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[No. 5246. September 16, 1910.]

MANUELA GREY ALBA ET AL., petitioners and

appellants,vs. ANACLETO R. DE LA CRUZ, objector and

appellee.

1.1.REGISTRATION OF LAND; NOTICE TO

DEFENDANTS BY DUE PUBLICATION.—In the

original proceedings for the registration of land under

Act No. 496, the appellee herein was made a party

defendant by publication, but was not personally

served with notice: Held , That the decree of the Court

of Land Registration is conclusive against him as well

as all the world.

1.2.ID.; NATURE AND EFFECT OF PROCEEDINGS

“IN REM;” DUE PROCESS OF LAW.—The

proceedings for the registration of land, under Act No.

496, arein rem,and notin personam. A proceedingin

rem, dealing with a tangibleres, may be instituted

and carried to judgment without personal service

upon the claimants within the State or notice by

name to those outside of it. Jurisdiction is secured by

the power of the court over theres. Such a proceeding

would be impossible were this not so, for it would

hardly do to make a distinction between the

constitutional rights of claimants who were known

and those who were not known. to the plaintiff,

50

5

0

PHILIPPINE REPORTS ANNOTATED

Grey Alba vs. De la Cruz

1.when the proceeding is to bar all. (Tylervs. Judges,

175 Mass,, 71; see also Peoplevs. Chase, 165 111.,

527; Statevs. Guilbert, 56 Ohio St., 575;

Peoplevs. Simon, 176 111., 165; Pennoyervs. Neff, 95

U.S., 714;The Mary, 9 Cranch, 126;

Mankinvs, Chandler, 2 Brock (U. S. Circuit), 125;

Brownvs. Levee Commission, 50 Miss., 468; 2

Freeman, Judgments, 4th ed., secs. 605, 611.)

1.3.ID.; PROCEEDINGS “IN REM” AND “IN

PERSONAM,” DISTINGUISHED.—If the technical

object of the suit is to establish a claim against some

particular person, with a judgment which generally,in theory at least, binds his body, or to bar some

individual claim or objection, so that only certain

persons are entitled to be heard in defense, the action

isin personam, although it may concern the right to

or possession of a tangible thing. If, on the other

hand, the object is to bar indifferently all who might

be minded to make an objection of any sort against

the right sought to be established, and if anyone in

the world has a right to be heard on the strength of

alleging facts which, if true, show an inconsistent

interest, the proceeding isin rem. (Tylervs. Judges,

175 Mass., 71.)

1.4.ID.; FRAUD; SECTION 38, LAND REGISTRATION

ACT;REOPENING, AND MODIFICATION OF

DECREES.—By fraud is meant actual fraud,

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dishonesty of some sort. This meaning should be

given to the word “fraud” in section 38 of the Land

Registration Act. Proof of constructive fraud is not

sufficient to authorize the Court of Land Registration

to reopen a case and modify its decree. Specific acts

intended to deceive and deprive another of his right,or to in some manner injure him, must be alleged and

proved.

1.5.ID.; ID.; ID.—The question whether any particular

transaction shows fraud within the meaning of the

word as used in section 38 of the Land Registration

Act, will, in each case, be a question of f fact.

APPEAL from a judgment of the Court of Land Registration.

Sumulong, J.

The facts are stated in the opinion of the court.

Ramon Salinas, for appellants.

Aniceto G. Reyes, for appellee.

TRENT, J.:

These petitioners, Manuela, Jose, Juan, and Francisco,surnamed Grey y Alba, are the only heirs of Doña Segunda

Alba Clemente and Honorato Grey, deceased. Remedios Grey

y Alba, a sister of the petitioners, was married on the51

VOL. 17, SEPTEMBER 16, 1910 51


21st day of March, 1903, to Vicente Reyes and died on the

13th of July,1905, without leaving any heirs except her

husband. The four petitioners, as coöwners, sought to have

registered the following-described property:

“A parcel of land situated in the barrio of Talampas,

municipality of Baliuag, Province of Bulacan, upon which are

situated three -houses and one camarin of light material,

having a superficial area of 52 hectares, 51 ares, and 22centares; bounded on the north by the highway(calzada) of

Talampas and the lands of Rita Ruiz Mateo; on the east by

the lands of the said Rita Ruiz Mateo, Hermenegildo Prado,

Policarpo de Jesus, and a stream called Sapang Buslut; on

the south by the same stream and the lands of

thecapellanía; and on the west by the stream called Sapang

Buslut, and the lands of Vicente de la Cruz, Jose Camacho

and Domingo Ruiz Mateo.”This parcel of agricultural land is used for the raising of

rice and sugar cane and is assessed at $1,000 United States

currency. The petition, which was filed on the 18th of

December, 1906, was accompanied by a plan and technical

description of the above-described parcel of land,

After hearing the proofs presented, the court entered, on

the 12th of February, 1908, a decree in accordance with the

provisions of paragraph 6 of section 54 of Act No. 926,directing that the land described in the petition be registered

in the names of the four petitioners, as coöwners, subject to

the usufructuary right of Vicente Reyes, widower of

Remedios Grey.

On the 16th of June, 1908, Anacleto Ratilla de la Cruz

filed a motion in the Court of Land Registration asking for a

revision of the case, including the decision, upon the ground

that he is the absolute owner of the two parcels of land which

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are described in said motion, and which, according to his

allegations, are included in the lands decreed to the

petitioners. He alleged that the decree of February 12, 1908,

was obtained maliciously and fraudulently by the petitioners,

thereby depriving him of said two parcels of52

52 PHILIPPINE REPORTS ANNOTATED


land. He further alleged that he was the absolute owner of

the two parcels of land, having inherited them f rom his

father, Baldomero R. de la Cruz, who had a state grant for

the same. He therefore asked, under the provisions of section

38 of the Land Registration Act (No. 496), a revision of the

case, and that the said decree be modified so as to exclude the

two parcels of land described in said motion. The Land Court

upon this motion reopened the case, and after hearing the

additional evidence presented by both parties, rendered, on

the 23d of November, 1908, its decision modifying the former

decree by excluding from the same the two parcels of land

claimed by Anacleto Ratilla de la Cruz. From this decision

and judgment the petitioners appealed and now insist, first,

that the trial court erred in reopening the case and modifying

its decree. dated the 12th of February, 1908, for the reason

that said decree was not obtained by means of f raud; and,

second, that the court erred in holding that the two parcels of

land described in the appellee’s motion are not their property.

It was agreed by counsel that the two small parcels now in

dispute form a part of the land described in the petition and

were included in the decree of February 12, 1908, and that

the petitioners are the owners of the remainder of the land

described in the said decree.

The petitioners inherited this land from their parents, who

acquired the same, including the two small parcels in

question, by purchase, as is evidenced by a public document

dated the 26th of November, 1864, duly executed before

Francisco Iriarte,alcalde mayor and judge of the Court of

First Instance of the Province of Bulacan.Baldomero R. de la Cruz, father of the appellee, obtained

in March, 1895, a state grant for several parcels of land,

including the two parcels in question. This grant was duly

inscribed in the old register of property in Bulacan on the 6th

of April of the same year.

It is admitted that at the time the appellants presented

their petition in this case the appellee was occupying the53



two parcels of land now in question. It is also admitted that

the name of the appellee does not appear in the said petition

as an occupant of the said two parcels. The petitioners insist

that the appellee was occupying these parcels as their tenant

and for this reason they did not include his name in their

petition, as an occupant, while the appellee contends that he

was occupying the said parcels as the absolute owner under

the state grant by inheritance.

The court below held that the failure on the part of the

petitioners to include the name of the appellee in their

petition, as an occupant of these two parcels of land, was a

violation of section 21 of Act No. 496, and that this

constituted fraud within the meaning of section 38 of said

Land Registration Act. The trial court further held that the

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grant from the state should prevail over the public document

of purchase of 1864.

The mother of the petitioners died on November 15, 1881;

their father died prior to that time. Manuela, the oldest of the

petitioners, was about six years of age when their mother

died. So these children were minors when the father of theappellee obtained the state grant.

On the 13th of June, 1882, Jose Grey, uncle and

representative of the. petitioners, who were then minors,

rented the land owned by the petitioners’ deceased parents to

one. Irineo Jose for a period of three years. On the 23d of

March, 1895, the said Jose Grey, as the representative of the

petitioners, rented the same land for a period of six years to

Baldomero R. de la Cruz, father of the appellee. This rentalcontract was duly executed in writing. This land was

cultivated during these six years by Baldomero H. de la Cruz

and his children, one of whom is the appellee. On the 14th of

December, 1905, Jose Grey, for himself and the other

petitioners, rented the same land to Estanislao R. de la Cruz

for a period of two years. Estanislao de la Cruz on entering

into this rental contract with Jose Grey did so for himself and

his brothers, one of whom is the appellee. While the appelleeadmits that his father and

54



brother entered into these rental contracts and did, in fact,

cultivate the petitioners’ land, nevertheless he insists that

the two small parcels in question were.not included in these

contracts. In the rental contract between the uncle of the

petitioners and the father of the appellee the land is not

described. In the rental contract between Jose Grey, one of

the petitioners, and Estanislao R. de la Cruz, brother of the

appellee, the two small parcels of land in question are

included, according to the description given therein. This was

found, to be true by the court below, but the said court held

that as this contract was made by Estanislao R. de la Cruz itwas not binding upon Anacleto R. de la Cruz, the appellee.

The two small parcels of land in question were purchased

by the parents of the petitioners in 1864, as is evidenced by

the public document of purchase and sale of that year. The

same two parcels of land are included in the state grant

issued in favor of Baldomero Ratilla de la Cruz in 1895. This

grant was obtained after the death of the petitioners’ parents

and while they were minors. So it is clear that the petitionershonestly believed that the appellee was occupying the said

parcels as their lessee at the time they presented their

application for registration. They did not act in bad faith, nor

with any fraudulent intent, when they omitted to include in

their application the name of the appellee as one of the

occupants of the land. They believed that it was not necessary

nor required that they include in their application the names

of their tenants. Under these circumstances, did the courtbelow commit an error in reopening this case in June, 1908,

after its decree had been entered in February of the same

year?

The application for registration is to be in writing, signed

and sworn to by the applicant, or by some person duly

authorized in his behalf. It is to contain an accurate

description of the land. It shall contain the name in full and

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the address of the applicant, and also the names and

addressesof all occupants of land and of all adjoining55



owners, if known; and, if not known, it shall state what

search has been made to find them. In the form of noticegiven by statute, which shall be sworn to, the applicant is

required to state and set forth clearly all mortgages or

encumbrances affecting said land, if any, the rights and

interests, legal or equitable, in the possession, remainder,

reversion, or expectancy of all persons, with their names in

full, together with their place of residence and postoffice

addresses. Upon receipt of the application the clerk shall

cause notice of the filing to be published twice in the Official

Gazette. This published notice shall be directed to all persons

appearing to have an interest in the land sought to be

registered and to the adjoining owners, and also“to all whom

it may concern.” In addition to the notice in the Official

Gazette the Land Court shall, within seven days after said

publication, cause a copy of the notice, in Spanish, to be

mailed by the clerk to every person named in the application

whose address is known; to cause a duly attested copy of the

notice, in Spanish, to be posted in a conspicuous place on

every parcel of land included in the application, and in a

conspicuous place on the chief municipal building of the town

in which the land is situated. The court may also cause other

or further notice of the application to be given in such

manner and to such persons as it may deem proper. The

certificate of the clerk that he has served the notice as

directed by the court by publication or mailing shall be

conclusive proof of such service. Within the time allowed in

the notices, if no person appears and answers, the court may

at once, upon motion of the applicant, no reason to the

contrary appearing, order a general default. By the

description in the published notice “to all whom it may

concern,” and by express provision of law “all the world aremade parties defendant and shall be concluded by the default

and order.” If the court, after hearing, finds that the

applicant has title, as stated in his application, a decree of

registration shall be entered.

“Every decree of registration shall bind the land and56



quiet title thereto, subject only to the exceptions stated in the

following section. It shall beconclusive upon and againstall

persons, including the Insular Government, and all the

branches thereof, whether mentioned by name in the

application, notice, or citation, or included in the general

description‘to all whom it may concern.’ Such decree shall not

be opened by reason of the absence, infancy, or other

disability of any person affected thereby, nor by any

proceedings in any court for reversing judgments or decrees;

subject, however, to the right of any person deprived of land

or of any estate or interest therein by decree of

registrationobtained by fraud to file in the Court of Land

Registration a petition for review within one year * * *.” (Sec.

38 of Act No. 496.)

The appellee is not included in any of the exceptions

named in section 38 referred to above.

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It will be seen that the applicant is required to mention

not only the outstanding interest which he admits but also all

claims of interest, though denied by him. By express

provision of law all the world are made parties defendant by

the description in the notice “to all whom it may concern.”

Although the appellee, occupying the two small parcels ofland in question under the circumstances as we have set

forth, was not served with notice, he was made a party

defendant by publication; and the entering of a deeree on the

12th of February, 1908, must be held to be conclusive against

all persons, including the appellee, whether his (appellee’s)

name is mentioned in the application, notice, or citation.

The said decree of February 12, 1908, should not have

been opened on account of the absence, infancy, or otherdisability of any person affected thereby, and could have been

opened only on the ground that the said decree had been

obtained by fraud. That decree was not obtained by fraud on

the part of the applicants, inasmuch as they honestly

believed that the appellee was occupying these two small

parcels of land as their tenant. One of the petitioners57



went upon the premises with the surveyor when the original

plan was made.

Proof of constructive f raud is not sufficient to authorize

the Court of Land Registration to reopen a case and modify

its decree. Specific, intentional acts to deceive and deprive

another of his right, or in some manner injure him, must be

alleged and proved; that is, there must be actual or positive

fraud as distinguished from constructive fraud.

The question as to the meaning of the word “fraud” in the

Australian statutes has been frequently raised. Two

distinctions have been noted by the Australian courts; the

first is the distinction between the meaning of the word

“fraud” in the sections relating to the conclusive effect of

certificates of title, and its meaning in the sections relating tothe protection of bona fide purchasers from registered

proprietors. The second is the distinction between “legal,”

“equitable,” or “constructive” fraud, and “actual” or “moral”

fraud. In none of the groups of the sections of the Australian

statutes relating to the conclusive effect of certificates of title,

and in which fraud is referred to, is there any express

indication of the meaning of “fraud,” with the sole exception

of that of the South Australian group. (Hogg on AustralianTorrens System, p. 834.)

“With regard to decisions on the sections relating to the

conclusive effect of certificates of title, it has been held in

some cases that the ‘fraud’ there mentioned means actual or

moral fraud, not merely constructive or legal fraud. In other

cases ‘fraud’ has been said to include constructive, legal, and

every kind of fraud. In other cases, again, knowledge of other

persons’ rights, and the deliberate acquisition of registeredtitle in the face of such knowledge, has been held to be ‘fraud’

which rendered voidable the certificates of title so obtained;

and voluntary ignorance is, for this purpose, the same as

knowledge. But in none of these three classes of cases was

there absent the element of intention to deprive another of

just rights, which constitutes the essential characteristics of

actual—as distinguished from

58

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legal—fraud.” (Id., p. 835, and cases cited in notes Nos. 85,

86, 87, 88, and 89 at bottom of pages 835 and 836.)

By “fraud” is meant actual fraud—dishonesty of some sort.

(Judgment of Privy Council in Assets Co.vs. Mere Roihi,

and Assets Co.vs. Panapa Waihopi, decided in March, 1905,

cited by Hogg in his Supplementary Addendum to his work

on Australian Torrens System, supra.) The same meaning

should be given to the word “fraud” used in section 38 of our

statutes (Act No. 496).

The question as to whether any particular transaction

shows fraud, within the meaning of the word as used in our

statutes, will in each case be a question of fact: We will not

attempt to say what acts would constitute this kind of fraud

in other cases. This must be determined from the facts and

circumstances in each particular case. The only question we

are called upon to determine, and have determined, is

whether or not, under the facts and circumstances in this

case, the petitioners did obtain the decree of February 12,

1908, by means of fraud.

It might be urged that the appellee has been deprived of

his property without due process of law, in violation of section

5 of the Act of Congress of July 1, 1902, known as the

“Philippine Bill,” which provides “that no law shall be

enacted in the said Islands which shall deprive any person of

life, liberty, or property without due process of law.”

The Land Registration Act requires that all occupants be

named in the petition and given notice by registered mail.

This did not do the appellee any good, as he was not notified;

but he was made a party defendant, as we have said, by

means of the publication “to all whom it may concern.” If this

section of the Act is to be upheld this must be declared to be

due process of law.

Before examining the validity of this part of the Act it

might be well to note the history and purposes of what isknown as the “Torrens Land Registration System.” This

system was introduced in South Australia by Sir Robert

Torrens in 1857 and was there worked out in its practicable

form.59



The main principle of registration is to make registered titles

indefeasible. As we have said, upon the presentation in theCourt of Land Registration of an application for the

registration of the title to lands, under this system, the

theory of the law is that all occupants, adjoining owners,

adverse claimants, and other interested persons are notified

of the proceedings, and have a right to appear in opposition to

such application. In other words, the proceeding is against

the whole world. This system was evidently considered by the

Legislature to be a public project when it passed Act No. 496.

The interest of the community at large was considered to be

preferred to that of private individuals.

“At the close of this nineteenth century all civilized

nations are coming to registration of title to land, because

immovable property is becoming more and more a matter of

commercial dealing, and there can be no trade without

security.” (Dumas’s Lectures, p. 23.)

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“The registered proprietor will no longer have reasons to

fear that he may be evicted because his vendor had, unknown

to him, already sold the land to a third person. * * * The

registered proprietor may feel himself protected against any

defect in his vendor’s title.” (Id., p. 21.)

“The following summary of benefits of the system ofregistration of titles, made by Sir Robert Torrens, has been

fully justified in its use:

“First. It has substituted security for insecurity.

“Second. It has reduced the cost of conveyances from

pounds to shillings, and the time occupied from months to

days.

“Third. It has exchanged brevity and clearness for

obscurity and verbiage.“Fourth. It has so simplified ordinary dealings that he who

has mastered the ‘three R’s’ can transact his own

conveyancing.

“Fifth. It affords protection against fraud.

“Sixth. It has restored to their just value many estates.

held under good holding titles, but depreciated in conse-60



quence of some blur or technical defect, and has barred the

reoccurrence of any similar faults.” (Sheldon on Land

Registration, pp. 75, 76.)

“The boldest effort to grapple with the problem of

simplification of title to land was made by Mr. (afterwards Sir

Robert) Torrens, a layman, in South Australia in 1857. * * *

In the Torrens systemtitle by registration takes the place

of‘title by deeds’ of the system under the ‘general’ law. A sale

of land, for example, is effected by a registered transfer, upon

which a certificate of title is issued. The certificate is

guaranteed by statute, and, with certain exceptions,

constitutes indefeasible title to the land mentioned therein.

Under the old system the same sale would be effected by a

conveyance, depending for its validity, apart from intrinsicflaws, on the correctness of a long series of prior deeds, wills,

etc. * * * The object of the Torrens system, then, is to do away

with the delay, uncertainty, and expense of the old

conveyancing system.” (Duffy & Eagleson on The Transfer of

Land Act, 1890, pp. 2, 3, 5, 7.)

“By ‘Torrens’ systems generally are meant those systems

of registration of transactions with interest in land whose

declared object * * * is, under governmental authority, toestablish and certify to the ownership of an absolute and

indefeasible title to realty, and to simplify its transfer.” (Hogg

on Australian Torrens System, supra, pp. 1, 2.)

Compensation for errors from assurance funds is provided

in all countries in which the Torrens system has been

enacted. Cases of error no doubt will always occur. The

percentage of errors, as compared with the number of

registered dealings in Australia, is very small. In New SouthWales there were, in 1889, 209,894 registered dealings, the

average risk of error being only 2½ cents for each dealing. In

Queensland the risk of error was only 1½ cents, the number

of registered dealings being 233,309. In Tasmania and in

Western Australia not a cent was paid for compensation for

errors during the whole time of operation, (Dumas’s

Lectures, supra, p. 96.) This system has been

61

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adopted in various countries of the civilized world, including

some of the States of the American Union, and practical

experience has demonstrated that it has been successful ul as

a public project.

The validity of some of the provisions of the statutes

adopting the Torrens system has been the subject of judicial

decision in the courts of the United States. (Peoplevs. Chase,

165 111., 527; Statevs. Guilbert, 56 Ohio St.,

575; Peoplevs. Simon, 176 111., 165; Tylervs. Judges, 175

Mass., 71.)

Act No. 496 of the Philippine Commission, known as the

“Land Registration Act,” was copied substantially from the

Massachusetts law of 1898.

The Illinois and Massachusetts statutes were upheld by

the supreme. courts of those States.

“It is not enough to show a procedure to be

unconstitutional to say that we never heard of it before.”

(Tylervs. Judges, supra; Hurtadovs. California, 110 U.S.,

516.)

“Looked at either from the point of view of history or of the

necessary requirements of justice, a proceedingin remdealing

with a tangibleres may be instituted and carried to judgment

without personal service upon claimants within the State or

notice by name to those outside of it, and not encounter any

provision of either constitution. Jurisdiction is secured by the

power of the court over theres. As we have said, such a

proceeding would be impossible, were this not so, for it hardly

would do to make a distinction between the constitutional

rights of claimants who were known and those who were not

known to the plaintiff, when the proceeding is to bar all.”

(Tylervs. Judges, supra.) This same doctrine is annunciated

in Pennoyervs. Neff (95 U.S., 714) ;The Mary (9 Cranch,

126); Mankinvs. Chandler (2 Brock., 125); Brownvs. Levee

Commission (50 Miss., 468); 2 Freeman, Judgments, 4th ed.,

secs. 606, 611.

“If the technical object of the suit is to establish a claim

against some particular person, with a judgment which62



generally, in theory at least, binds his body, or to bar some

individual claim or objection, so that only certain persons are

entitled to be heard in defense, the action isin

personam, although it may concern the right to or possession

of a tangible thing. If, on the other hand, the object is to bar

indifferently all who might be minded to make an objection of

any sort against the right sought to be established, and if

anyone in the world has a right to be heard on the strength of

alleging facts which, if true, show an inconsistent interest,

the proceeding isin rem.” (Tylervs. Judges, supra.)

In the case of Hamiltonvs. Brown (161 U.S., 256) a

judgment of escheat was held conclusive -upon persons

notified by advertisement to all persons interested. In this

jurisdiction, by the provisions of the Code of Civil Procedure,

Act No. 190, a decree allowing or disallowing a will binds

everybody, although the only notice of the proceedings given

is by general notice to all persons interested.

The supreme court of Massachusetts, in the case

of Tylervs. Judges(supra), did not rest its judgment as to the

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conclusive effect of the decree upon the ground that the State

had absolute power to determine the persons to whom a

man’s property shall go at his death, but upon the

characteristics of a proceedingin rem. So we conclude that

the proceedings had in the case at bar, under all the facts and

circumstances, especially the absolute lack on the part of the

petitioners of any dishonest intent to deprive the appellee of

any right, or in any way injure him, constitute due process of

law.

As to whether or not the appellee can successfully

maintain an action under the provisions of sections 101 and

102 of the Land Registration Act (secs. 2365, 2366,

Compilation) we do not decide.

For these reasons we are of the opinion, and so hold, thatthe judgment appealed from should be, and the same is

hereby reversed and judgment entered in favor of the

petitioners in conformity with the decree of the lower court63


Rodriguez vs. Ravilan

of February 12, 1908, without special ruling as to costs. It is

so ordered.

Arellano, C.J., Torres, Johnson, and Moreland,

JJ.,concur.

Judgment reversed.

___________________

© Copyright 2015 Central Book Supply, Inc. All rights reserved.

[No. 8936. October 2, 1915.]

CONSUELO LEGARDA, with her husband MAURO

PRIETO, plaintiffs and appellants,vs. N. M. SALEEBY,

defendant and appellee.

1.1.REGISTRATION OF LAND; REGISTRATION OF

SAME LAND IN THE NAMES OF Two DIFFERENT

PERSONS.—L obtained a decree of registration of a

parcel of land on the 25th of October, 1906. S, on the

25th of March, 1912, obtained a certificate of

registration for his land which joined the land

theretofore registered by L. The certificate of title

issued to S included a narrow strip of the land

theretofore registered in the name of L. On the 13th

of December, 1912, L presented a petition in the

Court of Land Registration for the adjustment and

correction of the error committed in the certificate

issued to S, which included said narrow strip of

land. Held: That in a case where two certificates of

title include or cover the same land, the earlier in

date must prevail as between the original parties,

whether the land comprised in the latter certificate be

wholly or only in part comprised in the earlier

certificate. In successive registrations where more

than one certificate is issued in respect of a particular

interest in land, the person holding under the prior

certificate is entitled to the land as against the person

who obtained the second certificate. The decree of

registration is conclusive upon and against all

persons.

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1.2.ID.; PURPOSE OF THE TORRENS SYSTEM.—The

real purpose of the torrens system of land registration

is to quiet title to land; to put a stop forever to any

question of the legality of the title, except claims

which were noted, at the time of registration, in the

certificate, or which may arise subsequent thereto.

That being the purpose of the law, it would seem that

once the title

591

VOL. 31, OCTOBER 2, 1915. 59

1

Legarda and Prieto vs. Saleeby.

1.was registered, the owner might rest secure, withoutthe necessity of waiting in the portals of the court, or

sitting in the "mirador de su casa," to avoid the

possibility of losing his land. The proceeding for the

registration of land under the torrens system is a

judicial proceeding, but it involves more in its

consequences than does an ordinary action.

1.3.ID; ID.; EFFECT OF REGISTRATION AND

CERTIFICATE OF TITLE.—The registration under

the torrens system and the issuance of a certificate of

titledo not give the owner any better title than he

had. He does not obtain title by virtue of the

certificate. He secures his certificate by virtue of the

fact that he has a fee simple title. If he obtains a

certificate of title, by mistake, to more land than he

really and in fact owns, the certificate should be

corrected. If he does not already have a perfect title,

he can not secure his certificate. Having a fee simple

title, and presenting sufficient proof of that fact, he is

entitled to a certificate of registration. The certificate

of registration simply accumulates, in one document,

a precise and correct statement of the exact status of

the fee simple title, which the owner, in fact, has. The

certificate, once issued, is the evidence of the title

which the owner has. The certificate should not be

altered, changed, modified, enlarged or diminished,

except to correct errors, in some direct proceedings

permitted by law. The title represented by the

certificate can not be changed, altered, modified,

enlarged or diminished in a collateral proceeding.

APPEAL from a judgment of the Court of Land Registration.

Concepcion, J.


Singson, Ledesma & Lim for appellants.

D. R. Williams for appellee.

JOHNSON, J.:

From the record the following facts appear:

First. That the plaintiffs and the defendant occupy, as

owners, adjoining lots in the district of Ermita in the city of

Manila.

Second. That there exists and has existed for a number of

years a stone wall between the said lots. Said wall is located

on the lot of the plaintiff s.

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Third. That the plaintiffs, on the 2d day of March, 1906,

presented a petition in the Court of Land Registration for592



the registration of their lot. After a consideration of said

petition the court, on the 25th day of October, 1906, decreedthat the title of the plaintiffs should be registered and issued

to them the original certificate provided for under the torrens

system. Said registration and certificate included the wall.

Fourth. Later the predecessor of the defendant presented a

petition in the Court of Land Registration for the registration

of the lot now occupied by him. On the 25th day of March,

1912, the court decreed the registration of said title and

issued the original certificate provided for under the torrenssystem. The description of the lot given in the petition of the

defendant also included said wall.

Fifth. Several months later (the 13th day of December,

1912) the plaintiffs discovered that the wall which had been

included in the certificate granted to them had also been

included in the certificate granted to the defendant They

immediately presented a petition in the Court of Land

Registration for an adjustment and correction of the error

committed by including said wall in the registered title of

each of said parties. The lower court however, without notice

to the defendant, denied said petition upon the theory that,

during the pendency of the petition for the registration of the

defendant's land, they failed to make any objection to the

registration of said lot, including the wail, in the name of the

defendant.

Sixth. That the land occupied by the wall is registered in

the name of each of the owners of the adjoining lots. The wall

is not a joint wall.

Under these facts, who is the owner of the wall and the

land occupied by it?

The decision of the lower court is based upon the theory

that the action for the registration of the lot of the defendant

was a judicial proceeding and that the judgment or decree

was binding upon all parties who did not appear and oppose

it. In other words, by reason of the fact that the plaintiffs had

not opposed the registration of that part of the lot on which

the wall was situate they had lost it.593

VOL. 31, OCTOBER 2, 1915. 593


even though it had been theretofore registered in their name.

Granting that theory to be the correct one, and granting even

that the wall and the land occupied by it, in fact, belonged to

the defendant and his predecessors, then the same theory

should be applied to the defendant himself. Applying that

theory to him, he had already lost whatever right he had

therein, by permitting the plaintiffs to have the same

registered in their name, more than six years before. Having

thus lost his right, may he be permitted to regain it by simply

including it in a petition for registration ? The plaintiffs

having secured the registration of their lot, including the

wall, were they obliged to constantly be on the alert and to

watch all the proceedings in the land court to see that some

one else was not having all, or a portion of the same,

registered? If that question is to be answered in the

affirmative, then the whole scheme and purpose of the

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torrens system of land registration must fail. The real

purpose of that system is to quiet title to land; to put a stop

forever to any question of the legality of the title, except

claims which were noted at the time of registration, in the

certificate, or which may arise subsequent thereto. That

being the purpose of the law, it would seem that once a title is

registered the owner may rest secure, without the necessity

of waiting in the portals of the court, or sitting in the

"mirador de su casa," to avoid the possibility of losing his

land. Of course, it can not be denied that the proceeding for

the registration of land under the torrens system is judicial

(Escuetavs.Director of Lands, 16 Phil. Rep., 482). It is

clothed with all the forms of an action and the result is final

and binding upon all the world. It is an actioninrem. (Escuetavs.Director of Lands(supra) ; Grey Albavs. De

la Cruz, 17 Phil. Rep., 49; Roxasvs. Enriquez, 29 Phil. Rep.,

31; Tylervs. Judges, 175 Mass., 71; American Land

Co.vs. Zeiss, 219 U. S., 47.)

While the proceeding is judicial, it involves more in its

consequences than does an ordinary action. All the world are

parties, including the government. After the registra-594



tion is complete and final and there exists no fraud, there are

no innocent third parties who may claim an interest. The

rights of all the world are foreclosed by the decree of

registration. The government itself assumes the burden of

giving notice to all parties. To permit persons who are parties

in the registration proceeding (and they are all the world) to

again litigate the same questions, and to again cast doubt

upon the validity of the registered title, would destroy the

very purpose and intent of the law. The registration, under

the torrens system, does not give the owner any better title

than he had. If he does not already have a perfect title, he

can not have it registered. Fee simple titles only may be

registered. The certificate of registration accumulates in one

document a precise and correct statement of the exact status

of the fee held by its owner. The certificate, in the absence of

fraud, is the evidence of title and shows exactly the real

interest of its owner. Thetitle once registered, with very few

exceptions, should not thereafter be impugned, altered,

changed, modified, enlarged, or diminished, except in some

direct proceeding permitted by law. Otherwise all security in

registered titles would be lost. A registered title can not bealtered, modified, enlarged, or diminished in

acollateralproceeding and not even by a direct proceeding,

after the lapse of the period prescribed by law.

For the difficulty involved in the present case the Act (No.

496) providing for the registration of titles under the torrens

system affords us no remedy. There is no provision in said Act

giving the parties relief under conditions like the present.

There is nothing in the Act which indicates who should be theowner of land which has been registered in the name of two

different persons.

The rule, we think, is well settled that the decree ordering

the registration of a particular parcel of land is a bar to

future litigation over the same between the same parties. In

view of the fact that all the world are parties, it must follow

that future litigation over the title is forever barred; there

can be no persons who are not parties to the action.

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595

VOL. 31, OCTOBER 2, 1915. 595


This, we think, is the rule, except as to rights which are noted

in the certificate or which arise subsequently, and with

certain other exceptions which need not be discussed at

present. A title once registered can not be defeated, even byan adverse, open, and notorious possession. Registered title

under the torrens system can not be defeated by prescription

(section 46, Act No. 496). The title, once registered, is notice

to the world. All persons must take notice. No one can plead

ignorance of the registration.

The question, who is the owner of land registered in the

name of two different persons, has been presented to the

courts in other jurisdictions. In some jurisdictions, where the"torrens" system has been adopted, the difficulty has been

settled by express statutory provision. In others it has been

settled by the courts. Hogg, in his excellent discussion of the

"Australian Torrens System," at page 823, says: "The general

rule is that in the case of two certificates of title, purporting

to include the same land, the earlier in date prevails, whether

the land comprised in the latter certificate be wholly, or only

in part, comprised in the earlier certificate.

(Oelkersvs. Merry, 2 Q. S. C. R., 193;Millervs. Davy, 7 N. Z.

R., 155; Lloydvs. Mayfield, 7 A. L. T. (V.)

48; Stevensvs. Williams, 12 V. L. R., 152; Register of

Titlesvs. Esperance Land Co., 1 W. A. R., 118.)" Hogg adds

however that, "if it can be clearly ascertainedby the ordinary

rules of construction relating to written documents, that the

inclusion of the land in the certificate of title of prior date is a

mistake, the mistake may be rectified by holding the latter of

the two certificates of title to be conclusive." (See Hogg on the

"Australian Torrens System," supra, and cases cited. See also

the excellent work of Niblack in his "Analysis of the Torrens

System." page 99.) Niblack, in discussing the general

question, said: "Where two certificates purport to include the

same land the earlier in date prevails. * * * In successive

registrations, where more than one certificate is issued in

respect of a particular estate or interest in land, the person

claiming under the prior certificate is en-596



titled to the estate or interest; and that person is deemed to

hold under the prior certificate who is the holder of, or whose

claim is derived directly or indirectly from the person whowas the holder of the earliest certificate issued in respect

thereof. While the acts in this country do not expressly cover

the case of the issue of two certificates for the same land,

they provide that a registered owner shall hold the title, and

the effect of this undoubtedly is that where two certificates

purport to include the same registered land, the holder of the

earlier one continues to hold the title" (p. 237).

Section 38 of Act No. 496, provides that; "It (the decree of

registration) shall be conclusive upon and againstallpersons,

including the Insular Government and all the branches

thereof, whether mentioned by name in the application,

notice, or citation, or included in the general description 'To

all whom it may concern.' Such decree shall not be opened by

reason of the absence, infancy, or other disability of any

person affected thereby, nor by any proceeding in any court

for reversing judgments or decrees; subject, however, to the

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right of any person deprived of land or of any estate or

interest therein by decree of registration obtained by fraud to

file in the Court of Land Registration a petition for review

withinone year after entry of the decree (of registration),

provided no innocent purchaser for value has acquired an

interest."

It will be noted, from said section, that the "decree of

registration" shall not be opened, forany reason,

inanycourt, except for fraud, and not even for fraud, after the

lapse ofone year. If then the decree of registration can not be

opened forany reason, except for fraud, in a direct proceeding

for that purpose, may such decree be opened or set aside in a

collateral proceeding by including a portion of the land in a

subsequent certificate or decree of registration? We do notbelieve the law contemplated that a person could be deprived

of his registered title in that way.

We have in this jurisdiction a general statutory provision597

VOL. 31, OCTOBER 2, 1915. 597


which governs the right of the ownership of land when the

same is registered in the ordinary registry in the name of two

different persons. Article 1473 of the Civil Code provides,

among other things, that when one piece of real property has

been sold to two different persons it shall belong to the

person acquiring it, who first inscribes it in the registry. This

rule, of course, presupposes that each of the vendees or

purchasers has acquired title to the land. The real ownership

in such a case depends upon priority of registration. While we

do not now decide that the general provisions of the Civil

Code are applicable to the Land Registration Act, even

though we see no objection thereto, yet we think, in the

absence of other express provisions, they should have a

persuasive influence in adopting a rule for governing the

effect of a double registration under said Act. Adopting the

rule which we believe to be more in consonance with the

purposes and the real intent of the torrens system, we are of

the opinion and' so decree that in case land has been

registered under the Land Registration Act in the name of

two different persons, the earlier in date shall prevail.

In reaching the above conclusion, we have not overlooked

the forceful argument of the appellee. He says, among other

things; "When Prieto et al. were served with notice of the

application of Teus (the predecessor of the defendant) they

became defendants in a proceeding wherein he, Teus, wasseeking to foreclose their right, and that of others, to the

parcel of land described in his application. Through their

failure to appear and contest his right thereto, and the

subsequent entry of a default judgment against them, they

became irrevocably bound by the decree adjudicating such

land to Teus. They had their day in court and can not set up

their own omission as ground for impugning the validity of a

judgment duly entered by a court of competent jurisdiction.To decide otherwise would be to hold that lands with torrens

titles are above the law and beyond the jurisdiction of the

courts."

As was said above, the primary and fundamental purpose598



of the torrens system is to quiet title. If the holder of a

certificate cannot rest secure in his registered title then the

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purpose of the law is defeated. If those dealing with

registered land cannot rely upon the certificate, then nothing

has been gained by the registration and the expense incurred

thereby has been in vain. If the holder may lose a strip of his

registered land by the method adopted in the present case, he

may lose it all. Suppose within the six years which elapsed

after the plaintiff had secured their title, they had mortgaged

or sold their right, what would be the position or right of the

mortgagee or vendee? That mistakes are bound to occur

cannot be denied, and sometimes the damage done thereby is

irreparable. It is the duty of the courts to adjust the rights of

the parties under such circumstances so as to minimize such

damages, taking into consideration all of the conditions and

the diligence of the respective parties to avoid them. In thepresent case, the appellee was first negligent (granting that

he was the real owner, and if he was not the real owner he

can not complain) in not opposing the registration in the

name ofthe appellants. He was a party-defendant in an

action for the registration of the lot in question, in the name

of the appellants, in 1906. "Through his failure to appear and

to oppose such registration, and the subsequent entry of a

default judgment against him, he became irrevocably boundby the decree adjudicating such land to the appellants. He

had his day in court and should not be permitted to set up his

own omissions as the ground for impugning the validity of a

judgment duly entered by a court of competent jurisdiction."

Granting that he was the owner of the land upon which the

wall is located, his failure to oppose the registration of the

same in the name of the appellants, in the absence of fraud,

forever closes his mouth against impugning the validity of

that judgment. There is no more reason why the doctrine

invoked by the appellee should be applied to the appellants

than to him.

We have decided, in case of double registration under the

Land Registration Act, that the owner of the earliest certif-599

VOL. 31, OCTOBER 2, 1915. 599


icate is the owner of the land. That is the rule between

original parties. May this rule be applied to successive

vendees of the owners of such certificates? Suppose that one

or the other of the parties, before the error is discovered,

transfers his original certificate to an "innocent purchaser."

The general rule is that the vendee of land has no greater

right, title, of interest than his vendor; that he acquires theright which his vendor had, only. Under that rule the vendee

of the earlier certificate would be the owner as against the

vendee of the owner of the later certificate.

We find statutory provisions which, upon first reading,

seem to cast some doubt upon the rule that the vendee

acquires the interest of the vendor only. Sections 38, 55, and

112 of Act No. 496 indicate that the vendee may acquire

rights and be protected against defenses which the vendorwould not. Said sections speak of available rights in favor of

third parties which are cut off by virtue of the sale of the land

to an "innocent purchaser." That is to say, persons who had

had a right or interest in land wrongfully included in an

original certificate would be unable to enforce such rights

against an "innocent purchaser," by virtue of the provisions of

said sections. In the present case Teus had his land,

including the wall, registered in his name. He subsequently

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sold the same to the appellee. Is the appellee an "innocent

purchaser," as that phrase is used in said sections? May those

who have been deprived of their land by reason of a mistake

in the original certificate in favor of Teus be deprived of their

right to the same, by virtue of the sale by him to the

appellee? Suppose the appellants had sold their lot, including

the wall, to an "innocent purchaser," would such purchaser be

included in the phrase "innocent purchaser," as the same is

used in said sections? Under these examples there would be

two innocent purchasers of the same land, if said sections are

to be applied. Which of the two innocent purchasers, if they

are both to be regarded as innocent purchasers, should be

protected under the provisions of said sections? These

questions indicate the difficulty with which we are met ingiving mean-600



ing and effect to the phrase "innocent purchaser," in said

sections.

