals[4] are as follows: Petitioners, (respondents herein) as the surviving heirs of the late Homer Barque, filed a petition with the LRA for administrative reconstitution of the original copy of TCT No. 210177 issued in the name of Homer L. Barque, which was destroyed in the fire that gutted the Quezon City Hall, including the Office of the Register of Deeds of Quezon City, sometime in 1988. In support of the petition, petitioners submitted the owner¶s duplicate copy of TCT No. 210177, real estate tax receipts, tax declarations and the Plan FLS 3168 D covering the property. Upon being notified of the petition for administrative reconstitution, private respondents (petitioners herein) filed their opposition thereto claiming that the lot covered by the title under reconstitution forms part of the land covered by their reconstituted title TCT No. RT-22481, and alleging that TCT No. 210177 in the name of petitioners¶ predecessors-ininterest is spurious.

On June 30, 1997, Atty. Benjamin M. Bustos, as reconstituting officer, denied the reconstitution of TCT No. 210177[5] on grounds that: 1. Lots 823-A and 823-B, Fls-3168-D, containing areas of 171,473 Sq. Mtrs. and 171,472 Sq. Mtrs., respectively, covered by TCT No. 210177, appear to duplicate Lot 823 Piedad Estate, containing an area of 342,945 Sq. Mtrs., covered by TCT No. 372302 registered in the name of Severino M. Manotok, et. al., reconstituted under Adm. Reconstitution No. Q-213 dated February 01, 1991; 2. The submitted plan Fls-3168-D is a spurious document as categorically stated by Engr. Privadi J.G. Dalire, Chief, Geodetic Surveys Division, Land Management Bureau, in his letter dated February 19, 1997.[6]

Respondents¶ motion for reconsideration was denied in an order[7] dated February 10, 1998 hence they appealed to the LRA. The LRA ruled that the reconstituting officer should not have required the submission of documents other than the owner¶s duplicate certificate of title as bases in denying the petition and should have confined himself with the owner¶s duplicate certificate of title.[8] The LRA further declared: Based on the documents presented, petitioners have established by clear and convincing evidence that TCT NO. 210177 was, at the time of the destruction thereof, valid, genuine, authentic and effective. Petitioners duly presented the original of the owner¶s duplicate copy of TCT No. 210177 .... The logbook of the Register of Deeds of Quezon City lists TCT No. 210177 as among the titles lost .... The Register of Deeds of Quezon City himself acknowledged the existence and authenticity of TCT No. 210177 when he issued a certification to the effect that TCT No. 210177 was one of the titles destroyed and not salvaged from the fire that gutted the Quezon City Hall on 11 June 1988 .... It is likewise noteworthy that the technical description and boundaries of the lot reflected in TCT No. 210177 absolutely conform to the technical description and boundaries of Lot 823 Piedad Estate ... as indicated in the B. L. Form No. 28-37-R dated 11-8-94 and B. L. Form No. 31-10 duly issued by the Bureau of Lands .... It therefore becomes evident that the existence, validity, authenticity and effectivity of TCT No. 210177 was established indubitably and irrefutably by the petitioners. Under such circumstances, the reconstitution thereof should be given due course and the same is mandatory.[9] «. It would be necessary to underscore that the certified copy of Plan FLS 3168 D was duly issued by the office of Engr. Ernesto Erive, Chief, Surveys Division LMS-DENR-NCR whose office is the lawful repository of survey plans for lots situated within the National Capital Region including the property in question. Said plan was duly signed by the custodian thereof, Carmelito Soriano, Chief Technical Records and Statistics Section, DENR-NCR. Said plan is likewise duly supported by Republic of the Philippines Official Receipt No. 2513818 Q dated 9-23-96 .... Engr. Erive in his letter dated 28 November 1996 addressed to Atty. Bustos « confirmed that a microfilm copy of Plan FLS 3168D is on file in the Technical Records and Statistics Section of his office. Engr. Dalire, in his letter dated 2 January 1997 addressed to Atty. Bustos even confirmed the existence and authenticity of said plan. « .« The claim of Engr. Dalire in his letter dated 19 February 1997 that his office has no records or information about Plan FLS 3168-D is belied by the certified copy of the computer print-out duly issued by the Bureau of Lands indicating therein that FLS 3168D is duly entered into the microfilm records of the Bureau of Lands and has been assigned Accession Number 410436 appearing on Page 79, Preliminary Report No. 1, List of Locator Cards and Box Number 0400 and said computer print-out is duly supported by an Offical Receipt «. The said Plan FLS 3168D is indeed authentic and valid coming as it does from the legal repository and duly signed by the custodian thereof. The documentary evidence presented is much too overwhelming to be simply brushed aside and be defeated by the fabricated statements and concoctions made by Engr. Dalire in his 19 February 1997 letter. «[10]

Nevertheless, notwithstanding its conclusion that petitioners¶ title was fraudulently reconstituted, the LRA noted that it is only the Regional Trial Court (RTC) which can declare that the same was indeed fraudulently reconstituted. It thus opined that respondents¶ title may only be reconstituted after a judicial declaration that petitioners¶ title was void and should therefore be cancelled.[11] The dispositive portion of the LRA¶s decision reads: WHEREFORE, in view of the foregoing, it is hereby ordered that reconstitution of TCT No. 210177 in the name of Homer L. Barque, Sr. shall be given due course after cancellation of TCT No. RT-22481 (372302) in the name of Manotoks upon order of a court of competent jurisdiction. SO ORDERED.[12] Petitioners¶ filed a motion for reconsideration which was opposed by respondents with a prayer that reconstitution be ordered immediately.

On June 14, 2001, petitioners¶ motion for reconsideration and respondents¶ prayer for immediate reconstitution were denied.[13] From the foregoing, respondents filed a petition for review[14] with the Court of Appeals docketed as CA-G.R. SP No. 66700 and praying that the LRA be directed to immediately reconstitute TCT No. 210177 without being subjected to the condition that petitioners¶ TCT No. RT-22481 [372302] should first be cancelled by a court of competent jurisdiction.[15] Petitioners likewise filed a petition for review with the Court of Appeals docketed as CA-G.R. SP No. 66642. In CA-G.R. SP No. 66700, the Second Division of the Court of Appeals rendered a Decision[16] on September 13, 2002, the dispositive portion of which reads: WHEREFORE, the foregoing premises considered the assailed Resolution of the LRA dated June 24, 1998 is AFFIRMED in toto and the petition for review is ordered DISMISSED. No pronouncement as to costs. SO ORDERED.[17]

No.R.[19] Petitioners¶ motion for reconsideration of the amended decision in CA-G. the Motion for Reconsideration is hereby GRANTED. SP No. No. 2003. 162335. the dispositive portion of which reads: WHEREFORE.[23] Respondents¶ motion for reconsideration was granted by the Third Division of the Court of Appeals on February 24.[18] On November 7. petitioners argue that: I THE MAJORITY JUSTICES ACTED WITHOUT JURISDICTION IN ORDERING THE CANCELLATION OF PETITIONERS¶ EXISTING TITLE.R. THE MAJORITY JUSTICES DEPRIVED THE PETITIONERS OF THEIR PROPERTY AND THEIR CONSTITUTIONALLY PROTECTED RIGHT TO DUE PROCESS OF LAW.Respondents moved for reconsideration.[24] From the foregoing decisions of the Court of Appeals in CA-G. RT-22481 of private respondents and the LRA is hereby directed to reconstitute forthwith petitioners¶ valid. the dispositive portion of which reads: WHEREFORE. this petition docketed as G.R. No pronouncement as to costs. SP No. the Register of Deeds of Quezon City is hereby directed to cancel TCT No.R.R. BY ALLOWING A ³SHORT CUT´. 66642. 66700 and CA-G. c. genuine and existing Certificate of Title No. SO ORDERED. b. SO ORDERED. T-210177. 66642. No. T-210177. thus: WHEREFORE. Accordingly. SP No. No.R. CONSIDERING THAT: a. and THE COURT OF APPEALS. SP No. THEY ORDERED THE CANCELLATION OF TITLE DESPITE THE FACT THAT THE SAME IS NOT PART OF THE RELIEF SOUGHT IN A RECONSTITUTION PROCEEDINGS.R. SO ORDERED. 162605. 2004. the Third Division of the Court of Appeals declared that the LRA correctly deferred in giving due course to the petition for reconstitution since there is yet no final judgment upholding or annulling respondents¶ title. In G. petitioners filed separate petitions for review before this Court docketed as G. 66700 was denied. The Decision of this Court dated 29 October 2003 is RECONSIDERED and a new one is entered ordering the Register of Deeds of Quezon City to cancel petitioners¶ TCT No. SINCE ONLY A PROPER REGIONAL TRIAL COURT CAN ORDER THE ANNULMENT/CANCELLATION OF A TORRENS TITLE. in CA-G. 162605. The Resolution of the LRA dated 24 June 1998 is hereby AFFIRMED. II . the Third Division of the Court of Appeals rendered a Decision[21] on October 29. 162605 and G.[22] In so ruling.R. the petition is hereby DENIED. 66700. SP No. RT-22481 and directing the LRA to reconstitute forthwith respondents¶ TCT No. respectively. THEY ALLOWED A COLLATERAL ATTACK ON A TORRENS CERTIFICATE OF TITLE. IN RESOLVING AN APPEAL OF THE DECISION OF THE LAND REGISTRATION AUTHORITY. the Special Division of Five of the Former Second Division rendered an Amended Decision in CA-G. Meanwhile.[20] hence. DOES NOT HAVE JURISDICTION TO ORDER THE CANCELLATION OF TITLE.R. our decision dated 13 September 2002 is hereby reconsidered. 2003.

petitioners raise the following issues: I. THE HONORABLE COURT OF APPEALS (THIRD DIVISION) COMMITTED GRAVE ABUSE OF DISCRETION AND GROSS IGNORANCE OF THE LAW IN ORDERING THE LAND REGISTRATION AUTHORITY TO CANCEL TCT NO. 162605 was consolidated with the petition in G. THERE WAS SUFFICIENT GROUND TO ANNUL MOLINA¶S TITLE OUTRIGHT. VELASCO. IV.[26] On August 2. OR POSSESSION OF. 162335. ONLY PETITIONERS HOLD TITLE TO THE PROPERTY IN QUESTION.R. The petitions must be denied. No. specifically the chance to defend the validity of their Torrens title. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN FAILING TO ORDER THE SETTING ASIDE OF THE CHALLENGED RESOLUTION DATED JUNE 24. THERE WERE SEVERAL DECISIONS OF THE SUPREME COURT WHICH PREVIOUSLY RESOLVED THE ISSUE OF OWNERSHIP OF ORTIGAS¶ PROPERTY. ONLY THE REGIONAL TRIAL COURTS HAVE EXCLUSIVE ORIGINAL JURISDICTION OVER CIVIL ACTIONS WHICH INVOLVES TITLE TO. IN THE INSTANT CASE. CONSIDERING THAT: a. THERE ARE NO SUCH DECISIONS IN FAVOR OF RESPONDENTS WHICH WOULD JUSTIFY THE CANCELLATION OF THE TITLE OF PETITIONERS WITHOUT ANY HEARING. the petition in G. No. 162335. (d) the Court of Appeals. HENCE. . IN ORTIGAS. 2004. THE LAW EXPLICITLY VESTS EXCLUSIVE ORIGINAL JURISDICTION TO THE REGIONAL TRIAL COURTS OVER CIVIL ACTIONS WHICH INVOLVES TITLE TO. REAL PROPERTY. II.R. 1998 OF RESPONDENT LAND REGISTRATION AUTHORITY IN LRC ADMIN.THE MAJORITY JUSTICES GRAVELY MISAPPLIED THE RULING OF THIS HONORABLE COURT IN ORTIGAS V. (c) they were not given the opportunity to be heard. REAL PROPERTY. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF IN EXCESS OF JURISDICTION IN ALLOWING RESPONDENTS¶ MOTION FOR RECONSIDERATION WHICH WAS CLEARLY FILED OUT OF TIME. CASE NO. THERE WERE TWO TITLES EXISTING OVER THE SAME PARCEL OF LAND. RT-22481 OF PETITIONERS MANOTOK NOTWITHSTANDING THE FACT THAT SAID COURT WAS FULLY COGNIZANT THAT IT HAS NO JURISDICTION TO EXERCISE SUCH AUTHORITY AND POWER AND THE LAND REGISTRATION AUTHORITY IS EQUALLY DEVOID OF JURISDICTION ON THE MATTER BECAUSE UNDER THE JUDICIARY REORGANIZATION ACT OF 1980 SPECIFICALLY SECTION 19 (2) THEREOF. IN THE ORTIGAS CASE. OR ANY INTEREST THEREIN. THE LRA COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN ORDERING THE RECONSTITUTION OF THE TITLE OF HOMER BARQUE. No. IN THE INSTANT CASE. SUBJECT ONLY TO THE CONDITION THAT THE TITLE OF PETITIONERS MANOTOK SHOULD FIRST BE ORDERED CANCELLED BY COURT OF COMPETENT JURISDICTION IN THE FACE OF THE GLARING FACTS THAT SAID TITLE IS HIGHLY SUSPECT AND BEARS BADGES OF FABRICATION AND FALSIFICATION AND THEREFORE NO OTHER LOGICAL AND CREDIBLE CONCLUSION CAN BE DRAWN EXCEPT THAT IT IS A FAKE AND SPURIOUS TITLE.R. 2004 DIRECTING LRA TO CANCEL PETITIONERS MANOTOK¶S TITLE NOTWITHSTANDING THE FACT. has no jurisdiction to order the cancellation of petitioners¶ title. AS STATED.[25] b. OR POSSESSION OF. Q-547 [97] VIEWED FROM THE FACT THAT SAID RESOLUTION OF LRA IS PATENTLY AT WAR WITH LAW AND CONTROLLING JURISPRUDENCE THAT PROHIBITS RECONSTITUTION OF TITLE BY THIRD PARTY ALLEGED TO HAVE BEEN LOST OR DESTROYED IF ANOTHER VALID TITLE IS EXISTING COVERING THE LAND SUBJECT THEREOF. III. THE HONORABLE COURT OF APPEALS (THIRD DIVISION) COMMITTED GRAVE ABUSE OF DISCRETION AND GROSS IGNORANCE OF THE LAW IN INVOKING EQUITABLE CONSIDERATION TO JUSTIFY ITS CHALLENGED AMENDED DECISION DATED FEBRUARY 24. SR. OR ANY INTEREST THEREIN. AS A RESULT OF THE RECONSTITUTED TITLE ISSUED IN THE NAME OF MOLINA. AS RESPONDENTS ARE MERELY TRYING TO HAVE TITLE RECONSTITUTED IN THEIR NAMES.[27] In sum. in resolving the appeal from the LRA. and (e) the ruling in Ortigas was misapplied. V. petitioners contend that (a) the LRA has no authority to annul their title. In G. (b) the reconstitution of respondents¶ Torrens title would be a collateral attack on petitioners¶ existing title.

. real estate tax receipts and tax declaration. It should remain undisturbed since only questions of law may be raised in a petition for review under Rule 45 of the Rules of Court. Questions like these are not reviewable by this court which. 26 which explicitly mandates that the reconstitution shall be made following the hierarchy of sources as enumerated by law.. clear and convincing. 26[28] clearly provides: Section 3.[32] In Dolfo v..[31] A petition for review should only cover questions of law. Questions of fact are not reviewable. even finality by this Court and. are no longer reviewable except only for very compelling reasons. as a rule. as affirmed by the two divisions of the Court of Appeals. and existing.. By enumerating the hierarchy of sources to be used for the reconstitution.[33] this Court categorically declared: Second. Register of Deeds for the Province of Cavite. That in case the reconstitution is to be made exclusively from sources enumerated in section 2(f) or 3(f) of this Act. or with a certified copy of the description taken from a prior certificate of title covering the same property. they submitted in support thereof the owner¶s duplicate certificate of title. may be said to be strong. When respondents filed the petition for reconstitution. « Provided. it is the intent of the law to give more weight and preference to the owner¶s duplicate certificate of title over the other enumerated sources.. Whether or not the body of proofs presented by a party. . there is no need for the reconstituting officer to require the submission of the plan. whether or not inconsistencies in the body of proofs of a party are of such gravity as to justify refusing to give said proofs weight ± all these are issues of fact. Having jurisdiction only to resolve questions of law. the same should have more than sufficed as sources for the reconstitution pursuant to Section 3 of RA No. is conclusive before this Court. Basic is the rule that factual findings of agencies exercising quasi-judicial functions « are accorded not only respect but even finality. are without doubt questions of fact. or rejected as feeble or spurious. Findings of fact of administrative bodies are accorded respect. this Court is bound by the factual findings of the trial court and the Court of Appeals. valid.The LRA properly ruled that the reconstituting officer should have confined himself to the owner¶s duplicate certificate of title prior to the reconstitution.[30] Such questions as whether certain items of evidence should be accorded probative value or weight. when affirmed by the Court of Appeals. in the following order: (a) . the petition shall further be accompanied with a plan and technical description of the property duly approved by the Chief of the General Land Registration Office. genuine. Transfer certificates of title shall be reconstituted from such of the sources hereunder enumerated as may be available. whether or not certain documents presented by one side should be accorded full faith and credit in the face of protests as to their spurious character by the other side. or whether or not the proofs on one side or the other are clear and convincing and adequate to establish a proposition in issue. The factual finding of the LRA that respondents¶ title is authentic. aside from the consideration that this Court is essentially not a trier of facts. much less deny the petition on the ground that the submitted plan appears to be spurious. Both the trial court and the Court of Appeals made a factual finding that petitioner¶s title to the land is of doubtful authenticity. Thus: Section 12. In addition. Plainly. while petitioners¶ title is sham and spurious. Section 12 of the same law requires that the petition shall be accompanied with a plan and technical description of the property only if the source of the reconstitution is Section 3(f) of RA No. weighed and analyzed in relation to contrary evidence submitted by adverse party.[29] Since respondents¶ source of reconstitution is the owner¶s duplicate certificate of title. Section 3 of Republic Act (RA) No. 26. The owner¶s duplicate of the certificate of title. confines its review of cases decided by the Court of Appeals only to questions of law raised in the petition and therein distinctly set forth..

v... . . of law. it is no longer necessary to remand the case to the RTC for the determination of which title. The remand of the case or of an issue to the lower court for further reception of evidence is not necessary where the Court is in position to resolve the dispute based on the records before it and particularly where the ends of justice would not be subserved by the remand thereof. or mixed questions of fact and law. The findings of fact of the LRA. This Court will therefore make the adjudication entailed by the facts here and now. Valenzuela. The doctrine laid down inAlabang Dev. No useful purpose will be served if a case or the determination of an issue in a case is remanded to the trial court only to have its decision raised again to the Court of Appeals and then to the Supreme Court. shall be binding on the Court of Appeals. without further proceedings. then there would be no basis for its decision to grant or deny the reconstitution.[37] does not apply in the instant case. The very concept of stability and indefeasibility of titles covered under the Torrens System of registration rules out as anathema the issuance of two certificates of title over the same land to two different holders thereof. petitioners' or respondents'. since all the facts are now before this Court. the LRA is bound to determine from the evidence submitted which between or among the titles is genuine and existing to enable it to decide whether to deny or approve the petition. This has been ruled upon by the LRA and duly affirmed by the two divisions of the Court of Appeals. Hon. the revocation and cancellation of the deed of sale and the title issued in virtue thereof in de los Santos¶ favor should be had in appropriate proceedings to be initiated at the instance of the Government. The Court of Appeals also properly exercised its appellate jurisdiction over the judgment of the LRA. modify or affirm on appeal the decision of the reconstituting officer. Without such authority. for this Court to direct at this time that cancellation proceedings be yet filed to nullify the sale to de los Santos and his title. the LRA and the Court of Appeals have jurisdiction to act on the petition for administrative reconstitution. revise. the Court stressed that: « [L]ands already covered by duly issued existing Torrens Titles « cannot be the subject of petitions for reconstitution of allegedly lost or destroyed titles filed by third parties without first securing by final judgment the cancellation of such existing titles. as it has done in other cases in similar premises.[35] we ruled that: Now. « The courts simply have no jurisdiction over petitions by such third parties for reconstitution of allegedly lost or destroyed titles over lands that are already covered by duly issued subsisting titles in the names of their duly registered owners. it can declare a title as sham or spurious.. In the instant case. if it cannot make such declaration. or the verdict made inevitable by said facts. The LRA has the jurisdiction to act on petitions for administrative reconstitution. it would be needlessly circuitous to remand the case to the RTC to determine anew which of the two titles is sham or spurious and thereafter appeal the trial court¶s ruling to the Court of Appeals. is valid or spurious. Court of Appeals. Corp. After all. would be needlessly circuitous and would unnecessarily delay the termination of the controversy at bar. In Alabang.. the appellate court has jurisdiction on appeals from judgments or final orders of the LRA. Otherwise. the LRA would be a mere robotic agency clothed only with mechanical powers. or valid on its face. when supported by substantial evidence.In view of the foregoing.[34] In the reconstitution proceedings. and it is not within de los Santos¶ power in any case to alter those facts at any other proceeding. reverse.[36] The Register of Deeds. the LRA and the two divisions of the appellate court have already declared that petitioners¶ title is forged. as in this case. whether the appeal involves questions of fact. InMendoza v. et al. It has the authority to review. Logically. Rule 43 of the Rules of Court. et al. etc. «[38] The Alabang ruling was premised on the fact that the existing Torrens title was duly issued and that there is only one title subsisting at the time the petition for reconstitution was filed. it cannot be said that petitioners¶ title was duly issued much less could it be presumed valid considering the findings of the LRA and the Court of Appeals that the same is sham and spurious. Under Sections 1 and 3. The function is adjudicatory in nature ± it can properly deliberate on the validity of the titles submitted for reconstitution. However.. Indeed. technically.

it appearing from the records that in the previous petition for reconstitution of certificates of title. the LRA and the Court of Appeals. there is no need to remand the case to the RTC for a re-determination on the validity of the titles of respondents and petitioners as the same has been squarely passed upon by the LRA and affirmed by the appellate court. Q5405) to the Court of origin with instructions that Ortigas¶ and the Solicitor General¶s appeals from the judgment rendered therein. hence. and they were given the full opportunity to present their respective sides of the issues and evidence in support thereof. As expressly declared in Ortigas & Company Limited Partnership v. However. As held in Yusingco v. the parties acquiesced in submitting the issue of ownership for determination in the said petition. which is the essence of due process. petitioners acquiesced to the authority and jurisdiction of the reconstituting officer. Register of Deeds for the Province of Cavite:[44] The rule that a title issued under the Torrens System is presumed valid and. in fact. Velasco:[39] Ordinarily.[41] There was no adjudication on ownership. evident from the records before this Court. the adjudication of the issue of ownership was valid and binding. The reconstitution would not constitute a collateral attack on petitioners¶ title which was irregularly and illegally issued in the first place. Ong Hing Lian:[42] Therefore. would reveal that the sole issue resolved therein is whether or not a tenancy relationship exists between the parties. this presumption is overcome by the evidence presented. be given due course and the records forthwith transmitted to the appellate tribunal. it is not possible for Molina¶s cause to prosper. is a relief alternatively prayed for by petitioner Ortigas. In this case. The same rationale should apply in the instant case. It bears emphasis that the Torrens system does not create or vest title but only confirms and records one already existing and vested. A careful examination of the case of Spouses Cayetano. and that the evidence presented was sufficient and adequate for rendering a proper decision upon the issue. et al. such a remand and subsequent appeal proceedings would be pointless and unduly circuitous.The Court of Appeals properly applied the doctrine laid down in Ortigas in refusing to remand the case to the trial court. This. [43] As pertinently held in Dolfo v. T-320601 was issued without legal basis « «. v. the validity of respondents¶ and petitioners¶ title have been squarely passed upon by the LRA and reviewed and affirmed by the Court of Appeals. . the relief indicated by the material facts would be the remand of the reconstitution case (LRC No. Considering however the fatal infirmities afflicting Molina¶s theory or cause of action. There is thus no basis to petitioners¶ claim that they were deprived of their right to be heard and present evidence. By opposing the petition for reconstitution and submitting their administratively reconstituted title. et al. which were wrongly disallowed. Thus. consisting of the LRA report « that TCT No. even without a direct proceeding in the RTC. There is no basis in the allegation that petitioners were deprived of ³their property´ without due process of law when the Court of Appeals ordered the cancellation of their Torrens title. petitioner anchors her arguments on the premise that her title to the subject property is indefeasible because of the presumption that her certificate of title is authentic.[40] where this Court. it is equally true that this rule applies only where there exists no serious controversy as to the authenticity of the certificate. is the best proof of ownership of a piece of land does not apply where the certificate itself is faulty as to its purported origin. petitioner cannot invoke the indefeasibility of her certificate of title. As already discussed. that a land registration court has no jurisdiction over parcels of land already covered by a certificate of title. it cannot even be discerned if the property subject of the Spouses Cayetano case refers to the property subject of the instant controversy. Thus. as claimed by petitioners.. Upon the facts. as petitioner argues. CA. In fact. while it may be true. which factual findings are no longer reviewable by this Court. To defer adjudication thereon would be unwarranted and unjust. As already discussed. have affirmed their title over the disputed property. All the evidence presented was duly considered by these tribunals. and recognized their authority to pass judgment on their title.

2003 Amended Decision of the Special Division of Five of the Former Second Division in CA-G. On 10 April 1997. are AFFIRMED. in favor of named oppositors who had established their title to their respective lots and their continuous possession thereof since time immemorial and ordered the Chief of the General Land Registration Office.R. RT-22481 and directing the Land Registration Authority to reconstitute respondents¶ TCT No. refer to ordinary civil actions and not to "special" proceedings such as land registration cases. 162335. No evidence was apparently presented by the OSG. 66642. the one-half (1/2) share adjudicated to Eugenia Calingacion was also acquired by the Spouses Abierra through various purchases they effected from the heirs of Eugenia between the years 1975 to 1982. The records do not precisely reveal why the decree was not issued by the Director of Lands. the petitions are DENIED.2 Among these lots was Lot No.1 In the decision. as well as directing the Commissioner of the Land Registration Authority (LRA) to issue the corresponding decree of confirmation and registration based on the 1941 Decision. arguing in main that the right of action to revive judgment had already prescribed. SP No. Rule 39 of the Rules of Court. The facts bear little elaboration. On 26 April 2000. 2004 Resolution denying the motion for reconsideration. 66700 directing the Register of Deeds of Quezon City to cancel petitioners¶ TCT No. It is a hardly novel issue. The RTC heard the testimony of Nillas and received her documentary evidence. and ordering the revival of the 1941 Decision.1avvphi1. Nillas acquired Lot No. acting as a cadastral court. No. Abierra. yet petitioner Republic of the Philippines (Republic) pleads that the Court rule in a manner that would unsettle precedent.R. no decree of registration has ever been issued over Lot No. T-210177 and the March 12. upon the finality of the decision. the Court of Appeals reiterated that the provisions of Section 6. No. The Court of Appeals also noted that it would have been especially onerous to require Nillas to first request the LRA to comply with the 1941 decision considering that it had been established that the original records in the 1941 case had already been destroyed and could no longer be reconstructed. the parents of Nillas. RT-22481.[45] WHEREFORE. 162605. which was adjudicated to Eugenia Calingacion (married to Fausto Estoras) and Engracia Calingacion. this Court has ruled that wrongly reconstituted certificates of title secured through fraud and misrepresentation cannot be the source of legitimate rights and benefits. and in G. 2004 Amended Decision of the Third Division of the Court of Appeals in CA-G. 210177.4 In turn. the RTC rendered a Decision6 finding merit in the petition for revival of judgment. the November 7. These purchases were evidenced by three separate Deeds of Absolute Sale all in favor of the Spouses Abierra. 771. 771 to the Spouses Abierra.R. We deny certiorari and instead affirm the assailed rulings of the courts below.3 Nillas further alleged that her parents. although it entered its appearance on 13 May 1997 and simultaneously deputized the City Prosecutor of Dumaguete City to appear whenever the case was set for hearing and in all subsequent proceedings. together with the improvements thereon. Negros Oriental. 771 of the Sibulan Cadastre. captioned as El Director De Terrenos contra Esteban Abingayan y Otros. though it does not escape attention that the 1941 Decision was rendered a few months before the commencement of the Japanese invasion of the Philippines in December of 1941. The OSG further argued that at the very least.: The central question raised in this Petition for Review is whether prescription or laches may bar a petition to revive a judgment in a land registration case. adjudicated several lots. On the other hand. REPUBLIC VS NILLAS TINGA. the February 24. 771 despite the rendition of the 1941 CFI Decision. SP No. No responsive pleading was filed by the Office of the Solicitor General (OSG). the then Court of First Instance (CFI) of Negros Oriental rendered a Decision Adicional in Expediente Cadastral No. the CFI. 14. and the Land Registration Authority to reconstitute respondents¶ TCT No. Engracia Calingacion sold her undivided one-half (1/2) share over Lot No. and the fact that the Abierra spouses have been in open and continuous possession of the subject property since the 1977 sale. 771 from her parents through a Deed of Quitclaim dated 30 June 1994. 771 in its entirety. In its Decision. It was alleged therein that on 17 July 1941. Thus. SO ORDERED. which impose a prescriptive period for enforcement of judgments by motion.net The OSG appealed the RTC Decision to the Court of Appeals. Serapion and Josefina A. Nillas sought the revival of the 1941 Decision and the issuance of the corresponding decree of registration for Lot No. In G. The appeal was denied by the appellate court in its Decision7 dated 24 July 2003. Nillas should have established that a request for issuance of a decree of registration before the Administrator of the LRA had been duly made.5 Trial on the merits ensued. ordering the Register of Deeds of Quezon City to cancel petitioners¶ TCT No. Despite these multiple transfers. . both residents of Sibulan. to issue the corresponding decree of registration. eventually acquired Lot No.Under similar circumstances. respondent Lourdes Abiera Nillas (Nillas) filed a Petition for Revival of Judgment with the Regional Trial Court (RTC) of Dumaguete City. J.R. By way of a Deed of Absolute Sale dated 7 November 1977.

by an action (Sec. that the right of the applicant or a subsequent purchaser to ask for the issuance of a writ of possession of the land never prescribes. In rejecting the argument. Albano. 6. In special proceedings[. Despite the invocation by the OSG of these two cases. namely: Vda. the issuance of a decree is a ministerial duty both of the judge and of the Land Registration Commission. Rule 39). Section 6 of Rule 39 of the 1997 Rules of Civil Procedure establishes that a final and executory judgment or order may be executed on motion within five (5) years from the date of its entry.." The Court. et al. Ana v.18 respectively. or the person in whom the land is ordered to be registered. in Heirs of Cristobal Marcos. condition or fact. Llorente. v. The decision in a land registration case. Rule 39. etc. there is no provision in the Land Registration Act similar to Sec. 1529 has no provision on execution of final judgments. the Court was content in restating with approval the above-cited excerpts from Sta. except insofar as it supports his theory that after a decision in a land registration case has become final. the Sta. after which time it may be enforced by action before it is barred by statute of limitations. through Justice Labrador. except when the adverse or losing party had been in possession of the land and the winning party desires to oust him therefrom. hence. holding that laches had set in.22 The doctrine of stare decisis compels respect for settled jurisprudence. Anadoctrine was reiterated in another three (3) more cases later. there exists a more general but definite jurisprudential rule that favors Nillas and bolsters the rulings of the lower courts. the Sta. especially absent any compelling argument to do otherwise. citing Demoran v. Ana doctrine on the inapplicability of the rules on prescription and laches to land registration cases has been repeatedly affirmed.20 Cacho v. except by another proceeding to enforce the judgment or decision. the provisions of Rule 39 of the 1997 Rules of Civil Procedure should apply to land registration proceedings. the apparent strategy employed by the Republic in its present petition is to feign that the doctrine and the cases that spawned and educed it never existed at all. among others.] the purpose is to establish a status. The rule is that "neither laches nor the statute of limitations applies to a decision in a land registration case. wherein the Court refuted an argument that a decision rendered in a land registration case wherein the decree of registration remained unissued after 26 years was already "final and enforceable. Shipside Inc. Indeed. no further proceeding to enforce said ownership is necessary. etc. except the proceedings to place the winner in possession by virtue of a writ of possession. Ana.11 Shipside was cited since in that case.16 These cases further emphasized. the Court dismissed the action instituted by the Government seeking the revival of judgment that declared a title null and void because the judgment sought to be revived had become final more than 25 years before the action for revival was filed. Ana not out of simple reflex. Court of Appeals. it in view of the petitioners' omission to assert a right for nearly seven (7) years. The OSG notes that Article 1144 of the Civil Code establishes that an action upon judgment must be brought within ten years from the time the right of action accrues. explained: We fail to understand the arguments of the appellant in support of the assignment [of error]. or Nillas's acquisition of the rights of the original awardees. The Court dismissed the subsequent action. it was similarly argued that a prayer for the issuance of a decree of registration filed in 1962 pursuant to a 1938 decision was.8 Further. Ana. Authority for this theory is the provision in the Rules of Court to the effect that judgment may be enforced within 5 years by motion.9 It bears noting that the Republic does not challenge the authenticity of the 1941 Decision. and after five years but within 10 years. et al. Benedicto. such as a land registration case. . Neither does it seek to establish that the property is inalienable or otherwise still belonged to the State. After the ownership has been proved and confirmed by judicial declaration. This is so because a party in a civil action must immediately enforce a judgment that is secured as against the adverse party. Furthermore. De Castro. regarding the execution of a judgment in a civil action. The OSG also extensively relies on two cases. Ibanez."12 The most extensive explanation of this rule may be found in Sta.In the present petition.23 The Republic further observes that Presidential Decree (PD) No. the principles of prescription and laches do apply to land registration cases. De Banuvar. On the other hand. upon the expiration of the period for perfecting an appeal. Apart from the three (3) cases mentioned earlier. the Court relied on Article 1144 of the Civil Code and Section 6. in land registration proceedings. and the subsequent action by one set of applicants for the issuance of the decree of registration in their favor seven (7) years after the judgment had become final. 6. and Poras17 and Manlapas and Tolentino v. it may not be enforced after the lapse of a period of 10 years. which provides for the five (5)-year prescriptive period for execution of judgments. is applicable to land registration cases either by analogy or in a suppletory character and whenever practicable and convenient. barred by prescription and laches. We affirm Sta. failure of the court or of the clerk to issue the decree for the reason that no motion therefor has been filed can not prejudice the owner. the OSG strongly argues that contrary to the opinion of the Court of Appeals.19 Within the last 20 years. Court of Appeals10 and Heirs of Lopez v. A similar tack was again adopted by the Court some years later in Rodil v. Court of Appeals. Menla.13 decided in 1961. and his failure to act to enforce the same within a reasonable time as provided in the Rules makes the decision unenforceable against the losing party. becomes final without any further action. unless the adverse or losing party is in possession. Instead. The reason is xxx that the judgment is merely declaratory in character and does not need to be asserted or enforced against the adverse party.. In Shipside. x x x x x x x There is nothing in the law that limits the period within which the court may order or issue a decree. Heirs of Lopez involved the double registration of the same parcel of land. but because we recognize that the principle enunciated therein offers a convincing refutation of the current arguments of the Republic. Furthermore. This provision of the Rules refers to civil actions and is not applicable to special proceedings. Rule 39 of the 1997 Rules of Civil Procedure in declaring that extinctive prescription did lie.15 In that case.21 and Paderes v. it is insisted that the Rules of Court. the ownership by a person of a parcel of land is sought to be established. v. de Barroga v.14 The doctrine that neither prescription nor laches may render inefficacious a decision in a land registration case was reiterated five (5) years after Sta.

Ana and the present case. The original certificate of title shall be a true copy of the decree of registration. the Court sees the practical value of necessitating judicial recourse if a significant number of years has passed since the promulgation of the land court's unimplemented decision or order. a judicial evaluation would allow for a thorough examination of the veracity of the judgment or order sought to be effected. we note that the pronouncement therein that prescription barred the revival of the order of cancellation was made in the course of dispensing with an argument which was ultimately peripheral to that case. the judgment does not have to be executed by motion or enforced by action within the purview of Rule 39 of the 1997 Rules of Civil Procedure. with whom the duty to issue the decree of registration remains. certified copies of the judgment and of the order of the court directing the Commissioner to issue the corresponding decree of registration and certificate of title. Indeed. and perhaps with good reason. The original of the original certificate of title shall also be signed by the Commissioner and shall be sent. The provision lays down the procedure that interposes between the rendition of the judgment and the issuance of the certificate of title. Ana doctrine was not addressed. nor did they make any express declaration to such effect. Shipside expounds on this point. having divested the same to the Bases Conversion Development Authority prior to the filing of the action for revival. the portion of Shipsidedealing with the issue of prescription merely restated the provisions in the Civil Code and the Rules of Civil Procedure relating to prescription. Following these premises. quite distinct from the general situation that marked both Sta. The decree of registration shall be signed by the Commissioner. Ana doctrine. reconsidered. then there should be no impediment to the issuance of the decree of registration. as invoked by the Republic. 1529 does not specifically provide for execution of judgments in the sense ordinarily understood and applied in civil cases. No obligation whatsoever is imposed by Section 39 on the prevailing applicant or oppositor even as a precondition to the issuance of the title. nor appealed. hence. together with the owner¶s duplicate certificate. The failure on the part of the administrative authorities to do their part in the issuance of the decree of registration cannot oust the prevailing party from ownership of the land. both cases were governed by their unique set of facts. The Republic observes that the Property Registration Decree (PD No. 39. and the Land Registration Commissioner (that is to cause the preparation of the decree of registration and the transmittal thereof to the Register of Deeds). within fifteen days from entry of judgment. Hence. Even though prescription should not be a cause to bar the issuance of the decree of registration. applies only to ordinary civil actions. From another perspective. but with the LRA. it should be observed that neither case was intended to overturn the Sta. the application of Rule 39 of the 1997 Rules of Civil Procedure in suppletory fashion. Preparation of Decree and Certificate of Title. or a determination of causes other than prescription or laches that might preclude the issuance of the decree of registration.After the judgment directing the registration of title to land has become final. since revival of judgments is a procedure derived from civil procedure and proceeds from the assumption that the judgment is susceptible to prescription. If it is sufficiently established before that body that there is an authentic standing judgment or order from a land registration court that remains unimplemented. as in this case. to file a petition for revival of judgment. the court shall. within fifteen days from entry of judgment. The ultimate goal of our land registration system is geared towards the final and definitive determination of real property ownership in the country. the decree of registration. the reason being there is no need for the prevailing party to apply for a writ of execution in order to obtain the title. it can even be posited that in theory. the peculiar procedure provided in the Property Registration Law from the time decisions in land registration cases become final is complete in itself and does not need to be filled in. 1529 reads: SEC. the intent of land registration proceedings is to establish ownership by a person of a parcel of land. and the imposition of an additional burden on the owner after the judgment in the land registration case had attained finality would simply frustrate such goal. . that Rule 39 of the 1997 Rules of Civil Procedure is not applicable to land registration cases in the first place. 1529) does not contain any provision on execution of final judgments. no further step is required to effectuate the decision and a ministerial duty exists alike on the part of the land registration court to order the issuance of. condition or fact. Shipside and Heirs of Lopez? Even though the Court applied the doctrines of prescription and laches in those cases. but from a successful motion by the Republic seeking the cancellation of title previously adjudicated to a private landowner. and the LRA to issue. to the Register of Deeds of the city or province where the property is situated for entry in his registration book. and not on the applicability of the rules of prescription. the Commissioner shall cause to be prepared the decree of registration as well as the original and duplicate of the corresponding original certificate of title. However. What about the two cases cited by the Republic. followed by an observation that the judgment sought to be revived attained finality 25 years earlier. Moreover.Rule 39. or others under similar circumstances. as the significantly more extensive rationale provided by the Court in barring the revival of judgment was the fact that the State no longer held interest in the subject property. issue an order directing the Commissioner to issue the corresponding decree of registration and certificate of title. While one might argue that such motion still arose in a land registration case. Unlike in ordinary civil actions governed by the Rules of Civil Procedure. Neither the failure of such applicant to follow up with said authorities can. its clerk of court (that is to transmit copies of the judgment and the order to the Commissioner). Thereupon. The primary recourse need not be with the courts. and has become final. it is precisely because PD No. consistent with the purpose of such extraordinary proceedings to declare by judicial fiat a status. The clerk of court shall send. All these obligations are ministerial on the officers charged with their performance and thus generally beyond discretion of amendment or review. Quite the contrary. Clearly. the Sta. Section 39 of PD No. The obligations provided in the Section are levied on the land court (that is to issue an order directing the Land Registration Commissioner to issue in turn the corresponding decree of registration). upon the finality of a decision adjudicating such ownership. The judgment sought belatedly for enforcement in Shipside did not arise from an original action for land registration. not to other or extraordinary proceedings not expressly governed by the Rules of Civil Procedure but by some other specific law or legal modality such as land registration cases. . there would have been no need for Nillas. entered and filed in the Land Registration Commission. and a certificate stating that the decision has not been amended. However.

Notably, Shipside has attained some measure of prominence as precedent on still another point, relating to its pronouncements relating to the proper execution of the certification of non-forum shopping by a corporation. In contrast, Shipside has not since been utilized by the Court to employ the rules on prescription and laches on final decisions in land registration cases. It is worth mentioning that since Shipside was promulgated in 2001, the Court has not hesitated in reaffirming the rule in Sta. Ana as recently as in the middle of 2005 in the Paderes case. We now turn to Heirs of Lopez, wherein the controlling factual milieu proved even more unconventional than that in Shipside. The property involved therein was the subject of two separate applications for registration, one filed by petitioners therein in 1959, the other by a different party in 1967. It was the latter who was first able to obtain a decree of registration, this accomplished as early as 1968.24 On the other hand, the petitioners were able to obtain a final judgment in their favor only in 1979, by which time the property had already been registered in the name of the other claimant, thus obstructing the issuance of certificate of title to the petitioners. The issues of prescription and laches arose because the petitioners filed their action to enforce the 1979 final judgment and the cancellation of the competing title only in 1987, two (2) years beyond the five (5)-year prescriptive period provided in the Rules of Civil Procedure. The Court did characterize the petitioners as guilty of laches for the delay in filing the action for the execution of the judgment in their favor, and thus denied the petition on that score. Heirs of Lopez noted the settled rule that "when two certificates of title are issued to different persons covering the same land in whole or in part, the earlier in date must prevail x x x," and indeed even if the petitioners therein were somehow able to obtain a certificate of title pursuant to the 1979 judgment in their favor, such title could not have stood in the face of the earlier title. The Court then correlated the laches of the petitioners with their pattern of behavior in failing to exercise due diligence to protect their interests over the property, marked by their inability to oppose the other application for registration or to seek enforcement of their own judgment within the five (5) -year reglementary period. Still, a close examination of Heirs of Lopez reveals an unusual dilemma that negates its application as precedent to the case at bar, or to detract from Sta. Ana as a general rule for that matter. The execution of the judgment sought for belated enforcement in Heirs of Lopez would have entailed the disturbance of a different final judgment which had already been executed and which was shielded by the legal protection afforded by a Torrens title. In light of those circumstances, there could not have been a "ministerial duty" on the part of the registration authorities to effectuate the judgment in favor of the petitioners in Heirs of Lopez. Neither could it be said that their right of ownership as confirmed by the judgment in their favor was indubitable, considering the earlier decree of registration over the same property accorded to a different party. The Sta. Ana doctrine rests upon the general presumption that the final judgment, with which the corresponding decree of registration is homologous by legal design, has not been disturbed by another ruling by a co-extensive or superior court. That presumption obtains in this case as well. Unless that presumption is overcome, there is no impediment to the continued application of Sta. Ana as precedent.25 We are not inclined to make any pronouncements on the doctrinal viability of Shipside or Heirs of Lopezconcerning the applicability of the rules of prescription or laches in land registration cases. Suffice it to say, those cases do not operate to detract from the continued good standing of Sta. Ana as a general precedent that neither prescription nor laches bars the enforcement of a final judgment in a land registration case, especially when the said judgment has not been reversed or modified, whether deliberately or inadvertently, by another final court ruling. This qualifier stands not so much as a newly-carved exception to the general rule as it does as an exercise in stating the obvious. Finally, the Republic faults the Court of Appeals for pronouncing that the 1941 Decision constituted res judicatathat barred subsequent attacks to the adjudicates¶ title over the subject property. The Republic submits that said decision would operate as res judicata only after the decree of registration was issued, which did not happen in this case. We doubt that a final decision¶s status as res judicata is the impelling ground for its very own execution; and indeed res judicata is more often invoked as a defense or as a factor in relation to a different case altogether. Still, this faulty terminology aside, the Republic¶s arguments on this point do not dissuade from our central holding that the 1941 Decision is still susceptible to effectuation by the standard decree of registration notwithstanding the delay incurred by Nillas or her predecessors-in-interest in seeking its effectuation and the reasons for such delay, following the prostracted failure of the then Land Registration Commissioner to issue the decree of registration. In this case, all that Nillas needed to prove was that she had duly acquired the rights of the original adjudicates ± her predecessors-in-interest-in order to entitle her to the decree of registration albeit still in the names of the original prevailing parties who are her predecessors-in interest. Both the trial court and the Court of Appeals were satisfied that such fact was proven, and the Republic does not offer any compelling argument to dispute such proof. WHEREFORE, the Petition is DENIED. No pronouncement as to costs. SO ORDERED. MANOTOK REALTY VS CLT REALTY ANDOVAL-GUTIERREZ, J.:

Before us for resolution are three petitions for review on certiorari:[1]

1.

G.R. No. 123346

The petition in this case was filed by Manotok Realty, Inc. and Manotok Estate Corporation against CLT Realty Development Corporation assailing the Decision[2] dated September 28, 1995 and Resolution dated January 8, 1996 of the Court of Appeals in CA-G.R. CV No. 45255;

2.

G.R. No. 134385

The petition was filed by Araneta Institute of Agriculture, Inc. against Jose B. Dimson (now deceased), represented by his surviving spouse and children, and the Registry of Deeds of Malabon, challenging the Joint Decision[3] dated May 30, 1997 and Resolution dated July 16, 1998 of the Court of Appeals in CA-G.R. CV No. 41883 and CA-G.R. SP No. 34819; and

3.

G.R. No. 148767

The petition here was filed by Sto. Niño Kapitbahayan Association, Inc. against CLT Realty Development Corporation questioning the Decision[4] of the Court of Appeals dated March 23, 2001 in CA-G.R. CV No. 52549.

On March 6, 2002, these petitions were consolidated[5] as the issue involved is the validity of the parties¶ titles over portions of land known as theMaysilo Estate located at Caloocan City and Malabon, Metro Manila, covered by Original Certificate of Title (OCT) No. 994 of the Registry of Deeds of Caloocan City. It is this same OCT No. 994 from which the titles of the parties were purportedly derived.

We shall state the antecedents of these cases separately considering their peculiar circumstances.

1. G.R. No. 123346

(Manotok Realty, Inc. and Manotok Estate Corporation, petitioners, vs. CLT Realty Development Corporation, respondents)

On August 10, 1992, CLT Realty Development Corporation (CLT Realty) filed with the Regional Trial Court, Branch 129, Caloocan City a complaint for annulment of Transfer Certificates of Title (TCT), recovery of possession, and damages against Manotok Realty, Inc. and Manotok Estate Corporation (Manotok Corporations) and the Registry of Deeds of Caloocan City, docketed as Civil Case No. C15539.

The complaint alleges inter alia that CLT Realty (plaintiff) is the registered owner of Lot 26 of the Maysilo Estate located in Caloocan City, covered by TCT No. T-177013 of the Registry of Deeds of said city; that this TCT was originally derived from OCT No. 994; that on December 10, 1988, CLT Realty acquired Lot 26 from its former registered owner, Estelita I. Hipolito, by virtue of a Deed of Sale with Real Estate Mortgage; that she, in turn, purchased the same lot from Jose B. Dimson; that Manotok Corporations (defendants) illegally took possession of 20 parcels of land (covered by 20 separate titles[6]) within said Lot 26 owned by CLT Realty; that based on the technical descriptions of Manotok Corporations¶ titles, their property overlapor embrace Lot 26 of CLT Realty; and that the titles of Manotok Corporations constitute a cloud of doubt over the title of CLT Realty. The latter thus prays that the 20 titles of Manotok Corporations be cancelled for being void; and that Manotok Corporations be ordered to vacate the disputed portions of Lot 26 and turn over possession thereof to CLT Realty, and to pay damages.

In their answer with counterclaim, Manotok Corporations denied the material allegations of the complaint, alleging that Jose B. Dimson¶s title (TCT No. R-15166) was irregularly issued, hence void; and that consequently, the titles of Estelita Hipolito (TCT No. R-17994) and CLT Realty (TCT No. 177013) derived therefrom are likewise void. By way of affirmative defense, Manotok Corporations assert ownership of the parcel of land being claimed by CLT Realty, alleging that they acquired the same from the awardees or vendees of the National Housing Authority.

During the pre-trial conference, the trial court, upon agreement of the parties, approved the creation of a commission composed of three commissioners tasked to resolve the conflict in their respective titles. On July 2, 1993, the trial court issued an Order[7] defining the issues to be resolved by the commissioners, thus:

³1. Whether or not the property covered by the Transfer Certificates of Title of defendants (Manotok Realty, Inc. and Manotok Estate Corporation) pertain to or involved Lot No. 26 of the Maysilo Estate presently titled in the name of the plaintiff (CLT Realty Development Corporation); and ³2. Whether or not the property covered by the title of the plaintiff and the property covered by the titles of the defendants overlap.´[8]

The commissioners chosen were Engr. Avelino L. San Buenaventura (nominated by CLT Realty), Engr. Teodoro I. Victorino (nominated by Manotok Corporations), and Engr. Ernesto S. Erive (chosen by the two commissioners and the parties). Significantly, Engr. Ernesto Erive is the Chief of the Surveys Division, Land Management Bureau, Department of Environment and Natural Resources (DENR), Quezon City.[9] On July 2, 1993, the three took their oaths of office in open court.

Teodoro Victoriano submitted his Individual Final Report[11] (Minority Report) dated October 23. 1993 with the following findings: ³f. Manotok Corporations submitted their comment/objections to the Majority Report. 5261. Inc. That viewed in the light of the foregoing considerations. 1368 to 1374.On October 8. 4211 (also of TCT No. ³g. x x x. Thus.´[12] On April 6. which overlapping is due to the irregular and questionable issuance of TCT Nos. CLT Realty filed its objections to the Minority Report. there is no question that the different parcels of land which are covered by defendants¶ transfer certificates of title in question are parts of Lot 26 of then Maysilo Estate.´ On the other hand.´ The trial court then scheduled the hearing of the two Reports. 4210 which were exhaustively elucidated above. the trial court issued an Order directing the parties to file their respective memoranda ³to enable this court to adopt wholly or partially the memorandum for either as the judgment herein. That on the basis of the technical descriptions appearing on the certificates of titles of the defendants. which was derived from regularly issued titles. 1993. On February 8. as between plaintiff¶s title. and Manotok Estate Corporation) titles overlap portions of plaintiff¶s (CLT Realty Development Corporation) title. and that judgment be rendered pursuant thereto. Based on the foregoing. 4211 (from where defendants derive their titles) and TCT No. For its part. and defendants¶ titles. 4210). 1994. Manotok Corporations submitted their Memorandum praying that the trial court approve the Minority Report and render judgment in their favor. which were derived from irregularly issued titles. Ernesto Erive and Avelino San Buenaventura submitted an exhaustive Joint Final Report[10] (Majority Report) with the following conclusion: ³h.´ In its Order of April 22. plaintiff¶s title which pertains to the entire Lot 26 of the Maysilo Estate should prevail over defendants¶ titles. 1994 praying that ³the Majority Report be approved in toto. 35486. 1994. 1994. it is ascertained that the parcels of land covered therein overlap portions of the parcel of land which is covered by the plaintiff¶s certificate of title. 4210 and 4211. point to the fact that there was no approved subdivision of Lot 26 which served as legal basis for the regular issuance of TCT Nos. The inherent technical defects on TCT No. it is the conclusion of the undersigned Commissioners that defendants¶ (Manotok Realty. the trial court considered the case submitted for decision. CLT Realty likewise filed its Memorandum on April 15.[13] .

Ordering defendants jointly and severally to pay plaintiff¶s counsel (Villaraza & Cruz Law Office) the sum of P50. 8 to 15. 55896. 24. The original copy of OCT-994 in its original form although dilapidated is on file at the Registry of Deeds of Caloocan City. ³Defendants¶ Counterclaim is dismissed for lack of merit. That according to the documents submitted by the plaintiff. 23-A. T-232568.¶ TCT-177013 was a transfer from TCT-R-17994 registered in the name of Estelita Hipolito which in turn is a transfer from TCT-R-15166 registered in the name of Jose B. 163902 and 165119. the Maysilo Estate was registered under Republic Act No.288. while defendant Manotok Estate Corporation¶s property is covered by TCT No. the parcels of land covered therein overlap portions of the parcel of land covered by plaintiff¶s title. 9866. Lots 1 to 6. Lot 26 was apparently subdivided which led to the issuance of Transfer Certificates of Title Nos. ³2. Dimson which also is a transfer from OCT-994. ³4.00 as attorney¶s fees. That defendant Manotok Realty Inc. the dispositive portion of which reads: ³WHEREFORE. ³f. 7-A. That on the basis of the Decision rendered on December 3. the trial court rendered its Decision. 4210 and 4211 of the Registry of Deeds of Caloocan City which encroach on plaintiff¶s 201. are quoted as follows: ³7. covering 34 parcels of land.288 square meters of Lot No. ³3. . Maysilo Estate. Ordering defendants jointly and severally to pay the costs of suit. 1989. TCT-R17994 and TCT-R-15166 also specifically describe the parcel of land covered by the titles as µLot 26. and ³5. ³b. which the trial court adopted in its Decision. 8012. 21485. 25-D and 26 to 33. 1912 by Hon. ³SO ORDERED. ³e.288 square meters of Lot No. That on the basis of the technical descriptions on the titles of defendants. Alejandro Ruiz and Mariano Leuterio. 41956. C17272. 53268. 34255. 7762. Ordering the annulment and cancellation of defendants¶ Transfer Certificates of Title Nos. 36455 was issued and the approved plan Psu2345. 7528. 994. That the following facts were established by the undersigned Commissioners: ³a. 17 to 22. 26 of the Maysilo Estate. Norberto Romualdez in Land Registration Case No. 33904. Ordering defendants jointly and severally to pay plaintiff the sum of P201. October 4 to 21 and November 17 to 18. Ordering defendants to vacate said 201.000. 496 and Original Certificate of Title No. 4211. 1994.288 square meters involved in this case until the area is vacated. 26407. 1918 in the names of Messrs. 21107. That according to the documents of defendants. ³g. Maysilo Estate¶. 4429 pursuant to which the Decree No. 26 registered in the name of plaintiff. 26406. 1991. TCT-177013 in the name of plaintiff CLT Realty Development Corporation specifically describes the parcel of land covered by its title as µLot 26. was issued by the Registry of Deeds of Rizal. ³c. 25-A.¶s properties are covered by TCT Nos. all of the Registry of Deeds of Caloocan City.00 annually from March 15. premises considered. OCT994.´ The findings of fact and conclusions contained in the Majority Report. C-35267. 4210 and 4211 which were registered on September 9. all of Psu-2345. Psu-2345 on September 8 to 27. All of defendants¶ titles are derived from TCT No.On May 10. 26405. ³d. Caloocan City. Records show that Maysilo Estate was surveyed under Plan No. T-1214528. as reasonable compensation for defendants¶ occupancy and use of the 201. judgment is hereby rendered in favor of plaintiff (CLT Realty) and against defendants (Manotok Corporations) as follows: ³1.

however. ³r. The alleged subdivision plan Psd-21154 had seven (7) resultant lots which are issued individuals certificates. The same is true when the lots described on the titles of the defendants are plotted on the basis of their technical descriptions inscribed on said titles. Plan Psd-21154 appears to have been prepared on September 15. 1368 thru 1374. It appears that some of the tenants later sold their lots to various vendees some of whom are the defendants. Gonzales. 1946 according to the technical descriptions appearing on TCT Nos. 5261 and 35486. then TCT No. The dates of the original survey of the mother title OCT-994 (September 8-27. ³n. That there is no subdivision survey plan number indicated on TCT No. 7. December 22. 4210 and 4211 which allegedly were the result of the subdivision of Lot 26 were not designated or identified as Lot 26-A. Consuelo Susana Gonzales. 4211 (also on TCT No. 1917. The parcel of land covered by the successive titles TCT Nos. No. 4211 was later cancelled by TCT No. 21. 35486 in the names of Jose Leon Gonzales. Manotok Realty. 5261 in the name of Francisco J. is indicated at the end of the Spanish technical descriptions on TCT No. it was noticed that the tie lines deviated from the mother lot¶s tie point which is Bureau of Lands Location Monument No. Rather. . 1368 thru 1374 were later expropriated by the Republic of the Philippines through the People¶s Homesite and Housing Corporation (now the National Housing Authority) after which they were consolidated and subdivided into 77 lots under (LRC) Pcs-1828 for resale to tenants. it was noticed that the technical descriptions on TCT Nos. Piedad Estate. 35486 (formerly covered by TCT No. 29 and October 5-6. The tie point used in TCT No. The changing of the tie points resulted in the shifting of the position of the seven (7) lots do not fall exactly inside the boundary of the mother lot.M. Piedad Estate while TCT Nos. ³o. could not be traced at the official depository of plans which is the Bureau of Lands. 1368 is B. On the other hand. That Psd-21154. ³j. 1911¶ which dates are not found in the mother title TCT No. The original copy of OCT-994 does not contain the pages where Lot 26 and some other lots are supposedly inscribed. 21. ³s. TCT No. 5261 and 35486 is not identified by a lot number. 4210) 5261 and 35486 are inscribed in the Spanish language in these certificates. ³p. ³t. appears to be one of the original vendees of said lots having acquired Lot 11-B covered by TCT No. 1371. Manotok Realty. Inc.³h. 4211 (also on TCT No. Gonzales which was later cancelled by TCT No. According to the EDPS Listings of the Records Management Division of the Lands Management Bureau (formerly the Bureau of Lands). The three (3) separate lots covered by TCT Nos. 4211. ³q. TCT Nos. 4210). 1368 thru 1374. 5261 and 35486. the plan which allegedly subdivided the lot covered by TCT No. Lot 26-B and Lot 26-C to conform with existing practice. 4210). 1368 thru 1374. There is no reference or mention of Lot 26 of the Maysilo Estate in the technical description of said titles. ³k. Upon examination of the original copy of OCT-994.M. there is no record of the alleged plan Psd-21154. That it appears that the parcel of land covered by the successive titles TCT No. 5261). Inc. October 4-21 and November 17-18. then 5261 and lastly 35486 was again subdivided under Plan Psu-21154. Instead different location monuments of adjoining Piedad Estate were used. Accordingly. 4211. No. Juana Francisca Gonzales. ³i. and TCT Nos. Piedad Estate. 10. 9. it can be seen that the technical descriptions of the lots and the certificate itself are entirely written in the English language. Maria Clara Gonzales. 4211 (also on TCT No. Caloocan City. 4211 (as well as TCT No. which are the official depositories of all approved survey plans. It appears. 1368 thru 1374 that psd-21154 was done after the war on September 15. Francisco Felipe Gonzales and Concepcion Maria Gonzales. no survey plan covering said subdivision could be found. 1368 thru 1374 are written in the English language and the technical descriptions of the lots covered therein indicate the original survey of the mother title as µSeptember 8-27. an entirely different date. Upon verification with the Bureau of Lands or in the Land Registration Authority. ³m. six of which are in the names of each of the six children of Francisco J. 5261 and 35486 covering the purported subdivision of Lot 26. 1946. and Manotok Estate Corporation. ³l. 1911) are not indicated on TCT Nos.M. 1373 and 1374 used B. TCT Nos. Upon examination of the technical descriptions inscribed on TCT Nos. October 4-21 and November 17-18. from TCT Nos. 1372. 1369 and 1370 used B. 4210). 5261 and 4211. said EDPS listings indicate those survey plans which were salvaged after the fire that gutted the Philippines from the Japanese forces. 29 and October 5-6. 1. It appears that these seven (7) properties covered by TCT Nos. 35486 or the antecedent titles TCT No. 4211. 34255.