May the purchaser of land which has been included in a

"second original certificate" ever be regarded as an "innocent

purchaser," as against the rights or interest of the owner ofthe first original certificate, his heirs, assigns, or vendee? The

first original certificate is recorded in the public registry. It is

never issued until it is recorded. The 'record is notice to all

the world. All persons are charged with the knowledge of

what it contains. All persons dealing with the land so

recorded, or any portion of it, must be charged with notice of

whatever it contains. The purchaser is charged with notice of

every fact shown by the record and is presumed to know

every fact which the record discloses. This rule is so well

established that it is scarcely necessary to cite authorities in

its support (Northwestern National Bankvs. Freeman, 171

U. S., 620, 629; Delvin on Real Estate, sections 710, 710 [a]).

When a conveyance has been properly recorded such

record is constructive notice of its contents and all interests,

legal and equitable, included therein. (Grandinvs. Anderson,

15 Ohio State, 286, 289; Orvisvs. Newell, 17 Conn.,

97; Buchananvs. International Bank, 78 111., 500;Youngs vs.

Wilson, 27 N. Y., 351; McCabevs. Grey, 20 Cal.,

509; Montefiorevs. Browne, 7 House of Lords Cases, 341.)

Under the rule of notice, it is presumed that the purchaser

has examined every instrument of record affecting the title.

Such presumption is irrebutable. He is charged with notice ofevery fact shown by the record and is presumed to know

every fact which an examination of the record would have

disclosed. This presumption cannot be overcome by proof of

innocence or good faith. Otherwise the very purpose and

object of the law requiring a record would be destroyed. Such

presumption cannot be defeated by proof of want of

knowledge of what the record contains any more than one

may be permitted to show that he was ignorant of theprovisions of the law. The rule that all persons must take

notice of the facts which the public record contains601

VOL. 31, OCTOBER 2, 1915. 601


is a rule of law. The rule must be absolute. Any variation

would lead to endless confusion and useless litigation.

While there is no statutory provision in force here

requiring that original deeds of conveyance of real property

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be recorded, yet there is a rule requiring mortgages to be

recorded. (Arts. 1875 and 606 of the Civil Code.) The record

of a mortgage is indispensable to its validity. (Art. 1875.) In

the face of that statute would the courts allow a mortgage to

be valid which had not been recorded, upon the plea of

ignorance of the statutory provision, when third parties were

interested? May a purchaser of land, subsequent to the

recorded mortgage, plead ignorance of its existence, and by

reason of such ignorance have the land released from such

lien? Could a purchaser of land, after the recorded mortgage,

be relieved from the mortgage lien by the plea that he was

abona fide purchaser? May there be abona fide purchaser of

said land, bona fide in the sense that he had no knowledge of

the existence of the mortgage ? We believe the rule that allpersons must take notice of what the public record contains is

just as obligatory upon all persons as the rule that all men

must know the law; that no one can plead ignorance of the

law. The fact that all men know the law is contrary to the

presumption. The conduct of men, at times, shows clearly

that they do not know the law, The rule, however, is

mandatory and obligatory, notwithstanding. It would be just

as logical to allow the plea of ignorance of the law affecting acontract as to allow the defense of ignorance of the existence

and contents of a public record.

In view, therefore, of the foregoing rules of law, may the

purchaser of land f rom the owner of the second original

certificate be an "innocent purchaser," when a part or all of

such land had theretofore been registered in the name of

another, not the vendor? We are of the opinion that said

sections 38, 55, and 112 should not be applied to such

purchasers. We do not believe that the phrase "innocent

purchaser" should be applied to such a purchaser. He cannot

be regarded as an "innocent purchaser" because of the602



facts contained in the record of the first original certificate.The rule should not be applied to the purchaser of a parcel of

land the vendor of which is not the owner of the original

certificate, or his successors. He, in no sense, can be an

"innocent purchaser" of the portion of the land included in

another earlier original certificate. The rule of notice of what

the record contains precludes the idea of innocence. By

reason of the prior registry there cannot be an innocent

purchaser of land included in a prior original certificate andin a name other than that of the vendor, or his successors. In

order to minimize the difficulties we think this is the safer

rule to establish. We believe the phrase "innocent purchaser,"

used in said sections, should be limited only to cases where

unregistered land has been wrongfully included in a

certificate under the torrens system. When land is once

brought under the torrens system, the record of the original

certificate and all subsequent transfers thereof is notice to allthe world. That being the rule, could Teus even be regarded

as the holder in good faith of that part of the land included in

his certificate which had theretofore been included in the

original certificate of the appellants? We think not. Suppose,

for example, that Teus had never had his lot registered under

the torrens system. Suppose he had sold his lot to the

appellee and had included in his deed of transfer the very

strip of land now in question. Could his vendee be regarded

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as an "innocent purchaser" of said strip ? Would his vendee

be an "innocent purchaser" of said strip? Certainly not. The

record of the original certificate of the appellants precludes

the possibility. Has the appellee gained any right by reason of

the registration of the strip of land in the name of his vendor?

Applying the rule of notice resulting from the record of the

title of the appellants, the question must be answered in the

negative. We are of the opinion that these rules are more in

harmony with the purpose of Act No, 496 than the rule

contended for by the appellee. We believe that the purchaser

from the owner of the later certificate, and his successors,

should be required to resort to his vendor for603

VOL. 31, OCTOBER 2, 1915. 603


damages, in case of a mistake like the present, rather than to

molest the holder of the first certificate who has been guilty

of no negligence. The holder of the first original certificate

and his successors should be permitted to rest secure in their

title, against one who had acquired rights in conflict

therewith and who had full and complete knowledge of their

rights. The purchaser of land included in the second original

certificate, by reason of the facts contained in the publicrecord and the knowledge with which he is charged and by

reason of his negligence, should suffer the loss, if any,

resulting from such purchase, rather than he who has

obtained the first certificate and who was innocent of any act

of negligence.

The foregoing decision does not solve, nor pretend to solve,

all the difficulties resulting from double registration under

the torrens system and the subsequent transfer of the land.

Neither do we now attempt to decide the effect of the former

registration in the ordinary registry upon the registration

under the torrens system. We are inclined to the view,

without deciding it, that the record under the torrens system

must, by the very nature and purposes of that system,

supersede all other registries. If that view is correct then it

will be sufficient, in dealing with land registered and

recorded under the torrens system, to examine that record

alone. Once land is registered and recorded under the torrens

system, that record alone can be examined for the purpose of

ascertaining the real status of the title to the land.

It would seem to be a just and equitable rule, when two

persons have acquired equal rights in the same thing, to hold

that the one who acquired it first and who has complied with

all the requirements of the law should be protected.

In view of our conclusions, above stated, the judgment of

the lower court should be and is hereby revoked. The record is

hereby returned to the court now having and exercising the

jurisdiction heretofore exercised by the land court, with

direction to make such orders and decrees in604



the premises as may correct the error heretofore made in

including the land in question in the second original

certificate issued in favor of the predecessor of the appellee,

as well as in all other duplicate certificates issued.

Without any finding as to costs, it is so ordered.

Arellano, C. J. Torres, and Araullo, JJ., concur.

CARSON J., with whom concurs TRENT, /., dissenting:

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I dissent.

In cases of double or overlapping registration, I am

inclined to .agree with the reasoning and authority on which

it is held in the majority opinion (first) that the original

holder of the prior certificate is entitled to the land as against

the original holder of the later certificate, where there has

been no transfer of title by either party to an innocent

purchaser; both, as is shown in the majority opinion, being at

fault in permitting the double registration to take place;

(second) that an innocent purchaser claiming under the prior

certificate is entitled to the land as against the original

holder of the later certificate, and also as against innocent

purchasers from the holder of the later certificate; the

innocent purchaser being in no wise at f ault in connection

with the issuance of the later certificate.

But I am of opinion that neither the authorities cited, nor

the reasoning of the majority opinion sustains the proposition

that the original holder of the prior certificate is entitled to

the land as against an innocent purchaser from the holder of

the later certificate,

As to the text-book authorities cited in the majority

opinion, it is sufficient to say that the rules laid down by bothHogg and Niblack are mere general rules, admittedly subject

to exception, and of course of no binding force or authority

where the reasoning upon which these rules are based is

inapplicable to the facts developed in a particular case.

In its last analysis the general rule laid down in the

majority opinion rests upon the proposition set forth in the

last page of the opinion wherein it is said that "it would seem

to be a just and equitable rule, when two persons

605

VOL. 31, OCTOBER 2, 1915. 605


have acquired equal rights in the same thing, to hold that the

one who acquired it first and who has complied with all the

requirements of the law should be protected." The rule, as

applied to the matter in hand, may be stated as follows: Itwould seem to be a just and equitable rule when two persons

have acquired separate and independent registered titles to

the same land, under the Land Registration Act, to hold that

the one who first acquired registered title and who has

complied with all the requirements of the law in that regard

should be protected, in the absence of any express statutory

provision to the contrary.

Thus stated I have no quarrel with the doctrine as astatement of the general rule to be applied in cases of double

or overlapping registration under the Land Registration Act;

for it is true as stated in the majority opinion that in the

adjudication and registration of titles by the Courts of Land

Registration "mistakes are bound to occur, and sometimes the

damage done thereby is irreparable;" and that in the absence

of statutory provisions covering such cases, "it is the duty of

the courts to adjust the rights of the parties, under suchcircumstances, so as to minimize such damages, taking into

consideration all of the conditions, and the diligence of the

respective parties to avoid them."

But like most such general rules, it has its exceptions and

should not be applied in a case wherein the reasons on which

it is based do not exist, or in cases wherein still more forceful

reasons demand the application of a contrary rule.

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The general rule relied upon in the majority opinion is a

mere application of a well settled equity rule that: "Where

conflicting equities are otherwise equal in merit, that which

first accrued will be given the preference." But it is

universally laid down by all the courts which have had

occasion to apply this equity rule that "it should be the last

test resorted to," and that "it never prevails when any other

equitable ground for 'preference exists."(See 19 Cent. Dig.,

tit. Equity, par. 181; and many cases cited in 16 Cyc., 139,

note 57.) It follows that the general rules, that in606



cases of double or overlapping registration the earlier

certificate should be protected, ought not to prevail so as todeprive an innocent purchaser under the later certificate of

his title in any case wherein the fraud or negligence of the

holder of the earlier certificate contributed to the issuance of

the later certificate. Hence the holder of the earlier certificate

of title should not be heard to invoke the"just and equitable

rule" as laid down in the majority opinion, in order to have

his own title protected and the title of an innocent holder of a

later certificate cancelled or annulled, in any case wherein itappears that the holder of the later certificate was wholly

without fault, while the holder of the earlier certificate was

wholly or largely to blame for the issuance of the later

certificate, in that he might have prevented its issuance by

merely entering his appearance in court in response to lawful

summons personally served upon him in the course of the

proceedings for the issuance of the second certificate, and

pleading his superior rights under the earlier certificate,

instead of keeping silent and by his silence permitting a

default judgment to be entered against him adjudicating title

in favor of the second applicant.

The majority opinion clearly recognizes the soundness of

the principles I am contending for by the reasoning (with

which I am inclined to agree) whereby it undertakes to

demonstrate that as between the original holders of the

double or overlapping registration the general rule should

prevail,because both such original parties must be held to

have been at fault and, their equities being equal, preference

should be given to the earlier title.

The majority opinion further recognizes the soundness of

my contention by the reasoning whereby it undertakes to

sustain the application of the general rule in favor of the

original holder of the earlier certificate against purchasers

from the original holder of the later certificate, by an attempt

to demonstrate that such purchasers can in no event be held

to beinnocent -purchasers: because, as it is said, negligence

may and should always be imputed to such607

VOL. 31, OCTOBER 2, 1915. 607


a purchaser, so that in no event can he claim to bewithout fault when it appears that the lands purchased by

him f rom the holder of a duly registered certificate of title

are included within the bounds of the lands described in a

certificate of title of an earlier date.

At considerable length the majority opinion (in reliance

upon the general rule laid down under the various systems of

land registration, other than those based on the torrens

system) insists that a purchaser of land duly registered in the

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Land Registration Court, is charged with notice of the

contents of each and every one of the thousands and tens of

thousands of certificates of registry on file in the land

registry office, so thatnegligence may beimputed to him if he

does not ascertain that all or any part of the land purchased

by him is included within the boundary lines of any one of the

thousands or tens of thousands of tracts of land whose

original registry bears an earlier date than the date of the

original registry of the land purchased by him. It is

contended that he cannot claim to be without fault should he

buy such land because, as it is said, it was possible for him to

discover that the land purchased by him had been made the

subject of double or overlapping registration by a comparison

of the description and boundary lines of the thousands of

tracts and parcels of land to be found in the land registry

office.

But such a ruling goes far to defeat one of the principal

objects sought to be attained by the introduction and

adoption of the so-called torrens system for the registration of

land. The avowed intent of that system of land registration is

to relieve the purchaser of registered lands from the necessity

of looking farther than the certificate of title of the vendor inorder that he may rest secure as to the validity of the title to

the lands conveyed to him. And yet it is said in the majority

opinion that he ischarged with notice of the contents of every

other certificate of title in the office of the registrar so that

his f ailure to acquaint himself with its contentsmay be

imputed to him as negligence.

If the rule announced in the majority opinion is to pre-608



vail, the new system of land registration, instead of making

transf ers of real estate simple, expenditious and secure, and

instead of avoiding the necessity for expensive and oftimes

uncertain searches of the land records and registries, in order

to ascertain the true condition of the title before purchase,will, in many instances, add to the labor, expense and

uncertainty of any attempt by a purchaser to satisfy himself

as to the validity of the title to lands purchased by him.

As I have said before, one of the principal objects, if not the

principal object, of the torrens system of land registration

upon which our Land Registration Act is avowedly modelled

is to facilitate the transfer of real estate. To that end the

Legislature undertakes to relieve prospective purchasers andall others dealing in registered lands from the necessity of

looking farther than the certificate of title to such lands

furnished by the Court of Land Registration, and I cannot,

therefore, give my consent to a ruling which charges a

purchaser or mortgagee of registered lands with notice of the

contents of every other certificate of title in the land registry,

so that negligence and fault may be imputed to him should he

be exposed to loss or damages as a result of the lack of such

knowledge.

Suppose a prospective purchaser of lands registered under

the Land Registration Act desires to avoid the imputation of

negligence in the event that, unknown to him, such lands

have been made the subject of double or overlapping

registration, what course should he pursue? What measures

should he adopt in order to search out the information with

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notice of which he is charged? There are no indexes to guide

him nor is there anything in the record or the certificate of

title of the land he proposes to buy which necessarily or even

with reasonable probability will furnish him a clue as to the

fact of the existence of such double or overlapping

registration. Indeed the only course open to him, if he desires

to assure himself against the possibility of double or

overlapping registration, would seem to be a careful,609

VOL, 31, OCTOBER 2, 1915. 609


laborious and extensive comparison of the registered

boundary lines contained in the certificate of title of the tract

of land he proposes to buy with those contained in all the

earlier certificates of title to be found in the land registry. Assuredly it was never the intention of the author of the new

Land Registration Act to impose such a burden on a

purchaser of duly registered real estate, under penalty that a

lack of the knowledge which might thus be acquired may be

imputed to him by this court as negligence in ruling upon the

respective equities of the holders of lands which have been

the subject of double or overlapping registration.

On the other hand, I think that negligence and fault mayfairly be imputed to a holder of a registered certificate of title

who stood supinely by and let a default judgment be entered

against him, adjudicating all or any part of his registered

lands to another applicant, if it appears that he was served

with notice or had actual notice of the pendency of the

proceedings in the Court of Land Registration wherein such

default judgment was entered.

The owner of land who enjoys the benefits secured to him

by its registry in the Court of Land Registration may

reasonably be required to appear and defend his title when

he has actual notice that proceedings are pending in that

court wherein another applicant, claiming the land as his

own, is seeking to secure its registry in his name. All that is

necessary for him to do is to enter his appearance in those

proceedings, invite the court's attention to the certificate of

title registered in his name, and thus, at the cost of the

applicant, avoid all the damage and inconvenience flowing

from the double or overlapping registration of the land in

question. There is nothing in the new system of land

registration which seems to render it either expedient or

necessary to relieve a holder of a registered title of the duty

of appearing and defending that title, when he has actual

notice that it is being attacked in a court of competent

jurisdiction, and if, as a result of his neglect or failure so to

do, his lands become subject to double or over-610


Legarda and Prieto vs.' Saleeby.

lapping registration, he should not be permitted to subject an

innocent purchaser, holding under the later certificate, to allthe loss and damage resulting from the double or overlapping

registration, while he goes scot free and holds the land under

a manifest misapplication of the equitable rule that "where

conflicting equities are otherwise equal in merit, that which-

first accrued will be given the preference." It is only where

both or neither of the parties are at fault that the rule is

properly applicable as between opposing claimants under an

earlier and a later certificate of registry to the same land.

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Of course all that is said in the briefs of counsel and the

majority opinion as to the right of the holder of a certificate

to rest secure in his registered title so that those dealing with

registered lands can confidently rely upon registry

certificates thereto is equally forceful by way of argument in

favor of the holder of one or the other certificate in case of

double or overlapping registration. The problem is to

determine which of the certificate holders is entitled to the

land. The decision of that question in f avor of either one

must necessarily have the effect of destroying the value of the

registered title of the other and to that extent shaking the

public confidence in the value of the whole system for the

registration of lands. But, in the language of the majority

opinion, "that mistakes are bound to occur cannot be denied

and sometimes the damage done thereby is irreparable. It is

the duty of the courts to adjust the rights of the parties under

such circumstances so as to minimize the damages, taking

into consideration all the conditions and the diligence of the

respective parties to avoid them."

It will be observed that I limit the exception to the general

equitable rule, as laid down in the majority opinion, to cases

wherein the holder of the earlier certificate of title has actualnotice of the pendency of the proceedings in the course of

which the later certificate of title was issued, or to cases in

which. he has received personal notice of the pendency of

those proceedings. Unless he has actual notice of the

pendency of such proceedings I readily agree with611

VOL. 31, OCTOBER 2, 1915. 611


the reasoning of the majority opinion so far as it holds that

negligence, culpable negligence, should not be imputed to him

for failure to appear and defend his title so as to defeat his

right to the benefit of the equitable rule. It is true that the

order of publication in such cases having been duly complied

with, all the world is charged with notice thereof, but it does

not necessarily follow that, in the absence of actual notice,

culpable negligence in permitting a default judgment to be

entered against him may be imputed to the holder of the

earlier certificate so as to defeat his right to the land under

the equitable rule favoring the earlier certificate. Such a

holding would have the effect (to quote the language of the

majority opinion) of requiring the holder of a certificate of

title to wait indefinitely "in the portals of the court" and to sit

in the"mirador de su casa"in order to avoid the possibility of

losing his lands; and I agree with the.writer of the majority

opinion that to do so would place an unreasonable burden on

the holders of such certificate, which was not contemplated

by the authors of the Land Registration Act. But no

unreasonable burden is placed upon the holder of a

registered title by a rule which imputes culpable negligence

to him when he sits supinely by and lets a judgment indefault be entered against him adjudicating title to his lands

in favor of another applicant, despite the fact that he has

actual knowledge of the pendency of the proceedings in which

such judgment is entered and despite the fact that he has

been personally served with summons to appear and default

his title.

"Taking into consideration all of the conditions and the

diligence of the respective parties," it seems to me that there

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is no "equality in merit" between the conflicting equities set

up by an innocent purchaser who acquires title to the land

under a registered certificate, and the holder of an earlier

certificate who permitted a default judgment to be entered

against him, despite actual notice of the pendency of the

proceedings in the course of which the later certificate was

issued.612



I am convinced, furthermore, that aside from the superior

equities of the innocent purchaser in cases such as that now

under discussion, there are strong reasons of convenience and

public policy which militate in favor of the recognition of his

title rather than that of the holder of the earlier title.One ruling exposes all persons purchasing or dealing in

registered lands to unknown, unspecified and uncertain

dangers, to guard against which all such persons will be put

to additional cost, annoyance and labor on every occasion

when any transaction is had with regard to such lands; while

the other ruling tends to eliminate consequences so directly

adverse to the purpose and object for which the land

registration law was enacted, and imposes no burden uponany holder of a certificate of registered lands other than that

of defending his title on those rare, definite and specific

occasions wherein he has actual notice that his title is being

challenged in a Court of Land Registration, a proceeding in

which the cost and expense is reduced to the minimum by the

conclusive character of his certificate of title in support of his

claim of ownership. Furthermore, judgment against the

innocent purchaser and in favor of the holder of the earlier

certificate in a case such as that under consideration must

inevitably lend to increase the danger of double or

overlapping registrations by encouraging holders of

registered titles, negligently or fraudulently and collusively,

to permit default judgments to be entered against them

adjudicating title to all or a part of their registered lands in

favor of other applicants, despite actual notice of the

pendency of judicial proceedings had for that purpose, and

this, without adding in any appreciable degree to the security

of their titles, and merely to save them the very slight trouble

or inconvenience incident to an entry of appearance in the

court in which their own titles were secured, and inviting

attention to the fact that their right, title and ownership in

the lands in question has already been conclusively

adjudicated.

The cases wherein there is a practical possibility of double613

VOL. 31, OCTOBER 2, 1915. 613


or overlapping registration without actual notice to the

holder of the earlier certificate must in the very nature of

things be so rare as to be practically negligible. Double or

overlapping registration almost invariably occurs in relationto lands held by adjoining occupants or claimants. It is

difficult to conceive of a case wherein double registration can

take place, in the absence of fraud, without personal service

of notice of the pendency of the proceedings upon the holder

of the earlier certificate, the statute requiring such notice to

be served upon the owner or occupant of all lands adjoining

those for which application for registration is made; and the

cases wherein an adjoining land owner can, even by the use

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of fraud, conduct proceedings for the registration of his land

to a successful conclusion without actual notice to the

adjoining property owners must be rare indeed.

In the case at bar the defendant purchased the land in

question from the original holder of a certificate of title

issued by the Court of Land Registration, relying upon the

records of the Court of Land Registration with reference

thereto and with no knowledge that any part of the land thus

purchased was included in an earlier certificate of title issued

to plaintiff. The plaintiff, the holder of the earlier certificate

of title, negligently permitted a default judgment to be

entered against him in the Court of Land Registration,

adjudicating part of the lands included in his own certificate

of title in f avor of another applicant, f rom whom the

defendant in this action acquired title, and this despite the

fact that he was an adjoining land owner, had actual notice of

the pendency of the proceedings and was personally served

with summons to appear and defend his rights in the

premises. It seems to me that there can be no reason for

doubt as to the respective merits of the equities of the

parties, and further that the judgment of the majority in

favor of the plaintiff will inevitably tend to increase thenumber of cases wherein registered land owners in the future

will fail to appear and defend their titles when challenged in

other proceedings in the Courts of Land Regis-614


United States vs. Asuncion.

tration, thereby enormously increasing the possibility and

probability of loss and damage to innocent third parties and

dealers in registered lands generally, arising out of

erroneous, double or overlapping registration of lands by the

Courts of Land Registration.

Judgment reversed: case remanded with instructions.

________________



Government of the Philippine Islands vs. Abural.

[No. 14167. August 14,1919.]

THE GOVERNMENT OF THE PHILIPPINE ISLANDS,

petitioner and appellee. ANTIPAS VAZQUEZ and BASILIO

GAYARES, petitioners and appellants, vs.RUFINA ABURAL

ET AL., objectors and appellees.

1.1.LAND REGISTRATION; TORRENS SYSTEM;PURPOSE.—The prime purpose of the Torrens

System, as established in the Philippine Islands by

the Land Registration Law (Act No. 496), is to decree

land titles that shall be final, irrevocable, and

indisputable.

1.2.ID.; CADASTRAL SYSTEM; PURPOSE.—The

purpose of the offspring of the Torrens System here

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known as the Cadastral System, as established in the

Philippine Islands by the Cadastral Act (No. 2259), is,

like the purpose of the Torrens System, proper

incontestability of title. As stated in section 1 of the

Cadastral Act, the purpose is to serve the public

interest, by requiring that the titles to any lands "be

settled and adjudicated."

1.3.ID.; ID.; PROCEEDINGS.—Many precautions are

taken to guard against injustice.

1.4.ID. ; ID. ; ID.—After trial in a cadastral case, three

actions are taken. The first adjudicates ownership in

favor of one of the claimants. This 'constitutes the

decision—the judgment—the decree of the court. Thesecond action is the declaration by the court that the

decree is final and its order for the issuance of the

certificates of title by the Chief of the Land

Registration Office. Such order is made if within

thirty days from the date of receipt of a copy of the

decision no appeal is taken from the decision, The

third and last action devolves upon the General Land

Registration Office.

997

VOL. 39, AUGUST 14, 1919. 99

7


1.5.ID. ; ID. ; ID. ; FINALITY OF DECREE.—For a

decree to exist in legal contemplation, it is not

necessary to await the preparation of a so-calleddecree by the Land Registration Office.

1.6.ID. ; ID. ; ID. ; ID.—Cadastral proceedings

commenced. Notice published in the Official Gazette.

Trial judge also issued general notice. S asks for the

registration in his name of lot No. 1608. Hearing had.

On September 21, 1916, the court in a decree awarded

the lot to S. On November 23, 1916, the time for anappeal having passed, the court declares the decree

final. On July 23, 1917, before the issuance by the

Land Registration Office of the so-called technical

decree, V and G ask that the case be reopened to

receive proof relative to the ownership of the lot.

Motion denied by the trial court. Held: That since the

judgment of the Court of First Instance of September

21, 1916, has become final, and since no action wastaken within the time provided by law for the

prosecution of an appeal by bill of exceptions, the

Supreme Court is without jurisdiction, and the appeal

must be dismissed.

1.7.ID.; ID.; RELIEF FROM JUDGMENT.—Whether

sections 113 and 513 of the Code of Civil Procedure

apply to cadastral proceedings,quaere.

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1.8.GENERAL LAND REGISTRATION OFFICE.—The

General Land Registration Office has been instituted

"for the due effectuation and accomplishment of the

laws relative to the registration of land."

(Administrative Code of 1917, sec. 174.)

APPEAL from a judgment of the Court of First Instance ofOccidental Negros. Romualdez, J.


Cohn & Fisher for appellants.

Hilado & Hilado for appellees.

MALCOLM, J.:

The principal question which this appeal presents is—When

does the registration of title, under the Torrens System of

Land Registration, especially under the different Philippine

laws establishing the Cadastral System, become final,

conclusive, and indisputable ? The supplementary questions

are—At what stage of the cadastral proceedings does a decree

exist in legal contemplation ? Does it exist from the moment

that the court, after hearing the evidence,

998



adjudicates the land in favor of a person and then, or later,

decrees the land in favor of this person, or does it exist when

the Chief of the Land Registration Office transcribes theadjudication in the prescribed form?

STATEMENT OF THE CASE.

Cadastral proceedings were commenced in the municipality

of Hinigaran, Province of Occidental Negros, upon an

application of the Director of Lands, on June 16,1916. Notice

of the proceedings were published in the Official Gazette as

provided by law. The trial judge also issued general notice to

all Interested parties. Among others, Victoriano Siguenza

presented an, answer asking for registration in his name of

lot No. 1608. The instant petitioners, Antipas Vazquez and

Basilio Gayares, although said to reside in this municipality,

and although said to have participated in other cadastral

cases, did not enter any opposition as to this lot. Hearing was

had during September, 1916. On September 21 of this year,

the court issued the following decree:

"It is hereby decreed that, upon a previous declaration of

general default, the following lots be adjudged and registered

in the names of those persons whose names appear next after

the lots, and in accordance with the following conditions: * * *

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"Lot No. 1608 with the improvements thereon to the

conjugal partnership of Victoriano Siguenza and Marcela

Guanzon."

On November 23 of the same year, the court declared final

the foregoing decree in the following language:

"The decision rendered by the court in the above-entitled case

having become final on September 21,1916, it is hereby

ordered that the Chief of the General Land Registration

Office issue the decrees corresponding to the lots adjudged by

said decision.

"An appeal having however been interposed as to the lots

enumerated as follows, the decrees thereon, must besuspended until further order by this court:

"Lot No. 521.

999

VOL. 39, AUGUST 14, 1919. 999


Eight months later, that is, on July 23, 1917, but before the

issuance by the Land Registration Office of the so-called

technical decree, Antipas Vazquez and Basilio Gayares, the

latter as guardian of the minor Estrella Vazquez, came into

the case for the first time. The petitioners, after setting forth

their right of ownership in lot No. 1608, and that it was

included in their"Hacienda, Santa Filomena," and after

stating that they were in complete ignorance of the

proceedings, asked that the judgment of the court be

annulled and that the case be reopened to receive proof

relative to the ownership of the lot. Counsel for Victoriano

Siguenza answered by countermotion, asking the court to

dismiss the motion presented on behalf of Vazquez and

Gayares. The court denied the motion for a new trial on the

theory that there being a decree already rendered and no

allegation of fraud having been made, the court lacked

jurisdiction. It may also be stated parenthetically that

counsel for Vazquez and Gayares made an unsuccessful

attempt in the Supreme Court, through mandamus, to have

the record completed by the taking of evidence.

In order that the matter may not be confused, let it again

be made clear that counsel for petitioners have not raised, the

question of fraud as provided for in section 38 of the Land

Registration Law, nor have they asked to be relieved from a

judgment or order, pursuant to section 113 of the Code of

Civil Procedure, because of mistake, inadvertence, surprise,

or excusable neglect. As a matter of fact, they could not well

claim fraud because all the proceedings were public and free

from any suspicion. of chicanery. As a matter of fact, also, any

special reliance on section 113 of the Code of Civil Procedure

would not get them anywhere because more than six months

had elapsed af ter the issuance of a judgment in this case.

The issue fundamentally becomes one of whether or not the

Supreme Court has jurisdiction over the appeal, since if the

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judgment and the supplemental decree issued by the Judge of

the Court of First Instance on September 21, 1916, and

November 23, 1916, respectively, have become final,

petitioners may not bring their appeal

1000



bef ore this court, because the time for the filing of their bill

of exceptions has expired; while, if the cadastral proceedingsdid not become final until the f ormal decree was issued by

the Land Registration Office, then it was proper for them to

ask for a reopening of the case, and it would, consequently, be

just as proper for this court to order the trial court to permit

the same.

OPINION,

The prime purpose of the Torrens System is, as has been

repeatedly stated, to decree land, titles that shall be final,

irrevocable, and indisputable. Incontestability of title is the

goal. All due precaution must accordingly be taken to guard

against injustice to interested individuals who, for some good

reason, may not be able to protect their rights. Nevertheless,

even at the cost of possible cruelty which may result in

exceptional cases, it does become necessary in the interest of

the public weal to enf orce registration laws. No stronger

words can be found than those appearing in section 38 of the

Land Registration Law (Act No. 496) wherein it is said that:

"Every decree of registration shall bind the land, and quiet

title thereto. * * * It shall be conclusive upon and against all

persons, including the Insular Government and all the

branches thereof, whether mentioned by name in the

application, notice, or citation, or included in the general

description 'To all whom it may concern,' Such decree shall

not be opened. by reason of the absence, inf ancy, or other

disability of any person affected thereby, nor by any

proceeding in any court for reversing judgments or decrees;

subject, however, to the right of any person deprived of land

or of any estate or interest therein by decree of registration

obtained by fraud to file in the Court of Land Registration

(Court of First Instance) a petition for review within one year

after entry of the decree,' provided no in-nocent purchaser for

value has acquired an interest."

While such statements can be made of the Torrens System

proper, they become even more incisive and peremptory

1001

VOL. 39, AUGUST 14, 1919. 1001


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when we come to consider the offspring of this system, here

known as the Cadastral System. Under the Torrens System

proper, whether action shall or shall not be taken is optional

with the solicitant. Under the Cadastral System, pursuant to

initiative on the part of the Government, titles for all the

land within a stated area, are adjudicated whether or not the

people living within this district desire to have titles issued.

The purpose, as stated in section one of the Cadastral Act

(No. 2259), is to serve the public interests, by requiring that

the titles to any lands "be settled and adjudicated."

Admitting that such compulsory registration of land and

such excessive interf erence with private property constitutes

due process of law and that the Acts providing for the same

are constitutional, a question not here raised, yet a study ofthe law indicates that many precautions are taken to guard

against injustice. The proceedings are initiated by a notice of

survey. When the lands have been surveyed and plotted, the

Director of Lands, represented by the Attorney-General, files

a petition in court praying that the titles to the lands named

be settled and adjudicated. Notice of the filing of the petition

is then published twice in successive issues of theOfficial

Gazette in both the English and Spanish languages. All

persons interested. are given the benefit of assistance by

competent officials and are informed of their rights. A trial is

had. "All conflicting interests shall be adjudicated by the

court and decrees awarded in favor of the persons entitled to

the lands or the various parts thereof, and such decrees,

when final, shall be the bases of original certificates of title in

favor of said persons." (Act No. 2259, sec. 11.) Aside from this,

the commotion caused. by the survey and a trial affecting

ordinarily many people, together with the presence of

strangers in the community, should serve to put all those

affected on their guard.

After trial in a cadastral case, three actions are taken. The

first adjudicates ownership in favor of one of the

1002



claimants. This constitutes the decision—the judgment—the

decree of the court, and speaks in a judicial manner. The

second action is the declaration by the court that the decree

is final and its order for the issuance of the certificates of title

by the Chief of the Land Registration Office. Such order is

made if within thirty days from the date of receipt of a copy of

the decision no appeal is taken from the decision. This again

is judicial action, although to a less degree than the first.

The third and last action devolves upon the General Land

Registration Office. This office has been instituted "for the

due effectuation and accomplishment of the laws relative to

the registration of land." (Administrative Code of 1917, sec.

174.) An official found in the office, known as the chief

surveyor, has as one of his duties "to prepare final decrees in

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all adjudicated cases." (Administrative Code of 1917, sec.

177.) 'This latter decree contains the technical description of

the land and may not 'be issued until a considerable time

after the promulgation of the judgment. The form for the

decree used by the General Land Registration Office

concludes with the words: "Witness, the Honorable (name of

the judge), on this the (date)." The date that is used as

authority for the issuance of the decree is the date when,

after hearing the evidence, the trial court decreed the

adjudication and .registration of the land.

The judgment in a cadastral survey, including the

rendition of the decree, is a judicial act. As the law says, the

judicial decree when final is the base of the certificate of title.

The issuance of the decree by the Land Registrationoffice is a

ministerial act The date of the judgment, or more correctly

stated, the date on which the defeated party receives a copy

of the decision, begins the running of the time for the

interposition of a motion for a new trial or for the perfection

of an appeal to the Supreme Court. The date of the title

prepared by the Chief Surveyor is unimportant, for the

adjudication has taken place and all that is left to be

performed is the mere formulation of the

1003

VOL. 39, AUGUST 14, 1919. 1003


technical description. If an unknown individual could wait

possibly years until the day before a surveyor gets around to

transcribing a technical description of a piece of land, the

defeated party could just as reasonably expect the same

consideration for his appeal. As a matter of fact, the so-called

unknown is a party just as much as the known oppositor for

notice is to all the world, and the decree binds all the world.

Both counsel for petitioners and respondents rely upon the

decision of this court in the case

of Tambuntingvs.Manuel ([1916], 35 Phil.; 699). That case

and the instant case are not the same. In the Tambunting

case the contest was really between two parties each claiming

to have a Torrens title; here one party has the title and the

other is seeking to oust him from his fortress. In theTambunting case the declaration of ownership but not the

decree. of registration had issued; here both declaration and

decree have issued. The doctrines announced in the decision

inGrey Albavs. De la Cruz ([1910], 17 Phil., 49) relating to

general notice and the indefeasibility of land titles under the

Torrens system are much more applicable and can, with as

much reason, be applied to the cadastral system.

As a general rule, registration of title under the' cadastral

system is final, conclusive and indisputable, after the passage

of the thirty-day period allowed f or an appeal f rom the date

of receipt by the party of a copy of the judgment of the court

adjudicating ownership without any step having been taken

to perfect an appeal. The prevailing party may then have

execution of the judgment as of right and is entitled to the

certificate of title issued by the Chief of the Land

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Registration Office. The exception is the special provision

providing for fraud.

Counsel for appellants and appellees have favored the

court with able arguments relative to the applicability of

sections 113 and 513 of the Code of Civil Procedure to

1004



cadastral proceedings. The view we take of the case would

make unprofitable any discussion of this question.

It appearing that the judgment of the Court of First

lnstance of Occidental Negros of September 21, 1916, has

become final, and that no action was taken within the time

provided by law for the prosecution of an appeal by bill of

exceptions, this court is without jurisdiction. Accordingly the

appeal is dismissed with costs against the appellants. Soordered.

Arellano, C.

J., Torres, Johnson, Street, Avanceña, and Moir, JJ., concur.

Appeal dismissed.

1005


G.R. No. 166838.June 15, 2011.*

STA. LUCIA REALTY & DEVELOPMENT, INC.,

petitioner,vs.CITY OF PASIG, respondent,MUNICIPALITY OF CAINTA, PROVINCE OF RIZAL,

intervenor.

Taxation; Local Government Units; While a local

government unit is authorized under several laws to collect

real estate tax on properties falling under its territorial

jurisdiction, it is imperative to first show that these properties

are unquestionably within its geographical boundaries.—

While a local government unit is authorized under severallaws to collect real estate tax on properties falling under its

territorial jurisdiction,it is imperative to first show that

these properties are unquestionably within its

geographical boundaries.

Land Titles; While certificates of title are indefeasible,

unassailable and binding against the whole world, including

the government itself, they do not create or vest title. They

merely confirm or record title already existing and vested.—In De Pedro v. Romasan Development Corporation, 452 SCRA

564 (2005), we proclaimed that: We agree with the petitioners

that, generally, a certificate of title shall be conclusive as to

all matters contained therein and conclusive evidence of the

ownership of the land referred to therein. However, it bears

stressing that while certificates of title are indefeasible,

unassailable and binding against the whole world, including

the govern-

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_______________

* FIRST DIVISION.45

VOL. 652, JUNE 15, 2011 4

5

Sta. Lucia Realty & Development, Inc. vs. City of Pasig

ment itself, they do not create or vest title.They merely

confirm or record title already existing and vested. They

cannot be used to protect a usurper from the true owner, nor

can they be used as a shield for the commission of fraud;

neither do they permit one to enrich himself at the expense of

other.

Same; Mere reliance therefore on the face of the Transfer

Certificates of Title (TCT) will not suffice as they can only be

conclusive evidence of the subject properties’ locations if both

the stated and described locations point to the same area.—

Although it is true that “Pasig” is the locality stated in the

TCTs of the subject properties, both Sta. Lucia and Cainta

aver that the metes and bounds of the subject properties, as

they are described in the TCTs, reveal that they are within

Cainta’s boundaries. This only means that there may be a

conflict between the location as stated and the location as

technically described in the TCTs. Mere reliance therefore on

the face of the TCTs will not suffice as they can only be


the stated and described locations point to the same area.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

Abelardo B. Albis, Jr.for petitioner.

Carlos C. Abesamisfor respondent.

Crispino T. Pablo, Jr.for intervenor.

LEONARDO-DE CASTRO, J.:

For review is the June 30, 2004 Decision1 and the January

27, 2005 Resolution2 of the Court of Appeals in CA-G.R. CV

No. 69603, which affirmed with modification the August 10,

_______________

1 Rollo, pp. 39-55; penned by Associate Justice Ruben T.

Reyes with Associate Justices Eliezer R. De los Santos and

Arturo D. Brion (now Associate Justice of the Supreme

Court), concurring.

2 Id., at pp. 57-58.46

46 SUPREME COURT REPORTS ANNOTATEDSta. Lucia Realty & Development, Inc. vs. City of Pasig

1998 Decision3 and October 9, 1998 Order4 of the Regional

Trial Court (RTC) of Pasig City, Branch 157, in Civil Case

No. 65420.

Petitioner Sta. Lucia Realty & Development, Inc. (Sta.

Lucia) is the registered owner of several parcels of land with

Transfer Certificates of Title (TCT) Nos. 39112, 39110 and

38457, all of which indicated that the lots were locatedin Barrio Tatlong Kawayan, Municipality of Pasig5 (Pasig).