Similarly. 23-A. particularly Section 58 thereof. 4211. OCT-994. ³e. If OCT-994 is the mother title of TCT Nos. for example. 1368 thru 1374 from that of the mother lot¶s tie point which is BLLM No. It is the established procedure to always indicate in the certificate of title.. the absence of the original survey dates of OCT-994 on TCT Nos. The absence of a lot number and survey plan number in the technical description inscribed on TCT Nos. the language now officially used. ³c. then OCT-994 is not the mother title of TCT Nos. there are. Thus. 4210 and 4211 are not even described by lot number and this is again technically irregular and defective because the designation of lots by Lot Number was already a practice at that time as exemplified by the technical descriptions of some sub-lots covered by OCT-994. 5261 and 35486 but an entirely different date. 25-A. the official depository of survey plans. the Registry of Deeds may issue new certificates of title for any lot in accordance with said subdivision plan¶. the lots on TCT Nos. have been verified and approved by the Director of Lands«¶ and as corroborated by Section 44. 1917 and this is much ahead of the date of survey indicated on TCT Nos. or by the Director of Lands as provided in Section fifty-eight of this Act. 1911) are not indicated on the technical descriptions on TCT Nos.. Caloocan City to different location monuments of adjoining Piedad Estate which resulted in the shifting of the position of the seven (7) lots in relation to the mother lot defeats the very purpose of tie points and tie lines since the accepted practice is to adopt the mother lot¶s tie point in order to fix the location of the parcels of land being surveyed on the earth¶s surface. Republic Act No. then said titles should also be written in English because OCT-994 is already in English. OCT-994 was issued on May 3. 4210 and 4211 and the absence of a subdivision survey plan for Lot 26 at the records of the Bureau of Lands or the Land Registration Authority leads to the conclusion that there was no verified and approved subdivision survey plan of Lot 26 which is a compulsory requirement needed in the issuance of said titles. etc. 1902. Granting that the date December 22. 496 which took effect on November 6. 1917 is the date of a subdivision survey leading to the issuance of TCT Nos. 4210 and 4211´ mentioned therein are mistakenly referred to as the titles of . 4211. and the technical description of each portion or lot. 5261 and 35486 not only because the original survey dates are different but because the date of original survey is always earlier than the date of the issuance of the original title. October 4-21 and November 17-18. ³g.e. December 22. were already in English is abnormal and contrary to the usual practice in the issuance of titles. 4211 are again doubtful and questionable. 25-D. Moreover. no indications on the face of the titles themselves which show that a verified and approved subdivision of Lot 26 took place. 4211. 4210 and 4211 which is December 22. However. 4211. Lot 26-N and Lot 26-C followed by a survey number such as µPsd-_____¶ or µ(LRC) Psd-_____¶. In fact. For its part. the resulting parcels are always designated by the lot number of the subdivided lot followed by letters of the alphabet starting from the letter µA¶ to designate the first resultant lot. ³b. It is possible that an ascendant title be written in Spanish and the descendant title in English. provided that the Registry of Deeds shall not enter the transfer certificate to the grantee until a plan of such land showing all the portions or lots into which it has been subdivided. There are inherent technical infirmities or defects on the face of TCT Nos.³8. is another indication that the titles covered by TCT Nos.. The fact that the technical descriptions in TCT Nos. the undersigned Commissioners have come to the following conclusions: ³a. and that the plan has been approved by the Chief of the General Land Registration Office. That TCT Nos. the fact that the original survey dates of OCT-994 (September 8-27. the parcels of land covered by TCT Nos. 4211. 4211 (also on TCT No. whether original or transfer certificates. the date of the original survey of the mother title together with the succeeding date of subdivision or consolidation. 5261 and 35486. 4210 and 4211. ³f. CLT Realty filed a motion to amend/correct the dispositive portion of the above Decision alleging that ³TCT Nos. In the light of the foregoing facts. the absence of plan Psd-21154 from the files of the Bureau of Lands. 1368 thru 1374 which were derived from TCT No. i. 1. 1917. 5261 and 35486 could not have been derived from OCT-994. etc. 5261 and 35486. 1917. 5261 and 35486 is the original survey date of the mother title. these lots will be referred to as Lot 26-A. 4210 and 4211 do not contain such descriptions. In subdividing a lot. 5261 and 35486 are written in Spanish while those on the alleged mother title. Paragraph 2. 4210). is instead indicated likewise leads to the conclusion that TCT Nos. but the reverse is highly improbable and irregular. if Lot 26 is subdivided into three (3) lots.´[14] Manotok Corporations then interposed an appeal to the Court of Appeals. Also. the changing of the tie points in the technical descriptions on TCT Nos. however. 4211. 4210 and 4211 which allegedly was the result of a subdivision of Lot 26 should not have been issued without a subdivision plan approved by the Director of Lands or the Chief of the General Land Registration Office. ³d.

´ Manotok Corporations¶ motion for reconsideration was denied by the Appellate Court in its Resolution dated January 8. CV No. Inc. Linda and Carlos Lagman. Inc. 34255. They allege in essence that the Court of Appeals erred: ³1. 9866. C-35267. represented by his compulsory heirs: his surviving spouse. the Motion to Amend/Correct Judgment dated May 23. and Esperanza R. C-17272. and ³2. 1994. 1995 in CA-G. except as to the award of damages which was ordered deleted. petitioner. in its Decision dated September 28. Norma and Celso Tirado. in view of the foregoing. as corrected by the Order dated May 30. T-121428. premises considered. 26407. affirmed the Decision of the trial court. 26 of the Maysilo Estate. and Transfer Certificate of Title No. No. the present petition of Manotok Corporations. respondents) . Caloocan City. 163902 and 165119 in the name of defendant Manotok Realty. 1994 is amended as follows: xxx ³1. rendered by the trial court. 21485.´ The Court of Appeals. Dimson. Alson and Virginia Dimson. the correct numbers of the titles ordered to be cancelled should be indicated. Roqueta R. 134385 (Araneta Institute of Agriculture. the first paragraph of the dispositive portion of the Decision of this Court dated May 10. thus: ³WHEREFORE. and that to conform to the body of the Decision. In giving imprimatur to the trial court¶s Decision even though the latter overlooked relevant facts recited in the Minority Report of Commissioner Victorino and in the comment of petitioners on the Majority Report of Commissioners San Buenaventura and Erive.288 square meters of Lot No.´ 2. 1994. In upholding the trial court¶s Decision which decided the case on the basis of the Commissioners¶ Report. Lerma and Rene Policar. ³SO ORDERED. 8012. detailing the legal and factual basis which positively support the validity of petitioners¶ title and ownership of the disputed parcels of land. and Registry of Deeds of Malabon. G. the trial court granted the motion. 1994 filed by counsel for plaintiff is granted. judgment is hereby rendered AFFIRMING the Decision dated May 10.. 26405. 7528. Dimson and their children. 41956. 1994. 55897. vs. Ordering the annulment and cancellation of Transfer Certificates of Title Nos. In its Order dated May 30. Accordingly. with the modification that the award of damages in favor of plaintiff-appellee is hereby DELETED. Dimson. 7762. 1996.R. 45255.R. ³No costs. Hence.Manotok Corporations. thus: ³WHEREFORE. 21107. 33904. 53268. ³SO ORDERED. T-232568 in the name of defendant Manotok Estate Corporation of the Registry of Deeds of Caloocan City which encroach on plaintiff¶s 201. 26406. x x x. Heirs of Jose B.

³This is without prejudice on the part of the intervenors Heirs of Pascual David. claiming that it is the absolute owner of the land by virtue of TCT No. PREMISES CONSIDERED. to remove all the improvements thereon. and ³3) defendant Araneta Institute of Agriculture to pay costs. that he discovered that his land has been illegally occupied by Araneta Institute. . docketed as Civil Case No. hence. Jose B. his complaint has no cause of action. to vacate the parcel of land covered by plaintiff Dimson¶s title TCT No. Dimson alleged in his amended complaint that he is the absolute owner of a parcel of land located at Barrio Potrero. Metro Manila with an area of 50 hectares of the Maysilo Estate. Florentina David and Crisanta Santos to file the proper case against the proper party/parties in the proper forum. ³Defendant Araneta¶s counterclaim is hereby dismissed for lack of merit. Araneta Institute admitted occupying the disputed land by constructing some buildings thereon and subdividing portions thereof.000. R-15169 of the Registry of Deeds of Caloocan City.000 square meters. docketed as CA-G. ³2) defendant Araneta Institute of Agriculture to pay plaintiff Dimson the amount of P20. judgment is hereby rendered in favor of the plaintiff Jose B. hereby dismissed for lack of merit. 41883. Dimson filed with the then Court of First Instance of Rizal. (Araneta Institute). Inc. Dimson and against defendant Araneta Institute of Agriculture. that the latter has no legal and valid title to the land.Records show that on December 18.00 as and for attorney¶s fees.[16] It further alleged that Dimson¶s title of the subject land is void. likewise. Caloocan City a complaint for recovery of possession and damages against Araneta Institute of Agriculture. if they so desire. ³SO ORDERED. more or less. thus: ³WHEREFORE. covered by TCT No. CV No. ³All claims of all the intervenors claiming rights against the title of plaintiff Dimson TCT R-15169 are hereby dismissed for lack of merit. ³The claim of Virgilio L. District III. and to return full possession thereof to the said plaintiff Dimson.´[18] Araneta Institute interposed an appeal to the Court of Appeals. 1979. 13574. On May 30. Malabon. R-15169 of the Registry of Deeds of Metro Manila. ³All other counterclaim against plaintiff Dimson are. 1997. and that Araneta Institute refused to vacate the land and remove its improvements thereon despite his repeated demands. Branch 33. 737[15] and TCT No. 1993.R. ordering ± ³1) defendant Araneta Institute of Agriculture and all those claiming rights and authority under the said defendant Araneta. the trial court rendered a Decision[17] in favor of Dimson. Enriquez as co-plaintiff in the instant case is dismissed for lack of merit. On May 28. In its answer. the Court of Appeals rendered the assailed Decision affirming the Decision of the trial court in favor of Dimson. Caloocan City. C-8050. with a land area of 500.

defendant-appellant (Araneta Institute of Agriculture. which was declared null and void by the Supreme Court in Metropolitan Waterworks and Sewerage System vs. ³Unfortunately for defendant-appellant. CA-G. ³SO ORDERED. 13574 (Exh. The trial court ruled defendant-appellant Araneta Institute of Agriculture¶s TCT No. 1911 in CLR No. 13574spurious because this title refers to a property in the Province of Isabela (RTC Decision.R. TCT No. Araneta¶s TCT No. 1917.A-2 with an area of 500.¶ ³In sum. plaintiff-appellee¶s title must be sustained. the foregoing discussions unmistakably show two independent reasons why the title of defendantappellant Araneta Institute of Agriculture is a nullity. ³It was in the pursuit of this objective to nullify plaintiff-appellee¶s title that CA-G. Dimson separate transfer certificate of titles for the lot covered by plan (LRC) SWO-5268 and for the lots covered by the plans. 26538 and TCT No. Exhibits H. with MODIFICATION deleting the award for attorney¶s fees. 41883 (Civil Case No. ³Another point.R.R. R-15169 covers Lot 25.R. in CA-G. R-15169 was obtained by plaintiff-appellee Jose B. This was derived from OCT No. in the light of applicable law and jurisprudence. ³This validity of plaintiff-appellee¶s (Jose B.³WHEREFORE. 8-A Rivera). 6) and 21343 are both derived from OCT No. 4429 was issued by the Court of First Instance of Isabela. Dimson simultaneously with other titles. 994 dated April 19. TCT No. TCT No. 5898. ³Decree No. 34819 was belatedly filed on August 10. Inc. 4429 and Record No.´ In its Decision. 19). premises considered. 26539. ³Plaintiff-appellee¶s TCT No. 1994. 994 registered on May 3. the earlier in date prevails x x x. long after plaintiff-appellee¶s TCT No. the decision appealed from is AFFIRMED. holding that: ³We now proceed to CA-G. p. C-732. 8.R. CV No. 1917. 41883 . 1977 directed the Registry of Deeds of Caloocan City to issue in the name of Jose B. to wit: the factual finding that the property in Isabela. 7784 (now TCT No. and the decision of the Supreme Court in the MWSS case. Since the land in question has already been registered under OCT No.) contends that the trial court erred in giving more weight to plaintiff¶s transfer certificate of title over the land in question notwithstanding the highly dubious circumstances in which it was procured.´[19] Araneta Institute then filed the present petition. 1977. Branch 122. the Appellate Court ruled that the title of Araneta Institute to the disputed land is a nullity. SP No. with costs against defendant-appellant. CV No. 26539 both show Decree No. Caloocan City). ascribing to the Court of Appeals a long list of factual errors which may be stated substantially as follows: In CA-G. 26539 were both issued in the name of Jose Rato. Laguna (Exhs. defendant-appellant Araneta Institute of Agriculture¶s TCT No. in Special Proceedings No. CV No. I and J. SP No. R-15169 was issued on June 8. 994 registered on April 19. 1977 and Order dated October 18. C-8050 of the Regional Trial Court. The Order dated October 18. 1978. On the other hand. viz: TCT Nos. 1919 is null and void.000 square meters. 34819 is DENIED DUE COURSE and DISMISSED for lack of merit. 41883. 15167. 26538. ³Upon the other hand. 1917. Record No. ³In its first assignment of error. Court of Appeals. 4429. and 15168 by virtue of the Decision dated October 13. 13574 was derived from TCT No. 215 SCRA 783 (1992). while TCT No. 21343) was derived from TCT No. Dimson) title is actually the meat of the controversy. 26538 and TCT No. the subsequent registration of the same land on May 3. 15166. The Supreme Court ruled: µWhere two certificates of title purport to include the same land. 4429 was issued for ordinary Land Registration Case on March 31.

The certifications issued by the government officials. R-17994. Hipolito under TCT No.) F. who in turn. CLT Realty alleged that based on the technical descriptions on the titles of Sto.) D. Niño Association). Branch 121. notably from the Land Registration Authority. 36455 issued by the Court of Land Registration on April 17.[23] a forged and fictitious title.´[20] B. Niño Association denied the material allegations of the complaint and asserted that its members have been in possession of the disputed lots prior to 1987. Housing and Resettlement conducted an Investigation and concluded that there is only one OCT 994 that was issued on May 3. The Government fact-finding committee correctly found and concluded that there is only one OCT No. Nino Kapitbahayan Association. is the registered owner of two parcels of land likewise located in Caloocan City.) There is only one Original Certificate of Title No. No. The Government in the exercise of its governmental function of preserving the integrity of the torrens system initiated a fact-finding inquiry to determine the circumstances surrounding the issuance of OCT No. Caloocan City a complaint for annulment of titles[22] and recovery of possession with damages against Sto. 1917 pursuant to the Decree No. Inc. Sto. vs. Niño Kapitbahayan Association. covered by TCT No. 148767 (Sto. and that the titles of Sto. T-158373 and T-158374. T-177013. 994 and its derivative titles. Certifications of responsible government officials tasked to preserve the integrity of the Torrens System categorically confirm and certify that there is only one OCT 994 issued on May 3. 1917. 1917. C-15491. 994 covering the Maysilo Estate issued on May 3. CLT Realty filed with the Regional Trial Court. respondent) CLT Realty is the registered owner of a parcel of land known as Lot 26 of the Maysilo Estate in Caloocan City. covered by TCT Nos.R. Niño Association are void as they are derived from TCT No.) C. Inc. A.[21] It acquired the property on December 10.. . 1998 from the former registered owner Estelita I. acquired it from Jose B. The Senate Committee on Justice and Human Rights and the Senate Committee on Urban Planning. Sto. 1992. petitioner. Niño Association occupied and claimed ownership over a portion of Lot 26. 4211.) E. On the other hand. Dimson. (Sto. By virtue of these titles. docketed as Civil Case No. Dimson.The Honorable Court of Appeals erred in not holding that the evidence presented by petitioner Araneta Institute clearly establish the fact that it has the better right of possession over the subject property than respondent Jose B.) 3. 994 issued on May 3. an overlapping exists between their respective titles. on July 9. The area had been identified by the government as slum and blighted. CLT Realty Development Corporation. Sto. In its answer. Niño Association. G. In its complaint. 1917. Niño Association. 1917. the Department of Justice Committee Report and the Senate Committees¶ Joint Report are all newly-discovered evidence that would warrant the holding of a new trial. petitioner. Thus.

A trace of the history of TCT No. 4211 reveals a different date on its face. there was fraud in the issuance of TCT No. ³TCT No. T-177013 in the name of the plaintiff was derived from R-17994 T-89 in the name of Estelita Hipolito which title can trace its origin from OCT 994. premises considered. Niño Association¶s titles were derived. thus: T-158374. The irregularities which attended such issuance were discussed lengthily by the court a quo as follows: ³The court finds the motion meritorious. the survey dates indicated in OCT No. Niño Association. ³On the other hand. the parties entered into a stipulation of facts. NIÑO KAPITBAHAYAN ASSOCIATION. granted the motion. 994 are September 8-27. rendered judgment in favor of CLT Realty. However. This date. TCT Nos. and Both parties admit that the plaintiff (CLT) is also the registered owner of the same properties being occupied by the defendant and covered by TCT No. 1995. ³There is pervasive evidence that TCT No. 4211 reveals that it was succeeded by TCT No. 994. The defendants¶ counterclaim is hereby dismissed for utter lack of merit. 177013 of the Registry of Deeds of Caloocan City. T-158373 and of Sto. the Motion for Reconsideration is hereby GRANTED and judgment is accordingly rendered in favor of the plaintiff CLT REALTY DEVELOPMENT CORPORATION and against the defendant STO. T-177013 in the name of CLT Realty. ordering the cancellation of TCT Nos. upon motion for reconsideration by CLT Realty. ³The conflict stems from the fact that the plaintiff¶s and defendants¶ titles overlap each other. the trial court. both in the name of the defendants. 4211 contrary to established procedure that the original survey dates of the mother title should be indicated in succeeding titles. in its Amended Decision dated February 12. and ordered the cancellation of TCT Nos. ³Firstly. ³SO ORDERED. The boundaries of OCT 994 known as Lot No. rendered a Decision in favor of Sto.´ Resolving the issue of whose title to the disputed land is valid. a determination of the respective origins of such titles is of utmost importance. based on the evidence. 4211 from which the defendants¶ titles were originally derived can validly trace its origin from OCT 994. T-158373 and T-158374. Niño Association) is presently occupying the property covered by TCT Nos. 4211. on September 28. these dates of original survey are conspicuously missing in TCT No. an examination of TCT No. On the other hand. One or two of these subdivided lots were the predecessors of the defendants¶ titles. 26 of the Maysilo Estate are the same as that of the plaintiff¶s titles.. Niño Association and ordered the cancellation of TCT No. 1996. the trial court. Caloocan City.´[24] The Amended Decision is anchored on the trial court¶s finding that. October 8-21 and November 1718. INC. all in the year 1911. both in the name ³WHEREFORE. 35486. ³It behooves this court to address the issue of whether or not TCT No. T-158373 and T-158374. thus: ³(1) (2) Both parties admit that the defendant (Sto. hence. 4211 could not have been a true derivative of OCT No.At the pre-trial conference. 1368 to 1374. . 5261 which was in turn succeeded by TCT No. Instead. are the latest in a series of titles which descend from TCT No. 4211 from which Sto. TCT No. both in the name of the defendant. 35486 was allegedly subdivided into seven lots covered by TCT Nos. 158373 and 158374 located at Barrio Baesa.

³Neither is the Court inclined to consider this date as the date a subdivision survey was made. Of equal importance is the fact that the date of original survey always comes earlier than the date of the issuance of the mother title. The regular procedure is to identify the subdivided lots by their respective survey or lot numbers. Manotok Realty. The Land Management Bureau which handles survey plans has no records of the said PSD 21154. 1917. pointing to the inevitable conclusion that OCT No. 45255 entitled µCLT Realty Development Corp. of which one of them is covered by TCT No. 4210 and 4211 were estimated to be fifty (50) years old as of March 1993 when the examination was conducted. while its alleged derivative titles TCT Nos. 5261 and 35486 are still in Spanish. the assertion that TCT Nos. 1917.. the results of laboratory analysis conducted by a Forensic Chemist of the NBI revealed that TCT Nos. The pivotal role of tie points cannot be brushed aside as a change thereof could result to the shifting of positions of the derivative lots in relation to the mother lot. We AFFIRM the same. the Court of Appeals denied the Motion for Reconsideration of the defendants in the aforementioned case for lack of merit. Being void ab initio. The Registry of Deeds of Rizal has a copy of the plan but the court finds such possession questionable since the Land Registration Authority which supervises the Registry of Deeds does not have a copy of the same. ³SO ORDERED. 35486. finding no reversible error in the appealed Decision. the language of the technical descriptions of the land covered by OCT No. Without pronouncement as to costs. 209 SCRA 90) xxx ³The court¶s findings are consistent with a ruling of the Court of Appeals in CA-GR No. Consequently. affirming the decision of the mother branch of this court ordering the cancellation of TCT Nos. could not be an original survey date because it differs from those indicated in the mother title.´[25] (underscoring supplied) The above Amended Decision was affirmed by the Court of Appeals in its Decision dated May 23. 994 was issued on April 19. 4211 cannot be validly traced from OCT No. 1996. the tie points used in the mother lot were not adopted by the alleged derivative titles particularly TCT Nos. and resultantly. Intermediate Appellate Court. 4211 and all its derivative titles which preceded the defendants¶ titles. Caloocan City. the defendants. 1995. 4211.December 22. Inc. 4211. being the holders of the latest derivatives. TCT No. thus: ³WHEREFORE. ³Fourthly. 4211. 4211. 52549. 4210 and 4211 which encroached on a specific area of Lot No. ³Fifthly. This court is also aware that on January 8. Since OCT No.¶ (Republic vs. Evidently. it did not give rise to any transmissible rights with respect to the land purportedly invalid.¶ promulgated on September 28. ³Based on the foregoing patent irregularities. cannot assert any right of ownership over the lands in question. Hence. the documents could have been prepared only in 1940 and not in 1918 as appearing on the face of TCT No. µThe void ab initio land titles issued cannot ripen into private ownership. et al. the present petition based on the following assigned errors: . 26 of the Maysilo Estate. 994 is already in English. the court finds the attendance of fraud in the issuance of TCT No. 2001 in CA-G. The reversion to Spanish in the derivative titles is highly intriguing and casts a cloud of doubt to the genuineness of such titles.´[26] Hence. the immediate predecessors of the defendants¶ titles. ³Thirdly. overlapping could take place as in fact it did when the defendants¶ titles overlapped that of CLT at the northwestern portion of the latter¶s property. it is highly irregular that the original survey was made only several months later or only on December 22. 1971. The court therefore believes that the issuance of TCT Nos. 1368 to 1374 is attended by a serious irregularity which cannot be ignored as it affects the very validity of the alleged subdivisions of the land covered by TCT No. 994. on the contrary. 994 was never validly subdivided into smaller lots. no such lot number is found in TCT No. This is in direct violation of the practice that the language used in the mother title is adopted by all its derivative titles. CV No. 1368 to 1374. 1368 to 1374 which preceded the defendants¶ titles were issued pursuant to subdivision plan PSD 21154 is not supported by the evidence. vs.R. ³Secondly.

1917. ³3. SHOULD THIS HONORABLE COURT CONSIDER THE SAME. petitioners Manotok filed with this Court two separate Manifestations stating that a (1) Report of the Fact-Finding Committee dated August 28.´[30] Summary of the Contentions of the Parties I. ³2. transcribed and registered on May 3. The contending parties were accorded due process because they submitted their respective evidence to the commissioners in the course of the .[29] In the meantime. R-15169 of the Registry of Deeds of Caloocan City in the name of Jose B. Dimson. They (petitioners) were thus denied due process as they were not able to present evidence in a full-blown trial. Respondent CLT Realty. among others. THAT WOULD WARRANT THE REVERSAL OF THE CHALLENGED DECISION AND WILL IMPEL A DIFFERENT CONCLUSION. THE JUDGMENT OF THE HONORABLE COURT OF APPEALS IS PREMISED ON THE MISAPPREHENSION OF FACTS OF THE COURT A QUO. that the same are ³nothing but a crude attempt to circumvent and ignore time-honored judicial procedures and sabotage the orderly administration of justice by using alleged findings in the alleged reports prepared by the DOJ and the Senate Committee that were never presented before the trial courts to obtain a reversal of the questioned Decisions. also of the Maysilo Estate. At the very least. the three instant petitions assail the validity of: (1) TCT No. covering Lot 25-A-2 of the Maysilo Estate.[28] and (2) TCT No. on the other hand. THERE ARE SUPERVENING FACTS AND EVENTS. It merely relied on the technical report of the commissioners appointed by the court based on the parties¶ nomination. 1998 were issued by the DOJ and the Senate. 1997 composed of the Department of Justice (DOJ). ASSUMING ARGUENDO. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING IN TOTO THE AMENDED DECISION OF THE COURT A QUO. improper and contrary to the dictates of due process. Both reports conclude that there is only one OCT No.³1.R. said procedure is highly irregular. The respondents in these cases vehemently opposed the said Manifestations alleging. 123346 Petitioners Manotok Corporations mainly contend that the Court of Appeals erred in affirming the lower court¶s Decision which was rendered without conducting trial for the reception of evidence. Land Registration Authority and the Office of the Solicitor General. T-177013 of the same Registry of Deeds in the name of CLT Development Corporation. WITHOUT NECESSARILY ADMITTING THAT THE ARGUMENTS OF APPELLANT ARE UNAVAILING. 994issued. covering Lot 26. No. 1031 dated May 25. G.´[27] In sum. and (2) Senate Committee Report No. maintains that the factual findings of the commissioners are supported by evidence.

Thus. 1917. Respondent CLT Realty adds that the Decision of the trial court. 994 issued on May 3. petitioner Sto. No. it bears stressing that under Rule 45 of the 1997 Rules of Civil Procedure. Niño Association contends that there are supervening facts and events that transpired after the trial court rendered its Amended Decision that if considered will result in a different conclusion. The same evidence became the basis of their Majority and Minority Reports. CA. complies with the requirement of Section 14. III. Appellate Court erred when it relied onMWSS vs.proceedings. G. At the outset.R. 1917. 123346. and with the presentation of these Reports as evidence. or on April 19. In that case. No. II. Article VIII of the Constitution since it clearly and distinctly expresses the facts and the law upon which it is based. CA[31] cited in the Decision dated May 30.R. 134385 Petitioner Araneta Institute basically submits that the case of MWSS vs. it could be shown that the titles of Jose Dimson and CLT Realty are void. with a new trial. 134385 and petitioners Manotok Corporations in G. Thus. it is not our function to review factual issues and examine.[34] . or on May 3. 1917.R.[32] The On the other hand.R. The Supreme Court is not a trier of facts. No. 1997 of the Court of Appeals is inapplicable to the present case. The two Reports were later heard and passed upon by the trial court. it upheld TCT No. evaluate or weigh the probative value of the evidence presented by the parties. TCT No. as amended. G. 15167. the MWSS¶ title was derived from OCT 994 issued and registered later. 148767 Like petitioner Araneta Institute in G. Whereas. has been upheld by this Court in MWSS case. These are the two Reports of the DOJ and Senate Fact-Finding Committees that there is only one OCT No. Ruling of the Court The present petitions must fail. upheld by the Court of Appeals.[33] We are not bound to analyze and weigh all over again the evidence already considered in the proceedings below. 15167 of Dimson derived from OCT 994 issued and registered earlier. respondents heirs of Dimson counter that the validity of Dimson¶s title. our jurisdiction over cases brought to us from the Court of Appeals is limited to reviewing and correcting errors of law committed by said court.

15169 issued in the name of Jose B. modifying. Undoubtedly. Such findings are binding and conclusive on this Court. under the doctrine of estoppel. petitioners Manotok Corporations. upon agreement of the parties. however. the paramount question being raised in the three petitions is whether TCT No. As regards G. generally. for decision on the bases. among others. the same are accorded the highest degree of respect and. It bears stressing that the parties opted to submit the case objections/comments on the commissioners¶ reports. .R. as here. such issue is a pure question of fact ± a matter beyond our power to determine. 11. Certainly. the trial court may rely on their findings and conclusions.´ (underscoring supplied) The case of overlapping of titles necessitates the assistance of experts in the field of geodetic engineering. the findings of fact of the trial courts are affirmed by the Court of Appeals. of their respective Thus. Hearing upon report. ± Upon the expiration of the period of ten (10) days referred to in the preceding section. CLT Realty. Rule 32 of the Revised Rules of Court (now the 1997 Rules of Civil Procedure. Thus. We note further that while petitioners assail the trial court¶s Decision as being premature. 177013 issued in the name of CLT are valid. expertise and experience. involving Lot 26). That is allowed in Section 11. they also assert that the said court should have adopted the Minority Report which is favorable to them. we cannot countenance their act of adopting inconsistent postures as this is a mockery of justice. the report shall be set for hearing. these commissioners are in a better position to determine which of the titles is valid. 123346 (Manotok Corporations vs. after which the court shall render judgment by adopting. quoted below: ³SEC.Here. the trial court acted properly when it adopted the Majority Report of the commissioners as part and parcel of its Decision. cannot now be permitted to assail the Decision of the trial court ± which turned out to be adverse to them ± and insist that it should have conducted further reception of evidence before rendering its judgment on the case. was precisely to make an evaluation and analysis of the titles in conflict with each other.[35] Be that as it may. Where. The very reason why commissioners were appointed by the trial court. as amended). No. Dimson and TCT No. we shall still proceed to discuss why the present petitions have no merit. to reinforce our conclusion. will not be disturbed on appeal. or rejecting the report in whole or in part or it may receive further evidence or may recommit it with instructions. Given their background.

R. or any other agencies of the Government for that matter. Finally. MWSS vs. 96259. No.We noted in the beginning of this Decision that the issue in all these three (3) cases involves the validity of the parties¶ overlapping titles. Gonzaga vs. have clearly distinguishable roles from that of the Judiciary. It may no longer be modified in any respect. . No. Certainly.¶"[40] In the present cases. Court of Appeals.[37] We cannot delve anymore into the correctness of the Decision of this Court in MWSS. the ruling in MWSS was reiterated in G. 994 of the Registry of Deeds of Caloocan City registered on April 19. 103558. et al. the winning party likewise has the correlative right to enjoy the finality of the resolution of his case. . . thus setting to naught the main role of courts of justice which is to assist in the enforcement of the rule of law and the maintenance of peace and order by settling justiciable controversies with finality. 1996. confirming the validity of OCT No. such committee reports cannot override the Decisions of the trial courts and the Court of Appeals upholding the validity of respondents¶ titles in these cases. we cannot consider the alleged newly-discovered evidence consisting of the DOJ and Senate Fact-Finding Committee Reports invoked by petitioners herein. The DOJ and Senate. 994 issued on April 19. there would be no end to litigations. dated November 17.[39] Just as the losing party has the right to file an appeal within the prescribed period. 1992[36] earlier cited in the assailed Decisions.R. Just as overlapping . 1917. The said Decisions were rendered after the opposing parties have been accorded due process. and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land. The said Decision. and that. must not be deprived of the fruits of a final verdict. the judgments or orders of courts must become final at some definite time fixed by law. respondents herein. The titles of the respondents in these cases were derived from OCT No. The validity of such mother title has already been upheld by this Court in G. Heirs of Luis J. A final judgment is µa vested interest which it is right and equitable that the government should recognize and protect. Court of Appeals dated September 3. and of which the individual could not be deprived arbitrarily without injustice. Nothing is more settled in law than that once a judgment attains finality it becomes immutable and unalterable. We held that "a final judgment vests in the prevailing party a right recognized and protected by law under the due process clause of the Constitution. even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law. has long become final and executory. It bears stressing that the courts have the constitutional duty to adjudicate legal disputes properly brought before them. at the risk of occasional errors. the winning parties. Significantly.[38] The doctrine of finality of judgment is grounded on fundamental considerations of public policy and sound practice. otherwise. 1917 from which the titles of the respondents in the cases at bar were derived.

. 8066. The Court in assuming jurisdiction over the petitions at bar simply performed its constitutional duty as the arbiter of legal disputes properly brought before it. he claimed that he has been in. which writ was. 15896. we cannot subscribe to their submission. Respondent Mateo Raval Reyes opposed the motion. especially in this instance when public interest requires nothing less. 22161. No.[41] thus: ³Finally. Its aim is to assist and recommend to the legislature a possible action that the body may take with regard to a particular issue. both of the Registry of Deeds of Ilocos Norte. 22161. 15891. embraced in and covered by Original Certificate of Title No. After due hearing of this appellant. . the court a quo issued. the latter's undivided one-third (1/3) share. amended.: Direct appeal on pure question of law from an order of the Court of First Instance of Ilocos Norte. 22161 and 8066. OWNERS DUPLICATE CERTIFACTEE SEC 41 REYES VS RAVAI REYES REYES. the possession thereof (i. so is the overlapping of findings of facts among the different branches and agencies of the Government. L-3820. Inc. to include all the other lots covered by both titles.L. the instant petitions are DENIED and the assailed Decisions and Resolutions of the Court of Appeals are hereby AFFIRMED intoto. July 18. On the other hand. upon petitioners' motion for reconsideration. a congressional investigation is conducted in aid of legislation (Arnault vs. No. Juan H. Francisco H. the writ of possession with respect to Lot Nos. the respondent Congressmen assert that at least two (2) committee reports by the House of Representatives found the PIATCO contracts valid and contend that this Court.. and 42. upon petitioners' motion. and Francisco H. Respondent did not appeal from this order amending the writ of possession.. C. vs. Consequently. 1950). dated 31 May 1940. are the registered owners of several parcels of land. on 20 December 1962. These titles were issued pursuant to a decree of registration. R. et al. 1188.´ (Underscoring supplied) WHEREFORE. They insist that the Court must respect the findings of the said committees of the House of Representatives.. to wit.e. 20481 and 20484. all surnamed Reyes. admitting that he is only in possession of the lots covered by Original Certificate of Title No.of titles of lands is abhorred. a motion for issuance of writs of possession over all the lots covered by both Certificates of Title above referred to. Reyes. 15891 and 15896. Jr. With due respect. specifically as to whether or not to enact a new law or amend an existing one. Lots Nos. petitioners Mateo H. L. L.. Reyes filed. embraced in and covered by Original Certificate of Title No.. Costs against petitioners. in the above stated cadastral cases. J. G. of the Laoag (Ilocos Norte) Cadastre. to reconsider the first order of denial. interest and participation to these disputed lots. C. On 17 July 1962. No. 31. R. The undisputed facts are: three brothers. denying petitioners' motion to compel respondent to surrender their owners' duplicates of Original Certificates of Title Nos. as well as from a subsequent order of the same court. and also Lots Nos. by taking cognizance of the cases at bar. but denying that he possesses the lots covered by Original Certificate of Title No. refusing. J. Nazareno.. of the same cadastral survey. having acquired by way of absolute sale (not recorded) from petitioners' brother. on 7 January 1963. SO ORDERED. The purpose of a judicial proceeding is to settle the dispute in controversy by adjudicating the legal rights and obligations of the parties to the case. in its Cadastral Cases Nos..R. 15902 and 15912. Philippine International Air Terminals Co. et al. 1994. Reyes and Juan H. this Court cannot treat the findings in a congressional committee report as binding because the facts elicited in congressional hearings are not subject to the rigors of the Rules of Court on admissibility of evidence. 20481 and 20484). Lots Nos. however. This we unmistakably stressed in Agan.B. 8066. Rec. There is a fundamental difference between a case in court and an investigation of a congressional committee. and is entitled to. reviewed an action of a co-equal body. Rec. Mateo H.

alleging the same ground he had heretofore raised in his answer and/or opposition to the motion for issuance of writ of possession. an ordinary civil action seeking to recover the products of the disputed lots. This case was docketed as its Civil Case No. 698 se expidio por el Registrador de Titulos a favor de la misma es obvious que quien tiene derecho a poseer el certificado de titulo es ella y no la apelante (art. . Defendant therein (now respondent M. Petitioners subjected the foregoing order to a motion for reconsideration. without any appeal being taken. such as the petitioners-appellants herein. hence. La pretension no es meritoria Segun el articulo 41 de la Ley No. petitioners presented. he is their (plaintiffs') co-owner. In a decided case. the custody and possession of the owners' duplicates of certificates of title. como coheredera. In their reply brief. Francisco H. these lots are not in litigation in this ordinary civil case.ñët On the other hand. The court a quo denied petitioners' motion. 698. the withholding from the registered owners. or his heirs. Francisco H. interest and participation to these disputed lots. 41 de la Ley No. but without success. on this ground.Subsequently. The sole issue to be resolved in the instant appeal is: who between petitioners-appellants or respondent-appellee has a better right to the possession or custody of the disputed owners' duplicates of certificates of title. the trial court correctly held that these lots are subjects of litigation in this ordinary civil case. as plaintiffs. we see no valid and plausible reason to justify. of the Revised Rules of Court. 3659 are not the lots covered by the titles in question but their products or value. commenced. respondent is barred and estopped from raising the same issue in the ordinary civil case. lo unico que se suscita es si Ana Umbao de Carpio tiene derecho a la possession del duplicado para el dueno del Certificado de Titulo Original No. having pleaded a counterclaim for partition of the lots in question in said Civil Case No. While we agree with the court a quo that the disputed lots are subjects of litigation in Civil Case No. Hallandose admitido que el decreto final que se dicto en el expediente catastral en 28 de mayo de 1936. Raval Reyes) answered the complaint and pleaded a counterclaim for partition of all the disputed lots. 3659. Francisco H. which share respondent allegedly bought from the latter. Reyes. 3659. this Court said: Como acertadamente dijo el Juzgado. and because these heirs have not intervened in this particular incident. He also maintains that petitioners not having impleaded their brother. to better protect his rights thereto. (El Director de Terrenos contra Abacahin 72 Phil. his rights appear to be amply protected. ademas.1äwphï1. as parties in their motion for issuance of writ of execution. con preferencia a la opositora-apelante. at most. as defendant. debe ejercitar una accion independiente. It being undisputed that respondent had already availed of an independent civil action to recover his alleged co-owner's share in the disputed lots by filing a counterclaim for partition in said Civil Case No. the provision on notice of lis pendens under Section 24. la solucion es clara e ineludible. i. 496. Rule 14. or their value. petitioners-appellants refute the latter argument of respondent-appellee by showing that they had previously obtained special authority from the heirs of their deceased brother to represent them in the proceedings had in the court below. this Court has already held that the owner of the land in whose favor and in whose name said land is registered and inscribed in the certificate of title has a more preferential right to the possession of the owners' duplicate than one whose name does not appear in the certificate and has yet to establish his right to the possession thereto. A nuestro juicio. 3659 and the same has not yet been decided on the merits by it. he having bought from plaintiffs' brother. Petitioners-appellants dispute the above ruling of the trial court contending that. 778. 3659. on 25 February 1963. and moral damages. in the cadastral cases aforementioned. valid only with respect to their (petitioners) undivided two-thirds (2/3) share and participation in these disputed lots. en relacion con el lote No. the writ of possession issued by the trial court is. petitioners in the above cadastral cases. it appearing that respondent. the present appeal. for the purpose of recording the fact that the lots covered by the titles in question are litigated in said Civil Case No. under the principle ofres judicata. 3659. Reyes. on 15 January 1963. Pending trial on this ordinary civil case (No. el duplicado para el dueno debe expedirse por el Registrador a nombre de la persona a cuyo favor se ha decretado el terreno y dispone. and that since respondent had already raised the issue of ownership and possession of these lots in his opposition to the (petitioners') motion for issuance of writ of possession and. 3659). Alega la apelante que ella tiene tanto derecho como la apelada a poseer el titulo porque el terreno a que se refiere es de la propiedad de las tres hermanas.. on the ground that the parcels of land covered by both titles are subjects of litigation in Civil Case No. had presented a counterclaim for partition of the lots covered by the titles. fue a favor de Ana Umbao y que el duplicado para el dueño del Certificado de Titulo Original No. encaminada a obtener su participacion. Thus. 778. the court a quo granted the writ. despite this opposition. respondent-appellee maintains that. 496. que dicho duplicado debe entregarsele al dueño inscrito.e. before the same court of first instance. 22161 and 8066. Respondent opposed this motion. and considering that he may also avail of. since the subject matter of Civil Case No. the latter's undivided one-third (1/3) share. and moral damages against respondent Mateo Raval Reyes. hence. conforme ha sido enmendado. we again see no justifiable reason for respondent to retain the custody of the owners' duplicates of certificates of titles. 326). Reyes. as defendant therein. he concludes that he is not barred and estopped from raising the issue of ownership and possession of the undivided one-third (1/3) share and participation of petitioners' brother. a motion to compel respondent Mateo Raval Reyes to surrender and deliver to them the owners' duplicates of Original Certificates of Title Nos. 3659. Si la apelante cree que tiene derecho a participar en el lote No. tal como ha sido reformado).

JJ.00 as attorney¶s fees.000. 2. P300. 4. With costs against respondent-appellee.00 plus 6% per annum as actual damages. promulgated on November 19. being an innocent purchaser for value therefor. and (3) finally. P30. took no part. Cost of suit. The Amended Decision disposed as follows: ³WHEREFORE. P50. P30. Barrera.000.. As to [Respondent] Romana de Vera: 1.000. the dispositive part of the original DECISION of this case. and. is SET ASIDE and another one is entered AFFIRMING in part and REVERSING in part the judgment appealed from.000.00 as exemplary damages. 2002 Resolution[3] of the Court of Appeals (CA) in CA-GR CV No.´[4] The assailed Resolution denied reconsideration. This provision.J. respondent Mateo Raval Reyes is hereby ordered to deliver to petitioners the owners' duplicates of Original Certificates of Title No. as they are hereby. concur. however. as follows: ³1. Wherefore.. the orders appealed from should be. the following are the pertinent antecedents amply summarized by the trial court: . 2002 Amended Decision[2] and the July 22. 5. the CA narrated the facts as follows: ³As culled from the records. P50. the buyer who in good faith presents the oldest title..00 as exemplary damages. 22161 and 8066. C. reversed. 2001. Sanchez and Castro. the first possessor in good faith. Bengzon.00 as moral damages.P. The Facts Quoting the trial court. Declaring Gloria Villafania [liable] to pay the following to [Respondent] Romana de Vera and to [Petitioner-]Spouses [Noel and Julie] Abrigo. we deem it unnecessary to pass on the merits of the second contention of petitioners-appellants. to wit: ³2.: Between two buyers of the same immovable property registered under the Torrens system..In view of the above considerations. J. Dizon.000. Declaring [Respondent] Romana de Vera the rightful owner and with better right to possess the property in question. in accordance with this opinion. The Case Before us is a Petition for Review[1] under Rule 45 of the Rules of Court. seeking to set aside the March 21. J.000. 2. Regala. 3.00 as moral damages. Zaldivar. P50. 3. and Cost of suit. 4. 62391. ABRIGO VS DE VERA PANGANIBAN. Mateo Raval Reyes. the law gives ownership priority to (1) the first registrant in good faith. J. (2) then. P50. As to [Petitioner-]Spouses [Noel and Julie] Abrigo: 1. Makalintal. Concepcion.000. does not apply if the property is not registered under the Torrenssystem.00 as attorney¶s fees.

¶[5] ³Thus. the Regional Trial Court. however to Rosenda Tigno-Salazar and Rosita Cave-Go.´[6] Ruling of the Court of Appeals In its original Decision promulgated on November 19. Rosenda Tigno-Salazar and Rosita Cave-Go.[7] Since Gloria Villafania had already transferred ownership to Rosenda TignoSalazar and Rosita Cave-Go. µOn October 16. µOn December 7. 1406 to Rosenda Tigno-Salazar and Rosita Cave-Go. 1998. finding Respondent De Vera to be a purchaser in good faith and for value. the CA issued its March 21. In the said Decision. 1993. the subsequent sale to De Vera was deemed void. Moreover. 2001. Gloria Villafania failed to buy back the house and lot. injunction. restraining order and damages [against respondent and Gloria Villafania]. 1997. [petitioners] filed the instant case [with the Regional Trial Court of Dagupan City] for the annulment of documents. µUnknown. The appellate court ruled that she had relied in good faith on the Torrens title of her vendor and must thus be protected. 2002 Amended Decision.[8] Hence. so the [vendees] declared the lot in their name.[9] Issues Petitioners raise for our consideration the issues below: ³1. 1996. x x x Gloria Villafania was ordered to pay [petitioners and private respondent] damages and attorney¶s fees. On February 25. preliminary injunction. Pangasinan and covered by Tax Declaration No. Romana de Vera registered the sale and as a consequence. Hence the ejectment case was dismissed. awarding the properties to [petitioners] as well as damages. the lower court rendered the assailed Decision dated January 4.´[10] In the main. Branch 40 of Dagupan City rendered judgment approving the Compromise Agreement submitted by the parties. ³Not contented with the assailed Decision. 1452. the CA held that a void title could not give rise to a valid one and hence dismissed the appeal of Private Respondent Romana de Vera. Romana de Vera filed an action for Forcible Entry and Damages against [Spouses Noel and Julie Abrigo] before the Municipal Trial Court of Mangaldan. Gloria Villafania sold the same house and lot to Romana de Vera x x x. the parties therein submitted a Motion for Dismissal in view of their agreement in the instant case that neither of them can physically take possession of the property in question until the instant case is terminated. Gloria Villafania sold a house and lot located at Banaoang.µOn May 27. on November 21. Mangaldan. both parties [appealed to the CA]. Pangasinan docketed as Civil Case No. 1997. Whether or not the [R]espondent Romana de Vera is a purchaser for value in good faith. 212598 on April 11. µOn October 23. 22515 was issued in her name. TCT No. µOn November 12. The said free patent was later on cancelled by TCT No. 1988 as evidenced by OCT No. the issues boil down to who between petitioner-spouses and respondent has a better right to the property. 1993. The said sale became a subject of a suit for annulment of documents between the vendor and the vendees. Whether or not the deed of sale executed by Gloria Villafania in favor of [R]espondent Romana de Vera is valid. 1997. P-30522]. ³3. ³2. this Petition. ³After the trial on the merits. 1999. 1997. Gloria Villafania was given one year from the date of the Compromise Agreement to buy back the house and lot. The CA also dismissed the appeal of Petitioner-Spouses Abrigo and found no sufficient basis to award them moral and exemplary damages and attorney¶s fees. sold the house and lot to the herein [Petitioner-Spouses Noel and Julie Abrigo]. On reconsideration. Who between the petitioners and respondent has a better title over the property in question. Gloria Villafania obtained a free patent over the parcel of land involved [on March 15. and failure to do so would mean that the previous sale in favor of Rosenda Tigno-Salazar and Rosita Cave-Go shall remain valid and binding and the plaintiff shall voluntarily vacate the premises without need of any demand. .

. because the land was already covered by the Torrens system at the time the conveyance was registered under Act 3344. in Naawan Community Rural Bank v. as the term is used under Art. Villafania had presented the transfer certificate of title (TCT) covering the property. ³Should it be immovable property. on October 23. the ownership shall be transferred to the person who may have first taken possession thereof in good faith.The Court¶s Ruling The Petition is bereft of merit. since respondent was not a purchaser in good faith and for value.[13] There is no ambiguity in the application of this law with respect to lands registered under the Torrens system.´[20] We agree with respondent. and.[12] Law on Double Sale The present case involves what in legal contemplation was a double sale. as opposed to another who had registered a deed of final conveyance under Act 3344. the first possessor in good faith. the law provides that a double sale of immovables transfers ownership to (1) the first registrant in good faith. More recently. in the absence thereof. the buyer who in good faith presents the oldest title. and (3) finally. as amended.[15] Thus. Court of Appeals. 1997. inasmuch as the registration of the sale to Respondent De Vera under the Torrens system was done in good faith.´ Otherwise stated. respondent registered the transaction under theTorrens system[18] because. 1544 x x x. such sale is not considered REGISTERED. P-30522. and it is sold but the subsequent sale is registered not under the Land Registration Act but under Act 3344. Heirs of Magali[23] held that registration must be done in the proper registry in order to bind the land. provided there is good faith. the ownership shall pertain to the person who in good faith was first in the possession. it is binding only between the seller and the buyer but it does not affect innocent third persons. if it should be movable property. 1544. a second sale was executed by Villafania with Respondent Romana de Vera.[11] They further claim that the sale could not be validated. in turn. if the sale is not registered. Since the property in dispute in the present case was already registered under the Torrens system. from whom petitioners. For the same reason. This principle is in full accord with Section 51 of PD 1529[14] which provides that no deed.purporting to convey or affect registered land shall take effect as a conveyance or bind the land until its registration. It is undisputed that Villafania had been issued a free patent registered as Original Certificate of Title (OCT) No. the ³priority in time´ principle was not applied. during the sale. On May 27.[19] Respondent De Vera contends that her registration under the Torrens system should prevail over that of petitioners who recorded theirs under Act 3344. TCT No. In that case. 1993. derived their right. both Petitioners Abrigo and respondent registered the sale of the property. 212598. petitioners¶ registration of the sale under Act 3344 was not effective for purposes of Article 1544 of the Civil Code.[24] the Court upheld the right of a party who had registered the sale of land under the Property Registration Decree.[16] In the instant case. Article 1544 of the Civil Code states the law on double sale thus: ³Art. Since neither petitioners nor their predecessors (Tigno-Salazar and Cave-Go) knew that the property was covered by the Torrens system.[17] For her part. (2) then. If the same thing should have been sold to different vendees.[21] The OCT was later cancelled by Transfer Certificate of Title (TCT) No. Paras: ³x x x If the land is registered under the Land Registration Act (and has therefore a Torrens Title). the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Gloria Villafania first sold the disputed property to Rosenda Tigno-Salazar and Rosita Cave-Go. 22515 thereafter issued to respondent. Soriano v. ³Should there be no inscription. they registered their respective sales under Act 3344. mortgage.[22] As a consequence of the sale. this sale must be upheld over the sale registered under Act 3344 to Petitioner-Spouses Abrigo. to the person who presents the oldest title. Subsequently. De Vera relies on the following insight of Justice Edgardo L. Main Issue: Better Right over the Property Petitioners contend that Gloria Villafania could not have transferred the property to Respondent De Vera because it no longer belonged to her. also in Villafania¶s name. lease or other voluntary instrument -except a will -. 212598 was subsequently cancelled and TCT No.

once registered.[32] We explained the rationale in Uraca v. It was held therein that Article 1544 of the Civil Code has no application to land not registered under Act No. since such knowledge taints his prior registration with bad faith. Cabana (G. ³The case of Carumba vs.¶´[34] (Italics supplied) Equally important. it was held that it is essential. G. as provided by the Civil Code.R.[38] petitioners contend that their prior registration under Act 3344 is constructive notice to respondent and negates her good faith at the time she registered the sale. Knowledge by the first buyer of the second sale cannot defeat the first buyer's rights except when the second buyer first registers in good faith the second sale (Olivares vs. 1544. since such condition is noted on the face of the register or certificate of title. 02 September 1992). Court of Appeals. ³Applying this principle. But in converso.[36] Following this principle. a person dealing with registered land is not required to go behind the registry to determine the condition of the property. v. knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register. by the first buyer under . 496.[31] Mere registration of title is not enough. 129 SCRA 656). 26 December 1984) In Cruz vs. Rule 39 of the Revised Rules of Court. Court of Appeals. or failing registration. Crisostomo vs. CA. to merit the protection of Art. No. Applying [Section 33]. in ignorance of the first sale and of the first buyer¶s rights) ---. 31 SCRA 558). potior jure (first in time. xxx xxx xxx ³Registration of the second buyer under Act 3344. 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. by delivery of possession. however. 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 registration with bad faith (see also Astorga vs. he must show that he acted in good faith throughout (i.´[28] Petitioners cannot validly argue that they were fraudulently misled into believing that the property was unregistered. among them. serves as a notice to the whole world. and merely acquires the latter¶s interest in the property sold as of the time the property was levied upon. Like in the case at bar. registration of instruments affecting unregistered lands is µwithout prejudice to a third party with a better right. Court of Appeals. stronger in right).Radiowealth Finance Co. Gonzales.[27] 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. G.e. cannot improve his standing since Act 3344 itself expresses that registration thereunder would not prejudice prior rights in good faith (see Carumba vs. Conversely. 95843.R. and every subsequent purchaser of registered land taking such certificate for value and in good faith shall hold the same free from all encumbrances.[37] Citing Santiago v. Santiago affirmed the following commentary of Justice Jose C. providing for the registration of all instruments on land neither covered by the Spanish Mortgage Law nor the Torrens System (Act 496). under Section 44 of PD 1529. 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. stronger in right). Palileo[25] explained the difference in the rules of registration under Act 3344 and those under the Torrens system in this wise: ³Under Act No. that before the second buyer can obtain priority over the first.from the time of acquisition until the title is transferred to him by registration. Such knowledge of the first buyer does not bar her from availing of her rights under the law. 159 SCRA 33). Carumba dealt with a double sale of the same unregistered land.¶ The aforequoted phrase has been held by this Court to mean that the mere registration of a sale in one¶s favor does not give him any right over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded. this Court has consistently held as regards registered land that a purchaser in good faith acquires a good title as against all the transferees thereof whose rights are not recorded in the Registry of Deeds at the time of the sale. that the second realty buyer must act in good faith in registering his deed of sale (citing Carbonell vs.[33] which we quote: ³Under the foregoing. every registered owner receiving a certificate of title pursuant to a decree of registration. Jurisprudence teaches us that µ(t)he governing principle is primus tempore. Article 1544 requires that such registration must be coupled with good faith. the prior registration of the disputed property by the second buyer does not by itself confer ownership or a better right over the property. Vitug: ³The governing principle is prius tempore. to register first her purchase as against the second buyer. A Torrens title. Court of Appeals. 22 June 1984. x x x the execution sale of unregistered land in favor of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time of the said execution sale. good faith must concur with the registration. No 58530. potior jure (first in time. 3344.R.[29] All persons must take notice. 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. 69 SCRA 99. and no one can plead ignorance of the registration.[35] Thus. second paragraph. Court of Appeals. This is the price exacted by Article 1544 of the Civil Code for the second buyer being able to displace the first buyer.[30] 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. 56232. Court of Appeals[26] is a case in point. Registration. except those noted and enumerated in the certificate.

480. there is absence of prior registration in good faith by petitioners of the second sale in their favor. there is absent good faith in the registration of the sale by the [second buyers] for which they had been issued certificates of title in their names. SO ORDERED. the purchaser acquires such rights and interest as they appear in the certificate of title. In Santiago. necessarily. the first buyer did not register the sale. In Bayoca. Costs against petitioners. x x x. Garcia vs. Smith.[47] After its factual findings revealed that Respondent De Vera was in good faith. D-10638 of the Regional Trial Court of Dagupan City.[45] As can be gathered from the foregoing. that she did not know anything about the earlier sale and claim of the spouses Abrigo. Art. good faith on respondent¶s part stands. 3344 by [the first buyers]. WHEREFORE."[46] Respondent in Good Faith The Court of Appeals examined the facts to determine whether respondent was an innocent purchaser for value.Act 3344 can have the effect of constructive notice to the second buyer that can defeat his right as such buyer in good faith (see Arts. Bernales vs. when Respondent De Vera purchased the property. 18 October 1988. Act 496. The only exception is where the purchaser has actual knowledge of a flaw or defect in the title of the seller or of such liens or encumbrances which. Spouses Abrigo base their position only on the general averment that respondent should have been more vigilant prior to consummating the sale. registered in the name of Gloria Villafania. she testified clearly and positively.[43] Such registration was therefore considered effectual. which was omitted in Santiago.[40] which held: ³Verily. To the [Respondent] De Vera. known as Civil Case No. G. 708709. She was not even a party to said case. x x x. Galindez. [Respondent] De Vera¶s vendor. as can be inferred from the issuance of the TCT in their names. she knew or had the slightest notice that the same was under litigation in Civil Case No. The purchaser is not required to explore farther than what the Torrens title. are not on all fours with the present case. Gloria Villafania. her vendor. and still is. see also Fabian vs. [12] 900. the only legal truth upon which she had to rely was that the land is registered in the name of Gloria Villafania. and only then when she bought the same. by the spouses¶ own admission that the parents and the sister of Villafania were still the actual occupants in October 1997. 8 Phil. the first buyers registered the sale under the Torrens system. and that her title under the law. 69 Phil 744. between Gloria Villafania and [Petitioners] Abrigo. In Revilla.[42] There was no registration under Act 3344. without any contrary evidence presented by the [petitioners]. There is no evidence in the record showing that when she bought the land on October 23.[50] The family members may reasonably be assumed to be Villafania¶s agents. Revilla and Taguba.. Bell & Co. We quote below the additional commentary of Justice Vitug. appears to be the registered owner. registration was not an issue. 1452. Tajonera vs. 27 March 1981). Thus. 3344 can have the effect of constructive notice to the second buyer that can defeat his right as such buyer. however. upon its face. which petitioners have not rebutted. 1544 has been held to be inapplicable to execution sales of unregistered land. 75336. 132 SCRA 700). Taguba vs. She had no notice of the earlier sale of the land to [petitioners]. see also Revilla vs. Court of Appeals. Sales. it explained thus: ³x x x. In sum. Rosabal. Peralta. 107 Phil. until after she had bought the same. This omission was evidently the reason why petitioner misunderstood the context of the citation therein: "The registration contemplated under Art. On lands covered by the Torrens System. 1 O. since the purchaser merely steps into the shoes of the debtor and acquires the latter's interest as of the time the property is sold (Carumba vs. who had not been shown to have notified respondent of the first sale when she conducted an ocular inspection. 73 Phil 694). indicates. Tibe. IAC. Furthermore.R. On account of the undisputed fact of registration under Act No.´[41] Santiago and Bayoca are not in point. 158 SCRA 138).´[48] We find no reason to disturb these findings. 39. which are cited in Santiago. 1544 has been held to refer to registration under Act 496 Land Registration Act (now PD 1529) which considers the act of registration as the operative act that binds the land (see Mediante vs. There is nothing in her certificate of title and in the circumstances of the transaction or sale which warrant [Respondent] De Vera in supposing that she need[ed] to look beyond the title. 496) or when there is only one sale (Remalante vs. Nogales. and only then when she brought an ejectment case with the x x x Municipal Court of Mangaldan. as in this case. As stated in the Santiago case. when the first buyer registered the sale under Act 3344. Court of Appeals. Branch 40. Hernandez vs. constructive notice to the second buyer through registration under Act 3344 does not apply if the property is registered under the Torrenssystem. Rosabal. the property was still unregistered land. registration by the first buyer under Act No. the Petition is DENIED and the assailed Decision AFFIRMED. she would have found petitioners to be in possession.´[39] (Emphasis supplied) Santiago was subsequently applied in Bayoca v. as to him. 1997. . The subject land was.G.[44] In Taguba. She ascertained and verified that her vendor was the sole owner and in possession of the subject property by examining her vendor¶s title in the Registry of Deeds and actually going to the premises. L-26677. is absolute and indefeasible.[49] This argument is contradicted. 31 SCRA 558. They argue that had she inspected the property. unaffected by any prior lien or encumbrance not noted therein. is equivalent to registration (see Sec. Civil Code.