The parcel of land covered by TCT No. 39112 was

consolidated with that covered by TCT No. 518403, which

was situated in Barrio Tatlong Kawayan, Municipality of

Cainta, Province of Rizal (Cainta). The two combined lots

were subsequently partitioned into three, for which TCT Nos.

532250, 598424, and 599131, now all bearing the Cainta

address, were issued.

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TCT No. 39110 was also divided into two lots, becoming

TCT Nos. 92869 and 92870.

The lot covered by TCT No. 38457 was not segregated, but

a commercial building owned by Sta. Lucia East Commercial

Center, Inc., a separate corporation, was built on it.6

Upon Pasig’s petition to correct the location stated in TCT

Nos. 532250, 598424, and 599131, the Land Registration

Court, on June 9, 1995, ordered the amendment of the TCTs

to read that the lots with respect to TCT No. 39112 were

located in Barrio Tatlong Kawayan, Pasig City.7

On January 31, 1994, Cainta filed a petition8 for the

settlement of its land boundary dispute with Pasig before the

RTC, Branch 74 of Antipolo City (Antipolo RTC). This case,

_______________

3 Id., at pp. 59-70.

4 Id., at pp. 71-72.

5 Now City of Pasig.

6 Rollo, pp. 12-13.

7 Id., at p. 233.

8 CA Rollo, pp. 155-158.47

VOL. 652, JUNE 15, 2011 47Sta. Lucia Realty & Development, Inc. vs. City of Pasig

docketed as Civil Case No. 94-3006, is still pending up to this

date.

On November 28, 1995, Pasig filed a Complaint,9docketed

as Civil Case No. 65420, against Sta. Lucia for the collection

of real estate taxes, including penalties and interests, on the

lots covered by TCT Nos. 532250, 598424, 599131, 92869,

92870 and 38457, including the improvements thereon (the

subject properties).

Sta. Lucia, in its Answer, alleged that it had been

religiously paying its real estate taxes to Cainta, just like

what its predecessors-in-interest did, by virtue of the

demands and assessments made and the Tax Declarations

issued by Cainta on the claim that the subject properties

were within its territorial jurisdiction. Sta. Lucia further

argued that since 1913, the real estate taxes for the lots

covered by the above TCTs had been paid to Cainta.10

Cainta was allowed to file its own Answer-in-Intervention

when it moved to intervene on the ground that its interest

would be greatly affected by the outcome of the case. It

averred that it had been collecting the real property taxes on

the subject properties even before Sta. Lucia acquired them.

Cainta further asseverated that the establishment of the

boundary monuments would show that the subject properties

are within its metes and bounds.11

Sta. Lucia and Cainta thereafter moved for the suspension

of the proceedings, and claimed that the pending petition in

the Antipolo RTC, for the settlement of boundary dispute

between Cainta and Pasig, presented a “prejudicial question”

to the resolution of the case.12

_______________

9 Rollo, pp. 75-81.

10 Id., at p. 13.

11 Id., at p. 88.

12 Id., at p. 258.48

48 SUPREME COURT REPORTS ANNOTATED





















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The RTC denied this in an Order dated December 4, 1996

for lack of merit. Holding that the TCTs were conclusive

evidence as to its ownership and location,13 the RTC, on

August 10, 1998, rendered a Decision in favor of Pasig:

“WHEREFORE, in view of the foregoing, judgment is

hereby rendered in favor of [Pasig], ordering Sta. LuciaRealty and Development, Inc. to pay [Pasig]:

1) P273,349.14 representing unpaid real estate taxes and

penalties as of 1996, plus interest of 2% per month until

fully paid;

2) P50,000.00 as and by way of attorney’s fees; and

3) The costs of suit.

Judgment is likewise rendered against the intervenor

Municipality of Cainta, Rizal, ordering it to refund to Sta.

Lucia Realty and Development, Inc. the realty tax payments

improperly collected and received by the former from the

latter in the aggregate amount of P358,403.68.”14

After Sta. Lucia and Cainta filed their Notices of Appeal,

Pasig, on September 11, 1998, filed a Motion for

Reconsideration of the RTC’s August 10, 1998 Decision.

The RTC, on October 9, 1998, granted Pasig’s motion in an

Order15 and modified its earlier decision to include the realty

taxes due on the improvements on the subject lots:

“WHEREFORE, premises considered, the plaintiff’s

motion for reconsideration is hereby granted. Accordingly, the

Decision, dated August 10, 1998 is hereby modified in that

the defendant is hereby ordered to pay plaintiff the amount of

P5,627,757.07 representing the unpaid taxes and penalties on

the improvements on the subject parcels of land whereon real

estate taxes are adjudged as due for the year 1996.”16

_______________

13 Id., at p. 69.

14 Id., at p. 70.

15 Id., at pp. 71-72.16 Id., at p. 72.49

VOL. 652, JUNE 15, 2011 49


Accordingly, Sta. Lucia filed an Amended Notice of Appeal

to include the RTC’s October 9, 1998 Order in its protest.

On October 16, 1998, Pasig filed a Motion for Execution

Pending Appeal, to which both Sta. Lucia and Cainta filedseveral oppositions, on the assertion that there were no good

reasons to warrant the execution pending appeal.17

On April 15, 1999, the RTC ordered the issuance of a Writ

of Execution against Sta. Lucia.

On May 21, 1999, Sta. Lucia filed a Petition

forCertiorari under Rule 65 of the Rules of Court with the

Court of Appeals to assail the RTC’s order granting the

execution. Docketed asCA-G.R. SP No. 52874, the petitionwas raffled to the First Division of the Court of Appeals,

which on September 22, 2000, ruled in favor of Sta. Lucia, to

wit:

“WHEREFORE, in view of the foregoing, the instant

petition is herebyGIVEN DUE

COURSEandGRANTEDby this Court. The assailed Order

dated April 15, 1999 in Civil Case No. 65420 granting the

motion for execution pending appeal and ordering the









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issuance of a writ of execution pending appeal is herebySET

ASIDEand declared NULLand VOID.”18

The Court of Appeals added that the boundary dispute

case presented a “prejudicial question which must be decided

before x x x Pasig can collect the realty taxes due over the

subject properties.”19

Pasig sought to have this decision reversed in a Petition

forCertiorari filed before this Court on November 29, 2000,

but this was denied on June 25, 2001 for being filed out of

time.20

Meanwhile, the appeal filed by Sta. Lucia and Cainta was

raffled to the (former) Seventh Division of the Court of Ap-

_______________

17 Id., at p. 237.18 Id., at p. 93.

19 Id.

20 Id., at p. 95.50



peals and docketed asCA-G.R. CV No. 69603. On June 30,

2004, the Court of Appeals rendered its Decision, wherein itagreed with the RTC’s judgment:

“WHEREFORE,the appealed Decision is

hereby AFFIRMEDwith theMODIFICATION that the

award of P50,000.00 attorney’s fees isDELETED.”21

In affirming the RTC, the Court of Appeals declared that

there was no proper legal basis to suspend the

proceedings.22 Elucidating on the legal meaning of a

“prejudicial question,” it held that “there can be no

prejudicial question when the cases involved are both

civil.”23 The Court of Appeals further held that the elements

oflitis pendentiaand forum shopping, as alleged by Cainta to

be present, were not met.

Sta. Lucia and Cainta filed separate Motions for

Reconsideration, which the Court of Appeals denied in a

Resolution dated January 27, 2005.

Undaunted, Sta. Lucia and Cainta filed separate Petitions

forCertiorari with this Court. Cainta’s petition, docketed as

G.R. No. 166856 was denied on April 13, 2005 for Cainta’s

failure to show any reversible error.Sta. Lucia’s own

petition is the one subject of this decision.24

In praying for the reversal of the June 30, 2004 judgment

of the Court of Appeals, Sta. Lucia assigned the following

errors:

ASSIGNMENT OF ERRORS

I

THE HONORABLE COURT OF APPEALS ERRED IN

AFFIRMING [WITH MODIFICATION] THE DECISION OF

THE REGIONAL TRIAL COURT IN PASIG CITY

_______________

21 Id., at p. 54.

22 Id., at p. 46.

23 Id., at p. 47.

24 Id., at p. 102.51

VOL. 652, JUNE 15, 2011 51


II.

















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THE HONORABLE COURT OF APPEALS ERRED IN NOT

SUSPENDING THE CASE IN VIEW OF THE PENDENCY

OF THE BOUNDARY DISPUTE WHICH WILL FINALLY

DETERMINE THE SITUS OF THE SUBJECT

PROPERTIES

III.


HOLDING THAT THE PAYMENT OF REALTY TAXES

THROUGH THE MUNICIPALITY OF CAINTA WAS VALID

PAYMENT OF REALTY TAXES

IV.


HOLDING THAT IN THE MEANTIME THAT THE

BOUNDARY DISPUTE CASE IN ANTIPOLO CITY

REGIONAL TRIAL COURT IS BEING FINALLY

RESOLVED, THE PETITIONER STA. LUCIA SHOULD BE

PAYING THE REALTY TAXES ON THE SUBJECT

PROPERTIES THROUGH THE INTERVENOR CAINTA TO

PRESERVE THESTATUS QUO.25

Pasig, countering each error, claims that the lower courts

correctly decided the case considering that the TCTs are clear

on their faces that the subject properties are situated in its

territorial jurisdiction. Pasig contends that the principles

oflitis pendentia, forum shopping, andres judicata are all

inapplicable, due to the absence of their requisite elements.

Pasig maintains that the boundary dispute case before the

Antipolo RTC is independent of the complaint for collection of

realty taxes which was filed before the Pasig RTC. It avers

that the doctrine of “prejudicial question,” which has a

definite meaning in law, cannot be invoked where the two

cases involved are both civil. Thus, Pasig argues, since there

is no legal ground to preclude the simultaneous hearing of

both cases, the suspension of the proceedings in the Pasig

RTC is baseless.

_______________

25 Id., at p. 17.52



Cainta also filed its own comment reiterating its legal

authority over the subject properties, which fall within its

territorial jurisdiction. Cainta claims that while it has been

collecting the realty taxes over the subject properties since

way back 1913, Pasig only covered the same for real propertytax purposes in 1990, 1992, and 1993. Cainta also insists that

there is a discrepancy between the locational entries and the

technical descriptions in the TCTs, which further supports

the need to await the settlement of the boundary dispute case

it initiated.

The errors presented before this Court can be narrowed

down into two basic issues:

1) Whether the RTC and the CA were correct in decidingPasig’s Complaint without waiting for the resolution of

the boundary dispute case between Pasig and Cainta;

and

2) Whether Sta. Lucia should continue paying its real

property taxes to Cainta, as it alleged to have always

done, or to Pasig, as the location stated in Sta. Lucia’s

TCTs.



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We agree with the First Division of the Court of Appeals in

CA-G.R. SP No. 52874 that the resolution of the boundary

dispute between Pasig and Cainta would determine which

local government unit is entitled to collect realty taxes from

Sta. Lucia.26

The Local Government Unit entitled

To Collect Real Property Taxes

The Former Seventh Division of the Court of Appeals held

that the resolution of the complaint lodged before the Pasig

RTC did not necessitate the assessment of the parties’

evidence on the metes and bounds of their respective

territories.

_______________

26 Id., at p. 93.53

VOL. 652, JUNE 15, 2011 53


It cited our ruling inOdsigue v. Court of Appeals27 wherein

we said that a certificate of title is conclusive evidence of both

its ownership and location.28 The Court of Appeals even

referred to specific provisions of the 1991 Local Government

Code and Act No. 496 to support its ruling that Pasig had theright to collect the realty taxes on the subject properties as

the titles of the subject properties show on their faces that

they are situated in Pasig.29

Under Presidential Decree No. 464 or the “Real Property

Tax Code,” the authority to collect real property taxes is

vested in the localitywhere the property is situated:

“Sec.5. Appraisal of Real Property.—All real property,

whether taxable or exempt, shall be appraised at the current

and fair market value prevailing in the localitywhere the

property is situated.

x x x x

Sec.57. Collection of tax to be the responsibility of

treasurers.—The collection of the real property tax and all

penalties accruing thereto, and the enforcement of the

remedies provided for in this Code or any applicable laws,

shall be the responsibility of the treasurer of the province,

city or municipalitywhere the property is

situated.” (Emphases ours.)

This requisite was reiterated in Republic Act No. 7160,

also known as the 1991 the Local Government Code, to wit:

“Section201. Appraisal of Real Property.—All real

property, whether taxable or exempt, shall be appraised atthe current and fair market value prevailing in the

localitywhere the property is situated. The Department

of Finance shall promulgate the necessary rules and

regulations for the classification, appraisal, and assessment

of real property pursuant to the provisions of this Code.

_______________

27 G.R. No. 111179, July 4, 1994, 233 SCRA 626.

28 Id., at p. 631.

29 Rollo, pp. 47-51.54



Section233. Rates of Levy.—A province or city or a

municipality within the Metropolitan Manila Area shall fix a









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uniform rate of basic real property tax applicableto their

respective localities as follows: x x x.” (Emphases ours.)

The only import of these provisions is that, while a local

government unit is authorized under several laws to collect

real estate tax on properties falling under its territorial

jurisdiction,it is imperative to first show that these

properties are unquestionably within its geographical

boundaries.

Accentuating on the importance of delineating territorial

boundaries, this Court, in Mariano, Jr. v. Commission on

Elections30 said:

“The importance of drawing with precise strokes the

territorial boundaries of a local unit of government cannot be

overemphasized. The boundariesmust be clear for theydefine the limits of the territorial jurisdiction of a

local government unit. It can legitimately exercise

powers of government only within the limits of its

territorial jurisdiction. Beyond these limits, its acts

areultra vires.Needless to state, any uncertainty in the

boundaries of local government units will sow costly conflicts

in the exercise of governmental powers which ultimately will

prejudice the people’s welfare. This is the evil sought to beavoided by the Local Government Code in requiring that the

land area of a local government unit must be spelled out in

metes and bounds, with technical descriptions.”31 (Emphasis

ours.)

The significance of accurately defining a local government

unit’s boundaries was stressed inCity of Pasig v. Commission

on Elections,32 which involved the consolidated petitions filed

by the parties herein, Pasig and Cainta, against two decisions

of the Commission on Elections (COMELEC) with respect to

the plebiscites scheduled by Pasig for the ratification of its

_______________

30 312 Phil. 259; 242 SCRA 211 (1995).

31 Id., at pp. 265-266; p. 217.

32 372 Phil. 864; 314 SCRA 179 (1999).55

VOL. 652, JUNE 15, 2011 55


creation of two new Barangays. Ruling on the contradictory

reliefs sought by Pasig and Cainta, this Court affirmed the

COMELEC decision to hold in abeyance the plebiscite to

ratify the creation of Barangay Karangalan; but set aside the

COMELEC’s other decision, and nullified the plebiscite thatratified the creation of Barangay Napicoin Pasig, until the

boundary dispute before the Antipolo RTC had been resolved.

The aforementioned case held as follows:

1.The Petition of the City of Pasig in G.R. No. 125646 is

DISMISSED for lack of merit; while

2.The Petition of the Municipality of Cainta in G.R. No.

128663 is GRANTED. The COMELEC Order in UND

No. 97-002, dated March 21, 1997, is SET ASIDE andthe plebiscite held on March 15, 1997 to ratify the

creation of Barangay Napico in the City of Pasig is

declared null and void. Plebiscite on the same is ordered

held in abeyance until after the courts settle with

finality the boundary dispute between the City of Pasig

and the Municipality of Cainta, in Civil Case No. 94-

3006.33







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Clearly therefore, the local government unit entitled to

collect real property taxes from Sta. Lucia must undoubtedly

show that the subject properties are situated within its

territorial jurisdiction; otherwise, it would be acting beyond

the powers vested to it by law.

Certificates of Title as

Conclusive Evidence of Location

While we fully agree that a certificate of title is conclusive

as to its ownership and location, this does not preclude the

filing of an action for the very purpose of attacking the

statements therein. In De Pedro v. Romasan Development

Corporation,34 we proclaimed that:

_______________

33 Id., at p. 872; p. 185.34 492 Phil. 643; 452 SCRA 564 (2005).

56



“We agree with the petitioners that, generally, a certificate

of title shall be conclusive as to all matters contained therein

and conclusive evidence of the ownership of the land referred

to therein. However, it bears stressing that while certificatesof title are indefeasible, unassailable and binding against the

whole world, including the government itself, they do not

create or vest title.They merely confirm or record title

already existing and vested. They cannot be used to protect a

usurper from the true owner, nor can they be used as a shield

for the commission of fraud; neither do they permit one to

enrich himself at the expense of other.”35

In Pioneer Insurance and Surety Corporation v. Heirs of

Vicente Coronado,36 we set aside the lower courts’ ruling that

the property subject of the case was not situated in the

location stated and described in the TCT, for lack of adequate

basis. Our decision was in line with the doctrine that the

TCT is conclusive evidence of ownership and location.

However, we refused to simply uphold the veracity of thedisputed TCT, and instead, we remanded the case back to the

trial court for the determination of the exact location of the

property seeing that it was the issue in the complaint filed

before it.37

In City Government of Tagaytay v. Guerrero,38 this Court

reprimanded the City of Tagaytay for levying taxes on a

property that was outside its territorial jurisdiction,viz.:

“In this case, it is basic that before the City of Tagaytay

may levy a certain property for sale due to tax delinquency,

the subject property should be under its territorial

jurisdiction. The city officials are expected to know such basic

principle of law.The failure of the city officials of

Tagaytay to verify if the property is within its

jurisdiction before levying taxes on the same

constitutes gross negligence.”

39

(Emphasis ours.)_______________

35 Id., at p. 655; p. 577.

36 G.R. No. 180357, August 4, 2009, 595 SCRA 263.

37 Id., at pp. 271-272.

38 G.R. Nos. 140743 & 140745, September 17, 2009, 600

SCRA 33.

39 Id., at p. 63.















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57

VOL. 652, JUNE 15, 2011 57


Although it is true that “Pasig” is the locality stated in the

TCTs of the subject properties, both Sta. Lucia and Cainta

aver that the metes and bounds of the subject properties, as

they are described in the TCTs, reveal that they are withinCainta’s boundaries.40 This only means that there may be a

conflict between the location as stated and the location as

technically described in the TCTs. Mere reliance therefore on

the face of the TCTs will not suffice as they can only be


the stated and described locations point to the same area.

The Antipolo RTC, wherein the boundary dispute case

between Pasig and Cainta is pending, would be able to bestdetermine once and for all the precise metes and bounds of

both Pasig’s and Cainta’s respective territorial jurisdictions.

The resolution of this dispute would necessarily ascertain the

extent and reach of each local government’s authority, a

prerequisite in the proper exercise of their powers, one of

which is the power of taxation. This was the conclusion

reached by this Court inCity of Pasig v. Commission on

Elections,41 and by the First Division of the Court of Appealsin CA-G.R. SP No. 52874. We do not see any reason why we

cannot adhere to the same logic and reasoning in this case.

The “Prejudicial Question” Debate

It would be unfair to hold Sta. Lucia liable again for real

property taxes it already paid simply because Pasig cannot

wait for its boundary dispute with Cainta to be decided.

Pasig has consistently argued that the boundary dispute case

is not a prejudicial question that would entail the suspension

of its collection case against Sta. Lucia. This was also its

argument inCity of Pasig v. Commission on Elections,42 when

it sought to nullify the COMELEC’s ruling to hold in

abeyance (until

_______________

40 Rollo, pp. 32-33, 191-192.41 Supra note 32.

42 Id.58



the settlement of the boundary dispute case), the plebiscite

that will ratify its creation of Barangay Karangalan. We

agreed with the COMELEC therein that the boundarydispute case presented a prejudicial questionand explained

our statement in this wise:

“To begin with, we agree with the position of the

COMELEC that Civil Case No. 94-3006 involving the

boundary dispute between the Municipality of Cainta and the

City of Pasig presents aprejudicial question which must

first be decided before plebiscites for the creation of the

proposedbarangays may be held.The City of Pasig argues that there is no prejudicial

question since the same contemplates a civil and criminal

action and does not come into play where both cases are civil,

as in the instant case.While this may be the general rule,

this Court has held inVidad v. RTC of Negros Oriental,

Br. 42, that, in the interest of good order, we can very

well suspend action on one case pending the final







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outcome of another case closely interrelated or linked

to the first.

In the case at bar, while the City of Pasig vigorously

claims that the areas covered by the

proposed Barangays Karangalan and Napico are within its

territory, it can not deny that portions of the same area are

included in the boundary dispute case pending before the

Regional Trial Court of Antipolo. Surely, whether the areas

in controversy shall be decided as within the territorial

jurisdiction of the Municipality of Cainta or the City of Pasig

has material bearing to the creation of the

proposed Barangays Karangalan and Napico. Indeed, a

requisite for the creation of abarangay is for its territorial

jurisdiction to be properly identified by metes and bounds or

by more or less permanent natural boundaries. Precisely

because territorial jurisdiction is an issue raised in the

pending civil case, until and unless such issue is resolved

with finality, to define the territorial jurisdiction of the

proposedbarangays would only be an exercise in futility. Not

only that, we would be paving the way for potentiallyultra

vires acts of suchbarangays. x x x.”43 (Emphases ours.)

_______________43 Id., at pp. 869-870.59

VOL. 652, JUNE 15, 2011 59


It is obvious from the foregoing, that the term “prejudicial

question,” as appearing in the cases involving the parties

herein, had been used loosely. Its usage had been more in

reference to its ordinary meaning, than to its strict legal

meaning under the Rules of Court.44Nevertheless, even

without the impact of the connotation derived from the term,

our own Rules of Court state that a trial court may control its

own proceedings according to its sound discretion:

POWERS AND DUTIES OF COURTS AND

JUDICIAL OFFICERS

Rule 135

“SEC.5. Inherent powers of courts.—Every court

shall have power:

x x x x

(g) To amend and control its process and orders so as to

make them comformable to law and justice.”

Furthermore, we have acknowledged and affirmed this

inherent power in our own decisions, to wit:

“The court in which an action is pending may, in the

exercise of a sound discretion, upon proper application for a

stay of that action, hold the action in abeyance to abide the

outcome of another pending in another court, especially

where the parties and the issues are the same, for there is

power inherent in every court to control the disposition of

causes ( sic) on its dockets with economy of time and effort for

itself, for counsel, and for litigants. Where the rights ofparties to the second action cannot be properly determined

until the questions raised in the first action are settled the

second action should be stayed.

The power to stay proceedings is incidental to the power

inherent in every court to control the disposition of the cases

on its dockets, considering its time and effort, that of counsel

and the litigants. But if proceedings must be stayed, it must



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be done in order to avoid multiplicity of suits and prevent

vexatious litigations, conflicting

_______________

44 REVISED RULES OF COURT, Rule 111, Section 5.60



judgments, confusion between litigants and courts. It bears

stressing that whether or not the RTC would suspend the

proceedings in the SECOND CASE is submitted to its sound

discretion.”45

In light of the foregoing, we hold that the Pasig RTC

should have held in abeyance the proceedings in Civil Case

No. 65420, in view of the fact that the outcome of theboundary dispute case before the Antipolo RTC will

undeniably affect both Pasig’s and Cainta’s rights. In fact, the

only reason Pasig had to file a tax collection case against Sta.

Lucia was not that Sta. Lucia refused to pay, but that Sta.

Lucia had already paid, albeit to another local government

unit. Evidently, had the territorial boundaries of the

contending local government units herein been delineated

with accuracy, then there would be no controversy at all.In the meantime, to avoid further animosity, Sta. Lucia is

directed to deposit thesucceeding real property taxes due

on the subject properties, in an escrow account with the Land

Bank of the Philippines.

WHEREFORE, the instant petition is GRANTED. The

June 30, 2004 Decision and the January 27, 2005 Resolution

of the Court of Appeals in CA-G.R. CV No. 69603 are SET

ASIDE. The City of Pasig and the Municipality of Cainta are

both directed to await the judgment in their boundary

dispute case (Civil Case No. 94-3006), pending before Branch

74 of the Regional Trial Court in Antipolo City, to determine

which local government unit is entitled to exercise its powers,

including the collection of real property taxes, on the

properties subject of the dispute. In the meantime, Sta. Lucia

Realty and Development, Inc. is directed to deposit thesucceeding real property taxes due on the lots and

improvements covered by TCT Nos. 532250, 598424, 599131,

92869, 92870 and 38457 in an escrow account with the Land

Bank of the Philippines.

_______________

45 Security Bank Corporation v. Judge Victorio, 505 Phil.

682, 699-700; 468 SCRA 609, 627-628 (2005).61

VOL. 652, JUNE 15, 2011 61


SO ORDERED.

Velasco, Jr.** (Actg. Chairperson), Bersamin,*** Del

Castilloand Perez, JJ., concur.

Petition granted, judgment and resolution set aside.

Note.—It is well settled that a Torrens title cannot becollaterally attacked. The issue on the validity of title,i.e.,

whether or not it was fraudulently issued, can only be raised

in an action expressly instituted for that purpose. (Urieta

Vda. de Aguilar vs. Alfaro, 623 SCRA 130 [2010])

——o0o——






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G.R. No. 180027.July 18, 2012.*

REPUBLIC OF THE PHILIPPINES,

petitioner,vs.MICHAEL C. SANTOS, VANNESSA C.

SANTOS, MICHELLE C. SANTOS and DELFIN SANTOS,

all represented by DELFIN C. SANTOS, Attorney-in-Fact,

respondents.

Civil Law; Regalian Doctrine; Words and Phrases; Jura

Regalia simply means that the State is the original proprietor

of all lands and, as such, is the general source of all private

titles.—We start our analysis by applying the principle

of Jura Regaliaor the RegalianDoctrine. Jura

Regalia simply means that the State is the original

_______________

* SECOND DIVISION.145

VOL. 677, JULY 18, 2012 145

Republic vs. Santos

proprietor of all lands and, as such, is the general source

of all private titles. Thus, pursuant to this principle, all

claims of private title to land, save those acquired from native

title, must be traced from some grant, whether express or

implied, from the State. Absent a clear showing that land had

been let into private ownership through theState’simprimatur, such land is presumed to belong to the

State.

Same; Property Registration Decree (P.D. No. 1529);

Public Land Act (C.A. No. 141); Section 14(1) of Presidential

Decree No. 1529 and Section 48(b) of Commonwealth Act No.

141 specify identical requirements for the judicial

confirmation of “imperfect” titles.—Section 14(1) of

Presidential Decree No. 1529 refers to the original

registration of “imperfect” titles to public land acquired under

Section 11(4) in relation to Section 48(b) of Commonwealth

Act No. 141, or the Public Land Act, as amended. Section

14(1) of Presidential Decree No. 1529 and Section 48(b) of

Commonwealth Act No. 141 specify identical requirements

for the judicial confirmation of “imperfect” titles, to wit: 1.

That the subject land forms part of the alienable anddisposable lands of the public domain; 2. That the applicants,

by themselves or through their predecessors-in-interest, have

been in open, continuous, exclusive and notorious possession

and occupation of the subject land under abona fide claim of

ownership, and; 3. That such possession and occupation must

besince June 12, 1945 or earlier.

Same; Same; Section 14(2) of Presidential Decree No.

1529 sanctions the original registration of lands acquired by

prescription “under the provisions of existing law.”—Section

14(2) of Presidential Decree No. 1529 sanctions the original

registration of lands acquired by prescription “under the

provisions of existing law.” In the seminal case of Heirs

of Mario Malabanan v. Republic, 587 SCRA 172 (2009),

this Court clarified that the “ existing law” mentioned in the

subject provision refers to no other than Republic Act No.

386, or theCivil Code of the Philippines.

PETITION for review on certiorari of a decision of the Court

of Appeals.


Office of the Solicitor Generalfor petitioner.146146 SUPREME COURT REPORTS ANNOTATED

Republic vs. Santos

http://www.central.com.ph/sfsreader/session/0000014ff5950488674fa163000a0094004f00ee/p/AMJ458/?username=Guest#ftn1

http://192.168.1.224/reader/author/document/16235/?username=akashigp#body_ftn1



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Dime, Labastilla, De Leon, Tayagand Eviota for

respondents.

PEREZ, J.:

For review1 is the Decision2 dated 9 October 2007 of the

Court of Appeals in CA-G.R. CV No. 86300. In the said

decision, the Court of Appeals Affirmedin toto the 14

February 2005 ruling3 of the Regional Trial Court (RTC),Branch 15, of Naic, Cavite in LRC Case No. NC-2002-1292.

The dispositive portion of the Court of Appeals’ decision

accordingly reads:

“WHEREFORE, the instant appeal is herebyDENIED.

The assailed decision dated February 14, 2005 of the

Regional Trial Court (Branch 15) in Naic, Cavite, in LRC

Case No. NC-2002-1292 is AFFIRMEDin toto. No costs.”4

The aforementioned ruling of the RTC granted the

respondents’ Application for Original Registration of a parcel

of land under Presidential Decree No. 1529.

The antecedents are as follows:

Prelude

In October 1997, the respondents purchased three (3)

parcels of unregistered land situated in BarangayCarasuchi,Indang, Cavite.5 The 3 parcels of land were previously owned

by oneGenerosa Asuncion (Generosa), oneTeresita Sernal

_______________

1 Via a Petition for Review onCertiorariunder Rule 45 of

the Rules of Court.

2 Penned by Associate Justice Jose L. Sabio, Jr. with

Associate Justices Noel G. Tijam and Myrna Dimaranan

Vidal, concurring. Rollo, pp. 21-35.

3 Penned by Judge Lerio C. Castigador. Id., at pp. 123-129.

4 Id., at p. 34.

5 See Deeds of Absolute Sale. Records, pp. 181-183.147

VOL. 677, JULY 18, 2012 147

Republic vs. Santos

(Teresita) and by the spouses Jimmy and Imelda Antona,respectively.6

Sometime after the said purchase, the respondents caused

the survey and consolidation of the parcels of land.

Hence, per the consolidation/subdivision planCcs-04-003949-

D, the 3 parcels were consolidated into a single lot—“Lot 3”—

with a determined total area of nine thousand five hundred

seventy-seven (9,577) square meters.7

The Application for Land Registration

On 12 March 2002, the respondents filed with the RTC an

Application8 for Original Registration ofLot 3. Their

application was docketed as LRC Case No. NC-2002-1292.

On the same day, the RTC issued anOrder9 setting the

application for initial hearing and directing the satisfaction

of jurisdictional requirements pursuant to Section 23 of

Presidential Decree No. 1529. The sameOrder, however, also

required the Department of Environment and Natural

Resources (DENR) to submit areporton the status of Lot 3.10

On 13 March 2002, the DENR Calabarzon Office

submitted its Report11 to the RTC. The Report relates that

the area covered byLot 3 “falls within the Alienable and

Disposable Land, Project No. 13 of Indang, Cavite per

LC

12

3013 certified on March 15, 1982.” Later, the




































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respondents submitted aCertification13 from the DENR-

Community Environment and Natural Resources Office

(CENRO) attesting that, indeed,

_______________

6 Id.

7 Id., at p. 9.

8 Id., at pp. 1-5.9 Id., at p. 21.

10 Id.

11 Id., at p. 59.

12 Stands for “Land Classification Map.”

13 Dated 30 January 2002. Rollo, p. 48.148


Republic vs. SantosLot 3 was classified as an “ Alienable or Disposable Land” as

of 15 March 1982.

After fulfillment of the jurisdictional requirements, the

government, through the Office of the Solicitor General, filed

thelone opposition14 to the respondents’ application on 13

May 2003.

The Claim, Evidence and Opposition

The respondents allege that their predecessors-in-

interesti.e., the previous owners of the parcels of land

making upLot 3, have been in “continuous, uninterrupted,

open, public [and] adverse” possession of the said parcels

“ since time immemorial.”15 It is by virtue of such lengthy

possession, tacked with their own, that respondents now

hinge their claim of title overLot 3.

During trial on the merits, the respondents presented,

among others, the testimonies of Generosa16 and the

representatives of their two (2) other predecessors-in-

interest.17 The said witnesses testified that they have been in

possession of their respective parcels of land for over thirty

(30) years prior to the purchase thereof by the respondents in

1997.18 The witnesses also confirmed that neither they northe interest they represent, have any objection to the

registration ofLot 3 in favor of the respondents.19

_______________

14 Records, pp. 66-68.

15 Id., at p. 3.

16 TSN, 10 February 2004, pp. 12-14-A.

17 Teresita Sernal was represented by her son, Charlie

Sernal. TSN, 10 February 2004, pp. 14-A-16; The Spouses

Jimmy and Imelda Antona were represented by Gregorio

Sernal. TSN, 10 February 2004, pp. 17-20.

18 Id., at pp. 13, 15 and 18.

19 Id., at pp. 13-14-A, 14-B and 19.149

VOL. 677, JULY 18, 2012 149

Republic vs. Santos

In addition, Generosa affirmed in open court a Joint Affidavit20 she executed with Teresita.21 In it, Generosa

revealed that the portions ofLot 3 previously pertaining to

her and Teresita were once owned by her father, Mr. Valentin

Sernal (Valentin) and that the latter had “continuously,

openly and peacefully occupied and tilled asabsolute owner”

such lands even “before the outbreak of World War 2.”22


















































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To substantiate the above testimonies, the respondents

also presented variousTax Declarations23 covering certain

areas ofLot 3—the earliest of which dates back to 1948 and

covers the portions of the subject lot previously belonging to

Generosa and Teresita.24

On the other hand, the government insists thatLot 3still

forms part of the public domain and, hence, not subject to

private acquisition and registration. The government,

however, presented no further evidence to controvert the

claim of the respondents.25

The Decision of the RTC and the Court of Appeals

On 14 February 2005, the RTC rendered a ruling granting

the respondents’ Application for Original Registration ofLot3. The RTC thus decreed:

“WHEREFORE, in view of the foregoing, this Court

confirming its previous Order of general default, decrees and

adjudges Lot 3 (Lot 1755) Ccs-04-003949-D of Indang,

Cadastre, with a total area ofNINE THOUSAND FIVE

HUNDRED FIFTY-SEVEN (9,557) square meters and its

technical description as above-described and situated in Brgy.

[Carasuchi], Indang, Cavite, pursuant to the provi-_______________

20 Records, pp. 130-131.

21 Testimony of Generosa. TSN, 10 February 2004, p. 13.

22 Records, p. 130.

23 Id., at pp. 107-128.

24 Id., at p. 107.

25 See Manifestation and Comment. Id., at p. 191.

150


Republic vs. Santos

sions of Act 496 as amended by P.D. No. 1529, it is hereby

decreed and adjudged to be confirmed and registered in the

name of herein applicantsMICHAEL C. SANTOS,

VANESSA C. SANTOS, MICHELLE C. SANTOS, and

DELFIN C. SANTOS, all residing at No. 60 RockvilleSubdivision, Novaliches, Quezon City.

Once this decision has become final, let the corresponding

decree of registration be issued by the Administrator, Land

Registration Authority.”26

The government promptly appealed the ruling of the RTC

to the Court of Appeals.27 As already mentioned earlier, the

Court of Appeals affirmed the RTC’s decision on appeal.

Hence, this petition.28 The sole issue in this appeal is whether the Court of

Appeals erred in affirming the RTC ruling granting original

registration ofLot 3 in favor of the respondents.

The government would have Us answer in the affirmative.

It argues that the respondents have failed to offer evidence

sufficient to establish its title overLot 3and, therefore, were

unable to rebut the Regalianpresumption in favor of the

State.29

The government urges this Court to consider the DENR

Calabarzon Office Report as well as the DENR-

CENROCertification, both of which clearly state thatLot

3 only became “ Alienable or Disposable Land” on 15 March

1982.30 The government posits that sinceLot 3 was only

classified as alienable and disposable on 15 March 1982, the

period of prescription against the State should also






























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commence to run only from such date.31 Thus, the

respondents’ 12 March 2002 applica-

_______________

26 Rollo, pp. 128-129.

27 Via Notice of Appeal. Records, pp. 205-206.

28 Rollo, pp. 1-19.

29 Id., at p. 14.30 Id., at pp. 14-16.

31 Id.151

VOL. 677, JULY 18, 2012 151

Republic vs. Santos

tion—filed nearly twenty (20) years after the said

classification—is still premature, as it does not meet the

statutory period required in order for extraordinaryprescription to set in.32

Our Ruling

We grant the petition.

Jura Regalia and the Property Registration Decree

We start our analysis by applying the principle of Jura

Regaliaor the RegalianDoctrine.33 Jura Regalia simply

means that the State is the original proprietor of all lands

and, as such, is the general source of all private titles.34

Thus, pursuant to this principle, all claims of private title to

land, save

_______________

32 Id.

33 The principle is presently enshrined in Section 2,

Article XII of the Constitution, thus:

Section2.All lands of the public domain, waters,

minerals, coal, petroleum, and other mineral oils, all

forces of potential energy, fisheries, forests or timber,

wildlife, flora and fauna, and other natural resources

are owned by the State. With the exception of agricultural

lands, all other natural resources shall not be alienated. The

exploration, development, and utilization of natural resources

shall be under the full control and supervision of the State.

The State may directly undertake such activities, or it may

enter into co-production, joint venture, or production-sharing

agreements with Filipino citizens, or corporations or

associations at least sixty per centum of whose capital is

owned by such citizens. Such agreements may be for a period

not exceeding twenty-five years, renewable for not more than

twenty-five years, and under such terms and conditions as

may be provided by law. In cases of water rights for

irrigation, water supply fisheries, or industrial uses other

than the development of water power, beneficial use may be

the measure and limit of the grant. (Emphasis supplied)

34 Seville v. National Development Company, 403 Phil.

843, 854-855; 351 SCRA 112, 120 (2001).152


Republic vs. Santos

those acquired from native title,35 must be traced from some

grant, whether express or implied, from the State.36 Absent a

clear showing that land had been let into private ownership

through the State’simprimatur, such land is presumed to

belong to the State.37



































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Being an unregistered land,Lot 3 is therefore presumed

as land belonging to the State. It is basic that those who seek

the entry of such land into the Torrens system of registration

must first establish that it has acquired valid title thereto as

against the State, in accordance with law.

In this connection, original registration of title to land is

allowed by Section 14 of Presidential Decree No. 1529, orotherwise known as the Property Registration Decree. The

said section provides:

“Section 14. Who may apply.—The following persons

may file in the proper Court of First Instance an application

for registration of title to land, whether personally or through

their duly authorized representatives:

(1) Those who by themselves or through their

predecessors-in-interest have been in open,

continuous, exclusive and notorious possession

and occupation of alienable and disposable lands

of the public domain under abona fide claim of

ownership since June 12, 1945, or earlier.

(2) Those who have acquired ownership of

private lands by prescription under the

provisions of existing laws._______________

35 Separate Opinion of then Associate Justice Reynato S.

Puno inCruz v. Secretary of Environment and Natural

Resources, 400 Phil. 904, 960; 347 SCRA 128, 199 (2000).

36 Agcaoili, Property Registration Decree and Related

Laws (Land Titles and Deeds), 2006, p. 2.

37 Republic v. Register of Deeds of Quezon, G.R. No.

73974, 31 May 1995, 244 SCRA 537, 546; Aranda v. Republic,

G.R. No. 172331, 24 August 2011, 656 SCRA 140, 146-147.153

VOL. 677, JULY 18, 2012 153

Republic vs. Santos

(3) Those who have acquired ownership of privatelands or abandoned river beds by right of accession or

accretion under the existing laws.

(4) Those who have acquired ownership of land in any

other manner provided for by law.” (Emphasis supplied)

Basing from the allegations of the respondents in their

application for land registration and subsequent pleadings, it

appears that they seek the registration ofLot 3 under either

thefirst or thesecond paragraph of the quoted section.However, after perusing the records of this case, as well as

the laws and jurisprudence relevant thereto, We find

thatneither justifies registration in favor of the respondents.

Section 14(1) of Presidential Decree No. 1529

Section 14(1) of Presidential Decree No. 1529 refers to the

original registration of “imperfect” titles to public land

acquired under Section 11(4) in relation to Section 48(b) of

Commonwealth Act No. 141, or the Public Land Act, asamended.38 Section 14(1) of Presidential Decree No. 1529

and

_______________

38 Section 11(4) of Commonwealth Act No. 141 authorizes

the disposition of public agricultural landsvia “confirmation

of imperfect or incomplete titles.” Section 48(b) of the same

law, on the other hand, lays out the requisites for the judicial

confirmation of imperfect titles, to wit:











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Section48. The following described citizens of the

Philippines, occupying lands of the public domain or claiming

to own any such lands or an interest therein, but whose titles

have not been perfected or completed, may apply to the Court

of First Instance of the province where the land is located for

confirmation of their claims and the issuance of a certificate

of title therefor, under the Land Registration Act, to wit:x x x x.

(b) Those who by themselves or through their

predecessors in interest have been in open,

continuous, exclusive, and notorious possession and

occupation of agricultural

154


Republic vs. Santos

Section 48(b) of Commonwealth Act No. 141 specify identical

requirements for the judicial confirmation of “imperfect”

titles, to wit:39

1.That the subject land forms part of the alienable and

disposable lands of the public domain;

2.That the applicants, by themselves or through their

predecessors-in-interest, have been in open, continuous,

exclusive and notorious possession and occupation of thesubject land under abona fide claim of ownership; and,

3.That such possession and occupation must besince

June 12, 1945 or earlier.

In this case, the respondents were not able to satisfy

thethird requisite,i.e., that the respondents failed to

establish that they or their predecessors-in-interest, have

been in possession and occupation ofLot 3 “ since June 12,

1945 or earlier.” An examination of the evidence on record

reveals so:

First. The testimonies of respondents’ predecessors-in-

interest and/or their representatives were patently deficient

on this point. None of them testified about possession and

occupation of the subject parcels of land dating back to 12

_______________lands of the public domain, under abona fide claim

of acquisition or ownership, for at least thirty years

immediately preceding the filing of the application for

confirmation of title except when prevented by war

or force majeure. These shall be conclusively presumed

to have performed all the conditions essential to a

Government grant and shall be entitled to a certificateof title under the provisions of this chapter.

x x x x.

Presidential Decree No. 1073 further amended Section

48(b) of Commonwealth Act No. 141, by fixing the date of

possession and occupation required under the latter to “June

12, 1945 or earlier.” (Emphasis supplied)

39 Republic v. East Silverlane Realty Development

Corporation, G.R. No. 186961, 20 February 2012, 666 SCRA401.155

VOL. 677, JULY 18, 2012 155

Republic vs. Santos

June 1945 or earlier. Rather, the said witnesses merely

related that they have been in possession of their lands “ for

over thirty years” prior to the purchase thereof by

respondents in 1997.40








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Neither can the affirmation of Generosa of the Joint

Affidavit be considered as sufficient to prove compliance with

the third requisite. The said Joint Affidavit merely contains

ageneral claim that Valentin had “continuously, openly and

peacefully occupied and tilled as absolute owner” the parcels

of Generosa and Teresita even “before the outbreak of World

War 2”—which lacks specificity and is unsupported by anyother evidence. In Republic v. East Silverlane Realty

Development Corporation,41 this Court dismissed a

similar unsubstantiated claim of possession as a “mere

conclusion of law” that is “unavailing and cannot suffice:”

“Moreover, Vicente Oco did not testify as to what specific acts

of dominion or ownership were performed by the respondent’s

predecessors-in-interest and if indeed they did. He merely

made ageneral claim that they came into possession before

World War II, which is amere conclusion of law and not

factual proof of possession, and therefore unavailing

and cannot suffice.42 Evidence of this nature should

have been received with suspicion, if not dismissed as

tenuous and unreliable.”

Second.The supporting tax declarations presented by

the respondents also fall short of proving possession since 12June 1945 or earlier. The earliest declaration submitted by

the respondents,i.e., Tax Declaration No. 9412,43 was

issued only in 1948 and merely covers the portion ofLot

3previously pertaining to Generosa and Teresita. Much

worse,

_______________

40 TSN, 10 February 2004, pp. 13, 15 and 18.

41 Supra note 39.

42 The Director, Lands Mgt. Bureau v. Court of Appeals,

381 Phil. 761, 772; 324 SCRA 757, 765 (2000).

43 Records, p. 107.156


Republic vs. Santos

Tax Declaration No. 9412 shows no declared improvementson such portion ofLot 3 as of 1948—posing an apparent

contradiction to the claims of Generosa and Teresita in

their Joint Affidavit.

Indeed, the evidence presented by the respondents does

not qualify as the “well-nigh incontrovertible” kind that is

required to prove title thru possession and occupation of

public land since 12 June 1945 or earlier.44 Clearly,

respondents are not entitled to registration under Section14(1) of Presidential Decree No. 1529.

Section 14(2) of Presidential Decree No. 1529

The respondents, however, make an alternative plea for

registration, this time, under Section 14(2) of Presidential

Decree No. 1529. Notwithstanding their inability to comply

with Section 14(1) of Presidential Decree No. 1529, the

respondents claim that they were at least able to establish

possession and occupation ofLot 3 for a sufficient number ofyears so as to acquire title over the sameviaprescription.45

As earlier intimated, the government counters the

respondents’ alternative plea by arguing that the statutory

period required in order for extraordinary prescription to set

in was not met in this case.46 The government cites the

DENR Calabarzon Office Report as well as the DENR-

CENROCertification, both of which state thatLot 3 only

























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became “ Alienable or Disposable Land” on 15 March 1982.47

It posits that the period of prescription against the State

should also commence to run

_______________

44 Santiago v. De los Santos, G.R. No. L-20241, 22

November 1974, 61 SCRA 146, 152; Director of Lands v.

Buyco, G.R. No. 91189, 27 November 1992, 216 SCRA 78,94;The Director, Lands Mgt. Bureau v. Court of

Appeals, supra note 42 at p. 772; p. 765.

45 Comment. Rollo, pp. 174-187.

46 Id., at pp. 14-16.

47 Id.157

VOL. 677, JULY 18, 2012 157

Republic vs. Santosonly from such date.48 Hence, the government concludes, the

respondents’ 12 March 2002 application is still premature.49

We find the contention of the government inaccurate but

nevertheless deny registration ofLot 3 under Section 14(2) of

Presidential Decree No. 1529.

Section 14(2) of Presidential Decree No. 1529 sanctions

the original registration of lands acquired by prescription

“under the provisions of existing law.” In the seminal caseof Heirs of Mario Malabanan v. Republic,50 this Court

clarified that the “ existing law” mentioned in the subject

provision refers to no other than Republic Act No. 386, or

theCivil Code of the Philippines.

Malabanan acknowledged that only lands of the public

domain that are “ patrimonial in character” are “ susceptible

to acquisitive prescription” and, hence, eligible for

registration under Section 14(2) of Presidential Decree No.

1529.51 Applying the pertinent provisions of the Civil

Code,52 Malabanan further elucidated that in order for

public land to be considered as patrimonial “there must be

an express declaration by the State that the public dominion

property is no longer intended for public service or the

development of the national wealth or that the property has

been converted into patrimonial.”53 Until then, the period of

acquisitive prescription against the State will not commence

to run.54

The requirement of an “ express declaration” contemplated

by Malabanan isseparate and distinctfrom the mere

_______________

48 Id.

49 Id.

50 G.R. No. 179987, 29 April 2009, 587 SCRA 172.

51 Id., at p. 198.

52 Article 422 in relation to Article 420(2) and Article 421

of the Civil Code.

53 Supra note 50 at p. 203.

54 Id.158


Republic vs. Santos

classification of public land as alienable and disposable.55 On

this point, Malabanan was reiterated by the recent case

of Republic v. Rizalvo, Jr.56

_______________

55 The discussion of Malabanan on this point is

instructive:













































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Let us now explore the effects under the Civil Code of a

declaration by the President or any duly authorized

government officer of alienability and disposability of lands of

the public domain.Would such lands so declared

alienable and disposable be converted, under the Civil

Code, from property of the public dominion into

patrimonial property? After all, by connotative definition,

alienable and disposable lands may be the object of the

commerce of man; Article 1113 provides that all things

within the commerce of man are susceptible to prescription;

and the same provision further provides that patrimonial

property of the State may be acquired by prescription.

Nonetheless, Article 422 of the Civil Code states that

“[p]roperty of public dominion, when no longer

intended for public use or for public service, shall

form part of the patrimonial property of the State.” It

is this provision that controls how public dominion

property may be converted into patrimonial property

susceptible to acquisition by prescription. After all,

Article 420 (2) makes clear that those property “which

belong to the State, without being for public use, and are

intended for some public service or for the development of thenational wealth” are public dominion property.For as long

as the property belongs to the State, although already

classified as alienable or disposable, it remains

property of the public dominion if when it is “intended

for some public service or for the development of the

national wealth.” Id., at pp. 202-203. (Emphasis supplied)

Malabanan then laid out the rule:

Accordingly, there must be an express declaration

by the State that the public dominion property is no

longer intended for public service or the development

of the national wealth or that the property has been

converted into patrimonial. Without such express

declaration, the property, even if classified as

alienable or disposable, remains property of the public

dominion, pursuant to Article 420(2), and thus

159

VOL. 677, JULY 18, 2012 159

Republic vs. Santos

In this case, the respondents were not able to present any

“ express declaration” from the State, attesting to the

patrimonial character ofLot 3. To put it bluntly, the

respondents were not able to prove that acquisitive

prescription has begun to run against the State, much less

that they have acquired title toLot 3 by virtue thereof. As

jurisprudence tells us, a mere certification or report

classifying the subject land as alienable and disposable is not

sufficient.57 We are, therefore, left with the unfortunate but

necessary verdict that the respondents are not entitled to the

registration under Section 14(2) or Presidential Decree No.

1529.

There being no compliance with either the first or

second paragraph of Section 14 of Presidential Decree

No. 1529, the Regalianpresumption stands and must

be enforced in this case. We accordingly overturn the

decisions or the RTC and the Court of Appeals for not being

supported by the evidence at hand.



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WHEREFORE, the instant petition is GRANTED. The 9

October 2007 Decision of the Court of Appeals in CA-G.R. CV

No. 86300 affirming the 14 February 2005 Decision of the

Regional Trial Court, Branch 15, of Naic, Cavite in LRC Case

No. NC-2002-1292 is hereby REVERSED and SET ASIDE.

The respondents’ application for registration is, accordingly,

DENIED._______________

incapable of acquisition by prescription. It is only

when such alienable and disposable lands are

expressly declared by the State to be no longer

intended for public service or for the development of

the national wealth that the period of acquisitive

prescription can begin to run. Such declaration shall

be in the form of a law duly enacted by Congress or a

Presidential Proclamation in cases where the

President is duly authorized by law. Id., at p. 203.

(Underscoring supplied)

56 G.R. No. 172011, 7 March 2011, 644 SCRA 516.

57 Id., at p. 526. Heirs of Mario Malabanan v.

Republic, supra note 50 at p. 203.


Republic vs. Santos

Costs against respondents.

SO ORDERED.

Carpio (Chairperson), Brion, Sereno and Reyes, JJ.,

concur.

Petition granted, judgment reversed and set aside.

Notes.—Under the Regalian doctrine, all lands of the

public domain belong to the State and the latter is the source

of any asserted right to ownership in land—the State

presumably owns all lands not otherwise appearing to be

clearly within private ownership. ( Republic vs. Roche, 624

SCRA 116 [2010])

All lands not appearing to be clearly within privateownership are presumed to belong to the State; The burden

of proof in overcoming the presumption of State ownership of

the lands of the public domain is on the person applying for

registration (or claiming ownership), who must prove that the

land subject of the application is alienable or disposable.

(Valiao vs. Republic, 661 SCRA 299 [2011])

——o0o——


G.R. No. 171726.February 23, 2011.*

VICENTE YU CHANG AND SOLEDAD YU CHANG,

petitioners,vs. REPUBLIC OF THE PHILIPPINES,

respondent.

Land Registration; Requisites for the approval of an

application for registration of title; Applicants must overcome

the presumption that the land they are applying for is part of

the public domain and that they have an interest therein

sufficient to warrant registration in their names arising from

an imperfect title.—Under this provision, in order that

petitioners’ application for registration of title may be

granted, they must first establish the following: (1) that the

b l df fh d bl d l bll d b k l h f “F l d”d



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subject land forms part of the disposable and alienable lands

of the public domain and (2) that they have been in open,

continuous, exclusive and notorious possession and

occupation of the same under abona fide claim of ownership,

since June 12, 1945, or earlier. Applicants must overcome the

presumption that the land they are applying for

_______________

** In lieu of Justice Teresita J. Leonardo-De Castro per

Special Order No. 947 dated February 11, 2011.

* THIRD DIVISION.111

VOL. 644, FEBRUARY 23, 2011 1

11

Yu Chang vs. Republic

is part of the public domain and that they have an

interest therein sufficient to warrant registration in their

names arising from an imperfect title.

Same; The classification of land is descriptive of its legal

nature or status and does not have to be descriptive of what

the land actually looks like; Unless and until the land

classified as forest land is released in an official proclamation

to that effect so that it may form part of the disposable

agricultural lands of the public domain, the rules on

confirmation of imperfect title do not apply.—As clarified by

this Court in Heirs of Jose Amunategui v. Director of Forestry,

126 SCRA 69 (1983), a forested area classified as forest land

of the public domain does not lose such classification simply

because loggers or settlers may have stripped it of its forest

cover. Parcels of land classified as forest land may actually be

covered with grass or planted with crops

by kaingincultivators or other farmers. “Forest lands” do not

have to be on mountains or in out-of-the-way places. The

classification of land is descriptive of its legal nature or

status and does not have to be descriptive of what the land

actually looks like. Unless and until the land classified as

forest land is released in an official proclamation to that

effect so that it may form part of the disposable agriculturallands of the public domain, the rules on confirmation of

imperfect title do not apply.

Same; Petitioner’s possession of the subject forest land

prior to the date when it was classified as alienable and

disposable is inconsequential and should be excluded from

the computation of the period of possession; The

adverse possession which can be the basis of a grant of title in

confirmation of imperfect title cases cannot commence until

after forest land has been declared and alienable.—Moreover,

during the hearing of petitioners’ application, the Republic

presented a Report of Rene Gomez, Land

Investigator/Inspector, CENRO No. V-2-3, which disclosed

that the lots applied for by the petitioners were classified as

alienable and disposable under Project No. 9-E, L.C. Map No.

3393 and released and certified as such only on October 30,

1986. A Compliance dated January 19, 1999 submitted by

OIC-CENR Officer Joaquin Ed A. Guerrero to the trial court

also stated that Lots. 2199 and 2200 of Cad. 291

were “verified to be within Alienable and Disposable area

under Project No. 9-E, L.C. Map No. 3393, as certified on

October 30, 1986 by the then Bureau of Forestry”.Evidently,

therefore, the subject lots were declared alienable112

1 SUPREME COURT REPORTS ANNOTATED fi ti f i f t i lt titl l ifth

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1

12

SUPREME COURT REPORTS ANNOTATED


and disposable only on October 30, 1986. Prior to that

period, the same could not be the subject of confirmation of

imperfect title. Petitioners’ possession of the subject forest

land prior to the date when it was classified as alienable anddisposable is inconsequential and should be excluded from

the computation of the period of possession. To reiterate, it is

well settled that possession of forest land, prior to its

classification as alienable and disposable land, is ineffective

since such possession may not be considered as possession in

the concept of owner. The adverse possession which can be

the basis of a grant of title in confirmation of imperfect title

cases cannot commence until after forest land has beendeclared and alienable.

BRION, J., Separate Opinion:

Land Registration; The mode of acquisition recognized by

Section 48(b) of the Public Land Act and made registrable

under Section 14(1) of the Property Registration Decree is

through confirmation of an imperfect or incomplete title.—

Section 48(b) of the Public Land Act is the law that

recognizes the substantive right of a possessor and occupantof an alienable and disposable land of the public domain,

while Section 14(1) of the Property Registration Decree

recognizes this right by authorizing its registration, thus

bringing the land within the coverage of the Torrens System.

The mode of acquisition recognized by Section 48(b) of the

Public Land Act and made registrable under Section 14(1) of

the Property Registration Decree is throughconfirmation of

an imperfect or incomplete title. Both provisions allow

confirmation of an imperfect or incomplete title only if the

claimant has been in open, continuous, exclusive and

notorious possession and occupation of alienable and

disposable lands of the public domainsince June 12, 1945

or earlier.

Same; Even if possession of the alienable public land

commenced on a date later than June 12, 1945, and such

possession being open, continuous and exclusive, then the

possessor may have the right to register the land by virtue of

Section 14(2) of the Property Registration Decree; This

recourse is open only to private lands acquired through

prescription.—Section 48(b) of the Public Land Act and

Section 14(1) of the Property Registration Decree, however,

are not the only open avenues to register title over the land.

“[E]ven if possession of the alienable public land commencedon a date later than June 12, 1945, and such possession being

open, continuous and113

VOL. 644, FEBRUARY 23, 2011 1

13


exclusive, then thepossessor may have the right to

register the land by virtue of Section 14(2) of theProperty Registration Decree.” x x x But this recourse is

open only toprivate lands acquired through

prescription; the provision thus calls for the application of

Civil Code concepts of private property and prescription.

Same; Prescription is a mode of acquiring ownership and

other real rights over immovable property through the lapse of

time in the manner and under the conditions laid down by

law.—Prescription is a mode of acquiring ownership and

th liht i bl tth hth l Y Ch R bli

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other real rights over immovable property through the lapse

of time in the manner and under the conditions laid down by

law. Acquisitive prescription of dominion and other real

rights may be ordinary and extraordinary. If the applicant’s

possession of the immovable property is coupled with good

faith and just title, the lapse of 10 years is sufficient;

otherwise, the law requires 30 years of uninterrupted,adverse possession of the property.

Same; The 10 or 30-year period of prescription that

Section 14(2) of the Property Registration Decree and the Civil

Code speak of commences to run only from the time the land,

separately from being declared alienable and disposable, is

declared as patrimonial property of the State, i.e., property

held by the State and its private capacity.—Thus, the10 or

30-year period of prescription that Section 14(2) of the

Property Registration Decree and the Civil Code

speak of commences to run only from the time the

land, separately from being declared alienable and

disposable, is declared as patrimonial property of the

State, i.e., property held by the State and its private

capacity.

PETITION for review on certiorari of the decision andresolution of the Court of Appeals.


VILLARAMA, JR. J.:

This petition for review oncertiorariunder Rule 45 of

the 1997 Rules of Civil Procedure, as amended, assails the

Deci-114



sion1 dated August 26, 2005 and the Resolution2 dated

February 13, 2006 of the Court of Appeals (CA) in CA-G.R.

CV No. 67430. The CA reversed and set aside the April 28,

2000 Decision3 of the Regional Trial Court of Pili, Camarines

Sur, Branch 31, in LRC No. P-115, LRA Rec. No. N-68012,

which granted petitioners’ application for registration of titleover two parcels of land, denominated as Lots 2199 and 2200

of Cad. 291, Pili Cadastre.

The antecedent facts, as culled from the records, are as

follows:

On March 22, 1949, petitioners’ father, L. Yu Chang4and

the Municipality of Pili, Camarines Sur, through its then

Mayor, Justo Casuncad, executed an Agreement to Exchange

Real Property5 wherein the former assigned and transferredto the Municipality of Pili his 400-square-meter residential

lot in Barrio San Roque, Pili, Camarines Sur, in exchange for

a 400-square-meter piece of land located in San Juan, Pili.

Thereafter, L. Yu Chang and his family took possession of the

property thus obtained and erected a residential house and a

gasoline station thereon. He also declared the property in his

name under Tax Declaration No. 017946 and 017957 and paid

the real property taxes thereon as evidenced by twenty-eight(28) official receipts from February 21, 1951 up to March 10,

1976. When L. Yu Chang died on September 30, 1976, his

_______________

1 Rollo, pp. 49-60. Penned by Associate Justice Magdangal

M. De Leon, with Associate Justices Salvador J. Valdez, Jr.

and Mariano C. Del Castillo (now a Member of this Court),

concurring.

2Id t 6466P db A itJ ti M d l 9Lt2199 d ibd fll “A lfl d(Lt







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2 Id., at pp. 64-66. Penned by Associate Justice Magdangal

M. De Leon, with Associate Justices Jose L. Sabio, Jr. and

Mariano C. Del Castillo (now a Member of this Court),

concurring.

3 Id., at pp. 176-182. Penned by Judge Martin P. Badong,

Jr.

4 “Leoncio Yu Chang” in other parts of the records.5 Records, pp. 9-11.

6 Exh. “M”, Additional Exhibits for the Petitioners.

7 Exh. “M-1”,id.115

VOL. 644, FEBRUARY 23, 2011 115


wife, Donata Sta. Ana and his seven children inherited the

property and succeeded in the possession of the property.On March 1, 1978, a Deed of Transfer and Renunciation8of

their rights over the property was executed by L. Yu Chang’s

five children, Rafaela, Catalina, Flaviana, Esperanza, and

Antonio, in favor of herein petitioners. After the transfer,

petitioners had the subject property surveyed and subdivided

into two lots, Lot 21999 and Lot 220010 of Plan SWO-05-

000888, Pili Cadastre. Petitioners also declared the lots in

their names for taxation purposes as shown in TaxDeclaration No. 0263311 and paid the real property taxes

thereon.

On February 21, 1997, petitioner Soledad Yu Chang, for

herself and in representation of her brother and co-petitioner,

Vicente Yu Chang, filed a petition12 for registration of title

_______________

8 Records, pp. 12-13.

9 Lot 2199 was described as follows: “A parcel of land (Lot-

2199 of Plan SWO-05-000888 Cad. 291, Pili Cadastre),

situated in the Poblacion, Municipality of Pili, Province of

Camarines Sur, Island of Luzon. Bounded on the SW., along

line 1-2 by Lot 2184 on the NW., along line 2-3 by Lot 2198,

all of Cad. 291, Pili Cadastre, on the NE., along line 3-4 by

National Road (20.00m. wide) and on the SE., along line 4-1by Lot 2200, SWO-05-000888. Containing an area of ONE

HUNDRED THIRTY[-]THREE (133) square meters. x x x”

(Records, p. 2.)

10 Lot 2200 was described as follows: “A parcel of land

(Lot-2200 of Plan SWO-05-000888, Cad. 291, Pili Cadastre),

situated in the Poblacion, Municipality of Pili, Province of

Camarines Sur, Island of Luzon. Bounded on the NW., along

line 1-2 by Lot 2199, SWO-05-000888, on the NE., along line2-3 by Lot 2394, beyond by National Road (20.00 m. wide) on

the SE., along line 3-4 by Lot 1, Cad. 291, Pili Cadastre, (Lot

2, PSU-48590 Port. Accepted), and on the SW., along line 4-1

by Lot 2184, Cad-291 Pili Cadastre. Containing an area of

TWO HUNDRED SIXTY[-]FOUR (264) square meters. x x x”

( Id.)

11 Exh “O”, Additional Exhibits for the Petitioners.

12 Records, pp. 1-7. Exh. “A”, entitled Re: Petition for LandRegistration of Lot 2199 and Lot 2200 of Plan SWO-05-

000888, CAD.116



over the aforementioned lots under the Property Registration

Decree. In their petition, they declared that they are the co-

owners of the subject lots; that they and their predecessors-

ininterest“havebeeninactualphysicalmaterialexclusive 13Id atp3;Rollop33

























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in-interest “have been in actual, physical, material, exclusive,

open, occupation and possession of the above described

parcels of land for more than 100 years”13; and that allegedly,

they have continuously, peacefully, and adversely possessed

the property in the concept of owners. Hence, they are

entitled to confirmation of ownership and issuance and

registration of title in their names.In support of their application, petitioners submitted the

following documents, to wit:

1.Agreement to Exchange Real Property;

2.Deed of Transfer and Renunciation;

3.Approved Plan of Lot 2199 and Lot 2200, Cad. 291, Pili

Cadastre;

4.Approved Technical Description of Lot 2199;

5.Approved Technical Description of Lot 2200;6.Field Appraisal and Assessment Sheet (FAAS) A.R.P.

No. 026-044 for Lot 2199 Cad. 291; and

7.Field Appraisal and Assessment Sheet (FAAS) A.R.P.

No. 026-043 for Lot 2200 Cad. 291 Pili Cadastre.

The Republic, through the Office of the Solicitor General

(OSG), filed an Opposition14 to the application, alleging,inter

alia, that: (1) neither the applicants nor their predecessors-

in-interest have been in open, continuous, exclusive andnotorious possession of the land since June 12, 1945 or prior

thereto; (2) the muniments of title, tax declarations and tax

_______________

291, Pili Cadastre and to Cover the Same under the

Operation of the Property Registration Decree and to Have

the Title Thereto Registered and Confirmed.

13 Id., at p. 3; Rollo, p. 33.

14 Records, pp. 61-62.117

VOL. 644, FEBRUARY 23, 2011 117


receipts do not constitute competent and sufficient evidence of

abona fide acquisition of the land; and (3) that the parcels ofland applied for are portions of the public domain and are not

subject to private appropriation.

No other parties filed their opposition. Thus, on December

14, 1998, an Order of General Default15 was issued by the

trial court.

After hearing, the trial court rendered a Decision granting

petitioners’ application. The fallo of the trial court’s decision

reads:“WHEREFORE, in view of the foregoing, decision is

hereby rendered as follows:

1.Confirming the imperfect title of the herein applicants

Vicente Yu Chang and Soledad Yu Chang over the two (2)

parcels of land described in paragraph two (2) page 2 of the

Petition, particularly Lot 2199, Plans S”0-05-000888, Cad.

291, Pili Cadastre and Lot 2200, Plan SWO-05-000888, Cad.

291, Pili Cadastre; both Filipino citizens, residents of #14Joaquin St., Corinthian Garden, Quezon City and San Juan,

Pili, Camarines Sur respectively;

2.Ordering the dismissal of the application in the

Cadastral proceeding with respect to Lots 2199 and 2200,

Cad. 291, Pili Cadastre under CAD Case No. N-9;

3. After finality of this decision, let the corresponding

decree of registration be issued by the Administrator, Land

Registration Authority to the herein applicants above residentialand commercialpurposes suchfactwillnot





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Registration Authority to the herein applicants above-

mentioned.

SO ORDERED.”16

The Republic appealed the decision to the CA on the

ground that the courta quo erred in granting petitioners’

application for registration of Lots 2199 and 2200 despite

their failure to show compliance with the requirements of thelaw. In addition, the Republic asserted that the land was

_______________

15 Id., at p. 118.

16 Id., at pp. 181-182.118



classified as public forest land; hence, it could not be subject

to appropriation and alienation.

As aforesaid, the CA reversed the trial court’s decision on

August 26, 2005, and dismissed petitioners’ application for

land registration. The CA considered the petition to be

governed by Section 48(b) of Commonwealth Act (C.A.) No.

141 or the Public Land Act, as amended, and held that

petitioners were not able to present incontrovertible evidence

that the parcels of land sought to be registered are alienable

and disposable.17 The CA relied on the testimony of Lamberto

Orcena, Land Management Officer III of CENRO, Iriga City,

who testified that prior to October 30, 1986, the entire area

encompassing the right side of the Naga-Legaspi Highway,

including the subject properties, was classified as forest land.

According to the CA, even if the area within which the

subject properties are located is now being used for

residential and commercial purposes, such fact will not

convert the subject parcels of land into agricultural

land.18 The CA stressed that there must be a positive act from

the government declassifying the land as forest land before it

could be deemed alienable or disposable land for agricultural

or other purposes.19

Additionally, the CA noted that the lands sought to beregistered were declared disposable public land only on

October 30, 1986. Thus, it was only from that time that the

period of open, continuous and notorious possession

commenced to toll against the State.

Aggrieved, petitioners are now before this Courtvia the

present appeal, raising the sole issue of whether the

appellate court erred in dismissing their application for

registration of title on the ground that they failed to provecompliance with the requirements of Section 48(b) of

thePublic Land Act, as amended.

_______________

17 Rollo, p. 57.

18 Id., at p. 58.

19 Id., at pp. 58-59.

119VOL. 644, FEBRUARY 23, 2011 119


Petitioners insist that the subject properties could no

longer be considered and classified as forest land since there

are buildings, residential houses and even government

structures existing and standing on the land.20In their

Memorandum,21 petitioners point out that the original owner

and possessor of the subject land was the Municipal

GovernmentofPiliwhichwasestablishedin1930Theland 21Id atpp112123













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Government of Pili which was established in 1930. The land

was originally part of the municipal ground adjacent to the

Municipal Building located at the right side of the Naga-

Legaspi National Highway.22 From 1949, when L. Yu Chang

acquired the property through barter and up to the filing of

petitioners’ application in 1997, petitioners and their

predecessors-in-interest had been in actual physical andmaterial possession of the land in the concept of an owner,

notorious and known to the public and adverse to the whole

world.

The Republic, through the OSG, for its part, maintains

that petitioners failed to prove their open, continuous,

exclusive and notorious possession of the subject lots for the

period of time required by law. The OSG also submits that

the subject lands were declared as alienable and disposableonly on October 30, 1986.

We deny the petition for lack of merit.

Section 48(b) of the Public Land Act, as amended by P.D.

1073, under which petitioners’ application was filed, provides:

“SEC.48.The following described citizens of the


to own any such lands or an interest therein, but whose titles

have not been perfected or completed, may apply to theRegional Trial Court of the province or city where the land is

located for confirmation of their claims and the issuance of a

certificate of title therefor, under the Property Registration

Decree, to wit:

x x x x

_______________

20 Id., at p. 22.

21 Id., at pp. 112-123.

22 Id., at p. 120.120



(b)Those who by themselves or through their

predecessors[-]in[-]interest have been in the open, continuous, exclusive, and


disposable agricultural lands of the public domain, under

abona fide claim of acquisition or ownership, since June 12,

1945, except when prevented by war or force majeure. These

shall be conclusively presumed to have performed all the

conditions essential to a Government grant and shall be

entitled to a certificate of title under the provisions of thischapter.

x x x x”23

Under this provision, in order that petitioners’ application

for registration of title may be granted, they must first

establish the following: (1) that the subject land forms part of

the disposable and alienable lands of the public domain and

(2) that they have been in open, continuous, exclusive and

notorious possession and occupation of the same underabona fide claim of ownership, since June 12, 1945, or

earlier.24 Applicants must overcome the presumption that the

land they are applying for is part of the public domain and

that they have an interest therein sufficient to warrant

registration in their names arising from an imperfect title.25

In the instant case, petitioners did not adduce any

evidence to the effect that the lots subject of their application

are alienable and disposable land of the public domain.

Insteadpetitionerscontendthatthesubjectpropertiescould rulesonconfirmationofimperfecttitledonotapply28As







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Instead, petitioners contend that the subject properties could

no longer be considered and classified as forest land since

there are building structures, residential houses and even

government buildings existing and standing on the area.

This, however, is hardly the proof required under the law. As

clarified by this

_______________

23 See Agcaoili, PROPERTY REGISTRATION DECREE AND

RELATED L AWS (L AND TITLES AND DEEDS), 2006 Ed., p. 69.

24 Ong v. Republic, G.R. No. 175746, March 12, 2008, 548

SCRA 160, 166.

25 Collado v. Court of Appeals, G.R. No. 107764, October

4, 2002, 390 SCRA 343, 361.

121VOL. 644, FEBRUARY 23, 2011 121


Court in Heirs of Jose Amunategui v. Director of Forestry,26a

forested area classified as forest land of the public domain

does not lose such classification simply because loggers or

settlers may have stripped it of its forest cover. Parcels of

land classified as forest land may actually be covered with

grass or planted with crops by kaingincultivators or other

farmers. “Forest lands” do not have to be on mountains or in

out-of-the-way places. The classification of land is descriptive

of its legal nature or status and does not have to be

descriptive of what the land actually looks like.27 Unless and

until the land classified as forest land is released in an

official proclamation to that effect so that it may form part of

the disposable agricultural lands of the public domain, the

rules on confirmation of imperfect title do not apply. As

aptly held by the appellate court:

“[T]he fact that the area within which the subject parcels of

land are located is being used for residential and commercial

purposes does not serve to convert the subject parcels of land

into agricultural land. It is fundamental that before any land

may be declassified from the forest group and converted intoalienable or disposable land for agricultural or other

purposes, there must be a positive act from the government.

A person cannot enter into forest land and by the simple act

of cultivating a portion of that land, earn credits towards an

eventual confirmation of imperfect title. The Government

must first declare the forest land to be alienable and

disposable agricultural land before the year of entry,

cultivation and exclusive and adverse possession can becounted for purposes of an imperfect title.”29

Moreover, during the hearing of petitioners’ application,

the Republic presented a Report30 of Rene Gomez, Land

Investigator/Inspector, CENRO No. V-2-3, which disclosed

that the lots applied for by the petitioners were classified as

alienable

_______________

26 No. L-27873, November 29, 1983, 126 SCRA 69.

27 Id., at p. 75.

28 Id.

29 Rollo, pp. 58-59.

30 Exh. “5”, Additional Exhs. For the Oppositor.122



anddisposableunderProjectNo9-ELCMapNo3393and citingRepublicvHerbietoGR No156117May26 2005

















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and disposable under Project No. 9-E, L.C. Map No. 3393 and

released and certified as such only on October 30, 1986. A

Compliance31 dated January 19, 1999 submitted by OIC-

CENR Officer Joaquin Ed A. Guerrero to the trial court also

stated that Lots. 2199 and 2200 of Cad. 291 were“verified to

be within Alienable and Disposable area under Project No. 9-

E, L.C. Map No. 3393, as certified on October 30, 1986 by thethen Bureau of Forestry”.Evidently, therefore, the subject lots

were declared alienable and disposable only on October 30,

1986. Prior to that period, the same could not be the subject

of confirmation of imperfect title. Petitioners’ possession of

the subject forest land prior to the date when it was classified

as alienable and disposable is inconsequential and should be

excluded from the computation of the period of

possession.32 To reiterate, it is well settled that possession offorest land, prior to its classification as alienable and

disposable land, is ineffective since such possession may not

be considered as possession in the concept of owner.33 The

adverse possession which can be the basis of a grant of title

in confirmation of imperfect title cases cannot commence

until after forest land has been declared and alienable.34

Much as this Court wants to conform to the State’s policy

of encouraging and promoting the distribution of alienablepublic lands to spur economic growth and remain true to the

ideal of social justice, our hands are tied by the law’s

stringent

_______________

31 Exh. “R”, records, p. 121.

32 Ponciano, Jr. v. Laguna Lake Development Authority,

G.R. No. 174536, October 29, 2008, 570 SCRA 207, 227

citing Republic v. Herbieto, G.R. No. 156117, May 26, 2005,

459 SCRA 183, 201-202; Almeda v. Court of Appeals, G.R. No.

85322, April 30, 1991, 196 SCRA 476, 480;Vallarta v.

Intermediate Appellate Court, No. L-74957, June 30, 1987,

151 SCRA 679, 690; Republic v. Court of Appeals, No. L-

40402, March 16, 1987, 148 SCRA 480, 492.

33 Supra note 23 at p. 74.34 See Republic v. Diloy, G.R. No. 174633, August 26,

2008, 563 SCRA 413, 424.123

VOL. 644, FEBRUARY 23, 2011 123


safeguards against registering imperfect titles.35 Here,

petitioners failed to present “well-nigh incontrovertible”

evidence necessary to prove their compliance of therequirements under Section 48(b) of C.A. No. 141. Hence, the

Court of Appeals did not err in dismissing their application

for confirmation and registration of title.

WHEREFORE, the petition is hereby DENIED. The

Decision dated August 26, 2005 and the Resolution dated

February 13, 2006 of the Court of Appeals in CA-G.R. CV No.

67430 are hereby AFFIRMED.

With costs against the petitioners.SO ORDERED.

Bersamin, Abad** andSereno, JJ., concur.

Brion (J., Acting Chairperson), See: Separate Opinion.

SEPARATE OPINION

BRION,*** J.:

I concurin the resultfor the reasons discussed below.

The Facts

Thepetitioner’sfatherL YuChangwastheownerofa theconceptofowners”Hencetheypossessedthe[subject]





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The petitioners father, L. Yu Chang, was the owner of a

400 square meter property located in San Roque, Pili,

Camarines, Sur. OnMarch 22, 1949, he agreed

toexchange this property for a similarly-sized property

inSan Juan, Pili, Camarines Sur ( subject property) owned by

theMunicipality of Pili (embodied in an Agreement to

Exchange Real Prop-_______________

35 Republic v. Bibonia, G.R. No. 157466, June 21, 2007,

525 SCRA 268, 277.

** Designated additional member per Special Order No.

926 dated January 24, 2011.

*** Designated Acting Chairperson per Special Order No.

925 dated January 24, 2011.124



erty. From then on, L. Yu Chang and his family took

possession of the subject property where they constructed a

residential house and a gas station. When L. Yu Chang died,

his other children ceded their rights to the subject property to

the petitioners (as embodied in a Deed of Transfer andRenunciation dated March 1, 1978).

OnFebruary 21, 1997, petitioners (as co-owners) filed

apetition for registration of the title over the subject

property, contending that they and their predecessors-in-

interest have been an actual, physical, material, exclusive,

open occupation and possession of the [subject property] for

more than 100 years” and that “they have continuously,

peacefully, and adversely possessed the [subject] property in

the concept of owners. Hence, they possessed the [subject]

property in the concept of owners.” Hence, they claimed to be

entitled to a confirmation of ownership and the issuance and

registration of title in their names.

The Regional Trial Court( RTC) of Pili, Camarines

Sur granted the petitioners’ application. On appeal,

the CA reversed the RTC’s decision. Agreeing with therespondent Republic of the Philippines (represented by the

Office of the Solicitor General), theCourt of

Appeals (CA)declared that the petitioners failed to

present incontrovertible evidence that the subject

property sought to be registered are alienable and

disposable, as required under Section 48(b) of

Commonwealth Act No. 141 ( Public Land Act). The CA

pointed out that, according to official records,the subject

property was previously classified as forest land, and

was declared disposable public land only on October

30, 1986. Thus, it was only from that time that the

period of open, continuous and notorious possession

commenced to toil against the State.

The petitioners seek the reversal of the CA’s judgment

through the present petition for review oncertiorari underRule 45 of the Rules of Court. They insist that the subject

property can no longer be considered and classified as forest125

VOL. 644, FEBRUARY 23, 2011 125


land because there are buildings, residential houses, and

government structures existing on the land.

The Ponencia

Theponenciadeniedthepetitionforlackofmerit. exclusive,and notorious possession and occupation of







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The ponencia denied the petition for lack of merit.

The ponencia declared that a petition for registration

under Section 48(b) of the Public Land Act1 can prosper only

if the following are established: (a) that the subject property

forms of the disposable and alienable lands of the public

domain, and (b) that the petitioners have been in open,

continuous, exclusive and notorious possession occupation ofthe subject property under abona fide claim of

ownershipsince June 12, 1945 or earlier.

The ponencia agreed with the CA and held that the

petitioners failed to adduce any evidence showing that the

subject property is alienable and disposable land of the public

domain; the petitioners’ insistence that the subject property

can no longer be considered and classified as forest land

because there are structures erected thereon is unavailingbecause “the classification of land is descriptive of the land’s

legal nature or status, and does not have to be descriptive of

what

_______________

1 Sec. 48.The following-described citizens of the


to own any such lands or an interest therein, but whose titleshave been perfected or completed, may apply to the Court of

First Instance of the province where the land is located for

confirmation of other claims and the issuance of title therefor,

under the Land Registration Act, to wit:

x x x x


predecessors in interest have been in open, continuous,

exclusive, and notorious possession and occupation of

alienable and disposable lands of the public domain, under

abona fide claim of acquisition or ownership, since June 12,

1945, except when prevented by war or force majeure. These

shall be conclusively presumed to have performed all the

conditions essential to a Government grant and shall be

entitled to a certificate of title under the provisions of thischapter.

126



the land actually looks like.” Unless and until a land

classified as a forest land is formally declared in an official

proclamation to be part of the disposable agricultural lands

of the public domain, the rules on confirmation of imperfecttitle do not apply.2

Since the subject property was declared alienable and

disposable only on October 30, 1986, it is only from that time

that the petitioners’ possession can be considered as basis to

establish their claim of ownership over the subject property.

Prior to the classification of a forest land as alienable and

disposable agricultural land, the land of public domain

cannot be alienated.3

Prescription does not lie against theState and adverse possession, which is the basis for a

confirmation of title, cannot commence.4 In these lights,

the ponencia concluded thatthe petitioners failed to

prove compliance with the requirements of Section

48(b) of the Public Land Act.