: Before Us are consolidated Petitions for Review on Certiorari under Rule 45 of the Rules of Civil Procedure.07 hectares xxx. This new permit covers the combined areas under Ordinary Nipa-Bacauan Permit No. more or less. Within the month of March 1967.3881 hectares. hereby certified as such and released as Alienable or Disposable for fishpond purposes only pursuant to the directive of the President dated January 16. Mendoza. Several years later. F-2166-J. 2. NB 642 and Ordinary Fishpond Permit No. F-6029-Y subject of the sales patent application applied for by Democrito Mendoza. on 7 May 1969. Liloan. Sr. 29 of LC Map 1391-Liloan of the Land Classification Project of the Province of Cebu. the same (the 70. to wit: Please be informed that the tract of land situated in Silot-Poblacion. still another survey by the same bureau disclosed that the area applied for was only a little over 89 hectares.07 hectares. which reversed and set aside the Decision[2] of the Regional Trial Court (RTC) of Cebu. 1967). Meanwhile. Marcos issued a Memorandum addressed to the Secretary of Agriculture and Natural Resources. the area was reported to be measuring 92. 57069. however. Forestry. On 13 January 1954. as amended. Democrito Mendoza. 1967 and for disposition under the Public Land Act. then President Ferdinand E. but subject to the disposal of the Bureau of Fisheries for fishpond purposes. the District Engineer of Cebu. subject nevertheless. on 24 September 1969. Sr. Project No. Cebu. x x x. all these fishpond areas shall be released by the Bureau of Forestry to the Bureau of Lands as alienable and disposable. Democrito T. Sr. containing an area of 70. which was previously leased by his father who waived the leasehold rights in his favor. Democrito Mendoza. Later. therefore.07 hectares within Silot Bay. to determine if there were .[6] [Emphasis ours] In compliance with the process for sales patent application. Branch 14.REPUBLIC VS MENDOZA CHICO-NAZARIO. the Undersecretary of Natural Resources. was accorded Ordinary Fishpond Permit No.R. was also issued Ordinary Nipa-Bacauan Permit No. the Commissioner of Customs. since the said area has already been certified as available for fishpond development and is thus no longer needed for forest purposes. and dismissed for lack of merit Civil Case No. per BF Map LC1391. Identify the exact locations and area of these 700. NB 642 for an area of 2. F-6029-Y encompassing an estimated area of 70. F-6029-Y. also in Silot Bay. Sr. Democrito Mendoza. acquired for valuable consideration. and originally classified as part of Block B-Timberland. Democrito Mendoza. J. That the area herein certified as Alienable or Disposable be solely developed and used for fishpond purposes in consonance with the approved scientific practices and assistance of the personnel of the Philippine Fisheries Commission (Presidential Directive of January 16. then Acting Director of Forestry Jose Viado issued a Letter Certification addressed to the Director of Lands regarding the classification of the property covered by Ordinary Fishpond Permit No. CEB-9563. as well as other areas previously managed by other fishpond permit grantees whichDemocrito Mendoza.000 hectares of fishpond areas on or before February 28. the Municipal Council of Liloan. and the Directors of the Bureaus of Fishery. filed an application for sales patent[4] to purchase the area covered by Ordinary Fishpond Permit No. Sr. is within the Timberland Block-B of LC Project No.635 hectares. among other offices. However.[5] The fishpond permit indicated that the area covered by said permit was only 70.07 hectares shown on Cebu PMD No.134 hectares. Sr. with an area of 87. upon resurvey by the Bureau of Lands. thereby constituting a continuing committee to accomplish the following: 1. respectively. was issued Ordinary Fishpond Permit No. Sr.[3] Thereafter. on 16 January 1967. the Secretary of Public Works and Highways. On 17 August 1970.25 hectares within Silot Bay. 29 ofLiloan. to the following conditions: xxxx 2. CV No. secured and submitted separate certifications from concerned government agencies such as the Provincial Engineer of Cebu. Cebu. the Chairman of the Board of Governors of the Development Bank of the Philippines.. assailing the Decision[1] of the Court of Appeals in CA-G. The present controversy involves a considerable spread of Silot Bay situated in Liloan. F-2166-J for an area of 6. and Lands. dated 30 March 2001. On 26 July of the same year. 1967. Cebu. Cebu. 1379) is.

executed a ³Deed of Exchange´ wherein Lot No. Sr. Subsequently.800. Providing for the Accelerated Development of the Fishery Industry of the Philippines. 1-B.600. 1-C. Mendoza at P200.[8] On 18 January 1973. such as tidal swamps. Vilma. In the First Indorsement of then Secretary of Agriculture and Natural Resources Arturo Tanco. Sr. Democrito Mendoza. On 26 June 1974.. (VI-I) 41-A on grounds of justice and equity. dated 5 March 1974 to the Office of the President. and his three children Gwendolyn. Cebu. Jr. notices of sale were published in the Nueva Era and the Mindanao Mail.00 per hectare or P4. both in Cebu City. 1-C Si(F) (VI-I) 42-D.[13] Following the registration of the sales patents with the Register of Deeds of Cebu. Sr. Lot No.[7] was issued on 9 November 1972. Jr.[15] Vilma. while the lot retained by Democrito Mendoza. 1-B-2 and 1-C-2. the area was intended for development by the local government as a tourist attraction. The portion tendered to MENCA was later on known as Lot No. Thereafter.. whereby he ceded to MENCA Lot No.477. to Gwendolyn C. 1-D Si(F) (VI-I) 42-D. executed a ³Contract of Exchange of Real Properties for Shares of Stock´ on 8 January 1982. The portion of the lots originally belonging to Gwendolyn and Vilma that were given to Jacinto Velez. had caused the property to be subdivided into Lots 1 and 2. Sr. was denominated as Lot No.¶s request for the issuance of a patent to the land covered by Sales (Fishpond) Application No. to Vilma C. Sr.. Lot 1 was further subdivided into four. then Liloan Mayor Cesar Bugtai filed a letterprotest with the Director of Lands objecting to the proposed sale of the property. however. Prior to the formal award of the subject property. Clave issued a Memorandum informing the Secretary of the Department of Natural Resources that President Marcos had approved the recommendation advising approval of the request of Democrito Mendoza. Casanova recommended the approval of Democrito Mendoza. 1-A & Lot No.838 square meters and Lot 2 with an area of 241. Jr. The same were posted in conspicuous places within the vicinity of the property subject of the sale and on the bulletin boards of the Municipal Hall of Liloan. The opposition of Mayor Bugtai was subsequently recommended for dismissal by the Bureau of Lands for lack of merit. Casanova issued an Order awarding the sales patents over the disputed property toDemocrito Mendoza.¶s request.. Lot No. made an assignment of his rights and interests over Lots 1-B. Gwendolyn. Democrito Mendoza. According to Mayor Bugtai.[9] Vilma. and Democrito.00 per hectare or P4. for the issuance of a patent over the disputed property. while the lots retained were labeled Lots No. Thereafter. and which are not needed for forestry purposes were declared available for fishpond purposes and automatically transferred to the Bureau of Fisheries for its administration and disposition. then Acting Director of the Bureau of Lands Ramon N. 1-B. Sr.00 per hectare or P4. Mendoza at P200. Whereupon all public lands.00 per hectare or P4. Original Certificates of Title were each issued to Democrito. In the interim. Democrito Mendoza. wherein Democrito Mendoza. Mendoza at P200. and Carmen Velez-Ting were thereafter denominated as Lots No. was declared winner. Democrito Mendoza. mangrove and other swamps. retainedLot 1-A[12] with an area of 215. Jr.0000 hectares. and Carmen Velez-Ting in exchange for properties enumerated in said instrument.objections to his application. Acting Director of the Bureau of Lands Ramon N. District VII-I. Casanova was favorably endorsed. marshes. 1-A-1. Sr.. including public lands left dry during the lowest low tide and covered by water during the highest tide. it was ascertained that there was no objection to said application and that the same did not interfere with any function or proposed project of the government. the District Land Office of Cebu City proceeded with the scheduled auction sale on 19 January 1973. for himself and on behalf of his daughters Gwendolyn and Vilma. and 1-D in favor of his three children Gwendolyn. Jr. 2. then Presidential Executive Assistant Jacobo C. Vilma. For himself.00. Democrito Mendoza.0000 hectares. and 1-D.[17] On 8 January 1982. . in consideration of shares of stock in MENCA Development Corporation (MENCA) worth P77. 1-A-2. respectively. namely Lots 1-A. Jr. 1-A-2 and a portion of each lot belonging to Gwendolyn and Vilma. Based on these certifications issued upon DemocritoMendoza. 43. Presidential Decree No. ponds and streams within public lands. being the sole bidder thereat. a day before the scheduled auction sale of the disputed property. Si(F) (VII) 42-D are hereby awarded to Democrito T. were relinquished to Jacinto Velez.[14]Gwendolyn. Sr. to Democrito C. Jr. Subsequently.61 square meters. On 21 May 1974.600. the portions of the land applied for which correspond to Lot No.62 for the whole tract of 23. to wit: It appearing that the proceedings had in connection with the above-noted applications were in accordance with law and existing regulations. Sr. Si(F) (VI-I) 42-D.00 for the whole tract of 23.283. Sr. filed their respective sales patent applications for the property assigned to them by their father.[16] and Democrito. Mendoza. Sr.00 for the whole tract of 24. the recommendation of Acting Director of the Bureau of Lands Ramon N. 1-A. and Democrito..3881 hectares. Sr. 1-B-1 and 1-C-1.0000 hectares and Lot No.[11] all surnamed Mendoza. Jr. Despite said opposition by the municipal mayor. and of the Bureau of Lands. 2 and a portion of Lot No. On 9 July 1982. 1-C. at P200. respectively. in addition to the publication in the Official Gazette.[10] and Democrito.00 for the whole tract of 23.

468 shares of stock in said corporation. It is further maintained that the sales patents were issued in violation of Section 23 of Presidential Decree No. the primordial issue is whether or not appellants are qualified to own the property subject matter of this controversy. Inc. rendered a Decision declaring the sales patents. Gwendolyn Mendoza and Vilma Mendoza. It added that. . claiming that its members have a legal interest in the cancellation of the sales patents as they are residing around Silot Bay and deriving their income from fishing in the said disputed area. on behalf of his three children Gwendolyn. the Republic of the Philippines. Vilma. together with the Register of Deeds of Cebu City. 0-9981 and 0-9982 issued to defendants Democrito T. filed a Complaint in Intervention on 24 October 1991. 7. Sr. Sometime in 1988.Finally. Vilma. 07-01-00026 as inalienable and non-disposable being parts of Silot Bay. showing that there were alleged irregularities in the issuance of the sales patents awarded to the Mendozas. On 8 July 1991. on 9 May 1988. 188. Jr. Jr. premises considered. (2) Ordering the said defendants to surrender to the defendant Register of Deeds for the Province of Cebu their respective owner¶s duplicate copies of Original Certificates of Titles Nos. 1-B-2. is barred from asserting ownership thereof in view of Section 11. when in fact the same form part of Silot Bay being used as communal fishing grounds by the residents of Liloan. trading Lots No. herein petitioner Republic of the Philippines filed an Amended Complaint impleading as additional party-defendants MENCA Development Corporation. the appellate court rendered the herein assailed Decision. and hence. Cebu. 0-9980. as follows: One. judgment is hereby rendered: (1) Declaring Sales Patents Nos. filed with the RTC of Cebu. and Carmen Velez-Ting. the pertinent portions of which state: The separate appeals interposed by the defendants are impressed with merit. a complaint for Cancellation of Sales Patents and Titles againstDemocrito Mendoza. the Mendozas and MENCA Corporation lodged an appeal with the Court of Appeals. 09983. 0-9983. absolutely null and void ab initio. that is whether or not said property is alienable and disposable and. Thus: WHEREFORE. While Silot Bay is a potential fishpond area. the Silot Bay Fisherman¶s Association. appellant Democrito. and 1-D in exchange for 8. Sr. there was irregularity in the issuance of the sales patents covering the subject properties since the area in question forms part of SilotBay and used as communal fishing grounds by the residents of Liloan. there must be. Jacinto Velez. based on the information gathered by the DENR. as erroneously concluded by the court a quo.. The Court cannot bring itself to agree to the rationale for the trial court¶s posture. Mendoza.[19] Complainant also contends that the issuance of the sales patents was attended by fraud and misrepresentation in that it was made to appear in the applications for sales patents that the areas sought to be patented were alienable and disposable tracts of land. Our reasons are. Democrito Mendoza. According to the complaint. Acting thereon. assuming the availability for disposition of the area applied for. Democrito Mendoza.[20] Aggrieved by the aforequoted Decision.. On 30 March 2001. 704. Sr. on 3 June 1996. Cebu City. as well as the original certificates of title issued to theMendozas as null and void ab initio. therefore. After trial on the merits. non-alienable. 189 and 190 together with its corresponding Original Certificates of Titles Nos. Lot 1-C and Lot 1-D Psd. 187. Cebu.. hence. and his three children Gwendolyn. the trial court. Implied in this issue is a more basic one. Jr. The lower court resolved the issue in the negative on the main reasoning that Silot Bay is a ³communal fishing ground´. and that the area in question is actually part of the seabed.. for it to come within the term ³communal fishing ground´. Lot 1-B. (3) Declaring Lot 1-A. xxx. Sr. executed another ³Contract of Exchange of Real Properties for Shares of Stock´ with MENCA. represented by the Director of the Land Management Bureau. Article XIV of the 1973 Constitution. a protest was filed by the fisherman-residents of Liloan against the issuance of the sales patents to the Mendozas. and. and Democrito. the Department of Environment and Natural Resources (DENR) Regional Office No.[18] which prohibits the disposal by sale of public land suitable for fishpond purposes. a declaration to that effect by the appropriate agency. As We see it. and Democrito. subject to private appropriation through modes recognized under the Public Land Act. 0-9980. and directing the said defendant Register of Deeds for the Province of Cebu to cancel the same and all the patent titles emanating or springing therefrom. conducted an investigation. 0-9981 and 0-9982. On 23 October 1990. Fisheries Decree of 1975. is not alienable and disposable.. Subsequently.. Jr. the property involved in this case is not a communal fishing ground. 1-C-2.

now the DENR. that the area in question cannot be legally titled because it is underwater may be accorded some cogency but for the hard fact that it is being titled ³for fishpond purposes only´. on the consistent ground that the applicant had complied with all the requirements of the law for a sales patent grant. into four (4) parts. Third. supra. the sales patents and the original certificates of titles issued in favor of the Mendozas are presumptively legal and valid. for argument. Rubenecia vs. Jr. P. et al. be successfully challenged on the ground of fraud or misrepresentation. with the end view of attaining selfsufficiency in fish production. the sales patents and certificates of titles issued in the name of the Mendozas cannot. Sr. what a subordinate has done. with each part containing an area not exceeding twenty-four (24) hectares in the names of Democrito. We refer to the issuance on January 16. namely: the DANR. In this regard. consistent with the oft-repeated pronouncements that courts will not interfere on matters which are addressed to the sound discretion of government and/or quasi-judicial agencies entrusted with the regulation of activities coming under the special technical knowledge and training (International Container Terminal Service. in the manner the Mendoza children acquired their sales patents was remedied by the positive actions of the very officials charged by law with the administration and disposition of alienable public lands. the government if deprived of property through fraud. as a necessary consequence of Democrito. 244 SCRA 770). It cannot be overemphasized that the prerogative of classifying public lands pertains to administrative agencies which have been specially tasked by statutes to do so. xxxx This Court. Democrito. as shown by a Land Classification (LC) map. Sr. Article XIV of the 1973 Constitution. Gwendolyn Mendoza and Vilma Mendoza. after the lapse of one (1) year from their issuance. Otherwise. the same to be declared alienable and disposable to be titled in the name of the actual occupants thereof. limiting the acquisition of alienable land by individuals to twenty-four (24) hectares ± came with the approval of the Director of Lands and the Secretary of Agriculture and Natural Resources. that an interplay of events had supervened to alter this reserved nature of the bay. 241 SCRA 165. xxx. Sr. supra. xxx As may be noted. Failing in this.. Jr. 1967 of the Presidential Memorandum. No.. as the trial court seems to imply. and as intervenor-appellee have at every turn postulated. developmental. Alba vs. The reason is simple. vs. Casa Filipinas Realty Corporation vs. as what precisely appears in the sales patents. or Democrito. Fish are born and grow in water. In a very real sense. as adopted by the trial court. and two (2) of its bureaus. Sr. CA. Macaraig. Sr. if supported by substantial evidence and approved by the DENR Secretary of Agriculture. bidding and other legal requirements necessary for securing sales patents. What the records yield is the fact thatSilot Bay. whereunder then President Marcos. must institute the proper petition in court for the reopening and review of the decree of registration ± including of course the patent issued ± within one (1) year from and after the date of entry of such decree of registration. It may well be noted. vs. the one-year prescriptive period in the underscored portion of Section 32. therefore. NLRC. The unyielding posture of the appellee. The actuality of the Director of Lands recommending and the Secretary of Agriculture and Natural Resources favorably endorsing the request of Democrito. It has to be pointed out. by way of reclassification.We have carefully perused the records before Us and found nothing therein evidencing such a declaration by the DANR respecting Silot Bay. if any there be. the covered area is deemed to have been brought under the aegis of the Torrens system entitled to all guarantees implied in such system of registration. 257 SCRA 411. jurisprudence reminds that decisions of the Director of Lands on disputes involving patents to public lands. the Bureau of Lands and the Bureau of Forestry. Accordingly. Sr.. xxxx Fourth.D. 43. during the evaluation process. and subsequently Presidential Decree (PD) No. Fish do not thrive on dry land. Nitorreda. the decree becomes inconvertible even as against the . it behooves this Court to refrain from looking into the underlying reasons or grounds which impelled the classification and declaration of Silot Bay as timberland or from questioning the wisdom such classification or declaration. the Director of Lands. citing other cases). has indeed met all the requirements to justify a public land award through sales.. citing Ynson vs. 256 SCRA 124. After the due registration of a patent and the issuance of the corresponding title. the Mendozas. Much was made by the trial court of the splitting up of the sales patent issued to Democrito. publication. Inc. may allow that Silot Bay had once upon a time been duly reserved or declared as a communal fishing ground. Second. that the split ± obviously effected in view of Section 11. would have simply denied due course to his application. was once categorized as timberland. the flaw. Sr. Office of the President. 254 SCRA 753. however. It may be worth mentioning that the Director of Lands had dismissed the protests filed by then Liloan Municipal Mayor Bugtai. 1529 applies even to the government. directed the identification of potential fishpond areas. Hence. Last but not least. CSC.. or to undo. 299 SCRA 491. for the issuance of what turned out to be the underlying sales (fishpond) patent is indicative of Democrito¶s compliance. Ines MelaleForest Products Corp. There can hardly be any quibbling regarding the power of the then President to promulgate the twin issuances. in his behalf and in behalf of his children appear to have complied with all the documentary. however. against the Sales (Fishpond) Patent application ofDemocrito.¶s compliance with the legal requirements referred to above. and that issues involving basically technical matters deserve to be disentangled from undue interference by the courts (Sta. the President¶s act of approving the issuance of the requested sales (fishpond) patent cannot but be viewed as final confirmation that Democrito. are generally conclusive.

given that those who may be minded to question their validity have not done so within the period of one (1) year from the date of their registration. can no longer assail the issuance of the patents and titles to the Mendozas on the ground of fraud or irregularity. 1974. x x x. and which has thus developed an expertise on the subject. 1990 of the complaint contesting their validity on the ground of fraud. For. the very same agency ± the Bureau of Land Management. It is indeed illogical and a cruel breach of the sporting idea of fair play. if not absurd. it has been the long standing policy and practice of this Court to respect the conclusions arrived at by quasi-judicial agencies x x x which by the nature of its functions. goes against well-settled principles of justice and fair play. not demonstrated. if the very same government agency which vigorously recommended. the evidentiary value of antique map like Map 1391 ought to be accorded weighty consideration. To Our mind. as what the Bureau of Land Management has done in this case. . too. Hence. xxxx Then. and. therefore. ± which presumptively evaluated with thoroughness and recommended the grant of Sales (Fishpond) Application No. 1990. at this late hour. have become incontrovertible and are binding against all persons. including the government and its branches. which in net legal effect partakes of a petition for a reopening or review of the validity of the issuance of the sales patents. As it were. Suffice it to state that to go back on one¶s word and to change a stand volte face. the issuance of Sales Patents to Democrito Sr. pointedly stated that: ³This Court is mindful of the well entrenched principle that the government is never estopped from the collecting of taxes because of the mistakes or errors on the part of its agents.government itself. in the instant case. the government agency concerned and the intervenor are guilty of laches and are now precluded from questioning the validity of such grants. x x x´ The Bureau of Land Management and the intervenor-appellee. the government is estopped to ask for the cancellation of the sales patents and titles issued in the names of the Mendozas. what with the reality that no evidence whatsoever was adduced by the Republic to sustain such a finding. The trial court deduced that the 1940 map wherein Silot Bay is classified as timberland is incorrect due to misleading information wittingly or unwittingly supplied by the government agencies concerned. has. It bears stressing herein that LC map 1391-Liloan of the Land Classification Project of the Province of Cebu classified Silot Bay as ³timberland´. because the sales patents in question. and. Fifth. the lower court makes light of LC Map 1391 prepared in 1940. While concededly. x x x. by reason of the lapse of more that sixteen (16) years from the issuance of the patents and the titles in question up to the filing on October 23. xxxx As between the aforesaid official findings of experts and the bare unsupported conclusions of the lower court. the filing of the instant action for cancellation on October 23. The conclusion reached by the lower court is assumed. Moreover. is dedicated exclusively to the study and consideration of x x x problems. (VI-I) 41-A of Democrito Sr. such land as disposable and alienable by sale or other modes of ownership transfer. Precisely. the choice is not hard to make. It cannot be taken to overturn the legal presumption that official duties have been regularly performed. and the certificates of title issued by virtue thereof.. This is as it should be. What compounds matters is that the same agency led Democrito Sr. 1973 and paid the price for the area sold. for purposes of administration and disposition. through indubitable public documents and authentic writings. x xx. could not have been declared as alienable and disposable. 303 SCRA 508. x x x. We note that the primary basis of the lower court in declaring the nullity of the sales patent and titles of the appellants is its finding that the area covered thereby is ³beyond the commerce of man´. there is something disconcerting. Evidently. acting on such belief. would now be permitted to deny and successfully impugn in this action its official acts. 516.. participated in the bidding held on January 19. but this rule admits of exceptions in the interest of justice and fair play x x x. execute a 180 degree turn to argue and say that the same is not valid and illegal. formerly called Bureau of Lands. xxxx Finally. to classify. the Supreme Court in Commissioner of Internal Revenue v. Court of Appeals. would now trifle with its own processes. in like manner. To say the least. the antiquity of documents impart then with greater probative value. he having complied with all the requirements of the law for the grant. only the executive and possibly the legislative departments have the power to transfer. to believe that he has truly complied with the law and who. with the view We take of the case. since the sales patents in question were registered a little less than a month after they were issued on September 25. it is absolutely wanting in factual support. definitely prescribed. lands of the public domain from one class to another. any time. unless an abuse or improvident exercise of its authority is shown. there is the legal stricture that the government is not estoppedby the mistakes committed by its agents. under the Revised Rules on Evidence.

filed their separate appeals before this Court. and not on marshy lands. the sales patents and certificates of title . It is true that. According to petitioners. and (3) all the derivative titles emanating therefrom in the names of MENCA Development Corporation and Carmen Velez-Teng and Jacinto Velez. rivers or lakes. Foregoing premises considered. Jr. 0-9981. (The questioned sales patents do not fall within the exception as they were issued on September 25. Edgardo Lipang explained in his testimony that the subject property is deep even during low tide and navigable by boats which further indicate that the area is part of the seabed rather than the foreshore. which provides that no public land suitable for fishpond purposes shall be disposed by sale except sales patent already processed and approved on or before November 9.. the appellate court failed to consider that Silot Bay is a navigable body of water and by its very nature and inherent character is of public dominion. (c) The issuance of the sales patents was attended by fraud and misrepresentation committed by the applicants in that it was made to appear that the areas applied for are alienable and disposable tracts of land. the Court of Appeals did not consider the findings of the investigation team from the DENR which discovered irregularities in the issuance of the sales patents. therefore. the lower court committed a serious error in ruling that Silot Bay cannot be declared as alienable and disposable. as well as the Original Certificates of Title issued to the Mendozas having been declared valid. Sr. 0-9980. 1972 subject to the condition that such application covers a fully developed fishpond not exceeding twenty-four (24) hectares. Cebu. a former Geodetic Engineer of the Community and Environment Resources Office in Cebu City. In resolving the instant controversy. petitioners assert that the Court of Appeals failed to give weight to the testimony of Edgardo Lipang. petitioner explains that the court a quo found that the sales patents were issued on the basis of false and misleading information supplied by the Mendozas to the government agencies which processed and granted their application. 187. Additionally. then. clearly in violation of the constitutional limitation of 24 hectares. Petitioner Republic of the Philippines added that it was erroneous for the appellate court to conclude that the Mendozas complied with all the requirements for the issuance of sales patents. to wit: (a) The areas covered by the sales patents are part of Silot Bay and used as communal fishing grounds by Liloan residents and. (2) the corresponding Original Certificates of Titles Nos. legal and binding as against the whole world. His testimony established that the disputed area were found to be at the center of Silot Bay. We answer in the negative. when in truth and in fact.[21] The trial court¶s Decision having been reversed and the Sales Patents. which is a condition that must first be complied with before the grant of a sales patent. Petitioners maintain that the Court of Appeals erred in declaring that the area covered by the sales patents are not communal fishing grounds due to the absence of any declaration to that effect by the appropriate government agency. who was authorized by the trial court to conduct a resurvey of the disputed area. are all valid. 1974). Inc. On the Court of Appeals¶ ruling that the government is now precluded from bringing an action for annulment of title after the lapse of one year from the issuance of the certificate of title. hence. petitioners call attention to the previous rulings of this Court that estoppel does not operate against the government. thus there is no need for a declaration by any appropriate government agency that it is a communal fishing ground before Silot Bay may be recognized as such. According to petitioner. and that his act of circumventing the constitutional prohibition by distributing the area applied for to his three children cannot be legally authorized since his children were not qualified to apply for sales patents because not one of them had an existing lease over the property. was for an area of 92.Unquestionably. it is erroneous for the appellate court to say that the government is already estopped from seeking the cancellation of these sales patents since the Republic of the Philippines is never estopped by the mistakes or error committed by its officials or agent. petitioners Republic of the Philippines and Silot Bay Fisherman¶s Association. 189 and 190 issued in favor of the Mendozas. the waters of which flow fromCamotes Sea where marine organisms like sea urchins thrive. as the Court of Appeals upheld. petitioners contend that said ruling is diametrically opposed to the pronouncement of this Court that the Republic of the Philippines is not precluded from bringing an action for annulment of title and reversion of land to the public domain even after the lapse of the one-year period. In the case at bar. they form part of Silot Bay being used as communal fishing grounds by the residents of Liloan. 0-9982 and 0-9983 issued in favor of the Mendozas. 704. we shall foremost settle the issue of whether or not the government is now precluded from bringing an action for the annulment of title and reversion of the disputed property to the public domain after the lapse of the one-year period from registration thereof. is not alienable and disposable. 188. We rule and so hold that (1) Sales Patents Nos.3881 hectares. Lastly. the government stresses the fact that the sales patent application of Democrito Mendoza. Moreover. Furthermore. (b) The sales patents were issued in violation of Section 23 0f Presidential Decree No.

Mendoza.. Sr. that this Court. for to hold that a title may become indefeasible by registration.. even if such title had been secured through fraud or in violation of the law would be the height of absurdity.issued in the name of the Mendozas cannot. the covered area is deemed to have been brought under the aegis of the Torrens system entitled to all guarantees implied in such system of registration. the adoption of the 1973 Constitution during the pendency of the sales patent application of Democrito T. while the land covered thereby was sold at public auction in which the applicant is the successful bidder and has been considerably improved and developed.. courts should refrain from looking into the underlying reasons or grounds which impelled the classification and declaration of Silot Bay as timberland and its subsequent release as alienable and disposable land. Casanova. following the above-noted ruling of the Secretary of Justice. yet from the letter of then Acting Director of the Bureau of Lands Ramon N.[27] (Emphasis ours. Hence. to wit: Under Opinion No.[24] Nevertheless. has declared too in numerous cases that the lapse of the one-year period within which a decree of title may be reopened for fraud would not prevent the cancellation thereof by the government. whilst we agree with petitioners that the government is not precluded from conducting an investigation as to how titles to property formerly belonging to the public domain has been acquired notwithstanding the lapse of the one-year period for bringing an action for the annulment of title and reversion of property to the public domain. to exemption from constitutional injunction.[25] It should be stressed that the function of administering and disposing of lands of the public domain in the manner prescribed by law is not entrusted to the courts but to executive officials. it is evident that the Bureau of Forestry released Silot Bay as alienable and disposable by virtue of the Memorandum issued by then President Marcos on 16 January 1967which clearly empowered said bureau to identify and locate the 700. Jr. thus. In other words. and the findings of the appellate court that the Mendozas have complied with all the necessary requirements under the law for the issuance of the sales patents. Clave.e. we are constrained to uphold the ruling of the Court of Appeals regarding the authority of administrative agencies to classify Silot Bay as timberland and its subsequent release as alienable and disposable. Gwendolyn Mendoza. on the other hand. it can be deduced that had it not been for circumstance beyond the applicant¶s control. has in good faith made considerable investment in the development and improvement of the fishpond area and could have already obtained a title thereto were it not for circumstances beyond his control. it cannot be gainsaid that the prerogative of classifying public lands pertains to administrative agencies which have been specially tasked by statutes to do so and that the courts will not interfere on matters which are addressed to the sound discretion of government and/or quasi-judicial agencies entrusted with the regulation of activities coming under their special technical knowledge and training. Mendoza. were properly issued. there would not have been any obstacle for its approval by the Office of the President. no formal award has up to now been issued by this Office. After a careful perusal of the records of the case.) From the abovequoted letter. 1974 of Presidential Executive Assistant Jacobo C. Court of Appeals[23]: [T]he indefeasibility of a title over land previously public is not bar to an investigation by the Director of Lands as to how such title has been acquired. It is equally true however. in the absence of any showing that there was fraud or a violation of any law.000 hectares of fishpond areas and to release said areas as alienable and disposable. As the applicant. be successfully challenged on the ground of fraud or misrepresentation for the reason that after the due registration of a patent and the issuance of the corresponding title. there is no need for a declaration by any appropriate government agency that it is a communal fishing ground before Silot Bay may be recognized as such. In the case of the abovementioned application.[26] And as such. if the purpose of such investigation is to determine whether or not fraud has been committed in securing such title in order that the appropriate action for reversion may be filed by the Government. will refrain from questioning the wisdom of such classification or declaration. on considerations of equity and justice. Despite petitioners¶ assertion that Silot Bay is a navigable body of water and by its very nature and inherent character is of public dominion. It may also be mentioned that this case does not fall under any of the categories of sales applications which may be given due course and issued patent pursuant to the policy guidelines prescribed by the Honorable Secretary in his memorandum dated February 18. Although it may seem that upon the advent of the 1973 Constitution. We rule that the sales patents handed out to Democrito T. Hence. Sr. after the lapse of one year from their issuance. Sr. it has been held that ³even sales application already awarded are not to be exempted from constitutional injunction regarding the acquisition of public lands for the reason that other requirements have still to be satisfied before a patent may be issued´. From the facts of the case. Sr. had complied with all the necessary . it is believed that he is entitled. Mendoza. the applicant may be considered not having acquired vested rights over the land applied for prior to the advent of the New Constitution which will entitle him to exemption from the constitutional limitation. however. 1974. VilmaMendoza and Democrito Mendoza.. the approval of the sales patent application of Democrito T.[22] As held in the case of Republic v. 64. a conflict had arisen with respect to the then pending sales patent application of DemocritoMendoza.. i. in view of the clear legal directive by which said area was released as alienable and disposable. the courts. taking into account the fact that Democrito T. was still favorably recommended on grounds of equity and justice. Sr. Mendoza. series of 1973 which was promulgated in the meantime by the Secretary of Justice and given clearance for implementation by the President per Memorandum dated February 6.

in its effort to recover ill-goten wealth. must be specifically alleged and proved. Hernaez vs. each comprising an area not more than 24 hectares. viz: "Estoppels against the public are little favored. like all general rules. well-within the constitutional limitation.[29] There is very little evidence in this case to convince Us that the Mendozas were able to secure their sales patent by fraud or misrepresentation. then Acting Director of the Bureau of Lands Ramon N. The assertion of petitioner Republic that the issuance of the sales patents was attended by fraud and misrepresentation is based solely on the claim made by the Mendozasin their sales patent applications that the areas sought to be patented were alienable and disposable tracts of land. Sandiganbayan. or in some manner injure him.. New Civil Code. even as against the petitioner Republic. Petitioner Republic has failed to prove fraud on the part of the Mendozas with respect to the issuance of the sales patents. 3 Aquino. In the absence of any evidence of fraud or violation of law. In this jurisdiction. 201 SCRA 299. .. and like any other contract. freely and in good faith executed between the parties thereto is susceptible to disturbance ad infinitum. has been squarely debunked in light of the unmistakable legal basis by which the appropriate administrative agency classified the areas applied for as alienable and disposable. The Court countered: "We agree with the statement that the State is immune from estoppel. p. p. The area applied for in each of the Mendozas¶ sales patent applications were. Such subdivision of the area originally applied for by Democrito Mendoza. Court of Appeals. A different interpretation will lead to the absurd scenario of permitting a party to unilaterally jettison a compromise agreement which is supposed to have the authority of res judicata (Article 2037. which peculiar circumstances are absent in the case at bar.[28] It must be stressed that mere allegations of fraud are not enough. amended his sales patent application while his three children filed their own applications for their respective parts. Civil Code Annotated. 1990 ed. tried to skirt the application of estoppel against it by invoking a specific constitutional provision. They must be applied with circumspection and should be applied only in those special cases where the interests of justice clearly require it. Moreover. While the general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or agents. the same form part of Silot Bay which were being used as communal fishing grounds by the residents of Liloan. Civil Code. and must not play an ignoble part or do a shabby thing. Democrito Mendoza. That the subdivision was executed overtly actually establish the good faith of the Mendozas to comply with the Constitutional and statutory provisions on sales patent applications. the Acting Director of Lands would not have recommended the approval of said application despite the seeming constitutional impediment. Democrito Mendoza. Kao. New Civil Code). 46. Cebu. was made with the full knowledge and the subsequent approval of all the appropriate government authorities. Such an assertion. in fact. 711.. Although the State's right of action to recover ill-gotten wealth is not vulnerable toestoppel[. The burden of proving that actual fraud exists rests on the party alleging it. the government. like all general rules. and subject to limitations x x x the doctrine of equitable estoppelmay be invoked against public authorities as well as against private individuals.] it is non sequitur to suggest that a contract. Sr. otherwise. 7th ed.requirements for the issuance of sales patent covering the disputed area. by then. Sr. it is worth noting that in order to conform to the prohibitions imposed by the 1973 Constitution which limits the purchase of lands of the public dominion to 24 hectares per individual. Sr. 120 SCRA 186 [1983]). Nevertheless. this is also subject to exceptions.. Aquino. Accordingly. Sr. 17 SCRA 296 [1966]. the title of the Mendozas over the disputed property has now become indefeasible. has the force of law between parties thereto (Article 1159. They should not be invoked except in rare and unusual circumstances. the government must not be allowed to deal dishonorably or capriciously with its citizens. However. Republic v. appears to have complied with all the legal requirements for securing the sales patents. Casanova recommended the approval of said application in the spirit of justice and equity. As stated by the Court of Appeals. There is nothing to suggest that it was done illicitly or fraudulently. Court of Appeals." In Republic v. this is also subject to exceptions. fraud is never presumed ± FRAUS EST IDIOSA ET NON PRAESUMENDA. and assigned his rights over three parts to his three children. 306 [1991].[30] to wit ± The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or agents. subdivided the property in question into four. however. 198. Intentional acts to deceive and deprive another of his right. and may not be invoked where they would operate to defeat the effective operation of a policy adopted to protect the public. but this concept is understood to refer to acts and mistakes of its officials especially those which are irregular (Sharp International Marketing vs. Democrito Mendoza. 6 Padilla. We recognized such exceptions in Republic v. when.

granted. WHEREFORE. If the titles of innocent buyers were recognized and protected in the afore-mentioned circumstances. Based on their patents. we note that the land covered thereby is either a part of the forest zone which is definitely non-disposable. and. Agunoy. In Republic v. Cebu. as in Acot. otherwise know as the Land Registration Decree. error or irregularity in the approval of the sales patent applications and issuance of the certificates of title in the name of the Mendozas. the State can only be immune from estoppel as regards mistakes. the District Engineer of Cebu. or that said patent and title are still in the name of the person who committed the fraud or misrepresentation. It is thus understandable why petitioner chants the dogma of fraus et jus nunquam cohabitant. even when the original title to the property was obtained through fraud. When the Mendozas¶ sales patents were registered. then the State cannot invoke its immunity from estoppel. in either instance. and the President of the Republic. as well as in those other cases where the doctrine of fraus et jus nunquam cohabitant was applied against a patent and title procured thru fraud or misrepresentation. rights. and the Secretary of Public Works and Highways. CV No. as in Animas.R. but only has to rely on the title. then their acts in relation thereto estop the Republic from questioning the validity of the said sales patents and the certificates of title. the Mendozas were given clearances and certifications on the lack of objections to their sales patent applications by the Director of Forestry. According to Section 103 of the Land Registration Decree. CA and Del Mundo and Director of Lands vs. their sales patent applications were approved by the Director of the Bureau of Lands. Their titles.[31] The Mendozas¶ certificates of title were clean and. there were yet no innocent third parties standing in the way. Significantly. the instant petition is hereby DENIED. the same shall be brought under the operation of the said Decree and shall be deemed to registered lands to all intents and purposes under the Decree. and interests to the fishpond area must be respected and protected.. Jr. error or irregularity in the performance by the concerned government officials of their duties. et al. 57069 is herebyAFFIRMED.. Republic vs.[32] We refused to revert the land in question to the public domain despite the fact that the free patent thereto was secured by fraud since the same land already passed on to purchasers in good faith and for value ± There can be no debate at all on petitioner¶s submission that no amount of legal technicality may serve as a solid foundation for the enjoyment of the fruits of fraud. and Carmen Velez-Ting were induced to acquire the same from the Mendozas. et al. or conveyed to any person. Abanilla. He is charged with notice only of such burdens and claims as are annotated on the title. they were brought under the operation of Presidential Decree No. however. the Municipal Council of Liloan. whenever public lands is by the Government alienated. That they did so in good faith and for value was not even questioned herein. MENCA Corporation. SO ORDERED. In the Petition at bar. Finally. In the absence of mistake. Subsequently. And a well-settled doctrine in Our jurisdiction provides that one who deals with property registered under the Torrens system need not go beyond the same. and the Commissioner of Customs. Animas. . Jacinto Velez. the Mendozas were able to acquire original certificates of tile from the Registry of Deeds. Sr. the Secretary of the Department of Natural Resources. Provincial Engineer of Cebu.Based on the foregoing. it should be borne in mind that that the contested areas and titles thereto had already passed on to third parties who acquired the same from theMendozas in good faith and for value. errors or irregularities committed by its officials or agents. thus. Without any allegation and evidence that these government officials committed any mistake. The Decision of the Court of Appeals in CA-G. in the cases cited by petitioner Republic. then the titles of the purchasers in good faith and for value of the fishpond areas in the present case better deserve our recognition and protection considering that the sales patents and original certificates of title of their predecessors-in-interest were found to be legally and validly issued. premises considered. 11529.

and her daughter Marykane Cabrera for µQuieting of Title to Real Property. PLS-287.´ The trial court¶s disposition reads: ³WHEREFORE. µONE HALF PORTION OF LOT NO.R. but no concrete action on the matter was pursued by Virgilia Orais until February 11. No. Cateel Cadastre. On July 27. Virgilia Orais was issued Free Patent No. µ2¶) and pinpointed and identified during the ocular investigation as to its extent and boundaries of the said portion bought by defendants Felicidad Vda. the Deed of Sale was not signed by Felicidad. 2239. 4). 2239 actually and physically possessed and occupied by the defendant as seen from the sketch plan of Engr. 1950.¶ . Damages with Preliminary Mandatory Injunction. A). now a widow. It was explained by Felicidad Cabrera that the Deed of Sale was signed by Albertana Teokemian. eastern portion. Alberto (sic. However. Original Certificate of Title No. 1993 in CA-G. 1965 as evidenced by a Certification of an officer-in-charge of the Office of the Clerk of Court. Virgilia Orais¶ predecessor-in-interest. SO ORDERED. Rodolfo and Jimmy Orais went to Cateel. more or less¶ (Exh. the decision of the lower court is hereby REVERSED and judgment is hereby entered ordering defendants Felicidad Vda. The property was owned in common by Daniel and Albertana and their sister Felicidad Teokemian. because the whole of Lot 2239 was adjudicated to Albertana in a decision of a cadastral court dated June 8. JR. 47 CABRERA VS CA TORRES. having inherited the same from their late father. not by Felicidad Teokemian. B) was executed by Daniel Teokemian and Albertana Teokemian in favor of Andres Orais over a parcel of unregistered land situated at Abejod. although her name was printed therein as one of the vendors. Baganga. the plaintiff is hereby ordered: (a) to execute a reconveyance within thirty (30) days after this decision shall have become final and executory in favor of defendant Felicidad Vda. viz: ³On January 16. Baganga.: Assailed in this Petition for Review on Certiorari is the Decision[1] of the respondent Court of Appeals dated January 7. Davao Oriental and confronted the Cabreras of the latter¶s alleged encroachment and illegal occupation of their sister¶s land. 3). de Cabrera and Marykane Cabrera to vacate the portion of Lot 2238 occupied by them and surrender possession thereof to plaintiff. Branch 7.00. Davao Oriental in Civil Case No. De Cabrera from Felicidad Teokemian. and (c) To pay the cost. 379. 1950. a Deed of Sale (Exh. SO ORDERED. Damages with Preliminary Injunction. daughter of the vendee Andres Orais.000. the dispositive portion of which reads: ³WHEREFORE. 2239. and denominated as Lot No. 1972. RTC. V-79089. 1988 when she filed Civil Case No.3720 hectares. 379 against Felicidad Cabrera. Davao Oriental with an area described as 7. 22407-CV.´ We are restating the facts as determined by the appellate court. Felicidad Cabrera and her husband immediately took possession of the western portion of Lot 2239. Albertana) Teokemian executed a Deed of Absolute Sale conveying to Elano Cabrera. Domingo Teokemian. containing an area of FIFTY FIVE THOUSAND FIVE HUNDRED TEN (55. P-10908 was issued in her name (Exh. 7. the property had an area of 11. In 1974 and 1978.´ Reversed by the foregoing pronouncements was the decision[2] of the Regional Trial Court.1000 hectares. As surveyed. On June 24. Davao Oriental (Exh. Virgilia Orais¶ brothers. Cateel. (b) To reimburse defendants for litigation expenses and attorney¶s fees in the amount of P7. Cad-287. 1957. Enecio Magno (Exh. the parcel of land was surveyed in the name of Virgilia Orais.STATEMENT OF PERSONAL CIRCUMSTANCES LITAM VS ESPIRITU ±LACKING² REGISTERED LAND NOT TO SUBJECT TO PRESCRIPTION SEC. J. husband of Felicidad Cabrera..510) SQUARE METERS. Br. which portion supposedly corresponded to the one-third share in Lot 2239 of Felicidad Teokemian who was not a party to the Deed of Sale earlier executed by her brother and sister in favor of Andres Orais. De Cabrera corresponding only to that portion of Lot No. On January 26. an action for ´Quieting of Title to Real Property.

Finding the defendants as the rightful. De Cabrera and the subsequent Tax Declaration creating a cloud of doubt on the title.00) Pesos and Ten Thousand (P10. prepared a document of sale and had Felicidad Teokemian sign it conveying a portion of said lot to them as described in the Sketch Map (Annex D of the Complaint). 1. clear and flawless title or ownership over the portion which the plaintiff holds title in trust in defendant¶s favor. 3. which was amended on June 22.000. and that plaintiff is guilty of laches for not initiating an action against defendants to recover the western portion of Lot 2239 despite plaintiff¶s knowledge of defendant¶s acquisition thereof in 1972. that said portion was owned by Felicidad Teokemian who was not a party to the Deed of Sale executed by Daniel and Albertana Teokemian on January 16. knowing that Lot 2239 was already registered in the name of the plaintiff. Records). b) Ordering the defendants to pay jointly the plaintiff the amount of not less than Sixteen Thousand Two Hundred (P16. proper. 1988 by including Felicidad Teokemian as party defendant (pp. and the amount of Twenty One Thousand Six Hundred (P21. after which they entered and possessed said portion and enjoyed the fruits thereon. to issue order or orders. and equitable in the premises. d) The defendants be ordered to pay Six Thousand (P6. 42-47. e) The document of sale executed by Felicidad Teokemian and the Tax Declarations issued to the late Elano Cabrera and Felicidad Vda.¶ In their answer with counterclaim (pp. the defendants. Plaintiff further averred that by reason of the document of sale and the declaration of the property involved in the name of defendant Felicidad Vda.000. rights and interest be declared null and void for being fraudulent and without any legal basis and inexistent. as in fact it was only in 1988 when the complaint for quieting of title was filed in court.00 as litigation expense and Attorney¶s fees in the sum of P5. possession.000. De Cabrera.000.600. . alleged that sometime in 1972 and 1973 the late Elano Cabrera and defendant Felicidad Cabrera. prepare and or make any instrument or document to finally vest in the Defendants absolute. and legal owner of that portion which was sold to them by Felicidad Teokemian and which was included in the title of plaintiff. premises considered.00) Pesos as the total proceeds of the nuts of the coconut land in question. 5. To order the plaintiff to execute. 4.00) Pesos as litigation expenses. 1950 in favor of Andres Orais over Lot 2239. that not having signed the Deed of Sale.200) as total value of the rice produced from the riceland in question.00) Pesos as expenses for every appearance in Court. Four Hundred (P400. plaintiff through the undersigned counsel respectfully prays this Honorable Court that: a) After due notice and hearing. To Order the Plaintiff to pay actual damages in the sum of P2. after due notice and hearing on the merits of this case. that Virgilia Orais (successor-in-interest of Andres Orais) committed fraud in including the portion owned by Felicidad Teokemian in her applying for free patent over Lot 2239 is concerned pursuant to Art.10-18. Records). this Honorable Court. thus: ³WHEREFORE. a Writ of Preliminary Mandatory Injunction be issued restraining the defendants from further dispossessing the plaintiff of the land in question. Finding that the plaintiff is only holding the title to that portion only in an implied trust in favor of the real owner. To find that the plaintiff did not own the said portion and that they have personal knowledge of the same when the plaintiff filed and secured the title under the Administrative Proceeding. Finding the plaintiff legally obligated to cause the segregation of the portion at their expense and deliver formally the said portion to the real owners. c) The Defendants be ordered to pay the plaintiff the amount of Twenty Thousand (P20.00) Pesos for attorney¶s fees. Plaintiff prayed as follows: µWHEREFORE. 2.00 in favor of defendants. defendants alleged that they acquired a portion of Lot 2239 in good faith and for value. there created a cloud of doubt on the former¶s title on said property. 6. Felicidad Teokemian¶s one-third share in Lot 2239 could not have been legally conveyed to Andres Orais. lawful.The complaint.000. and f) Such other reliefs and remedies which this Honorable Court may deem just. Defendants prayed. 1456 of the Civil Code.

it is negligence or omission to assert a right within a reasonable time. the lower court rendered judgment in favor of defendants and against the plaintiff. otherwise. not a definite portion described in the Deed of Sale executed on July 27. 1972 (Exh. There was no allegation. Such being the case.7. and Felicidad. without any color of title. Rodolfo Orais went to the house of Elcano Cabrera three times in 1974 and in 1979 complaining of the latter¶s occupancy of their sister¶s property. plaintiffs cannot be barred by laches from instituting the action to quiet title against defendants xxx Second. Parenthetically. From the time plaintiff became aware of Cabrera¶s possession of the western portion of Lot 2239. Third. for an unreasonable and unexplained length of time. could not have ripened into ownership on the principle of laches. while it is true that by themselves tax receipts and declaration of ownership for taxation purposes are not incontrovertible evidence of ownership. 1972 (Exh. all surnamed Teokemian. has no congruency with those cases where the Supreme Court ruled that the registered owner is barred by laches from recovering his property.N. as was held by the lower court. Elcano Cabrera proposed a relocation survey of the area to determine whether the premises occupied by him were included in the plaintiff¶s title (T. only fourteen (14) years had elapsed. Felicidad Teokemian could only dispose her undivided interest. Jimmy further declared that after Elcano Cabrera was shown plaintiff¶s title to the property. Thus. still the petitioners have acquired title to it by virtue of the equitable principle of laches due to the respondent¶s failure to assert her claim and ownership for thirty-two years. considering that Albertana did not have any authority from Felicidad Teokemian to effect such conveyance.¶ In Mejia vs. To direct the plaintiff to account for the share of the real owner of the portion of land illegally cultivated and planted by plaintiff to rice in favor of FELICIDAD TEOKEMIAN to be paid thru the Defendants who are the owners. registered title can easily . 3) ³as eastern part´. In support of its findings. which was not included in the sale executed by them and Albertana and Daniel Teokemian. according to the Supreme Court. According to Jimmy. 39-44. he and his elder brother Dr. De Cabrera and Marykane Cabrera had acquired no title upon which to anchor their claim of ownership over the one-third portion. the action of the plaintiffs is not barred by laches. before the land was sold to Andres Orais in 1950 when the same was still unregistered.¶ Laches. is failure or neglect. Consequently. Court of Appeals. occupied the western portion of Lot 2239. plaintiff¶s brother.´[3] On April 27. Court of Appeals[5] that. and assuming that Felicidad Teokemian had retained ownership over an undivided one-third portion of Lot 2239 despite its being titled in plaintiff¶s name in 1958. the supposed vendee. Furthermore. pp. This being the case. it nevertheless upheld its effects. it is not an ordinary delay in asserting one¶s right that will give rise to the application of the principle of laches. that nothing came out of the proposal to conduct a relocation survey. Their occupation of a definite portion of an undivided property.¶ In Miguel vs. January 3. First. however. by the exercise of due diligence. Elcano Cabrera. and her successors-in-interest. to respondent¶s µfailure to assert her claims and ownership for thirty-two (32) years. and in Miguel vs. It appears. the petitioners acquired title to the land owned by respondent by virtue of the equitable principles of laches due. admittedly. the allegations therein show that it is actually for recovery of ownership/possession. 3) executed by Albertana Teokemian in favor of Elcano Cabrera over the portion of 55. 1989. warranting a presumption that the party entitled to assert it (Tijam vs. Sibonghanoy. on the justification that the defendant¶s action for reconveyance based on an implied trust had already been barred by prescription. which consisted in ONE THIRD OF THE RICE HARVEST every year since the year 1950 to 1972 when the portion was sold and cultivated by defendant based on the computation of income by the plaintiff in Paragraph 16. ruling that the latter can no longer recover the western portion of Lot 2239 conveyed in 1972 by Felicidad Teokemian in favor of the late Elano Cabrera and Felicidad Cabrera due to laches. the Supreme Court said that appellant¶s µpassivity and inaction for more than 34 years (1928-1962) justifies the defendant-appellee in setting up the equitable defense of laches in his behalf. Worse. their passivity and inaction for more than thirty four years justifies the defendant appellee in setting up the equitable defense of laches in his own behalf. This case. while the complaint filed by plaintiff is designated as one for quieting of title. assuming that Felicidad Teokemian still owned a one-third portion of Lot 2238 which was already registered in plaintiff¶s name. The respondent Court of Appeals reversed such findings upon appeal. because. Gampomana (100 Phil 277). could or should have been done earlier. and to grant the defendants such other reliefs and remedies proper and equitable in the premises. which was in 1974. As testified to by Jimmy Orais. Catalino (26 SCRA 234). much less proof. a paragraph in the Second Cause of Action of the complaint. Since imprescriptibility is one of the basic features of a Torrens title. in a general sense. the trial court referred to the Court¶s pronouncements in Lola vs. 32 SCRA 29). in Lola vs. defendants Felicidad vda.510 square meters of Lot 2238 which allegedly pertained to the one-third interest of Felicidad Teokemian did not convey any title to Elcano Cabrera. de Cabrera and Marykane Cabrera. therefore.S. it was held that µthe original owner¶s right to recover back the possession of the property and title thereto from the defendant has by the long period of 37 years and by the patentee¶s inaction and neglect been converted into a stale demand. the title to the subject lot was still registered in the name of the respondent. not the eastern portion which was the subject of the sale. Albertana. Court of Appeals (145 SCRA 439). 1989). Even as the appellate court observed that the registration made by the plaintiffs was fraudulent insofar as it involved the one-third interest of Felicidad Teokemian. Said the appellate court: ³We disagree with the lower court¶s ruling that plaintiff is barred from bringing an action for recovery of ownership. Catalino. to do that which. it was only in 1974 when plaintiff came to know that her property was occupied by Elcano Cabrera.[6] that even granting appellant¶s proposition that no prescription lies against their fathers¶ recorded title. up to the time she instituted the action for quieting of title in 1988. The Deed of Absolute Sale dated May 27. and in Republic vs. they become strong evidence of ownership acquired by prescription when accompanied by proof of actual possession of the property.[4] where it was held that although the defense of prescription is unavailing to the petitioners. that Lot 2239 had been partitioned among the co-owners Daniel. defendants Felicidad vda.

assigning as errors the following: A RESPONDENT COURT OF APPEALS ERRED IN RULING THAT PRIVATE RESPONDENT¶S COMPLAINT FILED IN 1988 FOR QUIETING OF TITLE WHICH ACTUALLY IS ONE FOR RECOVERY OF OWNERSHIP AND POSSESSION AS FOUND BY RESPONDENT COURT IS NOT BARRED BY LACHES BECAUSE: 1. they are possessors in good faith of the portion occupied by them and.[8] The bone of the petitioner¶s contention rests on the alleged waiver of the plaintiff to recover any interest she had in the one-third portion of the property inherited by Daniel. the latter held that portion as a trustee of an implied trust for the benefit of Felicidad. Domingo. V-79089. due to the long period of time which lapsed from the time the plaintiff¶s title was registered until the action for quieting of title was instituted. OR EVEN EARLIER IN 1941 WHEN SHE INHERITED THE PROPERTY. FROM 1958. which was derived from Free Patent No. it must be observed that the Certificate of Title of the plaintiff. While possession of defendants Felicidad vda. ³B´) the said document apparently included the third heir of Domingo Teokemian Felicidad Teokemian because her name was typewritten together with her sister Albertana and brother Daniel all surnamed Teokemian in the said document. the delay in the case at bar was only fourteen years. Albertana and Felicidad Teokemian from their late father.[11] which is the same as stating that the very tardiness of the plaintiffs in pursuing the present action for reconveyance of the subject property has rendered the defendants¶ defense nugatory. did not bear the signature of Felicidad Teokemian. therefore. . Again this fact will come to mind that the vendee Andres Orais was anticipating at the time Felicidad Teokemian will also sell her share in this portion of land (Lot No. 2239 now titled in the name of the plaintiff. TO 1972 WHEN SHE SOLD IT TO THE CABRERAS WHO CONTINUED THE PRIOR POSSESSION UNTIL 1988 WHEN PRIVATE RESPONDENT¶S COMPLAINT WAS FILED. De Cabrera and Marykane Cabrera could not have ripened into ownership as already discussed. ³B´) will attest to the fact that she did not sell her share in the lot in question. issued in the name of Virgilia Orais. did not cover the latter¶s share. these conclusions.be defeated by prescription. CONTINUOUS AND ADVERSE POSSESSION OF THE ORIGINAL OWNER. 2239) which at the time of the sale it was still unregistered land. the plaintiff¶s attempt to recover the property is justified because defendant Felicidad Teokemian¶s own action for reconveyance has already been barred by prescription. Abejod. VOID AND THAT ALBERTANA TEOKEMIAN WHO SIGNED THE DOCUMENT OF SALE IN FAVOR OF THE CABRERAS HAD NO AUTHORITY FROM HER SISTER-CO-OWNER FELICIDAD TEOKEMIAN TO EXECUTE THE DEED OF CONVEYANCE. B RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT LACHES DOES NOT APPLY BECAUSE WHAT WAS SOLD TO THE CABRERAS WAS A DEFINITE PORTION OF THE COMMUNITY PROPERTY BEFORE PARTITION. the delay or inaction by the registered owners in asserting their rights was considered unreasonable and unexplained because it took them from 32 to 37 years to do so. being matters of fact. STILL THAT PERIOD CONSTITUTES LACHES. are entitled to our full affirmation. leaves much to be desired in propriety. Davao Oriental. 2. de Cabrera and Marykane Cabrera. In contrast. HENCE. seeking relief from the respondent court¶s decision. A PERIOD OF 30 YEARS HAD ELAPSED FROM 1958 WHEN TORRENS TITLE WAS ISSUED TO PRIVATE RESPONDENT TO 1988 WHEN HER COMPLAINT BELOW WAS FILED DURING WHICH PERIOD OF TIME THE PROPERTY HAS BEEN IN OPEN. the appellate court stated further that nonetheless. together with Felicidad Teokemian are now before the Court as Petitioners in this Petition for Review on Certiorari. At the outset. Taking a hard look over the aforesaid deed of sale (Exh. We find merit in the petition. since they are congruent with the findings of the trial court. therefore. 1950 acknowledged before Judge Proserador Danao as Notary Ex Oficio. on one hand and Andres Orais on the other. pursuant to Art.´[7] Sisters Felicidad vda. and has made the fortress of the plaintiff¶s case impregnable. considering that the Deed of Sale executed by Daniel and Albertana Teokemian. and therefore. FELICIDAD TEOKEMIAN. 1456 of the Civil Code. The non-signing of Felicidad Teokemian over her typewritten name in this deed of sale (Exh. in the cases cited. After this sale the vendee Andres Orais through his encargado Melecio Capilitan and later Servillano Abarca immediately took possession of the two third portion of said parcel of land respecting the third portion owned by Felicidad Teokemian. ASSUMING ARGUENDO RESPONDENT COURT¶S HOLDING THAT ONLY 14 YEARS HAD ELAPSED COUNTED FROM 1974 WHEN CABRERAS¶ POSSESSION WAS QUESTIONED BY PRIVATE RESPONDENT¶S BROTHERS.´[9] Needless to state. thus: ³It would seem from the facts of the case that the basis of the right of plaintiff over the land in litigation specifically Lot No. Cateel.´[10] However. This is precisely the reason why. It was the respondent appellate court which observed that ³the registration of the plaintiff¶s title over the subject property was fraudulent insofar as it involved the one-third interest of Felicidad Teokemian who did not sign the Deed of Sale in favor of plaintiff¶s predecessor-ininterest and. entitled to the benefits accorded by the Civil Code as such. proceeded from the Deed of Sale executed by Daniel Teokemian and Albertana Teokemian on January 16. located at Buayahon.

thirty years from the time the plaintiff¶s husband was able to acquire Certificate of Title covering the properties inherited by the Teokemians. which in effect seeks to quiet title to the property. has been lost by prescription. As can be discerned from the established facts. (c) the evidence thereon is clear and positive. and its use as defense in the present suit. to do that which by exercising due diligence could or should have been done earlier. Under the Land Registration Act (now the Property Registration Decree). plaintiffs.[15] we observed that an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years. Until the institution of the present action in 1988. a bar to the plaintiff¶s action. In our jurisdiction. therefore. before the period of prescription may start. been converted into a stale demand. likewise. In other words. Laches is not concerned merely with lapse of time. and thereafter. the Cabreras.[20] As we have stated earlier in Mejia de Lucas vs. Laches has been defined as the failure or neglect. despite the sale of the two-third portion thereof to the plaintiff in 1950.[18] This Court emphasized in Mejia de Lucas vs. by the latter¶s long period of possession and by patentee¶s inaction and neglect. but this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property. and. and were issued in a calculated move to deprive Felicidad Teokemian of her dominical rights over the property reserved to her by descent. as this was not among those ceded in the Deed of Sale between Daniel/Albertana Teokemian and Andres Orais.This conclusion is incorrect. that equitable relief cannot be afforded without doing injustice. It must be remembered that registration does not vest title. and apparently including that portion belonging to Felicidad Teokemian. because to allow him to do so would be inequitable and unjust to defendant. (Meneses vs. warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. which right can be claimed only by one who is in possession. it will not exert its equitable powers in order to save one from the consequences of his own neglect. it is negligence or omission to assert a right within a reasonable time. except when personal rights are involved. he should be barred from asserting his claim at all. and even he may therefore alienate. does not prescribe. it cannot be argued that the right of reconveyance on the part of the defendants. or that the intervening rights of third persons may be destroyed or seriously impaired. but the changes of condition which may have arisen during the period in which there has been neglect.[16] In the case at bar.´ . In the case of Heirs of Jose Olviga vs. Court of Appeals)[12] The defense of indefeasibility of the Torrens Title does not extend to a transferee who takes the certificate of title with notice of a flaw in his title. This must surely constitute such tardiness on the part of the plaintiff constituting the basis for laches. Court of Appeals)[13] The principle of indefeasibility of title is unavailing where there was fraud that attended the issuance of the free patents and titles. shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. the right to seek reconveyance. and even substitute another person in its enjoyment. have not displayed any unequivocal act of repudiation. for an unreasonable and unexplained length of time.[19] the reason upon which the rule is based is not alone the lapse of time during which the neglect to enforce the right has existed. but only with whether or not by reason of plaintiff¶s long inaction or inexcusable neglect. since if a person claiming to be the owner thereof is in actual possession of the property. As it is. (Embrado vs. as erroneously submitted by the plaintiffs. Plaintiff could not have registered the part reserved to Felicidad Teokemian. it must be shown that (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust. it is merely evidence of such title over a particular property. that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title. Gamponia. and the latter¶s procurement of a Certificate of Title over the subject property in 1957. the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property. De Cabrera and her late husband have been actively in possession of the same. that is. unlike prescription. with respect to the co-owners. On the other hand. While the latter deals with the fact of delay. is likewise untenable. which possession had not been interrupted. But the effect of the alienation or the mortgage. laches deals with the effect of unreasonable delay. the defendant Felicidad Teokemian. Gampona. The same is not true with regard to Laches. Court of Appeals)[14] Be that as it may. the Certificates of Title of the vendees Orais are. which satisfies the above-quoted requisites. the action for reconveyance (quieting of title) of the plaintiff was instituted only in 1988. void. tilling it. In the meantime. it is an enshrined rule that even a registered owner of property may be barred from recovering possession of property by virtue of laches. assign or mortgage it. no title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession. such remedy has not yet lapsed. and. (b) such positive acts of repudiation have been made known to the cestui que trust. defendant Felicidad vda. Under Article 493 of the Civil Code: ³Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto. and constructing an irrigation system thereon. is thus. were in actual possession of the property since it was left to Felicidad Teokemian by her father in 1941. while the defendant may not be considered as having acquired title by virtue of his and his predecessor¶s long continued possession (37 years) the original owner¶s right to recover back the possession of the property and the title thereto from the defendant has.[17] The defense of laches is an equitable one and does not concern itself with the character of the defendant¶s title. Thus. that the right of the defendants for reconveyance of the subject property arising from an implied trust under Article 1456 of the Civil Code is material to the instant case. Court of Appeals. as the defendant is in the instant case. where a court finds that the position of the parties has to change. and. the reason for the rule being. (Anonuevo vs. which could be considered as an assertion of adverse interest from the defendants. The argument that laches does not apply because what was sold to the Cabreras was a definite portion of the community property. to say the least. irregular.

R. An heir may. 150431 was issued in the name of the petitioner. enlarged. altered. Undisputed is the fact that since the sale of the two-third portion of the subject property to the plaintiff. modified. The question on the validity of a Torrens title. The decision of the trial court dated April 27.[21] this Court ruled that the heirs. this Court has ruled that even if a co-owner sells the whole property as his. therefore. in Civil Case No. as co-owners. RODRIGUEZ VS RODRIGUEZ This petition for review on certiorari assails the Decision[1] of the Court of Appeals in CA-G. the plaintiff in this instance is barred from asserting her alleged right over the portion subject matter in the instant case on the ground that their right has been lost by laches. the sale or other dispostion affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the things owned in common (Ramirez vs. 44 Phil 320 [1923]). Bautista. 03-517. his live-in partner. The decision of the Court of Appeals dated January 7. apartment B. been a partial partition. The title represented by the certificate cannot be changed. assign or mortgage it.In Go Ong vs. which set aside the Decision of the Regional Trial Court (RTC) of Makati City. Guadalupe Nuevo. shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. apartments D and E. 2006. 1989 is hereby REINSTATED in toto. where the transferees of an undivided portion of the land allowed a co-owner of the property to occupy a definite portion thereof and has not disturbed the same.´[22] IN VIEW WHEREOF. the latter had allowed Felicidad Teokemian to occupy that one-third portion allotted to her. Clearly. and covered by TCT No. 75717. This is because under the aforementioned codal provision. xxx For Article 494 of the Civil Code explicitly declares: µNo prescription shall lie in favor of a co-owner or co-heir so long as he expressly or impliedly recognizes the co-ownership. or cancelled in a collateral proceeding. in Civil Case No. 1984. But the effect of the alienation or mortgage. In Bailon-Casilao vs. apartment C. can be raised only in an action expressly instituted for that purpose. the sale will affect only his own share but not those of the other co-owners who did not consent to the sale (Punzalan vs. Boon Liat. respondent Buenaventura Rodriguez. Branch 63. Juanito executed a Deed of Absolute Sale over the property in favor of petitioner. TCT No. as well as the Resolution denying the motion for reconsideration. we ruled that: ³As early as 1923. Court of Appeals. The action for the declaration of nullity of deed of sale commenced by the petitioners in the RTC is not the direct proceeding required by law to attack a Torrens certificate of title. and his children Benjamin Rodriguez (the deceased husband of respondent Evangeline Rodriguez). Court of Appeals. shall each have the full ownership of his part and the fruits and benefits pertaining to it. Juanito executed a ³Huling Habilin at Testamento´ giving petitioner Cresenciana Tubo Rodriguez. with respect to the co-owners. 14 Phil 528 [1909]). and reinstated the Decision of the Metropolitan Trial Court (MTC) of Makati City. on June 14. therefore. apartment A. except when the personal rights are involved. There has. Branch 134. SP No. alienate. Makati City.[5] . and respondent Belen Rodriguez. and even substitute another person in its enjoyment. diminished. the petition is hereby GRANTED.[4] Thus.[3] However. 144865 was cancelled and a new TCT No. SO ORDERED. whether fraudulently issued or not. Juanito Rodriguez owned a five-door apartment located at San Jose Street. 144865. 48 TAPARUC VS VDA DE MENDE 512 SCRA 97 No collateral attack on title A Torrens title cannot be collaterally attacked. 1993 is hereby SET ASIDE. CERTIFICATE OF TITLE NOT TO SUBJECT TO COLLATERAL ATTACKS SEC. dismissing the complaint for ejectment.[2] On October 27. 91442 dated June 27. for a period too long to be ignored--the possessor is in a better condition or right (Potior est conditio possidentis). 1983.

They alleged that while petitioner is the registered owner of the property. this Court resolves to REVERSE and SET ASIDE the Decision of the Regional Trial Court. Makati City in Civil Case No.000. Further. Makati City. to agree to the sale of the property for only P20. she is not the lawful owner thereof because the June 14. Branch 63. is hereby ordered REVERSED AND SET ASIDE. Defendants are likewise ordered to pay jointly and severally the plaintiff an amount of P5. without her knowledge and consent. which legally conferred upon each heir exclusive ownership over their respective shares.00 after knowing that only two apartments were given to her in the Huling Habilin at Testamento. is not the proper action to challenge it. the MTC rendered a judgment in favor of the respondents and held that the deed of sale was simulated otherwise petitioner would not have entered into the Partition Agreement. such title is existing and valid. she allowed respondents Evangeline. It held that petitioner¶s certificate of title is a conclusive evidence of ownership of the land described therein. SO ORDERED. judgment is hereby rendered ordering the defendants and all persons claiming rights under them to vacate the premises and surrender the possession thereof to the plaintiff. the MTC erred when it relied heavily on the ³Huling Habilin at Testamento. respondents maintain that petitioner exerted undue influence over their father. SO ORDERED. Consequently.[9] Aggrieved.000. and that unless and until said title has been annulled by a court of competent jurisdiction. 75717 dismissing the complaint for ejectment is hereby REINSTATED. who at that time was seriously ill. This is true also with respect to the deed of sale. thus: WHEREFORE. Mel Navarro and Socorro Escota. premises considered.00 a month per unit beginning 13 August 2001 until they finally vacate the premises and the costs of this suit. Thus: WHEREFORE. she had no cause of action against them for being a party to the August 23. respondents claimed ownership over the subject property by succession. It held that the MTC correctly received evidence on ownership since the question of possession could not be resolved without deciding the issue of ownership.00 and the costs of suit in favor of defendants. which they filed to assail the validity of the said sale. respectively. thus: WHEREFORE. 1984 Deed of Absolute Sale was simulated and void. the decision rendered by the Metropolitan Trial Court. 01-1641 now pending before the RTC of Makati City.[8] On appeal. which involves only the issue of physical or material possession. the RTC reversed the decision of the MTC. out of kindness and tolerance.[10] . the Huling Habilin at Testamento transmitted ownership of the specific apartments not only to the respondents but also to the petitioner. The present action. 1990 Partition Agreement wherein they recognized each other as co-owners and partitioned the property in accordance with the provision of the last will and testament. SO ORDERED. The Partition Agreement which was allegedly entered into pursuant to the Huling Habilin at Testamento should not also be considered. the Complaint is DISMISSED. and that in 1984. respondents separately leased the units to Montano Magpantay. who despite repeated demands. respondents filed a petition for review before the Court of Appeals which reversed and set aside the decision of the RTC and reinstated the decision of the MTC. However. 2001 a complaint for unlawful detainer against the respondents.´ which was not probated hence has no effect and no right can be claimed therein.[7] On February 26. B and D. alleging that she is the lawful and registered owner of the property. however. the parties executed the Partition Agreement in accordance with the wishes of the testator. failed and refused to vacate the premises and to pay the rentals thereof. Branch 63. Plaintiff is ordered to pay attorney¶s fees of P10. As in Civil Case No. Branch 141. The decision dated February 26. Buenaventura and Belen.000. and pursuant thereto. Further. to personally occupy units A. 2002 of the Metropolitan Trial Court. 2002. Further.[6] In their Answer.The case arose when petitioner filed on September 20.

the issue of ownership shall be resolved only to determine the issue of possession. respondents pray that the instant petition for review be dismissed since the resolution of the question of ownership by the MTC and the Court of Appeals was provisional only to resolve the issue of possession. vendor. after the expiration or termination of the right to hold possession. it cannot resolve the issue of ownership because the resolution of said issue would effect an adjudication on ownership which is not proper in the summary action for unlawful detainer. An action for unlawful detainer exists when a person unlawfully withholds possession of any land or building against or from a lessor.The motion for reconsideration was denied hence. petitioner filed the present petition for review raising the following errors: I.[15] However. Aware of the provisional nature of the resolution on ownership in ejectment cases. BECAME THE SUBJECT OF JUANITO RODRIGUEZ¶S HULING HABILIN AT TESTAMENTO WHEREIN THE PROPERTY WAS DISTRIBUTED TO HIS HEIRS (HEREIN RESPONDENTS) INCLUDING THE RESPONDENT (PETITIONER HEREIN). petitioner¶s cause of action for unlawful detainer was based on her alleged ownership of land covered by TCT No.[13] Being a summary proceeding intended to provide an expeditious means of protecting actual possession or right to possession of property. the question of title is not involved[14] and should be raised by the affected party in an appropriate action in the proper court. Thus. II. vendee or other persons. Petitioner insists that the Court of Appeals erred in ruling that the Huling Habilin at Testamento transmitted ownership of the specific apartments disregarding the fact that the same is not probated yet and that the testator changed or revoked his will by selling the property to petitioner prior to his death.[16] But this adjudication is only provisional and does not bar or prejudice an action between the same parties involving title to the property. all that the trial court can do is to make an initial determination of who is the owner of the property so that it can resolve who is entitled to its possession absent other evidence to resolve ownership. ± When the defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership. by virtue of any contract.[12] The sole issue to be resolved is the question as to who is entitled to the physical or material possession of the premises or possession de facto. respondents filed Civil Case No. Contrarily. However. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW AND GRAVE ABUSE OF DISCRETION IN REVERSING AND SETTING ASIDE THE DECISION OF THE REGIONAL TRIAL COURT AND REINSTATING THE DECISION OF THE METROPOLITAN TRIAL COURT DISMISSING PETITIONER¶S COMPLAINT FOR UNLAWFUL DETAINER. express or implied. 150431 and that she merely tolerated respondents¶ stay thereat. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR OF LAW AND GRAVE ABUSE OF DISCRETION IN DECLARING THAT THE PROPERTY. when the issue of ownership is raised the court is not ousted of its jurisdiction.[11] Petitioner alleges that as the registered owner of the subject property. 01-1641 to assail the validity of the deed of sale of the property and the registration thereof in petitioner¶s name. Petitioner can always avail of legal remedies to have the issue of ownership passed upon by the proper court. Section 16 of Rule 70 of the Rules of Court provides: SEC 16. when respondents leased the apartments to other persons without her . Resolving defense of ownership. she enjoys the right of possession thereof and that question of ownership cannot be raised in an ejectment case unless it is intertwined with the issue of possession. While the court may look into the evidence of title or ownership and possession de jure to determine the nature of possession. A PARCEL OF LAND UPON WHICH A FIVE-UNIT APARTMENT STANDS.[17] In the case at bar. The petition has merit.

Further. whether or not the disposition was valid is an issue that can be resolved only in Civil Case No. this Court had the occasion to clarify this: . It cannot be altered. which is one of the attributes of ownership. the fact that petitioner was a party to said agreement becomes immaterial in the determination of the issue of possession. Now. 150431 in the name of the petitioner. modified or cancelled. as owner of the property. Respondents failed to prove their right of possession. Based on the foregoing documentary evidence. they presented the Huling Habilin at Testamento of Juanito Rodriguez and the Partition Agreement. respondents assailed petitioner¶s title by claiming that the deed of sale upon which it was based was simulated and void. Court of Appeals. In Ross Rica Sales Center. as the Huling Habilin at Testamento and the Partition Agreement have no legal effect since the will has not been probated. the validity of which shall not be subject to a collateral attack. We agree with the RTC that a certificate of title is a conclusive evidence of ownership of the land described therein. 2) Deed of Sale of the property executed by Juanito Rodriguez and the petitioner on June 14. Ong.[19] the Court held that: The long settled rule is that the issue of ownership cannot be subject of a collateral attack.consent. Under existing statutory and decisional law. we find that there is preponderance of evidence in favor of the petitioner¶s claim. 1983. Juanito Rodriguez remained the owner thereof since ownership would only pass to his heirs at the time of his death.[20] it was held that: [T]he Torrens System was adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized. they have the right to possess the said property. Inc. left with the deed of sale and the certificate of title over the property to consider. Militar. 1529. Thus. petitioner had a right to the possession of the property. As the registered owner. a certificate of title shall not be subject to collateral attack. Thus. he had the absolute right to dispose of it during his lifetime.[18] Article 838 of the Civil Code mandates that ³[n]o will shall pass either real or personal property unless it is proved and allowed in accordance with the Rules of Court. 3) TCT No. x x x . an action instituted by the respondents for that purpose. . This cannot be dispensed with and is a matter of public policy. It is settled that a Torrens Certificate of title is indefeasible and binding upon the whole world unless and until it has been nullified by a court of competent jurisdiction. Moreover. In Apostol v.´ As the will was not probated. 1990 Partition Agreement executed by both the respondents and the petitioner. 1984. especially in an ejectment case which is summary in nature. 01-1641. and 4) the August 23. in Co v. The issue of the validity of the title of the respondents can only be assailed in an action expressly instituted for that purpose. at the time the deed of sale was executed in favor of the petitioner. The lower courts considered the following documentary evidence in arriving at their respective decisions. albeit the RTC decision contradicts that of the MTC and Court of Appeals: 1) Huling Habilin at Testamento executed by Juanito Rodriguez on October 27. Under Section 48 of Presidential Decree No. v. the Partition Agreement which was executed pursuant thereto can not be given effect. On the other hand. except in a direct proceeding for that purpose in accordance with law. Whether or not the petitioners have the right to claim ownership over the property is beyond the power of the court a quo to determine in an action for unlawful detainer. thus. To prove their claim. We are. their possession as well as those persons claiming right under them became unlawful upon their refusal to vacate the premises and to pay the rent. . Before any will can have force or validity it must be probated. the power to pass upon the validity of such certificate of title at the first instance properly belongs to the Regional Trial Courts in a direct proceeding for cancellation of title. They insisted that they were co-owners thus.

which is the subject matter of Civil Case No. a complaint for ³Annulment of Loan Agreement and Real Estate Mortgage/ Declaration of Unenforceability of Loan Agreement and Real Estate Mortgage´ was filed against the Bank and the Sheriff. the Sheriff prepared and served the NOTICE OF EXTRAJUDICIAL SALE. where the issue as to who has title to the property in question is fully threshed out. SO ORDERED. in Civil Case No. The Decision of the Regional Trial Court of Makati City. the question of ownership may be provisionally ruled upon for the sole purpose of determining who is entitled to possession de facto. RTC issued a TRO effective for 72 hours which was extended to 20 days. however. CA annulled the order and resolution of the RTC.904. in an ejectment suit. as immediately due. 03-517. Thereafter. It is. the Decision of the Court of Appeals in CA-G. Php 17 M of which was applied to the 1st loan. In a notarized letter addressed to the Provincial Sheriff of Cebu. V. A few days after. 91442 dated June 27. it asked for an additional loan of Php 48.00). Counsel for the Bank immediately informed the Sheriff of the CA¶s favorable decision and requested him to proceed with the foreclosure. in Civil Case No. payable and defaulted. not conclusive as to the issue of ownership. Which was secured by pledge and real estate mortgage on several properties. treat the whole obligation. Both motions were denied by the respective courts. without necessity of any demand. that our ruling on the issue of ownership is only provisional to determine who between the parties has the better right of possession.871. its principal and accrued interest and other charges. reversing the Decision of the Metropolitan Trial Court (MTC) of Makati City. in view of the foregoing. Autocorp failed to pay despite repeated demands and extensions. Branch 134. is REINSTATED. WHEREFORE. Before the Sheriff could prepare the requisite publication and notice. presentment or notice by the creditor to the debtor. The extrajudicial sale proceeded and the land was awarded to the bank as the lone bidder. VOLUNTARY DEALINGS Entry in the primary entry book Auto Corp Group v. Total= Php 116. As the law now stands. This is embodied in an AGREEMENT which provides that the ³creditor may. 75717. Branch 63.8 M (143. . CA and Keppel Monte Bank (2004) CASE DIGEST FACTS: Certiorari.We emphasize. 2006 is REVERSED and SET ASIDE. therefore. for the satisfaction of Autocorp¶s obligations. SP No.8 M payable in 1 year at 20% interest. Keppel Monte Bank extended a loan of Php 85 M in favor of Autocorp Grp. the bank requested for the SALE of the mortgaged lots in a public auction. Subsequently it issued a Writ of Preliminary Injunction conditioned on Autocorp¶s filing of a bond of Php 20 M. Autocorp FAILED to pay the loan. Our ruling that petitioner has a better right of possession was arrived at on the basis of evidence without prejudice to the eventual outcome of the annulment case.R. Despite its failure. Autocorp filed a ³MOTION TO ADMIT THEIR AMENDED/SUPPLEMENTAL COMPLAINT WITH A PRAYER FOR THE ISSUANCE OF AN EX PARTE TRO AND AN ORDER FOR PRELIMINARY INJUNCTION´ before the RTC to stop the Register of Deeds of Cebu from Registering the CERTIFICATE OF SALE in the name of the Bank and the latter from taking into possession of the properties subject of the foreclosure. at its sole discretion. 01-1641. Before it could be published Autocorp filed an ³URGENT MOTION TO HOLD IN ABEYANCE THE EXTRAJUDICIAL SALE´ before the RTC and ³VERY URGENT MOTION FOR ISSUANCE OF AN ORDER OF STATUS QUO´ before the CA.

CA. and. RTC granted the motion to admit their amended complaint and issued the TRO. Xxx Given the peculiar facts of the case.January 21. we agree with the CA that the payment of respondent bank must be deemed to be substantial compliance with the law. The certificate of sale was duly annotated at the back of the transfer certificates of title of the subject lots. On the other hand. that the registrant is under no necessity to present the owner¶s duplicates of the certificates of title affected. ISSUE: WON there was registration? RULING: The objection as to the payment of the requisite fees is unavailing. the law does not require the presentation of the owner¶s duplicate certificate of title and considers the annotation of such instrument upon the entry book. the registered owner of the land to be affected by registration is presumed to be interested in registering the instrument and would willingly surrender. the instrument involved in the case at bar. Bank presented the ³SHERIFF¶s CERTIFICATE OF SALE´ to the Register of Deeds. annulled and set aside the RTC decision holding that the entry in the primary entry book was equivalent to registration. albeit belatedly. We hold now. It is a ministerial act by which an instrument is sought to be inscribed in the records of the Office of the Register of Deeds and annotated at the back of the certificate of title covering the land subject of the instrument. instrument or assignment. does not have the effect of a conveyance of the property. Registration is merely a species of notice. For the registration of a voluntary instrument. but a memorandum thereof must also be made on the owner¶s duplicate and on its original. Acting Register of Deeds of Nueva Ecija. January 25. The law on registration does not require that only valid instruments shall be registered. 1999. In a voluntary instrument. the entry of the instrument the day before. The purpose of registration is merely to give notice. Like in DBP vs. On the same date. (see Section 56. it is necessary not only to register the deed. as the transaction sought to be recorded is an involuntary transaction. for purposes of primary entry. In any case. PD 1529) xxx A voluntary instrument is a willful act of the registered owner of the land to be affected by registration. without the presentation of the owner¶s duplicate certificate of title for corresponding annotation of the conveyance. On the other hand. the entry fee and the registration fee were paid only the following day because the cashier had already left. mortgage. There is no question that the fees were paid. is a sheriff¶s certificate of sale. as we held therein. should not be invalidated. as sufficient to affect the real estate to which it relates. it is but natural that he will not willingly present or produce his duplicate certificate or at least delay the production as long as possible. It is not a declaration by the State that such an instrument is a valid and subsisting interest in the land. even if we consider the entry to have been made on January 22. the certificate was entered in the primary entry book of the Register of Deeds. as the registration of an involuntary instrument is contrary to the interest of the registered owner or will affect him adversely. for the registration of an involuntary instrument. HELD: petition dismissed /adsum . present or produce his duplicate certificate of title to the register of deeds in order to accomplish such registration. The reason for the difference is obvious. while an involuntary instrument is one pertaining to a transaction affecting lands in which the registered owner¶s cooperation is not needed and which transaction may even be done against his will. 1999. The mere entry by the register of deeds in the entry or diary book. the important fact is that the entry in the primary entry book was done prior to the issuance of the writ of injunction by the trial court. directing the Register of Deeds to refrain from registering the assailed sheriff¶s certificate of sale and the bank from taking possession of the properties. or lease in the entry book of the register of deeds. However.

1999 with the approval of Executive Judge Priscila Agana. Branch 5. and Deputy Sheriff Belarmino. It aimed to stop the Register . Of this additional loan. the trial court issued a writ of preliminary injunction. respondent bank requested for the sale of the six (6) mortgaged lots at a public auction. On October 1. Branch 5. Deputy Sheriff Belarmino issued a Certificate of Sale dated January 7. interests. Deputy Sheriff Belarmino prepared and served the Notice of Extrajudicial Sale.000. 1997. The extrajudicial sale proceeded on January 7. EJF-2397-CEB"15 dated December 7. it filed a "Very Urgent Motion for Issuance of an Order of Status Quo"17 with the Court of Appeals on December 17. the Court of Appeals denied the motion of the petitioners. The Court of Appeals granted the petition on November 12.000. addressed to the Office of the Provincial Sheriff of Cebu City. for implementation.00). 1997.R. 1998 Decision had become final and executory. or any part thereof as they fall due.19Petitioners filed a motion for the reconsideration of the trial court¶s decision but without any success.904. such as. 1999. without necessity of any demand. The Agreement provided that the "CREDITOR may. In response. the Clerk of Court Ex Oficio Provincial Sheriff of Cebu. 1998 Decision of the Court of Appeals and requested him to proceed with the foreclosure. It contended that the preliminary injunction was issued without the requisite prior notice and hearing. 1997. After a summary hearing on October 3. and raffled to Deputy Sheriff Jessie Belarmino on September 15. 72132. 1997. Branch 5. 1998.000. Inc. The respondent bank sought a reconsideration of the order but in vain. 1998.00) in favor of petitioner Autocorp Group (Autocorp)..000. it asked for an additional loan of P48. the TRO was extended for twenty (20) days. treat the whole obligation. 1999 at 10:00 a.: Petitioners are before us on a Petition for Review on Certiorari assailing the decision1 and resolution2 of the Court of Appeals in CA-G.Auto Corp Group vs CA PUNO.000. said counsel furnished Deputy Sheriff Belarmino with a copy of the November 12. 1998. The case was raffled to Branch 23 of the RTC of Cebu City. and a sum equivalent to 10% as attorney¶s fees.871. Rule 58 of the 1997 Rules of Court. and other fees and charges. granting a writ of preliminary injunction against the respondent Keppel Monte Bank and the Register of Deeds of Cebu City. the motion of petitioners should be resolved by the trial court. P17. It ruled that its November 12. Autocorp was again unable to pay both accounts totaling P116. to annul the order and resolution of the trial court. Inc. in a notarized letter7 dated September 8. presentment or notice by the CREDITOR to the DEBTOR" in any event of default.00 was applied partially against the original loan.11 conditioned on petitioners¶ filing of a bond of two million pesos (P2. 1997.000.14 He scheduled the extrajudicial sale on January 7. and covered by Transfer Certificates of Title (TCT) Nos. Summons and notice of raffle were served on respondent bank and its co-defendants on September 24. when "[t]he DEBTOR fails to pay the principal loan. and lots in Lapu-lapu City.8 Before Deputy Sheriff Belarmino could prepare the requisite publication and notice. payable and defaulted. Respondent bank filed a petition for certiorari under Rule 65 of the Rules of Court with the Court of Appeals. 1997. which. despite repeated demands and various requests for extension. In a letter13 dated November 25. the petitioners filed a complaint for "Annulment of Loan Agreement and Real Estate Mortgage/ Declaration of Unenforceability of Loan Agreement and Real Estate Mortgage with ex parte Restraining Order. the RTC of Cebu City.m. which set aside the order3 and resolution4 of the Regional Trial Court (RTC) of Cebu City.000. 1997.00.. hence. as of July 15. allegedly amounted to P143. provided under Section 5. for the satisfaction of petitioner Autocorp¶s obligations.00 payable in one year at 20% interest per annum.6 Hence." Petitioner Autocorp failed to pay the loan.10 On October 16. and covered by TCT Nos.m.m. petitioners filed an "Urgent Motion to Hold in Abeyance the Extrajudicial Sale in Case No.800. 1994 which was secured by pledge and real estate mortgage on several properties. also denied petitioners¶ motion to hold the extrajudicial sale in abeyance on the ground that petitioners violated the rule against forum-shopping. 1998. co-owned by petitioner Autographics. 85737. 1999. were lots in Cebu City.800. Preliminary Injunction and Damages"9against respondent bank. It also set the pre-trial hearing of the case. and closed at 10:45 a. petitioners filed a motion to admit their Amended/Supplemental Complaint with a prayer for the issuance of an ex parte Temporary Restraining Order and an Order for Preliminary Injunction21 with the RTC of Cebu City. On January 6. In addition. 1999 at 10:00 a. The six (6) properties were awarded to respondent bank as the lone bidder. among which."12 The counsel for respondent bank immediately informed Deputy Sheriff Belarmino of the Court of Appeals¶ favorable decision. Despite its failure. as immediately due. The loan is embodied in an Agreement5 dated December 16. SP No.00. after finding that the summary hearing conducted by the trial court was insufficient. 72002. 1997 with Branch 516 of the RTC of Cebu City. at its sole discretion. and 102042. The letter was filed with the Office of the Clerk of Court Ex OficioProvincial Sheriff of Cebu City on September 12. 1997. Before the notice could be published. J. 59004. the trial court issued a Temporary Restraining Order (TRO) effective for seventy-two (72) hours. its principal and accrued interest and other charges. 19135 and 19136. The decision was held to be "without prejudice to his (the trial court judge¶s) conducting the required hearing to determine whether preliminary injunction should be issued. registered under the name of Eurasia Heavy Industries. The records show that respondent bank extended a loan of eighty-five million pesos (P85. In its Resolution18 dated December 22.000.20 On January 13.

of Deeds of Cebu from registering the Certificate of Sale in the name of respondent bank and the latter from taking possession of the properties subject of the foreclosure. 3135.R. 2003 IN CA-G. In addition. 19135 and 19136. 2000 Resolution. 1999 as the cashier in charge of receiving payment had already left. On January 21. the RTC of Cebu City. within ten (10) days from receipt of the order. 1999. the entry fee of P30. seeking to annul the orders of the trial court dated February 15.. were issued with grave abuse of discretion. on the same day that the sheriff¶s certificate of sale was presented and entered in the primary entry book. 1999 and March 9. and 102042. Petitioners¶ motion for reconsideration was denied by the Court of Appeals in a Resolution dated March 17. 2003. Hence. Consequently. 1999 and the preliminary injunction dated February 15.m. the Court of Appeals rendered its first assailed decision."23 On January 25. the TRO dated January 25. In any case. the Court of Appeals resorted to judicial legislation when it held that the subsequent payment of the entry fee was curative and a substantial compliance with the law.29 The Court of Appeals held that the failure of respondent bank to pay the entry and registration fees. Respondent bank also faulted the part of the order prohibiting petitioner from taking possession of the properties as it has not even filed a petition for a writ of possession at the time as required by Section 7 of Act No.30 Hence. dated January 7. 1999 at 4:30 p. respondent bank presented the sheriff¶s certificate of sale to the Register of Deeds of Cebu City. 1999. Allegedly. Branch 5. admitted the amended/supplemental complaint of petitioners and granted their prayer for the issuance of a TRO.00) Pesos conditioned that the applicant will pay the adverse party of all damages which it may sustain by reason of the injunction if the court will finally decide that the applicant is not entitled thereto. SP. directing the Office of the Register of Deeds to refrain from registering the assailed sheriff¶s certificate of sale and also respondent bank from taking possession of the properties subject of the certificate of sale. As the TRO it issued was to expire on the same day. the Office of the Register of Deeds. involving the four (4) properties located in Cebu City covered by TCT Nos. this petition where petitioners raise the following issues: I ARE THE QUESTIONED DECISION OF THE COURT OF APPEALS AND ITS RESOLUTION DATED AUGUST 16. Petitioners presented their evidence ex parte. 2002 AND MARCH 17. 2002. 1999 was equivalent to registration. 1999 Order and April 28." and the case of DBP vs.D.22 The certificate of sale was duly annotated at the back of the transfer certificates of title of the subject lots with a note that "this include[s] four (4) other lots situated in Cebu City. It held that the entry of the certificate of sale in the primary entry book was equivalent to registration. 72132. 1529.28 annulling and setting aside the trial court¶s February 15. and likewise defendant Monte de Piedad is directed not to take possession or do any act related thereto on the properties subject of said Certificate of [S]ale until further orders from this court.24 Respondent bank¶s counsel failed to appear on the scheduled February 15. Cebu City is enjoined not to register the Certificate of Sale.00 and the registration fee of P154. Acting Register of Deeds of Nueva Ecija does not apply to this . 1999. was not respondent¶s fault but due to the absence of the cashier. 72002. The dispositive portion of the order states: WHEREFORE. covered by TCT Nos. the amended complaint sought the annulment of the extrajudicial foreclosure due to several alleged irregularities in the conduct of the sale.26 On May 29.) No.000. 1999. and set a hearing on the propriety of issuing a writ of preliminary injunction on February 15. the registration of the certificate of sale having already become fait accompli at the time. On August 16. also known as the "Property Registration Decree.25 Respondent bank¶s motion for reconsideration was denied in an Order dated March 9. 1999. It required the respondent bank to file its answer to the amended/supplemental complaint. in view of the foregoing. the certificate was entered in the primary entry book of the Register of Deeds of Cebu. Respondent bank also presented the sheriff¶s certificate of sale to the Register of Deeds of Lapu-lapu City with respect to the two (2) subject lots. Respondent bank contended that the entry of the certificate of sale in the primary entry book on January 21. 2000. respondent bank filed a petition for certiorari27 under Rule 65 of the Rules of Court with the Court of Appeals. 59004 IN ACCORD WITH THE LAW AND JURISPRUDENCE THEREON? II CAN THE COURT OF APPEALS IN A PETITION FOR CERTIORARI PASS UPON AND REVERSE THE FINDINGS OF FACT AND LAW OF THE TRIAL COURT MADE IN THE EXERCISE OF ITS JURISDICTION?31 Petitioners contend that payment of the entry fee is a condition sine qua non before any valid entry can be made in the primary entry book. However. The Court of Appeals also found as premature the injunction to stop respondent bank from taking possession of the properties. 85737. 1999 hearing despite due notice. On the same date. located therein.923. the court hereby grants the preliminary injunction and let a writ issue after the plaintiffs shall have put up a bond of ONE HUNDRED THOUSAND (P100. 1999. it ruled that the payment by respondent bank the following day cured the defect. Petitioners claim that the ruling in DBP vs. Acting Register of Deeds of Nueva Ecija. citing Section 56 of Presidential Decree (P. NO. the trial court issued the preliminary injunction on the basis of the evidence adduced by petitioners.00 were paid only the following day or on January 22.

As the cashier had already left. petitioner¶s prayer for the issuance of a writ of injunction. which dissolved the first writ of preliminary injunction issued by the court a quo. even if we consider the entry to have been made on January 22.case. In a voluntary instrument. Atty. he shall enter.39 It is a ministerial act by which an instrument is sought to be inscribed in the records of the Office of the Register of Deeds and annotated at the back of the certificate of title covering the land subject of the instrument. The purpose of registration is merely to give notice. No. as the registration of an involuntary instrument is contrary to the interest of the registered owner or will affect him adversely. hour and minute of reception of all instruments. present or produce his duplicate certificate of title to the register of deeds in order to accomplish such registration. The objection as to the payment of the requisite fees is unavailing. 63.40 The law on registration does not require that only valid instruments shall be registered. it is but natural that he will not willingly present or produce his duplicate certificate or at least delay the production as long as possible. note in such book the date. in the order in which they were received.m. for the registration of an involuntary instrument.D. respondent bank paid the requisite entry and registration fees.34 For the registration of a voluntary instrument. ± x x x (b) If the mortgage was foreclosed extrajudicially. as the act sought to be enjoined had already become a fait accompli or an accomplished act. as required under Administrative Order No. in DBP. 1999 was not supervised by the Clerk of Court Ex Oficio Sheriff. In any case. . petitioners conclude that the order of the trial court issuing a writ of preliminary injunction was proper. As there was no valid registration. instrument or assignment. 1999 at 4:30 p. Respondent bank presented the certificate of sale to the Office of the Register of Deeds of Cebu City for registration on January 21. Registration is merely a specie of notice. as the transaction sought to be recorded is an involuntary transaction. a certificate of sale executed by the officer who conducted the sale shall be filed with the Register of Deeds who shall make a brief memorandum thereof on the certificate of title. The following day. in the order of their reception. as we held therein. He shall. Primary Entry Book. and (c) the extrajudicial foreclosure sale on January 7. (emphases ours) In fine. We find no merit in petitioners¶ posture. They fail to consider the voluntary or involuntary nature of the instrument subject of registration.D. First. (b) the notice of extrajudicial foreclosure was made three (3) days ahead of the finality of the November 12. They shall be regarded as registered from the time so noted. the bank not only paid the registration fees but also presented the owner¶s duplicate certificate of title. No. certified copies. Foreclosure of Mortgage. the registered owner of the land to be affected by registration is presumed to be interested in registering the instrument and would willingly surrender. or lease in the entry book of the register of deeds. It is not a declaration by the State that such an instrument is a valid and subsisting interest in the land. albeit belatedly. the entry of the instrument the day before. should not be invalidated. Jeffrey Joaquino. when made on the certificate of title to which it refers. that the national government as well as the provincial and city governments shall be exempt from the payment of such fees in advance in order to be entitled to entry and registration. Allegedly. and the memorandum of each instrument. for purposes of primary entry. all instruments including copies of writs and processes filed with him relating to registered land. fees.38 the instrument involved in the case at bar. Injunction would not lie anymore. We hold now. Such entry is equivalent to registration. without the presentation of the owner¶s duplicate certificate of title for corresponding annotation of the conveyance. (emphasis ours) Second. the Office could not receive the payment for entry and registration fees. 3-98 of this Court. P. as a preliminary process in registration.41 It is a ministerial duty on the part of the Register of Deeds to annotate the instrument on the certificate of sale after a valid entry in the primary entry book. shall bear the same date: Provided. as sufficient to affect the real estate to which it relates. 48305. but still. the certificate of sale was entered in the primary entry book. the law does not require the presentation of the owner¶s duplicate certificate of title and considers the annotation of such instrument upon the entry book. and. 1998 Decision of the Court of Appeals in CA-G. had been rendered moot and academic by the valid entry of the instrument in the primary entry book.35 On the other hand.33 while an involuntary instrument is one pertaining to a transaction affecting lands in which the registered owner¶s cooperation is not needed and which transaction may even be done against his will. does not have the effect of a conveyance of the property. 1529 provides: SEC. upon payment of the entry fee. Acting Register of Deeds of Nueva Ecija. is a sheriff¶s certificate of sale. Section 56 of P. it is necessary not only to register the deed.37 Like in DBP vs. ± Each Register of Deeds shall keep a primary entry book in which. to prevent the register of deeds from registering the subject certificate of sale. but a memorandum thereof must also be made on the owner¶s duplicate and on its original. 1524 provides: SEC. that the registrant is under no necessity to present the owner¶s duplicates of the certificates of title affected. the important fact is that the entry in the primary entry book was done prior to the issuance of the writ of injunction by the trial court. Petitioners contend that the aforecited case of DBP is not apropos to the case at bar. Given the peculiar facts of the case.36 The reason for the difference is obvious. we agree with the Court of Appeals that the payment of respondent bank must be deemed to be substantial compliance with the law. SP No.R. 56. On the other hand. There is no question that the fees were paid. A voluntary instrument is a willful act of the registered owner of the land to be affected by registration.32 We find the petition bereft of merit. mortgage. The mere entry by the register of deeds in the entry or diary book. considering the irregularities present in the conduct of the extrajudicial foreclosure such as: (a) the petition for extrajudicial foreclosure was not filed with the executive judge of the RTC of Cebu City but only with the Clerk of Court Ex Oficio Sheriff.

order that a writ of possession issue. furnishing bond in an amount equivalent to the use of the property for a period of twelve months. 3-storey commercial building. who shall execute said order immediately. son of Dr. It was to be effective for a period of five years from November 1. In any sale made under the provisions of this Act. He made advance payments for the rent of the two doors until June 1997. Vargas. upon the filing of such petition. Cost against petitioners. It has been consistently held that during the period of redemption after the registration of the sale. The lease was to run until April 1. 2000. Ruperto Esano is the owner of a 2-door. who represented himself as the absolute owner of the property. collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six. Rodolfo Vargas. over the properties subject of the certificate of sale. It was not alleged that respondent bank committed acts of possession over the properties before it could file a petition for a writ of possession during the redemption period. the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated. September 27. Act No. March 14. 1995. October 30. He also sought to register the new contract of lease with the Register of Deeds of Iriga City. 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. The assailed decision and resolution of the Court of Appeals are affirmed. A writ of possession is generally understood to be an order whereby a sheriff is commanded to place a person in possession of a real or personal property. However. the petition is dismissed. following the consolidation of ownership in his name and the issuance to him of a new transfer certificate of title. Paulo Ballesteros v. 1995. 3135 provides: SECTION 7. It is settled that the buyer in a foreclosure sale. when a property is extrajudicially foreclosed. Ownership was then transferred to DBP which in turn sold the property to Dr. 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. or until November 1. we have disallowed injunction to prohibit its issuance. just as we have held that issuance of the same may not be stayed by a pending action for annulment of the mortgage or the foreclosure itself. IN VIEW WHEREOF. upon approval of the bond. was properly set aside by the Court of Appeals.42 The preliminary injunction issued by the trial court to prevent respondent bank from taking possession of the subject lots. New lease contract was entered between Ballesteros and Ronald Vargas. and the court shall. As to the writ of injunction preventing respondent bank from possessing the subject lands. TCT was transferred to Abion on April 10. Vargas sold the property to Rolando Abion. and in each case the clerk of the court shall. A writ of possession may also be issued after consolidation of ownership of the property in the name of the purchaser.Third. The agreement was not registered in the Register of Deeds. 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. 1996. Rolando Abion (2006) CASE DIGEST FACTS: Certiorari. a writ of possession issues as a matter of course upon the filing of the proper motion and the approval of a bond. 1995. Ballesteros immediately occupied the additional door upon the execution of the new contract of lease. who becomes the absolute owner of the property if the same is not redeemed during the one-year redemption period after the registration of the sale. Dr. 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. as the trial court judge acted with grave abuse of discretion when it issued the same. evidenced by a deed of absolute sale. This new agreement extended the term of the original contract of lease between the parties and included the remaining door of the building in its coverage. such as. 1991. preempting respondent bank from filing a petition or application for a writ of possession. Ballesteros entered into a contract of lease for 1 door of the building with Ronald Vargas. to give him possession thereof during the redemption period. If the trial court cannot refuse to issue a writ of possession in the event that respondent bank complies with the requisites for its issuance. who again misrepresented himself as absolute owner of the property. 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. is entitled to the possession of the property and can demand it at any time. as amended by Act Numbered Twenty-eight hundred and sixty-six. addressed to the sheriff of the province in which the property is situated. 1996. To underscore the writ¶s ministerial character. with more reason that the trial court cannot issue an injunction. . SO ORDERED.

so long as the registrant has complied with all that is required of him for purposes of entry and annotation. It was not registered because it lacked certain requisites. CA. entry in the day book will not convey or affect the land sold. 6178. 1988. as evidenced by TCT No. Registration does not legitimize a void contract. petitioner refused to vacate the premises. RTC. Ordered Ballesteros to vacate the property and surrender its possession to Abion. 46065 which affirmed the decision of the Regional Trial Court (RTC) of Iriga City. J. A complaint for UNLAWFUL DETAINER was filed in the MTCC.April 30. He also subsequently received another letter from Abion¶s counsel reiterating the demand for him to vacate the property. however. Vargas (TCT Nos. ISSUE: WON the second lease contract was ³registered´ in the Register of Deeds of Iriga City so as to amount to notice to Abion of the existence of such lease contract? RULING: Petitioner¶s third argument is likewise without merit. in Civil Case No. three-story commercial building and the 229 sq. the primary entry thereof did not produce the effect of registration. if the owner¶s duplicate certificate is not surrendered and presented or if no payment of registration fees is made within fifteen days. 3. affirmed the RTC decision. deed of sale or contract of lease).g.. parcel of land on which it stands. or a day after its execution. whether the transaction entered is voluntary or involuntary. assuming for the sake of argument that the second contract could be registered. Entry alone produces the effect of registration. instrument of assignment. Reversed the decision of the MTCC. 1996. HELD: petition is denied. The contract was. Branch 37. however. sold the property to Dr. Despite these transfers of ownership. Ballesteros received a letter from Abion demanding that he vacate the property and surrender its possession.: Before us is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the July 15. 1999 decision1 of the Court of Appeals (CA) in CA-G. petitioner admits that the second lease contract was refused registration by the Register of Deeds for his failure to comply with certain conditions for registration. The property was originally owned by Ruperto Ensano. the sheriff opened the main entrance of the building and delivered possession of the property to Abion. merely entered in the primary book. 1996. As authorized by the court. Whether the second lease contract was registered or not was immaterial since it was void. mortgaged or leased. 2917. And since petitioner failed to comply with all the requisites for entry and annotation. MTCC. Rodolfo Vargas in a deed of absolute sale dated March 30.R. Ownership was subsequently transferred to the Development Bank of the Philippines (DBP) which. /adsum Ballesteros vs Abion CORONA. . it is necessary not only to register the deed. 1997.m. It is well settled that for the registration of voluntary instruments (e. Here. and nothing more remains to be done but a duty incumbent solely on the Register of Deeds. The property subject of this petition is a two-door. respectively) only on February 21. RTC issued a writ of execution which was received by Ballesteros¶ wife on Dec. in turn. In voluntary registration. mortgage or lease in the entry book of the register of deeds but also for the Register of Deeds to annotate a memorandum thereof on the owner¶s duplicate certificate and its original. All this notwithstanding. 941 and 942. SP No. the property was registered in the names of DBP and Dr. the entry in the primary book did not ripen into registration. 1995. Moreover. dismissed for failure to state a cause of action. Petitioner presented the second lease contract to the Register of Deeds of Iriga City for registration on October 31.

petitioner moved for a reconsideration of the December 9.000 toP5. 1996. As authorized by the trial court. 46065. reversed the decision of the MTCC and ordered petitioner to vacate the property and surrender its possession to respondent. 1995. Dr. 1997. The sheriff filed a manifestation with motion dated December 9. Acting on the sheriff¶s manifestation with motion and the petitioner¶s motion for reconsideration and/or suspension of the implementation of the writ of execution. On the other hand. Branch 37. the RTC denied petitioner¶s motion and directed the sheriff to immediately effect the restitution and delivery of the property to respondent. 1997. who represented himself as the absolute owner of the property. On September 27.Meanwhile.2 On April 30. SP No. Petitioner was also ordered to pay respondent P50.000 per month as rental for the property from September 1995 until petitioner vacated the premises. Petitioner himself admitted respondent¶s ownership of the property. This was evidenced by a deed of absolute sale of even date. It was. The CA ruled that petitioner¶s right of possession to the property was only by virtue of the second lease contract dated October 30. however. on October 30. On July 15. 1991. the CA reduced the award of attorney¶s fees from P50. the RTC issued a writ of execution dated December 1. On December 9. the CA affirmed the RTC decision with modification. the RTC of Iriga City. denied petitioner¶s motion and allowed the sheriff to execute the writ pursuant to paragraph (c) of Rule 39. It was docketed as CA-G. TCT No. respondent filed a complaint for unlawful detainer with damages against petitioner in the Municipal Trial Court in Cities (MTCC) of Iriga City. 949 in the name of the respondent was subsequently issued on April 10. on March 14. 1996. petitioner received another letter from respondent¶s counsel reiterating the demand for him to vacate the property. On June 20. On appeal. 1995. Neither was there any evidence that Ronald Vargas had been authorized by respondent or even by Dr. On September 4.000 for lack of factual basis.000 as attorney¶s fees and P7.5 praying for thirty days from December 5.3 It was received on December 3. 19976 praying that the use of force to implement the writ of execution be allowed in order to open the premises and deliver its possession to respondent. 1996. and only for the period covering July 1 to December 15. petitioner received respondent¶s April 25. . The property was registered with the Register of Deeds and such registration constituted notice to the whole world. In the meantime. the sheriff forced open the main entrance of the building and delivered possession of the property to respondent on December 15. He also sought to register the new contract of lease with the Register of Deeds of Iriga City. 1995. 1997 order of the RTC as well as for the suspension of the implementation of the writ of execution. Section 10 of the Rules of Court. On respondent¶s motion. or until November 1. in an order dated December 11. 1997. petitioner refused to vacate the premises. 1996 letter demanding that he vacate the property and surrender its possession. 1997 by petitioner¶s wife. Since respondent had not yet taken possession of the building. 1997. It was clear. petitioner entered into a contract of lease for one door of the building with Ronald Vargas.000 to P20. dismissed for failure to state a cause of action. 2000. 1997. The CA also took the stipulation in petitioner¶s lease agreement into consideration and reduced the rent from P7. Branch 2. 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. petitioner entered into a new contract of lease with Ronald Vargas who again misrepresented himself as the absolute owner of the property. The CA further ruled that petitioner could not pretend ignorance of the ownership of the property when he entered into the second lease agreement. However. however. It was to be effective for a period of five years from November 1. Vargas himself to transact the second lease on their behalf. the RTC. Vargas sold the property to respondent.7 Petitioner filed a petition for review with the CA. He made advance payments for the rent of the two doors until June 1997. Petitioner filed an urgent motion for time to vacate the premises4 and a supplemental motion for time to vacate the property.R. son of Dr. Such possession became unlawful from the time respondent made a demand on petitioner to vacate it. 1997 (the deadline given by the sheriff for petitioner to leave the premises) within which to vacate the property. 1999. 1995 between petitioner and Ronald Vargas. However. that Ronald Vargas was not the owner of the property and therefore had no right to lease it out. This new agreement extended the term of the original contract of lease between the parties and included the remaining door of the building in its coverage. Under the agreement (which was not registered in the Register of Deeds). Vargas. 1996. petitioner immediately occupied the additional door upon the execution of the new contract of lease.000 per month. All this notwithstanding. the lease was to run until April 1. The CA held that petitioner¶s possession of the property from the date of purchase by respondent was merely by tolerance. 1996. Petitioner moved for a reconsideration of the RTC decision but the motion was denied.

We disagree. The good faith of a party in entering into a contract is immaterial in determining whether it is valid or not. 1997 was valid. Here. hence respondent had notice thereof and was bound to respect it.. 5. Under Arts. or lessee) to lease it out.g. then his supposed lessee does not acquire any right to the possession or enjoyment of the property. According to petitioner. whether or not the implementation of the writ of execution dated December 1. Dr. he was not unlawfully detaining the property because the action was commenced by respondent while the second lease contract was still in force. we consider the first lease valid. 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. 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. Any attempt to eject the lessee within the period of lease constitutes a breach of contract. The river cannot rise higher than its source. is erroneous. and be binding upon. usufructuary. whether or not the [RTC had] the jurisdiction to issue a writ for the implementation of the [CA¶s] decision when the case was originally filed with the [MTCC]. Court of Appeals9 that the owner¶s successor-in-interest must respect an existing contract of lease. Thus. The first premise of petitioner¶s argument. Ronald Vargas was not the owner of the property and had no authority to let it. this petition. Where the purported lessor is bereft of any right or authority to lease out the property. his successor-in-interest. whether or not respondent was able to establish a cause of action. whether or not respondent and the sheriffs who implemented on December 15. there was pretended ignorance by petitioner of the ownership of the property. 4. Although the lessor need not be the owner of the property being leased. Br.. 2. not being an essential element of a contract. As correctly observed by the RTC and the CA. which raises the following issues: 1. Neither did respondent authorize him to enter into a new lease contract with petitioner. 1997) should be held in contempt of court [and] 8. either as a usufructuary or a lessee) or at least an authority (e. Thus. as an agent of the owner. 7. has no bearing on its validity. Petitioner also invokes our ruling in Garcia v. Petitioner further asserts that the second lease contract was "registered" with the Register of Deeds of Iriga City.g. whether or not. Ronald Vargas had neither the right nor the authority to grant petitioner the lease of the property. whether or not respondent could legally eject petitioner or terminate the lease. 1997 (as reiterated by the RTC¶s order of December 11. A contract which the law denounces as void is necessarily no contract at all and no effort or act of the parties to create one can bring about a change in its legal status.10 he should have a right (e. Suffice it to say that the second lease contract was legally inexistent for lack of an object certain. as ruled by the [CA]. whether or not the [CA¶s] award of attorney¶s fees was justified. 2000. Vargas to respondent bound Ronald Vargas as an heir of the seller. Ronald Vargas could not have validly executed the second lease agreement upon which petitioner now bases his right to the continued possession of the property. the sale of the property by Dr. Hence. 3.11 . He insists that his good faith and honest belief that he was transacting with the true owner should be considered in favor of the validity of the lease contracts entered into by him. 1997 the writ of execution dated December 1. whether or not the trial court (MTCC of Iriga City.Petitioner moved for a reconsideration of the CA decision but it was denied in a resolution dated May 25. 6.8 Propriety of the Ejectment Petitioner contends that respondent could not have legally ejected him from the premises or terminated the lease. Good faith. Petitioner¶s claim of good faith is of no moment. No amount of good faith can validate an agreement which is otherwise void. that both lease agreements were valid. 1997 on December 15. He claims that the two lease contracts he entered into with Ronald Vargas were valid and that contracts validly entered into by a predecessor-in-interest should be respected by. Under the principle of relativity of contracts. 2) had jurisdiction to try the case. But the same cannot be said of the second lease.

Petitioner also anchors his arguments against the ejectment on the second contract of lease which was inexistent and void ab initio. there is no more contract to breach. however.12 Every possessor in good faith becomes a possessor in bad faith from the moment he becomes aware that what he believed to be true is not so. it already lapsed on November 1. or a day after its execution. assuming for the sake of argument that the second contract could be registered. in which case the question of the propriety of petitioner¶s ejectment would now be moot.15 Entry alone produces the effect of registration. "where the lease has expired. instrument of assignment. The contract was.1avvphil. 1995. the allegation in a complaint that the "plaintiff verbally asked the defendants to remove their houses on the lot of the former but the latter refused and still refuse to do so without just and lawful grounds" was held to be more than sufficient compliance with the jurisdictional requirements. the property involved is a commercial building. entry in the day book will not convey or affect the land sold. deed of sale or contract of lease). (citations omitted) . not a residential unit. Registration does not legitimize a void contract. petitioner uses "registered" (that is. his attention was called to the fact that the "lessor" (Ronald Vargas) whom he believed to be the owner of the property had no authority to lease it out. This shows that petitioner himself doubted whether he had actually fulfilled the requirements for the registration of the lease.16 Here. Garcia involved the lease of a residential unit and was governed by a special law. such as how defendant¶s possession started or continued. the primary entrythereof did not produce the effect of registration.. In this case. so long as the registrant has complied with all that is required of him for purposes of entry and annotation. respondent failed to establish a cause of action by omitting to allege that demand to vacate was made for failure to pay the rent or comply with the conditions of the contract.1avvphil. the word µregistered¶ in quotation marks) to describe his act of presenting the lease contract to the register of deeds. whether the transaction entered is voluntary or involuntary. in violation of Rule 70. From that moment. Section 2 of the Rules of Court. Assuming arguendo that Garcia is applicable. his possession ceased to be in good faith. The complaint must aver facts showing that the inferior court has jurisdiction to try the case." Since the lease between petitioner and Ronald Vargas had expired on April 1. "An Act Regulating Rentals of Dwelling Units or of Land on which Another¶s Dwelling is Located and for Other Purposes" (BP 25). We held in Garciathat. petitioner admits that the second lease contract was refused registration by the Register of Deeds for his failure to comply with certain conditions for registration. What determine the nature of the action as well as the court which has jurisdiction over the case are the allegations in the complaint. mortgaged or leased. Petitioner presented the second lease contract to the Register of Deeds of Iriga City for registration on October 31.net Sufficiency of the Allegations in the Complaint to Confer Jurisdiction on the MTCC and to Establish a Cause of Action Petitioner asserts that the MTCC had no jurisdiction to try the case because the complaint did not allege that he was withholding possession of the property beyond the expiration of the lease period and that.18 we ruled: The settled rule is that a complaint for unlawful detainer is sufficient if it contains the allegation that the withholding of possession or the refusal to vacate is unlawful. without necessarily employing the terminology of the law. petitioner¶s argument would still be untenable. Curiously. 1996. the entry in the primary book did not ripen into registration. Moreover.13 When petitioner presented the second lease contract to the Register of Deeds a day after its execution. while a successor-ininterest would be in breach of contract if he were to eject a lessee of his predecessor-in-interest during the existence of the lease. Whether the second lease contract was registered or not was immaterial since it was void.14 In voluntary registration. merely entered in the primary book. We disagree. if the owner¶s duplicate certificate is not surrendered and presented or if no payment of registration fees is made within fifteen days. But even assuming that it was valid. there was no existing lease contract that could have been breached when respondent made a demand on petitioner to vacate the property on April 30.g.net Petitioner¶s reliance on our ruling in the Garcia case is misplaced. 2000. and nothing more remains to be done but a duty incumbent solely on the Register of Deeds. 1996.Any presumption of good faith on the part of petitioner disappeared after he learned from the Register of Deeds that the property was already registered in the name of another person. It was not registered because it lacked certain requisites. mortgage or lease in the entry book of the register of deeds but also for the Register of Deeds to annotate a memorandum thereof on the owner¶s duplicate certificate and its original. it is necessary not only to register the deed. It is well settled that for the registration of voluntary instruments (e. Court of Appeals. The Garcia case is therefore inapplicable. And since petitioner failed to comply with all the requisites for entry and annotation. Possession in good faith ceases from the moment defects in the title are made known to the possessor by extraneous evidence or by a suit for recovery of the property by the true owner.17 In Hilario v. Registration of the Lease Contract Petitioner¶s third argument is likewise without merit. Thus.