An Alternative View

While theponenciadenied the petition and thereby sinceJune12,1945,exceptwhenpreventedbywaror











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While the ponencia denied the petition and thereby

arrived at the correct result, it failed to make the proper

consideration in resolving the basic issue presented—i.e.,

whether the petitioners have a valid title over the

subject property that can be registered under the law.

a.Registration under the Section 14(1) of

the Property Registration Decree

Section 48(b) of the Public Land Act reads:

“Sec.48.The following-described citizens of the


to own any such

_______________

2 Ponencia at 7.

3 CONSTITUTION, Article XII, Section 2.4 CIVIL CODE, Article 1113;Celestial v. Cachopero, G.R.

No. 142595, October 15, 2003, 413 SCRA 469.127

VOL. 644, FEBRUARY 23, 2011 127


lands or an interest therein, but whose titles have not been

perfected or completed, may apply to the Court of First

Instance of the province where the land is located forconfirmation of their claims and the issuance of a certificate

of title therefore, under the Land Registration Act, to wit:

x x x




alienable and disposable lands of the public domain,

under abona fideclaim of acquisition or ownership,

since June 12, 1945, except when prevented by war or

force majeure. These shall be conclusively presumed

and to have performed all the conditions essential to a

Government grant and shall be entitled to a certificate

of title under the provisions of this chapter.”

Complementing Section 48(b) of the Public Land Act is

Section 14(1) of Presidential Decree ( P.D.) No. 1529 ( Property Registration Decree), which provides:

“Sec.14. Who may apply.—The following persons may file

in the proper Court of First Instance [now Regional Trial

Court] an application for registration of title to land, whether

personally or through their duly authorized representatives:

(1)Those who by themselves or through their

predecessors-in-interest have been in open, continuous,

exclusive and notorious possession and occupation ofalienable and disposable lands of the public domain

under abona fide claim of ownership since June 12,

1945, or earlier.”

Section 48(b) of the Public Land Act is the law that

recognizes the substantive right of a possessor and occupant

of an alienable and disposable land of the public domain,

while Section 14(1) of the Property Registration Decree

recognizes this right by authorizing its registration, thusbringing the land within

128



the coverage of the Torrens System.5 The mode of

acquisition recognized by Section 48(b) of the Public Land Act

and made registrable under Section 14(1) of the Property

Registration Decree is throughconfirmation of an

imperfect or incomplete title.6 Both provisions allow (3) By lease;











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p f p p

confirmation of an imperfect or incomplete title only if the

claimant has been in open, continuous, exclusive and


disposable lands of the public domainsince June 12, 1945

or earlier.

Parenthetically, I discussed the use of “June 12, 1945” asthe cut-off date in my dissenting opinion in Heirs of Mario

Malabanan v. Republic, based on the legislative history of the

Public Land Act and the Court’s ruling in Abejaron v.

Nabasa.7 Prior to the Public Land Act’s amendment by P.D.

No. 1073, the law provided for “a simple 30-year prescriptive

period for judicial confirmation of imperfect title.”8 P.D. No.

1073, however, “changed the required 30-year possession and

occupation period provision, to possession and occupation ofthe land applied for since June 12, 1945, or earlier.”9 The

_______________

5 See Heirs of Mario Malabanan v. Republic, G.R. No.

178987, April 29, 2009, 587 SCRA 172, 190-191.

I concurred with therein majority’s opinion with respect to

the relation between Section 48(b) of the Public Land Act and

Section 14(1) of the Property Registration Decree, see pp.230-234.

6 Effectively, this is a grant of title by the State under

Section 11(4) of the Public Land Act, which states:

SEC.11. Public lands suitable for agricultural purposes

can be disposed of only as follows and not otherwise:

(1) For homestead settlement:

(2)By sale:

() y ;

(4) By confirmation of imperfect or incomplete

title;

(5) By judicial legalization;

(6) By administrative legalization (free patent).

7 G.R. No. 84831, June 20, 2001, 359 SCRA 47.

8 Heirs of Mario Malabanan v. Republic, supra note 2 atp. 234.

9 Id., at p. 235.129

VOL. 644, FEBRUARY 23, 2011 129


significance of this date though was never explained by the

law. In order not to prejudice the vested rights of those who

complied with the original 30-year period of possession (butwhose possession began onlyafter the June 12, 1945 cut-off

date set by P.D. No. 1073), the Court declared that the P.D.’s

requirements as inapplicable to them:

Filipino citizens who by themselves or their predecessors-in-

interest have been, prior to the effectivity of P.D. 1073 on

January 25, 1977, in open, continuous, exclusive and

notorious possession and occupation of agricultural lands of

the public domain, under abona fide claim of acquisition ofownership, for at least 30 years, or at least since January 24,

1947 may apply for judicial confirmation of their imperfect or

incomplete title under Sec. 48(b) of the Public Land Act.10

Whether the cut-off date is June 12, 1945 or January 24,

1947 (applying the 30-year prescriptive period used prior to

the effectivity of P.D. No. 1073), the petitioner’s application

for registration of land pursuant to Section 48(b) of the Public

Land Act [in relation with Section 14(1) that the Property (2) Those who have acquired ownership




















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() p y

Registration Decree] should be denied. The facts stated that

the petitioners (through their predecessors-in-interest)

possessed the subject property only after March 22,

1949 exchange agreement with the Municipality of Pili. The

petitioners’ obvious failure to meet the law’s alternative

deadline renders any discussion of Section 48(b) of the PublicLand Act unnecessary.

b.Registration under Section 14(2) of the

Property Registration Decree

Section 48(b) of the Public Land Act and Section 14(1) of

the Property Registration Decree, however, are not the only

open avenues to register over the land. “[E]ven if possession

of the alienable public land commenced on a date later than

_______________

10 Id., at p. 236, citing Abejaron v. Nabasa.130



June 12, 1945, and such possession being open, continuous

and exclusive, then thepossessor may have the right to

register the land by virtue of Section 14(2) of theProperty Registration Decree.”11 Section 14(2) of the

Property Registration Decree states:

SECTION 14. Who may apply.—The following persons

may file in the proper Court of First Instance an application

for registration of title to land, whether personally or through


x x x x

() q p

of privatelands by prescription under the

provisions of existing laws.

But this recourse is open only toprivate lands acquired

through prescription; the provision thus calls for the

application of Civil Code concepts of private property and

prescription.Prescription is a mode of acquiring ownership and other

real rights over immovable property through the lapse of

time in the manner and under the conditions laid down by

law.12 Acquisitive prescription of dominion and other real

rights may be ordinary and extraordinary.13 If the applicant’s

possession of the immovable property is coupled with good

faith and just title, the lapse of 10 years is sufficient;14

otherwise,

_______________

11 Heirs of Mario Malabanan v. Republic, supra note 2 at

p. 197.

12 CIVIL CODE, Article 1106.By prescription, one acquires

ownership and other real rights through the lapse time in the

manner and under the conditions laid down by law.

In the same way, rights and conditions are lost byprescription. (1930a).

13 CIVIL CODE, Article 1117.Acquisitive prescription of

dominion and other real rights may be ordinary or

extraordinary.

14 CIVIL CODE, Article 1134. Ownership and other real

rights over immovable property are acquired by ordinary

prescription through possession of ten years.

131 17 Art.420.The following things are property of public





















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VOL. 644, FEBRUARY 23, 2011 131


the law requires 30 years of uninterrupted, adverse

possession of the property.15

Whether ordinary or extraordinary,prescription will

run only against properties that are within thecommerce of men. Properties of public dominion are not

susceptible to acquisitive prescription.16 Article 1113 of the

Civil Code states that property of the State or any of its

subdivisionsnot patrimonial in charactershallnot be the

object of prescription. Properties of the public domain become

patrimonial properties only when they no longer intended for

public use or for public service.17 A land declared as alienable

and disposable by the government does not necessarilybecome patrimonial property; it remains part of the public

dominion:

[T]here must be anexpress declaration by the State that

the public dominion property is no longer intended for

public service or the development of the national

wealth or that the property has been converted into

patrimonial. Without such express declaration, the

property even, if classified as alien-

_______________

15 CIVIL CODE, Art.1137.Ownership and other real

rights over immovables also prescribe through uninterrupted

adverse possession thereof for thirty years, without need of

title or of good faith.

16 Celestial v. Cachopero, supra note 4.

g g p p y p

dominion:

(1) Those intended for public use, such as roads, canals,

rivers, torrents, ports and bridges constructed by the State,

bank, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for

public use, and are intended for some public service or for thedevelopment of the national wealth. (339a).

Art.421.All other property of the State, which is not of

the character stated in the preceding article, is patrimonial

property. (340a).

Art. 422.Property of public dominion, when no longer

intended for public use or for public service, shall form part

of the patrimonial property of the State. (341a).



able or disposable, remains property of the public

dominion, pursuant to Article 420(2), and thus incapable of

acquisition by prescription.It is only when such alienable

and disposable lands are expressly declared by the

State to be no longer intended for public service or for

the development of the national wealth that the period

of acquisitive prescription can begin to run. Such

declaration shall be in the form of a law duly enacted by

Congress or a Presidential Proclamation in cases where the

President is duly authorized by law.18

Thus, the10 or 30-year period of prescription that

Section 14(2) of the Property Registration Decree and

the Civil Code speak of commences to run only from

the time the land, separately from being declared belong to the State. ( Republic vs. T.A.N. Properties, Inc., 555















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p y g

alienable and disposable, is declared as patrimonial

property of the State, i.e., property held by the State

and its private capacity.19

Tested against these requirements in the application of

Section 14(2) of the Property Registration Decree, it is clear

that the petitioners’ application for registration of their titleshould be denied. Although the subject property was declared

alienable and disposable by the government on October 30,

1986, the petitioners— for purposes of a claim of prescription

—failed to establish whether it had also been declared as

patrimonial property.

Thus, the petitioners have no basis to register the subject

property either on the basis of Section 14(1) or 14(2) of the

Property Registration Decree. For this reason, the petitionshould be denied.

_______________

18 Heirs of Malabanan v. Republic, supra note 2 at p. 303,

which position is similar to what I discussed in my dissenting

opinion, at pp. 253-254.

19 CIVIL CODE, Art.425. Property of private ownership,

besides the patrimonial property of the State, provinces,cities, and municipalities, consists of all property belonging

to private persons, either individually or collectively.133

VOL. 644, FEBRUARY 23, 2011 133


Petition denied, judgment and resolution affirmed.

Note.—The well-entrenched rule is that all lands not

appearing to be clearly of private dominion presumably

SCRA 477 [2008])

——o0o——


G.R. No. 186961.February 20, 2012.*

REPUBLIC OF THE PHILIPPINES, petitioner,vs.EASTSILVERLANE REALTY DEVELOPMENT CORPORATION,

respondent.

Remedial Law; Civil Procedure; Appeals; A petition for

review should be confined to questions of law and that the

Supreme Court is not a trier of facts.—Preliminarily, with

respect to the infirmity suffered by this petition from the

standpoint of Rule 45, this Court agrees with the respondent

that the issue of whether the respondent had presentedsufficient proof of the required possession under abona

fide claim of ownership raises a question of fact, considering

that it invites an evaluation of the evidentiary record.

However, that a petition for review should be confined to

questions of law and that this Court is not a trier of facts and

bound by the factual findings of

_______________

* SECOND DIVISION.402

4

02


Republic vs. East Silverlane Realty Development Corporation

the CA are not without exceptions. Among these

exceptions, which obtain in this case, are: (a) when the

judgment of the CA is based on a misapprehension of facts or

(b) when its findings are not sustained by the evidence on interest have been in open, continuous, exclusive, and




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http://192.168.1.54/reader/author/document/9825/?username=Jeric#body_ftn1






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record.

Civil Law; Property; Land Registration; Public Land Act;

Judicial Confirmation of Imperfect Title; Under Section 11 of

the Public Land Act, one of the modes of disposing public

lands suitable for agricultural purposes is by “confirmation of

imperfect or incomplete titles.”—The PLA governs theclassification and disposition of lands of the public domain.

Under Section 11 thereof, one of the modes of disposing

public lands suitable for agricultural purposes is by

“confirmation of imperfect or incomplete titles.” On the other

hand, Section 48 provides the grant to the qualified possessor

of an alienable and disposable public land. Thus: SEC. 48.

The following-described citizens of the Philippines, occupying

lands of the public domain or claiming to own any such landsor an interest therein, but whose titles have not been

perfected or completed, may apply to the Court of First

Instance of the province where the land is located for


of title therefor, under the Land Registration Act, to wit: (a)

Those who prior to the transfer of sovereignty from Spain to

the United States have applied for the purchase, composition

or other form of grant of lands of the public domain under thelaws and royal decrees then in force and have instituted and

prosecuted the proceedings in connection therewith, but have

with or without default upon their part, or for any other

cause, not received title therefor, if such applicants or

grantees and their heirs have occupied and cultivated said

lands continuously since the filing of their applications. (b)

Those who by themselves or through their predecessors in

notorious possession and occupation of agricultural lands of

the public domain, under a bona fide claim of acquisition or

ownership, for at least thirty years immediately preceding

the filing of the application for confirmation of title except

when prevented by war or force majeure. These shall be

conclusively presumed to have performed all the conditionsessential to a Government grant and shall be entitled to a

certificate of title under the provisions of this chapter. (c)

Members of the national cultural minorities who by

themselves or through their predecessors-in-interest have


and occupation of lands of the public domain suitable to

agriculture,

403VOL. 666, FEBRUARY 20, 2012 4

03


whether disposable or not, under abona fide claim of

ownership for at least 30 years shall be entitled to the rights

granted in sub-section (b) hereof. Presidential Decree No.

1073 (P.D. No. 1073), which was issued on January 25, 1977,

deleted subsection (a) and amended subsection (b) as follows:

SECTION 4. The provisions of Section 48 (b) and Section 48

(c), Chapter VIII of the Public Land Act are hereby amended

in the sense that these provisions shall apply only to

alienable and disposable lands of the public domain which

have been in open, continuous, exclusive and notorious

possession and occupation by the applicant thru himself or

thru his predecessor-in-interest under a bona fide claim of

ownership since June 12, 1945.

Same; Same; Same; Property Registration Decree (P.D. the national wealth. All other properties of the State, which

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No. 1529); Persons Who May Apply for Registration of Title to

Land.—P.D. No. 1529, which was enacted on June 11, 1978,

codified all the laws relative to the registration of property.

Section 14 thereof partially provides:Section 14.Who may

apply.The following persons may file in the proper Court of

First Instance an application for registration of title to land,whether personally or through their duly authorized

representatives: (1) Those who by themselves or through

their predecessors-in-interest have been in open, continuous,

exclusive and notorious possession and occupation of

alienable and disposable lands of the public domain under a

bona fide claim of ownership since June 12, 1945, or earlier.

(2) Those who have acquired ownership of private lands by

prescription under the provision of existing laws. (3) Thosewho have acquired ownership of private lands or abandoned

river beds by right of accession or accretion under the

existing laws. (4) Those who have acquired ownership of land

in any other manner provided for by law.

Same; Same; Same; Article 420 of the Civil Code

enumerates the properties belonging to the public dominion,

outside thereof are patrimonial property, hence, susceptible to

acquisitive prescription.—Property is either part of the publicdomain or privately owned. Under Article 420 of the Civil

Code, the following properties are of public dominion: (a)

Those intended for public use, such as roads, canals, rivers,

torrents, ports and bridges constructed by the State, banks,

shores, roadsteads and others of similar character; (b) Those

which belong to the State, without being for public use, and

are intended for some public service or for the development of

is not of the404

4

04



character mentioned in Article 420 is patrimonial

property, hence, susceptible to acquisitive prescription.

Same; Same; Same; Without express declaration that the

property is no longer intended for public service or

development of national wealth, the property, even if classified

as alienable or disposable, remains property of the State, and

thus, may not be acquired by prescription.—In Heirs of

Malabanan, this Court ruled that possession and occupation

of an alienable and disposable public land for the periods

provided under the Civil Code do not automatically convert

said property into private property or release it from the

public domain. There must be an express declaration that the

property is no longer intended for public service or

development of national wealth. Without such express

declaration, the property, even if classified as alienable or

disposable, remains property of the State, and thus, may not

be acquired by prescription.

Same; Same; Same; The possession and occupation

required to acquire an imperfect title over an alienable and

disposable public land must be “open, continuous, exclusive

and notorious” in character.—It is explicit under Section 14

(1) that the possession and occupation required to acquire an

imperfect title over an alienable and disposable public land

must be “open, continuous, exclusive and notorious” in

character. In Republic of the Philippines v. Alconaba, 427

SCRA 611 (2004), this Court explained that the intent behind of prescription: It is concerned with lapse of time in the

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the use of “possession” in conjunction with “occupation” is to

emphasize the need for actual and not just constructive or

fictional possession. The law speaks of possession and

occupation. Since these words are separated by the

conjunctionand, the clear intention of the law is not to make

one synonymous with the other. Possession is broader thanoccupation because it includes constructive possession. When,

therefore, the law adds the wordoccupation, it seeks to

delimit the all encompassing effect of constructive possession.

Taken together with the words open, continuous, exclusive

and notorious, the wordoccupation serves to highlight the

fact that for an applicant to qualify, his possession must not

be a mere fiction. Actual possession of a land consists in the

manifestation of acts of dominion over it of such a nature as aparty would naturally exercise over his own property.

(citations omitted)405VOL. 666, FEBRUARY 20, 2012 4

05


Same; Same; Same; Possession; Acquisitive Prescription;

Possession for purposes of prescription must be “in the concept

of an owner, public, peaceful and uninterrupted.”—On theother hand, Section 14 (2) is silent as to the required nature

of possession and occupation, thus, requiring a reference to

the relevant provisions of the Civil Code on prescription. And

under Article 1118 thereof, possession for purposes of

prescription must be “in the concept of an owner, public,

peaceful and uninterrupted.” In Heirs of Marcelina Arzadon-

Crisologo v. Rañon, 532 SCRA 391 (2007), this Court

expounded on the nature of possession required for purposes

manner and under conditions laid down by law, namely, that

the possession should be in the concept of an owner, public,

peaceful, uninterrupted and adverse. Possession is open

when it is patent, visible, apparent, notorious and not

clandestine. It is continuous when uninterrupted, unbroken

and not intermittent or occasional; exclusive when theadverse possessor can show exclusive dominion over the land

and an appropriation of it to his own use and benefit; and

notorious when it is so conspicuous that it is generally known

and talked of by the public or the people in the neighborhood.

The party who asserts ownership by adverse possession must

prove the presence of the essential elements of acquisitive

prescription. (citations omitted)

Same; Same; Same; Same; Same; A person who seeks theregistration of title to a piece of land on the basis of possession

by himself and his predecessors-in-interest must prove his

claim by clear and convincing evidence.—The phrase

“adverse, continuous, open, public, and in concept of owner,”

by which the respondent describes its possession and that of

its predecessors-in-interest is a conclusion of law. The burden

of proof is on the respondent to prove by clear, positive and

convincing evidence that the alleged possession of itspredecessors-in-interest was of the nature and duration

required by law. It is therefore inconsequential if the

petitioner failed to present evidence that would controvert

the allegations of the respondent. A person who seeks the

registration of title to a piece of land on the basis of

possession by himself and his predecessors-in-interest must

prove his claim by clear and convincing evidence,i.e., he must

prove his title and should not rely on the absence or The respondent filed with the RTC an application for land

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weakness of the evidence of the oppositors.406




resolution of the Court of Appeals.


Office of the Solicitor Generalfor petitioner.

Jaime Y. Sindiongfor respondent.

REYES, J.:

This Court is urged to review and set aside the July 31,

2008 Decision1 and February 20, 2009 Resolution2 of the

Court of Appeals (CA) in CA-G.R. CV No. 00143. In its July

31, 2008 Decision, the CA affirmed the August 27, 2004Decision of the Regional Trial Court (RTC), Branch 40 of

Cagayan De Oro City. The dispositive portion thereof states:

“WHEREFORE, premises foregoing, the instant appeal is

herebyDISMISSED for lack of merit. The assailed Decision

dated August 27, 2004 is hereby AFFIRMEDin toto.

SO ORDERED.”3

In its February 20, 2009 Resolution, the CA denied the

petitioner’s August 29, 2008 Motion for Reconsideration.4

The Factual Antecedents

registration, covering a parcel of land identified as Lot 9039

of Cagayan Cadastre, situated in El Salvador, Misamis

Oriental and with an area of 9,794 square meters. The

respondent purchased the portion of the subject property

consisting of

_______________1 Penned by Associate Justice Rodrigo F. Lim, Jr., with

Associate Justices Michael P. Elbinias and Ruben C. Ayson,

concurring; Rollo, pp. 43-54.

2 Id., at p. 56.

3 Id., at p. 54.

4 Id., at pp. 57-61.407

VOL. 666, FEBRUARY 20, 2012 407 Republic vs. East Silverlane Realty Development Corporation

4,708 square meters (Area A) from Francisca Oco pursuant to

a Deed of Absolute Sale dated November 27, 1990 and the

remaining portion consisting of 5,086 square meters (Area B)

from Rosario U. Tan Lim, Nemesia Tan and Mariano U. Tan

pursuant to a Deed of Partial Partition with Deed of Absolute

Sale dated April 11, 1991. It was claimed that the

respondent’s predecessors-in-interest had been in open,notorious, continuous and exclusive possession of the subject

property since June 12, 1945.

After hearing the same on the merits, the RTC issued on

August 27, 2004 a Decision, granting the respondent’s

petition for registration of the land in question, thus:

“ACCORDINGLY, finding the application meritorious, and

pursuant to applicable law and jurisprudence on the matter,

particularly the provisions of P.D. 1529, judgment is hereby

rendered granting the instant application. The Land BF Project [N]o. 8 Blk. I, L.C. Map [N]o. 585 and was

















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Registration Authority is hereby ordered to issue a decree in

the name of the applicant East Silverlane Realty

Development Corporation covering the parcel of land, Lot

9039, Cad 237, having an area of 9,794 square meters covered

by the two (2) tax declarations subject of this petition. Based

on the decree, the Register of Deeds for the Province ofMisamis Oriental is hereby directed to issue an original

certificate of title in the name of the applicant covering the

land subject matter of this application.”5

On appeal by the petitioner, the CA affirmed the RTC’s

August 27, 2004 Decision. In its July 31, 2008 Decision,6the

CA found no merit in the petitioner’s appeal, holding that:

“It is a settled rule that an application for land

registration must conform to three requisites: (1) the land isalienable public land; (2) the applicant’s open, continuous,

exclusive and notorious possession and occupation thereof

must be since June 12, 1945, or earlier; and (3) it is abona

fideclaim of ownership.

_______________

5 Id., at pp. 108-109.

6 Supra note 1.



In the case at bench, petitioner-appellee has met all the

requirements. Anent the first requirement, both the report

and certification issued by the Department of Environment

and Natural Resources (DENR) shows that the subject land

was within the alienable and disposable zone classified under

released and certified as such on December 31, 1925.

Indubitably, both the DENR certification and report

constitute a positive government act, an administrative

action, validly classifying the land in question. It is a settled

rule that the classification or re-classification of public lands

into alienable or disposable, mineral or forest land is now aprerogative of the Executive Department of the government.

Accordingly, the certification enjoys a presumption of

regularity in the absence of contradictory evidence. As it is,

the said certification remains uncontested and even

oppositor-appellant Republic itself did not present any

evidence to refute the contents of the said certification. Thus,

the alienable and disposable character of the subject land

certified as such as early as December 31, 1925 has beenclearly established by the evidence of the petitioner-appellee.

Anent the second and third requirements, the applicant is

required to prove his open, continuous, exclusive and

notorious possession and occupation of the subject land under

abona fideclaim of ownership either since time immemorial

or since June 12, 1945.

x x x x

In the case at bench, ESRDC tacked its possession andoccupation over the subject land to that of its predecessors-in-

interest. Copies of the tax declarations and real property

historical ownership pertaining thereto were presented in

court. A perusal of the records shows that in 1948, a portion

of the subject land was declared under the name of Agapito

Claudel. Subsequently, in 1957 until 1991 the same was

declared under the name of Francisca Oco. Thereafter, the

same was declared under the name of ESRDC. A certification ownership, nevertheless, they are goodindiciaof the










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was likewise issued by the Provincial Assessor of Misamis

Oriental that previous tax declarations pertaining to the said

portion under the name of Agapita Claudel could no longer

be located as the files were deemed lost or destroyed before

World War II.

On the other hand, the remaining portion of the said landwas previously declared in 1948 under the name of Jacinto

Tan Lay Cho. Subsequently, in 1969 until 1990, the same was

declared under the409

VOL. 666, FEBRUARY 20, 2012 409


name of Jacinto Tan. Thereafter, the same was declared

under the name of ESRDC. A certification was likewise

issued by the Provincial Assessor that the files of previous

tax declarations under the name of Jacinto Tan Lay Cho were

deemed lost or destroyed again before World War II.

In 1991 or upon ESRDC’s acquisition of the subject

property, the latter took possession thereto. Albeit it has

presently leased the said land to Asia Brewery, Inc., where

the latter built its brewery plant, nonetheless, ESRDC has its

branch office located at the plant compound of Asia Brewery,Inc.

Corollarily, oppositor-appellant’s contentions that the

courta quo erred in considering the tax declarations as

evidence of ESRDC’s possession of the subject land as the

latter’s predecessors-in-interest declared the same

sporadically, is untenable.

It is a settled rule that albeit tax declarations and realty

tax payment of property are not conclusive evidence of

possession in the concept of owner for no one in his right

mind would be paying taxes for a property that is not in his

actual or at least constructive possession. They constitute at

least proof that the holder has a claim of title over the

property. The voluntary declaration of a piece of property for

taxation purposes manifests not only one’s sincere and honestdesire to obtain title to the property and announces his

adverse claim against the State and all other interested

parties, but also the intention to contribute needed revenues

to the Government. Such an act strengthens one’sbona

fide claim of acquisition of ownership.

Finally, it bears stressing that the pieces of evidence

submitted by petitioner-appellee are incontrovertible. Not

one, not even oppositor-appellant Republic, presented anycountervailing evidence to contradict the claims of the

petitioners that they are in possession of the subject property

and their possession of the same is open, continuous and

exclusive in the concept of an owner for over 30 years.

Verily, from 1948 when the subject land was declared for

taxation purposes until ESRDC filed an application for land

registration in 1995, ESRDC have been in possession over the

subject land in the concept of an owner tacking its possessionto that its predecessors-in-interest for forty seven (47) years

already. Thus, ESRDC was able to prove sufficiently that it

has been in possession of the subject property for more than

30 years, which possession is characterized410



as open, continuous, exclusive, and notorious in the concept of7

Preliminarily, with respect to the infirmity suffered by this



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an owner.”7 (citations omitted)

The petitioner assails the foregoing, alleging that the

respondent failed to prove that its predecessors-in-interest

possessed the subject property in the manner and for the

length of time required under Section 48 (b) of

Commonwealth Act No. 141, otherwise known as the “PublicLand Act” (PLA), and Section 14 of Presidential Decree No.

1529, otherwise known as the “Property Registration Decree”

(P.D. No. 1529). According to the petitioner, the respondent

did not present a credible and competent witness to testify on

the specific acts of ownership performed by its predecessors-

in-interest on the subject property. The respondent’s sole

witness, Vicente Oco, can hardly be considered a credible and

competent witness as he is the respondent’s liaison officerand he is not related in any way to the respondent’s

predecessors-in-interest. That coconut trees were planted on

the subject property only shows casual or occasional

cultivation and does not qualify as possession under a claim

of ownership.

Issue

This Court is confronted with the sole issue of whether the

respondent has proven itself entitled to the benefits of the

PLA and P.D. No. 1529 on confirmation of imperfect or

incomplete titles.

Our Ruling

This Court resolves toGRANT the petition.

petition from the standpoint of Rule 45, this Court agrees

with the respondent that the issue of whether the respondent

had presented sufficient proof of the required possession un-

_______________

7 Rollo, pp. 48-54.

411VOL. 666, FEBRUARY 20, 2012 411


der abona fide claim of ownership raises a question of fact,

considering that it invites an evaluation of the evidentiary

record.8 However, that a petition for review should be

confined to questions of law and that this Court is not a trier

of facts and bound by the factual findings of the CA are not

without exceptions. Among these exceptions, which obtain in

this case, are: (a) when the judgment of the CA is based on a

misapprehension of facts or (b) when its findings are not

sustained by the evidence on record.

This Court’s review of the records of this case reveals that

the evidence submitted by the respondent fell short of

proving that it has acquired an imperfect title over the

subject property under Section 48 (b) of the PLA. The

respondent cannot register the subject property in its nameon the basis of either Section 14 (1) or Section 14 (2) of P.D.

No. 1529. It was not established by the required quantum of

evidence that the respondent and its predecessors-in-interest

had been in open, continuous, exclusive and notorious

possession of the subject property for the prescribed statutory

period.

The PLA governs the classification and disposition of

lands of the public domain. Under Section 11 thereof, one of

the modes of disposing public lands suitable for agricultural

b “ fi f f l

domain under the laws and royal decrees then in force and

h d d dh d







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purposes is by “confirmation of imperfect or incomplete

titles.”9 On the other hand, Section 48 provides the grant to

the qualified possessor of an alienable and disposable public

land. Thus:

_______________

8 Republic of the Philippines v. Manna Properties, Inc.,490 Phil. 654, 665; 450 SCRA 247, 258 (2005).

9 Sec.11. Public lands suitable for agricultural purposes

can be disposed of only as follows, and not otherwise:

(1) For homestead settlement;

(2) By sale;

(3) By lease;

(4) By confirmation of imperfect or incomplete

titles; (a) By judicial legalization;

(b) By administrative legalization (free

patent).412



“SEC.48.The following-described citizens of the

Philippines, occupying lands of the public domain or claimingto own any such lands or an interest therein, but whose titles

have not been perfected or completed, may apply to the Court

of First Instance of the province where the land is located for


of title therefor, under the Land Registration Act, to wit:

(a) Those who prior to the transfer of sovereignty from

Spain to the United States have applied for the purchase,

composition or other form of grant of lands of the public

have instituted and prosecuted the proceedings in connection

therewith, but have with or without default upon their part,

or for any other cause, not received title therefor, if such

applicants or grantees and their heirs have occupied and

cultivated said lands continuously since the filing of their

applications.(b)Those who by themselves or through their



agricultural lands of the public domain, under a bona fide

claim of acquisition or ownership, for at least thirty years

immediately preceding the filing of the application for

confirmation of title except when prevented by war or force

majeure. These shall be conclusively presumed to haveperformed all the conditions essential to a Government grant

and shall be entitled to a certificate of title under the

provisions of this chapter.

(c) Members of the national cultural minorities who by

themselves or through their predecessors-in-interest have


and occupation of lands of the public domain suitable to

agriculture, whether disposable or not, under a bona fideclaim of ownership for at least 30 years shall be entitled to

the rights granted in sub-section (b) hereof.”

Presidential Decree No. 1073 (P.D. No. 1073), which was

issued on January 25, 1977, deleted subsection (a) and

amended subsection (b) as follows:

“SECTION 4.The provisions of Section 48 (b) and Section

48 (c), Chapter VIII of the Public Land Act are hereby

amended in the sense that these provisions shall apply only

t li bl ddi bll d fth blid i hih

(2) Those who have acquired ownership of private lands

b iti d th ii f iti l







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to alienable and disposable lands of the public domain which

have been in open, continuous,413

VOL. 666, FEBRUARY 20, 2012 413


exclusive and notorious possession and occupation by the

applicant thru himself or thru his predecessor-in-interest

under a bona fide claim of ownership since June 12, 1945.”

Notably, the first PLA, or Act No. 926, required a

possession and occupation for a period of ten (10) years prior

to the effectivity of Act No. 2096 on July 26, 1904 or on July

26, 1894. This was adopted in the PLA until it was amended

by Republic Act No. 1942 on June 22, 1957, which provided

for a period of thirty (30) years. It was only with the

enactment of P.D. No. 1073 on January 25, 1977 that it was

required that possession and occupation should commence on

June 12, 1945.

P.D. No. 1529, which was enacted on June 11, 1978,

codified all the laws relative to the registration of property.

Section 14 thereof partially provides:

“Section14. Who may apply.—The following persons

may file in the proper Court of First Instance an applicationfor registration of title to land, whether personally or through


(1)Those who by themselves or through their

predecessors-in-interest have been in open, continuous,

exclusive and notorious possession and occupation of

alienable and disposable lands of the public domain under a

bona fide claim of ownership since June 12, 1945, or earlier.

by prescription under the provision of existing laws.

(3) Those who have acquired ownership of private lands

or abandoned river beds by right of accession or accretion

under the existing laws.

(4) Those who have acquired ownership of land in any

other manner provided for by law.”Section 14 (1) and Section 14 (2) are clearly different.

Section 14 (1) covers “alienable and disposable land” while

Section 14 (2) covers “private property.” As this Court

categorically stated in Heirs of Malabanan v. Republic of the

Philip-

414



pines,10 the distinction between the two provisions lies with

the inapplicability of prescription to alienable and disposable

lands. Specifically:

“At the same time, Section 14 (2) puts into operation the

entire regime of prescription under the Civil Code, a fact

which does not hold true with respect to Section 14 (1).”11

roperty is either part of the public domain or privately

owned.

12

Under Article 420 of the Civil Code, the followingproperties are of public dominion:

(a) Those intended for public use, such as roads, canals,

rivers, torrents, ports and bridges constructed by the State,

banks, shores, roadsteads and others of similar character;

(b) Those which belong to the State, without being for

public use, and are intended for some public service or for the

development of the national wealth.

All other properties of the State, which is not of the

h t ti d i Atil 420 i ti il

development of the national wealth” are public dominion

t F l th t bl t th







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character mentioned in Article 420 is patrimonial

property,13 hence, susceptible to acquisitive prescription.14

In Heirs of Malabanan, this Court ruled that possession

and occupation of an alienable and disposable public land for

the periods provided under the Civil Code do not

automatically convert said property into private property orrelease it from the public domain. There must be an express

declaration that the property is no longer intended for public

service or development of national wealth. Without such

express declaration, the property, even if classified as

alienable or disposable, remains property of the State, and

thus, may not be acquired by prescription.

_______________

10 G.R. No. 179987, April 29, 2009, 587 SCRA 172.11 Id., at p. 201.

12 Article 419, Civil Code.

13 Article 421, Civil Code.

14 Supra note 10, at p. 202.415

VOL. 666, FEBRUARY 20, 2012 415


“Nonetheless, Article 422 of the Civil Code states that“[p]roperty of public dominion, when no longer intended for

public use or for public service, shall form part of the

patrimonial property of the State.” It is this provision that

controls how public dominion property may be converted into

patrimonial property susceptible to acquisition by

prescription. After all, Article 420 (2) makes clear that those

property “which belong to the State, without being for public

use, and are intended for some public service or for the

property.For as long as the property belongs to the

State, although already classified as alienable or

disposable, it remains property of the public dominion

if when it is “intended for some public service or for

the development of the national wealth.” (emphasis

supplied) Accordingly, there must be an express declaration

by the State that the public dominion property is no

longer intended for public service or the development

of the national wealth or that the property has been

converted into patrimonial. Without such express

declaration, the property, even if classified as

alienable or disposable, remains property of the public

dominion, pursuant to Article 420(2), and thus

incapable of acquisition by prescription. It is only

when such alienable and disposable lands are

expressly declared by the State to be no longer

intended for public service or for the development of

the national wealth that the period of acquisitive

prescription can begin to run. Such declaration shall

be in the form of a law duly enacted by Congress or a

Presidential Proclamation in cases where the

President is duly authorized by law.”15

In other words, for one to invoke the provisions of Section

14 (2) and set up acquisitive prescription against the State, it

is primordial that the status of the property as patrimonial

be first established. Furthermore, the period of possession

preceding the classification of the property as patrimonial

cannot be considered in determining the completion of the

iti id

The respondent also offered the following testimony of

Vi tO

















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prescriptive period.

_______________

15 Id., at p. 203.416



To prove that its predecessors-in-interest were in

possession of the subject property on or prior to June 12,

1945 or had completed the prescriptive period of thirty (30)

years, the respondent submitted the following tax

declarations:

a) Tax Declaration in the name of Agapita Claudel

for the year 1948;

b) Tax Declarations in the name of Francisca Oco

for the years 1957, 1963, 1969, 1973, 1974, 1980, 1987,

1989 and 1991;

c) Tax Declarations in the respondent’s name for

the years 1991, 1992 and 1994;

d) Tax Declarations in the name of Jacinto Tan Lay

Cho for the years 1948 and 1952;

e)Tax Declarations in the name of Jacinto Tan for

the years 1969, 1973, 1974, 1980, 1989 and 1990; andf) Tax Declarations in the respondent’s name for

the years 1991, 1992 and 1994.

Pursuant to Agapita Claudel’s 1948 Tax Declaration, there

were nineteen (19) coconut and ten (10) banana trees planted

on Area A. The coconut trees were supposedly four years old,

hence, the reasonable presumption that she had been in

possession even before June 12, 1945.16

Vicente Oco:

“Q – Mr. Witness, If you know about what period your

predecessor has started to possess this land subject matter of

this application?

A – Per my personal knowledge, it was before the second

world war but the Municipality of El Salvador was created onJune 15, 1948 by virtue of RA 268 and it’s started to officially

function only on August 2, 1948[.]

_______________

16 Rollo, p. 102.417

VOL. 666, FEBRUARY 20, 2012 417


Q – From whom did you acquire this information?

A – From the seller and the adjoining lot owners.”17

To prove that its predecessors-in-interest exercised acts of

dominion over the subject property, the respondent claimed

that per Francisca Oco’s Tax Declarations, the following

improvements were introduced in Area A: nineteen (19)

coconut and ten (10) banana trees in Area A in 1957 and

1963; thirty-three (33) coconut trees in 1969 and 1973; thirty-

three (33) coconut trees, one (1) mango tree and three (3)seguidillas vines in 1974; thirty-three (33) coconut trees in

1980; eighty-seven (87) coconut trees in 1987; and fifteen (15)

coconut trees in 1989. Per Jacinto Tan’s Tax Declarations,

there were fifty-seven (57) coconut trees in Area B in 1973,

1974, 1980, 1989 and 1990.18

A reading of the CA’s July 31, 2008 Decision shows that it

affirmed the grant of the respondent’s application given its

supposed compliance with Section 14 (2) of P.D. No. 1529. It

ruled that based on the evidence submitted, the respondent

isnotqualifiedtoregisterthesubjectpropertyinitsname

Environment and Natural Resources Office (CENRO),20 the

DepartmentofAgrarianReform (DAR)convertedthesame













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is not qualified to register the subject property in its name

under Section 14 (1) as the possession and occupation of its

predecessors-in-interest commenced after June 12, 1945.

Nonetheless, as the CA ruled, the respondent acquired title to

the subject property by prescription as its predecessors-in-

interest had possessed the subject property for more thanthirty (30) years. Citing Buenaventura v. Republic of the

Philippines,19 the CA held that even if possession commenced

after June 12, 1945, registration is still possible under

Section 14 (2) and possession in the concept of an owner

effectively converts an alienable and disposable public land

into private property.

This Court, however, disagrees on the conclusion arrived

at by the CA. On the premise that the application forregistra-

_______________

17 Id., at pp. 102-103.

18 Id., at pp. 99-101.

19 G.R. No. 166865, March 2, 2007, 517 SCRA 271.418


Republic vs. East Silverlane Realty Development Corporationtion, which was filed in 1995, is based on Section 14 (2), it

was not proven that the respondent and its predecessors-in-

interest had been in possession of the subject property in the

manner prescribed by law and for the period necessary before

acquisitive prescription may apply.

While the subject land was supposedly declared alienable

and disposable on December 31, 1925 per the April 18, 1997

Certification and July 1, 1997 Report of the Community

Department of Agrarian Reform (DAR) converted the same

from agricultural to industrial only on October 16,

1990.21 Also, it was only in 2000 that the Municipality of El

Salvador passed a Zoning Ordinance, including the subject

property in the industrial zone.22Therefore, it was only in

1990 that the subject property had been declared patrimonialand it is only then that the prescriptive period began to run.