Under Rule 39. 1997. 1997. 20 A person who occupies the land of another with the latter¶s tolerance or permission." Since he actively participated in the proceedings before the MTCC and in fact later sought the affirmation of its decision. His refusal to comply with the demand made his continued possession unlawful. since the implementation of the writ was not in accordance with the Rules of Court.The complaint filed with the MTCC alleged that petitioner had been holding the property by virtue of an expired lease contract with the son of respondent¶s predecessor-in-interest and that. in his motion for reconsideration of the RTC decision. the award is a conclusion without a premise. According to him.26 The exercise of judicial discretion in the award of attorney¶s fees under Article 2208 (11) of the Civil Code demands a factual. he in effect recognized its jurisdiction and he should now be estopped from questioning the jurisdiction of that court. Section 10 (c) of the Rules of Court.1avvphil. giving respondent the right to institute an action for unlawful detainer. the conclusion must be borne out by findings of facts and law."23 Correctness of the Award of Attorney¶s Fees Petitioner argues that the award of attorney¶s fees was improper because it was touched upon only in the dispositive portion of the RTC decision. It is not sound public policy to place a penalty on the right to litigate. petitioner explicitly prayed that the "MTCC decision be affirmed. it is also worthy to note that. The text of the decision must state the reason behind the award of attorney¶s fees. the award of attorney¶s fees was mentioned only in the dispositive portion of the RTC decision. legal or equitable justification.25 The CA correctly noted that the decisions of both the MTCC and the RTC do not state any factual basis for an award of attorney¶s fees." Article 2208 (11) of the Civil Code allows the recovery of counsel¶s fees: where the court deems it just and equitable that attorney¶s fees and expenses of litigation should be recovered. such possession becomes illegal from the moment a demand to vacate is made by the owner and the possessor refuses to comply with such demand. the CA should not have merely reduced the award of attorney¶s fees but should have deleted it entirely. instead of deleting the award of attorney¶s fees. is necessarily bound by an implied promise that he will vacate upon demand. While possession by tolerance is lawful. without any contract between them. In other words.000 to P20. His lawful possession was interrupted when respondent demanded that he vacate the property. despite demands made by respondent for him to vacate the property."19 Nothing could be clearer to confer jurisdiction on the MTCC and to establish a cause of action. failing which a summary action for ejectment is the proper remedy against him. its award is totally unjustified. the CA merely reduced the amount thereof from P50. 1997 (denying his motion for reconsideration and/or suspension of the implementation of the writ of execution) instead of threeworking days as provided in Rule 39.27 The matter of attorney¶s fees cannot be dealt with only in the dispositive portion of the decision.000 on the ground that attorney¶s fees may be awarded "if the court deems it just and equitable. Propriety of the Issuance and Service of the Writ of Execution Petitioner alleges that the writ of execution was implemented in violation of the Rules of Court because it was implemented after only one working day from his receipt of a copy of the order dated December 11. nor should attorney¶s fees be awarded every time a party wins a lawsuit. Section 10 (c) of the Rules of Court. In particular. The award of attorney¶s fees is the exception. its basis being improperly left to speculation and conjecture.22 We have held that "while lack of jurisdiction may be assailed at any stage.24 It is necessary for the court to make express findings of facts and law that would bring the case within the exception and justify the grant of such award. Without such justification.29 the . the sheriffs should have been cited in contempt by the CA.net Furthermore. However. petitioner cannot now assail the jurisdiction of the MTCC after voluntarily submitting himself to its proceedings. a party¶s active participation in the proceedings before a court without jurisdiction will estop such party from assailing such lack of jurisdiction. petitioner had "unjustifiably refused to heed [respondent¶s] demand and continuously and unlawfully occup[ied] and possess[ed] [respondent¶s] property.21 The CA correctly ruled that petitioner¶s possession from the time the property was sold to respondent was merely by tolerance. hence.28 Otherwise. He should have counted it from receipt by his wife of the copy of the writ of execution on December 3. not the general rule. Petitioner¶s error was that he counted the three days from receipt of denial of his motion for reconsideration and/or suspension of the implementation of the writ on December 12. We agree. Nonetheless.

Receipt of a copy of the writ by petitioner¶s wife in their office constituted constructive personal service on petitioner. pursuant to Act No. on April 24. SP No. 1992.6 without respondents having redeemed the properties. 287008 and 285413. 1997 supplemental motion for time to vacate the property. WHEREFORE.5 On April 16. there was no basis to hold the sheriffs in contempt. The July 15. A Writ of Possession10 was issued on March 9. Besides. 46065 is AFFIRMED with the MODIFICATION that the award of attorney¶s fees is deleted.R. 6572/T-287008-PR-29207. the redemption period expired. Costs against petitioner. The said petition was granted by the Regional Trial Court (RTC) in an Order9 dated August 4. 3135. 1997 sheriff¶s report state that the sheriff served a copy of the writ on the wife of the petitioner on December 3. petitioner alleged that the writ of execution issued by the trial court on December 1. 1997 urgent motion for time to vacate the premises.4On April 16. 1988. J.3 After notice and publication. 1992. the properties were sold at public auction where NHA emerged as the highest bidder.writ of execution is carried out by giving the defendant notice of such writ and making a demand that the latter vacate the property within three working days from such notice. 2000 and its Resolution dated July 19. This particular issue was never brought to the attention of the CA. 2000 order. there is therefore no way to determine the nature and import of the challenged order. 1997 manifestation and motion filed by the sheriff and the December 16. the petition is hereby DENIED. from December 3. 1991. a diligent search of the entire records of this case failed to yield a copy of the alleged July 4. and the same was inscribed by the Register of Deeds on the certificates of title in the hand of NHA under Entry No. 2000 order of the RTC directing the issuance of a writ to enforce the petitioner¶s civil liability as determined by the CA. served and implemented.827. Petitioner insists that it is either the MTCC where the case was originally filed or the CA itself which should have issued the writ. NHA executed an Affidavit of Consolidation of Ownership7 over the foreclosed properties. The writ. 2000 Order Petitioner also questions the July 4. ordering spouses Augusto and Luz Basa to vacate the subject lots. . 1983.31 Since the writ of execution was properly issued. Hence. This compelled NHA to move for the issuance of an alias writ of possession on April 28. since the titles in the custody of the Register of Deeds were among those burned down when a fire gutted the City Hall of Quezon City on June 11. Except for the bare allegations of petitioner. filed a verified petition for extrajudicial foreclosure of mortgage before the Sheriff¶s Office in Quezon City. 1997. SO ORDERED. The December 9. that is." These incidents indubitably show that petitioner had notice of the issuance of the writ of execution within a sufficient period before the writ was actually implemented on December 15. Shortly thereafter.: This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Amended Decision1 of the Court of Appeals dated November 27. the NHA. To collect its credit. 1992. 1990. 1997. 1993. And in his December 8. 1997 "[gave] the sheriff 30 days from [petitioner¶s] receipt of the writ within which to implement the same.2 Spouses Basa did not pay the loan despite repeated demands.. On April 19. the sheriff could have lawfully ejected petitioner from the property as early as December 8. San Francisco del Monte. Moreover. the third workingday from notice of the writ of execution to petitioner. petitioner admitted that a writ had been issued by the RTC and a copy thereof received by his wife. 1993 by the RTC. NHA vs BASA LEONARDO-DE CASTRO.8 On June 18. the sheriff¶s certificate of sale was registered and annotated only on the owner¶s duplicate copies of the titles in the hands of the respondents.10 secured by a real estate mortgage over their properties covered by Transfer Certificates of Title (TCTs) Nos. on August 9. 1992. 1999 decision of the Court of Appeals in CA-G. spouses Augusto and Luz Basa loaned from NHA the amount of P556. as amended. There was substantial compliance with the requirement of service or notice when petitioner acquired knowledge of the writ of execution. NHA filed a petition for the issuance of a Writ of Possession. located at No. however.30 Thus. the three-day period of implementation of the writ of execution should be reckoned from the date petitioner was notified of the writ. remained unserved. 1997. in his December 4. 2001 denying the motion for reconsideration of the National Housing Authority (NHA). Correctness of the RTC¶s July 4. 1997. the date his wife received the notice or writ. Quezon City. 30 San Antonio St.

.14 Citing Bernardez v. 287008 and 285413 and located at No.160. and notices of sale were not tendered to the occupants of the sold properties. respondents averred that the extrajudicial foreclosure of the subject properties was a nullity since notices were not posted and published. respondents asked the RTC. otherwise or if no preliminary injunction is issued. do or continue the doing of the act with the intervenor asks the court to restrain. a special civil action for certiorari and prohibition before the Court of Appeals. and not during the hearing in the petition for the issuance of an alias writ of possession since the "petition" referred to in Section 8 of Act No. 1995. It pointed out that the RTC. 8] of Act No. after a BOND in the amount of P20. 3135 pertains to the original petition for the issuance of the Writ of Possession and not the Motion for the Issuance of an Alias Writ of Possession. The order partly provides: The motion is without merit. Since said order had already attained finality. 3135 as evidenced by the publication of the Notice of Sheriff¶s Sale in the Manila Times in its issues dated July 14. 3155". on June 2. had already ruled that respondents¶ right of redemption was already gone without them exercising said right. thereby denying them the opportunity to ventilate their rights. NHA argued that respondents should have assailed the foreclosure sale during the hearing in the petition for the issuance of a Writ of Possession. 3135. 30.m. the movant NHA may. And. 1995. and to cancel the Writ of Possession dated March 9. ordering movant National Housing Authority. San Antonio Street. 3135. filed a Motion for Leave to Intervene and Petition in Intervention (with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction). to desist and refrain from selling or in any manner from disposing of the subject properties covered by TCT Nos.19 NHA also said that respondents had been furnished with a copy of the Notice of Sheriff¶s Sale as shown at the bottom portion of said notice. NHA asserted that the writ of possession was issued as a matter of course upon filing of the proper motion and thereby. NHA opposed respondents¶ petition for intervention.000. before final judgment. among others. respondents spouses Basa and Eduardo Basa. 3155. Reyes15 and Bass v. the motion for reconsideration is DENIED.16respondents theorized that the instrument is deemed registered only upon actual inscription on the certificate of title in the custody of the civil registrar.13 Respondents likewise insisted that even assuming arguendo that the foreclosure sale were valid.00. 1992 since the certificate of sale was inscribed on their TCT Nos. at 8:30 a. the ruling therein could no longer be disturbed. The issuance of a writ of preliminary injunction. Thus. 25 Undaunted.Before the RTC could resolve the motion for the issuance of an alias writ of possession.20 NHA maintained that respondents¶ right of redemption had long expired on April 15. 1990. Quezon City. 1993. 4. written notices of foreclosure were not given to them.00 had been duly filed by intervenors. pending the termination of this proceeding and/or unless a contrary order is issued by this Court. San Francisco del Monte. 3135. to allow the respondents to redeem the mortgaged properties in the amount of P21. 1992 declaring respondents¶ right of redemption barred by prescription. the court was bereft of discretion. 1992. its agents and/or any other person acting under its command. the judgment which may be favorable to respondents would be ineffectual. mentioned in [Sec. as amended. 2. Setting the hearing of the petition in intervention (to set aside) on March 17. 2) admitting the Petition in Intervention and "treating the same as the petition to set aside sale mentioned in [Sec. Lastly. De la Rama. etc. 8] of Act No. . and not on the certificate of title in the possession of the Register of Deeds. The issuance of an alias writ of possession. On January 2. The admission of the intervention is sanctioned by Sec. 21 and 28. to declare the foreclosure sale null and void. because. the RTC issued the first assailed Order21 with the following directives: 1) granting the issuance of the alias writ of possession which allowed NHA to take possession of the subject properties. 1991. which gives the debtor/mortgagor the remedy to petition that the sale be set aside and the writ of possession be cancelled. 1995. NHA filed on November 24. 1995. In the second assailed Order24 dated September 4. and 3) granting the issuance of a Writ of Preliminary Injunction in favor of respondents that ordered NHA to refrain from selling or disposing of the contested properties. 3. the RTC denied NHA¶s motion for reconsideration reasoning that the admission of the intervention was sanctioned by Section 8 of Act No.18 It countered that the extrajudicial foreclosure sale was conducted validly and made in accordance with Act No. NHA stressed that another reason why the petition for intervention should be denied was the finality of the Order dated August 4. or on April 16. ACCORDINGLY.17 Since the sheriff¶s certificate was only inscribed on the owner¶s duplicate certificate of title. and thus make ineffectual the final judgment rendered afterwards which may grant the relief sought by the intervenor. In the said petition for intervention. 285413 and 287008 a year earlier. 1993.11 Respondents anchored said petition for intervention on Section 812 of Act No. the RTC made the justification that if the NHA was not restrained. As to the grant of preliminary injunction. The pertinent portion of the order reads: After examining the record and following precedents x x x this Court hereby orders: 1. they were still entitled to redeem the same since the one-year redemption period from the registration of the sheriff¶s certificate of foreclosure sale had not yet prescribed. Admission of the "Petition in Intervention. then there was no effective registration and the one-year redemption period had not even begun to run. 8 of Act No. via its Order dated August 4.22 NHA filed a motion for reconsideration23 assailing the RTC¶s Order insofar as it admitted respondents¶ motion for intervention and issued a writ of preliminary injunction." treating the same as the "petition" to set aside sale.

2. and the assailed order of January 2. Thus. Also. It also observed that the grant of the preliminary injunction by the RTC was uncalled for as it would effectively defeat the right of NHA to possession. In its memorandum. a summary procedure provided for under Section 112 of the Land Registration Act. 1995 is declared NULL AND VOID except for the portion directing the issuance of an alias writ of possession. Let an alias writ of possession be issued and executed/implemented by the public respondent without further delay. Likewise declared NULL AND VOID is the second assailed order of September 4. in the entry book is insufficient to treat such document as registered. thus: WHEREFORE. in this case the respondents. in a foreclosure sale is to question the validity of the sale through a petition to set aside the sale and to cancel the writ of possession. in its Amended Decision. It declared that the period of redemption had not expired as the certificate of sale had not been registered or annotated in the original copies of the titles supposedly kept with the Register of Deeds since said titles were earlier razed by fire. the motion for reconsideration is GRANTED. in view of the various issues raised.31 Respondents. It further explained that NHA was entitled to the writ of possession as a matter of course after the lapse of the redemption period. 2001 Resolution. which the Court of Appeals denied in its July 19. NHA filed a motion for reconsideration. to the extent that the said orders admitted the petition in intervention and granted the issuance of the preliminary injunction. the latter having been entitled by virtue of the grant of the alias writ of possession. respondents would like the Court of Appeals to treat the petition for intervention not only as an opposition to the issuance of the alias writ of possession.28 They alleged that since they raised the issue that their right of redemption had not prescribed. 1995 and September 4. It declared null and void the assailed orders of the RTC dated January 2. the instant petition. to wit: ACCORDINGLY. the petition is GRANTED. the Court of Appeals went on to say that the entry of the certificate of sale in the owner¶s duplicate of the titles could not have been sufficient to register the same since anyone who would wish to check with the Register of Deeds would not see any annotation. With regard to the RTC Order dated August 4. 2000. 2000. 1995 denying the petitioner¶s motion for reconsideration. De la Rama where the Court purportedly made a ruling that entry of a document. 1995. DE LA RAMA HAS BEEN SUPERSEDED. but also as a proper remedy under Section 8 of Act No. Having been deprived of their right of redemption.29 Unfazed.27 The Court of Appeals defended its affirmation of the RTC¶s grant of the alias writ of possession in NHA¶s favor by saying that it was a necessary consequence after the earlier writ was left unserved to the party.1avvphi1 The dispositive part of the amended decision decrees: WHEREFORE. Our decision dated February 24. 2000.The Court of Appeals rendered a Decision26 dated February 24. the Court of Appeals deemed it proper to allow respondents to intervene. WHETHER OR NOT THE CASE OF BASS VS. entry made on the owner¶s duplicate of the titles cannot be considered notice that would bind the whole world. Respondents filed a motion for reconsideration. the Motion for Reconsideration dated February 24. 2000 is DENIED for lack of merit. in favor of the NHA. reconsidered its earlier stance. said fact should have changed the whole scenario such that the issuance of a writ of possession ceased to be summary in nature and was no longer ministerial. the Court of Appeals. according to the NHA. unless the same had been annotated on the certificate of title. 1992 granting the writ of possession which. the appellate court opined that it was improperly and erroneously made. is RECONSIDERED and SET ASIDE and the petition DISMISSED. On November 27. As to the RTC¶s admission of respondents¶ petition for intervention. respondents argued that said order did not constitute res judicata so as to bar the filing of the petition for intervention since the said order was not a judgment on the merits that could attain finality. Respondents then concluded that their right to redeem the properties against NHA¶s right to the writ of possession must be threshed out in a hearing of the case on its merits. WHETHER OR NOT THE ANNOTATION OF THE SHERIFF¶S CERTIFICATE OF SALE IN THE PRIMARY ENTRY BOOK OF THE REGISTER OF DEEDS AND ON THE OWNER¶S DUPLICATE TITLE IS SUFFICIENT COMPLIANCE WITH THE REQUIREMENT OF LAW ON REGISTRATION. 3135. Taking its cue from Bass v.30 Hence. NHA tendered the following issues: 1. The Court of Appeals believed that the only recourse available to a mortgagor. but it upheld the grant of the alias writ of possession. such as sale of real property. as amended. on the other hand. became final and executory. offered the following as issues: I .

As to the merits. 2000 Decision. 4. and the July 19. or a certified true copy of the judgment or final order or resolution certified by the clerk of court of the court a quo and the requisite number of plain copies thereof. NHA refers to Land Registration Administration Circular No. Contents of petition. Inc. it could not be blamed for the non-registration of the sale in the original copies. Respondents also assail NHA¶s citation of Sta. II WHETHER OR NOT THE INSTANT PETITION COMPLIES WITH THE REQUIREMENTS OF RULE 45 OF THE RULES OF COURT. Acting Register of Deeds of Nueva Ecija. De la Rama since the ruling therein stating that entry and annotation of a sale instrument on the owner¶s duplicate copy only as insufficient registration. namely. this Court made a favorable interpretation of Section 56 of Presidential Decree No. Acting Register of Deeds of Nueva Ecija. Respondents reiterate that the issuance of the writ of possession prayed for by NHA before the RTC is no longer ministerial since it raised the issue of whether their period of redemption has already expired. 1994 Order of the Quezon City RTC . entitled "Entry and Provisional Registration of Instruments Pending Reconstitution of Title" which allegedly authorized all Registers of Deeds to accept for entry and provisional registration instruments affecting lost or destroyed certificates of title pending reconstitution of the original. ² The petition shall be filed in eighteen (18) copies. Acting Register of Deeds of Nueva Ecija. where it was allegedly ruled that the primary entry alone of the transaction produces the effect of registration so long as the registrant has complied with all that is required of him for purposes of entry and annotation.32 On the procedural aspect. which ostensibly is not the bone of contention in this case. Court of Appeals. De la Rama was superceded by Development Bank of the Philippines v. NHA insists. with the original copy intended for the court being indicated as such by the petitioner. Additionally. 3 dated December 6.34According to them.WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT THE LOWER COURT DID NOT ACT WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN ADMITTING THE RESPONDENTS¶ INTERVENTION AND GRANTING THE EQUITABLE WRIT OF INJUNCTION THEREBY DISMISSING THE PETITION FOR CERTIORARI AND PROHIBITION. 2000 Amended Decision. Respondents contend that the instant petition is dismissible on the ground that NHA failed to attach pleadings filed in the RTC and the Court of Appeals as required under Section 4. They firmly believe that for the sale instrument to be considered as registered. According to respondents. said case finds no application to the instant controversy because the issue involved in the former was whether the redemption period should be reckoned from the date of the auction sale or the registration of the certificate of sale. and not in the instant special civil action for certiorari and prohibition which is limited in scope. 2001 Resolution all of the Court of Appeals. NHA attached the February 24. Ignacia Rural Bank. In contrast. copies of the transfer certificates of title of the disputed properties. respondents insist that the question of whether the redemption period should be reckoned from the inscription on the owner¶s duplicate copies is a factual and legal issue that is appropriately adjudicated in a hearing on the merits of their petition in intervention. and shall x x x (d) be accompanied by a clearly legible duplicate original. Intermediate Appellate Court35 as the authority to this argument. but not to the instant case where Basspurportedly applies. We dwell first with the procedural issues before the main controversy. and such material portions of the record as would support the petition. respondents submit that annotation of the sheriff¶s certificate of sale on the owner¶s copy is inadequate to propel the running of the redemption period. Rule 45 of the Rules of Court. Ascribing NHA¶s inaction to have the burned titles reconstituted. Respondents disagree with NHA¶s opinion that Bass v. but not to those in the custody of the register of deeds is justified as the latter were burned down. such declarations were not in accordance with the rules which require that a verified pleading must state that the affiant had read the pleading and that the allegations therein were true and correct based on his personal knowledge and not only to the "best" of his knowledge. whether the RTC committed grave abuse of discretion amounting to lack of jurisdiction in admitting their petition in intervention. the inscription must be made on the reconstituted titles. respondents assert that such neglect should not be used as a justification for the non-inscription in the original titles of the certificate of sale. To support this. Respondents also pointed out the purported defective verification of NHA in view of the fact that it merely stated that the one verifying had read the allegations of the petition and that the same were true and correct to the best of his knowledge. 1529. are backed by this Court¶s ruling in Development Bank of the Philippines v. NHA stresses that the annotation and entry in the owner¶s duplicate certificate of titles of the sheriff¶s certificate of sale are sufficient compliance with the requirement of law on registration. and the June 13. NHA says that the inscription of the sheriff¶s certificate of sale only to the owner¶s duplicate copies. the November 27. The legality and validity of the disputed registration on its duplicate copies of the sheriff¶s certificate of sale. respondents question NHA¶s alleged failure to include in its petition copies of material portions of the record such as pleadings filed in the RTC and the Court of Appeals as required under Section 4.33 where purportedly. They cite Barican v. x x x. v. NHA faults the Court of Appeals¶ reliance on Bass v. In its petition. Rule 45 of the Rules of Court which partly provides: SEC. was already abandoned in Development Bank of the Philippines v. Thus. They are of the persuasion that the ruling in DBP pertains exclusively to the unique factual milieu and the issues attendant therein. 1988.

NHA¶s verification conforms to the rule. I have read the allegations contained therein and that the same are true and correct to the best of my own personal knowledge. This Court finds that NHA substantially complied with the requirements under Section 4 of Rule 45.36 when it was faced with the same procedural objection. speedy and inexpensive disposition of every action and proceeding. The same conclusion was arrived at by this Court in Development Bank of the Philippines v. A pleading required to be verified which contains a verification based on "information and belief. thus: As held by this Court in Air Philippines Corporation v. shall be treated as an unsigned pleading. Section 4. We must stress that cases should be determined on the merits. the ends of justice would be served better. The affiant confirmed that he had read the allegations in the petition which were true and correct based on his personal knowledge. if the material allegations in a position paper are summarized in a questioned judgment.37 To achieve this purpose. In fact. after all parties have been given full opportunity to ventilate their causes and defenses. the latter resolved against the annotation of the sale transaction and opined that said entry was "ineffective due to the impossibility of . Rules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court. A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records. In that way. Zamora: [E]ven if a document is relevant and pertinent to the petition. Without a doubt.39 A reading of the above verification reveals nothing objectionable about it. Section 6 of Rule 1 states that the Rules shall be liberally construed in order to promote their objective of ensuring the just. Nevertheless. it being sufficient that the affiant declared that the allegations in the petition are true and correct based on his personal knowledge. The addition of the words "to the best" before the phrase "of my personal knowledge" did not violate the requirement under Section 4 of Rule 7. 4. Now. Four years had passed before the missing certificates of title were reconstituted. The main issue before us is whether the annotation of the sheriff¶s certificate of sale on the owner¶s duplicate certificate of titles is sufficient registration considering that the inscription on the original certificates could not be made as the same got burned. verified or accompanied by affidavit. the annotation of the said transaction to the originals of the certificates of title could not be done because the same titles were missing from the files of the Registry. we have sufficient basis to actually and completely dispose of the case. the dismissal is unwarranted because the CA records containing the promissory notes and the real estate and chattel mortgages were elevated to this Court. it will suffice that only a certified true copy of the judgment is attached. Rule 7 of the Rules of Court states: SEC. as to the merits of the case. After it had paid the required fees. ± Except when otherwise specifically required by law or rule. Ltd. it need not be appended if it is shown that the contents thereof can also [be] found in another document already attached to the petition. are not speculative or merely imagined. resulting in technicalities that tend to frustrate rather than promote substantial justice. Verification." or upon "knowledge. and have been made in good faith. a petition lacking an essential pleading or part of the case record may still be given due course or reinstated (if earlier dismissed) upon showing that petitioner later submitted the documents required. following the extrajudicial foreclosure sale where it emerged as the highest bidder." or lacks a proper verification. When DBP sought the inscription of the four-year old sale transaction on the reconstituted titles. The reason for requiring verification in the petition is to secure an assurance that the allegations of a pleading are true and correct. said transaction was entered in the primary entry book. A strict and rigid application of rules. being in doubt of the proper action to take. DBP.ordering the reconstitution of the said titles. the verification of a pleading is made through an affidavit or sworn statement confirming that the affiant has read the pleading whose allegations are true and correct of the affiant's personal knowledge or based on authentic records. rather than on technicalities or procedural imperfections. Of foremost importance is Development Bank of the Philippines v. Third. must be avoided. even if the pleadings and other supporting documents were not attached to the petition. referred the matter to the Commissioner of the Land Registration Authority by consulta. In that case.. registered with the Register of Deeds the sheriff¶s certificate of sale in its favor. This prompted DBP to commence reconstitution proceedings of the lost titles. Family Foods Manufacturing Co. information and belief. pleadings need not be under oath. or that it will serve the higher interest of justice that the case be decided on the merits. Jurisprudence is replete with analogous cases. Contrary to respondents¶ assertion. Acting Register of Deeds of Nueva Ecija40 where the Court listed cases where the transaction or instrument was annotated not on the original certificate but somewhere else. Thus. the Acting Register of Deeds. However.38 The General Manager of NHA verified the petition as follows: 3.

accomplishing registration at the time the document was entered because of the non-availability of the certificate (sic) of title involved."41 In other words, annotation on the primary book was deemed insufficient registration. The Court disagreed with this posture. Considering that DBP had paid all the fees and complied with all the requirements for purposes of both primary entry and annotation of the certificate of sale, the Court declared that mere entry in the primary book was considered sufficient registration since "[DBP] cannot be blamed that annotation could not be made contemporaneously with the entry because the originals of the subject certificates of title were missing and could not be found, since it had nothing to do with their safekeeping. If anyone was responsible for failure of annotation, it was the Register of Deeds who was chargeable with the keeping and custody of those documents."42 To buttress its conclusion, the Court reviewed the relevant jurisprudence starting from 1934.1avvph!1 The Court noted that before the Second World War, particularly in Government of the Philippine Islands v. Aballe,43 the prevailing doctrine was an inscription in the book of entry even without the notation on the certificate of title was considered as satisfactory and produced all the effects which the law gave to its registration. During the war, however, the Court observed that there was apparent departure from said ruling since in Bass v. De la Rama, the holding was that entry of an instrument in the primary entry book does not confer any legal effect without a memorandum thereof inscribed on the certificate of title.44 DBP noted that Bass v. De la Rama, however, survived only for a little while since "later cases appear to have applied the Aballe ruling that entry in the day book, even without the corresponding annotation on the certificate of title, is equivalent to, or produces the effect of, registration to voluntary transactions, provided the requisite fees are paid and the owner¶s duplicates of the certificates of title affected are presented."45 These later cases are Levin v. Bass46 and Potenciano v. Dineros,47 both of which involve the issue of whether entry in the day book of a deed of sale, payment of the fees, and presentation of the owner¶s duplicate certificate of title constitute a complete act of registration.48 Simply, respondents¶ resort to Bass v. De la Rama is futile as the same was abandoned by the later cases, i.e.,Bass, Potenciano and DBP. In the recent case of Autocorp Group v. Court of Appeals,49 the respondent was awarded the foreclosed parcels of land. A sheriff¶s certificate of sale was thereafter issued in its favor. Thereafter, petitioners in that case filed a complaint before the RTC with a prayer for the issuance of an ex parte TRO aimed at preventing the Register of Deeds from registering the said certificate of sale in the name of the respondent and from taking possession of the subject properties.50 Before the RTC could issue a TRO, respondent presented the sheriff¶s certificate of sale to the Register of Deeds who entered the same certificate in the primary book, even if the registration fee was paid only the following day. Four days after, the RTC issued a TRO directing the Register of Deeds to refrain from registering the said sheriff¶s certificate of sale. A preliminary injunction was thereafter issued as the TRO was about to expire. The preliminary injunction was questioned by therein respondent. One of the main issues raised there was whether the entry of the certificate of sale in the primary book was equivalent to registration such that the TRO and the preliminary injunction issues would not lie anymore as the act sought to be restrained had become an accomplished act. The Court held that the TRO and the preliminary injunction had already become moot and academic by the earlier entry of the certificate of sale in the primary entry book which was tantamount to registration, thus: In fine, petitioner¶s prayer for the issuance of a writ of injunction, to prevent the register of deeds from registering the subject certificate of sale, had been rendered moot and academic by the valid entry of the instrument in the primary entry book. Such entry is equivalent to registration. Injunction would not lie anymore, as the act sought to be enjoined had already become a fait accompli or an accomplished act.51 Indeed, the prevailing rule is that there is effective registration once the registrant has fulfilled all that is needed of him for purposes of entry and annotation, so that what is left to be accomplished lies solely on the register of deeds. The Court thus once held: Current doctrine thus seems to be that entry alone produces the effect of registration, whether the transaction entered is a voluntary or an involuntary one, so long as the registrant has complied with all that is required of him for purposes of entry and annotation, and nothing more remains to be done but a duty incumbent solely on the register of deeds.52 In the case under consideration, NHA presented the sheriff¶s certificate of sale to the Register of Deeds and the same was entered as Entry No. 2873 and said entry was further annotated in the owner¶s transfer certificate of title.53 A year later and after the mortgagors did not redeem the said properties, respondents filed with the Register of Deeds an Affidavit of Consolidation of Ownership54after which the same instrument was presumably entered into in the day book as the same was annotated in the owner¶s duplicate copy.55 Just like in DBP, Levin, Potenciano and Autocorp, NHA followed the procedure in order to have its sheriff¶s certificate of sale annotated in the transfer certificates of title. There would be, therefore, no reason not to apply the ruling in said cases to this one. It was not NHA¶s fault that the certificate of sale was not annotated on the transfer certificates of title which were supposed to be in the custody of the Registrar, since the same were burned. Neither could NHA be blamed for the fact that there were no reconstituted titles available during the time of inscription as it had taken the necessary steps in having the same reconstituted as early as July 15, 1988.56 NHA did everything within its power to assert its right. While it may be true that, in DBP, the Court ruled that "in the particular situation here obtaining, annotation of the disputed entry on the reconstituted originals of the certificates of title to which it refers is entirely proper and justified," this does not mean, as respondents insist, that the ruling therein applies exclusively to the factual milieu and the issue obtaining in said case, and not to similar cases. There is nothing in the subject declaration that categorically states its pro hac vice character. For in truth, what the said statement really conveys is that the current doctrine that entry in the primary book produces the effect of registration can be applied in the situation obtaining in that case since the registrant therein complied with all that was required of it, hence, it was fairly reasonable that its acts be given the effect of registration, just as the Court did in the past cases. In fact the Court there continued with this pronouncement: To hold said entry ineffective, as does the appealed resolution, amounts to declaring that it did not, and does not, protect the registrant (DBP) from claims arising, or transactions made, thereafter which are adverse to or in derogation of the rights created or conveyed by the transaction

thus entered. That, surely, is a result that is neither just nor can, by any reasonable interpretation of Section 56 of Presidential Decree No. 1529 be asserted as warranted by its terms.57 What is more, in Autocorp Group v. Court of Appeals,58 the pertinent DBP ruling was applied, thereby demonstrating that the said ruling in DBP may be applied to other cases with similar factual and legal issues, viz: Petitioners contend that the aforecited case of DBP is not apropos to the case at bar. Allegedly, in DBP, the bank not only paid the registration fees but also presented the owner¶s duplicate certificate of title. We find no merit in petitioner¶s posture x x x. xxxx Like in DBP v. Acting Register of Deeds of Nueva Ecija, the instrument involved in the case at bar, is a sheriff¶s certificate of sale, We hold now, as we held therein, that the registrant is under no necessity to present the owner¶s duplicates of the certificates of title affected, for purposes of primary entry, as the transaction sought to be recorded is an involuntary transaction. xxxx x x x Such entry is equivalent to registration. Injunction would not lie anymore, as the act sought to be enjoined had already become a fait accompli or an accomplished act.59 Moreover, respondents¶ stand on the non-applicability of the DBP case to other cases, absent any statement thereof to such effect, contravenes the principle of stare decisis which urges that courts are to apply principles declared in prior decisions that are substantially similar to a pending case.60 Since entry of the certificate of sale was validly registered, the redemption period accruing to respondents commenced therefrom, since the oneyear period of redemption is reckoned from the date of registration of the certificate of sale.61 It must be noted that on April 16, 1991, the sheriff¶s certificate of sale was registered and annotated only on the owner¶s duplicate copies of the titles and on April 16, 1992, the redemption period expired, without respondents having redeemed the properties. In fact, on April 24, 1992, NHA executed an Affidavit of Consolidation of Ownership. Clearly, respondents have lost their opportunity to redeem the properties in question. As regards respondents¶ allegation on the defect in the publication and notice requirements of the extrajudicial foreclosure sale, the same is unavailing. The rule is that it is the mortgagor who alleges absence of a requisite who has the burden of establishing such fact.62 This is so because foreclosure proceedings have in their favor the presumption of regularity and the burden of evidence to rebut the same is on the party who questions it.63 Here, except for their bare allegations, respondents failed to present any evidence to support them. In addition, NHA stated in its Comment to Motion for Leave of Court to Intervene that it had complied with the publication of the Notice of Sheriff¶s Sale in the Manila Times in the latter¶s issues dated July 14, 21 and 28, 1990.64 It also claimed that an Affidavit of Publication of said newspaper was attached as Annex "B" in the said comment.65 NHA also said that respondents had been furnished with a copy of the Notice of Sheriff¶s Sale as shown at the bottom portion of said notice.66 From all these, it would tend to show that respondents¶ aspersion of non-compliance with the requirements of foreclosure sale is a futile attempt to salvage its statutory right to redeem their foreclosed properties, which right had long been lost by inaction. Considering that the foreclosure sale and its subsequent registration with the Register of Deeds were done validly, there is no reason for the nonissuance of the writ of possession. A writ of possession is an order directing the sheriff to place a person in possession of a real or personal property, such as when a property is extrajudicially foreclosed.67 Section 7 of Act No. 3135 provides for the rule in the issuance of the writ of possession involving extrajudicial foreclosure sales of real estate mortgage, to wit: Sec. 7. In any sale made under the provisions of this Act, the purchaser may petition the [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 the 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. This provision of law authorizes the purchaser in a foreclosure sale to apply for a writ of possession during the redemption period by filing an ex parte motion under oath for that purpose in the corresponding registration or cadastral proceeding in the case of property with Torrens title.68 Upon the filing of such motion and the approval of the corresponding bond, the law also in express terms directs the court to issue the order for a writ of possession.69

The time-honored precept is that after the consolidation of titles in the buyer¶s name, for failure of the mortgagor to redeem, the writ of possession becomes a matter of right.70 Its issuance to a purchaser in an extrajudicial foreclosure is merely a ministerial function.71 The writ of possession issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond. The judge issuing the writ following these express provisions of law neither exercises his official discretion nor judgment.72 As such, the court granting the writ cannot be charged with having acted without jurisdiction or with grave abuse of discretion.73 To accentuate the writ¶s ministerial character, the Court disallowed injunction to prohibit its issuance despite a pending action for annulment of mortgage or the foreclosure itself.74 Believing that the instant case does not come within the penumbra of the foregoing rule, respondents resort to the ruling in Barican v. Intermediate Appellate Court.75 Unfortunately for them, the instant case does not even come close to the cited case. There, the Court deemed it inequitable to issue a writ of possession in favor of the purchaser in the auction sale considering that the property involved was already in the possession of a third person by virtue of a deed of sale with assumption of mortgage even before the purchaser could register the sheriff¶s certificate of sale. Also, the auction buyer therein unreasonably deferred to exercise its right to acquire possession over the property. These circumstances are not present in the instant case. Moreover, in Fernandez v. Espinoza,76 the Court refused to apply the ruling in Barican v. Intermediate Appellate Court77 and Cometa v. Intermediate Appellate Court,78 two cases which are exemptions to the stated rule, reasoning that: In Cometa, which actually involved execution of judgment for the prevailing party in a damages suit, the subject properties were sold at the public auction at an unusually lower price, while in Barican, the mortgagee bank took five years from the time of foreclosure before filing the petition for the issuance of writ of possession. We have considered these equitable and peculiar circumstances in Cometa and Barican to justify the relaxation of the otherwise absolute rule. None of these exceptional circumstances, however, attended herein so as to place the instant case in the same stature as that of Cometa and Barican. Instead, the ruling in Vaca v. Court of Appeals is on all fours with the present petition. In Vaca, there is no dispute that the property was not redeemed within one year from the registration of the extrajudicial foreclosure sale; thus, the mortgagee bank acquired an absolute right, as purchaser, to the issuance of the writ of possession. Similarly, UOB, as the purchaser at the auction sale in the instant case, is entitled as a matter of right, to the issuance of the writ of possession. Just as in Fernandez, this Court does not see any compelling reason to veer away from the established rule. In fine, this Court finds that the Court of Appeals committed reversible error in ruling that the annotation of NHA¶s sheriff¶s certificate of sale on the duplicate certificates of title was not effective registration and in holding that respondents¶ redemption period had not expired. WHEREFORE, premises considered, the instant petition is hereby GRANTED. The Amended Decision of the Court of Appeals dated November 27, 2000 is SET ASIDE. SO ORDERED. DOUBLE SALE San Lorenzo Dev¶t. Corp. v. CA CASE DIGEST FACTS: Certiorari. Sps. Lu are owners of 2 parcels of land situated in Laguna. They sold these to Babasanta for the price of P15 per sq. m. A downpayment worth P50 K was evidenced by a memorandum receipt. Other payments were also made totaling P200 K. Babasanta wrote Pacita Lu demanding the execution of a final deed of sale in his favor so that he could effect full payment of the purchase price. He also informed the spouses that he received information that the property was sold to another and demanded that the second sale be cancelled. Pacita responded acknowledging the agreement to sell the property but reminded Babasanta that when the payment for the purchase price became due, he asked for its reduction which was refused causing him to back out of the sale. She added that she returned the P50 k through Eugenio Oya. Babasanta filed a COMPLAINT FOR SPECIFIC PERFORMANCE AND DAMAGES before the RTC. He filed an amended complaint praying for the issuance of a WRIT OF PRELIMINARY INJUNCTION with TRO which included the Register of Deeds as defendant to restrain the transfer or conveyance of the properties. San Lorenzo filed a MOTION FOR INTERVENTION alleging its interest because the properties were sold to it evidenced by a DEED OF ABSOLUTE SALE WITH MORTGAGE.

the most that sale does is to create the obligation to transfer ownership. since in a contract of sale ownership is transferred to the vendee only upon the delivery of the thing sold. reversed the RTC decision. the law provides that the ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Article 1497 to 1501. 2. When the thing sold twice is an immovable. 1544. When SLDC registered the sale in June 30. Babasanta had not taken possession of the property at any time after the perfection of the sale in his favor or exercised acts of dominion over it despite his assertions that he was the rightful owner of the lands. 3. the one who acquires it and first records it in the Registry of Property. if it should be movable property. RTC applied Article 1544 CC. but merely a title.RTC. even on the assumption that the perfected contract between the parties was a sale. It declared that SLDC is a buyer in bad faith. and in consequence of certain contracts. ³ownership and other real rights over property are acquired and transmitted by law. there was no delivery to Babasanta. 3. however. RESPONDENT¶S CONTENTION(S): 1. 2. respondent Babasanta did not acquire ownership by the mere execution of the receipt by Pacita Lu acknowledging receipt of partial payment for the property.´ Contracts only constitute titles or rights to the transfer or acquisition of ownership. Sldc did not acquire ownership of the property because it failed to comply with the requirements of registration in good faith. Under Article 712 of the Civil Code. It provides: Art. If the same thing should have been sold to different vendees. To execute the necessary deed of conveyance. In relation to the acquisition and transfer of ownership. 4. Therefore. Granted the preliminary injunction conditioned upon Babasanta¶s filing of a bond in the amount of P50 K. The principle of primus tempore. Bad faith is evident from the fact that it did not inquire the purpose for the advance sought by Pacita. the ownership shall be transferred to the person who may have first taken possession thereof in good faith. Should it be immovable property. However. potior jure (first in time. provided there is good faith. by tradition. which is essential to transfer ownership of the property. A mode is the legal means by which dominion or ownership is created. in the absence thereof. Upheld the sale to SLDC. PETITIONER¶S CONTENTION(S): 1. Simply stated. and (2) legal or constructive delivery. For another. no constructive delivery of the lands could have been effected. Thus. sale by itself does not transfer or affect ownership. xxxxx Following the above disquisition. was not embodied in a public instrument. that actually transfers ownership. Having advance P200 K to Pacita did not amount to a prior notice that the property was prior sold to Babasanta Pacita had not informed them that the land was already sold to another After execution of the sale in its favor it immediately took possession thereof. it should be noted that sale is not a mode. Lu and Babasante was vailid and subsisting and ordered the Sps. Since there was no annotations in the in the title it relied on the correctness of the title. to wit: (1) actual delivery. whether actual or constructive. The word ³delivered´ should not be taken restrictively to mean transfer of actual physical possession of the property. both . but title is only the legal basis by which to affect dominion or ownership. while delivery or tradition is the mode of accomplishing the same. to the person who presents the oldest title. The law recognizes two principal modes of delivery. Hence. though valid. Should there be no inscription. CA. It acquired the property in good faith. it must be stressed that the juridical relationship between the parties in a double sale is primarily governed by Article 1544 which lays down the rules of preference between the two purchasers of the same property. 1989. by testate and intestate succession. ISSUE: Who has a better right SLDC or Babasanta? RULING: xxxx The perfection of a contract of sale should not. be confused with its consummation. It declared that the sale between Sps. For one. stronger in right) gains greater significance in case of double sale of immovable property. 1990 there was already a notice of lis pendens annotated on the title as early as June 2. and. the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Explicitly. by donation. the ownership shall pertain to the person who in good faith was first in the possession. ownership could not have passed to Babasanta in the absence of delivery. It is tradition or delivery. transferred or destroyed. as a consequence of sale. the agreement between Babasanta and the Spouses Lu.

the Spouses Lu executed the Option to Buy in favor of SLDC upon receiving P316.160. and the buyer who has taken possession first of the property in good faith shall be preferred. SLDC¶s right is definitely superior to that of Babasanta¶s. the third priority is of the date of title. A notice of lis pendens. be constructive notice to all persons from the time of such registering. unless he intends to gamble on the results of the litigation. shall be deemed the owner. The law speaks not only of one criterion. Court of Appeals. filing. It must be stressed that as early as 11 February 1989. given the superiority of the right of SLDC to the claim of Babasanta the annotation of the notice of lis pendens cannot help Babasanta¶s position a bit and it is irrelevant to the good or bad faith characterization of SLDC as a purchaser. the constructive notice operates as such by the express wording of Section 52 from the time of the registration of the notice of lis pendens which in this case was effected only on 2 June 1989. However. the vendors were still the registered owners of the property and were in fact in possession of the lands. If the registration is done in bad faith.D. Time and again. from the time of execution of the first deed up to the moment of transfer and delivery of possession of the lands to SLDC. or interest in. there was already a notice of lis pendens on the file with the Register of Deeds. the same having been filed one year before on 2 June 1989.264. order. the registrant must have no knowledge of the defect or lack of title of his vendor or must not have been aware of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor. In assailing knowledge of the transaction between him and the Spouses Lu.00 as option money from SLDC. Constructive notice upon registration. Esteban. such property and pays a full and fair price for the same at the time of such purchase. At the time of the sale of the property to SLDC. Babasanta. After SLDC had paid more than one half of the agreed purchase price of P1. it is as if there is no registration at all. 52. however. this Court had the occasion to rule that if a vendee in a double sale registers the sale after he has acquired knowledge of a previous sale. strongly argues that the registration of the sale by SLDC was not sufficient to confer upon the latter any title to the property since the registration was attended by bad faith. /adsum . lease. Simply stated. thus: Sec. Babasanta apparently relies on the principle of constructive notice incorporated in Section 52 of the Property Registration Decree (P. as the Court held in Nataño v. the registration constitutes a registration in bad faith and does not confer upon him any right. HELD: petition granted. Did the registration of the sale after the annotation of the notice of lis pendens obliterate the effects of delivery and possession in good faith which admittedly had occurred prior to SLDC¶s knowledge of the transaction in favor of Babasanta? We do not hold so. judgment. we rule that SLDC qualifies as a buyer in good faith since there is no evidence extant in the records that it had knowledge of the prior transaction in favor of Babasanta. Since SLDC acquired possession of the property in good faith in contrast to Babasanta. ± Every conveyance. the second is priority of possession. or entering. 1529) which reads. there being no priority of such entry. or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies. at which time the sale in favor of SLDC had long been consummated insofar as the obligation of the Spouses Lu to transfer ownership over the property to SLDC is concerned. he points out that at the time SLDC registered the sale on 30 June 1990. it had acted in good faith and the subsequent annotation of lis pendens has no effect at all on the consummated sale between SLDC and the Spouses Lu. A purchaser in good faith is one who buys property of another without notice that some other person has a right to.640. who neither registered nor possessed the property at any time. still Babasanta¶s claim could not prevail over that of SLDC¶s. SLDC had no knowledge of the prior transaction of the Spouses Lu with Babasanta. and that he should keep his hands off the same. with good faith as the common critical element. mortgage. Verily. attachment. instrument or entry affecting registered land shall. serves as a warning to a prospective purchaser or incumbrancer that the particular property is in litigation. SLDC registered the sale with the Registry of Deeds after it had acquired knowledge of Babasanta¶s claim. and. The first criterion is priority of entry in the registry of property. More fundamentally. lien. in the absence of the two priorities. No. At the time both deeds were executed. In Abarquez v. Specifically.´ xxxxx Assuming ex gratia argumenti that SLDC¶s registration of the sale had been tainted by the prior notice of lis pendens and assuming further for the same nonce that this is a case of double sale. or before he has notice of the claim or interest of some other person in the property.00. this Court has ruled that a person dealing with the owner of registered land is not bound to go beyond the certificate of title as he is charged with notice of burdens on the property which are noted on the face of the register or on the certificate of title.made in good faith. the act of registration must be coupled with good faith² that is. Admittedly. filed. Following the foregoing definition. the Spouses Lu subsequently executed on 3 May 1989 a Deed of Absolute Sale in favor or SLDC. if registered.

He demanded that the second sale be cancelled and that a final deed of sale be issued in his favor. He contended that the issuance of a preliminary injunction was necessary to restrain the transfer or conveyance by the Spouses Lu of the subject property to other persons. the Spouses Lu) owned two (2) parcels of land situated in Sta. had verbally agreed to transform the transaction into a contract to sell the two parcels of land to Babasanta with the fifty thousand pesos (P50. T. (hereinafter.808 square meters or a total of 3. Rosa. Laguna covered by TCT No.000. On 2 June 1989. She.00) per square meter. Laguna as party defendant. a Complaint for Specific Performance and Damages[1] against his co-respondents herein.000.00) and the latter allegedly failed to pay the balance of two hundred sixty thousand pesos (P260.39022 and T-39023 had been sold to him by the spouses at fifteen pesos (P15. Babasanta alleged that the lands covered by TCT No.000. (hereinafter.000.00). the latter rescinded the contract to sell and declared that the original loan transaction just be carried out in that the spouses would be indebted to him in the amount of two hundred thousand pesos (P200. on 6 July 1989. Pacita Lu wrote a letter to Babasanta wherein she acknowledged having agreed to sell the property to him at fifteen pesos (P15. of San Pedro. he requested for a reduction of the price and when she refused. .00) in the name of Babasanta to show that she was able and willing to pay the balance of her loan obligation.00) per square meter and when the Spouses Lu refused to grant Babasanta¶s request. the Spouses Lu. Babasanta) for the price of fifteen pesos (P15. total payments made by Babasanta amounted to only two hundred thousand pesos (P200. it appears that respondents Miguel Lu and Pacita Zavalla. In the same letter.00) to twelve pesos (P12. Accordingly.00) to be considered as the downpayment for the property and the balance to be paid on or before 31 December 1987. In response. the trial court in its Order dated 17 January 1990[5] admitted the amended complaint. however.00) per square meter. 05020269 in the amount of two hundred thousand pesos (P200.00) as evidenced by a memorandum receipt issued by Pacita Lu of the same date. In their Answer. Pacita added that she returned the sum of fifty thousand pesos (P50. respondents allegedly refused. as plaintiff. filed before the Regional Trial Court (RTC).00) per square meter. Several other payments totaling two hundred thousand pesos (P200. Babasanta had purportedly asked Pacita for a reduction of the price from fifteen pesos (P15. Babasanta notified the spouses about having received information that the spouses sold the same property to another without his knowledge and consent.000. However. T-39023 both measuring 15. T-39022 and TCT No. Babasanta wrote a letter to Pacita Lu to demand the execution of a final deed of sale in his favor so that he could effect full payment of the purchase price. J. On 20 August 1986. without the knowledge and consent of Miguel Lu.000.00) despite repeated demands. the latter and Babasanta. Babasanta made a downpayment of fifty thousand pesos (P50. they purchased Interbank Manager¶s Check No.1616 hectares. Babasanta backed out of the sale. Branch 31. Respondents Lu added that as of November 1987. Babasanta later filed an Amended Complaint dated 17 January 1990[3] wherein he prayed for the issuance of a writ of preliminary injunction with temporary restraining order and the inclusion of the Register of Deeds of Calamba.00). Laguna. Despite his repeated demands for the execution of a final deed of sale in his favor.SAN LORENZO VS DEV¶T CORP VS CA TINGA.000. reminded Babasanta that when the balance of the purchase price became due. The Spouses Lu filed their Opposition[4] to the amended complaint contending that it raised new matters which seriously affect their substantive rights under the original complaint.000. Sometime in May 1989.00) to Babasanta through Eugenio Oya.000. respondent Babasanta.00) were made by Babasanta. the Spouses Lu purportedly sold the two parcels of land to respondent Pablo Babasanta.[2] the Spouses Lu alleged that Pacita Lu obtained loans from Babasanta and when the total advances of Pacita reached fifty thousand pesos (P50.: From a coaptation of the records of this case.

In his Opposition to SLDC¶s motion for intervention. the RTC rendered its Decision on 30 July 1993 upholding the sale of the property to SLDC. it paid an option money in the amount of three hundred sixteen thousand one hundred sixty pesos (P316. It ordered the Spouses Lu to pay Babasanta the sum of two hundred thousand pesos (P200. After a protracted trial. the vendors were without legal capacity to transfer or dispose of the two parcels of land to the intervenor. and the latter to pay the balance of the purchase price in the amount of two hundred sixty thousand pesos (P260. this petition. The Spouses Lu were further ordered to return all payments made by SLDC with legal interest and to pay attorney¶s fees to Babasanta. T-39022 (T-7218) and No. in awarding damages in his favor and in refusing to grant the reliefs prayed for in their answer. SAN LORENZO WAS PUT ON INQUIRY OF A PRIOR TRANSACTION ON THE PROPERTY.[13] the Spouses Lu informed the appellate court that they are no longer contesting the decision dated 4 October 1995. SLDC assigns the following errors allegedly committed by the appellate court: THE COURT OF APPEALS ERRED IN HOLDING THAT SAN LORENZO WAS NOT A BUYER IN GOOD FAITH BECAUSE WHEN THE SELLER PACITA ZAVALLA LU OBTAINED FROM IT THE CASH ADVANCE OF P200. ownership of the property should pertain to the buyer who first acquired possession of the property.000. the Spouses Lu executed in its favor an Option to Buy the lots subject of the complaint.160.On 19 January 1990. . The appellate court denied SLDC¶s motion for reconsideration on the ground that no new or substantial arguments were raised therein which would warrant modification or reversal of the court¶s decision dated 4 October 1995. Meanwhile.[14] the appellate court considered as withdrawn the motion for reconsideration filed by the Spouses Lu in view of their manifestation of 20 December 1995. THE COURT OF APPEALS ERRED IN FAILING TO APPRECIATE THE ESTABLISHED FACT THAT THE ALLEGED FIRST BUYER.[8] respondent Babasanta demurred and argued that the latter had no legal interest in the case because the two parcels of land involved herein had already been conveyed to him by the Spouses Lu and hence. SLDC added that the certificates of title over the property were delivered to it by the spouses clean and free from any adverse claims and/or notice of lis pendens. It concluded that symbolic possession could be considered to have been first transferred to SLDC and consequently ownership of the property pertained to SLDC who purchased the property in good faith. LIEN. ENCUMBRANCE OR LIS PENDENS WAS ANNOTATED ON THE TITLES. The trial court equated the execution of a public instrument in favor of SLDC as sufficient delivery of the property to the latter. The appellate court ruled that the Absolute Deed of Sale with Mortgage in favor of SLDC was null and void on the ground that SLDC was a purchaser in bad faith. On the complaint-in-intervention.00) out of the total consideration for the purchase of the two lots of one million two hundred sixty-four thousand six hundred forty pesos (P1. namely Lot 1764-A and 1764-B. the trial court in its Order dated 21 March 1990 allowed SLDC to intervene.000. Respondent Babasanta appealed the trial court¶s decision to the Court of Appeals alleging in the main that the trial court erred in concluding that SLDC is a purchaser in good faith and in upholding the validity of the sale made by the Spouses Lu in favor of SLDC.264. the trial court ordered the Register of Deeds of Laguna. Hence. Accordingly. WAS NOT IN POSSESSION OF THE DISPUTED PROPERTY WHEN SAN LORENZO BOUGHT AND TOOK POSSESSION OF THE PROPERTY AND NO ADVERSE CLAIM. the trial court ruled that since both Babasanta and SLDC did not register the respective sales in their favor. After the Spouses Lu received a total amount of six hundred thirty-two thousand three hundred twenty pesos (P632.00) with legal interest plus the further sum of fifty thousand pesos (P50. the trial court should have declared the verbal contract to sell between Pacita Lu and Pablo Babasanta null and void ab initio for lack of knowledge and consent of Miguel Lu. Applying Article 1544 of the Civil Code. SLDC in its Complaint-in-Intervention alleged that on 11 February 1989. Respondent spouses likewise filed an appeal to the Court of Appeals.320. RESPONDENT BABASANTA. in a Manifestation dated 20 December 1995. Claiming that it was a buyer in good faith.000. T-39023 (T-7219).00).00) they executed on 3 May 1989 a Deed of Absolute Sale with Mortgage in its favor.[7] It alleged that it was a buyer in good faith and for value and therefore it had a better right over the property in litigation.[12] However. Calamba Branch to cancel the notice of lis pendens annotated on the original of the TCT No. herein petitioner San Lorenzo Development Corporation (SLDC) filed a Motion for Intervention[6] before the trial court.000. They further averred that the trial court erred in not dismissing the complaint filed by Babasanta. SLDC further alleged that it only learned of the filing of the complaint sometime in the early part of January 1990 which prompted it to file the motion to intervene without delay. the two parcels of land involved. SLDC alleged that it had legal interest in the subject matter under litigation because on 3 May 1989.00). In its Resolution dated 11 March 1996. the Court of Appeals rendered its Decision[11] which set aside the judgment of the trial court.000. had been sold to it in a Deed of Absolute Sale with Mortgage.640. On 4 October 1995.[9] Respondent Babasanta¶s motion for the issuance of a preliminary injunction was likewise granted by the trial court in its Order dated 11 January 1991[10] conditioned upon his filing of a bond in the amount of fifty thousand pesos (P50. The Spouses Lu argued that since the properties involved were conjugal.00) as and for attorney¶s fees.00). SLDC and the Spouses Lu filed separate motions for reconsideration with the appellate court. SLDC argued that it had no obligation to look beyond the titles submitted to it by the Spouses Lu particularly because Babasanta¶s claims were not annotated on the certificates of title at the time the lands were sold to it. It declared that the sale between Babasanta and the Spouses Lu was valid and subsisting and ordered the spouses to execute the necessary deed of conveyance in favor of Babasanta. They contended that the trial court erred in failing to consider that the contract to sell between them and Babasanta had been novated when the latter abandoned the verbal contract of sale and declared that the original loan transaction just be carried out. SLDC filed its Complaint-in-Intervention on 19 April 1990.00.

the Spouses Lu informed the Court that due to financial constraints they have no more interest to pursue their rights in the instant case and submit themselves to the decision of the Court of Appeals. He emphasized that at the time SLDC registered the sale in its favor on 30 June 1990.000.000. title passes to the vendee upon the delivery of the thing sold. THE COURT OF APPEALS ERRED IN HOLDING THAT NOTWITHSTANDING ITS FULL CONCURRENCE ON THE FINDINGS OF FACT OF THE TRIAL COURT.00) which it advanced to Pacita Lu would be deducted from the balance of the purchase price still due from it and should not be construed as notice of the prior sale of the land to Babasanta. they could have easily executed the document of sale in its required form simultaneously with their acceptance of the partial payment. Contracts. such payment being a positive suspensive condition and failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective. SLDC averred that the amount of two hundred thousand pesos (P200.6 hectares of land to Babasanta for fifteen pesos (P15. there was already a notice of lis pendens annotated on the titles of the property made as early as 2 June 1989.00) manager¶s check in his favor. are perfected by mere consent. but they did not. He stated therein that despite his repeated requests for the execution of the final deed of sale in his favor so that he could effect full payment of the price. In effect. Invoking the presumption of good faith. Rosa. It added that at no instance did Pacita Lu inform it that the lands had been previously sold to Babasanta.[22] In a contract of sale.000. Doubtlessly. Moreover. in general. Cruz.6 hectares of farm lot situated at Barangay Pulong. the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded. Moreover. contracts shall be obligatory in whatever form they may have been entered into. The offer must be certain and the acceptance absolute. SLDC stressed that after the execution of the sale in its favor it immediately took possession of the property and asserted its rights as new owner as opposed to Babasanta who has never exercised acts of ownership.[20] Moreover.00) per square meter.[24] Consignation of the amounts due in court is essential in order to extinguish Babasanta¶s obligation to pay the balance of the purchase .[17] While the receipt signed by Pacita did not mention the price for which the property was being sold.[21] The receipt signed by Pacita Lu merely states that she accepted the sum of fifty thousand pesos (P50. title is retained by the vendor until the full payment of the price.THE COURT OF APPEALS ERRED IN FAILING TO APPRECIATE THE FACT THAT RESPONDENT BABASANTA HAS SUBMITTED NO EVIDENCE SHOWING THAT SAN LORENZO WAS AWARE OF HIS RIGHTS OR INTERESTS IN THE DISPUTED PROPERTY. petitioner¶s registration of the sale did not confer upon it any right. It argued that it had no reason to suspect that Pacita was not telling the truth that the money would be used to pay her indebtedness to Babasanta. in an Urgent Ex-Parte Manifestation dated 27 August 1999.6 hectares of farm lot situated in Sta. the receipt signed by Pacita Lu should legally be considered as a perfected contract to sell. irresistibly leads to the conclusion that the agreement between Babasanta and the Spouses Lu is a contract to sell and not a contract of sale. Babasanta¶s letter dated 22 May 1989 was quite telling. Hence. SLDC argued that it had every reason to rely on the correctness of the certificate of title and it was not obliged to go beyond the certificate to determine the condition of the property. IT REVERSED AND SET ASIDE THE DECISION OF THE TRIAL COURT UPHOLDING THE TITLE OF SAN LORENZO AS A BUYER AND FIRST POSSESSOR IN GOOD FAITH. encumbrance.[16] On the other hand. whereas in a contract to sell.00) to Pacita Lu upon the latter¶s representation that she needed the money to pay her obligation to Babasanta.000. An analysis of the facts obtaining in this case. Babasanta himself recognized that ownership of the property would not be transferred to him until such time as he shall have effected full payment of the price. Since the titles bore no adverse claim.[23] The perfected contract to sell imposed upon Babasanta the obligation to pay the balance of the purchase price. Rosa.00) as partial payment for 3. Sta. To prove the perfection of the contract of sale in his favor. or lien at the time it was sold to it. In a contract of sale.000. it added that the burden rests on Babasanta to prove that it was aware of the prior sale to him but the latter failed to do so. Pacita Lu allegedly refused to do so. by agreement the ownership is reserved in the vendor and is not to pass until the full payment of the price. The distinction between a contract to sell and a contract of sale is quite germane. While there is no stipulation that the seller reserves the ownership of the property until full payment of the price which is a distinguishing feature of a contract to sell. [15] SLDC contended that the appellate court erred in concluding that it had prior notice of Babasanta¶s claim over the property merely on the basis of its having advanced the amount of two hundred thousand pesos (P200. Meanwhile. as well as the evidence presented by the parties. At any rate. this deficiency was supplied by Pacita Lu¶s letter dated 29 May 1989[18] wherein she admitted that she agreed to sell the 3. Babasanta presented a document signed by Pacita Lu acknowledging receipt of the sum of fifty thousand pesos (P50. The core issue presented for resolution in the instant petition is who between SLDC and Babasanta has a better right over the two parcels of land subject of the instant case in view of the successive transactions executed by the Spouses Lu. Sta. provided all the essential requisites for their validity are present. There being an obligation to pay the price. Laguna. Mere sending of a letter by the vendee expressing the intention to pay without the accompanying payment is not considered a valid tender of payment.00) from Babasanta as partial payment of 3. Laguna. whereas in a contract to sell. Babasanta further asserted that petitioner¶s bad faith in the acquisition of the property is evident from the fact that it failed to make necessary inquiry regarding the purpose of the issuance of the two hundred thousand pesos (P200. the subsequent acts of the parties convince us that the Spouses Lu never intended to transfer ownership to Babasanta except upon full payment of the purchase price.[19] which is manifested by the meeting of the offer and the acceptance upon the thing which are to constitute the contract. respondent Babasanta argued that SLDC could not have acquired ownership of the property because it failed to comply with the requirement of registration of the sale in good faith. had the sellers intended to transfer title. Babasanta should have made the proper tender of payment and consignation of the price in court as required by law. SLDC pointed out that the notice of lis pendens was annotated only on 2 June 1989 long after the sale of the property to it was consummated on 3 May 1989.