The respondent cannot benefit from the alleged possession of

its predecessors-in-interest because prior to the withdrawal

of the subject property from the public domain, it may not be

acquired by prescription.

On the premise that the application of the respondent is

predicated on Section 14 (1), the same would likewise not

prosper. As shown by the tax declarations of the respondent’spredecessors-in-interest, the earliest that the respondent can

trace back the possession of its predecessors-in-interest is in

1948. That there were four-year old coconut trees in Area A

as stated in Agapita Claudel’s 1948 Tax Declaration cannot

be considered a “well-nigh controvertible evidence” that she

was in possession prior to June 12, 1945 without any

evidence that she planted and cultivated them. In the case of

Jacinto Tan Lay Cho, the earliest tax declaration in his nameis dated 1948 and there is no evidence that he occupied and

possessed

_______________

20 Rollo, p. 142.

21 Id., at pp. 84, 133.

22 Id., at pp. 89-90, 138-140.419

VOL. 666, FEBRUARY 20, 2012 419

Republic vs. East Silverlane Realty Development CorporationOn the other hand, Section 14 (2) is silent as to the

requirednatureofpossessionandoccupationthusrequiring




















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p y p p

Area B on or prior to June 12, 1945. Furthermore, the

testimony of the respondent’s lone witness that the

respondent’s predecessors-in-interest were already in

possession of the subject property as of June 12, 1945 lacks

probative value for being hearsay.

It is explicit under Section 14 (1) that the possession and

occupation required to acquire an imperfect title over an

alienable and disposable public land must be “open,

continuous, exclusive and notorious” in character. In Republic

of the Philippines v. Alconaba,23 this Court explained that the

intent behind the use of “possession” in conjunction with

“occupation” is to emphasize the need for actual and not just

constructive or fictional possession.“The law speaks of possession and occupation. Since these

words are separated by the conjunctionand, the clear

intention of the law is not to make one synonymous with the

other. Possession is broader than occupation because it

includes constructive possession. When, therefore, the law

adds the wordoccupation, it seeks to delimit the all

encompassing effect of constructive possession. Taken

together with the words open, continuous, exclusive andnotorious, the wordoccupation serves to highlight the fact

that for an applicant to qualify, his possession must not be a

mere fiction. Actual possession of a land consists in the

manifestation of acts of dominion over it of such a nature as a

party would naturally exercise over his own

property.”24 (citations omitted)

required nature of possession and occupation, thus, requiring

a reference to the relevant provisions of the Civil Code on

prescription. And under Article 1118 thereof, possession for

purposes of prescription must be “in the concept of an owner,

public, peaceful and uninterrupted.” In Heirs of Marcelina

_______________23 471 Phil. 607; 427 SCRA 611 (2004).

24 Id., at p. 620; pp. 619-620.420



Arzadon-Crisologo v. Rañon,25 this Court expounded on the

nature of possession required for purposes of prescription:

“It is concerned with lapse of time in the manner and under

conditions laid down by law, namely, that the possession

should be in the concept of an owner, public, peaceful,

uninterrupted and adverse. Possession is open when it is

patent, visible, apparent, notorious and not clandestine. It is

continuous when uninterrupted, unbroken and not

intermittent or occasional; exclusive when the adverse

possessor can show exclusive dominion over the land and an

appropriation of it to his own use and benefit; and notoriouswhen it is so conspicuous that it is generally known and

talked of by the public or the people in the neighborhood. The

party who asserts ownership by adverse possession must

prove the presence of the essential elements of acquisitive

prescription.”26 (citations omitted)

This Court is not satisfied with the evidence presented by

the respondent to prove compliance with the possession

required either under Section 14 (1) or Section 14 (2).

First, the twelve (12) Tax Declarations covering Area A

andtheeleven(11)TaxDeclarationscoveringAreaBfora

nature and duration required by law.29 It is therefore

inconsequentialifthepetitionerfailedtopresentevidence















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and the eleven (11) Tax Declarations covering Area B for a

claimed possession of more than forty-six (46) years (1948-

1994) do not qualify as competent evidence of actual

possession and occupation. As this Court ruled inWee v.

Republic of the Philippines:27

“It bears stressing that petitioner presented only five taxdeclarations (for the years 1957, 1961, 1967, 1980 and 1985)

for a claimed possession and occupation of more than 45

years (1945-1993).This type of intermittent and

sporadic assertion of alleged ownership does not prove

open, continuous, exclusive and notorious possession

and occupation. In any event, in the absence of other

competent evidence, tax declarations do not conclusively

estab-_______________

25 G.R. No. 171068, September 5, 2007, 532 SCRA 391.

26 Id., at p. 404.

27 G.R. No. 177384, December 8, 2009, 608 SCRA 72.421

VOL. 666, FEBRUARY 20, 2012 421


lish either possession or declarant’s right to registration oftitle.”28(emphasis supplied and citation omitted)

The phrase “adverse, continuous, open, public, and in

concept of owner,” by which the respondent describes its

possession and that of its predecessors-in-interest is a

conclusion of law. The burden of proof is on the respondent to

prove by clear, positive and convincing evidence that the

alleged possession of its predecessors-in-interest was of the

inconsequential if the petitioner failed to present evidence

that would controvert the allegations of the respondent. A

person who seeks the registration of title to a piece of land on

the basis of possession by himself and his predecessors-in-

interest must prove his claim by clear and convincing

evidence,i.e., he must prove his title and should not rely onthe absence or weakness of the evidence of the oppositors.30

The respondent’s claim of ownership will not prosper on

the basis of the tax declarations alone. InCequeña v.

Bolante,31 this Court ruled that it is only when these tax

declarations are coupled with proof of actual possession of the

property that they may become the basis of a claim of

ownership.32 In the absence of actual public and adverse

possession, the declaration of the land for tax purposes doesnot prove ownership.33

Second, that the nineteen (19) coconut trees supposedly

found on Area A were four years old at the time Agapita

Claudel filed a Tax Declaration in 1948 will not suffice as

_______________

28 Id., at p. 83.

29 SeeThe Director, Lands Mgt. Bureau v. Court of

Appeals, 381 Phil. 761, 772; 324 SCRA 757, 767 (2000).30 Arbias v. Republic of the Philippines, G.R. No. 173808,

September 17, 2008, 565 SCRA 582, 597.

31 386 Phil. 419; 330 SCRA 216 (2000).

32 Id., at p. 430.

33 Id., at p. 431; p. 228.422



evidence that her possession commenced prior to June 12,

1945 in theabsenceofevidencethatsheplantedand

testify as to what specific acts of dominion or ownership were

performedbytherespondent’spredecessors-in-interestandif
































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1945, in the absence of evidence that she planted and

cultivated them. Alternatively, assuming that Agapita

Claudel planted and maintained these trees, such can only be

considered “casual cultivation” considering the size of Area A.

On the other hand, that Jacinto Tan Lay Cho possessed Area

B in the concept of an owner on or prior to June 12, 1945cannot be assumed from his 1948 Tax Declaration.

Third, that plants were on the subject property without

any evidence that it was the respondent’s predecessors-in-

interest who planted them and that actual cultivation or

harvesting was made does not constitute “well-nigh

incontrovertible evidence” of actual possession and

occupation. As this Court ruled inWee:

“We are, therefore, constrained to conclude that the mereexistence of an unspecified number of coffee plants, sans any

evidence as to who planted them, when they were planted,

whether cultivation or harvesting was made or what other

acts of occupation and ownership were undertaken, is not

sufficient to demonstrate petitioner’s right to the registration

of title in her favor.”34

Fourth, Vicente Oco’s testimony deserves scant

consideration and will not supplement the inherentinadequacy of the tax declarations. Apart from being self-

serving, it is undoubtedly hearsay. Vicente Oco lacks personal

knowledge as to when the predecessors-in-interest of the

respondent started to occupy the subject property and

admitted that his testimony was based on what he allegedly

gathered from the respondent’s predecessors-in-interest and

the owners of adjoining lot. Moreover, Vicente Oco did not

performed by the respondents predecessors-in-interest and if

indeed they did. He merely made a general claim that they

came into possession before World War II, which is a mere

conclusion of law and

_______________

34 Supra note 27, at p. 84.423

VOL. 666, FEBRUARY 20, 2012 423


not factual proof of possession, and therefore unavailing and

cannot suffice.35 Evidence of this nature should have been

received with suspicion, if not dismissed as tenuous and

unreliable.

Finally, that the respondent’s application was filed after

only four years from the time the subject property may be

considered patrimonial by reason of the DAR’s October 26,

1990 Order shows lack of possession whether for ordinary or

extraordinary prescriptive period. The principle enunciated

in Heirs of Malabanancited above was reiterated and applied

in Republic of the Philippines v. Rizalvo:36

“On this basis, respondent would have been eligible for

application for registration because his claim of ownershipand possession over the subject property even exceeds thirty

(30) years. However, it is jurisprudentially clear that the

thirty (30)-year period of prescription for purposes of

acquiring ownership and registration of public land under

Section 14 (2) of P.D. No. 1529 only begins from the moment

the State expressly declares that the public dominion

property is no longer intended for public service or the

development of the national wealth or that the property has

beenconvertedintopatrimonial”37——o0o——











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been converted into patrimonial.

WHEREFORE, premises considered, the instant petition

is GRANTED. The July 31, 2008 Decision and February 20,

2009 Resolution of the Court of Appeals in CA-G.R. CV No.

00143 are REVERSED and SET ASIDE and the respondent’s

application for registration of title over Lot 9039 of CagayanCadastre is hereby DENIED for lack of merit.

SO ORDERED.

Carpio, Villarama, Jr.,** Perezand Sereno, JJ., concur.

_______________

35 Supra note 29, at p. 770; p. 765.

36 G.R. No. 172011, March 7, 2011, 644 SCRA 516.

37 Id.



Petition granted, judgment and resolution reversed and set

aside.

Notes.—Under ordinary acquisitive prescription, a person

acquires ownership of a patrimonial property through

possession for at least ten (10) years, in good faith and with

just title. Under extraordinary acquisitive prescription, aperson’s uninterrupted adverse possession of patrimonial

property for at least thirty (30) years, regardless of good faith

or just title, ripens into ownership. ( Republic vs. Ching, 634

SCRA 415 [2010])

An applicant for judicial confirmation of imperfect title

must prove compliance with Section 14 of Presidential Decree

No. 1529 or the Property Registration Decree. ( Republic vs.

Rizalvo, Jr., 644 SCRA 516 [2011])

_______________

** Additional Member in lieu of Associate Justice Arturo

D. Brion per Special Order No. 1195 dated February 15,

2012.


G.R. No. 161380. April 21, 2014.*

AZNAR BROTHERS REALTY COMPANY,

petitioner,vs.SPOUSES JOSE and MAGDALENA YBAÑEZ,

respondents.

Remedial Law; Civil Procedure; Pre-Trial; The parties

had the obligation to disclose during the pre-trial all the

issues they intended to raise during the trial, except those

involving privileged or impeaching matters, for the rule is that

the definition of issues during the pre-trial conference will bar

the consideration of others, whether during trial or on

appeals.—The holding by both lower courts was proper and

correct. The noninclusion in the pre-trial order barred the

identity of the propertyin litis as an issue, for it is basic that

any factual

_______________

* FIRST DIVISION.

12


Aznar Brothers Realty Company vs. Ybañez

issue not included in the pre-trial order will not be heard and

considered at the trial, much less, on appeal. The parties had

the obligation to disclose during the pre-trial all the issues

theyintendedtoraiseduringthetrialexceptthoseinvolving

findings of fact were conclusions without citation of the

specificevidenceonwhichtheywerebased;and(10)when




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they intended to raise during the trial, except those involving

privileged or impeaching matters, for the rule is that the

definition of issues during the pre-trial conference will bar

the consideration of others, whether during trial or on

appeal. The basis of the exclusion is that the parties are

concluded by the delimitation of the issues in the pre-trialorder because they themselves agreed to it.

Same; Same; Courts; Supreme Court; Jurisdiction; The

Supreme Court is not a trier of facts; Exceptions.—For the

Spouses Ybañez to call upon the Court now to analyze or

weigh evidence all over again upon such a factual matter

would be impermissible considering that the Court is not a

trier of facts. There are exceptional instances in which the

Court has held itself competent to make its own appreciationof the facts, and not be concluded by the findings of fact of the

trial and appellate courts, namely: (1) when the factual

findings of the CA and those of the trial court were

contradictory; (2) when the findings are grounded entirely on

speculation, surmises, or conjectures; (3) when the inference

made by the CA from its findings of fact was manifestly

mistaken, absurd, or impossible; (4) when there is grave

abuse of discretion in the appreciation of facts; (5) when theCA, in making its findings, went beyond the issues of the

case, and such findings were contrary to the admissions of

both appellant and appellee; (6) when the judgment of the CA

was premised on a misapprehension of facts; (7) when the CA

failed to notice certain relevant facts that, if properly

considered, would justify a different conclusion; (8) when the

findings of facts were themselves conflicting; (9) when the

specific evidence on which they were based; and (10) when

the findings of fact of the CA were premised on the absence of

evidence but such findings were contradicted by the evidence

on record.

Civil Law; Land Registration; Although a deed or

instrument affecting unregistered lands would be valid onlybetween the parties thereto, third parties would also be

affected by the registered deed or instrument on the theory of

constructive notice once it was further registered.—Although a

deed or instrument affecting unregistered lands would be

valid only between the parties thereto, third parties3

VOL. 722, APRIL 21, 2014


would also be affected by the registered deed or

instrument on the theory of constructive notice once it was

further registered in accordance with Section 194,i.e., the

deed or instrument was written or inscribed in the day book

and the register book for unregistered lands in the Office of

the Register of Deeds for the province or city where the realty

was located. As ruled inGutierrez v. Mendoza-Plaza, 607

SCRA 807 (2009): The non-registration of the aforesaid deed

does not also affect the validity thereof. Registration is not a

requirement for validity of the contract as between the

parties, for the effect of registration serves chiefly to bind

third persons.The principal purpose of registration is

merely to notify other persons not parties to a

contract that a transaction involving the property has

been entered into. The conveyance of unregistered land

shall not be valid against any person unless registered, except

(1)thegrantor,(2)hisheirsanddevisees,and(3)third

4


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(1) the grantor, (2) his heirs and devisees, and (3) third

persons having actual notice or knowledge thereof. As held by

the Court of Appeals, petitioners are the heirs of Ignacio, the

grantor of the subject property. Thus, they are bound by the

provisions of the deed of donationinter vivos.

Same; Same; Even with the effectivity of Presidential Decree (P.D.) No. 1529, all unregistered lands may still be

registered pursuant to Section 113 of P.D. No. 1529, which

essentially replicates Section 194, as amended by Act No.

3344, to the effect that a deed or instrument conveying real

estate not registered under the Torrens system should affect

only the parties thereto unless the deed or instrument was

registered in accordance with the same section.—Section 3 of

P.D. No. 1529, albeit expressly discontinuing the system ofregistration under theSpanish Mortgage Law, has

considered lands recorded under that system as unregistered

land that could still be recorded under Section 113 of P.D. No.

1529 “until the land shall have been brought under the

operation of the Torrens system;” and has provided that

“[t]he books of registration for unregistered lands provided

under Section 194 of the Revised Administrative Code, as

amended by Act No. 3344, shall continue to remain in force;provided, that all instruments dealing with unregistered

lands shall henceforth be registered under Section 113 of this

Decree.” It is clear, therefore, that even with the effectivity of

P.D. No. 1529, all unregistered lands may still be registered

pursuant to Section 113 of P.D. No. 1529, which essentially

replicates Section 194, as amended by Act No. 3344, to the

effect that a deed or instrument conveying


real estatenot registered under the Torrens system should

affect only the parties thereto unless the deed or instrument

was registered in accordance with the same section.

Same; Same; Constructive Notice; The only exception to

the rule on constructive notice by registration of the deed or

instrument affecting unregistered realty exists in favor of a

“third party with a better right.”—The only exception to the

rule on constructive notice by registration of the deed or

instrument affecting unregistered realty exists in favor of “a

third party with a better right.” This exception is provided in

Section 194, as amended by Act No. 3344, to the effect that

the registration “shall be understood to be without prejudice

to a third party with a better right;” and in paragraph (b) of

Section 113 of P.D. No. 1529, to the effect that “any recording

made under this section shall be without prejudice to a third

party with a better right.” As to who is “a third party with

better right” under these provisions is suitably explained

in Hanopol v. Pilapil, 7 SCRA 452 (1963), a case where the

sale of unregistered land was registered under Act No. 3344

but the land was sold twice, as follows: It thus appears that

the “better right” referred to in Act No. 3344 is much more

than the mere prior deed of sale in favor of the first vendee.

In the Lichauco case just mentioned,it was the

prescriptive right that had supervened. Or, as also

suggested in that case,other facts and circumstances

exist which, in addition to his deed of sale, the first

vendee can be said to have better right than the

secondpurchaser.

knowledge or notice of defendant’s conduct and having been

afforded an opportunity to institute a suit; (3) lack of

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second purchaser.

Same; Same; Laches; Words and Phrases; Laches is the

failure or neglect for an unreasonable and unexplained length

of time to do that which by exerting due diligence a party

could and should have done earlier.—Laches is the failure or

neglect for an unreasonable and unexplained length of timeto do that which by exerting due diligence a party could and

should have done earlier. A suit that is barred on the ground

of laches is also called a stale demand. Laches is based on

grounds of public policy that requires, for the peace of society,

the discouragement of stale claims and, unlike the statute of

limitations, is not a mere question of time but is principally a

question of the inequity or unfairness of permitting a right or

claim to be enforced or asserted. Tempus enim modustollendi obligationes et actiones, quia tempus currit contra

desides et sui juris contemptores(For time is a means of

dissipating obligations and actions, because5

VOL. 722, APRIL 21, 2014


time runs against the slothful and careless of their own

rights).Truly, the law serves those who are vigilant anddiligent, not those who sleep when the law requires them to

act.

Same; Same; Elements of Laches.—For laches to bar a

claim, four elements must be shown, namely: (1) conduct on

the part of the defendant, or one under whom he claims,

giving rise to a situation of which a complaint is made and for

which the complainant seeks a remedy; (2) delay in asserting

the complainant’s right, the complainant having had

aoded a oppotu tyto sttuteasut;(3) ac o

knowledge or notice on the part of the defendant that the

complainant would assert the right on which he bases his

suit; and (4) injury or prejudice to the defendant in the event

that the relief is accorded to the complainant, or the suit is

not held to be barred.Same; Land Registration; An action to declare the nullity

of a void title does not prescribe and is susceptible to direct, as

well as to collateral, attack.—The principle of indefeasibility

of the Torrens title does not protect OCT No. 2150 because

the free patent on which the issuance of the title was based

was null and void. A direct attack as well as a collateral

attack are proper, for, as the Court declared in De Guzman v.

Agbagala, 546 SCRA 278 (2008): x x x. An action to declarethe nullity of a void title does not prescribe and is susceptible

to direct, as well as to collateral, attack. OCT No. P-30187

was registered on the basis of a free patent which the RTC

ruled was issued by the Director of Lands without authority.

The petitioners falsely claimed that the land was public land

when in fact it was not as it was private land previously

owned by Carmen who inherited it from her parents.

PETITION for review on certiorari of a decision of the Courtof Appeals.


Ricar N. Vasquez for petitioner.

Palma, Pangan & Ybañez for respondents.6



BERSAMIN, J.:

The ownership of a sizable parcel of land is the subject of

[1] Rollo, pp. 28-36; penned by Associate Justice Hilarion

L. Aquino (retired) and concurred in by Associate Justice



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p p j

this dispute between the buyer of its recognized owner and

the buyer of the successors-in-interest of the recognized

owner. The land has since been registered under the Torrens

system in the name of the latter buyer who had meanwhile

obtained a free patent on the premise that the land belongedto the public domain.

The Case

Aznar Brothers Realty Company (Aznar Brothers) is on

appeal to review and undo the adverse decision promulgated

on October 10, 2002,[1] whereby the Court of Appeals (CA)

affirmed the judgment rendered on March 8, 1996 by the

Regional Trial Court (RTC), Branch 10, in Cebu

City[2] insofar as the RTC: (a) dismissed for lack of merit Aznar Brothers’ complaint for the declaration of the nullity of

the extrajudicial declaration of heirs with extrajudicial

settlement of estate and deed of absolute sale, and (b)

declared Lot No. 18563 as legally owned by defendants

Spouses Jose and Magdalena Ybañez (Spouses Ybañez), but

modified the decision of the RTC by deleting the awards of

moral and exemplary damages, attorney’s fees, litigation

expenses and costs of suit. Antecedents

On March 21, 1964, Casimiro Ybañez (Casimiro), with the

marital consent of Maria Daclan, executed a Deed of Absolute

Sale in favor of Aznar Brothers conveying for P2,500.00 the

17,575-square-meter unregistered agricultural land planted

_______________

q ( ) y

Reyes (now a Member of the Court) and Associate Justice

Mario L. Guariña III (retired).

[2] Id., at pp. 24-27; penned by Judge Leonardo B.

Cañares.7

VOL. 722, APRIL 21, 2014 7


with 17 coconut trees situated in Banika-Bulacao, Pardo,

Cebu City, and covered by Tax Declaration No. IV-00128.

[3]The Deed of Absolute Sale described the property as

bounded on the North by Aznar Brothers; on the East by

Angel Sabellano; on the South by Bernardo Sabellano; and on

the West by Agaton Bacalso. The parties agreed to register

the sale under Act No. 3344.[4]

On February 17, 1967, Saturnino Tanuco sold to Aznar

Brothers for P2,528.00 the 15,760-square-meter parcel of corn

and cogon land planted with 17 coconut trees situated in

Candawawan, Pardo, Cebu City, bounded on the North by

Alfonso Pacaña; on the East by Tecla Cabales; on the South by

Angel Abellana; and on the West by Castor Sabellano. Tax

Declaration No. IV-004787 was issued for the property. The

parties agreed to register the parcel of land under Act No.

3344.[5]

In his affidavit of confirmation executed on April 11, 1967,

Angel Abellana declared that during the lifetime of his

daughter, Rosa, he had given to her husband, Tanuco, a

parcel of land “known as Lot No. 18563” with an area of

15,760 square meters located in Pardo, Cebu City; that the

land was bounded on the North by Alfonso Pacaña; on the

East by Tecla Cabales; on the South by Lot No. 5316 of Angel

Abellana; and on the West by Castor Sabellano; that the

Cebu City. By the same document, they sold the entire lot for

P1,000.00 to their co-heir, Adriano D. Ybañez (Adriano).[7]















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; y ;

property assessed at P300.00 was declared under Tax

Declaration No. IV-004787; and that on February 17, 1967

Tanuco had sold the parcel of land to Aznar Brothers for

P4,728.00.[6]

_______________[3] Records, p. 6.

[4] An Act to Amend Section One Hundred and Ninety-

Four of the Administrative Code, as Amended by Act

Numbered Two Thousand Eight Hundred and Thirty-Seven,

Concerning the Recording of Instruments Relating to Land

Not Registered under Act Numbered Four Hundred Ninety-

Six, entitled “The Land Registration Act,” and Fixing the Fees

to be Collected by the Register of Deeds for Instruments Recorded under said Act.

[5] Records, p. 158.

[6] Id., at p. 252; Exh. J.8



On July 3, 1968, Casimiro died intestate leaving as heirs

his wife Maria, and their children, namely, Fabian and

Adriano, both surnamed Ybañez, and Carmen Ybañez-

Tagimacruz, Fe Ybañez-Alison, and Dulcisima Ybañez-

Tagimacruz. On August 29, 1977, the heirs of Casimiro

executed a document entitled Extrajudicial Declaration of

Heirs with an Extrajudicial Settlement of Estate of Deceased

Person and Deed of Absolute Sale, whereby they divided and

adjudicated among themselves Lot No. 18563 with an area of

16,050 square meters situated in Banika, Bulacao, Pardo

, ,

On June 21, 1978, Adriano sold Lot No. 18563 to Jose R.

Ybañez for P60,000.00. Lot No. 18563 is described in their

deed of sale as containing an area of 16,050 square meters,

and was bounded on the North by the lot of Eusebia Bacalso;

on the East by a lot of Aznar Brothers; on the South by a lotof Angel Abellana; and on the West by a lot of Teofila C.

Leona.[8]

On January 15, 1979, Jose R. Ybañez filed Free Patent

Application No. (VII-I) 18980 in respect of the land he had

bought from Adriano.[9] In due course, on July 20, 1979,

Original Certificate of Title (OCT) No. 2150 was issued to

Jose R. Ybañez. The 16,050-square-meter land is particularly

described in OCT No. 2150 as —situated in the Barrio of Bulacao-Pardo, City of Cebu

x x x. Bounded on the NorthEast, along lines 1-2-3 by

Lot No. 1811, on the SouthEast, along lines 3-4 by Lot

No. 5316; on the SouthWest, along lines 4-5-6-7-8-9-10-

11 by Lot No. 18565; on the NorthWest, along line 11-12

by Lot No. 18566; along line 12-1 by Lot No. 18114, all

of Cebu City.[10]

_______________ [7] Id. , at pp. 36-37.

[8] Id. , at p. 20.

[9] Id. , at pp. 43 & 44.

[10] Id., at p. 21.9

VOL. 722, APRIL 21, 2014 9


On May 26, 1989, Aznar Brothers filed in the RTC a

complaint against Jose R. Ybañez claiming absolute

[11] Id., at pp. 1-3.

[12] Id., at pp. 13-18.








































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ownership of Lot No. 18563 by virtue of the Deed of Absolute

Sale dated March 21, 1964 executed in its favor by Casimiro

(Civil Case No. CEB-7887). Alleging that the free patent

issued in favor of Jose R. Ybañez covered the same property

“already adjudicated as private property,” Aznar Brotherssought judgment to compel Jose R. Ybañez to surrender all

the documents pertaining to the free patent for cancellation,

and to order him to pay attorney’s fees of P5,000.00 and

litigation expenses of P3,000.00.[11]

Jose R. Ybañez moved to dismiss the complaint of Aznar

Brothers on the ground of lack of cause of action, lack of

jurisdiction over the nature of the action, and estoppel by

laches.[12] After Aznar Brothers opposed,[13] the RTCdenied the motion to dismiss.[14] Thereafter, Jose R. Ybañez

filed his answer to the complaint.

In his answer, Jose R. Ybañez reiterated the grounds of

his motion to dismiss (i.e., lack of cause of action, lack of

jurisdiction over the nature of the action, and the bar by

estoppel by laches); and prayed that Aznar Brothers be

ordered to pay moral damages of P100,000.00; exemplary

damages in an amount to be determined by the court;attorney’s fees of P20,000.00; and litigation expenses of

P5,000.00, plus costs of suit.[15]

In its reply, Aznar Brothers averred that Jose R. Ybañez

did not present “records or certification as to the ownership of

the land at the time of the application for free patent x x x to

prove that the land x x x is not a private land.”[16]

_______________

[13] Id., at pp. 27-31.

[14] Id., at p. 56.

[15] Id., at pp. 60-66.

[16] Id., at pp. 74-75.10



In the course of the case, Aznar Brothers amended its

complaint to allege the sale executed on February 17, 1967 by

Tanuco and confirmed by Angel Abellana on April 11, 1967.

[17]

In his amended answer, Jose R. Ybañez contended that

Aznar Brothers had offered to buy the property from him,

requesting him to update and prepare all the documents

relevant to the sale, but Aznar Brothers later opted to claim

the property as its own when the sale could not be finalized.

[18]

Aznar Brothers amended its complaint a second time to

implead Jose R. Ybañez’s wife Magdalena Marcos-Ybañez as

defendant, averring that both defendants held “no legal right

nor just title to apply for free patent over the lot in question,”

for the land was “no longer a public disposable agricultural

land but a private residential land” that it already owned;

that the issuance of OCT No. 2150 was erroneous and

without factual and legal bases; that it learned about the

registration of the land in the name of Jose R. Ybañez only

when his agent offered to sell the land to it; that it refused

the offer because it was already the owner of the land; and

that consequently OCT No. 2150 should be cancelled, and

Jose R. Ybañez should be ousted from the land.[19]

Settlement of Estate of Deceased Person and Deed of Absolute

Sale, specifically Adriano, were not being impleaded; and that





























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Aznar Brothers sought a restraining order or a writ of

preliminary injunction to prevent the Spouses Ybañez from

disposing of the land. It further sought the declaration as

null and voidab initio the Extrajudicial Declaration of Heirs

with Extrajudicial Settlement of Estate of Deceased Personand Deed of Absolute Sale dated August 29, 1977, and of

the Deed of Absolute Sale dated June 21, 1978; the

cancellation of OCT No. 2150; an order directing the Register

of Deeds to issue another title in its name; the ouster of the

Spouses Ybañez from the property; the permanent injunction

to prevent Spouses Ybañez from interfering with or

disturbing its pos-

_______________[17] Id., at pp. 108-110.

[18] Id., at pp. 116-123.

[19] Id., at pp. 150-155.11

VOL. 722, APRIL 21, 2014 11


session and ownership of Lot No. 18563; and judgment

ordering the Spouses Ybañez to pay moral damages of

P50,000.00, attorney’s fees of P30,000.00, and litigation

expenses of P20,000.00.

The Ybañez Spouses opposed the admission of the second

amended complaint, claiming that the cause of action would

thereby be changed fromaccion publiciana toaccion

reivindicatoria; that while Magdalena Marcos-Ybañez was

thereby being impleaded, the heirs named in

the Extrajudicial Declaration of Heirs with Extrajudicial

the declaration of nullity of OCT No. 2150 was a prohibited

collateral attack on their title to the property.[20]

The RTC admitted the second amended complaint,

emphasizing that the original cause of action ofaccion

publiciana would not be changed because the secondamended complaint would incorporate additional but related

causes of action, a change permitted only during the pre-trial

stage.[21]

The Ybañez Spouses then amended their answer by

reiterating the allegations in their previous answers, and, in

addition, pleaded that they had religiously paid the taxes on

the land; that the claim of ownership of Aznar Brothers had

been based only on tax declarations; that their application forfree patent had been granted more than ten years prior to

the filing of the complaint by Aznar Brothers, who were all

too aware of the land registration case; that Aznar Brothers

did not question their title within one year from its issuance;

that a decree of registration being binding on the whole

world, the filing of the complaint ten years after the title had

been issued left the complaint without any cause of action;

that the action for recovery of possession constituted acollateral attack on their title to the property; and that

adverse, notorious

_______________

[20] Id., at pp. 177-178.

[21] Id., at pp. 179-180.12


Aznar Brothers Realty Company vs. Ybañ

ez

and continuous possession of the property under a claim of

ownership was ineffective against a Torrens title. They

in its favor of Lot No. 18563 despite the sale being registered

under Act No. 3344, as amended; and for awarding moral
















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sought the dismissal of the second amended complaint for

lack of cause of action, lack of jurisdiction, estoppel by laches,

and lack of proper parties; and prayed for moral damages of

P100,000.00; exemplary damages in such amount as the

court would award in the exercise of discretion; attorney’sfees of P20,000.00; and litigation expenses of P5,000.00 plus

costs of suit.[22]

Judgment of the RTC

On March 8, 1996,[23] the RTC rendered judgment after

trial, declaring that the identity of the land sold to Aznar

Brothers by Casimiro and the land sold by the heirs of

Casimiro to Jose R. Ybañez was “not an issue anymore”

because it was “not raised as an issue” during the pre-trialconference; that the issue remaining for resolution concerned

which of the conflicting claims of ownership — that of Aznar

Brothers based on Tax Declaration No. GR-07-049-00694 or

that of the Spouses Ybañez based on OCT No. 2150 — should

prevail; that the Spouses Ybañez with their OCT No. 2150

should prevail, rendering Aznar Brothers’ complaint

dismissible for lack of merit; that Lot No. 18563 was “legally

owned by the defendants”; and Aznar Brothers was liable topay the Spouses Ybañez moral damages of P100,000.00,

exemplary damages of P50,000.00, attorney’s fees of

P20,000.00, and litigation expenses of P5,000.00, plus costs of

suit.

Decision of the CA

Aznar Brothers appealed to the CA, assailing the

judgment of the RTC for not sustaining the sale by Casimiro

damages,

_______________

[22] Id., at pp. 184-191.

[23] Supra note 2.13

VOL. 722, APRIL 21, 2014 13


exemplary damages, attorney’s fees and litigation expenses to

the Spouses Ybañez.

As earlier mentioned, the CA promulgated its adverse

decision on October 10, 2002,[24] decreeing thusly:

WHEREFORE, premises considered, the

Court AFFIRMS the appealed judgment butDELETES the

award of attorney’s fees, litigation expenses, costs of the suit,

moral and exemplary damages.

SO ORDERED.

The CA denied the motion for reconsideration of Aznar

Brothers.

Issues

Only Aznar Brothers has come to the Court for review,raising the following issues for consideration and resolution,

to wit:

1. THE CONCLUSION OF THE HONORABLE COURT

OF APPEALS THAT PETITIONER IS BARRED BY

ESTOPPEL BY LACHES, IS NOT IN ACCORD WITH

LAW AND/OR WITH APPLICABLE DECISIONS OF THE

SUPREME COURT THEREBY COMMITTING A

REVERSIBLE ERROR OF LAW WHICH IS GRAVELY

trial. The Spouses Ybañez insist herein, however, that the

RTC and the CA should have made such a finding











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PREJUDICIAL TO THE RIGHT OF THE PETITIONER

OVER THE SUBJECT LOT NO. 18563. SAID

CONCLUSION IS NOT SUPPORTED BY FACTS ON

RECORDS ( sic).

2. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE DECISION OF THE REGIONAL

TRIAL COURT DECLARING SUBJECT LOT AS

LEGALLY OWNED BY THE RESPONDENTS DESPITE

OF ITS OWN FINDING THAT: RESPONDENTS WERE

BUYERS IN BAD FAITH

_______________

[24] Supra note 1.



AND THAT THEIR SELLERS WERE NOT OWNERS OF

THE PROPERTY IN QUESTION AND THEREFORE,

THERE WAS NOTHING THAT THEY COULD HAVE

SOLD TO THE RESPONDENTS.[25]

Ruling of the Court

The appeal is meritorious.

1.

Identity of the lot in litis is no

longer a proper issue herein

The CA and the RTC both held that the identity of the

propertyin litiswas no longer an issue to be considered and

determined because the parties did not raise it at the pre-

nonetheless in view of the materiality of whether the land

claimed by Aznar Brothers was different from Lot No. 18563,

the land subject of their OCT No. 2150.

We clarify that although the Spouses Ybañez’s non-appeal

barred them from assigning errors for purposes of thisreview, they are not prevented from now insisting, if only to

uphold the judgment of the CA against Aznar Brothers,

[26] that the property in litis was not the same as Lot No.

18563, but they would not be accorded any relief upon those

reasons,[27] even if

_______________

[25] Rollo, p. 9.

[26] Bersamin, Appeal and Review in the Philippines,Central Professional Books, Inc., Quezon City, Second

Edition, p. 197,citingJustice Thurgood Marshall,The Federal

Appeal, in Counsel on Appeal,141, 152: (A. Charpentier, ed.,

1968).

[27] Id., citing Aparri v. Court of Appeals, No. L-15947,

April 30, 1965, 13 SCRA 611; Makati Haberdashery, Inc. v.

NLRC, G.R. Nos. 83380-81, November 15, 1999, 179 SCRA

448; Bella v. Court of Appeals, G.R. No. 105997, September26, 1997, 279 SCRA 497;Cabral15

VOL. 722, APRIL 21, 2014 15


the Court should find Aznar Brother’s appeal unmeritorious

or utterly frivolous.[28]

Regardless, the holding by both lower courts was proper

and correct. The noninclusion in the pre-trial order barred

the identity of the propertyin litis as an issue, for it is basic

that any factual issue not included in the pre-trial order will

issues to be tried. The contents of the order shall

control the subsequent course of the action, unless


















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not be heard and considered at the trial,[29]much less, on

appeal. The parties had the obligation to disclose during the

pre-trial all the issues they intended to raise during the trial,

except those involving privileged or impeaching matters, for

the rule is that the definition of issues during the pre-trialconference will bar the consideration of others, whether

during trial or on appeal. The basis of the exclusion is that

the parties are concluded by the delimitation of the issues in

the pre-trial order because they themselves agreed to it.[30]

The waiver of the identity of the propertyin litis as an

issue did not violate the right of any of the parties herein due

to the Rules of Courthaving forewarned them in Section 7,

Rule_______________

v. Court of Appeals, G.R. No. 50702, September 29, 1989, 178

SCRA 91; Franco v. Intermediate Appellate Court, G.R. No.

71137, October 5, 1989, 178 SCRA 331.

[28] Id., citing Enecilla v. Magsaysay, L-21568, May 19,

1966, 63 OG 9627.

[29] Section 7, Rule 18, Rules of Court, which states:

Section7.

Record of pre-trial.—The proceedings in thepre-trial shall be recorded. Upon the termination thereof, the

court shall issue an order which shall recite in detail the

matters taken up in the conference, the action taken thereon,

the amendments allowed to the pleadings, and the

agreements or admissions made by the parties as to any of

the matters considered.Should the action proceed to

trial, the order shall explicitly define and limit the

modified before trial to prevent manifest injustice. (5a,

R20)

[30] Asian Terminals, Inc. v. Malayan Insurance Co., Inc.,

G.R. No. 171406, April 4, 2011, 647 SCRA 111, 122

citingVillanueva v. Court of Appeals, G.R. No. 143286, April14, 2004, 427 SCRA 439, 447.16



18 of the Rules of Courtthat should the action proceed to

trial, the pre-trial order would explicitlydefine andlimitthe

issues to be tried, and its contents would control the

subsequent course of the action,unless modified before trial

to prevent manifest injustice.

In reality, the parties could still have reversed the waiver

had they so wanted. Towards that end, they had three

opportunities after the issuance of the pre-trial order to

submit the identity of the propertyin litis as an issue for

trial and decision. The first was for either of them to seek the

modification of the pre-trial order prior to the trial in order to

prevent manifest injustice,[31] but neither did so. The secondwas for either of them to have the trial court consider the

identity of the propertyin litisas an issue proper for the

trial, but such party must give a special reason to justify the

trial court in doing so. This would have been authorized

under Section 5, Rule 30 of the Rules of Court.[32] Again,

neither of them seized

_______________

[31] Section 7, Rule 18 of the Rules of Court.

[32] Section5. Order of trial.—Subject to the provisions

objection, or objected to such evidence on the ground of its not

being relevant to any issue raised in the pleadings or in the



















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of Section 2 of Rule 31, andunless the court for special

reasons otherwise directs, the trial shall be limited to

the issues stated in the pre-trial orderand shall proceed

as follows:

(a) The plaintiff shall adduce evidence in support of hiscomplaint;

(b) The defendant shall then adduce evidence in support

of his defense, counterclaim, cross-claim and third-party

complaint;

(c) The third-party defendant, if any, shall adduce

evidence of his defense, counterclaim, cross-claim and fourth-

party complaint;

(d) The fourth-party, and so forth, if any, shall adduceevidence of the material facts pleaded by them;

(e) The parties against whom any counterclaim or cross-

claim has been pleaded, shall adduce evidence in support of

their defense, in the order to be prescribed by the court;

(f) The parties may then respectively adduce rebutting

evidence only, unless the court, for good reasons and in the

furtherance of justice, permits them to adduce evidence upon

their original case; and17

VOL. 722, APRIL 21, 2014 17


such opportunity. And the third was for the Spouses Ybañez

to adduce evidence on Lot No. 18563 being different from the

land claimed by Aznar Brothers. Had they done so, Aznar

Brothers could have either allowed such evidence without

pre-trial order. The RTC could then have proceeded as it

deemed fit, including allowing such evidence. This procedure

would have been authorized by Section 5, Rule 10 of

the Rules of Court, viz.:

Section5.

Amendment to conform to or authorize presentation of evidence.—When issues not raised by the

pleadings are tried with the express or implied consent of the

parties, they shall be treated in all respects as if they had

been raised in the pleadings. Such amendment of the

pleadings as may be necessary to cause them to conform to

the evidence and to raise these issues may be made upon

motion of any party at any time, even after judgment; but

failure to amend does not affect the result of the trial of theseissues. If evidence is objected to at the trial on the ground

that it is not within the issues made by the pleadings, the

court may allow the pleadings to be amended and shall do so

with liberality if the presentation of the merits of the action

and the ends of substantial justice will be subserved thereby.

The court may grant a continuance to enable the amendment

to be made. (5a)

Moreover, for the Spouses Ybañez to call upon the Courtnow to analyze or weigh evidence all over again upon such a

(g) Upon admission of the evidence, the case shall be

deemed submitted for decision, unless the court directs the

parties to argue or to submit their respective memoranda or

any further pleadings.

If several defendants or third-party defendants, and so

forth, having separate defenses appear by different counsel,

the court shall determine the relative order of presentation of

their evidence. (1a, R30)

Accordingly, the Court, just as the lower courts have been

bound, shall proceed upon the assumption that the

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18



factual matter would be impermissible considering that the

Court is not a trier of facts.[33]There are exceptional instances in which the Court has

held itself competent to make its own appreciation of the

facts, and not be concluded by the findings of fact of the trial

and appellate courts, namely: (1) when the factual findings of

the CA and those of the trial court were contradictory; (2)

when the findings are grounded entirely on speculation,

surmises, or conjectures; (3) when the inference made by the

CA from its findings of fact was manifestly mistaken, absurd,

or impossible; (4) when there is grave abuse of discretion in

the appreciation of facts; (5) when the CA, in making its

findings, went beyond the issues of the case, and such

findings were contrary to the admissions of both appellant

and appellee; (6) when the judgment of the CA was premised

on a misapprehension of facts; (7) when the CA failed to

notice certain relevant facts that, if properly considered,

would justify a different conclusion; (8) when the findings of

facts were themselves conflicting; (9) when the findings of fact

were conclusions without citation of the specific evidence on

which they were based; and (10) when the findings of fact of

the CA were premised on the absence of evidence but such

findings were contradicted by the evidence on record.

[34] None of the aforementioned exceptions obtains in this

case.

propertyin litis and Lot No. 18563 were one and the same

realty.

2.

CA correctly concluded that Aznar Brothers

owned Lot No. 18563; and that the SpousesYbañez were not buyers in good faith

_______________

[33] Heirs of Margarito Pabaus v. Heirs of Amanda

Yutiamco, G.R. No. 164356, July 27, 2011, 654 SCRA 521,

531-532.

[34] E.Y. Industrial Sales, Inc. v. Shen Dar Electricity and

Machinery Co., Ltd., G.R. No. 184850, October 20, 2010, 634

SCRA 363, 382.19

VOL. 722, APRIL 21, 2014 19


In its assailed judgment, the CA concluded that the RTC

erred in holding in favor of the Spouses Ybañez, observing as

follows:

The trial court however erred when it held:

Nevertheless, from the totality of the evidence adduced bythe parties, there is no preponderant evidence that the

defendants had prior knowledge of the previous sale of

subject property to the plaintiff when they bought the same

from Adriano D. Ybañez on June 21, 1978. And there is

neither any showing that defendant had prior knowledge of

such sale when they applied for and was issued Original

Certificate of Title No. 2150 on August 14, 1979. Thus,

defendants can very well be considered as purchasers to the

protection of the provisions of P.D. 1529. While plaintiff has

from sellers who were not the owners. Accordingly, we resolve

the second error raised herein in favor of Aznar Brothers.









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shown to have acquired or was issued tax declaration No. GR-

07-049-00694 and had paid taxes on the property, said tax

declaration and realty tax payments are not conclusive

evidence of ownership ( Ferrer-Lopez vs. Court of Appeals, 150

SCRA 393). It cannot prevail over Original Certificate of TitleNo. 2150 in the name of the defendants, as a torrens title

concludes all controversies over ownership of land covered by

a final decree of registration ( PNB vs. Court of Appeals, 153

SCRA 435).

The Deed of Absolute Sale (Exhibit F) in favor of plaintiff-

appellant Aznar was registered under Act 3344, as amended

on March 23, 1964 with the Register of Deeds of Cebu City.

The registration of said deed gave constructive notice to thewhole world including defendant-appellees of the existence of

said deed of conveyance. (Gerona v. Guzman, 11 SCRA

153) Defendant-appellees cannot, therefore, claim to be

buyers in good faith of the land in question. Resultantly, they

merely stepped into the shoes of their sellersvis-à-vis said

land. Since their sellers were not owners of the property in

question, there was nothing that they could have sold to

defendant-appellees.[35]_______________

[35]Supra note 1 at p. 33.20



We sustain the CA’s conclusion that the Spouses Ybañez

were guilty of bad faith, and that they acquired Lot No. 18563

The records and evidence fully substantiated the CA’s

conclusion. The Spouses Ybañez acquired Lot No. 18563

through the deed of sale executed on June 21, 1978 by

Adriano in favor of Jose R. Ybañez. Together with his siblings

Fabian Ybañez, Carmen Ybañez-Tagimacruz, Fe Ybañez- Alison, and Dulcisima Ybañez-Tagimacruz, Adriano had

supposedly inherited Lot No. 18563 from Casimiro, their

father, who had died intestate on July 3, 1968. Holding

themselves as the heirs and successors-in-interest of

Casimiro, they had then executed on August 29, 1977

the Extrajudicial Declaration of Heirs with anExtrajudicial

Settlement of Estate of Deceased Person and Deed of Absolute

Sale, whereby they divided and adjudicated Lot No. 18563among themselves, and then sold the entire lot to Adriano.

But, as the CA correctly found, the Spouses Ybañez held

no right to Lot No. 18563 because Adriano, their seller, and

his siblings were not the owners of Lot No. 18563. Indeed,

Casimiro had absolutely conveyed his interest in Lot No.

18563 to Aznar Brothers under the Deed of Absolute Sale of

March 21, 1964 with the marital consent of Maria Daclan,

Casimiro’s surviving spouse and the mother of Adriano andhis siblings. Considering that such conveyance was effective

and binding on Adriano and his siblings, there was no valid

transmission of Lot No. 18563 upon Casimiro’s death to any

of said heirs, and they could not legally adjudicate Lot No.

18563 unto themselves, and validly transfer it to Adriano.

The conveyance by Adriano to Jose R. Ybañez on June 21,

1978 was absolutely void and ineffectual.

There is also no question that the Spouses Ybañez were

aware of the conveyance of Lot No. 18563 by Casimiro to

S

prepared by the Chief of the General Land Registration

Office, with the approval of the Secretary of Justice. The day





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Aznar Brothers considering that the Deed of Absolute Saleof

March 21, 1964 between Casimiro and Aznar Brothers was21

VOL. 722, APRIL 21, 2014 21


registered in the book of registry of unregistered land on thesame day pursuant to their agreement. Such registration

constituted a constructive notice of the conveyance on the

part of the Spouses Ybañez pursuant to Section 194 of

the Revised Administrative Code of 1917, as amended by Act

No. 3344, which provided as follows:

Section194. Recording of instruments or deeds

relating to real estate not registered under Act

Numbered Four hundred and ninety-six or under the

Spanish Mortgage Law.—No instrument or

deed establishing, transmitting, acknowledging, modifying

or extinguishing rights with respect to real estate not

registered under the provisions of Act Numbered Four

hundred and ninety-six, entitled “The Land Registration

Act,” and its amendments, or under the Spanish Mortgage

Law,shall be valid, except as between the partiesthereto, until such instrument or deed has been

registered, in the manner hereinafter prescribed, in

the office of the register of deeds for the province or

city where the real estate lies.

It shall be the duty of the register of deeds for each

province or city to keep a day book and a register book of

unregistered real estate, in accordance with a form to be

book shall contain the names of the parties, the nature of the

instrument or deed for which registration is requested, the

hour and minute, date and month of the year when the

instrument was received. The register book shall contain,

among other particulars, the names, age, civil status, and theresidences of the parties interested in the act or contract

registered and in case of marriage, the name of the wife, or

husband, as the case may be, the character of the contract

and its conditions, the nature of each piece of land and its

improvements only, and not any other kind of real estate or

properties, its situation, boundaries, area in square meters,

whether or not the boundaries of the property are visible on

the land by means of monuments or otherwise, and in theaffirma-22



tive case, in what they consist; the permanent improvements

existing on the property; the page number of the assessment

of each property in the year when the entry is made, and the

assessed value of the property for that year; the notary or the

officer who acknowledged, issued, or certified the instrument

or deed; the name of the person or persons who, according to

the instrument, are in present possession of each property; a

note that the land has not been registered under Act

Numbered Four hundred and ninety-six nor under the

Spanish Mortgage Law; that the parties have agreed to

register said instrument under the provisions of this Act, and

that the original instrument has been filed in the office of the

register of deeds, indicating the file number, and that the

duplicate has been delivered to the person concerned; the

hd h d h h lf

have been removed, stating in writing his reasons for

refusing to record said instrument as requested. Any

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exact year, month, day, hour, and minute when the original of

the instrument was received for registration, as stated in the

day book. It shall also be the duty of the register of deeds to

keep an index-book of persons and an index-book of estates,

respectively, in accordance with a form to be also prepared bythe Chief of the General Land Registration Office, with the

approval of the Secretary of Justice.

Upon presentation of any instrument or deed relating to

real estate not registered under Act Numbered Four hundred

and ninety-six and its amendments or under the Spanish

Mortgage Law, which shall be accompanied by as many

duplicates as there are parties interested, it shall be the duty

of the register of deeds to ascertain whether said instrumenthas all the requirements for proper registration. If the

instrument is sufficient and there is no legitimate objection

thereto, or in case of there having been one, if the same has

been dismissed by final judgment of the courts, and if there

does not appear in the register any valid previous entry that

may be affected wholly or in part by the registration of the

instrument or deed presented, and if the case does not come

under the prohibition of section fourteen hundred and fifty-two of Act Numbered Twenty-seven hundred and eleven, the

register of deeds shall register the instrument in the proper

book. In case the instrument or23

VOL. 722, APRIL 21, 2014 23


deed presented has defects preventing its registration, said

register of deeds shall refuse to register it until the defects

registration made under this section shall be

understood to be without prejudice to a third-party

with a better right.

The register of deeds shall be entitled to collect in advance

as fees for the services to be rendered by him in accordancewith this Act, the same fees established for similar services

relating to instruments or deeds in connection with real

estate in section one hundred fourteen of Act Numbered Four

hundred ninety-six entitled “The Land Registration Act,” as

amended by Act Numbered Two thousand eight hundred and

sixty-six. (Emphasis in the original; bold italics supplied.)

Although a deed or instrument affecting unregistered

lands would be valid only between the parties thereto, thirdparties would also be affected by the registered deed or

instrument on the theory of constructive notice once it was

further registered in accordance with Section 194,i.e., the

deed or instrument was written or inscribed in the day book

and the register book for unregistered lands in the Office of

the Register of Deeds for the province or city where the realty

was located. As ruled inGutierrez v. Mendoza-Plaza:[36]

The non-registration of the aforesaid deed does not alsoaffect the validity thereof. Registration is not a requirement

for validity of the contract as between the parties, for the

effect of registration serves chiefly to bind third persons.The

principal purpose of registration is merely to notify

other persons not parties to a contract that a

transaction involving the property has been entered

into. The conveyance of unregistered

_______________

[36] G.R. No. 185477, December 4, 2009, 607 SCRA 807,

817 iti Hi fEd d M l t C t fA l

Aznar Brothers. Both deeds were registered pursuant to

Section 194; while, on the other hand, the sale between

Adi dJ RYbñ J 211978 db





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817, citing Heirs of Eduardo Manlapat v. Court of Appeals,

G.R. No. 125585, June 8, 2005, 459 SCRA 412, 416.24



land shall not be valid against any person unless registered,except (1) the grantor, (2) his heirs and devisees, and (3) third

persons having actual notice or knowledge thereof. As held by

the Court of Appeals, petitioners are the heirs of Ignacio, the

grantor of the subject property. Thus, they are bound by the

provisions of the deed of donationinter vivos.

The effect on third parties of the constructive notice by

virtue of the registration of the deed or instrument was aptly

illustrated in Bautista v. Fule,[37] where the Court

pronounced that the subsequent buyer of unregistered land

sold at an execution sale, which the purchaser at the public

auction registered under Act No. 3344 seven days after that

sale, was “deemed to have constructive notice” of the sale,

and, therefore, could not be “entitled to the rights of a

purchaser in good faith.” The Court emphasized that as to

lands not registered under either theSpanish Mortgage

Law or the Land Registration Act, the registration under Act

No. 3344 should produce its effects against third persons if

the law was “to have utility at all.”[38]

It is worth mentioning that Act No. 3344 (approved on

December 8, 1926) was the governing law at the time of the

execution of the deed of absolute sale of March 21, 1964

between Casimiro and Aznar Brothers, and the deed of

absolute sale of February 17, 1967 between Tanuco and

Adriano and Jose R. Ybañez on June 21, 1978 was covered by

the P.D. No. 1529, also known as the Property Registration

Decree (whose effectivity was upon its approval on June 11,

1978).[39]

_______________[37] No. L-1577, 85 Phil. 391, 393 (1950).

[38] Id., at pp. 393-394.

[39] However, to conform with the pronouncement of

the Court inTañada v. Tuvera, No. L-63915, April 24, 1985,

136 SCRA 27 & No. L-63915, December 29, 1986, 146 SCRA

446, to the effect that all laws should be published in full in

theOfficial Gazette immediately25

VOL. 722, APRIL 21, 2014 25


Section 3 of P.D. No. 1529, albeit expressly discontinuing

the system of registration under theSpanish Mortgage Law,

has considered lands recorded under that system as

unregistered land that could still be recorded under Section

113 of P.D. No. 1529 “until the land shall have been brought

under the operation of the Torrens system”; and has provided

that “[t]he books of registration for unregistered lands

provided under Section 194 of the Revised Administrative

Code, as amended by Act No. 3344, shall continue to remain

in force; provided, that all instruments dealing with

unregistered lands shall henceforth be registered under

Section 113 of this Decree.” It is clear, therefore, that even

with the effectivity of P.D. No. 1529, all unregistered lands

may still be registered pursuant to Section 113 of P.D. No.

1529, which essentially replicates Section 194, as amended

by Act No. 3344, to the effect that a deed or instrument

i l tt t it d d th T

26















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conveying real estatenotregistered under the Torrens

system[40] should affect only the

_______________

upon their approval, P.D. No. 1529 became effective 15 days

from its publication in the January 8, 1979 issue of theOfficial Gazette (75 O.G. No. 2, 185) as required under Article

2,Civil Code.

[40] It is jurisprudentially settled, however, that

registration under Act No. 3344 of real

estateregistered under the Torrens system does not

constitute constructive notice to the whole world. In Mactan-

Cebu International Airport Authority v. Tirol(G.R. No.

171535, June 5, 2009, 588 SCRA 635, 649), the Court heldthat the “registration of instruments must be done in the

proper registry in order to effect and bind the land. Prior to

the Property Registration Decree of 1978, Act No. 496 (or the

Land Registration Act) governed the recording of

transactions involvingregistered land,i.e., land with a

Torrens title. On the other hand, Act No. 3344, as amended,

provided for the system of recording of transactions

overunregisteredreal estate without prejudice to a thirdparty with a better right. Accordingly, if a parcel of land

covered by a Torrens title is sold, but the sale is

registered under Act No. 3344 and not under the Land

Registration Act, the sale is not considered registered

and the registration of the deed does not operate as

constructive notice to the whole world.” (Bold italics

supplied)

z y p y z

parties thereto unless the deed or instrument was registered

in accordance with the same section.[41]

The only exception to the rule on constructive notice by

registration of the deed or instrument affecting unregistered

_______________[41] The Property Registration Decree states:Section113. Recording of instruments relating to

unregistered lands.—No deed, conveyance, mortgage,

lease, or other voluntary instrument affecting land not

registered under the Torrens system shall be valid,

except as between the parties thereto, unless such

instrument shall have been recorded in the manner

herein prescribed in the office of the Register of Deedsfor the province or city where the land lies.

(a) The Register of Deeds for each province or city shall

keep a Primary Entry Book and a Registration Book. The

Primary Entry Book shall contain, among other particulars,

the entry number, the names of the parties, the nature of the

document, the date, hour and minute it was presented and

received. The recording of the deed and other instruments

relating to unregistered lands shall be effected by any ofannotation on the space provided therefor in the Registration

Book, after the same shall have been entered in the Primary

Entry Book.

(b) If, on the face of the instrument, it appears that it is

sufficient in law, the Register of Deeds shall forthwith record

the instrument in the manner provided herein. In case the

Register of Deeds refuses its admission to record, said official

shall advise the party in interest in writing of the ground or

grounds for his refusal, and the latter may appeal the matter

tth C ii fL dR it ti i d ith

It thus appears that the “better right” referred to in Act

No. 3344 is much more than the mere prior deed of sale in

f fth fi t d I th Lih j t









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to the Commissioner of Land Registration in accordance with

the provisions of Section 117 of this Decree.It shall be

understood that any recording made under this

section shall be without prejudice to a third party

with a better right.c) After recording on the Record Book, the Register of

Deeds shall endorse, among other things, upon the original of

the recorded instruments, the file number and the date as

well as the hour and minute when the document was received

for recording as shown in the Primary Entry Book, returning

to the registrant or person in interest the duplicate of the

instrument, with appropriate annotation, certifying that he

has recorded the instrument after reserving27

VOL. 722, APRIL 21, 2014 27


realty exists in favor of “a third party with a better right.”

This exception is provided in Section 194, as amended by Act

No. 3344, to the effect that the registration “shall be

understood to be without prejudice to a third party with a

better right;” and in paragraph (b) of Section 113 of P.D. No.1529, to the effect that “any recording made under this

section shall be without prejudice to a third party with a

better right.” As to who is “a third party with better right”

under these provisions is suitably explained in Hanopol v.

Pilapil,[42] a case where the sale of unregistered land was

registered under Act No. 3344 but the land was sold twice, as

follows:

favor of the first vendee. In the Lichauco case just

mentioned,it was the prescriptive right that had

supervened. Or, as also suggested in that case,other facts

and circumstances exist which, in addition to his deed

of sale, the first vendee can be said to have better rightthan the second purchaser.[43] (Bold emphasis supplied.)

_______________

one copy thereof to be furnished the provincial or city

assessor as required by existing law.

(d) Tax sale, attachment and levy, notice oflis pendens,

adverse claim and other instruments in the nature of

involuntary dealings with respect to unregistered lands, if

made in the form sufficient in law, shall likewise beadmissible to record under this section.

(e)

For the services to be rendered by the Register of

Deeds under this section, he shall collect the same amount of

fees prescribed for similar services for the registration of

deeds or instruments concerning registered lands. (Italics in

the original; emphasis supplied)

[42] No. L-19248, February 28, 1963, 7 SCRA 452.

[43] Id., at p. 456.28



The Court also observes inSales v. Court of Appeals,[44] a

case involving parties to a deed of donation who had agreed

to register the instrument under Act No. 3344 but failed to do

so, that the “better right” of a third party relates to “other

titles which a party might have acquired independently of the

unregistered deed such as title by prescription.”[45] But the

exceptiondoesnotobviouslyapplytotheSpousesYbañez

[45] Id., at pp. 866-867.29

VOL. 722, APRIL 21, 2014 29















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exception does not obviously apply to the Spouses Ybañez

because they acquired their right from Adriano who did not

hold any legal or equitable interest in Lot No. 18563 that he

could validly transfer to the Spouses Ybañez.

3. Estoppel by laches did not bar

Aznar Brothers’ right over Lot No. 18563

Unexpectedly, the CA disregarded its aforecited correct

conclusion on Aznar Brothers’ ownership of Lot No. 18563,

and instead ruled that estoppel by laches had already barred

Aznar Brothers’ “dominical claim” over Lot No. 18563. It

ratiocinated thusly:

But then, there were pre-existing and superveningcircumstances which effectively quashed the dominical claim

of plaintiff-appellant over the subject land. Plaintiff-appellant

was never in possession of the land which it bought. Even

after buying the land from Casimiro Ybañez, plaintiff-

appellant did not take possession of it. On the other hand, the

heirs of Casimiro Ybañez took possession of said land upon

the latter’s death. Said heirs sold their shares on said land to

one of their co-heirs, Adriano Ybañez, who in turn, sold thewhole land to defendant appellees, the spouses Jose and

Magdalena Ybañez. The latter continued possessing said

land, tax declared it, paid realty taxes thereon and finally

secured a free patent and title over it. Up to the present,

defen-

_______________

[44] G.R. No. 40145, July 29, 1992, 211 SCRA 858.

, , 9


dant-appellees are in possession of the land as owners

thereof.

There is absolutely no doubt that in law, plaintiff-

appellant had lost its dominical and possessory claim overthe land for its inaction from 1964 when it bought the land

up to 1989 when it filed the Complaint in the trial court — or

a long period of 25 years. This is calledestoppel by laches.

[46]

Aznar Brothers now assails this adverse ruling under its

first assigned error by pointing out that the CA erred in

relying on estoppel by laches, a rule of equity, to bar its

“dominical claim” over Lot No. 18563. It insists that its action

to declare the nullity of the Extrajudicial Declaration of

Heirs with Extrajudicial Settlement of Estate of Deceased

Person and Deed of Absolute Saledated August 29, 1977, and

the Deed of Absolute Sale of June 21, 1978 was

imprescriptible under Article 1410 of theCivil Code; and that

on the assumption thataccion publicianawould prescribe in

ten years, its filing of the original complaint on May 26, 1989

was done within the 10-year period counted from August 14,

1979, the date of the issuance of OCT No. 2150 in the name of

Jose R. Ybañez.

The Spouses Ybañez counter that the CA was correct

because Aznar Brothers did not assert possession and

ownership over the land for 25 years; that it brought its

complaint only in 1989 after they had undergone the

proceedingsin rem for the issuance of OCT No. 2150; that it

did not challenge their application for the free patent or the

proceedingsfortheissuanceofOCTNo2150;thatitdidnot

stale demand. Laches is based on grounds of public policy

that requires, for the peace of society, the discouragement of

staleclaimsandunlikethestatuteoflimitationsisnota





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proceedings for the issuance of OCT No. 2150; that it did not

also oppose the conduct of the survey of the land relevant to

the application for the free patent despite the notice of the

survey given by the surveying engineer to the adjoining lot

owners; that during the hearing of the case, Jose R. Ybañeztestified that only three hectares of the land originally owned

by Casimiro had been sold to it, the rest having been retained

by Casimiro that

_______________

[46] Supra note 1 at pp. 33-34.30



became the subject of the extrajudicial settlement by hisheirs, who had then sold that retained portion to Jose R.

Ybañez; that the tax declarations presented by it described

property distinct from that covered by OCT No. 2150,

although it claimed that the same property had been sold to

it twice by Casimiro and Tanuco; and that on at least three

occasions, it had attempted to buy the lot from them but the

negotiations did not push through.

We hold and declare that the CA’s ruling in favor of the

Spouses Ybañez was devoid of legal and factual support, and

should be rightfully reversed.

Laches is the failure or neglect for an unreasonable and

unexplained length of time to do that which by exerting due

diligence a party could and should have done earlier.[47] A

suit that is barred on the ground of laches is also called a

stale claims and, unlike the statute of limitations, is not a

mere question of time but is principally a question of the

inequity or unfairness of permitting a right or claim to be

enforced or asserted.[48] Tempus enim modus tollendi

obligationes et actiones, quia tempus currit contra desides et sui juris contemptores(For time is a means of dissipating

obligations and actions, because time runs against the

slothful and careless of their own rights).[49] Truly, the law

serves those who are vigilant and diligent, not those who

sleep when the law requires them to act.[50]

_______________

[47] La Campana Food Products, Inc. v. Court of

Appeals, G.R. No. 88246, June 4, 1993, 223 SCRA 151, 158.[48] Pangilinan v. Court of Appeals, G.R. No. 83588,

September 29, 1997, 279 SCRA 590, 601.

[49] Id.

[50] Marcelino v. Court of Appeals, G.R. No. 94423, June

26, 1992, 210 SCRA 444, 447.31

VOL. 722, APRIL 21, 2014 31


For laches to bar a claim, four elements must be shown,

namely: (1) conduct on the part of the defendant, or one

under whom he claims, giving rise to a situation of which a

complaint is made and for which the complainant seeks a

remedy; (2) delay in asserting the complainant’s right, the

complainant having had knowledge or notice of defendant’s

conduct and having been afforded an opportunity to institute

a suit; (3) lack of knowledge or notice on the part of the

defendant that the complainant would assert the right on

whichhebaseshissuit;and(4)injuryorprejudicetothe

[51] Go Chi Gun v. Co Cho, 96 Phil. 622, 637

(1955); Maneclang v. Baun, G.R. No. 27876, April 22, 1992,

208SCRA179193





















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which he bases his suit; and (4) injury or prejudice to the

defendant in the event that the relief is accorded to the

complainant, or the suit is not held to be barred.[51]

The CA incorrectly barred the claim of Aznar Brothers to

Lot No. 18563 because of laches. For one, Aznar Brothersimmediately registered the purchase in accordance with Act

No. 3344, the law then governing the registration of

unregistered land. Its action in that regard ensured the

protection of the law as to its ownership of the land, and

evinced that it did not abandon its ownership. Verily, its

maintaining Lot No. 18563 as an unregistered land from then

on should not prejudice its rights; otherwise, its registration

pursuant to law would be set at naught. Secondly, thesupposed acts of possession of Lot No. 18563 exercised by the

Spouses Ybañez from the time of their purchase from

Adriano, including causing it to be surveyed for purposes of

the application for free patent, did not prejudice Aznar

Brothers’ interest because the registration under Act No.

3344 had given constructive notice to the Spouses Ybañez of

its prior acquisition of the land. Thereby, the Spouses Ybañez

became bound by the sale from Casimiro to Aznar Brothers,and rendered them incapable of acquiring the land in good

faith from Adriano. Consequently, Jose R. Ybañez’s

intervening application for the free patent, the grant of the

free patent and the issuance of OCT No. 2150 thereafter did

not supplant the superior rights and interest of

_______________

208 SCRA 179, 193.32



Aznar Brothers in Lot No. 18563. And, lastly, the Spouses

Ybañez would not suffer any prejudice should Aznar Brothersprevail herein, for Adriano, their predecessor-in-interest, did

not transmit to them any kind or degree of right or interest in

Lot No. 18563.

4.

Lot No. 18563, not being land of the

public domain, was not subject to the free patent

issued to the Spouses Ybañez

The Spouses Ybañez’s position rests on their having been

issued the free patent and OCT No. 2150.

The records do not support the position of the Spouses

Ybañez. Although Jose R. Ybañez declared in paragraph 4 of

his application for the free patent that Lot No. 18563 was

public land, and was not then claimed or occupied by any

other person;[52] and further declared under oath in the

affidavit submitted to support his application for the free

patent that he “recognize(d)” Lot No. 18563 “as public land,”

his declarations did not establish that Lot No. 18563 was

land of the public domain. Nor did the Spouses Ybañez show

that Jose R. Ybañez had acted in good faith in applying for

the free patent pursuant to Commonwealth Act No. 141 (The

Public Land Act), as amended. Instead, they were fully aware

of the nature and character of the land as private. In

the Deed of Absolute Saledated June 21, 1978, Adriano

stated that he had been “the absolute owner in fee simple free

fromallliens

land already in private ownership.[56] The invalidity of the

free patent necessarily left OCT No. 2150 a patent nullity. As

ruledinHeirsofSimplicioSantiagovHeirsofMarianoE







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from all liens

_______________

[52] Records, p. 311 (Exhibit M), to wit:

x x x x

4.The land described and applied for isnot claimed oroccupied by any other person, but ispublic land. I

entered upon and began cultivation of the same on the 21 day

of June 1978, and since that date I have continuously

cultivated the land, and have made thereon the following

improvements,viz.: coconuts, fruit trees and seasonal crops.

x x x x33

VOL. 722, APRIL 21, 2014 33


and encumbrances whatsoever” of Lot No. 18563; and that he

(Adriano) had held the “perfect right to convey the same (as)

the purchaser of the same as per Extrajudicial Declaration of

Heirs with extrajudicial settlement of estate of deceased

person and deed of absolute sale.”[53] In view of the privity

between Adriano and the Spouses Ybañez as to the land, the

former’s statements concluded the latter.[54]

In contrast, Aznar Brothers acquired Lot No. 18563 as the

private land of Casimiro. In their Deed of Absolute Saleof

March 21, 1964, Casimiro expressly warranted that the land

was his “own exclusive property.”[55] With the ownership of

Aznar Brothers being thus established, the free patent issued

to Jose R. Ybañez by the Government was invalid for the

reason that the Government had no authority to dispose of

ruled in Heirs of Simplicio Santiago v. Heirs of Mariano E.

Santiago:[57]

The settled rule is that a free patent issued over a private

land is null and void, and produces no legal effects

whatsoever.Private ownership of land — as when thereis a prima facie proof of ownership like a duly

registered possessory information or a clear showing

of open, continuous, exclusive, and notorious

possession, by present or previous occupants — is not

affected by the issuance of a free patent over the same

land, because the Public Land Law applies only to

lands of the public domain. The Director of Lands has

no authority to grant free patent

_______________

[53] Records, p. 290 (Exhibit 2).

[54] Rule 130, Rules of Court, states:

Section31.

Admission by privies.—Where one derives

title to property from another, the act, declaration, or

omission of the latter, while holding the title, in relation to

the property, is evidence against the former.

[55] Exhibit F.[56] Magistrado v. Esplana, G.R. No. 54191, May 8, 1990,

185 SCRA 104, 109.

[57] G.R. No. 151440, June 17, 2003, 404 SCRA 193, 199.34



to lands that have ceased to be public in character and

have passed to private ownership. Consequently, a

certificateoftitleissued pursuanttoahomestead

[58] G.R. No. 40399, February 6, 1990, 181 SCRA 793,

807; citing Director of Lands v. Sisican, Nos. L-20003-05,

March31196513SCRA516























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certificate of title issued pursuant to a homestead

patent partakes of the nature of a certificate issued in

a judicial proceeding only if the land covered by it is

really a part of the disposable land of the public

domain. (Bold emphasis supplied)To the same effect was Agne v. Director of Lands,[58]where

the Court declared that if land covered by free patent was

already the private property of another and, therefore, not

part of the disposable land of the public domain, the patentee

did not acquire any right or title to the land.

The principle of indefeasibility of the Torrens title does not

protect OCT No. 2150 because the free patent on which the

issuance of the title was based was null and void. A directattack as well as a collateral attack are proper, for, as the

Court declared in De Guzman v. Agbagala:[59]

x x x. An action to declare the nullity of a void title does not

prescribe and is susceptible to direct, as well as to collateral,

attack. OCT No. P-30187 was registered on the basis of a free

patent which the RTC ruled was issued by the Director of

Lands without authority. The petitioners falsely claimed that

the land was public land when in fact it was not as it wasprivate land previously owned by Carmen who inherited it

from her parents. x x x.

Nonetheless, it appears that Aznar Brothers actually

mounted a direct attack on the title of the Spouses Ybañez.

In the original complaint, Aznar Brothers sought judgment

or-

_______________

March 31, 1965, 13 SCRA 516.

[59] G.R. No. 163566, February 19, 2008, 546 SCRA 278,

285.35

VOL. 722, APRIL 21, 2014 35


dering them to “[s]urrender all the documents pertaining to

the Free Patent for cancellation.” Such relief was predicated

on the allegation that the land in question “was already

adjudicated as private property of the plaintiff” through

the Deed of Absolute Sale of March 21, 1964. Aznar Brothers

reiterated the relief in the amended complaint. In its second

amended complaint, it expressly prayed for the “cancellation

and annulment” of OCT No. 2150. By such pleadings, itdirectly attacked OCT No. 2150, because their object was “to

nullify the title, and thus challenge the judgment or

proceeding pursuant to which the title was decreed.”[60]

WHEREFORE, the CourtREVERSES andSETS

ASIDE the decision promulgated on October 10, 2002 by the

Court of Appeals partially affirming the judgment rendered

on March 8, 1996 by the Regional Trial Court, Branch 10, in

Cebu City;DECLARES petitioner AZNAR BROTHERS

REALTY COMPANY the sole and exclusive owner of the

unregistered parcel of land known and described as Lot No.

18563;CANCELS andNULLIFIESFree Patent No. VII-

1118514 and Original Certificate of Title No. 2150 of the

Registry of Deeds of the Province of Cebu in the name of

respondent Jose R. Ybañez, married to Magdalena Marcos;

andORDERS respondents to pay the costs of suit.

SOORDERED

G.R. No. 171286. June 2, 2014.*

DOLORESCAMPOSpetitionervs.DOMINADORORTEGA









http://www.central.com.ph/sfsreader/session/0000014ff59f793c2db404e5000a0094004f00ee/p/ANS459/?username=Guest#_ftn1


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SO ORDERED.

Sereno (CJ., Chairperson), Leonardo-De Castro, Villarama,

Jr.and Perez,** JJ., concur.

Judgment reversed and set aside.

_______________[60] Heirs of Simplicio Santiago v. Heirs of Mariano E.

Santiago, supranote 57 at p. 203.

** Vice Associate Justice Bienvenido L. Reyes, who took

part in the Court of Appeals, per the raffle of January 22,

2014.



Notes.—A.M. No. 03-1-09-SC states that within five (5)

days from date of filing of the reply, the plaintiff must

promptly move ex parte that the case be set for pre-trial

conference; If the plaintiff fails to file said motion within the

given period, the Branch COC shall issue a notice of pre-trial.

( Polanco vs. Cruz, 579 SCRA 489 [2009])

Although a pre-trial order is not meant to catalogue each

issue that the parties may take up during the trial, issues notincluded in the pre-trial order may be considered only if they

are impliedly included in the issues raised or inferable from

the issues raised by necessary implication. ( LICOMCEN, Inc.

vs. Abainza, 691 SCRA 158 [2013])

——o0o——


DOLORES CAMPOS, petitioner,vs. DOMINADOR ORTEGA,

SR.[1] and JAMES SILOS, respondents.

Civil Law; Property; Public Lands; One of the

requirements before an entitlement to an award of the

government-owned lot is that they must own the subject house.

—Neither does petitioner have a “cognizable” right respecting

the lot in question. Notably, she readily admitted not

exercising their option to buy Boloy’s property despite the

knowledge that one of the requirements before an

entitlement to an award of the government-owned lot is that

they must own the subject house.

Remedial Law; Civil Procedure; Appeals; Petition for

Review on Certiorari; As a general rule, only questions of lawmay be raised in a petition for review on certiorari filed with

this Court.—The presence or absence of fraud is a factual

issue. As a general rule, only questions of law may be raised

in a petition for review oncertiorarifiled with this Court and

factual findings of the trial courts, when adopted and

confirmed by the CA, are final and conclusive on this Court,

except when the CA judgment is based on a misapprehension

of facts or the factual inferences are manifestly incorrect orwhen that court overlooked certain relevant facts which, if

properly considered, would justify a different conclusion.

Civil Law; Land Titles; Collateral Attack; Direct Attack;

A collateral attack transpires when, in another action to

obtain a different relief and as an incident to the present

action, an attack is made against the judgment granting the

title while a direct attack (against a judgment granting the

title) is an action whose main objective is to annul, set aside,

or enjoin the enforcement of such judgment if not yet

implemented, or to seek recovery if the property titled under

against the judgment granting the title while a direct attack

(against a judgment granting the title) is an action whose

main objective is to annul,setaside,or enjoin the









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implemented,o toseek ecoveyifthepopetytitledunde

the

_______________

* THIRD DIVISION.

[1] Dominador Ortega, Sr. died on April 14, 2003 while

the case was pending before the Court of Appeals. He was

survived by his wife Teodora T. Ortega and children

Dominador T. Ortega, Jr., Jennifer T. Ortega, and Janette T.

Ortega (CA Rollo, pp. 63-65).241

VOL. 724, JUNE 2, 2014 241

Campos vs. Ortega, Sr.

judgment had been disposed of.—We agree with the CA

that the case for specific performance with damagesinstituted by petitioner effectively attacks the validity of

respondents’ Torrens title over the subject lot. It is evident

that, ultimately, the objective of such claim is to nullify the

title of respondents to the property in question, which, in

turn, challenges the judgment pursuant to which the title

was decreed. This is a collateral attack that is not permitted

under the principle of indefeasibility of Torrens title. Section

48 of Presidential Decree No. 1529, otherwise known as theProperty Registration Decree, unequivocally states:

SEC.48.Certificate not subject to collateral attack.—A

certificate of title shall not be subject to collateral attack. It

cannot be altered, modified, or cancelled except in a direct

proceeding in accordance with law. A collateral attack

transpires when, in another action to obtain a different relief

and as an incident to the present action, an attack is made

main objective is to annul, set aside, or enjoin the

enforcement of such judgment if not yet implemented, or to

seek recovery if the property titled under the judgment had

been disposed of. The issue on the validity of

title,i.e., whether or not it was fraudulently issued, can only

be raised in an action expressly instituted for that purpose.

Same; Trusts; Reconveyance; Under the principle of

constructive trust, registration of property by one person in his

name, whether by mistake or fraud, the real owner being

another person, impresses upon the title so acquired the

character of a constructive trust for the real owner, which

would justify an action for reconveyance.—Under the

principle of constructive trust, registration of property by oneperson in his name, whether by mistake or fraud, the real

owner being another person, impresses upon the title so

acquired the character of a constructive trust for the real

owner, which would justify an action for reconveyance. In the

action for reconveyance, the decree of registration is

respected as incontrovertible but what is sought instead is

the transfer of the property wrongfully or erroneously

registered in another’s name to its rightful owner or to onewith a better right. If the registration of the land is

fraudulent, the person in whose name the land is registered

holds it as a mere trustee, and the real owner is entitled to

file an action for reconveyance of the property.2422

42



Same; Reconveyance; Prescription; In effect, the action for

reconveyance is an action to quiet title to the property, which

does not prescribe.—An action for reconveyance resulting

On August 17, 1999, petitioner Dolores Campos, through

her attorney-in-fact, Salvador Pagunsan ( Pagunsan), filed a





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p y g

from fraud prescribes four years from the discovery of the

fraud, which is deemed to have taken place upon the issuance

of the certificate of title over the property, and if based on an

implied or a constructive trust it prescribes ten (10) years

from the alleged fraudulent registration or date of issuance of

the certificate of title over the property. However, an action

for reconveyance based on implied or constructive trust is

imprescriptible if the plaintiff or the person enforcing the

trust is in possession of the property. In effect, the action for

reconveyance is an action to quiet title to the property, which

does not prescribe.

PETITION for review on certiorari of the decision andresolution of the Court of Appeals.


Pajares, Asual & Adaci Law Offices for petitioner.

Celso A. Tabobo, Jr. for respondents.

PERALTA, J.:

This petition for review oncertiorariunder Rule 45 of the

1997 Revised Rules on Civil Procedure ( Rules) seeks the

reversal of the August 12, 2005 Decision[2] and January 17,

2006 Resolution[3] of the Court of Appeals (CA) in C.A.-G.R.

CV No. 76994, which set aside the November 12, 2002

Decision[4] of the Mandaluyong City Regional Trial Court,

Branch 213 ( RTC) and, in effect, dismissed petitioner’s

complaint for specific performance and damages.

_______________

[2] Penned by Associate Justice Rebecca De Guia-Salvador,

with Associate Justices Conrado M. Vasquez, Jr. and Jose C.

Mendoza (now a member of the Court), concurring; Rollo, pp.

27-40.

[3] Rollo, pp. 41-43.