[33] traditio longa manu or by mere consent or agreement if the movable sold cannot yet be transferred to the possession of the buyer at the time of the sale. sale by itself does not transfer or affect ownership. potior jure (first in time. 1544.[28] Under Article 712 of the Civil Code. however. (3) cause of the obligation which is established. the obligation on the part of the sellers to convey title never acquired obligatory force. to transfer ownership in exchange for the price. while delivery or tradition is the mode of accomplishing the same. provided there is good faith. though valid. It provides: Art. that is.00 as option money from SLDC. be confused with its consummation. Should it be immovable property.[37] However. Explicitly. ³ownership and other real rights over property are acquired and transmitted by law. which is essential to transfer ownership of the property. Actual delivery consists in placing the thing sold in the control and possession of the vendee. strongly argues that the registration of the sale by SLDC was not sufficient to confer upon the latter any title to the property since the registration was attended by bad faith. but merely a title. It must be stressed that as early as 11 February 1989. the ownership shall pertain to the person who in good faith was first in the possession.[30] The word ³delivered´ should not be taken restrictively to mean transfer of actual physical possession of the property. On the assumption that the transaction between the parties is a contract of sale and not a contract to sell.[38] Verily. was not embodied in a public instrument. Should there be no inscription. being a consensual contract. that actually transfers ownership. but title is only the legal basis by which to affect dominion or ownership.[35] and traditio constitutum possessorium.[29] Therefore. the registrant must have no knowledge of the defect or lack of title of his vendor or must not have been aware of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor. The principle of primus tempore. Thus. the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. the ownership shall be transferred to the person who may have first taken possession thereof in good faith. the one who acquires it and first records it in the Registry of Property.[34] traditio brevi manu if the buyer already had possession of the object even before the sale. he points out that at the time SLDC registered the sale on 30 June 1990. Sale.[36] Following the above disquisition. It is tradition or delivery.00. by donation. SLDC registered the sale with the Registry of Deeds after it had acquired knowledge of Babasanta¶s claim. For one. there was no delivery to Babasanta. Hence. however. After SLDC had paid more than one half of the agreed purchase price of P1. by testate and intestate succession. and.[31] Legal or constructive delivery. respondent Babasanta did not acquire ownership by the mere execution of the receipt by Pacita Lu acknowledging receipt of partial payment for the property. since in a contract of sale ownership is transferred to the vendee only upon the delivery of the thing sold. and in consequence of certain contracts. where the seller remains in possession of the property in a different capacity. even on the assumption that the perfected contract between the parties was a sale. Simply stated. the parties may reciprocally demand performance.[26] The essential elements of a contract of sale. as a consequence of sale. both made in good faith. the most that sale does is to create the obligation to transfer ownership. A mode is the legal means by which dominion or ownership is created. there was already a notice of lis pendens on the file with the Register of Deeds. At the time both deeds were executed. it should be noted that sale is not a mode.640. Glaringly absent from the records is any indication that Babasanta even attempted to make the proper consignation of the amounts due. to wit: (1) actual delivery. whether actual or constructive. the Spouses Lu executed the Option to Buy in favor of SLDC upon receiving P316.[39] Admittedly. When the thing sold twice is an immovable. if it should be movable property. in the absence thereof.[27] The perfection of a contract of sale should not. is perfected by mere consent[25] and from that moment.264. thus.[32] symbolical tradition such as the delivery of the keys of the place where the movable sold is being kept. Did the registration of the sale after the annotation of the notice of lis pendens obliterate the effects of delivery and possession in good faith which admittedly had occurred prior to SLDC¶s knowledge of the transaction in favor of Babasanta? We do not hold so. Babasanta had not taken possession of the property at any time after the perfection of the sale in his favor or exercised acts of dominion over it despite his assertions that he was the rightful owner of the lands. the act of registration must be coupled with good faith² that is. no constructive delivery of the lands could have been effected. from the time of execution of the first deed up to the . SLDC had no knowledge of the prior transaction of the Spouses Lu with Babasanta. (2) object certain which is the subject matter of the contract.´ Contracts only constitute titles or rights to the transfer or acquisition of ownership. the Spouses Lu subsequently executed on 3 May 1989 a Deed of Absolute Sale in favor or SLDC. the same having been filed one year before on 2 June 1989. to the person who presents the oldest title. and (2) legal or constructive delivery. Babasanta. the agreement between Babasanta and the Spouses Lu.price. it must be stressed that the juridical relationship between the parties in a double sale is primarily governed by Article 1544 which lays down the rules of preference between the two purchasers of the same property. transferred or destroyed. Specifically. stronger in right) gains greater significance in case of double sale of immovable property. For another. If the same thing should have been sold to different vendees. The law recognizes two principal modes of delivery. may be had through any of the following ways: the execution of a public instrument evidencing the sale. Babasanta¶s claim of ownership should nevertheless fail. In relation to the acquisition and transfer of ownership. Simply stated.160. shall be deemed the owner. by tradition. ownership could not have passed to Babasanta in the absence of delivery. the law provides that the ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Article 1497 to 1501. on the other hand. to wit: (1) consent or meeting of the minds.

More fundamentally. in this case SLDC has intervened in the pending litigation to protect its rights. Assuming ex gratia argumenti that SLDC¶s registration of the sale had been tainted by the prior notice of lis pendens and assuming further for the same nonce that this is a case of double sale. Esteban. with good faith as the common critical element. the contract between Babasanta and the Spouses Lu is not a contract of sale but merely a contract to sell. attachment.moment of transfer and delivery of possession of the lands to SLDC.[47] we had the occasion to rule that Article 1544 does not apply to a case where there was a sale to one party of the land itself while the other contract was a mere promise to sell the land or at most an actual assignment of the right to repurchase the same land. Realty (2007) CASE DIGEST FACTS: Certiorari. mortgage. instrument or entry affecting registered land shall. CA and Aznar Bro. filed. A purchaser in good faith is one who buys property of another without notice that some other person has a right to. the above discussion on the rules on double sale would be purely academic for as earlier stated in this decision. No. of San Pedro. given the superiority of the right of SLDC to the claim of Babasanta the annotation of the notice of lis pendens cannot help Babasanta¶s position a bit and it is irrelevant to the good or bad faith characterization of SLDC as a purchaser. the registration constitutes a registration in bad faith and does not confer upon him any right. order. the vendors were still the registered owners of the property and were in fact in possession of the lands. Obviously. Court of Appeals. SLDC¶s right is definitely superior to that of Babasanta¶s.D.00 payable to Babasanta and the confirmatory testimony of Pacita Lu herself on cross-examination. we would not hesitate to rule in favor of SLDC on the basis of its prior possession of the property in good faith. there being no priority of such entry. Branch 31. still Babasanta¶s claim could not prevail over that of SLDC¶s. In Dichoso v. A notice of lis pendens. or entering. the instant petition is hereby GRANTED. . 1529) which reads. 52. there was no double sale of the same land in that case. be constructive notice to all persons from the time of such registering. The first criterion is priority of entry in the registry of property.[45] However. In any event. the third priority is of the date of title. in the absence of the two priorities. and the buyer who has taken possession first of the property in good faith shall be preferred. The law speaks not only of one criterion. The decision of the Court of Appeals appealed from is REVERSED and SET ASIDE and the decision of the Regional Trial Court. or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies. or before he has notice of the claim or interest of some other person in the property. In Abarquez. who neither registered nor possessed the property at any time. Be it noted that delivery of the property to SLDC was immediately effected after the execution of the deed in its favor. thus: Sec.[40] Following the foregoing definition. as the Court held in Nataño v. The Court of Appeals has made capital[43] of SLDC¶s averment in its Complaint-in-Intervention[44] that at the instance of Pacita Lu it issued a check for P200. the first sale to the spouses Israel was notarized and registered only after the second vendee. as previously explained. Since SLDC acquired possession of the property in good faith in contrast to Babasanta. it had acted in good faith and the subsequent annotation of lis pendens has no effect at all on the consummated sale between SLDC and the Spouses Lu. In Abarquez v. there is nothing in the said pleading and the testimony which explicitly relates the amount to the transaction between the Spouses Lu and Babasanta for what they attest to is that the amount was supposed to pay off the advances made by Babasanta to Pacita Lu.[42] serves as a warning to a prospective purchaser or incumbrancer that the particular property is in litigation. Accordingly. filing. ± Every conveyance. the incident took place after the Spouses Lu had already executed the Deed of Absolute Sale with Mortgage in favor of SLDC and therefore. or interest in. This Court awarded the property to the Israels because registration of the property by Abarquez lacked the element of good faith.´ Precisely. SO ORDERED. Abarquez.[46] this Court had the occasion to rule that if a vendee in a double sale registers the sale after he has acquired knowledge of a previous sale. lien. Laguna is REINSTATED. registered their deed of sale with the Registry of Deeds. lease. and. the second is priority of possession. No costs. judgment. it has no effect on the legal position of SLDC. While the facts in the instant case substantially differ from that in Abarquez. at which time SLDC had no knowledge at all of the prior transaction by the Spouses Lu in favor of Babasanta. such property and pays a full and fair price for the same at the time of such purchase. At the time of the sale of the property to SLDC. However. but the Israels were first in possession. If the registration is done in bad faith. at which time the sale in favor of SLDC had long been consummated insofar as the obligation of the Spouses Lu to transfer ownership over the property to SLDC is concerned. Roxas.[41] In assailing knowledge of the transaction between him and the Spouses Lu. the constructive notice operates as such¾by the express wording of Section 52¾from the time of the registration of the notice of lis pendens which in this case was effected only on 2 June 1989. Constructive notice upon registration. this Court has ruled that a person dealing with the owner of registered land is not bound to go beyond the certificate of title as he is charged with notice of burdens on the property which are noted on the face of the register or on the certificate of title. Babasanta apparently relies on the principle of constructive notice incorporated in Section 52 of the Property Registration Decree (P. and that he should keep his hands off the same. it is as if there is no registration at all. SLDC¶s faith in the merit of its cause has been vindicated with the Court¶s present decision which is the ultimate denouement on the controversy. Melencion v. At any rate.000. Time and again. unless he intends to gamble on the results of the litigation. if registered. WHEREFORE. we rule that SLDC qualifies as a buyer in good faith since there is no evidence extant in the records that it had knowledge of the prior transaction in favor of Babasanta.

It was registered under Act No. 4. Thus. Aznar registered the sale in its favor under Act 3344 on the contention that at the time of sale.00. The property was brought under the Torrrens system but the title thereto was lost during the 2nd world war. Aznar filed a case for ANNULMENT OF SALE AND CANCELLATION OF TCT NO.00. Go exercised control and dominion over the subject property in an adverse and continuous manner and in a concept of an owner. Juana on the other hand is the mother of the petitioners. there was no title on file. 2. 2nd sale did not transfer the subject property to Go since it was no longer within the vendor¶s power to convey With respect to forgery. RESPONDENT¶S CONTENTION(S): 1.351 sq. Petition id dismissible because the verification and certification of non-forum shopping were not signed by all petitioners Go was a buyer in bad faith because he had prior constructive notice that the property was sold to Aznar because it was registered under Act 3344. Realty in consideration of P10. Improvements have beeb introduced by the buyer. 1989. despite this knowledge. CC) PETITIONER¶S CONTENTION(S): 1. But if the land is registered under the Land Registered Act. Aznar also annotated a NOTICE OF ADVERSE CLAIM in the derivative title possessed by Go. 3. Art 1544 CC does not apply Aznar should have availed of the remedy of RECONSTITUTION.200. The former deed prevails over the latter (according to Art.000. Unheeded. Pursuant to Act No. 3. Yet. It held that the Deed executed between the Amodia¶s and Aznar was registered first than the deed executed with Go. and it is sold and the sale is registered not under the Land Registration Act but under Act 3344.Esteban Bonghanoy was the owner of s 30. 1544 CC. it is uncontroverted that the subject property was under the operation of the Torrens system even before the respective conveyances to Aznar and Go were made. 2. such sale is not considered registered. This rule precisely applies to cases involving conflicting rights over registered property and those of innocent transferees who relied on the clean title of the properties. Thereafter in 1964. Registration under Act 3344 is without legal effect and could not operate as a constructive notice to petitioners and 3rd persons. which considers the act of registration as the operative act that gives validity to the transfer or create a lien upon the land. (see Article 1544 CC) We have already ruled that the REGISTRATION contemplated in this provision refers to registration under the Torrens System. Cebu. the findings of the document examiner is iconcusive ISSUE: Who has a better right to the property Aznar or Go? RULING: Go Kim Chuan! ELEMENTS: 1. 3344 as there was no title on file at the Register of Deeds of Lapu-lapu City. CA. 4. we held that registration must be done in the property registry in order to bind the same. The Notice of Adverse Claim was annotated ony in 1990 after the execution of the deed between the Amodia¶s and Go in 1989. 20626. the Amodia¶s executed an EXTRAJUDICIAL PARTITION OF REAL ESTATE with DEED OF ABSOLUTE SALE which settled Esteban¶s estate and conveyed the property to the Aznar Bro. 1544. and admits this fact. Aznar knew of this. We are not persuaded by such a lame excuse. a reconstituted title was issued to Bonghanoy and a subsequent derivative title to Go Kim Chuan. . the Ampdia¶s executed a DEED OF EXTRAJUDICIAL SETTLEMENT WITH DEED OF ABSOLUTE SALE conveying the property to Go Kim Chuan in consideration of P70. as the term is used under Art. Dismissed Aznar¶s complaint and declared Go as the real owner of the property. Juana Bonghanoy-Amodia is his only daughter. 26. reversed and set aside the RTC decision. RTC. we have here a case of DOUBLE SALE of registered land. m. Act 3344 provides for the system of recording of transactions or claims over unregistered real estate without prejudice to a 3 rd party with a better right. In the case at bench. parcel of land located at MArigondon. Priority in registration Without doubt. Aznar wrote a letter to the Amodia¶s asking them to nullify or withdraw the sale they entered with Go.

Notably. 1990. 1993. he paid all taxes in arrears.: Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Civil Procedure seeking the reversal of the Court of Appeals (CA) Decision[2] dated March 30. good faith on the part of Go cannot be doubted. i. it was the sale in favor of Go which was registered under Act No. before buying the subject property. J. /adsum MELENCION VS COURT OF APPEALS NACHURA. a certificate of title is merely an evidence of ownership or title over the particular property described therein. caused the reconstitution of the lost certificate of title and caused the issuance of the assailed TCT in his name. inscription of an adverse claim serves as a warning to 3rd parties dealing with a piece of real property that someone claims an interest therein or that there is a right superior to that of the titled owner. the said document is deemed not registered. It is therefore absurd to say that Go should be bound by an adverse claim which was not previously annotated on the lost title or on the new one. HELD: petition granted. 1989. However. the second purchaser must be in good faith. . 496. he must have no knowledge of the previous alienation of the property by the vendor to another. Xxx Moreover. 2001 and praying that the Decision[3] of the Regional Trial Court (RTC) of Lapu-Lapu City. the Notice of Adverse clai was annotated only in Feb. Given these antecedents. 3344. 3344 and not under Act No. what is important for this purpose is not whether the buyer is in good faith. 2. caused the publication of the deed in a newspaper of general circulation. 4. 1. after the lost certificate of title was reconstituted and after the issuance of said TCT in the name of Go on Dec. or be shackled by a claim which he did not have any knowledge of. instead of registering under Act No. After he decided to buy the subject property. since the deed in favor of Aznar was registered under Act No. as pointed out by petitioners and as admitted by Aznar. This Court agrees with the petitioners that Aznar should have availed itself of the legal remedy of reconstitution of the lost certificate of title. dated February 18.In this case. Rather. Go made verifications with the Office of the City Assessor of Lapu-lapu City and the Register of Deeds. He likewise visited the premises of the property and found that nobody interposed any adverse claim against the Amodia¶s. Xxx Concededly.xxxx The fact that the certificate of title over the registered land is lost does not convert it unto unregistered land. but whether he registers the second sale in good faith.e. be upheld. After all. meaning he does so without knowledge of any defect in the title over the property sold. Good faith To be able to enjoy priority status. 496.

The entire property was brought under the operation of the Torrens System.00. the Amodias allegedly executed an Extra-Judicial Partition of Real Estate with Deed of Absolute Sale[10] whereby they extra-judicially settled the estate of Esteban Bonghanoy and conveyed the subject property to respondent Aznar Brothers Realty Company (AZNAR) for a consideration of P10. Cebu. Marigondon.[9] However. Juana Bonghanoy-Amodia.351 square meter parcel of land (subject property) particularly denominated as Lot No. de Melencion. Felipe Amodia. Veneranda Amodia.[7] mother of the late Leoncia Amodia and petitioners Cecilia Amodia Vda. the said Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered under Act 3344[11] as there was no title on file at the Register of Deeds of Lapu-Lapu . and Eutiquio Amodia[8] (the Amodias).The Facts The subject property is a 30. and part of a total area of 30. the title thereto was lost during the Second World War. On July 10. 1964.[5] The entire property was originally owned by Esteban Bonghanoy[6] who had only one child. Lapu-Lapu City. 20626[4] (entire property) in the name of the late petitioner Go Kim Chuan (Go Kim Chuan).200. located at Subabasbas. OnAugust 10.777 square meters covered by Transfer Certificate of Title (TCT) No. 3368. 1964.

The RTC ratiocinated that the signatures of the Amodias in the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale executed in favor of AZNAR were found by the document examiner of the Philippine Constabulary (PC) Crime Laboratory to be forged. hence. AZNAR made some improvements and constructed a beach house thereon. Finally. that AZNAR's adverse claim was annotated earlier than the execution of the Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan. 2001. Petitioners Amodias denied that they executed the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale in favor of AZNAR. Veneranda A. petitioners Cecilia Amodia Vda. The RTC's Decision On February 18. de Melencion.City (Register of Deeds).[19] Trial on the merits ensued. 1989 executed by Felipe Amodia. 20626. pursuant to Article 1544 of the New Civil Code. 20626) was issued in the name of Go Kim Chuan on December 1. Moreover. the finding of the document examiner was insufficient for the RTC to rule in favor of the petitioners. AZNAR filed a case against petitioners Amodias and Go Kim Chuan for Annulment of Sale and Cancellation of TCT No. 20626[18] alleging that the sale to Go Kim Chuan was an invalid second sale of the subject property which had earlier been sold to it. On the same date. the said deed did not convey anything in favor of AZNAR. subsequently. the latter should have respected said adverse claim and should have made inquiries as to possible defects that may exist in the title over the subject property.[13] conveying the subject property in favor of Go Kim Chuan for and in consideration ofP70. in Civil Case No. Ibag . 1989.[20] The CA's Decision On March 30. the RTC dismissed AZNAR's complaint and declared Go Kim Chuan as the real owner of the subject property. 1990. On February 18. Aggrieved. claiming that their purported signatures thereon were forged. 1990. The CA disposed of the case in this wise: WHEREFORE. onApril 25. a derivative title (TCT No. all transactions involving the same should have complied with the said law.000. thus. and that in the absence of a final determination by a court of proper jurisdiction on the alleged forged signatures of the Amodias in the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. the RTC held that AZNAR failed to show that Go Kim Chuan acquired the subject property in bad faith. hence. The lost title covering the subject property was reconstituted pursuant to Republic Act (RA) No. Because petitioners did not heed AZNAR's demand. Veneranda Amodia. premises considered. AZNAR wrote a letter[16] to petitioners Amodias asking the latter to withdraw and/or nullify the sale entered into between them and Go Kim Chuan. Cecilia Amodia.00. the former deed should be given preference over the latter. 1993. 1993 of the Regional Trial Court of Lapu-Lapu City. 26.[14] A reconstituted title particularly designated as Original Certificate of Title (OCT) No. thus. the assailed decision dated February 18. Thereafter. Go Kim Chuan exercised control and dominion over the subject property in an adverse and continuous manner and in the concept of an owner. Felipe Amodia and Eutiquio Amodia[12] (petitioners Amodias) executed a Deed of Extra-Judicial Settlement with Absolute Sale. 1989. the subject property had been brought under the Land Registration Act. AZNAR appealed the RTC Decision to the CA. (2) Declaring both the Deed of Extra-judicial Settlement with Absolute Sale dated February 1. Branch 27. On February 14. a Notice of Adverse Claim[17] was annotated by AZNAR on TCT No. Thereafter. 2254-L is herebyREVERSED and SET ASIDE and a new one is hereby entered as follows: (1) Declaring plaintiff-appellant Aznar Brothers Realty Company as the real owner of the land in question. RO-2899 was issued in the name of Esteban Bonghanoy[15] and. the CA rendered a Decision holding that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale executed by the Amodias in favor of AZNAR was registered ahead of the Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan.

Counsel for petitioners admitted that he inadvertently included the petitioners Amodias in the initial Petition for Review on Certiorari (Original Petition). the registration by respondent of the Deed of Sale in 1964 under Act 3344 produces no legal effect whatsoever. Daryl Go. 20626 in the name of Go Kim Chuan as NULL AND VOID. it is without prejudice to better rights and the provision of Article 1544 of the New Civil Code would be inapplicable. daughter of the late Go Kim Chuan. this Petition based on the following grounds: I Lot 3368 was already a registered land under Act 496. thus. Petitioners submitted that they substantially complied with the Rules of Court by attaching the required Verification and Certification of Non-Forum Shopping and since the same are required simply to facilitate and promote the orderly administration of justice. On December 19. SO ORDERED. and April Socorro Go be impleaded as petitioners instead of the earlier designated petitioners. In their Reply[27] dated October 22. 2001. Office of the Ombudsman. de Melencion. Lastly. on the contrary. and IV The Court of Appeals has misapplied the case of Heirs of Severa Gregorio v. without notice of any fact that would reasonably impel a closer inquiry as to the possibility of a defect in the vendor's title. Cecilia Amodia Vda. Veneranda Amodia. 2001. who did not even appear to be authorized to file the instant case in behalf of the other petitioners. petitioners. Petitioners manifested that they were seeking to correct a defect in the designation of parties and prayed that the Heirs of Go Kim Chuan. Eutiquio Amodia. (3) Ordering Go Kim Chuan to deliver to the aforesaid plaintiff-appellant the possession of the land in question and to execute a registrable deed of conveyance of the subject property to the said plaintiff-appellant. Go. as such. filed a Motion[28] for Leave to Admit Amended Petition[29] for Review on Certiorari (Amended Petition). through counsel. cited in support of its ruling that the court a quo committed error in appreciating the testimony of an expert witness as to the forgery of the first Deed of Sale. the latter had purchased the said land in good faith and for value. 300 SCRA 565. No costs. CA. he claimed that other than the substitution of the original petitioners. invoking this Court's Decision in the case of Loquias v. that the Petition is dismissible because the Verification and Certification of Non-forum Shopping were not signed by all the petitioners. Estrella S.[24] In its Comment[25] dated September 18. Sonia Beth Go-Reynes. III The Honorable Court of Appeals erred in holding that an adverse claim was already existing at the time the subject land was sold to petitioner Go Kim Chuan.[21] Petitioners filed a Motion for Reconsideration[22] which the CA denied in its Resolution[23] dated June 5. II Even assuming arguendo that the lot in question was duly registered under Act 3344 as an unregistered land. compliance therewith should not be imposed with absolute literalness. both the Original Petition and . as they were parties before the RTC and CA. Hence.and Eustaquio Amodia in favor of Go Kim Chuan and the Transfer Certificate of Title No. The counsel also manifested that he was only representing the Heirs of Go Kim Chuan in this case. 2001. AZNAR argued. among others. namely. Felipe Amodia.[26] and that the same were signed only by one April Socorro Go. 2001. and Go Kim Chuan. she has personal knowledge of the truth of the facts alleged in the Petition. petitioners contended that April Socorro Go is one of the legitimate children and an heir of the late Go Kim Chuan and.

hence. 1989. and that the doctrine laid down in Heirs of Severa Gregorio v.: non-compliance with the rules on Verification and .[32] the Heirs of Go Kim Chuan. hence. Per directive of the Court. the Heirs of Go Kim Chuan. Ponferrada[37] is instructive. the case of Iglesia ni Cristo v. the finding of the document examiner is not conclusive. left with no choice. he sent several letters to petitioners Amodias but they did not reply. the original copy of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale executed by the Amodias in favor of AZNAR was presented before the trial court judge. On the other hand. filed the instant case before this Court on their own.[34] petitioners Heirs of Go Kim Chuan reiterate the same issues raised in the Original Petition and the Amended Petition. viz. The counsel claims that after the rendition of the assailed CA Decision. However. AZNAR interposed strong opposition to the Amended Petition's admission since the names of the petitioners Amodias were deleted without their written consent. in its Memorandum. AZNAR further claims that the Amended Petition was filed in order to cure a fatal defect which should not be countenanced by this Court. claimed that petitioners Amodias were excluded from the Amended Petition because they can no longer be located despite diligent efforts exerted by counsel. the Court shall first deal with an apparent procedural lapse in this case. In this regard. hence. that the 1964 sale was registered under Act 3344 because the subject property was not actually covered by a Torrens title at the time. In their Reply.[30] AZNAR filed its Comment[31] on the said motion wherein AZNAR manifested that it had no serious objection to the admission of the Amended Petition if the same was intended merely to implead the Heirs of Go Kim Chuan as petitioners. In their Memorandum. through counsel. that the Notice of Adverse Claim of AZNAR was annotated on TCT No. that if AZNAR could not have registered the sale in 1964 under Act 496 because the title over the subject property was lost. 1990 after the execution of the Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan on February 18. that the second sale did not transfer the subject property to Go Kim Chuan since it was no longer within the vendors' power to convey. that registration under Act 3344 is without legal effect and could not operate as constructive notice to petitioners and third persons. 2002 giving due course to the Petition and requiring the parties to submit their respective Memoranda. AZNAR should have availed itself of the remedy of reconstitution. They argue that Act 3344 only refers to transactions affecting lands or interests therein not previously registered under the Spanish Mortgage Law or under the Torrens system. may not be used as basis for the application of Art. Before resolving the main issues raised. The Court issued a Resolution[33] dated September 16. AZNAR opposes the Amended Petition because it was allegedly filed to cure a fatal defect in the original petition Certification of Non-Forum Shopping. that with respect to the issue of forgery. 20626 only on February 14. that Go Kim Chuan had to wait for the reconstitution of the lost title. Counsel for petitioners filed a Motion for Leave to Admit Amended Petition for Review on Certiorari in order to implead the Heirs of the late Go Kim Chuan as the new petitioners and to delete the names of petitioners Amodias because they could no longer be located. hence. and that such issue was belied by petitioner Veneranda Amodia herself when she declared that the negotiated sale in 1964 between AZNAR and the Amodias was not consummated because the latter did not receive the full consideration for the subject property. 1544 of the New Civil Code. the case can be decided on the merits. CA[35] is inapplicable since it referred to a case wherein the original copy of the document under review was not produced in evidence while in the instant case. it could not be said that he examined any certificate of title and could feign ignorance of the sale in favor of AZNAR. the CA erred when it held that Go Kim Chuan was not a buyer in good faith for supposedly having knowledge of such adverse claim. AZNAR also contends that Go Kim Chuan was a buyer in bad faith as he had prior constructive notice that the subject property was sold to AZNAR because the sale was registered with the Register of Deeds under Act 3344.[36] AZNAR maintains that the Original Petition is dismissible because the Verification and Certification of Non-Forum Shopping thereof were not signed by all the petitioners. that there was no other mode of registration except under Act 3344.Amended Petition uniformly raised the same issues and should be given due course in the greater interest of justice and that the instant Motion was not interposed for delay. Said petitioners sought the relaxation of the rules so that in the interest of justice.

Thus. the petitioners in the Amended Petition are Heirs of the late Go Kim Chuan. Forgery cannot be presumed. CA in ruling that the RTC committed an error in appreciating the testimony of an expert witness as to the forgery of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale? Second. From the issues raised. The document relied upon by the plaintiff in its claim of ownership over the land in question. Hence. there is presence of the commonality of interest referred to inIglesia ni Cristo. However. The general rule is that the certification must be signed by all plaintiffs in a case and the signature of only one of them is insufficient. They represent their predecessor-ininterest in whose favor a title was issued covering the subject property and said title is sought to be canceled by AZNAR.[39] The RTC's finding with respect to the issue of forgery reads: After a thorough study of the pleadings and evidence of the parties. positive and convincing evidence and the burden of proof rests on the party alleging forgery. But 1resort to these experts is not mandatory or indispensable. The same liberality should likewise be applied to the certification against forum shopping. The issue in the present case is not the lack of verification but the sufficiency of one executed by only one of plaintiffs. because the judge must conduct an independent examination of the questioned signature in order to arrive at a reasonable conclusion as to its authenticity. the court finds that preponderance of evidence heavily tilts in favor of the defendants. Being a forgery. verification is only a formal. and noncompliance therewith does not necessarily render it fatally defective. This requirement is simply a condition affecting the form of pleadings.[38] The Issues We now proceed to the merits of the case. who between Go Kim Chuan and AZNAR has the better right over the subject property? We resolve the first question in the negative. Under the circumstances. not a jurisdictional requirement.The purpose of verification is simply to secure an assurance that the allegations of the petition (or complaint) have been made in good faith. as in the present case. In the case at bench. only one of the heirs-plaintiffs. the Court has also stressed in a number of cases that the rules on forum shopping were designed to promote and facilitate the orderly administration of justice and thus should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective. has been found by the document examiner of the PC Crime Laboratory to be a forgery. The rule of substantial compliance may be availed of with respect to the contents of the certification. plaintiff's claim of ownership over the same has no more leg to stand on. because it cannot be denied that the ends of justice are better served when cases are determined on the merits ² after all parties are given full opportunity to ventilate their causes and defenses ² rather than on technicality or some procedural imperfections. not merely speculative. Clearly. said document conveyed nothing in favor of the plaintiff. that the verification requirement is deemed substantially complied with when. not merely speculative. It must be proved by clear. who has sufficient knowledge and belief to swear to the truth of the allegations in the petition (complaint). Such verification is deemed sufficient assurance that the matters alleged in the petition have been made in good faith or are true and correct. Handwriting experts are usually helpful in the examination of forged documents because of the technical procedure involved in analyzing them. x x x[40] . Indeed. the extrajudicial partition and sale. we held in Iglesia ni Cristo that the commonality of interest is material and crucial to relaxation of the Rules. signed the verification attached to it. This is because the requirement of strict compliance with the provisions merely underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded. Manalo. there are ultimately two questions that require resolution: First. the rules may be reasonably and liberally construed to avoid a patent denial of substantial justice. or are true and correct. A finding of forgery does not depend entirely on the testimonies of handwriting experts. did the CA misapply the doctrine in Heirs of Severa Gregorio v. This Court held in Ateneo de Naga University v.

Other than the statement of the document examiner. the RTC decision contains no other basis to support its conclusion . the finding of forgery relies wholly on the testimony of the document examiner. It falls short of the required independent examination to be conducted by the trial court judge.While it is true that the original document was produced before the RTC.

the said document is deemed not registered. such sale is not considered registered. there was no title on file. Should it be immovable property. 1544 of the New Civil Code.[44] In the case at bench. we still cannot make an outright award of the subject property to the petitioners solely on that basis. and admits this as fact. jura subveniunt. AZNAR opted to register the same under the improper registry (Act 3344) and allowed such status to lie undisturbed. Apropos is Article 1544 of the New Civil Code which provides: ART. However. it is uncontroverted that the subject property was under the operation of the Torrens System even before the respective conveyances to AZNAR and Go Kim Chuan were made. provided there is good faith. the CA was correct in rejecting the RTC¶s finding and in applying the doctrine laid down in the case of Heirs of Severa Gregorio v.[50] AZNAR. Accordingly. We have already ruled that the registration contemplated in this provision refers to registration under the Torrens System. the ownership shall pertain to the person who in good faith was first in the possession. From 1964 to 1989. 496. Without doubt. the subject property was unregistered at the time. The fact that the certificate of title over the registered land is lost does not convert it into unregistered land. despite the sale of the subject property way back in 1964 and the existence of the remedy of reconstitution at that time.[43] Thus.[49] This Court agrees with the petitioners that AZNAR should have availed itself of the legal remedy of reconstitution of the lost certificate of title.[47] In this case. Aying. if it should be movable property. we held that registration must be done in the proper registry in order to bind the same.[51] Although it is obvious that Go Kim Chuan registered the sale in his favor under Act 496 while AZNAR did not. not of the sleepy. since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale in favor of AZNAR was registered under Act No. we have here a case of double sale of registered land. we resolve the second question in favor of Go Kim Chuan. sought the reconstitution thereof. If the same thing should have been sold to different vendees. non dormientibus.[42] This rule precisely applies to cases involving conflicting rights over registered property and those of innocent transferees who relied on the clean title of the properties. as amended. a certificate of title is merely an evidence of ownership or title over the particular property described therein. and. AZNAR knew of this. insofar as the vendors. AZNAR. and it is sold and the sale is registered not under the Land Registration Act but under Act 3344. After all. It is unfortunate that. Good faith must accompany the registration. which considers the act of registration as the operative act[41] that gives validity to the transfer or creates a lien upon the land.[48] Rather. 496. We are not persuaded by such a lame excuse. despite this knowledge. 3344 and not under Act No. We note that in Aznar Brothers Realty Company v. AZNAR registered the sale in its favor under Act 3344 on the contention that at the time of sale. AZNAR did not bother to have the lost title reconstituted or even have the subject property declared under its name for taxation purposes. 1544. Vigilantibus. as the term is used under Art. The contention is untenable. Should there be no inscription. . beset with the similar problem of a lost certificate of title over a registered land. to the person who presents the oldest title. For the law is clear: mere registration of title is not enough. in the absence thereof. the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. instead of registration under Act 3344. it was the sale in favor of Go Kim Chuan which was registered under Act No. Laws must come to the assistance of the vigilant.[46] But if the land is registered under the Land Registration Act (and therefore has a Torrens Title). Act 3344 provides for the system of recording of transactions or claims over unregistered real estate[45] without prejudice to a third party with a better right. AZNAR insists that since there was no Torrens title on file in 1964. in the instant case.of the existence of forgery. and the Register of Deeds are concerned. Yet. CA. the ownership shall be transferred to the person who may have first taken possession thereof in good faith.

Thus, to be able to enjoy priority status, the second purchaser must be in good faith, i.e., he must have no knowledge of the previous alienation of the property by the vendor to another. Notably, what is important for this purpose is not whether the second buyer is a buyer in good faith, but whether he registers the second sale in good faith, meaning, he does so without knowledge of any defect in the title over the property sold. [52] To fully resolve the second question, therefore, it is imperative that we determine whether Go Kim Chuan was a registrant in good faith. The CA found that AZNAR registered its Notice of Adverse Claim ahead of the Deed of Extra-Judicial Settlement with Absolute Sale in favor of Go Kim Chuan. Because of this, the CA declared that Go Kim Chuan was not a buyer in good faith, because he should have respected such adverse claim or, at least, inquired into the validity thereof. We do not agree. While factual issues are not within the province of this Court, as it is not a trier of facts and is not required to examine the oral and documentary evidence de novo, this Court has the authority to review and, in proper cases, reverse the factual findings of lower courts in the following instances: (a) when the findings of fact of the trial court are in conflict with those of the appellate court; (b) when the judgment of the appellate court is based on a misapprehension of facts; and, (c) when the appellate court manifestly overlooked certain relevant facts which, if properly considered, would justify a different conclusion.[53] The instant case falls squarely within the foregoing exceptions. Concededly, inscription of an adverse claim serves as a warning to third parties dealing with a piece of real property that someone claims an interest therein or that there is a right superior to that of the titled owner.[54] However, as pointed out by petitioners and as admitted by AZNAR, the Notice of Adverse Claim was annotated on TCT No. 20626 only on February 4, 1990, after the lost certificate of title was reconstituted and after the issuance of said TCT in the name of Go Kim Chuan on December 1, 1989. It is, therefore, absurd to say that Go Kim Chuan should be bound by an adverse claim which was not previously annotated on the lost title or on the new one, or be shackled by a claim which he did not have any knowledge of. Citing Santiago v. Court of Appeals,[55] AZNAR contends that even if the adverse claim was annotated on TCT No. 20626 only on February 4, 1990, the prior registration of the sale in its favor under Act 3344 served as constructive notice to Go Kim Chuan and thus negates the latter's claim of good faith, since the Court held in that case, ³Registration, however, by the first buyer under Act 3344 can have the effect of constructive notice to the second buyer that can defeat his right as such buyer in good faith.´ AZNAR's reliance on Santiago is misplaced. In Santiago, the first buyers registered the sale under the Torrens System, as can be inferred from the issuance of the TCT in their names. There was no registration under Act 3344. Conversely, in the instant case, AZNAR registered the sale in its favor under Act 3344 despite its full knowledge that the subject property is under the operation of the Torrens System. To repeat, there can be no constructive notice to the second buyer through registration under Act 3344 if the property is registered under the Torrens system.[56] Moreover, before buying the subject property, Go Kim Chuan made verifications with the Office of the City Assessor of Lapu-Lapu City and the Register of Deeds. He likewise visited the premises of the subject property and found that nobody interposed any adverse claim against the Amodias. After he decided to buy the subject property, he paid all taxes in arrears, caused the publication of the Deed of Extra-Judicial Settlement with Absolute Sale in a newspaper of general circulation, caused the reconstitution of the lost certificate of title and caused the issuance of the assailed TCT in his name.[57] Given these antecedents, good faith on the part of Go Kim Chuan cannot be doubted. We also note that AZNAR's complaint for cancellation of title contains no allegation that the (second) purchaser was aware of defects in his title. In the absence of such an allegation and proof of bad faith, it would be grossly inappropriate for this Court to render judgment against the

purchaser who had already acquired title not only because of lack of evidence, but also because of the indefeasibility and conclusiveness of such title.[58] Finally, it is worth stressing that the Torrens system was adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to insure their indefeasibility once the claim of ownership is established and recognized. If a person purchases a piece of land on the assurance that the seller's title thereto is valid, he should not run the risk of losing his acquisition. If this were permitted, public confidence in the system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive investigations and proof of ownership.[59] WHEREFORE, the instant petition for review is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 51814 is REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Lapu-Lapu City, Branch 27, in Civil Case No. 2254-L, is REINSTATED. No costs.

SO ORDERED.

ANTONIO VS SANTOS ± LACKING INNOCENT PURCHASER FOR VALUE ISLAMIC DIRECTORATE OF THE PHILIPPINES VS CA HERMOSISIMA, JR., J.: The subject of this petition for review is the Decision of the public respondent Court of Appeals,[1] dated October 28, 1994, setting aside the portion of the Decision of the Securities and Exchange Commission (SEC, for short) in SEC Case No. 4012 which declared null and void the sale of two (2) parcels of land in Quezon City covered by the Deed of Absolute Sale entered into by and between private respondent Iglesia Ni Cristo (INC, for short) and the Islamic Directorate of the Philippines, Inc., Carpizo Group, (IDP, for short). The following facts appear of record. Petitioner IDP-Tamano Group alleges that sometime in 1971, Islamic leaders of all Muslim major tribal groups in the Philippines headed by Dean Cesar Adib Majul organized and incorporated the ISLAMIC DIRECTORATE OF THE PHILIPPINES (IDP), the primary purpose of which is to establish an Islamic Center in Quezon City for the construction of a ³Mosque (prayer place), Madrasah (Arabic School), and other religious infrastructures´ so as to facilitate the effective practice of Islamic faith in the area.[2] Towards this end, that is, in the same year, the Libyan government donated money to the IDP to purchase land at Culiat, Tandang Sora, Quezon City, to be used as a Center for the Islamic populace. The land, with an area of 49,652 square meters, was covered by two titles: Transfer Certificate of Title Nos. RT-26520 (176616)[3] and RT-26521 (170567),[4]both registered in the name of IDP. It appears that in 1971, the Board of Trustees of the IDP was composed of the following per Article 6 of its Articles of Incorporation: Senator Mamintal Tamano[5] Congressman Ali Dimaporo Congressman Salipada Pendatun Dean Cesar Adib Majul Sultan Harun Al-Rashid Lucman Delegate Ahmad Alonto Commissioner Datu Mama Sinsuat Mayor Aminkadra Abubakar[6] According to the petitioner, in 1972, after the purchase of the land by the Libyan government in the name of IDP, Martial Law was declared by the late President Ferdinand Marcos. Most of the members of the 1971 Board of Trustees like Senators Mamintal Tamano, Salipada Pendatun, Ahmad Alonto, and Congressman Al-Rashid Lucman flew to the Middle East to escape political persecution. Thereafter, two Muslim groups sprung, the Carpizo Group, headed by Engineer Farouk Carpizo, and the Abbas Group, led by Mrs. Zorayda Tamano and Atty. Firdaussi Abbas. Both groups claimed to be the legitimate IDP. Significantly, on October 3, 1986, the SEC, in a suit between these two contending groups, came out with a Decision in SEC Case No. 2687 declaring the election of both the Carpizo Group and the Abbas Group as IDP board members to be null and void. The dispositive portion of the SEC Decision reads: ³WHEREFORE, judgment is hereby rendered declaring the elections of both the petitioners[7] and respondents[8] as null and void for being violative of the Articles of Incorporation of petitioner corporation. With the nullification of the election of the respondents, the approved by-laws which they certified to this Commission as members of the Board of Trustees must necessarily be likewise declared null and void. However, before any election of the members of the Board of Trustees could be conducted, there must be an approved by-laws to govern the internal government of the association including the conduct of election. And since the election of both petitioners and respondents have been declared null and void, a vacuum is created as to who should adopt the by-laws and certify its adoption. To remedy this unfortunate situation that the association has found itself in, the members of the petitioning corporation are hereby authorized to prepare and adopt their by-laws for submission to the Commission. Once approved, an election of the members of the Board of Trustees shall immediately be called pursuant to the approved by-laws.

treated INC as the rightful owner of the real properties and disposed as follows: ³WHEREFORE. Although the Carpizo Group[10] attempted to submit a set of by-laws. 4012. rendered Partial Judgment in Civil Case No. so that the sale in INC¶s favor may be registered and new titles issued in the name of INC. Ligon is hereby ordered to produce and/or surrender to plaintiff[17] the owner¶s copy of RT-26521 (170567) and RT26520 (176616) in open court for the registration of the Deed of Absolute Sale in the latter¶s name and the annotation of the mortgage executed in her favor by herein defendant Islamic Directorate of the Philippines on the new transfer certificate of title to be issued to plaintiff. Intervenor¶s legal interest in the instant case. 1991. Judge Reyes.[14] Judge Celia Lipana-Reyes of Branch 81. That the said case before the SEC is docketed as Case No. without having been properly elected as new members of the Board of Trustees of IDP. 1989. Meanwhile. aside from Engineer Farouk Carpizo and Atty.. Leticia P. sought to intervene in Civil Case No. 1992. et. the above Order was amended by Judge Reyes directing Ligon ³to deliver the owner¶s duplicate copies of TCT Nos. who. hence. furthermore. denied petitioner¶s motion to intervene on the ground of lack of juridical personality of the IDP-Tamano Group and that the issues being raised by way of intervention are intra-corporate in nature. 4. Q-90-6937 averring. pertaining also to Civil Case No.´[19] . Mrs. filed a petition before the SEC. al. seeking to declare null and void the Deed of Absolute Sale signed by the Carpizo Group and the INC since the group of Engineer Carpizo was not the legitimate Board of Trustees of the IDP. Musib Buat. pursuant to the Deed of Absolute Sale executed in its favor. the petitioner 1971 IDP Board of Trustees headed by former Senator Mamintal Tamano. those who prepared and adopted the by-laws were not bona fide members of the IDP. 1989.´[9] Neither group. thus. took the necessary steps prescribed by the SEC in its October 3. Carpizo Group. thus rendering the adoption of the by-laws likewise null and void. inter alia: ³xxx xxx xxx 2. private respondent INC.[16] Thereupon. The IDP-Tamano Group. Likewise. that the issue sought to be litigated by way of intervention is an intracorporate dispute which falls under the jurisdiction of the SEC. inter alia. docketed as Civil Case No. through false schemes and machinations.´[13] Private respondent INC opposed the motion arguing. xxx xxx xxx. That. on June 11.SO ORDERED. RT-26521 and RT-26520 covering the aforementioned two parcels of land. 1991. before Branch 81 of the Regional Trial Court of Quezon City. Ligon to produce and surrender to the Register of Deeds of Quezon City the owner¶s duplicate copy of TCT Nos. Farouk Carpizo.T. 3. Judge Reyes in another Order.400. 1986 Decision. which sale was evidenced by a Deed of Absolute Sale[12] dated April 20. jurisdiction thereto properly pertaining to the SEC. however. 1992. to compel said group to clear the property of squatters and deliver complete and full physical possession thereof to INC. Linzag and Rowaida Busran-Sampaco claimed to be in behalf of the Carpizo Group. succeeded in executing the Deed of Sale between the IDP and the Iglesia Ni Kristo (plaintiff in the instant case) and which Deed of Sale is the subject of the case at bar. 4012 involving the controverted status of the IDP-Carpizo Group but without waiting for the outcome of said case. the main issue of which is whether or not the aforesaid Deed of Sale between IDP and the Iglesia ni Kristo is null and void.[15] Apprised of the pendency of SEC Case No. dated March 2. Regional Trial Court of Quezon City. Ligon was alleged to be the mortgagee of the two parcels of land executed in her favor by certain Abdulrahman R. On May 30. 1992. Q-90-6937.00. SO ORDERED. docketed as SEC Case No. no valid election of the members of the Board of Trustees of IDP was ever called. and. RT-26521 (170567) and RT-26520 (176616) to the Register of Deeds of Quezon City for the purposes stated in the Order of March 2. On April 20. the Carpizo Group caused to be signed an alleged Board Resolution[11]of the IDP. 04012. filed an action for Specific Performance with Damages against the vendor. A copy of the said case is hereto attached as Annex µA¶. That the Intervenor has filed a case before the Securities and Exchange Commission (SEC) against Mr. Leticia P. 1991. the SEC found that. INC filed a motion in the same case to compel one Mrs.´[18] On April 6. authorizing the sale of the subject two parcels of land to the private respondent INC for a consideration of P22. Intervenor herein is the duly constituted body which can lawfully and legally represent the Islamic Directorate of the Philippines. or the Tamano Group. Q90-6937. Q-90-6937 ordering the IDP-Carpizo Group to comply with its obligation under the Deed of Sale of clearing the subject lots of squatters and of delivering the actual possession thereof to INC.343. on September 12.

No.R. the court a quo promulgated a Decision in CA-G. assailing the foregoing Orders of Judge Reyes. denied the Ligon petition and affirmed the October 28. No. having jurisdiction to pronounce the judgment or order. dated December 21. ³Ligon v. dated September 7. (c) In any other litigation between the same parties or their successors in interest.R. 107751 on the petition filed by Mrs. the requisites of res judicata do not obtain in the case at bench. RT-26521 (170567) and RT-26520 (176616) to the Register of Deeds of Quezon City so that the Deed of Absolute Sale in INC¶s favor may be properly registered. Ligon filed a petition for review before the Supreme Court which was docketed as G. dated June 1. Declaring the by-laws submitted by the respondents[21] as unauthorized. docketed as CA-G. the IDP-Tamano Group brought the instant petition for review. Declaring the sale of the two (2) parcels of land in Quezon City covered by the Deed of Absolute Sale entered into by Iglesia ni Kristo and the Islamic Directorate of the Philippines. as members of the IDP null and void. No.[22] null and void. and hence.R. but the same was denied on account of the fact that the decision of the case had become final and executory.´[24] Private respondent INC filed a Motion for Intervention. 107751. SO ORDERED. . In the meantime.[26] While the above petition was pending. or which was actually and necessarily included therein or necessary thereto. 1994. may be as follows: xxx xxx xxx (b) In other cases the judgment or order is. litigating for the same thing and under the same title and in the same capacity. 1992. 107751 entitled.´ .Mortgagee Ligon went to the Court of Appeals. however. the SEC. 2. 4. On October 28. 2) Encouraging multiplicity of suits. Rule 39 of the Revised Rules of Court lays down the dual aspects of res judicata in actions in personam. 33295. No pronouncement as to cost. Declaring the acceptance of the respondents. 3.R. docketed as CA-G.[25] INC elevated SEC Case No. 1993. SP-27973 which sustained the Order of Judge Reyes compelling mortgagee Ligon to surrender the owner¶s duplicate copies of TCT Nos.The effect of a judgment or final order rendered by a court or judge of the Philippines.´ promulgated on June 1. Thus. null and void. 1995. 1995. 4012 which declared the sale of the two (2) lots in question to INC as void was ordered set aside by the Court of Appeals. Section 49. 1993. The Decision. submitting that the Court of Appeals gravely erred in: 1) Not upholding the jurisdiction of the SEC to declare the nullity of the sale. SP No. 33295 granting INC¶s petition. Quite the contrary. except Farouk Carpizo and Musnib Buat. no appeal having been taken therefrom. thru a petition for certiorari. that only is deemed to have been adjudged in a former judgment which appears upon its face to have been so adjudged. Declaring the election of the Board of Directors[23] of the corporation from 1986 to 1991 as null and void. Court of Appeals. 4012 in this wise: ³1. No. and 3) Not applying the principles of estoppel and laches. in no wise constitutes res judicata such that the petition under consideration would be barred if it were the case. Before we rule upon the main issue posited in this petition. the Supreme Court rendered judgment in G. Inc. we would like to point out that our disposition in G.R. SP-27973. 4012. No. Leticia P. SP No.R. in SEC Case No. 1994. 4012 to the public respondent Court of Appeals by way of a special civil action for certiorari. 1992 Decision of the Court of Appeals in CA-G.[20] Undaunted.R. conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding. to wit: ³Effect of judgment. with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto. The portion of the SEC Decision in SEC Case No. on July 5. finally came out with a Decision in SEC Case No. Ligon. The appellate court dismissed her petition on October 28.

But where between the first case wherein judgment is rendered and the second case wherein such judgment is invoked.R. or ancillary to the principal action. where the IDP-Tamano Group became a principal party. accessory.[28] It was never originally a principal party thereto. There can be no question as to the authority of the SEC to pass upon the issue as to who among the different contending groups is the legitimate Board of Trustees of the IDP since this is a matter properly falling within the original and exclusive jurisdiction of the SEC by virtue of Sections 3 and 5(c) of Presidential Decree No. but is merely collateral. while it is true that the principle of res judicata is a fundamental component of our judicial system. 107751 cannot be considered determinative and conclusive on the matter of the validity of the sale for this particular issue was not the principal thrust of Ligon.[34] The main question though in this petition is: Did the Court of Appeals commit reversible error in setting aside that portion of the SEC¶s Decision in SEC Case No. Ligon. the judgment is conclusive in the second case. whereas the cause of action in the present case is the validity of the Carpizo Group-INC Deed of Absolute Sale. it should be disregarded if its rigid application would involve the sacrifice of justice to technicality. No. It must be noted that intervention is not an independent action. for want of legitimate representation. 107751 as intervenor.[32] Elsewise put. the judgment on the merits rendered in the first constitutes an absolute bar to the subsequent action.R. as private respondent.[30] It is only in the present case. a mere action in personam. 107751 is the surrender of the owner¶s duplicate copy of the transfer certificates of title to the rightful possessor thereof. or managers of such corporations. Q-90-6937.´ whereas. it shall have original and exclusive jurisdiction to hear and decide cases involving: xxx xxx xxx c) Controversies in the selection or appointment of directors. which gave rise to G. 107751 were mortgagee Leticia P.Section 49(b) enunciates the first concept of res judicata known as ³bar by prior judgment. a case for Specific Performance with Damages. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations. there is identity of parties. thru a legitimate Board of Trustees. When the three identities are present. No. 902-A: ³Section 3. This is what is termed ³conclusiveness of judgment. Matters adjudged in a cause do not prejudice those who were not parties to it. Q-90-6937.´ There is ³bar by former judgment´ when. In this connection.R. officers. subject matter and cause of action. who are the grantees of primary franchises and/or a license or permit issued by the government to operate in the Philippines xxx xxx. actually. Islamic Directorate of the Philippines. partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees. The IDP. partnerships or associations.R. To rule otherwise would be to cause grave and irreparable injustice to IDP which never gave its consent to the sale. only as to those matters actually and directly controverted and determined. partnerships or associations. trustees. As a necessary consequence.R. as petitioner.R. res judicata as a ³bar by former judgment´ will still not set in on the ground that the cause of action in the two cases are different. Section 49(c) is referred to as ³conclusiveness of judgment. ³Iglesia Ni Kristo. and not as to matters merely involved therein. no person (natural or juridical) shall be affected by a proceeding to which he is a stranger. No. although it is true that Civil Case No. that IDP may be considered a principal party in Ligon. was effectively deprived of its day in court in said case. there is only identity of parties but there is no identity of cause of action.´[27] Neither of these concepts of res judicata find relevant application in the case at bench. 4012 which declared the sale of two (2) parcels of land in Quezon City between the IDP-Carpizo Group and private respondent INC null and void? We rule in the affirmative. and the Iglesia Ni Cristo. In any case.´[31] the IDP can not be considered essentially a formal party thereto for the simple reason that it was not duly represented by a legitimate Board of Trustees in that case. It is just an interlocutory proceeding dependent on or subsidiary to the case between the original parties. was entitled. Defendant. x x x. there is no identity of parties. Res Judicata in the form of ³conclusiveness of judgment´ cannot likewise apply for the reason that any mention at all in Ligon as to the validity of the disputed Carpizo Board-INC sale may only be deemed incidental to the resolution of the primary issue posed in said case which is: Who between Ligon and INC has the better right of possession over the owner¶s duplicate copy of the TCTs covering the IDP property? G.[33] Granting arguendo. Plaintiff v. The Commission shall have absolute jurisdiction.´ xxx xxx xxx Section 5. with the Iglesia Ni Cristo. did not become final and executory insofar as the true IDP is concerned since petitioner corporation. The cause of action in G. No. the IDP-Tamano Group cannot be considered a principal party in G. as represented by the 1971 Board of Trustees or the Tamano Group. Civil Case No. supervision and control over all corporations.´ . No. While there may be identity of subject matter (IDP property) in both cases. as petitioner. and the second case where such judgment is invoked. between the first case where the judgment was rendered. there is no identity of parties in both cases. No. 107751. 107751 for purposes of applying the principle of res judicata since the contrary goes against the true import of the action of intervention as a mere subsidiary proceeding without an independent life apart from the principal action as well as the intrinsic character of the intervenor as a mere subordinate party in the main case whose right may be said to be only in aid of the right of the original party. Clearly. The principal parties in G.[29] Indeed. Res inter alios judicatae nullum aliis praejudicium faciunt. was only made an ancillary party in G. as private respondent.

owner of the subject property. or served personally: Provided. never gave its consent. sell. but one where consent on the part of one of the supposed contracting parties is totally wanting. the SEC. concurred in by the vote of at least 2/3 of the bona fide members of the corporation should have been obtained. . where even one is absent. owner of the subject parcels of land. As far back as October 3. the Carpizo Group is bereft of any authority whatsoever to bind IDP in any kind of transaction including the sale or disposition of IDP property.[37] Nothing thus becomes more settled than that the IDP-Carpizo Group with whom private respondent INC contracted is a fake Board. all acts carried out by the Carpizo Board. Premises considered. For. or in case of non-stock corporation. it appears from the records. as its board of directors or trustees may deem expedient. This is precisely what the SEC did in SEC Case No.[39] All told. thru a legitimate Board of Trustees. by a majority vote of its board of directors or trustees. including its goodwill. it can also declare who is not the legitimate IDP Board. its sale to a third-party is a sale or disposition of all the corporate property and assets of IDP falling squarely within the contemplation of the foregoing section. have to be struck down for having been done without the consent of the IDP thru a legitimate Board of Trustees.[35] By this ruling. 40. It must be noted that SEC Case No. 4012 when it adjudged the election of the Carpizo Group to the IDP Board of Trustees to be null and void. 1986. the same not being an intra-corporate dispute. No end of substantial justice will be served if we reverse the SEC¶s conclusion on the matter. Apparently. Sale or other disposition of assets. consent is essential for the existence of a contract. to the disputed Deed of Absolute Sale executed in favor of INC. the SEC in effect made the unequivocal finding that the IDP-Carpizo Group is a bogus Board of Trustees. Hence. a corporation may. bonds or other instruments for the payment of money or other property or consideration. when authorized by the vote of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock. then by parity of reasoning. there are only fifteen (15) official members of the petitioner corporation including the eight (8) members of the Board of Trustees. therefore.[38] In this case.´ All these elements must be present to constitute a valid contract. . and where it is wanting. stocks. (2) Object certain which is the subject matter of the contract. Private respondent INC nevertheless questions the authority of the SEC to nullify the sale for being made outside of its jurisdiction. which may be money. (3) Cause of the obligation which is established. Ineluctably. As succinctly put by Tolentino. upon terms and conditions and for such consideration. the contract is void. Article 1318 of the New Civil Code lays down the essential requisites of contracts: ³There is no contract unless the following requisites concur: (1) Consent of the contracting parties. in a stockholders¶ or members¶ meeting duly called for the purpose. the contract is non-existent. the subject sale is void and produces no effect whatsoever. and remand the case to the regular courts for further litigation over an issue which is already determinable based on what we have in the records. the IDP. from all indications. Consequently. That any dissenting stockholder may exercise his appraisal right under the conditions provided in this Code.Subject to the provisions of existing laws on illegal combinations and monopolies. 4012 is not the first case wherein the SEC had the opportunity to pass upon the status of the Carpizo Group. For the sale to be valid. Written notice of the proposed action and of the time and place of the meeting shall be addressed to each stockholder or member at his place of residence as shown on the books of the corporation and deposited to the addressee in the post office with postage prepaid.If the SEC can declare who is the legitimate IDP Board. the disputed Deed of Absolute Sale executed by the fake Carpizo Board and private respondent INC was intrinsically void ab initio. The Carpizo Group-INC sale is further deemed null and void ab initio because of the Carpizo Group¶s failure to comply with Section 40 of the Corporation Code pertaining to the disposition of all or substantially all assets of the corporation: ³Sec. These twin requirements were not met as the Carpizo Group which voted to sell the Tandang Sora property was a fake Board of Trustees. constitutes the only property of the IDP.[36] in a suit between the Carpizo Group and the Abbas Group. 2687. A sale or other disposition shall be deemed to cover substantially all the corporate property and assets if thereby the corporation would be rendered incapable of continuing the business or accomplishing the purpose for which it was incorporated. by the vote of at least two-thirds (2/3) of the members. particularly the sale of the Tandang Sora property. in Case No. already declared the election of the Carpizo Group (as well as the Abbas Group) to the IDP Board as null and void for being violative of the Articles of Incorporation.´ The Tandang Sora property. mortgage. a case not only of vitiated consent. the majority vote of the legitimate Board of Trustees. exchange. xxx xxx x x x. This is. and those whose names and signatures were affixed by the Carpizo Group together with the sham Board Resolution authorizing the negotiation for the sale were. lease. pledge or otherwise dispose of all or substantially all of its property and assets. The resolution of the question as to whether or not the SEC had jurisdiction to declare the subject sale null and void is rendered moot and academic by the inherent nullity of the highly dubious sale due to lack of consent of the IDP. allegedly in the name of the IDP. not bona fide members of the IDP as they were made to appear to be.

alleging. SO ORDERED. Cabrera. Q90-6937. In the meantime. Furthermore. and on March 25. Hence. whose omissions cannot possibly bind her because this amounted to a violation of her right to due process of law. a Final Deed of Sale was issued by the sheriff on July 8. Coronel again neglected to protect his client¶s interest by failing to file a motion for reconsideration or to appeal therefrom until said decision became final on December 21. 1993 in SEC Case No. as highest bidder. The Decision of the public respondent Court of Appeals dated October 28. 1986. a judgment by default was reached by the trial court ordering Legarda to execute the lease contract in favor of. a Certificate of Sale was issued by the sheriff on June 27. she refused to sign the contract although respondent lessee. wanting to acquire the property at all costs and threatened by the participation of the legitimate IDP Board in the civil suit. WHEREFORE. 1991. If new titles have been issued in the name of Iglesia Ni Cristo. INC may run after Engineer Farouk Carpizo and his group for the amount of money paid. a case for Specific Performance with Damages between INC and the Carpizo Group on the subject Deed of Absolute Sale. ³she nevertheless did not lose faith in her counsel´[2] and prevailed upon him to seek appropriate relief. the petition is GRANTED. Coronel but from his secretary. Atty. Inc. 270814 was cancelled with the issuance of TCT No. The legitimate IDP Board could have been granted ample opportunity before the regional trial court to shed light on the true status of the Carpizo Board and settled the matter as to the validity of the sale then and there. The Decision of the Securities and Exchange Commission dated July 5. inter alia. the Court observed that the INC bought the questioned property from the Carpizo Group without even seeing the owner¶s duplicate copy of the titles covering the property. 1986. failed to file an answer within the extended period. Otherwise. a petition for relief from judgment by default. dismissing the petition for annulment of judgment. came out nullifying the sale. For some reason or another. 1989. . 1985. The parties hereto entered into a lease agreement over a certain Quezon City property owned by petitioner Victoria Legarda. Thus.It is unfortunate that private respondent INC opposed the motion for intervention filed by the 1971 Board of Trustees in Civil Case No. 1989. Upon notice of the Court of Appeals decision. which has jurisdiction to rule on the validity of the sale. that the issue sought to be litigated by the movant is intra-corporate in nature and outside the jurisdiction of the regional trial court. She then hired a new counsel for the purpose of elevating her case to this Court. this time. Atty. She. and to pay damages to. Atty. did not take heed of this and nevertheless went through with the sale with undue haste. made a deposit and a down payment of rentals. the minimum requirement for one to be a good faith buyer for value is that the vendee at least sees the owner¶s duplicate copy of the title and relies upon the same. which was registered by Cabrera with the Register of Deeds three days later. Sometime in March 1990. When Legarda did learn of the adverse decision. SP No.500. 33295 is SET ASIDE. if one has already been made. Jr. Roberto V. 1985. But INC.[41] The private respondent presumably knowledgeable on the aforesaid working of the Torrens System.. Cathay was allowed to present evidence ex-parte. Petitioner corporation is ordered to return to private respondent whatever amount has been initially paid by INC as consideration for the property with legal interest.00 in satisfaction of the judgment debt. On April 9. Branch 94 a complaint[1] against the former for specific performance with preliminary injunction and damages. (Cathay). 4012. 350892 in the name of Cabrera. therefore. Coronel but he took no action until the judgment became final and executory. on October 23. LEGARDA VS COURT OF APPEALS ROMERO. and that under the Torrens System of Registration. requested a 10-day extension of time to file an answer which the court granted. asked Cathay (not Cabrera) to reconvey the subject property to her. and holding Legarda bound by the negligence of her counsel. Legarda¶s counsel. This is very strange considering that the subject lot is a large piece of real property in Quezon City worth millions. J. INC is here trifling with the courts.[3] On November 29. Cathay. the register of Deeds is hereby ordered to cancel the same. decision of the Courts's First Division. filed by private respondents New Cathay House.R. Coronel made no move on behalf of his client. The court a quo issued the injunction. the appellate court rendered a decision affirming the March 25. and not the SEC. would result in a failure of justice. if countenanced. 1985. quibbling over the issue that it is the regional trial court. Legarda¶s Transfer Certificate of Title (TCT) No. Consequently. Cathay.: For our resolution is the motion for reconsideration of the March 18. and issue new ones in the name of petitioner Islamic Directorate of the Philippines. When the Decision in SEC Case No. however. A brief narration of facts is in order. Despite the lapse of over a year since the judgment by default became final and executory. the motion for intervention was denied. prompting the latter to file before the Regional Trial Court of Quezon City. 1989. a copy of said decision was served on Atty. not from Atty. The new lawyer filed a petition for certiorari praying for the annulment of the decision of the trial and appellate courts and of the sheriff¶s sale. noted lawyer Dean Antonio Coronel. Legarda learned of the adverse decision of the Court of Appeals dated November 29. 4012 is REINSTATED.[40] As a result. He did not even inform her of all these developments. Upon failure of Legarda to redeem her property within the one-year redemption period.´ and added that there was ³pure and simple negligence´ on the part of petitioner¶s counsel who failed to file an answer and. A month later. among other things. 1985. We cannot put a premium on this clever legal maneuverings of private respondent which. that Legarda lost in the courts below because her previous lawyer was grossly negligent and inefficient. INC came forward. The Register of Deeds of Quezon City is hereby ordered to cancel the registration of the Deed of Absolute Sale in the name of respondent Iglesia Ni Cristo. he filed a petition for annulment of judgment with prayer for the issuance of a writ of preliminary mandatory injunction before the Court of Appeals. was awarded the property for P376. Coronel. argued for the denial of the motion averring. It considered her allegation of fraud by Cathay to be ³improbable. His client was eventually declared in default. if the same was actually received by IDP. decision of the trial court. The unexplained eagerness of INC to buy this valuable piece of land in Quezon City without even being presented with the owner¶s copy of the titles casts very serious doubt on the rightfulness of its position as vendee in the transaction. the trial court issued a writ of execution and a public auction was held where Cathay¶s manager. 1994 in CA-G. later.

1985. Yet. 1992. not just ordinary or simple negligence. The impossibility of this directive is immediately apparent.: (a) from Cabrera to Nancy Saw on March 21. she cannot be said to have been denied due process of law. the subject property has been sold and ownership thereof transferred no less than three times. 1990. alleging. 31673. It has not been shown nor even alleged.´ Aggrieved by this development. then to Chua¶s TCT No. generally by service of summons. basic that as long as a party was given the opportunity to defend her interests in due course. resolution. 99143. even prior to the promulgation of said decision. 1990. (b) from Nancy Saw to Lily Tanlo Sy Chua on August 7. 31672. What is clear from the records is that the auction sale was conducted regularly.´ Thus. ruling. of the property in question.[12] With the fulfillment of the judgment debtor¶s obligation. a decision[4] was rendered in this case by Mr. 1985. it can no longer be returned to its original owner by Cabrera. and noted that counsel¶s ³lack of devotion to duty is so gross and palpable that this Court must come to the aid of his distraught client. and finally to Luminlun¶s TCT No. more than one year before the Court issued a temporary restraining order in connection with this case. et al. much less by Cathay itself. Assuming arguendo that reconveyance is possible. Justice Gancayco.´[7] In the case at bar. it would not have created a lien over the property because the main office of a lien is to warn prospective buyers that the property they intend to purchase is the subject of a pending litigation. And even if there were such a notice. For all intents and purposes. 350892 gave way to Saw¶s TCT No. Since the decision of the Court of Appeals gained finality on December 21. either as plaintiff-appellee below or as respondent in the present action. 1990.. 1990. There is no question that the highest bidder at the public auction was Cathay¶s manager. that a certificate of sale and. that reconveyance is not possible because the subject property had already been sold by its owner. and (c) from the spouses Victor and Lily Sy Chua to Janet Chong Luminlun on April 3. the Court of Appeals decision dated November 29. 1991. and the Register of Deeds to cancel the registration of said property in the name of Cathay (not Cabrera) and to issue a new one in Legarda¶s name. ownership over the property had already been validly transferred to innocent third parties at the time of promulgation of said judgment.´ in the words of the Gancayco decision. By virtue of the Gancayco decision. is the fact that Cabrera was impleaded as a party-respondent only on August 12. 1991. register it and obtain a title in his own name. No proof was ever presented which would reveal that the sale occurred only on paper. Neither did he ever act as Cathay¶s representative. inter alia. would still not address the issues raised herein The application of the sale price to Legarda¶s judgment debt constituted a payment which extinguished her liability to Cathay as the party in whose favor the obligation to pay damages was established. nothing else was required to be done. Cathay was duty bound to return the subject property to Legarda.[9] ³(j)urisdiction over a party is acquired by his voluntary appearance or submission to the court or by the coercive process issued by the court to him. and the subsequent final deed of sale covering the same property. Cathay filed the instant motion for reconsideration.´[10] In other words. He is charged with notice only of such burdens and claims as are annotated on the title. 1989. Cabrera¶s TCT No. should not be allowed to bind Legarda who has been ³consigned to penury´ because ³her lawyer appeared to have abandoned her case not once but repeatedly. it cannot be denied that the proceedings which led to the filing of this case were not attended by any irregularity. but reckless. after the promulgation of the Gancayco decision. his negligence every step of the way amounting to ³abandonment. for two reasons: First. however. and November 24. inter alia. The chronology of events shows that the case took its regular course in the trial and appellate courts but Legarda¶s counsel failed to act as any ordinary counsel should have acted. respectively. or the lack of it. Cabrera himself maintained that he was ³acting in his private (as distinct from his corporate) capacity´[5] when he participated in the bidding. a final deed of sale were issued to Cabrera which allowed him to consolidate his ownership over the subject property. Court of Appeals. Cabrera.[8] The dispositive portion itself ordered Cathay. The Court then declared that Atty. Therefore. at a premium price. Cabrera was never a party to this case. 1989. 1993.viz. which deprived his client of her property without due process of law. Cathay neither possessed nor owned the property so it is in no position to reconvey the same. an innocent purchaser for value.´ It is. Nothing on record would demonstrate that Cathay was the beneficiary of the sale between Cabrera and Saw. instead of Cabrera to reconvey the property to Legarda. Another point to consider. and (c) ordering Cathay to reconvey said property to Legarda. since the property is already in the hands of Luminlun. until Cabrera was impleaded as party respondent and ordered to file a comment in the August 12. even if it did. the Court ruled against tolerating ³such unjust enrichment´ of Cathay at Legarda¶s expense. the order of reconveyance was premised on the alleged gross negligence of Legarda¶s counsel which should not be allowed to bind her as she was deprived of her property ³without due process of law.[11] It was a payment in the sense that Cathay had to resort to a court-supervised auction sale in order to execute the judgment. 1991. Cabrera was simply a vendee whose payment effectively extinguished Legarda¶s liability to Cathay as the judgment creditor.On March 18. an innocent purchaser for value. We do not have to belabor the fact that all the successors-in-interest of Cabrera to the subject lot were transferees for value and in good faith. NLRC. the Sheriff¶s Certificate of Sale dated June 27. second. Coronel committed.[6] ³(i)t is settled doctrine that one who deals with property registered under the Torrens system need not go beyond the same. however. The successive owners were each armed with their own indefeasible titles which automatically brought them under the aegis of the Torrens System. August 8. for this opportunity to be heard is the very essence of due process. subsequently. Under the Gancayco ruling. so was the ensuing sale at public . His acts. As the Court declared in Sandoval v. that Cathay and Cabrera are one and the same and that Cabrera¶s payment redounded to the benefit of his principal. and to command his principal to reconvey a piece of property which used to be HIS would not only be inappropriate but would also constitute a real deprivation of one¶s property without due process of law. it is not disputed that no notice of lis pendens was ever annotated on any of the titles of the subsequent owners. four months after the decision of the Court of Appeals became final and executory and one year before the promulgation of the March 18. inexcusable and gross negligence. the Court never obtained jurisdiction over him. with Cabrera acting as a mere conduit for Cathay. that Roberto Cabrera had all the time been acting for or in behalf of Cathay. all issued by the Register of Deeds of Quezon City on April 3. The judgment by default was valid. but only has to rely on the title. As we held in the recent case of National Power Corporation v. With these transfers. (b) nullifying the trial court¶s decision dated March 25. decision under reconsideration. as follows: (a) granting the petition. and sell it to Nancy Saw. 1991. though not raised as an issue in this case. having relied as they did on the clean titles of their predecessors. under the facts and evidence obtaining in this case. reconveyance.

or sixteen days after the auction sale of June 27. the trial court¶s judgment was based on Cathay¶s evidence after Legarda was declared in default. in spite of this allegedly low selling price.´[17] It is ³a judicial act which settles the issues. applying the relevant. Cabrera parted with real money at the auction.B.auction. These twin judgments. untainted by any irregularity. Neither Cathay nor Cabrera should be made to suffer for the gross negligence of Legarda¶s counsel. ³A judgment may be broadly defined as the decision or sentence of the law given by a court or other tribunal as the result of proceedings instituted therein. it is likewise true that said bidding was conducted by the book. what then is it? Had there been no real purchase and payment below. There is no call to be alarmed that an official of the company emerges as the winning bidder since in some cases.[13] Deputy Sheriff Angelito R. Whether the money used to pay for said property came from the judgment creditor or its representative is not relevant. and lose money by them . and it is regarded as the sentence of the law pronounced by the court on the action or question before it. that ³. but not for that alone can the law intervene and restore. she was not totally in the dark as to the fate of her property and she could have exercised her right of redemption if she chose to. If the subject property was at all sold. inter alia. a judgment becomes ipso facto final when no appeal is perfected or the reglementary period to appeal therefrom expires. Villa. use miserable judgment. In our jurisdiction. appropriate law.L.[14] In short. in addition. The fact that Cabrera is an officer of Cathay does not make him a purchaser in bad faith. that the ³highest bidder paid to the Deputy Sheriff the said amount of P376. She could not feign ignorance of said sale on account of her counsel¶s failure to so inform her. She cannot claim that she was illegally deprived of her property because such deprivation was done in accordance with the rules on execution of judgments. The Gancayco decision makes much of the fact that Legarda is now ³consigned to penury´ and. she admits that her mother Ligaya represented her during her absence. It would create doubt. therefore. the commission of what the law knows as an actionable wrong. Public policy and sound practice demand that.´ It must be remembered that this Court renders decisions. the presumption of regularity stands. Legarda still failed to redeem her property within the one-year redemption period. it was not through any machination on his part. which were nullified by the Gancayco decision.´[15] In this case. . His act in representing the company was never questioned nor disputed by Legarda. it was not respondents. but she did not. ³The necessity of giving finality to judgments that are not void is self-evident.[16] this Court warned against the danger of jumping to the aid of a litigant who commits serious error of judgment resulting in his own loss: ³x x x Courts operate not because one person has been defeated or overcome by another. he could not help it if his bid of only P376. so succinctly stated by Justice J. but upon proof of its entitlement thereto. the right of Cathay to be vindicated for such breach and the liability incurred by Legarda in the process were determined. the sale price of the levied property. not whimsically. fixes the rights and liabilities of the parties. the subject property would never have been awarded to Cabrera and registered in his name. and determines the proceeding.500. Legarda. before the courts are authorized to lay hold of the situation and remedy it. all they have in the world.00 was the highest. If she may be said to be ³innocent´ because she was ignorant of the acts of negligence of her counsel. should be respected and allowed to stand by this Court for having become final and executory. an act which would constitute an actual denial of property without due process of law. the issues raised in the complaint had already been determined and disposed of by the trial court. The interests of society impose it. who misjudged and hired the services of the lawyer who practically abandoned her case and who continued to retain him even after his proven apathy and negligence. Finally. The issue of whether the plaintiff (Cathay) deserved to recover damages because of the defendant¶s (Legarda¶s) refusal to honor their lease agreement was resolved. This judgment became final when she failed to avail of remedies available to her. to require either Cathay or Cabrera to reconvey the property would be an unlawful intrusion into the lawful exercise of his proprietary rights over the land in question. . this Court ³must come to the aid of the distraught client. ignorance or misjudgment may have been bested in a legal joust which complied with all the rules of legal proceedings. become . the judgment creditor himself personally participates in the bidding. not on the basis of emotions but on its sound judgment. ³they. with more reason are respondents truly ³innocent. and controversy would constantly arise as to what the judgment or order was. It may be true that the subject lot could have fetched a higher price during the public auction. And while it is true that he won in the bidding. such as filing a motion for reconsideration or appealing the case. Her property was sold at public auction to satisfy the judgment debt. or any losing litigant for that matter. The very object for which courts were instituted was to put an end to controversies. Reyes. At the time. because such auction sales comply with requirements of notice and publication under the Rules of Court. Moreover. but because he has been defeated or overcome illegally." Respondents should not be penalized for Legarda¶s mistake. Mendoza certified. What is important is that it was purchased for value. In the absence of any clear and convincing proof that such requirements were not followed.´[18] In the case at bar.indeed. Thus. and the judgment debt would never have been satisfied. 1985. but she admits that she left the Philippines only on July 13. In his ³Sheriff¶s Certificate of Sale´ dated June 27. who through her weakness.[19] This is the stage of finality which judgments must at one point or another reach. the one who made it possible for the wrong to be done should be the one to bear the resulting loss. The opposite view might make litigations more unendurable than the wrongs (they are) intended to redress. judgments of courts should become final at some definite date fixed by law. Men may do foolish things. real or imaginary. Legarda also claims that she was in the United States during the redemption period. as Legarda claims. too. All of his actuations that led to the final registration of the title in his name were aboveboard. There must be. the party who was responsible for making it happen should suffer the consequences. In Vales v. at the risk of occasional errors.´ [20] When judgments of lower courts gain finality.00. This reflects the basic common law maxim. make ridiculous contracts. it was only after the decisions of the trial and appellate courts had gained finality.500. There is no gainsaying that Legarda is the judgment debtor here. Much as it may pity Legarda. but the fail to betray any hint of a bid higher than Cabrera¶s which was bypassed in his favor. 1985. 1985. If Cabrera was adjudged highest bidder in said auction sale. Consequently. a violation of law.´ As between two parties who may lose due to the negligence or incompetence of the counsel of one. it cannot play the role of a ³knight in shining armor´ coming to the aid of someone.´ If this does not constitute payment. Certainly. (B)etween two innocent parties. Damages were duly awarded to Cathay.

Soriano asked Celestino whether there was any truth to the spreading rumor that he had already sold the subject property. J. Such being the case. CHUA VS SORIANO USTRIA-MARTINEZ. if any. Sometime in the early months of 1988.000. Soriano executed a SPA authorizing Celestino and one Carlito Castro to initiate administrative reconstitution proceedings of TCT No. SP-10487. that TCT No. Emmanuel C. 363471 had been canceled by TCT No. is hereby GRANTED. impervious to modification.R. this would have been dismissed outright for being dilatory and appearing as an act of desperation on the part of a vanquished litigant.´[25] At this juncture. Void judgments may be classified into two groups: those rendered by a court without jurisdiction to do so and those obtained by fraud or collusion. then.´ [24] Where is the fraud in the case at bar? Was Legarda unlawfully barred from the proceedings below? Did her counsel sell her out to the opponent? It must be noted that. Q-90-6439. No. the property auctioned off then sold to an innocent purchasers for value. In most cases. ³In this regard. .inviolable. the reconstituted title. 56568 which affirmed with modification the Decision2 dated July 10. she grounded her petition before the Supreme Court upon her estranged counsel¶s negligence. that she began to protest the alleged negligence of her attorney.00.7 Celestino denied the rumor but informed Soriano that the subject property was mortgaged with a foreign bank. an action to annul a judgment on the ground of fraud will not lie unless the fraud is extrinsic or collateral and facts upon which it is based (have) not been controverted or resolved in the case where (the) judgment was rendered. WHEREFORE. 1988 fire that gutted a portion of the Quezon City Hall and destroyed in the process the original copy of TCT No. TCT No.4 Then came the June 11. The factual background of the case is as follows: Msgr. the only errors that may be corrected are those which are clerical.5 On April 17. Soriano executed on March 29. can only be reviewed on appeal. or in any way modified directly or indirectly. no longer be reviewed. we now have an opportunity to rectify a grave error of the past. CV No. the Motion for Reconsideration of respondent New Cathay House. SO ORDERED. Sr. ruled otherwise. Fortunately. the decision dated March 18. Soriano made inquiries with the Registry of Deeds of Quezon City9 and discovered. 363471 as a security for a loan to be used in the business operation of Celestino¶s company. RT-3611 (363471) PR 1686. Soriano¶s first cousin and godson. aside from the fact that no extrinsic fraud attended the trial and resolution of this case. not even by the Supreme Court.R. of the Court¶s First Division is VACATED and SET ASIDE. she entertained no notion that Atty. 363471 on file with the Registry of Deeds of Quezon City. was issued. This could only imply that at the time she filed her petition for annulment of judgment. It was only after the appellate court¶s decision had become final and executory. 1991.600 square meter parcel of land located in Barangay Banlat. to his dismay. A new judgment is hereby entered DISMISSING the instant petition for review and AFFIRMING the November 29. it must be pointed out that while Legarda went to the Court of Appeals claiming precisely that the trial court¶s decision was fraudulently obtained. Celestino sold to the Chuas the property in an Absolute Deed of Sale12 dated July 4. 363471 of the Registry of Deeds of Quezon City. Celestino. failing which the decision becomes final and executory. They may.3 Acceding to Celestino¶s request. By virtue of a SPA11 dated March 9. Branch 81. 1997 of the Regional Trial Court. The Gancayco ruling. a writ of execution issued. On August 22.6 During the pendency of the administrative reconstitution proceedings. the jurisdiction of the court a quo over the parties and the subject matter was never raised as an issue by Legarda.[22] From the foregoing precedents. Inc. decision of the Court of Appeals in CA-G. Errors of judgment. 1451410 in the name of spouses Emmanuel and Edna Chua and spouses Manuel and Maria Chua (Chuas). by a higher court. 1989.´[21] In other words. Virgilio C.8 Dissatisfied with Celestino's explanation. Inc. unfortunately. (Celestino) asked Soriano to lend him TCT No. 1988. it is readily apparent that the real issue that must be resolved in this motion for reconsideration is the alleged illegality of the final judgments of the trial and appellate courts. Soriano (Soriano) owned a 1. Consequently. covered by Transfer Certificate of Title (TCT) No. once a judgment becomes final. 2001 of the Court of Appeals (CA) in CA-G. 363471. Digital Philippines. 1990. 1989 forP500. the decision of the trial court cannot be nullified. Coronel was being remiss in his duties. 1989 with Soriano's purported signature. 1988 a Special Power of Attorney (SPA) authorizing Celestino to mortgage said property. Quezon City. ³valid and binding upon the parties in the case and their successors in interest.[23] This case must be tested in light of the guidelines governing the latter class of judgments.: Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision1dated September 21. Costs against petitioner Victoria Legarda. Quezon City (RTC) in Civil Case No.

19 The RTC held that Soriano's purported signature in the SPA dated March 9. The Chuas filed the present petition anchored on the following grounds: THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION IN A WAY NOT PROBABLY IN ACCORD WITH THE LAW AND WITH THE DECISIONS OF THE HONORABLE SUPREME COURT.00 as litigation expenses. Celestino and the Chuas filed separate appeals with the CA. No. cancellation of title and reconveyance with damages.P20. Chief of the Questioned Documents Division of the National Bureau of Investigation (NBI).00 as attorney¶s fees and P10.16 He was substituted by his sister.00 as moral damages.000. the registered owner. judgment is hereby rendered as follows: 1. that the Chuas were placed on guard to ascertain the authenticity of the authority of Celestino since they were not dealing with Soriano. 2."20 that the Chuas are not purchasers in good faith since they did not personally verify the title of the subject property but relied only upon its tax declaration. Ordering defendant Celestino to pay to the defendants Chuas the amount of P500. 1989 as without legal force and effect.21 On September 21.000. Dissatisfied. RT-3611 (363471) PR-1686 in the name of appellee Soriano.00 as litigation expenses. 2001.00 plus interest at the legal rate from July 4. 14514 in the name of the defendants Chuas as null and void. 6. Ramos. The Register of Deeds of Quezon City is ordered to reinstate and reactivate Transfer Certificate of Title No.000. Florencia Celestino Soriano. AND . No appeal was filed by Celestino. 1997. this Court DISMISSES the appeal and AFFIRMS the appealed Decision except paragraph number 3 of the dispositive part which is hereby completely DELETED and replaced with the following: 3.15 Soriano died during the pendency of the trial. premises considered. 5. SO ORDERED.R.Claiming that his signature in the SPA is a forgery. 1989 is a forgery based on the opinion of expert witness Arcadio A. 1989 until fully paid. the dispositive portion of which reads: WHEREFORE. 4.000. the RTC rendered its Decision18 in favor of Soriano. also known as Sister Mary Virgilia Celestino Soriano (Sis. SO ORDERED.000. 1990 a complaint against Celestino and the Chuas for annulment of deed of sale and special power of attorney.23 The CA held that that there was no cogent reason to set aside the RTC¶s reliance on the testimony of the expert witness since there is no contrary evidence to rebut the same. Soriano filed on August 20. 1989 revealed that they were "not written by one and the same person.17 On July 10. Declaring Transfer Certificate of Title No.000. Declaring the special power of attorney dated March 19. 1985 and the Deed of Sale dated July 4. With costs against defendant Celestino. The CA also agreed with the RTC¶s findings that the Chuas are not purchasers in good faith since they failed to determine the veracity of Celestino¶s alleged authority to sell the property. Ordering defendant Celestino to pay the defendants Chuas the amounts of P20. docketed singly as CA-G. Soriano). for the lack of merit. the CA rendered its Decision. 56568. Directing defendants Chuas to reconvey the subject property to plaintiff Soriano.00 as attorney¶s fees and P10. Ordering defendant Celestino to pay to the plaintiff the amounts of P100. 3.22 the dispositive portion of which reads: WHEREFORE.13 The defense of Celestino is that he was duly authorized to sell the property14 while the Chuas contend that they are purchasers in good faith since they bought the property from Celestino by virtue of a SPA which was duly inscribed and annotated on the owner's duplicate of the TCT and the tax declaration and that they have duly inspected the property before purchasing it. that a comparison of Soriano's sample signature and the one appearing on the SPA dated March 9.

all surnamed Chua. (2) when the inference made is manifestly mistaken. (6) when in making its findings the Court of Appeals went beyond the issues of the case. Erlyn.30 As the Court enunciated in Lim v.27 The established rule is that in the exercise of the Supreme Court¶s power of review. good faith is the opposite of fraud and it refers to the state of mind which is manifested by the acts of the individual concerned. Chua. that they paid off the two squatters and appointed the third squatter occupant as caretaker of the property. Emmanuel Chua died during the pendency of the present petition. While one who buys from the registered owner does not need to look behind the certificate of title. or its findings are contrary to the admissions of both the appellant and the appellee. while it is always to be presumed in the absence of proof to the contrary. in order to determine if the vendor has the capacity to transfer any interest in the land. A purchaser in good faith is one who buys property without notice that some other person has a right to or interest in such property and pays its fair price before he has notice of the adverse claims and interest of another person in the same property. 1989 with Soriano¶s purported signature. (7) when the findings are contrary to the trial court.34 He has the duty to ascertain the identity of the person with whom he is dealing and the latter¶s legal authority to convey. requires a well founded belief that the person from whom title was received was himself the owner of the land. (4) when the judgment is based on a misapprehension of facts. The question of whether or not a person is a purchaser in good faith is a factual matter that will generally be not delved into by this Court. and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties. not being a trier of facts. that the SPA dated March 9. if properly considered. Ericson. or in his capacity to transfer the land. Sis. avers that the Chuas are not purchasers in good faith since they failed to check the veracity of Celestino's alleged authority to sell the property. that the fact that Soriano¶s purported signature in the SPA dated March 9."36 The strength of buyer¶s inquiry on the seller¶s capacity or legal authority to sell depends on the proof of capacity of the seller. has several well-recognized exceptions: (1) when the findings are grounded entirely on speculation. (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record. that they inspected the property and found three squatter occupants. would justify a different conclusion. Otherwise stated. the purchaser is not required to explore further than what the Torrens Title upon its face indicates in quest for any hidden defects or inchoate right that may subsequently defeat his right thereto. (8) when the findings are conclusions without citation of specific evidence on which they are based. one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor.24 The Chuas argue that they are purchasers in good faith since they dealt with Celestino who had in his possession the owner's duplicate title and the SPA dated March 9. mere inspection of the face of such public document already constitutes sufficient . however. this Court has ruled that every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the condition of the property. If the proof of capacity consists of a special power of attorney duly notarized. 1989 was later declared by the NBI handwriting expert as a forgery is of no moment since they are not handwriting experts and they had the right to assume that the SPA was perfectly legal for otherwise.29 Exception (4) is present in the instant case. with the right to convey it. that since verification with the original title in the Registry of Deeds of Quezon City was not possible. Chuatoco:31 x x x good faith consists in the possessor¶s belief that the person from whom he received the thing was the owner of the same and could convey his title. Good faith. they would have readily discovered the fraud being then hatched by Celestino. surmises or conjectures.28This rule. and his children.33 However. although the land object of the transaction is registered. since only questions of law may be raised in petitions for review. (9) when the facts set forth in the petition as well as in the petitioner¶s main and reply briefs are not disputed by the respondent.(5) when the findings of fact are conflicting. that Soriano was responsible for his predicament since he entrusted the owner¶s duplicate title to Celestino.THE HONORABLE COURT OF APPEALS HAS SO FAR DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS. does not normally embark on a re-examination of the evidence presented by the contending parties during the trial of the case considering that the findings of facts of the CA are conclusive and binding on the Court. or any encumbrance thereon. he is expected to look behind the certificate of title and examine all the factual circumstances. Emmanuel and Elise. they checked the tax declaration of the property. it could not have been annotated at the back of the title. (3) when there is grave abuse of discretion. absurd or impossible. which. Soriano. on the other hand. There is good faith where there is an honest intention to abstain from taking any unconscientious advantage from another. Edna L. that had the Chuas conferred with Soriano about the sale transaction proposed by Celestino.32 Consistently. that the SPA was inscribed and annotated in the owner's duplicate title. 1989 was duly annotated in the tax declaration. when a person who deals with registered land through someone who is not the registered owner. the Court. Where there is nothing in the certificate of title to indicate any cloud or vice in the ownership of the property.25 He was substituted by his surviving spouse and co-petitioner. The honesty of intention which constitutes good faith implies a freedom from knowledge of circumstances which ought to put a person on inquiry.35 The law "requires a higher degree of prudence from one who buys from a person who is not the registered owner.26 The sole issue to be resolved in the present petition is this: whether or not the Chuas are purchasers in good faith.

It was registered with the Registry of Deeds of Quezon City42 and inscribed and annotated in the owner's duplicate title. It is mischief at worse. The fact that Soriano's purported signature in the SPA dated March 9. Yet whatever sympathies may be judicially appreciated for the deceived party must be balanced in deference to the protection afforded by law to the purchaser in good faith. the Decision of the Court of Appeals dated September 21. image or impression on a document which would indicate that the notary public has officially signed it. and tax declaration. An examination of the assailed SPA shows that it is valid and regular on its face. After the judgment becomes final and executory until the obligation is satisfied. the court cannot disregard such rights and order the cancellation of the certificate. Branch 81. mere inspection of the document will not do. Thus. relying on the correctness of the certificate of title thus issued.41 Moreover.inquiry. the general rule that the direct result of a previous void contract cannot be valid. 1989 with Soriano¶s purported signature. If such innocence or good faith is established by the evidence. the Chuas already acquired valid title to the property. Quezon City (RTC) in Civil Case No. The notarial acknowledgment has removed the choice from him and replaced it with a presumption sanctioned by law that the affiant appeared before the notary public and acknowledged that he executed the document. it is now of no moment that some irregularity attended the issuance of the SPA. 1997 of the Regional Trial Court. CV No. a SPA dated March 9. he is deprived of such choice not because he is incapable of knowing and finding out but because. which the RTC directed Celestino to pay to the Chuas should instead be paid to Soriano as part of the actual damages awarded to him. the interim period being deemed equivalent to a forbearance of credit. then the corresponding duty of the Court is simply to affirm the rights of the purchaser in good faith. who presented Soriano¶s duplicate title.000.38 A notarial seal is a mark.R. 1989. 1997 in Civil Case No. and error at least. A purchaser presented with such a document would have no choice between knowing and finding out whether a forger lurks beneath the signature on it. Where innocent third persons. With the property in question having already passed to the hands of purchasers in good faith. The Chuas need not prove anything more for it is already the function of the notarial acknowledgment to establish the appearance of the parties to the document. otherwise. consistent with our pronouncement in Heirs of Spouses Benito Gavino and Juana Euste v. The effect of such outright cancellation will be to impair public confidence in the certificate of title. presumed to be valid and duly executed. In reality. 1990. A purchaser in good faith holds an indefeasible title to the property and he is entitled to the protection of the law. Court of Appeals. under our notarial system. Accordingly. the Chuas were dealing with Celestino. acquire rights over the property. for a court to misread or inflate the facts to justify a ruling for the defrauded party. the SPA was accepted by the Register of Deeds. we know it to be a public document where the notarial acknowledgment is prima facie evidence of the fact of its due execution. understood its import and signed it. The amount of P500.50 WHEREFORE. Q-90-6439 finding the Chuas as purchasers in bad faith. Petitioners are hereby declared purchasers in good faith. the reliance by the Chuas on the notarial acknowledgment found in the duly notarized SPA presented by Celestino is sufficient evidence of good faith. 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. 56568 is PARTLY REVERSEDand SET ASIDE insofar as it affirms the Decision of the Regional Trial Court.37 In the present case. he has been given the luxury of merely relying on the presumption of regularity of a duly notarized SPA. Accordingly. its due execution and authenticity. or insufficiently rebutted by the disputant. Soriano¶s attorney-in-fact. Branch 81. the petition is GRANTED.43 further bolstering the appearance of due execution and regularity. the amount due shall earn interest at 12% per year. 1989 was subsequently declared by the trial court to have been falsified would not revoke the title subsequently issued title in favor of the Chuas. Quezon City dated July 10. the time of the filing of the complaint until its full payment before finality of judgment. Q-90-6439 is MODIFIED to read as follows: . the buyer must show that his investigation went beyond the document and into the circumstances of its execution.00. And he cannot be faulted for that because it is precisely that fiction of regularity which holds together commercial transactions across borders and time. It contains a notarial seal.40 The assailed SPA is a notarized document and therefore.45 Thus. The Court's recent pronouncements in Bautista v. Silva44 are enlightening to quote: When the document under scrutiny is a special power of attorney that is duly notarized. If no such special power of attorney is provided or there is one but there appear flaws in its notarial acknowledgment. Such amount shall earn interest rate of 6% from August 20. TCT No. representing the purchase price in the Absolute Deed of Sale48 dated July 4. no matter how wronged he or she may be. 2001 in CA-G. the fact that Soriano¶s signature in the SPA dated March 9.39 The long-standing rule is that documents acknowledged before a notary public have the evidentiary weight with respect to their due execution and regularity. 14514 issued in the name of the Chuas is valid.47 Being purchasers in good faith. The sanctity of the Torrens system must be preserved. is inapplicable in this case as it will directly contravene the Torrens system of registration.46 to wit: x x x.49 For the Court to uphold the effects of a SPA that is rooted in falsity may be disconcerting. The Decision dated July 10. 1989 was declared to be a forgery does not alter the Chuas¶ status as purchasers in good faith.

computed from the time of the filing of the complaint until its full payment before finality of judgment.00 as litigation expenses. He ordered to stop the payment of all [postdated] checks from September 1990 to November 1995 on the ground of non-completion of his unit and had later learned of the foreclosure of the property. Garcia/TransAmerican failed to comply with their undertakings.00 and had allegedly made a payment of P669. It is stipulated in their respective contracts that their individual townhouses will be fully completed and constructed as per plans and specifications and the respective titles thereto shall be delivered and transferred to private respondents free from all liens and encumbrances upon their full payment of the purchase price. On May 30. 1989. The proceeds of the loan were intended for the development of the lots into an eight-unit townhouse project. Declaring the special power of attorney dated March 9. involving certain portions of land covered by Transfer Certificate of Title (TCT) No.00 on December 22. despite repeated demands. Ordering Celestino to pay plaintiff the amount of P500.41. 3349 to 3356 as collateral. Subsequently. 1[3] for the amount of P800.000. Each of private respondents entered into separate contracts to sell with TransAmerican Sales and Exposition (TransAmerican) through the latter¶s Owner/General Manager. as follows: Respondent Pablo N. 3[5] on February 15. Lim Street. 3. . a certificate of sale[9] in its favor was issued by the sheriff on February 26. 1990.R. the interest rate shall be 12% p.00 as moral damages. thereafter. and Lilian Soriano purchased the portion of land denominated as Unit No. However. 5[2] for the amount of P750. 1988. 1988 and fully paid the same upon execution of the agreement on the same day. with interest rate of 6% p.00 on August 21.P20. 14514 in the name of the defendants Chuas as valid.a.00 as attorney¶s fees and P10.00. Engr.000. Jesus Garcia. if the amount adjudged remains unpaid. 19155. Heroes Hill. 1989. J. petitioner instituted an extrajudicial foreclosure[8] on the subject lots and being the highest bidder in the public auction. SP No. With costs against defendant Celestino.960. 40892 and its Resolution dated February 19. five out of these eight titles turned out to be private respondents¶ townhouses subject of the contracts to sell with Garcia/TransAmerican.000.000.000. together with one unit three-storey townhouse to be built on each portion. Garcia failed to pay his obligation to petitioner. 1988 in the amount of P800. Respondent Alfredo Lim purchased the portion of land denominated as Unit No. Engr.000. Quezon City. Soriano. the spouses mortgaged[7] eight lots covered by TCT Nos. Respondent Francisco A. 1988 and had already fully paid the purchase price on September 3. 45 Gen. Santos Lim subsequently sold and assigned his share of the property to private respondent Felisa Chi Lim on May 12.a.00 and without the prior approval of the Housing and Land Use Regulatory Board (HLURB).000. 7[6] for P700.000. 1990 in the amount of P1.000. Ordering defendant Celestino to pay to the plaintiff the amounts of P100.000. 1985 and the Deed of Sale dated July 4. computed from the time the judgment becomes final and executory until fully satisfied. When the loan became due. 1996 in CA-G. Arevalo purchased the portion of land denominated as Unit No.00 as actual damages. 1989. located at No.: Before us is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul the Decision[1] of the Court of Appeals (CA) dated November 28.507. Uy purchased the portion of land denominated as Unit No. However.000.1. Petitioner registered its mortgage on these titles without any other encumbrance or lien annotated therein.600. Consequently. Jr. the sheriff¶s certificate of sale was registered and annotated on the titles of the subject lots in the Register of Deeds of Quezon City. Respondents Alfredo Lim and Santos Lim purchased the portion of land denominated as Unit No. Respondent spouses Leandro A.00 on October 1988 and had been fully paid as of March 18. 1989 and the Transfer Certificate of Title No. They had stopped paying because of non-completion of the project and had later learned of the foreclosure of the property. Garcia and his wife Lorelie Garcia obtained from petitioner Home Bankers Savings and Trust Company (formerly Home Savings Bank and Trust Company) a loan in the amount of P4. 1997 denying petitioner¶s motion for reconsideration. SO ORDERED. 2. 6[4] on October 29.00 payable in installments and had allegedly made a total payment of P581. REAL ESTATE MORTGAGE HOME BANKERS SAVINGS VS CA AUSTRIA-MARTINEZ.

1. Adjudication and Legal Affairs (OAALA).[10] They prayed for the completion of the units. 4. 3356 4. liens or encumbrances of third persons on the titles of the subject lots. the case against Garcia/TransAmerican was archived for failure to serve summons on him/it despite efforts to locate his whereabouts or its office. 4. annulment of the mortgage in favor of petitioner. without prejudice to its right to require respondent Engr. against Garcia/TransAmerican as seller/developer of the property and petitioner. Private respondents filed their Reply and a motion for the judgment on the pleadings. 1992. Jesus Garcia/TransAmerican Sales and Exposition and Home Bankers Savings and Trust Company (formerly Home Savings Bank and Trust Company) to be unenforceable as against all the complainants. Ordering the Register of Deeds of Quezon City to cancel the annotations of the mortgage indebtedness between respondents Engr. 4. and Lilian Soriano who were not able to complete or make full payment and to accept and/or receive amortization from said Complainants Soriano and upon full payment to deliver TCT No. Uy and upon full payment to deliver TCT No.On November 8. Ordering. Petitioner filed its Answer contending that private respondents have no cause of action against it. 3351 3) TCT No. AS TO THE SECOND CAUSE OF ACTION Deliver to Complainant Alfredo Lim TCT No. 4. private respondents filed a complaint with the Office of Appeals. Jesus Garcia/TransAmerican to constitute new collaterals in lieu of the said titles sufficient in value to cover the mortgage obligation. that the loan was granted and released without notifying HLURB as it was not necessary. AS TO THE THIRD CAUSE OF ACTION To compute and/or determine the loan value of complainant Francisco A. likewise the Register of Deeds of Quezon City to cancel the annotation of the Certificate of Sale in favor of the respondent Home Bankers Savings and Trust Company on the following Transfer Certificates of Title to wit: 1) TCT No. 3350 2) TCT No. AS TO THE FIRST CAUSE OF ACTION Deliver to Complainant Pablo N. 1991. 3. Arevalo TCT No. On August 16. Uy who was not able to complete or make full payment and to accept payment and/or receive amortization from said complainant Francisco A. 3354 5) TCT No.[11] the dispositive portion of which reads: WHEREFORE.2. 3352 4) TCT No. Petitioner did not file a rejoinder. there were no known individual buyers of the subject land nor annotation of any contracts. 2. OAALA rendered its Decision.5. The case was then considered submitted for decision. Private respondents filed a manifestation reiterating for a judgment on their pleadings and asked that the reliefs prayed for be rendered as far as petitioner was concerned. 1990. HLURB.3. Upon motion of private respondents. 3350 free from all liens and encumbrances. Jesus Garcia and Home Bankers Savings and Trust Company (formerly Home Savings Bank and Trust Company). 3351 free from all liens and encumbrances. Ordering respondent Home Bankers Savings and Trust Company (formerly Home Savings Bank and Trust Company) to: 4. Jr. that at the time of the loan application and execution of the promissory note and real estate mortgage by Garcia. AS TO THE FIFTH CAUSE OF ACTION Deliver to complainant Alfredo Lim and Felisa Chi Lim TCT No. AS TO THE FOURTH CAUSE OF ACTION To compute and/or determine the loan value of Complainant Spouses Leandro A. as indispensable party. Declaring the mortgage executed by and between respondents Engr. Judgment is hereby rendered as follows: 1. 3354 free from all liens and encumbrances.[13] Petitioner then elevated the case to the Office of the President which rendered a decision dated June 30. 3356 free from all liens and encumbrances. 3352 free from all liens and encumbrances. for non-delivery of titles and non-completion of the subdivision project. release of the mortgage on the lots with fully paid owners and delivery of their titles.[12] Petitioner filed an appeal with the Board of Commissioners of the HLURB which dismissed the same in a decision dated June 15. and for petitioner to compute individual loan values of amortizing respondents and to accept payments from them and damages.4. 1995[14] dismissing the appeal . Soriano.

the Office of the President and the CA which we uphold as we find no reversible errors committed. The CA applied the case of Union Bank of the Philippines vs. RESPONDENT COURT MANIFESTLY ERRED IN FINDING THE REAL ESTATE MORTGAGE IN FAVOR OF HOME AS INVALID AND UNENFORCEABLE AGAINST RESPONDENTS. HLURB that private respondents had already entered into separate contracts to sell with TransAmerican as early as 1988 while it was only in 1989 that spouses Garcia applied for a loan with petitioner and executed a mortgage contract over the subject lots. developer. The CA upheld the findings of the OAALA. Private respondents filed their Comment and petitioner filed its Reply thereto. C. The issue in HLURB Case No. otherwise known as ³The Subdivision and Condominium Buyer¶s Protective Decree´ are quoted hereunder as follows: Sec.[15] Petitioner filed a petition for review with the CA which. a banking institution.D.and affirming the June 15. that the mortgage of the subject lots without the consent of the buyers and the authorization of the HLURB is a clear violation of P. HLURB.[16] where it was held that the act of a subdivision developer of mortgaging the subdivision without the knowledge and consent of a unit buyer and without the approval of the National Housing Authority (NHA. HLURB has no jurisdiction to rule on the validity of the mortgage and to annul foreclosure proceedings. ± The National Housing Authority shall have exclusive jurisdiction to regulate the real estate trade and business in accordance with the provisions of this Decree. 3. et al. now HLURB) is violative of Section 18 of P.D. 1996. HLURB. Such approval shall not be granted unless it is shown that the proceeds of the mortgage loan shall be used for the development of the condominium or subdivision project and effective measures have been provided to ensure such utilization. The applicable provisions of P. Petitioner asserts that being a mortgagee of the subject lots and a purchaser in good faith. It correctly relied on Union Bank of the Philippines vs. The argument is untenable.[18]where we squarely ruled on the question of HLURB¶s jurisdiction to hear and decide a condominium buyer¶s complaint for: (a) annulment of a real estate mortgage constituted by the project owner without the consent of the buyer and without the prior written approval of the NHA. 1344. it is not a project owner. . as it is properly within the jurisdiction of the Regional Trial Court. and (c) annulment of the condominium certificate of title that was issued to the highest bidder at the foreclosure sale. pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the corresponding mortgage indebtedness . 957 thus. No. void or unenforceable. that the proceeds of the loan were purposely intended for the development of a property which was the same property subject of the contracts to sell. THE OFFICE OF THE PRESIDENT ERRED IN RULING THAT THE HLURB HAS JURISDICTION TO NULLIFY OR DECLARE UNENFORCEABLE THE REAL ESTATE MORTGAGE VALIDLY CONSTITUTED BY THE OWNER. Section 18.D. Petitioner claims that HLURB has no power to declare the mortgage contract over real property executed between a real estate developer and petitioner. Petitioner¶s motion for reconsideration was denied by the CA in its Resolution dated February 19. 1992 decision of the HLURB. or dealer contemplated under P. denied the petition and affirmed the decision of the Office of the President. the issues raised are mere rehash of the issues already passed upon by the HLURB. No.D. that despite the contracts to sell. in the herein assailed decision dated November 28. In a Resolution dated February 23. at his option. ASSUMING ARGUENDO THAT THE HLURB HAS JURISDICTION. NATIONAL HOUSING AUTHORITY. The petition is devoid of merit. the law which expanded the jurisdiction of the NHA. 1996. 957. that the mortgage contract is void and unenforceable against private respondents. No. and that since there is no seller-buyer relationship existing between it and private respondents. 1997. 2004. Petitioner¶s motion for reconsideration was also denied in a Resolution dated May 7. THE UNREGISTERED CONTRACTS TO SELL IN FAVOR OF RESPONDENTS SHOULD ALSO BE HELD VALID ONLY AS TO THE PARTIES THERETO BUT UNENFORCEABLE AGAINST PETITIONER. we gave due course to the petition and required the parties to submit their respective memoranda which they complied with. 957. IN THE EVENT THAT THE DECISION OF THE RESPONDENT COURT FINDING THE REAL ESTATE MORTGAGE IN FAVOR OF HOME AS INVALID AND UNENFORCEABLE AGAINST RESPONDENTS IS UPHELD. thus: . B. The loan value of each lot or unit covered by the mortgage shall be determined and the buyer thereof if any shall be notified before the release of the loan. The CA did not err in affirming the decision of the Office of the President that HLURB has jurisdiction to declare invalid the mortgage contract executed between Garcia/TransAmerican and petitioner over the subject lots insofar as private respondents are concerned. falling under the exclusive jurisdiction of HLURB. et al. No.[17] Petitioner is now before us raising the following grounds in support of its petition: A. The buyer may. (b) annulment of the foreclosure sale. .. Notably. Garcia/TransAmerican did not apprise petitioner of the existence of these contracts nor did petitioner exhaust any effort to inquire into their existence since petitioner merely relied on the purported clean reconstituted titles in the name of Garcia. REM-062689-4077 is the validity of the real estate mortgage of David¶s condominium unit that FRDC executed in favor of the Union Bank and Far East Bank without prior approval of the National Housing Authority and the legality of the title which the mortgage banks acquired as highest bidder therefore in the extrajudicial foreclosure sale. Mortgages ± No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the authority.

The case falls within the exclusive jurisdiction of the NHA (now HLURB) as provided in P. Sec. David. Executive Order No. In fact. was not only an unsound real estate business practice but also highly prejudicial to the buyer. or salesmen. records show that private respondents Arevalo. Regulation of the real estate trade and business: . since it had no knowledge of any buyer of the subject lots at the time the mortgage was constituted. Among these regulatory functions are: 1. had already fully paid their townhouse units in 1988 without the certificates of title being delivered to them. it is provided that no mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the authority. appropriation. No. Hear and decide cases on unsound real estate business practices.D. the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: A. records. On February 7. ± The regulatory functions of the National Housing Authority pursuant to Presidential Decree Nos. 8. Garcia mortgaged the subject lots without their knowledge and consent. 957. No. the mortgage foreclosure sale. 957 to mean any of the lots. subdivision lots which as defined under Section 2(e) of P. and Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner. No. FRDC¶s act of mortgaging the condominium project to Bancom and FEBTC. 1981. broker or salesman. who has a cause of action for annulment of the mortgage. 7. developer. Contrary to petitioner¶s claim that there were no buyers of the subject lots at the time of the constitution of the mortgage.[19] Petitioner avers that the Union Bank ruling is not applicable in its case. P. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner. We are not persuaded. together with such applicable personnel.. We hold that the jurisdiction of the HLURB to regulate the real estate trade is broad enough to include jurisdiction over complaints for specific performance of the sale. commercial. 1344 of April 2. While private respondents spouses Soriano bought the subject lots after the constitution of the mortgage in favor of petitioner. dealers. TRANSFER OF FUNCTIONS. Such approval shall not be granted unless it is shown that the proceeds of the mortgage loan shall be used for . developers. Alfredo Lim and Santos Lim had entered into contracts to sell with Garcia/TransAmerican as early as 1988 for their respective lots. . Executive Order No. 1. 1986 changed the name of the Human Settlements Regulatory Commission to Housing and Land Use Regulatory Board (HLURB).D.D. 957. 1216. the subject lots are. 957. broker or salesman. C. Approval of mortgage on any subdivision lot or condominium unit made by the owner or developer. that there was no construction in the subject lots at the time petitioner accepted the same as collateral.D. and cases of specific performance. of a condominium unit. 11. as early as 1988. industrial. or annulment of the mortgage. 1978 expanded the jurisdiction of the National Housing Authority to include the following: Sec. Unsound real estate business practices. 1344 of 1978. 957. No. Uy. with damages. they. without the knowledge and consent of David as buyer of a unit therein. Under Section 18 of P. with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereof. except for Uy. that the title to the subject property was still in the process of being reconstituted and the loan was in fact meant for the development of the subject lots into an eight-unit townhouse project. claims involving refund filed against project owners. developer. brokers. or recreational in a subdivision project[20] are entitled to the protection of P. whether residential. and without the approval of the NHA (now HLURB) as required by P. 957 of 1976 and P.D. 957. No.D. equipment and property necessary for the enforcement and implementation of such functions. 1344 and other related laws are hereby transferred to the Commission. 648 transferred the regulatory and quasi-judicial functions of the NHA to the Human Settlements Regulatory Commission. No.. No.... 90 dated December 17.. dealer.D. B. Clearly.secured by the particular lot or unit being paid for. and the condominium certificate of title that was issued to the UBP and FEBTC as the highest bidders at the sale. . In the exercise of its function to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No.

and do not relate to the essence of the thing to be done. Petitioner¶s insistence that prior to the approval of the loan. HLURB¶s orders of the cancellation of the sheriff¶s certificate of sale. Tolentino. and therefore is presumed to have conducted the usual ³due diligence´ checking and ascertaining (whether thru ocular inspection or other modes of investigation) the actual status. or permissive. We likewise find petitioner negligent in failing to even ascertain from Garcia if there are buyers of the lots who turned out to be private respondents. its very essence and intendment being to provide a protective mantle over helpless citizens who may fall prey to the razzmatazz of what P.[24] Neither will the conversion set aside the consequence of its negligence as a mortgagee. is mortgaged without their knowledge. . Petitioner¶s want of knowledge due to its negligence takes the place of registration. condition. In Philippine National Bank vs. the petitioner Bank had at its disposal vast resources with which it could adequately protect its loan activities. thus it is presumed to know the rights of respondents over the lot. . so that compliance is a matter of convenience rather than substance. 957 thus: . Arturo M. 957 compels the reading of Section 18 as prohibitory ± acts committed contrary to it are void. No. It was incumbent upon petitioner to inquire into the status of the lots which includes verification on whether Garcia had secured the authority from the HLURB to mortgage the subject lots. vs. Office of the President. it is not obliged under the law to go beyond the certificates of title registered under the Torrens system and had every reason to rely on the correctness and validity of those titles. release of the mortgaged lots and delivery of the corresponding titles to respondents who had fully paid the purchase price of the units are but the necessary consequences of the invalidity of the mortgage for the protection of private respondents. . so that they do not end up still homeless despite having fully paid for their home lots with their hard-earned cash. . Indeed. an authority on civil law: There is no well-defined rule by which a mandatory or prohibitory law may. Marquez. Petitioner failed to do so. utilization and occupancy of the property offered as collateral. and which they have religiously paid for. statutory provisions which relate to matters of substance.[21] we held that Section 18 of P. We said: In determining whether a law is mandatory. Anent the second issue. The conversion of the status of petitioner from mortgagee to buyer-owner will not lessen the importance of such knowledge.the development of the condominium or subdivision project and effective measures have been provided to ensure such utilization.[25] Judicial notice can be taken of the uniform practice of banks to investigate. or any encumbrance thereon. Since the lot was mortgaged in violation of Section 18 of P. it must be remembered that it was first a mortgagee of the same. Such construal ensures the attainment of the purpose of the law: to protect lot buyers.D.´ Concededly. Generally speaking. 957 aims to protect innocent lot buyers. thus HLURB has jurisdiction to rule on the validity of the mortgage. No. suppletory. As in the Union Bank. it is obvious that the law ± as an instrument of social justice ± must favor the weak. liens and encumbrances at the time of the mortgage. P. Notwithstanding that petitioner became the owner of the subject lots by being the highest bidder in the extrajudicial foreclosure sale. No. The avowed purpose of P. We do not agree. in all circumstances. private respondents obviously were powerless to discover attempt of the land developer to hypothecate the property being sold to them. that it was thereby relieved of taking any other step to verify the over-reaching implications should the subdivision be auctioned on foreclosure. those provisions which are mere matter of form. [T]he unmistakable intent of the law [is] to protect innocent lot buyers from scheming subdivision developers. 957 is a prohibitory law. where there is nothing on the certificate of title to indicate any cloud or vice in the ownership of the property. and acts committed contrary to it are void. vs. No. do not affect any substantial right.D. On the other hand. examine and assess the real estate offered as security for the application of a loan. It was precisely in order to deal with this kind of situation that P. 957 termed ³unscrupulous subdivision and condominium sellers. as stated by Sen. . the mortgage was constituted on the subject lots in favor of petitioner without the prior written approval from the HLURB. In this case. No. it is necessary to ascertain the legislative intent. or which are not material.D.D. On the other hand. are regarded as mandatory. affect substantial rights and are the very essence of the thing required to be done. . since the title offered as security was clean of any encumbrances or lien. it was free from lien or encumbrances. 957. the purchaser is not required to explore further than what the Torrens Title upon its face indicates in quest for any hidden . Section 18 of the decree directly addresses the problem of fraud committed against buyers when the lot they have contracted to purchase. we had occasion to mull over the intent of P. HLURB has jurisdiction to declare the mortgage void insofar as private respondents are concerned and to annul the foreclosure sale.[26] We find apropos to cite our ruling in Far East Bank and Trust Co.[22] Since the mortgage is void.D.D. the mortgagees therein were considered in good faith as they were totally innocent and free from negligence or wrongdoing in the transaction. the prime object is to ascertain the legislative intention. We are not convinced. Marquez. . it undertook a thorough check on the property and found the titles free from liens and encumbrances would not suffice. In the determination of this question. No. In Far East Bank and Trust Co. While the cases[23] cited by petitioner held that the mortgagee is not under obligation to look beyond the certificate of title when on its face.D. As between these small lot buyers and the gigantic financial institutions which the developers deal with. As a general rule. 957 was enacted. No. petitioner contends that since the titles on their face were free from any claims. petitioner knew that the loan it was extending to Garcia/TransAmerican was for the purpose of the development of the eight-unit townhouses. thus:[27] Petitioner argues that it is an innocent mortgagee whose lien must be respected and protected. are considered to be directory. We cannot overemphasize the fact that the Bank cannot barefacedly argue that simply because the title or titles offered as security were clean of any encumbrances or lien. . be distinguished from one which is directory.

alleged that the mortgage was constituted without the prior written approval of the HLURB which is in violation of Section 18 of P. as mortgagee. China Bank. As a consequence thereof. in their complaint. considering petitioner¶s negligence in ascertaining the existence or absence of authority from HLURB for Garcia/TransAmerican to mortgage the subject lots. is not an indispensable party in a case filed by a person claiming to be the true registered owner. private respondents. sources of funds could have been used other than the loan. admits of an exception as where the purchaser or mortgagee has knowledge of a defect or lack of title in the vendor. the registered owner of TCT No. the developer/seller and mortgagor of the subject lots.D. without prejudice to petitioner bank¶s seeking relief against the subdivision developer. it is Garcia¶s responsibility as seller to register the contracts and petitioner should not blame private respondents for not doing so. the mortgage constituted in favor of petitioner can be declared invalid as against private respondents even without the presence of Garcia/TransAmerican. S-50195.D. considering the presence of circumstances indicating the need for a thorough investigation of the existence of buyers like respondent. 957 provides that respondents who have not yet paid in full have the option to pay their installment for the lot directly to the mortgagee (petitioner) who is required to apply such payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for. In China Bank vs. This rule. No. Hence.: . for annulment of mortgage and cancellation of title against the mortgagee. Having been wanting in care and prudence. the absence of Garcia/TransAmerican did not hamper the OAALA from resolving the dispute between private respondents and petitioner. Petitioner cannot claim to be a mortgagee in good faith. As to the third issue. Petitioner¶s admission that it granted and released the loan without notifying the HLURB because of its belief that it was not necessary to do so. No. The present case merely involves the liability of petitioner bank to private respondents as buyers of the lots and townhouse units. is fatal to petitioner¶s defense. was archived for failure to serve summons on him/it as his whereabouts or the office could not be located. WHEREFORE. Thus. A reasonable person should have been aware that. the petition is DISMISSED for lack of merit. Section 17 of P. petitioner bank should not have been content merely with a clean title. Petitioner should not have relied only on the representation of the mortgagor that the latter had secured all requisite permits and licenses from the government agencies concerned. We disagree. the true Mercedes Oliver can prove in her complaint that she is the real person referred in the title and she is not the same person using the name who entered into a deed of mortgage with the mortgagee. No. J. No. In granting the loan. Thus. the latter cannot be deemed to be an innocent mortgagee. petitioner cannot claim to be an innocent purchaser for value and in good faith. DE LA MERCED VS GSIS YNARES-SANTIAGO. Having been negligent in finding out what respondent¶s rights were over the lot. however. Petitioner bank should have considered that it was dealing with a [townhouse] project that was already in progress. petitioner is obliged to accept the payment of remaining unpaid amortizations. Oliver. who allegedly misrepresented herself to be Mercedes M. or to herein petitioner.D.[30] we held that the mortgagor.defect or inchoate right that may subsequently defeat his right thereto. there was need to verify whether any part of the property was already the subject of any other contract involving buyers or potential buyers. or that he was aware of sufficient facts to induce a reasonably prudent man to inquire into the status of the property in litigation. It is worthy to mention that the assailed decision was rendered merely against petitioner and had not made any pronouncement as to Garcia/TransAmerican¶s liability to private respondents for the non-completion of the projects. Petitioner is bound by private respondents¶ contracts to sell executed with Garcia/TransAmerican. 957. As we have said earlier. as found by the Office of the President and by the CA. with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereof. petitioner contends that private respondents were negligent in failing to register their contracts to sell in accordance with Section 17 of P. The last paragraph of Section 18 of P. Oliver. it must be stated that Garcia/TransAmerican is not an indispensable party since a final determination on the validity of the mortgage over the subject lots can be rendered against petitioner. We found therein that even without the mortgagor. which was intended to serve the purpose only partially.[29] Notably.D. Thus. 957[28] provides that the seller shall register the contracts to sell with the Register of Deeds of Quezon City. Indeed it was negligent. In the present case. petitioner must be deemed to possess constructive knowledge of those rights. that private respondents¶ unregistered contracts to sell are binding only on them and Garcia/TransAmerican but not on petitioner which had no actual or constructive notice of the sale at the time the mortgage was constituted. China Bank. SO ORDERED. although no issue was taken on the fact that the case against Garcia/TransAmerican. 957. The former should have required the submission of certified true copies of those documents and verified their authenticity through its own independent effort. to finance the project.

1984. CV No.[1] which reversed the decision of the Regional Trial Court of Pasig. as security for which they mortgaged the lands covered by TCT No. It was expressly stipulated in the mortgage deed that certain lots within TCT No.[7] On August 22. and the sale of the lots to defendant Manlongat spouses. Branch 154. Branch 160. against GSIS and the spouses Zulueta. and directing the Office of the Register of Deeds of Pasig. as culled from the records. 51410. 1982. Manlongat and Ma. The parcels of land were registered in their names under Transfer Certificates of Title Nos.00. 1957 in the amount of P190.[9] Plaintiffs therein averred that they were owners of houses in various lots in Antonio Village. Thus. 51410 and 51470. the Zuluetas obtained another loan from GSIS this time in the amount of P1. purchased Lot 6. Col.000. 1956. 1972. Declaring Lots 6.[13] On October 23. 26105. a Deed of Absolute Sale was executed by the Zuluetas in his favor. the Regional Trial Court of Pasig. 51470: 1. insofar as his lots were concerned. injunction and damages. docketed as Civil Case No.000. On September 7. as null and void. Consequently. title to the properties was consolidated to GSIS.[6] On October 26. 26105 and 50256. Since the Zuluetas did not redeem the properties within the reglementary period. 26105. that defendants Suarez and Manlongat claimed to be vendees of lots in Antonio Village.000.000. the Zulueta spouses executed a contract to sell whereby they undertook to sell to Francisco dela Merced and Evarista Mendoza lots identified as Lots 6. Antonio Subdivision covered by TCT No. On October 15.[12] On September 5. 8 and 10 of Block 2. On September 3. 55034.[10] Meanwhile. The complaint in Civil Case No. after full payment by Col.This is a petition for review under Rule 45 of the Rules of Court. and in Civil Case No. are as follows: Governor Jose C. 1974. 2.000. . dela Merced also instituted Civil Case No. in Civil Cases Nos. including the consolidation of ownership thereof by the GSIS. on March 25. Zulueta and his wife Soledad Ramos were the owners of parcels of land consisting of 100. dela Merced of the purchase price. Therese D. seeking to set aside the decision of the Court of Appeals dated May 21. that the foreclosure sale. in his capacity as In-Charge of the Municipal Task Force on Squatters of the Municipal Engineer¶s Office of Pasig. Col. dela Merced was allowed to proceed against defendants Suarez and Manlongat. 7. 1957. having constructed the same with the permission of the late Jose C.398. 1987. and Lot 8 of Block 8 which are the subject of the action. another loan was extended by GSIS to the Zulueta spouses in the amount of P1. 51470 with the Regional Trial Court of Pasig. the trial court ordered the consolidation of Civil Case No. GSIS held a sale at public auction of its acquired assets. 26105 and 37177. dela Merced filed a complaint-in-intervention in Civil Case No. 51410. 51410 was dismissed for failure of plaintiffs to prosecute. 51410: 1. and that defendant Cabusao was threatening to demolish plaintiffs¶ houses on the alleged ground that they were squatters on the lots.986 square meters. The Zuluetas defaulted in the payment of their loans. 1957. which they secured by mortgaging parcels of land included in TCT Nos. upon motion of plaintiff Col. On April 4. Branch 160. 26105. praying. 51410. as null and void. to issue a new one in the name of the plaintiff Francisco Mendoza dela Merced. as security for which they mortgaged the land covered by TCT No. Later. judgment is hereby rendered in Civil Case No. Branch 160. the dispositive portion of which reads: WHEREFORE.[2] The antecedent facts. 7 and 8. Metro Manila. but the complaint-in-intervention of Col. by Victor Lemonsito and several others. Declaring the foreclosure proceedings conducted by defendant GSIS.[11] wherein he prayed that plaintiffs¶ complaint be dismissed and defendants¶ titles to lots 6. 7.R. as well as those issued to defendant Manlongat spouses by virtue of the sale executed by the former in favor of the latter. 51470 with Civil Case No. The Zulueta spouses obtained an additional loan from the GSIS on March 6.00. at the foreclosure sale held on August 16. 8 and 10. On September 25. a complaint for declaratory relief. 1986. Metro Manila. 1957. Zulueta before the same was foreclosed by GSIS. Elizabeth D. as the exclusive property of the intervenor. be declared null and void. the certificates of Title of the defendants covering said property lots are declared null and void. Manlongat. spouses Domini and Olivia Suarez and spouses Victor and Milagros Manlongat. 1999 in CA-G. was filed with the Regional Trial Court of Pasig. 1984.[3] 37177[4] and 50256[5] of the Registry of Deeds of the Province of Rizal. Orambo. among others. the children of Victor and Milagros Manlongat.00. 50256. GSIS was awarded the mortgaged properties as the highest bidder. Block 2 be declared null and void. GSIS extrajudicially foreclosed the mortgages and. known as the Antonio Village Subdivision.00 from the Government Service Insurance System. Block 2 of Antonio Village. rendered its decision.[8] against Benjamin Cabusao. 26105 shall be excluded from the mortgage because they have been either previously sold to third parties or donated to the government. Declaring the certificates of title issued to GSIS covering the aforesaid lots. dela Merced. secured by a mortgage on the properties included in TCT Nos. insofar as they affected the lots in question. the Zuluetas obtained a loan of P520. Pasig City. Block 2 (formerly Block 4).

³B-1´ Merced) The intent of the parties was clear to exclude from the mortgage the properties claimed by plaintiff-intervenor.´ The contention of defendant GSIS and defendants Victor and Milagros Manlongat that Lot Nos. Road Lots Nos. 26105 in favor of GSIS (Exh. ³C-1´ Merced. Block 2. Lot No.m. 1. 7.´ (Exh.000. 7. 15.[14] The GSIS and Manlongat spouses filed separate appeals. On December 27. On October 26. The Court of Appeals held that the trial court erred in declaring defendants as having waived their right to present evidence.m. the Court of Appeals set aside the decision of the trial court and remanded the case to the lower court for the reception of evidence of defendants Manlongat and GSIS. 1988. 8 and 10 of Block 2.3. defendant GSIS confirmed that portions of the subdivision such as lots Nos.000. SO ORDERED. 2. plus costs. Thus. ³C´.6. lot numbers 1 to 11. jointly and severally.´ Evidently. 4. 3 & 4 -. 1. 1972. 6.000. 1. Block No. 1994. ³C´). with a total area of 1. 6. on March 19. 2 .m.m. 1956. Block 2 to include plaintiff-intervenor¶s lots were excluded from the mortgage. (Exh. the letter to plaintiff acknowledging that there has been no problem with respect to Lot 8. 17.747 sq. 7. 8 and 10. and Lot 8 of Block 8 and certificate of Titles issued to GSIS covering the aforesaid lots as well as those issued to defendant Manlongat spouses as null and void. Blanquita Errea dela Merced. Ordering defendants GSIS and spouses Manlongat jointly and severally to pay attorney¶s fees of P20. 1996. 8 & 10 are not the lots excluded from the mortgage by the spouses Zulueta to the GSIS cannot be given credence.[16] The trial court made the following findings: The mortgage contract signed by the Zulueta spouses of the property covered by TCT No. P50.405 square meters of the Antonio Village Subdivision were excluded from the September 25. 4 -----Lot No.4.00 as exemplary damages.00 by way of attorney¶s fees. Branch 160. Metro Manila to issue new titles in the name of plaintiff-intervenor or his substituted heirs namely Blanquita dela Merced-Macatangay. Block 8 of the said property. Ordering the defendants. judgment is hereby rendered: 1. 1 . 2. Obviously. ³C-C-1´ Merced) contained the following provisions: ³Note: The following lots which form part of TCT No.m. 6. 3 -----Lot No. Block No. 2. in a letter dated October 1.[15] In the meantime. In fact. 5. 9-1-95) Defendant GSIS in fact had admitted in its answer.22. Lots Nos. Col. 4.00 as moral damages. Declaring the foreclosure sale of Lot Nos. 3. to pay the plaintiff the sums of P100. 1 to 13. among others. 263 sq. Declaring plaintiff-intervenor as the true and lawful owner of the aforesaid lots. the dispositive portion of which reads: WHEREFORE. 1956 mortgage contract executed by defendants in favor of GSIS.00 and to pay the costs. Block No. 3. 7 -------487 sq. Block 2 x x x have already been sold x x x. SO ORDERED. defendant recognized the ownership of intervenor of . the spouses Zulueta executed the corresponding deed of sale in favor of plaintiff-intervenor (Exh. dela Merced passed away and was substituted by his heirs. Ordering the Register of Deeds of Pasig. Block No. 402 sq. 26105 are not covered by this mortgage contract due to sale to third parties and donation to government. Luis dela Merced and Maria Olivia dela Merced Paredes. where he introduced improvements since 1955. 1 to 11. the Regional Trial Court of Pasig.000.m. rendered a decision. Evidence reveal that lots 6.138 sq. Block No. Lots No. and P50.660 sq. on April 19. 1 to 11.

Respondent GSIS countered that it cannot be legally presumed to have acknowledged petitioners¶ rights over Lot 8. 1957. and that the inclusion of the subject lots in the mortgage was confirmed by Manuel Ibabao. While the deed of sale between the Zuluetas and plaintiff-intervenor was never registered nor annotated in the title and executed only after one (1) year. petitioners cite the judicial admission of respondent GSIS in its answer before the trial court. Furthermore.[19] Petitioners aver that when the Zuluetas mortgaged their properties to GSIS on October 15. The petition is impressed with merit. The execution and validity of the contract to sell dated September 3. Elizabeth Manlongat. Therese Manlongat. also known as ³The Subdivision and Condominium Buyers¶ Protective Decree. wherein it recognized the rights of ownership of Francisco dela Merced over Lot 8. Petitioners also argued that GSIS was a mortgagee in bad faith as it had been negligent in ascertaining and investigating the condition of the subject lots mortgaged to it as well as the rights of petitioners who were already in possession thereof at the time of mortgage. Elizabeth and Ma. the instant petition for review. 1957 executed by the Zulueta spouses. Hence. Finally. as mortgagee. PT-94007 was issued to her. Moreover. albeit unregistered. 1999. With regard to the possession of petitioners. 1957. that defendant GSIS was not acting in good faith when it accepted the mortgage of the questioned lots. Block 8 of TCT 26105.[17] Respondents appealed the decision to the Court of Appeals. On May 21. the Court of Appeals reversed the decision of the trial court. Respondent GSIS also maintained that the lots being claimed by petitioners were included in the real estate mortgage executed by the Zuluetas in favor of GSIS. defendant GSIS had knowledge of the possession of intervenor of the lots. under Presidential Decree No. respondent GSIS admitted that the lots in questions were excluded from the mortgage.the mentioned lots. Block 8 and of Eva Mendoza dela Merced over Lot 10. was also void from the beginning. more specifically. the mortgage was void from its inception and GSIS. Furthermore. Besides defendant GSIS had knowledge of the possession of intervenor. insofar as the properties previously sold to petitioners were concerned. as a consequence of which TCT No. CV No. Petitioners¶ rights of ownership over the properties in dispute. Block 2 of TCT 26105. acquired no better right notwithstanding the registration of the mortgage. It is further to be noted that plan Pcs-5889 was not yet in existence when the mortgage was executed in 1956. where the same was docketed as CA-G. an employee of the Acquired Assets Department of GSIS. and GSIS had knowledge thereof. the same having been sold to Francisco dela Merced by virtue of the contract to sell executed on September 3. they were no longer the owners of the lots subject of this litigation. raising the following assignments of error: FIRST ASSIGNMENT OF ERROR THE COURT A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE IN TOTALLY DISREGARDING THE ADMISSION OF DEFENDANT GSIS THAT THE LOTS IN QUESTION WERE EXCLUDED FROM THE MORTGAGE SECOND ASSIGNMENT OF ERROR THE COURT A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE IN NOT RULING THAT (A) PLAINTIFF HAS BEEN IN POSSESSION OF THE SUBJECT LOTS SINCE 1955 CONTINUOUSLY UNTIL THE PRESENT AND (B) GSIS HAD KNOWLEDGE OF PLAINTIFF¶S POSSESSION THIRD ASSIGNMENT OF ERROR THE COURT A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE IN ITS FAILURE TO APPRECIATE THE SIGNIFICANCE OF PLAINTIFF¶S CONTINUOUS OPEN AND ADVERSE POSSESSION IN THE CONCEPT OF OWNER FOR 28 YEARS AND THE ACTUAL KNOWLEDGE OF GSIS OF SUCH POSSESSION FOURTH ASSIGNMENT OF ERROR THE COURT A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE IN RULING THAT NO JUDGMENT CAN BE RENDERED AGAINST THE SPOUSES MANLONGAT WITHOUT VIOLATING THEIR RIGHT TO DUE PROCESS OF LAW[18] In essence.´ petitioners are entitled to the issuance of their corresponding title over the lots after having completed their payments to the subdivision owner.R. respondent spouses Manlongat alleged that since Francisco dela Merced never registered the contract to sell and deed of absolute sale with the Register of Deeds. Plaintiff-intervenor in 1957 built a house and introduced improvement and built a house of strong structure on lots 6 & 7 and with the other lots serving as backyard and for 28 years had paid dues on the lots. respondent GSIS invoked the ruling of the Court of Appeals that the mere possession of petitioner cannot stand against the registered titles of GSIS and its buyers. who dealt in good faith with GSIS as the prior registered owner. are superior to the registered mortgage rights of GSIS over the same. Hence. the same cannot affect the rights of third persons such as their daughter. Block 2 (formerly Block 4) of the Antonio Village Subdivision was acquired by Elizabeth Manlongat in a public bidding. 1999. Lot 6. since 1955 continuously up to the present. as the former . petitioners allege that the foreclosure sale was null and void because the mortgage executed by the parties. For their part. Petitioners had been in continuous and open possession thereof before and during the time of the mortgage. Petitioners filed a Motion for Reconsideration which was denied on October 4. 55034. 957.

26105 had ³no problem. takes the place of registration of the rights of petitioners. examined and assessed the subdivision lots when they were offered as security for the loans by the original owners. 1980.must favor the weak. On the other hand. was ³not very clear´. However. Block 2 at an auction sale conducted by GSIS. and therefore is presumed to have conducted the usual ³due diligence´ checking and ascertained (whether thru ocular inspection or other modes of investigation) the actual status. Nemo potest plus juris ad alium transferre quam ipse habet. Ramos owned the Antonio Subdivision when they mortgaged the same with GSIS. v. It might be easily inundated.D. admits of an exception as where the purchaser or mortgagee has knowledge of a defect or lack of title in the vendor. It might be an interior lot without convenient access. Intermediate Appellate Court. 1981. where there is nothing on the certificate of title to indicate any cloud or vice in the ownership of the property. the petitioner Bank had at its disposal vast resources with which it could adequately protect its loan activities. Further: Nevertheless. the mortgage was foreclosed and the properties were sold at public auction to GSIS as the highest bidder. We presume it is experienced in its business. whose acquisition over the property proceeded from a foreclosure sale that was null and void.´ but his claim to Lots 6.we must rule in the negative.[26] GSIS also admitted the fact that on October 17. 10 and 11 of Block 2. therefore. had a better right than petitioners --. These and other similar factors determine the value of the property and so should be of practical concern to the petitioner. therefore.´[25] In the case at bar. There is also no dispute that the contract to sell was entered into by the parties before the third mortgage was constituted on October 15. Inc. 26105. or any encumbrance thereon. who later executed a deed of absolute sale in his favor. Likewise. in this case) had parted with his ownership of the thing sold then he no longer had ownership and free disposal of that thing so as to be able to mortgage it again. of TCT No. 957 was enacted. Office of the President. No one can transfer a greater right to another than he himself has.[20] it was held that: STATE¶s registered mortgage right over the property is inferior to that of respondents-spouses¶ unregistered right. This rule. it is obvious that the law --. Indeed.[22] we held that when the purchaser or mortgagee is a financing institution. Coming now to the last issue --. we have to deviate from the general rule because of the failure of petitioner in this case to take the necessary precautions to ascertain if there was any flaw in the title of the Nolascos and to examine the condition of the property they sought to mortgage. Zulueta and Soledad B. GSIS admitted in its answer that it received a letter from Francisco dela Merced on August 27. It was precisely in order to deal with this kind of situation that P. of the same title. private respondents obviously were powerless to discover the attempt of the land developer to hypothecate the property being sold to them. but that was after the foreclosure sale was already conducted and not before the mortgage was constituted over the property. 1957 by the Zuluetas in favor of GSIS on the property covered by TCT No. Court of Appeals. GSIS is admittedly a financing institution. It should be borne in mind that the title of Manlongat was derived through sale or transfer from GSIS. the general rule that a purchaser or mortgagee of land is not required to look further than what appears on the face of the title does not apply. condition. Lot 8. 957 termed ³unscrupulous subdivision and condominium sellers.as an instrument of social justice --. The land might be in a depressed area. GSIS was not required to do more than rely upon the certificate of title. its very essence and intendment being to provide a protective mantle over helpless citizens who may fall prey to the razzmatazz of what P.whether Elizabeth Manlongat.[23] There is nothing in the records of this case to indicate that an ocular inspection report was conducted by GSIS.[28] In other words. are beyond cavil. GSIS admitted knowledge that the spouses Jose C. or whether it investigated. In the same vein. in Philippine National Bank v. the Zuluetas defaulted on their loans.[24]24 we held that --As between these small lot buyers and the gigantic financial institutions which the developers deal with.[21] In the case at bar. which included the subject lots.D. In Sunshine Finance and Investment Corp. is preferred for the same reason stated above. the subsequent certificates of title of GSIS and of Manlongat over the property are both void. The only inventory made by GSIS based on its documentary evidence was prepared by its officers employed with the Acquired Assets Department. Registration of the mortgage is of no moment since it is understood to be without prejudice to the better right of third parties.[27] Clearly. 7. It could not have been unaware that the property had been built on by small lot buyers. As a general rule. utilization and occupancy of the property offered as collateral. or that he was aware of sufficient facts to induce a reasonably prudent man to inquire into the status of the property in litigation. the original owners. The constructive knowledge of GSIS of the defect in the title of the subject property. . the purchaser is not required to explore further than what the Torrens Title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. stating that he had acquired the subject lots by virtue of a deed of absolute sale executed in his favor by the Zulueta spouses. The unrecorded sale between Francisco dela Merced as the vendee of the property and the Zuluetas. because of the legal truism that the spring cannot rise higher than the source.subdivision owner. GSIS had full knowledge of the claim of ownership of dela Merced over the aforementioned lots even before their sale at public auction to Elizabeth Manlongat. the registered right of GSIS as mortgagee of the property is inferior to the unregistered right of Francisco dela Merced. Francisco dela Merced was able to fully pay the purchase price to the vendor. or lack of such knowledge due to its negligence. Surely it cannot simply rely on an examination of a Torrens certificate to determine what the subject property looks like as its condition is not apparent in the document. Ascertainment of the status and condition of properties offered to it as security for the loans it extends must be a standard and indispensable part of its operations. however. The petitioner is an investment and financing corporation. The unrecorded sale between respondents-spouses and SOLID is preferred for the reason that if the original owner (SOLID. hence. Respondents cannot even assert that as mortgagee of land registered under the Torrens system. In its answer to the complaint filed with the trial court. its Deputy General Counsel wrote Francisco dela Merced stating that his claim of ownership over Block 8. There might be squatters on it. in favor of Francisco dela Merced. In the case of State Investment House. v. as purchaser of Lot 6.

She went back to the Philippines to get her daughter on May 13.00. Kauffman asked her sister.4 On October 25. this being standard practice in the real estate industry.9 together with Jennifer V. petitioners were not only in actual possession thereof. jointly and severally. and to ISSUE new certificates of title over the same in the name of petitioners as co-owners thereof. In fact. Eduardo Victor. Bernal and Jennifer Ramirez for Nullification of Deed of Real Estate Mortgage and Damages with prayer for a Temporary Restraining Order and Preliminary Mandatory Injunction12 in the RTC of Las Piñas City. a cautious and prudent purchaser would usually make an ocular inspection of the premises. as attorney-in-fact. as she was going to the United States. Ramirez. the defendant Mira V. PT-94007 in the name of Elizabeth Manlongat. The assailed decision reversed the decision of the Regional Trial Court (RTC) of Las Piñas City in Civil Case No. The property is covered by Transfer Certificate of Title (TCT) No. WHEREFORE. Kauffman then asked Pares to hire a professional locksmith who could open the safe. 8 and 10 of Block 2 and Lot 8 of Block 8 of the property originally covered by TCT 26105. ERENA VS QUERRER KAUFFMAN CALLEJO. Pares discovered that the owner¶s duplicate title and the tax declarations. Bernal admitted that Jennifer Ramirez had been in a tight financial fix and pleaded for time to return the title and the jewelry. possessed the property prior to or after the former bought the same at an auction sale. who is the daughter of Eduardo Victor.00.. but their father. who. The foreclosure sale of Lot Nos. Again. 1997. 1997. T-48521 of the Register of Deeds of Las Piñas City. 4. when the plaintiff left for the United States. but Pares did not receive it. When Kauffman told Bernal that she would file a case against them. She and Pares went to the Register of Deeds of Las Piñas City and found out that the lot had been mortgaged to Rosana Ereña on August 1. Branch 160. and tax declarations of the lot and house x x x. in this case.: Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) in CA-G. are declared NULL AND VOID. Should such prospective buyer find out that the land she intends to buy is being occupied by anybody other than the seller. Bernal cried and asked for forgiveness. is REINSTATED. it would then be incumbent upon her to verify the extent of the occupant¶s possessory rights. were kept in a safety deposit box in the house. Las Piñas City. 3. 1998. Mira Bernal. covered by Transfer Certificate of Title No. in turn. She also entrusted the key to her house to Victor. Ramirez. however.R. and copies of said TCT. Kauffman filed a complaint against Ereña. Sometime between May and July 1997. was not in actual possession. 6. Victor¶s daughter. SO ORDERED. The failure of a prospective buyer to take such precautionary steps would mean negligence on her part and would thereby preclude her from claiming or invoking the rights of a purchaser in good faith. 1997. CV No. The plaintiff is the owner of a property consisting of a lot with an area of One Hundred Ten (110) square meters located at Blk. said defendant Mira V. using the key in their possession. SR. Lot 13. when he himself went to the United States. the defendant Jennifer V. Talon. to get the house from Bernal so that the property could be sold. GSIS. with a combined assessed value of P40. The decision of the Regional Trial Court of Pasig City. BF Resort Village. Sometime in February 1997. Pianza Sts. to her live-in partner. Bernal.S.2 Vida Dana Querrer-Kauffman is the owner of a residential lot with a house constructed thereon located at Block 3. Respondents GSIS and spouses Victor and Milagros Manlongat are ORDERED to pay. Manlongat cannot claim that she was a purchaser in good faith.8 It appeared that a "Vida Dana F. Vida Rose.11 On March 12. T-48521. BF Resort Village. Sometime in February 1997. had already built a house thereon. when asked. 1997. Francisco dela Merced. in conspiracy with her niece. opened the locked and the unoccupied house of the . 3. attorney¶s fees in the increased amount of P50. The records categorically reflect that neither Manlongat nor her predecessor-in-interest. 51410 and 51470.10 Kauffman and Pares were able to locate Bernal who. and again left for the U. Kauffman entrusted her minor daughter.6When the safe was broken open. and the subsequent certificates of titles issued to GSIS as well as TCT No.500. on the same day. together with a residential house thereon. including pieces of jewelry were missing. The owner¶s duplicate copy of the title as well as the tax declaration3 covering the property. J. entrusted said key to his sister. Marcillo corner Planza Streets.7 Kauffman learned about this on October 29. 67899. The complaint contained the following allegations: 2.. Victor also left for the U. The decision of the Court of Appeals is REVERSED AND SET ASIDE. in view of the foregoing. Pares did as she was told.Further. 1997 and returned to the Philippines on November 9. Las Piñas City.5 Kauffman then sent the key to the safety deposit box to Pares.000. Later on. she entrusted the key of her said house to one Eduardo Victor who. at the time the lots were sold to Manlongat. confirmed that Ramirez had taken the contents of the safety deposit box. LP-98-0056.S. and to pay the costs. The Register of Deeds of Pasig City is ordered to CANCEL all present certificates of title in the name of GSIS and Elizabeth Manlongat covering the above-mentioned properties. the petition is GRANTED. Talon. and entrusted the house and the key thereto to his sister. 7. in Civil Cases Nos. Marcillo cor. Lot 13. Querrer" had signed the Real Estate Mortgage as owner-mortgagor. Bernal. Evelyn Pares.

00. jointly and severally. (c) In case a temporary mandatory order or preliminary injunction be not issued. and by reason of which the plaintiff is entitled to recover possession of said title and the cancellation of Entry No.00 as acceptance fee. as a deterrent to people from committing fraudulent acts against their fellowmen. serious anxiety and similar injuries in the amount of P200.00 appearance fee every hearing. mortgaged the property in question to the defendant Rosana L. the plaintiff is furthermore entitled to attorney¶s fees in the amount of P50. Likewise. 12. for forging the signature of the plaintiff on the corresponding Real Estate Mortgage. Mendoza and registered as Doc. but is also prevented from pursuing her intention to sell her property. (b) That after due hearing. for which the defendants should be liable.000. Ereña for the amount of P250. a writ of preliminary mandatory injunction be issued making permanent the temporary mandatory order. After the execution of the falsified Real Estate Mortgage.000. with the latter falsely representing herself to be the attorney-in-fact of the plaintiff. 43. 7.000. Page No. No. T-48521. P200. all belonging to the plaintiff. She likewise interposed a cross-claim against Bernal and Jennifer Ramirez for the refund of the P250.00 appearance fee every hearing.00 which plaintiff seeks to impose upon the defendants as a correction or example for the public good. P50. and this notwithstanding.00 as actual damages. be ordered. defendants Mira V.plaintiff. Series of 1997. the plaintiff is not only in constant apprehension as to what other fraudulent transactions the defendant might enter into involving her title.000. The plaintiff has been a victim of fraud as above narrated and the defendant Rosana L. Ereña as mortgagee accepted the property in mortgage.000. a temporary mandatory order be issued requiring the defendant Rosana L. 7185-15. Ramirez were not authorized to mortgage the property as they claimed themselves to be. 11.500.00 she loaned to "Vida Dana Querrer. P100.000.000.00 as exemplary damages. that the Real Estate Mortgage (Annex "D") of this complaint be declared null and void.000. the defendants be ordered to pay the plaintiff. T-48521 and other articles contained therein valued at more than P60. Ereña now being in unlawful possession of her torrens title. the defendants registered the same with the Registry of Deeds of Las Piñas City and had it annotated on the TCT No.00 as acceptance fee. Plaintiff further prays for such other relief that this Honorable Court may deem just and equitable in the premises. (d) That after hearing.000. Bernal and Jennifer V. T-48521.14 Ereña interposed the defense of being a mortgagee in good faith. the following amounts: 1. Ramirez. VII.13 The complaint also contained the following prayer: (a) That upon the filing of this complaint and compliance with the pertinent rule. 2. Having in their possession the stolen TCT No. In view thereof. after due hearing. When the defendant Rosana L. in Pasay City. 9. as attorney¶s fees. forced open the vault of the plaintiff and stole the owner¶s copy of TCT No. 7185-15 on said title be cancelled. that the defendant Rosana L. 10.000. P200. Book No.00. The plaintiff is also entitled to exemplary damages in the amount of P100."15 . aside from costs.00 as moral damages. Bernal and Jennifer V. the defendants who were in bad faith conspired and confederated between and among themselves and fraudulently executed the said document of mortgage for purposes of personal gain. she knew fully well that the plaintiff-owner was in the United States at that time and the defendants Mira V. 5. plaintiff is entitled to actual damages in the amount of P200. Ereña to turn over to the plaintiff the possession of TCT No. 8. 7185-15 thereon.500. to turn the same over to the plaintiff. which appears to have been notarized by Notary Public Alfredo M. plus P1.00. 4. x x x. On account of defendants¶ unwarranted acts aforecited. Ereña or whoever be in possession of TCT No. and Entry No. 1. plaintiff suffered moral damages in the form of mental anguish. wounded feelings. T-48521 as Entry No. 6.00.000. plus P1. 3. T-48521.

000. and the location plan of the property. defendants Ramirez and Bernal failed to appear. testified that. Rosana Ereña. SO ORDERED. Jennifer Ramirez. Richmond Ramirez. Ereña and "Vida Dana Querrer" showed to him their respective residence certificates. Jennifer¶s husband.S.22 Jennifer Ramirez informed Ereña that Vida Dana was applying for a passport as she was going to Japan and the U.23 "Vida Dana Querrer" likewise introduced herself as Richmond¶s sister. 2000. Ramos. as attorney-in-fact. the complaint filed by plaintiff VIDA DANA QUERRER-KAUFFMAN is hereby DISMISSED for lack of merit and the questioned Deed of Real Estate Mortgage dated 1 August 1997 is hereby declared VALID. on November 13. 1998. the defendant still had possession of the owner¶s duplicate of the title when she received the complaint and summons. the Ramirez spouses arrived in her house with one "Vida Dana Querrer" whom Richmond introduced as his half-sister. Mendoza prepared the documents after which the parties affixed their respective signatures above their respective names26 and their submarkings on the deeds." The spouses also showed an I.19 He also told Ramos that Querrer wanted to mortgage her house and lot as she was going to the U.27 On April 4.21 Ramos then informed her niece. 1997. On August 1. nevertheless. Intermediate Appellate Court.D. On motion of the plaintiff. and a Real Estate Mortgage contract over the lot covered by TCT No. who turned out to be an impostor.18 The Ramirez spouses used to go to her house. She insisted that Solivel v. a tax clearance. and asked if she would agree to mortgage the property. No pronouncement as to costs. they were thus declared in default. the City Prosecutor approved a Resolution absolving them of the robbery and estafa cases through falsification of a public document. The court declared that the woman who pretended to be the plaintiff and lawful owner of the property had in her possession the original copy of the owner¶s duplicate of title. in favor of Jennifer Ramirez.29 The fallo of the decision reads: WHEREFORE. Socorro Ramos. In one occasion.Jennifer Ramirez and Bernal interposed the common defense that. II . Rosana Ereña and a woman who identified herself as "Vida Dana Querrer" arrived in the office Notary Public Alfredo M. although the plaintiff adduced proof that she owned the property and that her signatures on the Special Power of Attorney and in the Real Estate Mortgage were forged. with the house and lot as security therefor. all in the name of "Vida Dana Querrer. a police clearance. alleging that the Cebu International Finance Corporation case is not applicable as the facts therein are different. had been classmates and were compadres. The court cited the ruling of this Court in Cebu International Finance Corporation v. and "Vida Dana Querrer" later inspected the house and lot two times. and pictures of the house and lot. THE LOWER COURT ERRED IN FINDING THAT DEFENDANT-APPELLANT ROSANA EREÑA WHO ACCEPTED THE MORTGAGE OFFERED BY SAID IMPOSTOR IS A MORTGAGEE IN GOOD FAITH. Angel Jose.) card.16 During pre-trial. tax declaration. prompting Kauffman to file an appeal with the CA where she made the following allegations: I CONSIDERING THAT THE MORTGAGE CONTRACT IN QUESTION WAS EXECUTED AND MADE POSSIBLE THROUGH THE FRAUDULENT MANIPULATION OF AN IMPOSTOR. and Angel Jose. 48521 to be executed by "Vida Dana Querrer" and Jennifer Ramirez as mortgagors. card of "Vida Dana Querrer" as a worker in Japan.20 Richmond showed her a copy of TCT No. In fact.30 Kauffman filed a motion for reconsideration of the decision.24 Ereña was able to verify from the Office of the Register of Deeds that the property was in the name of Vida Dana Querrer and that it was free of any lien or encumbrance. Francisco31 is the case in point. 48521 on November 7. Richmond Ramirez. The defendant thus relied in good faith on the title after ascertaining with the Register of Deeds the identity of Vida Dana Querrer as the registered owner of the property.00 mortgage loan.S. Ereña and her husband. her grandson and Ereñas¶ nephew. the RTC rendered judgment in favor of the defendants and ordered the dismissal of the complaint. T-48521. The court ruled that. Ereñas¶ aunt.25 Ereña finally agreed to aP250. defendant Ereña adduced evidence that she was a mortgagee in good faith.D.17 During trial." as principal. The RTC denied the motion. Querrer¶s identification (I. Court of Appeals28 and Duran v. Mendoza and asked him to prepare a Special Power of Attorney to be executed by "Vida Dana Querrer. premises considered. The Real Estate Mortgage was filed with the Office of the Register of Deeds and annotated at the dorsal portion of TCT No. 1997. Ramos later brought the spouses Ramirez and "Vida Dana Querrer" to Ereña who showed a copy of the title.

a known compadre of Angel Jose. III THE LOWER COURT ERRED IN APPRECIATING THE JURISPRUDENCE CITED IN ITS APPEALED DECISION AND IN APPLYING THE SAME TO THE CASE AT BAR. The presentation of the desired certificate was complied with. 2. the rule that the seller must be the owner of the thing sold also applies in a foreclosure sale (Cavite Development Bank vs.R No. the grandson of Socorro Ramos. Cyrus Lim. The identity of the mortgagor was ascertained from the personal interview of the relatives of the mortgagor who were the spouses Jennifer and Richmond Ramirez. the signature over the printed name in the said document must be the genuine signature of Vida Dana Querrer. it has been uniformly held that (I)n a real estate mortgage contract. This is in anticipation of a possible foreclosure sale should the mortgagor default in the payment of the loan. WHO DID NOT IN ANY WAY CONTRIBUTE TO THE COMMISSION OF THE FRAUD. There is thus no factual basis for the CA¶s finding that the Real Estate Mortgage was a forged deed." is still a sale in accordance with Art. Considering that respondent. it is essential that the mortgagor be the absolute owner of the property to be mortgaged. 131679. and points out that the documentary evidence shows that the negotiator over the property is Vida Dana Querrer and not Vida Dana Querrer-Kaufffman. Court of Appeals. The mortgagee took such step to enable her to know the rights of the mortgagor over the property to be mortgaged. Being a sale. petitioner insists that she is a mortgagee in good faith as shown by the following facts and circumstances: 1. Inc. 139884.R. the RTC disregarded the clear provisions of the Civil Code. G. though essentially a "forced sale.THE COURT A QUO ERRED IN CONCLUDING THAT THE DEED OF MORTGAGE IN QUESTION IS VALID DESPITE ITS OWN FINDING THAT THE SUBJECT PROPERTY IS OWNED BY THE PLAINTIFF-APPELLANT WHOSE SIGNATURE ON THE DEED WAS FORGED. This was simply in line with the basic requirement in our laws that the mortgagor be the absolute owner of the property sought to be mortgaged (Lorbes vs. 14. as the plaintiff below. It held that in ruling as it did. otherwise. II THE COURT OF APPEALS HAS SERIOUSLY ERRED IN HOLDING THAT THE CONTRACT OF REAL ESTATE MORTGAGE EXECUTED ON 01 AUGUST 1997 BETWEEN ROSANA EREÑA AND VIDA DANA QUERRER IS A FORGED DEED OF MORTGAGE WITHOUT SUBSTANTIAL EVIDENCE TO ESTABLISH SUCH FACT. G. 2001). 1.32 On June 10. thus: Thus. III THE COURT OF APPEALS HAS SERIOUSLY ERRED IN HOLDING THAT THE DOCTRINE OF A "MORTGAGE IN GOOD FAITH" DOES NOT APPLY TO PETITIONER DESPITE SUBSTANTIAL AND UNDISPUTED EVIDENCE PROVING HER A MORTGAGEE IN GOOD FAITH. the CA rendered judgment in favor of Kauffman. Richmond Ramirez with his wife introduced the mortgagor Vida Dana Querrer as his half-sister who wanted to mortgage the property .37 Petitioner avers that respondent failed to prove that she is the owner of the property. No. 2004. IV THE LOWER COURT ERRED IN UPHOLDING THE RIGHT OF DEFENDANT-APPELLANT ROSANA EREÑA DERIVED FROM A FORGED MORTGAGE CONTRACT AS AGAINST THE RIGHT OF THE PLAINTIFF. 2000). 2000). 15. particularly Articles 2085 (2)33 and 1409 (2)34 The appellate court relied on the Court¶s ruling in Insurance Services & Commercial Traders. (Robles vs.36 Ereña thus filed the instant petition contending that the following legal issues should be resolved: I THE COURT OF APPEALS HAS SERIOUSLY ERRED IN HOLDING THAT RESPONDENT QUERRER-KAUFFMAN IS THE OWNER OF THE PROPERTY MORTGAGED TO PETITIONER DESPITE THE ABSENCE OF SUBSTANTIAL EVIDENCE TO SUPPORT SUCH A CONCLUSION OF FACT. Court of Appeals. Even assuming that respondent was the lawful owner of the property and the signature in the Real Estate Mortgage is a forgery. the mortgage is void. THE PROVEN TRUE OWNER OF THE SUBJECT PROPERTY. G. Court of Appeals35 and ratiocinated. No. 1458 of the Civil Code.R. Before the offer of mortgage was accepted by petitioner Rosana Ereña. failed to adduce clear and convincing evidence that the signature on the Real Estate Mortgage is a forgery. Feb. and a foreclosure sale. 12309. the registered owner of the property. she required the production of the owner¶s copy of TCT No. Feb. the aunt of the petitioner. T-48521. v. Mar.

the issues raised in the instant petition are factual in nature. and inspection of the premises showed that earnest and diligent efforts were exerted by the petitioner to ascertain the identity of the mortgagor and her ownership of the subject property.? A Yes. The actual physical inspection of the house and lot covered by the certificate in the given address for two (2) times. police clearance. The Tax Declarations. more or less." ATTY. Sir. 3. Espiritu on June 21. her aunt who acknowledged to know Richmond and Jennifer Ramirez for a period of five years. 48521 under her name was issued by the Register of Deeds on June 25. Without admitting on the allegation of a forged signature. Dana said. Bernal pleaded for mercy. survey plan attested to the fact that the owner of the property subject of the mortgage was the mortgagor. adduced clear and convincing evidence that she is the owner of the property and that the signature on the Special Power of Attorney and Real Estate Mortgage are not her genuine signatures.. the owner¶s copy of TCT No. Sir. after admitting that she and Jennifer Ramirez stole the owner¶s duplicate copy of the title and the tax declarations covering the property. the trial and appellate courts found that respondent. impliedly admitted that they forged the respondent¶s signature on the Real Estate Mortgage: Q Were you able to see Mira in Pasay. She purchased the property from Edgardo C. Q But you said you arrived there at 6:00 p. "Mabuti pang ilabas ninyo and mother ni¶yo.40 Indeed. Indeed. Besides. as plaintiff below. and that such findings are conclusive on this Court. The petition has no merit. and the Ramirez couple strengthened her reasonable belief in good faith that the mortgagor is the owner of the property covered by the certificate of title. MASANGKAY: . The aforestated steps taken by her are visible proofs of the due diligence exercised by Rosana Erena to ascertain the identity of the mortgagor and respondent¶s capacity to convey the property to her in a contract of mortgage with her. thus. T-48521. 1997 via a Deed of Absolute Sale. the established facts showing the exercise of due diligence and reasonable caution observed by petitioner preparatory to the acceptance and execution of the mortgage contract BELIE the accusation of bad faith to her. Q You mean you waited? A We waited for her.38 For her part. the air-conditioning unit. 1997. based on the evidence on record. her personal Identification Card showed the mortgagor¶s name and proved her identity to be Vida Dana Querrer. Q What time did you see Mira in her house in Pasay? A Between 11:00 to 12:00 P. both the trial and appellate courts are one in declaring that she is the lawful registered owner of the property. the petitioner is proscribed from assailing the findings of the trial and appellate courts since under Rule 45 of the Rules of Court. tax clearance. Your Honor. Aside from the confirmation of her filial relation to the Ramirez couple by Richmond Ramirez. 4. but in Biñan. petitioner had been reasonably diligent to meet the justification of a mortgagee in good faith. and the pieces of jewelry owned by respondent. 6. she suddenly disappeared when we arrived. The spouses of the mortgagor were accompanied to the house of Rosana Erena by Socorro Ramos. respondent avers that. when respondent and her sister. Sir.39 on the basis of which TCT No. 5. in her house? A Yes. ATTY. Further examination of the certificate of title in the Office of the Register of Deeds of Las Piñas City proved the authenticity of the owner¶s copy of the certificate. We saw her in Pasay. confronted Mira Bernal (Jennifer Ramirez¶s aunt).m.M. on bended knees. only questions of law may be raised in this Court. CABARON: The witness is narrating. Evelyn Pares. Moreover. The aforesaid interviews/examination of records. In truth. contrary to petitioner¶s claim. television. and.described in the certificate of title which was registered in her name. She insists that petitioner failed to establish special and important reasons for the Court to exercise its discretion to review the appellate court¶s decision. at least by the mortgagor and mortgagee together with Soccoro Ramos.

Sir. sabi ni Tita Ellen. MASANGKAY: Q And finally. We did not ask anymore because she continued on talking and she said Jennifer was short of funds. Q Alright. what? A She just said Jennifer. you were able to talk to Mira in that house? A Yes. She said. "Tita Dana. Then the daughter of Beth said. Q It was Jennifer who. what was the statement of Mira with respect to the transaction? . it was Jennifer. you better answer. she is the daughter of Eduardo Victor. then Mira answered. "Why did you not inform that you will be coming?" ATTY. "Nagipit kasi ang bata. naawa ako kaya binigay ko ang titulo. what did you ask Mira? A My sister asked Mira who destroyed my vault? Q What was the answer of Mira? A Mira answered. Q Who is she? A According to my sister. it was Jennifer. Q What about the title? A My sister was asking who destroyed the vault. Q What was the answer? A According to her. Dana looked for jewelries. Q How about Jennifer? A No. papalitan niya ang mga alahas na iyon.Q So. finally." ATTY. Sir. Q What else did she say? WITNESS: A When she said that Jennifer took it. MASANGKAY: Q And then? A Dana said. what I am asking. Sir. Q And. who is Jennifer? Is this Jennifer the same Jennifer Ramirez who is one of the defendants here? A Yes.

an impostor.46 While it serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein47 (and TCT No. This is so because this Court is not a trier of facts and is not to re-examine and re-evaluate the testimonial and documentary evidence on record. Q What did she say? A She said. The evidence shows that Mira Bernal and Jennifer Ramirez were able to open respondent¶s vault and steal the owner¶s duplicate of TCT No. that the . quote with approval the CA when it held: As to the claim of Querrer-Kauffman that her purported signatures on the mortgage are forgeries. That woman. that the Real Estate Mortgage executed in petitioner¶s favor is null and void. p. any subsequent registration procured by the presentation of a forged duplicate certificate of title. the trial court and the CA are one in finding that based on the evidence on record the owner of the property is respondent who was not the one who mortgaged the same to the petitioner. And rightly so because of the immigration entries on her passport. the Court cannot do so in the absence of any such justification or exceptional circumstance. the trial court believed her and held that there is "convincing proof to the contention of the plaintiff that the signature of Vida Dana Querrer as appearing on the question[ed] contract was a forgery because the real Vida Dana Querrer who is the plaintiff in this case was actually in the United States at the time of the questioned contract on 1 August 1997" (Decision. shall be null and void (emphasis supplied). T-48521 (Exh. Richmond Ramirez. While the findings and conclusion of the trial court and the appellate court may be reversed in exceptional circumstances. married.42 A mortgage is. thus. "A") over the litigated lot was issued on June 26. That the appellant now goes by the name and status of Vida Dana Querrer-Kauffman. 226. Q And so? A Mira knelt down and began to cry and was begging. is correct. the owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice. as principal.44 The evidence on record further shows that Jennifer Ramirez and her husband. with the connivance of a woman who pretended to be the respondent. thus. as provided in the last paragraph of Section 53. As correctly ruled by the appellate court: TCT No. she said. and quibble on this raised by Ereña about the identity and interest of the appellant in the suit has been dismissed by the trial court as "of no moment as this discrepancy is negligible if no[t] bearing at all to the issue of nullity of the questioned contract" and "has no legal anchorage to cling on. Presentation of owner¶s duplicate upon entry of new certificate. has been well explained. and showed to petitioner the owner¶s duplicate copy of the title that was taken from the respondent¶s vault. to the rights of any innocent holder of the decree of registration on the original petition or application. 53."41 The trial court¶s findings of fact as affirmed by the CA are conclusive on this Court absent evidence that the trial court ignored. 1529 which reads: Sec. 1995 in the name of the owner of the covered lot: Vida Dana Querrer.± xxxx In all cases of registration procured by fraud. Bigyan mo kami ng konting panahon at ibabalik naming iyon. The registration thereof with the Register of Deeds and its annotation at the dorsal portion of TCT No. and the comic incongruity of Querrer-Kauffman as principal and Ramirez as her attorney-in-fact both signing the mortgage deed. her juxtaposed sample signatures which are clearly different from those in the deed. record). One of the essential requisites of a mortgage contract is that the mortgagor must be the absolute owner of the thing mortgaged. such as in this case. misapplied or misconstrued facts and circumstances of substance which. would alter the outcome of the case. or a forged deed or other instrument. invalid if the mortgagor is not the property owner. used a woman who introduced herself as Vida Dana Querrer to the petitioner and claim as owner of the property." The decision went on to state in no uncertain terms that the appellant Querrer-Kauffman "was able to prove preponderantly that she is the real owner of the subject property.A When Dana learned about that."45 Indeed. 48521 is also null and void. signed the Real Estate Mortgage as mortgagor and the Special Power of Attorney. case law is that a Torrens title is generally conclusive evidence of ownership of the land referred to therein. they were able consummate the execution of the Real Estate Mortgage by forging the respondent¶s signature on said deed. if considered. and succeeded in having the Real Estate Mortgage annotated at the dorsal portion of the title. all prove and declare beyond reasonable doubt that the subject real estate mortgage is a forgery. however. Luluhod ako sa harapan ni¶yo. single. The ruling of the CA. we will file a case against them.43 In this case. patawarin mo lang kami. T48521 and the tax declarations covering the property. only questions of law may be raised. T-48521 shows. Indeed." She was crying and saying. under Rule 45 of the Rules of Court. on its face. Dana. We. P. "Gipit na gipit lang talaga kami. "Parang awa mo na sa akin.D.

in good faith. We thus agree with the following discussion of the CA: The trial court wrongly applied in this case the doctrine of "mortgagee in good faith" which has been allowed in many instances but in a milieu dissimilar from this case. relied upon what appears on the face of the certificate of title. has already succeeded in obtaining a Torrens title over the property in his name and that. even if accompanied by the owner¶s duplicate certificate of title. the mortgagee in good faith is nonetheless entitled to protection. the registered owner does not thereby lose his title. 55 of the Land Registration Act expressly provides that "in all cases of registration of fraud." the second proviso in the same section "that a registration procured by the presentation of a forged deed shall be null and void" should be overlooked. is not even a purchaser or a mortgagee for value protected by law. however. When the instrument presented is forged. without prejudice to the rights of any innocent holder for value of a certificate of title. Lim. The innocent purchaser for value protected by law is one who purchases a titled land by virtue of a deed executed by the registered owner himself. is the much later case of Joaquin v. Thus. Constancio Joaquin admitted that the spouses Madrid and Yu were. in fact. are not required to go beyond what appears on the face of the title. the instrument registered should not be forged.56 This doctrine presupposes. It turned out. the property had been mortgaged to Constancio Joaquin in a deed signed by two persons posing as the owners and that after said deed had been registered.48 In such a case. a certain Carmencita de Jesus. the registered owner does not thereby lose his title. There is no merit in this argument. When the instrument presented is forged.54 the Court explained the doctrine of mortgagee in good faith. but not when the mortgagor is an impostor and a forger. as the law expressly states. thus: There is. he should be protected as against the registered owner because the latter can secure reparation from the assurance fund. a situation where. v. that petitioner herein is not the innocent purchaser for value protected by law. the spouses decided to withdraw the application they had filed with the RFC and asked Carmencita to retrieve their title and return it to them Carmencita failed to do so. seeking a building construction loan from the then Rehabilitation Finance Corporation. as the law expressly states. however. Such is not the situation of petitioner. that the mortgagor. that through the machinations of Carmencita. who had offered to expedite the approval of the loan. acquire any right or title to the property. the amount for which the mortgage was constituted had been given to the person who had passed herself off as Rosalinda Yu. This last proviso is a limitation of the first part of par. based on a forged instrument. Madrid. protects a buyer or mortgagee who.charge of keeping the title was on leave. a mortgagee has a right to rely in good faith on the certificate of title of the mortgagor of the property given as security and in the absence of any sign that might arouse suspicion. Later having obtained a loan from another source.50 The Court cited this ruling in the Joaquin case in Solivel v. The public interest in upholding the indefeasibility of a certificate of title. the instrument registered should not be forged. and neither does the assignee in the forged deed acquire any right or title to the property. Francisco.55 Indeed. however. as buyers or mortgagees. it is further argued that as the petitioner is an innocent purchaser for value. or does not have a valid title to. in. But this is only in a situation where the mortgagor has a fraudulent or otherwise defective title. his title being fraudulent. 2 in the sense that in order that the holder of a certificate for value issued by virtue of the registration of a voluntary instrument may be considered a holder in good faith for value. who is not the rightful owner of the property. despite the fact that the mortgagor is not the owner of the mortgaged property. which would have the effect of deleting the last proviso. and neither does the assignee or the mortgagee. Such is not the situation of the petitioner. even if accompanied by the owner¶s duplicate certificate of title. In the second assignment of error.57 The doctrine of mortgagee in good faith does not apply to a situation where the title is still in the name of the rightful owner and the mortgagor is a different person pretending to be the owner. In such a case. Hence. giving the excuse that the employee. not by a forged deed. Such mortgage is void and cannot prejudice the registered owner whose signature to the deed is falsified. the mortgage contract and any foreclosure sale arising therefrom are given effect by reason of public policy. after obtaining the said title. in Joaquin v. has no obligation to undertake further investigation. entrusted their certificate of title for surrender to the RFC to Rosalinda¶s godmother. This is the doctrine of "mortgagee in good faith" based on the rule that all persons dealing with the property covered by a Torrens Certificate of Title.51 to wit: Even more in point and decisive of the issue here raised. In a forged mortgage. Court of Appeals. the doctrine of "mortgagee in good faith" cannot be applied and will not benefit a mortgagee no matter how large is his or her reservoir of good faith and diligence. owners of a residential lot in Makati. the owner may pursue all his legal and equitable remedies against the parties to the fraud. not the persons who had signed the deed of mortgage.owner is the respondent). The fact is. who has been the victim of impostors pretending to be the registered owners but who are not said owners. however. he succeeds in mortgaging the property to another who relies on what appears on the said title. 2 of Sec. Madrid. This doctrine is based on the rule that persons dealing with properties covered by a Torrens certificate of title are not required to go beyond what appears on the face of the title. even if the mortgagor is not the rightful owner of. the registered owner . The innocent purchaser (mortgagee in this case) for value protected by law is one who purchases a titled land by virtue of a deed executed by the registered owner himself. even if accompanied by the owner¶s duplicate certificate of title. when the instrument presented for registration is forged. as evidence of lawful ownership of the land or of any encumbrance thereon.53 where the Court stressed that in order that the holder of a certificate of value issued by virtue of the registration of a voluntary instrument may be considered a holder in good faith and for value. who has been the victim of impostors pretending to be the registered owners but who are not said owners. the transferee or the mortgagee. In Cavite Development Bank v. the mortgagee is not an innocent mortgagee for value and the registered owner will generally not lose his title. not by a forged deed. for that matter. Inc. the mortgaged property.49 the Court had the occasion to state: In the first assignment of error. however. it is argued that since par.52 This ruling was later reiterated in Insurance Services & Commercial Traders. as in this case. where the spouses Abundio Madrid and Rosalinda Yu.

. and bounds of the lot subject of said title based on the technical description in the said title and the approved survey plan in the Land Management Bureau. leased. It is advisable that such parties (1) verify the origin. there shall be no increase or decrease of the price. Court of Appeals (513 SCRA 40) Caveat Emptor Principle Hopefully this case will serve as a precaution to prospective parties to a contract involving titled lands for them to exercise the diligence of a reasonably prudent person by undertaking measures to ensure the legality of the title and the accurate metes and bounds of the lot embraced in the title. Trinidad (518 SCRA 186) Unit Price Contract vs.does not lose his title. If the vendor delivers more than the area stated in the contract. the obligation of the vendor is to deliver everything within the boundaries. and validity of the title with the Office of the Register of Deeds and the Land Registration Authority. (5) put up signs that said lot is being purchased. Respondent Acero. Costs against the petitioner. It is not of vital consequence that a deed or contract of sale of land should disclose the area with mathematical accuracy. or encumbered. If the vendor delivers less than the area agreed upon. authenticity. or encumbrance by the parties. (3) conduct an actual ocular inspection of the lot. and (6) undertake such other measures to make the general public aware that said lot will be subject to alienation. In a contract of sale of land in a mass. The Decision of the Court of Appeals dated June 10. the statement of area of immovable is not conclusive and the price may be reduced or increased depending on the area actually delivered. Lump Sum In a unit price contract.58 As aforesaid. IN LIGHT OF ALL THE FOREGOING. Thus. history. the petition is DENIED. respondent¶s signature on the Real Estate Mortgage was forged by an impostor. for all his woes. SALES INVOLVING REAL ESTATE Esguerra vs. provided he pays for the additional area at the contract rate. 2004 and Resolution dated October 28. (2) engage the services of a competent and reliable geodetic engineer to verify the boundary. CAVEAT EMPTOR PRINCIPLE Domingo Realty Inc vs. it is well established that the specific boundaries stated in the contract must control over any statement with respect to the area contained within its boundaries. (4) inquire from the owners and possessors of adjoining lots with respect to the true and legal ownership of the lot in question. 2004 are AFFIRMED. An innocent purchaser for value is one who purchases a titled land by virtue of a deed executed by the registered owner himself not a forged deed. the vendee may oblige the vendor to deliver all that may be stated in the contract or demand for the proportionate reduction of the purchase price if delivery is not possible. made for a lump sum and not at the rate of a certain sum for a unit of measure or number. may have a legal recourse against lessor David Victorio who inveigled him to lease the lot which turned out to be owned by another. inasmuch as it is the entirety thereof that distinguishes the determinate object. An error as to the superficial area is immaterial. SO ORDERED. lease. although there be a greater or less areas or number than that stated in the contract. the vendee has the option to accept only the amount agreed upon or to accept the whole area. In the sale of real estate. and neither does the assignee in the forged deed acquire any right or title to the property. It is sufficient if its extent is objectively indicated with sufficient precision to enable one to identify it. metes.

Sign up to vote on this title
UsefulNot useful