[4] CA Rollo, pp. 31-35.243

VOL. 724, JUNE 2, 2014 243


case for specific performance with damages against

respondents Dominador Ortega, Sr. (Ortega, Sr.) and James

Silos (Silos). The “Petition” stated, among others, that:

2.Plaintiff, and her husband [Ernesto Campos], along

with their family, occupied the entire second level as well as

the front portion of the ground level of a residential structure

located at No. 208[5] F. Blumentritt Street, Mandaluyong

City. The lot on which the said structure is standing is owned

by the government, while the structure itself is owned by

[Dominga Boloy] from whom plaintiff leased the same

beginning in 1966;2.1 Plaintiff had, in fact, paid the real

estate taxes in behalf of Dominga Boloy in

1987, including the arrearages that

accumulated from 1979 in view of the

apparent abandonment by Dominga Boloy

on these obligations x x x;

3.In 1977, under and pursuant to the ZonalImprovement

Program [ZIP] of the then Metro Manila Commission,[6] in

coordination with the Local Government of Mandaluyong, a

immediate vacation of the subject premises. An ejectment

suit was eventually filed against plaintiff but [it] was later

dismissed by the Metropolitan Trial Court (Branch 59,


















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y g,

census of the Hulo estate, where plaintiff’s dwelling is

located, was conducted wherein plaintiff was among those

censused and qualified as abona fideoccupant x x x;

4.As a consequence of having qualified, plaintiff was

assigned an identifying house tag number77-00070-08 on

August 20, 1977 x x x;

5.In 1979, after the death of the owner Dominga Boloy,

plaintiff had a verbal understanding with Clarita Boloy,

daughter-in-law of the former, to allow plaintiff to introduce

improvements and renovations on the structure, in which she

incurred expenses amounting to aboutP10,000.00. It was

further agreed that said amount shall be accordingly appliedto their monthly rentals. x x x.

_______________

[5] Formerly 600 (TSN, July 23, 2001, pp. 6-7).

[6] The predecessor of the Metropolitan Manila

Development Authority (MMDA).244



The foregoing agreement, however, was never followed and

plaintiff was made to continue paying the monthly

obligations because of the assurance of Clarita Boloy that the

expenses incurred by plaintiff will just be reimbursed in full,

but even this latter agreement never materialized;

6.In 1987, Walter Boloy stepped into the situation and

thru counsel demanded from the plaintiff and family the

y p ( ,

Mandaluyong City) in its February 12, 1986 decision x x x;

7.After receiving the said decision, and after having

verified her husband’s status as abona fide[occupant],

plaintiff forthwith authorized [her] nephew SalvadorPagunsan to follow up with the NHA the matter concerning

the award of lot to them in line with the [ZIP], more

particularly after learning that allbona fide occupants may

be allowed to buy the structure if the owner has already died;

8.In the course of [the follow up], Salvador Pagunsan

was informed by one Antonio Fernando thru a letter of July

20, 1987, that if Ernesto Campos, who was duly censused as

abona fide occupant, may be able to buy the property fromMr. Walter Boloy, Ernesto Campos may be awarded the lot on

which the structure is located;

9.On November 19, 1987, plaintiff’s attorney-in-fact,

Salvador Pagunsan attended the meeting scheduled by the

Arbitration and Awards Committee [AAC] held at the Budget

Office of the Mandaluyong Municipal Hall x x x but[,] except

for Atty. Eddie Fernandez, who represented the Local

Government of Mandaluyong, no other representative fromthe NHA came. In said meeting, Atty. Fernandez gave

plaintiff one month, or until December 19, 1987, to buy the

property denominated asLot 17, Block 7, Phase III, of the

Hulo estate;

10.Plaintiff did not accede to the offer since the lot

occupied by them and where they were duly censused245

VOL. 724, JUNE 2, 2014 245


as occupants isLot 18 , Block 7, whereas the one offered to be

her daughter Helen Telos Boloy Williams, to deal with the

property in any manner is completely baseless and a sham;

14 OnFebruary 19,1988 a similar or almost





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sold is Lot 17, which pertains to a different owner;

11.Another meeting was set on December 17, 1987, this

time at the Administrator’s Office of the Mandaluyong

Municipal Hall x x x. Again, nobody attended from the NHA.

On February 4, 1988, yet another meeting was set, and the

same result happened;

12. But it was learned by plaintiff, however ( sic), that on

the same date, February 4, 1988, the property [was already]

awarded to James Silos and Dominador Ortega, [Sr.], and

that onNovember 23, 1987, just four days after the initial

meeting scheduled by the [AAC] of the NHA (on November 19,

1987, paragraph [9], supra) a Deed of Absolute Sale [was]executed by and between Clarita Boloy (in representation of

Helen Telos Boloy Williams) and Dominador Ortega, [Sr.]

overLot 17, Block 7x x x. This despite the fact that during

the said initial meeting,plaintiff was givenone monthto

exercise the option of buying the property;

13. In paragraph 5 of the aforementioned deed, the “x x x

[V]endor warrants her legal and absolute ownershipof the

aforesaid semi-apartment house ...,” which is highlydisputable considering that no due transfer whatsoever was

made by the structure owner Dominga Boloy who was still

single at the time of her death and who died without issue.

Moreover, in the earlier ejectment suit filed by Walter Boloy

(paragraph [6], supra), his relation [to] Dominga Boloy was

never proven[;] hence, his claim of any authority, and that of

14.OnFebruary 19, 1988, a similar, or almost

identical, Deed of Absolute Sale x x x was executed by and

between the same parties in the instrument executed on

November 23, 1987, only that this time, in [comparison] with

the first deed of sale, it is very noticeable that the name ofplaintiff Dolores Campos which was mentioned in paragraph

3 of the first deed as one of the renters and as a home-lot

applicant wasomitted in this second deed;

246



15.Plaintiff, thru her representative, inquired with the

NHA and questioned the award of the lot to defendants whoare disqualified for not having been duly censused either as

renters or sharers, and also the matter regarding the

alteration the lot number actually being occupied by plaintiff.

But the NHA could not offer a satisfactory explanation to the

seemingly irregular process. A certain Ms. Myrna Cuarin of

the Legal Department refused to show the book containing

the list of the qualified occupants and their respective true

house tag number;16.Plaintiff only came to know later that a Transfer

Certificate of Title [was already] issued to Dominador

Ortega, [Sr.] and James Silos over the lot despite the appeal

made by plaintiff with the NHA, much to her damage and

prejudice;

17.Defendants Dominador Ortega, Sr. and James Silos

are disqualified to become lot owners since they were not duly

censused as renters or sharers, pursuant to the ZIP

Guideline Circular No. 1 dated [September 16, 1977] of the

NHA x x x. Moreover, only those who have been actually

being in fraud of herein plaintiff; directing the defendants to

surrender their title to the [NHA]; and directing the

[NHA] to recognize plaintiff’s right to purchase the structure

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residing in the ZIP Project area before

August 15, 1975 shall be considered to qualify as

beneficiaries, but herein defendants have commenced their

residence only after the said date[;] hence, they are not

qualified beneficiaries, but just the same the lot was awarded

by the NHA to them;

18.The promptitude of the award by the NHA to herein

defendants was maneuvered ( sic) by the latter in

circumvention of the real right that has already accrued to

plaintiff as abona fide applicant who has duly qualified as a

beneficiary. In fact, she had been given the right to purchase

the structure only to find out that it had been alreadytransferred to another in complete disregard of herein

plaintiff’s right ( see paragraph 12, supra);

19.As a result of the bypassing of plaintiff’s right[,] she

was dislocated, [has] suffered sleepless nights, mental

anguish, wounded feelings, and undue embarrassment,

among others, the assessment of which in pe-247

VOL. 724, JUNE 2, 2014 247Campos vs. Ortega, Sr.

cuniary terms is left to the sound discretion of this Honorable

Court.

WHEREFORE, in view of the foregoing premises, it is

most respectfully prayed of this Honorable Court that after

due hearing a judgment be rendered declaring the acquisition

by defendants of Lot 18, Block 7 of the Hulo Estate void for

and giving her reasonable opportunity to exercise said right.

[7]

Respondents countered that the complaint stated no cause

of action, and that, if any, such cause of action is alreadybarred by prior judgment. They noted petitioner’s admission

in theVerification that an action for recovery of possession

was commenced against her by respondents before the Pasig

City RTC, Branch 153, involving the same property; that it

was resolved in respondents’ favor on October 12, 1992; and

that such decision was affirmed by the CA on May 30, 1996

and became final and executory on September 14, 1996.

Respondents also contended that the case was prematurelyfiled since there was no prior recourse to the barangay

conciliation as required by Section 412 of the

Revised Katarungang PambarangayLaw. Lastly, respondents

argued that they are registered owners of the land in

question as well as the house built thereon by virtue of

Transfer Certificate of Title (TCT) No. 13342 and tax

declarations, and that the Torrens title cannot be altered,

modified or cancelled except through a direct proceeding.

Trial ensued. Presented as witnesses for the plaintiff were

petitioner herself, Pagunsan, and Dolores Abad Juan, who

claimed to be a bookkeeper of the NHA and a member of its

census team in 1977.[8] Only Ortega, Sr. testified for and in

behalf of the defendants.

_______________

[7] Records, pp. 2-6. (Emphasis in the original)

[8] Exhibit “L,” Evidence Folder p. 12; TSN, September 3,

2001, p. 5.

in the previous case involves the right of possession over the

disputed property. In the instant case, the cause of action is

the violation of the plaintiff’s right to exercise their right to










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248



On November 12, 2002, the RTC ruled in favor of

petitioner. The dispositive portion of the Decision reads:WHEREFORE, accordingly the acquisition of

[DOMINADOR] V. ORTEGA and JAMES SILOS of Lot 18

Block 7 of the Hulo estate is hereby declared VOID for being

violative of the right of the plaintiff. Herein defendants are

hereby ordered to surrender their title to the National

Housing Authority (NHA). Finally, the [NHA] is hereby

ordered to recognize plaintiff’s right to purchase the structure

and give her reasonable time within which to exercise saidright.

No pronouncement as to cost.

SO ORDERED.[9]

For lack of clear and convincing proof, the RTC rejected

the allegation that respondents are guilty of committing

fraud and, consequently, denied petitioner’s claim for

damages. Despite this, it held that the principle ofres

judicatais inapplicable and that petitioner has a vested rightover the subject property. The trial court opined:

x x x The case being referred to by defendants is for

therecovery of possessionfiled in Pasig City Court, which

judgment was confirmed by the Honorable Court of Appeals.

In that case, the appellate [court] ruled that the defendants

in this case [have] better rights over the said property, it

being titled under their names. Therefore, the cause of action

buy the property in dispute within the period given by the

Arbitration and Awards Committee of the National Housing

Authority in [coordination] with the Local Government of

Mandaluyong City. Thus, this court was never swayed by the

[defendants’] argument thatres judicata is present. There is

no iden-

_______________

[9] CA Rollo, pp. 34-35.249

VOL. 724, JUNE 2, 2014 249


tity of the cause of action between the Pasig case and the

instant case.Under the Zonal Improvement Program Guideline

Circular No. 1 dated September 16, 1977 of the National

Housing [Authority], plaintiff is a qualified beneficiary of

NHA’s Zonal Improvement Program[,] she being in the

premises since 1966 as lessee of a residential structure.

According to the aforementioned circular, only occupants who

have been actually residing in the ZIP project area either as

sharer or renter before August 15, 1975 are qualifiedbeneficiaries under this NHA program. The plaintiff was

given until December 19, 1987 within which to buy the

property located at Lot 17, Block 7[,] Phase III of the Hulo

estate but did not exercise her right because the property

involved is different from what she had been occupying since

1966 until they left. Before any clarification was made on this

matter and before plaintiff could exercise [her] right to

purchase, [she] learned that the property, Lot 18, Block [7],

Phase III of Hulo estate was already sold to herein

defendants in violation of her right. The court is convinced

those who permanently reside in the project site either as

owners of residential structures or renters/sharers thereof

before August 15, 1975 up to the time that the area has been





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that plaintiff has acquired a vested right over the subject

property. Such right is protected by law and a violation of

said right will give rise to a valid cause of action.[10]

Upon appeal by respondents, the CA reversed the trial

court’s decision. In ruling that petitioner has no vested right

over the subject parcel of land and the residential structure

standing thereon, the appellate court pronounced:

To our mind, [respondents] correctly underscore the fact

that, even from the testimonial evidence proffered by

[petitioner], there is no gainsaying [of] their lease of the first

floor of the residential structure owned by Dominga Boloy.

Although the commencement of their contract with the latterhad, admittedly, not been exactly established, the record

ineluctably shows that both [respondents] had attended the

meetings conducted by the NHA

_______________

[10] Id., at pp. 33-34. (Emphasis in the original)250



Arbitration Committee for the purpose of awarding the lotscovered by the ZIP. Even more significantly, [respondent]

[Ortega, Sr.] was also included in the NHA’s [1977] survey of

the Hulo Estate and was, in fact, issued a separate

identifying house tag alongside [petitioner’s] husband.

In contrast, [petitioner’s] lease of the second floor since

1966 clearly qualified her as a “beneficiary” under the ZIP

Guideline Circular No. 1 which employs the term to refer to

adopted as a slum-upgrading site. Unlike [respondents] who

immediately availed of the opportunity they were afforded to

purchase their own residential lot, however, it appears that

[petitioner] demurred when the NHA offered her the chance

of buying Lot 17, Block [7] of the Hulo Estate until December

[19], 1987. On this score alone, we find that [petitioner]

cannot be presently heard to complain that she had been

unjustifiably deprived of her right as a qualified beneficiary

under the aforesaid program.

[Petitioner] had, of course, impressed upon the trial court

that the reason for her refusal was the fact that, as occupant

of the residential structure on Lot 18, Block 7, she had beenoffered the wrong lot by the NHA. It bears emphasizing,

however, that ZIP Guideline Circular No. 1 does not give

renters or sharers a preferential right to purchase a

particular lot within the ZIP project site. While actual owners

of structures are thereunder given priority to stay in the

project site, house renters or [sharers] like [petitioner] are

only entitled to accommodation in a relocation site, if one is

available, or “allowed to continue within the project area,together with the owner of the structures they are renting.”

In this particular regard, even [petitioner] conceded that she

could have acquired the subject lot had she purchased the

residential structure owned by Dominga Boloy or, at least,

her allotted 1/3 portion thereof.251VOL. 724, JUNE 2, 2014 251


Viewed in the foregoing light, it would appear that

[respondents’] further acquisition of the subject residential

structure from the successors-in-interest of Dominga Boloy

convincing evidence to the contrary, the appellate court

upheld the presumption of regularity of official acts and

resolved not to disturb the NHA’s award in favor of





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should have likewise militated against [petitioner’s] cause.

Indeed, the record shows that [respondent] [Ortega, Sr.]

initially purchased 1/3 of said residential structure in the

November 23, 1987 Deed of Absolute Sale[,] which, in

recognition of their co-occupancy, also gave both [respondent]

Silos and [petitioner] the option to buy their respective 1/3

portion thereof. After the conclusion of the meetings called by

the NHA Arbitration Committee and upon [petitioner’s]

failure to exercise said option, the entire structure was,

finally, sold in favor of both [respondents] thru the Deed of

Sale dated February 19, 1988.[11]

The CA also gave credit to respondents for causing the

titling of the subject lot in their names, declaring it for

taxation purposes, and paying the realty taxes due thereon.

While petitioner’s tax declarations are considered as

goodindicia of possession in the concept of the owner, the

appellate court ruled that respondents’ certificate of title is

indefeasible and cannot be subject of a collateral attack like

petitioner’s present complaint for specific performance and

damages. Even if a transfer of title that is replete withbadges of fraud and irregularities renders nugatory and

inoperative the existing doctrines on land registration and

land titles, the CA opined that petitioner lost sight of the fact

that the trial court discounted the existence of fraud which

she imputed against respondents’ acquisition of the subject

parcel and the fact that she did not appeal such finding. In

the end, for petitioner’s failure to present clear and

respondents.

_______________

[11] Id., at pp. 86-88.252



Petitioner moved for reconsideration, but it was denied.

Now before Us, the following issues for resolution were

raised:

WHETHER OR NOT THE HONORABLE COURT OF

APPEALS ERRED IN REVERSING THE DECISION OF

THE REGIONAL TRIAL COURT, PARTICULARLY, IN

FAILING TO RECOGNIZE THAT PETITIONER HAS ALREADY ACQUIRED A VESTED AND COGNIZABLE

RIGHT RESPECTING THE PROPERTY.

WHETHER OR NOT THE HONORABLE COURT OF

APPEALS ERRED IN UPHOLDING THE PRESUMPTION

OF REGULARITY OF OFFICIAL ACTS RESPECTING THE

PROCESS OF AWARD OF THE PROPERTY MADE TO THE

RESPONDENTS, AND RULE OUT THE ATTENDANTIRREGULARITIES AS INSUFFICIENT TO OVERCOME

THE SAID PRESUMPTION.[12]

The Court is unimpressed.

Like in petitioner’s case, one of the issues raised

in Magkalas v. National Housing Authority[13] was whether

the demolition or relocation of Caridad Magkalas’ structure

would violate her vested rights over the subject property

under the social justice provisions of the 1987 Constitution on

the ground that she had been in its possession for forty (40)

but a mere expectancy that the lot will be

awarded to her. The expectancy did not

ripen into a legal title when the NHA,









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years. Resolving that a censused owner with assigned NHA

tag number acquired no vested right over the subject

property, We held:

Neither can it be successfully argued that petitioner had

already acquired a vested right over the subject property

when the NHA recognized her as the censused owner by

assigning to her a tag number (TAG No. 77-0063). We quote

with approval the trial court’s pertinent findings on the

matter:

_______________

[12] Rollo, p. 96.

[13] 587 Phil. 152; 565 SCRA 379 (2008).253

VOL. 724, JUNE 2, 2014 253


Plaintiff’s structure was one of those

found existing during the census/survey of

the area, and her structure was assigned

TAG No. 77-0063. While it is true that NHA

recognizes plaintiff as the censused owner of

the structure built on the lot, the issuance

of the tag number is not a guarantee for lot

allocation. Plaintiff had petitioned the NHA

for the award to her of the lot she is

occupying. However, the census, tagging,

and plaintiff’s petition, did not vest upon

her a legal title to the lot she was occupying,

through Ms. Ines Gonzales, sent a letter

dated March 8, 1994 informing her that her

petition for the award of the lot was denied.

Moreover, the NHA, after the conduct of

studies and consultation with residents, had

designated Area 1, where the lot petitioned

by plaintiff is located, as an Area Center.

A vested right is one that is absolute, complete and

unconditional and no obstacle exists to its exercise. It is

immediate and perfect in itself and not dependent upon any

contingency. To be vested, a right must have become a title —

legal or equitable — to the present or future enjoyment ofproperty.

Contrary to petitioner’s position, the issuance of a tag

number in her favor did not grant her irrefutable rights to

the subject property. The “tagging of structures” in

the Bagong Barrio area was conducted merely to determine

the qualified beneficiaries andbona fide residents within the

area. It did not necessarily signify an assurance that the

tagged structure would be awarded to its occupant as therewere locational and physical considerations that must be

taken into account, as in fact, the area where petitioner’s

property was located had been classified as Area Center

(open space). The assignment of a tag number was a mere

expectant or contingent right and could not have ripened into

a vested right254



in favor of petitioner. Her possession and occupancy of the

id t ld tb h t id fi d d

totally immaterial if the land on which the structure stood

was indicated as Lot 17 or Lot 18. It should not have been a

source of needless concern on the part of petitioner mainly





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said property could not be characterized as fixed and

absolute. Assuch, petitioner cannot claim that she was

deprived of her vested right when the NHA ordered her

relocation to another area.[14]

Neither does petitioner have a “cognizable” right

respecting the lot in question. Notably, she readily admitted

not exercising their option to buy Boloy’s property despite the

knowledge that one of the requirements before an

entitlement to an award of the government-owned lot is that

they must own the subject house.[15]

Petitioner argues that what prompted her refusal to

purchase was not a matter of whimsical preference, not reallyinsisting on any preferential right, but on imminent

apprehension that the house that was being sold by Boloy is

situated at Lot 17 while they were occupying Lot 18; that the

particular lot number is different from what she is applying;

and that said lot is actually occupied by another person who

too may have already qualified as a ZIP beneficiary, resulting

in conflict of award. She contends that she could not be

compelled to suddenly become particularly interested in a lotthat is completely different from the one where the house

structure she occupies is situated and that the structure

owner in Lot 17 may not be willing to sell the same.

The argument is untenable. Petitioner is certainly

confused. There should be no doubt that the object of the sale

is a determinate thing, a semi-apartment house owned by

Boloy and not the specific lot on which it was built. Thus, it is

because the lots in the Hulo estate were at the time owned by

the

_______________

[14] Magkalas v. National Housing Authority, supra, at pp.

161-162; pp. 388-389 (2008).

[15] TSN, July 23, 2001, pp. 31-32.255

VOL. 724, JUNE 2, 2014 255


government prior to the actual award to qualified

beneficiaries. Likewise, petitioner has not shown that Boloy,

or another specific person, actually owned a housing

structure in Lot 17 aside from the one they were leasing inLot 18.

Petitioner next alleges that the entire process was pock-

marked with irregularities too nagging to be ignored, and

collectively outweighed the presumption of regularity; that

the meetings only proved to be farcical, even embarrassing;

and that the repetitive absence of the persons necessary

forthose meetings could not have been trifling or insignificant

since, as what later proved to have transpired, the execution ofa deed of conveyance for the property was already taking place

while petitioner was still unsuspectingly relying on the

prospects of the scheduled meetings. Particularly, she

maintains that the brazen irregularity took place just four

days after the initial meeting on November 19, 1987 with the

execution of the Deed of Absolute Sale on November 23, 1987

in favor of respondents who surreptitiously and effectively

preempted the option given her to purchase the residential

structure, easing her out from the race, so to speak. These fail

to convince.

Ortega, Sr. initially purchased 1/3 of the residential structure

on November 23, 1987, per Deed of Absolute Sale, which,

recognizing his co-occupancy with others, also gave











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The presence or absence of fraud is a factual issue.[16] As a

general rule, only questions of law may be raised in a petition

for review oncertiorarifiled with this Court and factual

findings of the trial courts, when adopted and confirmed by

the CA, are final and conclusive on this Court, except when

the CA judgment is based on a misapprehension of facts or

the factual inferences are manifestly incorrect or when that

court overlooked certain relevant facts which, if properly

considered, would justify a different conclusion.[17]

In this case, petitioner, as the party alleging fraud in the

transaction and the one who bears the burden of proof,

[18]mis-

_______________

[16] Republic of the Philippines v. Guerrero, 520 Phil. 296,

306; 485 SCRA 424, 434 (2006).

[17] Id.

[18] Id., at p. 310; p. 438.256



erably failed to demonstrate that respondents committedfraud or that they connived with government officials and

employees to cause undue damage or prejudice to petitioner.

Petitioner did not present even a single evidence to support

the view that the repetitive absences of the persons necessary

for the meetings before the Arbitration and Awards

Committee were intentional or done with malicious intent.

Also, as the CA found, records would show that respondent

respondent Silos and petitioner the similar option to buy

their respective 1/3 portion. Petitioner did not exercise the

option given. Hence, upon such failure, the entire structure

was eventually sold to bothrespondents through the Deed of

Sale dated February 19, 1988.

We agree with the CA that the case for specific

performance with damages instituted by petitioner effectively

attacks the validity of respondents’ Torrens title over the

subject lot. It is evident that, ultimately, the objective of such

claim is to nullify the title of respondents to the property in

question, which, in turn, challenges the judgment pursuant

to which the title was decreed. This is a collateral attack thatis not permitted under the principle of indefeasibility of

Torrens title. Section 48 of Presidential Decree No. 1529,

otherwise known as the Property Registration Decree,

unequivocally states:

SEC.48. Certificate not subject to collateral attack.—A

certificate of title shall not be subject to collateral attack. It

cannot be altered, modified, or cancelled except in a direct

proceeding in accordance with law.

A collateral attack transpires when, in another action to

obtain a different relief and as an incident to the present

action, an attack is made against the judgment granting the

title while a direct attack (against a judgment granting the

title) is an action whose main objective is to annul, set aside,

or enjoin the enforcement of such judgment if not yet

implemented, or to seek recovery if the property titled under

the257

VOL 724 JUNE 2 2014 257

over the property, and if based on an implied or a

constructive trust it prescribes ten (10) years from the

alleged fraudulent registration or date of issuance of the















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VOL. 724, JUNE 2, 2014 257


judgment had been disposed of.[19] The issue on the validity

of title,i.e., whether or not it was fraudulently issued, can

only be raised in an action expressly instituted for thatpurpose.[20]

The appropriate legal remedy that petitioner should have

availed is an action for reconveyance. Proof of actual fraud is

not required as it may be filed even when no fraud intervened

such as when there is mistake in including the land for

registration.

Under the principle of constructive trust, registration of

property by one person in his name, whether by mistake or

fraud, the real owner being another person, impresses upon

the title so acquired the character of a constructive trust for

the real owner, which would justify an action for

reconveyance. In the action for reconveyance, the decree of

registration is respected as incontrovertible but what is

sought instead is the transfer of the property wrongfully or

erroneously registered in another’s name to its rightful owner

or to one with a better right. If the registration of the land is

fraudulent, the person in whose name the land is registered

holds it as a mere trustee, and the real owner is entitled to

file an action for reconveyance of the property.[21]

An action for reconveyance resulting from fraud prescribes

four years from the discovery of the fraud, which is deemed to

have taken place upon the issuance of the certificate of title

certificate of title over the property.[22] However, an action

for reconveyance based on implied or constructive trust is

imprescriptible if the plaintiff

_______________

[19] Urieta Vda. de Aguilar v. Alfaro, G.R. No. 164402,

July 5, 2010, 623 SCRA 130, 143-144.

[20] Id., at p. 145.

[21] Pasiño v. Dr. Monterroyo, 582 Phil. 703, 715-716; 560

SCRA 739, 751 (2008).

[22] Philippine Economic Zone Authority (PEZA) v.

Fernandez, 411 Phil. 107, 119; 358 SCRA 489, 498 (2001).258



or the person enforcing the trust is in possession of the

property.[23] In effect, the action for reconveyance is an

action to quiet title to the property, which does not prescribe.

[24] We said inYared v. Tiongco:[25]

The Court agrees with the CA’s disquisition that an action for

reconveyance can indeed be barred by prescription. In a long

line of cases decided by this Court, we ruled that an action forreconveyance based on implied or constructive trust must

perforce prescribe in ten (10) years from the issuance of the

Torrens title over the property.

However, there is an exception to this rule. In the case

of Heirs of Pomposa Saludares v. Court of Appeals, the Court,

reiterating the ruling in Millena v. Court of Appeals, held

that there is but one instance when prescription cannot be

invoked in an action for reconveyance, that is, when the

plaintiff is in possession of the land to be reconveyed.

H fP Sld h C l dh h

for reconveyance remains in possession of the subject land,

the action for reconveyance becomes in effect an action to

quiet title to property, which is not subject to prescription.
























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In Heirs of Pomposa Saludares, this Court explained that the

Court, in a series of cases, has permitted the filing of an

action for reconveyance despite the lapse of more than ten

(10) years from the issuance of title to the land and declared

that said action, when based on fraud, is imprescriptible as

long as the land has not passed to an innocent buyer for

value. But in all those cases, the common factual backdrop

was that the registered owners were never in possession of

the disputed property. The exception was based on the theory

that registration proceedings could not be used as a shield for

fraud or for enriching a person at the expense of another.

In Alfredo v. Borras, the Court ruled that prescription doesnot run against the plaintiff in actual possession of the

disputed land because such plaintiff has a right to wait until

his possession is disturbed or his title is questioned before

initiating an action to vindicate his

_______________

[23] Id.

[24] Id.

[25] G.R. No. 161360, October 19, 2011, 659 SCRA 545.259

VOL. 724, JUNE 2, 2014 259


right. His undisturbed possession gives him the continuing

right to seek the aid of a court of equity to determine the

nature of the adverse claim of a third party and its effect on

his title. The Court held that where the plaintiff in an action

The Court reiterated such rule in the case ofVda. de

Cabrera v. Court of Appeals, wherein we ruled that the

imprescriptibility of an action for reconveyance based on

implied or constructive trust applies only when the plaintiffor the person enforcing the trust is not in possession of the

property. In effect, the action for reconveyance is an action to

quiet the property title, which does not prescribe.

Similarly, in the case of David v. Malay, the Court held

that there was no doubt about the fact that an action for

reconveyance based on an implied trust ordinarily prescribes

in ten (10) years. This rule assumes, however, that there is an

actual need to initiate that action, for when the right of thetrue and real owner is recognized, expressly or implicitly such

as when he remains undisturbed in his possession, the

statute of limitation would yet be irrelevant. An action for

reconveyance, if nonetheless brought, would be in the nature

of a suit for quieting of title, or its equivalent, an action that

is imprescriptible. In that case, the Court reiterated the

ruling in Faja v. Court of Appeals which we quote:

x x x There is settled jurisprudence that one

who is in actual possession of a piece of land

claiming to be owner thereof may wait until

his possession is disturbed or his title is

attacked before taking steps to vindicate his

right, the reason for the rule being, that his

undisturbed possession gives him a

continuing right to seek the aid of a court of

equity to ascertain and determine the

nature of the adverse claim of a third party

and its effect on his own title, which right

b l d l

therein from 1966 until 1997 when they were ejected by the

sheriff of Pasig RTC;[29] (2) TCT No. 13342 was issued on

De-









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can be claimed only260



by one who is in possession. No better

situation can be conceived at the moment

for Us to apply this rule on equity than that

of herein petitioners whose mother, Felipa

Faja, was in possession of the litigated

property for no less than 30 years and was

suddenly confronted with a claim that the

land she had been occupying and cultivating

all these years, was titled in the name of a

third person. We hold that in such a

situation the right to quiet title to the

property, to seek its reconveyance and annul

any certificate of title covering it, accrued

only from the time the one in possession

was made aware of a claim adverse to his

own, and it is only then that the statutory

period of prescription commences to run

against such possessor.[26]

In this case, petitioner, taking into account Article 1155 of

the Civil Code[27] and jurisprudence[28] on the matter,

should be guided by the following facts in enforcing her legal

remedy/ies, if still any: (1) her judicial admission that they no

longer possess the subject lot, claiming that they stayed

_______________

[26] Yared v. Tiongco, supra note 25 at pp. 552-554.

[27] ART. 1155.The prescription of actions in

interrupted when they are filed before the court, when there

is a written extrajudicial demand by the creditors, and when

there is any written acknowledgement of the debt by the

debtor.

[28] See Ampeloquio, Sr. v. Napiza, 536 Phil. 1102; 506

SCRA 396 (2006); Permanent Savings and Loan Bank v.

Velarde, G.R. No. 140608, September 23, 2004, 439 SCRA

1; Ledesma v. Court of Appeals, G.R. No. 106646, June 30,

1993, 224 SCRA 175; Philippine National Railways

v. National Labor Relations Commission, 258 Phil. 552; 177

SCRA 740 (1989); andThe Overseas Bank of Manila v.

Geraldez, 183 Phil. 493; 94 SCRA 937 (1979).

[29] TSN, July 23, 2001, pp. 7, 33-34, 36-37.261

VOL. 724, JUNE 2, 2014 261


cember 9, 1997; and (3) the instant case for specific

performance with damages was filed on August 17, 1999.WHEREFORE, premises considered, the Petition

isDENIED. The August 12, 2005 Decision and January 17,

2006 Resolution of the Court of Appeals in C.A.-G.R. CV No.

76994, which dismissed petitioner’s complaint for specific

performance and damages docketed as Civil Case No. MC99-

826 before the Mandaluyong City Regional Trial Court,

Branch 213, are hereby AFFIRMED.

SO ORDERED.

G.R. No. 205065 June 4, 2014

VERGEL PAULINO AND CIREMIA PAULINO, Petitioners,vs.COURT OF APPEALS AND REPULIC OF T!E
















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Velasco, Jr. (Chairperson), Del Castillo,** Villarama,

Jr.*** and Leonen, JJ., concur.

Petition denied, judgment and resolution affirmed.

Notes.—An action for reconveyance based on an implied or

constructive trust prescribes in 10 years from the time the

right of action accrues. ( Mercado vs. Espinocilla, 664

SCRA 724 [2012])

The certificate of title issued pursuant to any grant or

patent involving public lands is as conclusive and

indefeasible as any other certificate of title issued to private

lands in the ordinary or cadastral registration proceedings. It

is not subject to collateral attack. ( Republic vs. Bellate, 703SCRA 210 [2013])

——o0o——

_______________

** Designated additional member in lieu of Associate

Justice Jose Catral Mendoza, per Raffle dated June 2, 2014.

*** Designated acting member, per Special Order No. 1691

dated May 22, 2014.


Republic of the PhilippinesSUPREME COURTManila

THIRD DIVISION

COURT OF APPEALS AND REPULIC OF T!EP!ILIPPINES, "e#"e$en%e& '( %)e DMINISTRATOR o* %)eLAND REGISTRATION AUT!ORIT+, Respondents.

! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

G.R. No. 205--

SPOUSES DR. VERGEL L. PAULINO DR. CIREMIA G.PAULINO, Petitioners,vs.REPULIC OF T!E P!ILIPPINES, "e#"e$en%e& '( %)eADMINISTRATOR o* %)e LAND REGISTRATIONAUT!ORIT+, Respondent.

D " # I S I O N

MENDO/A, J.:

These consolidated petitions assail $% the Septe&ber '(, ')$'Resolution$ of the #ourt of *ppeals +#* orderin- the issuanceof a rit of preli&inar/ in0unction restrainin- the eecution of the1ul/ '), ')$) Decision' of the Re-ional Trial #ourt, 2ranch 34,5ue6on #it/, +RT#, 1ud-e Ralph 7ee presidin-, hich orderedthe reconstitution of a supposedl/ lost title8 and '% its March 9,')$4 Decision4 annullin- the said RT# decision.

Specificall/, :.R. No. ')9);9 is a petition for certiorari under Rule ;9of the Rules of #ourt see<in- to annul the Septe&ber '(, ')$' and Dece&ber '), ')$' Resolutions issued b/ therespondent #*, -rantin- the public respondent=s pra/er for theissuance of a rit of preli&inar/ in0unction en0oinin- the RT#fro& enforcin- and i&ple&entin- its 1ul/ '), ')$) decision,hich ordered the 7and Re-istration *uthorit/ +7R* toreconstitute the petitioners= certificate of title, Transfer of

#ertificate Title +T#T No. 4)$;$> of the Re-istr/ of Deeds of 5ue6on #it/ +5#RD.

On the other hand, :.R. No. ')>944is a petition for revie onti i d R l (9 f th R l f # t <i t

Report, the RT# rendered the assailed 1ul/ '), ')$) Decision,-rantin- the petition for reconstitution and orderin- the Re-istrar of Deeds of the 5#RD to reconstitute the ori-inal cop/ of T#TNo. 4)$;$>. The dispositive portion of the decision reads@




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certiorari under Rule (9of the Rules of #ourt see<in- to reverseand set aside the March 9, ')$4 Decision and 1une ;, ')$4Resolution of the #*, hich -ranted the petition for annul&entand settin- aside of the 1ul/ '), ')$) RT# Decision, hichordered the 7R* to reconstitute petitioners= certificate of title.

The ?acts@

On Dece&ber $(, '))>, the late #elso ?ernande6 purchased, ina public auction conducted b/ the 5ue6on #it/ -overn&ent, areal propert/ oned and re-istered in the na&e of 7olita :.1avier +1avier,&arried to Pedro 1avier, as evidenced b/ acertificate of sale of delinAuent propert/. The sub0ect propert/appeared to be covered b/ an oner=s duplicate of T#T No.4)$;$> of the 5#RD.

*fter his death, the survivin- heirs of #elso ?ernande6 eecutedan "tra!1udicial Settle&ent of "state ith *bsolute Salecoverin- the sub0ect propert/, sellin- it in favor of the petitioners,spouses Ver-el 7. Paulino and #ire&ia Paulino +SpousesPaulino,for a consideration of P$,3)9,))).)).

On 1une $$, $B33, a fire bro<e out in the 5ue6on #it/ Hall hichburned a portion thereof hich included the office of the 5#RD.

#onseAuentl/, on March B, ')$), Spouses Paulino filed apetition for reconstitution of the ori-inal cop/ of T#T No. 4)$;$>ith the RT#, alle-in- that its ori-inal cop/ as a&on- thosetitles that ere ra6ed durin- the fire. Cpon receipt, the RT#directed the publication and postin- of the scheduled hearin- of case. *fter the 0urisdictional facts ere established, a hearin-officer as desi-nated to receive the evidence e parte.

On 1une '), ')$), the RT# directed the 7R* to sub&it a reportithin five +9 da/s fro& notice. ithout aaitin- the 7R*

H"R"?OR", the Re-ister of Deeds for 5ue6on #it/ is hereb/directed to reconstitute in the files of his office the ori-inal cop/of Transfer #ertificate Title No. 4)$;$> in eactl/ the sa&eter&s and conditions on the basis of Oner=s Duplicate#ertificate of said Transfer #ertificate of Title No. 4)$;$> andother available supportin- docu&ents sub&itted to /our officeand once acco&plished, the said Re-ister of Deeds is further ordered to issue ne oner=s duplicate cop/ of the said#ertificate of Title after pa/&ent of the prescribed fees.

SO ORD"R"D.(

On *u-ust $;, ')$), the RT# issued the #ertificate of ?inalit/,9 there bein- no &otion for reconsideration or appealfiled b/ an/ of the interested parties.

Meanhile, on *u-ust $>, ')$), the RT# received the 7R*Report,; statin- that T#T No. 4)$;$>as re-istered in the na&eof a certain "&&a 2. ?lorendo +?lorendoand that it aspreviousl/ the sub0ect of an application for ad&inistrativereconstitution. It as also discovered that the ori-inal cop/ of the title on file in the Re-istr/ of Deeds as a&on- those savedtitles fro& the fire that -utted the office of 5#RD on 1une $$,$B33. In addition, hen the technical description of the sub0ectpropert/ as plotted, it as identical ith 7ot B4B,Piedad "statecovered b/ T#T No. RT!993;B +('94', in the na&e of Ma-nolia. *ntonino +*ntonino.

On Dece&ber 4, ')$), Spouses Paulino filed ith the 5#RD anapplication for re-istration of the 0udicial reconstitution of T#TNo. 4)$;$> based on the RT# decision. The Re-istrar of Deeds, *tt/. "lbert T. 5uilala +*tt/. 5uilala,and other officials of the 5#RD refused to reconstitute the ori-inal cop/ of the T#T.Hence, Spouses Paulino filed a petition for indirect conte&pt.

SubseAuentl/, the RT# found *tt/. 5uilala -uilt/ of indirectconte&pt in its Decision,> dated Dece&ber ', ')$$.

On 1ul/ $4, ')$', respondent Republic of the Philippines,represented b/ the *d&inistrator of the 7R* filed its Petition for

Spouses Paulino filed a &otion for reconsideration of the saidresolution, but it as denied in the assailed Dece&ber '), ')$'Resolution.

On 1anuar/ $> ')$4 Spouses Paulino filed the special civil









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represented b/ the *d&inistrator of the 7R*, filed its Petition for *nnul&ent of 1ud-&ent ith Cr-ent Pra/er for Issuance of Te&porar/ Restrainin- Order andEor rit of Preli&inar/In0unction3 assailin- $% the 1ul/ '), ')$) RT# decision -rantin-the petition for reconstitution of the ori-inal title8 and '% theDece&ber ', ')$$ RT# decision, findin- the officials of the5#RD -uilt/ of indirect conte&pt for failin- to reconstitute T#TNo. 4)$;$>.

On Septe&ber '(, ')$', the #* issued the assailed resolution,-rantin- the pra/er for the issuance of a rit of preli&inar/in0unction. The decretal portion reads@

H"R"?OR", let a rit of Preli&inar/ In0unction ISSC"en0oinin- public respondent Re-ional Trial #ourt, 2ranch 34,5ue6on #it/, or an/ person actin- under its authorit/, fro&enforcin- and i&ple&entin- the Decisions dated 1ul/ '), ')$)and Dece&ber ', ')$$. The filin- of a bond is not reAuiredpursuant to Section '', Rule $($ of the Rules of #ourt.

SO ORD"R"D.B

Ta<in- into account that the case as still in its co&pletion sta-eand it appearin- that the i&&ediate eecution and satisfactionof the assailed Decisions, dated 1ul/ '), ')$) and Dece&ber ',')$$, ould probabl/ result in &anifest in0ustice and irreparablein0ur/ a-ainst petitioner Republic of the Philippines +norespondent 7R*, the #* found &erit in its pra/er for theissuance of a rit of preli&inar/ in0unction. It eplained that itas in the best interest of all the parties to &aintain the statusAuo until it had resolved the &erits of the issues raised in thepetition, addin- that to den/ the pra/er ould render ineffectivean/ 0ud-&ent that &a/ be rendered in the case.$)

On 1anuar/ $>, ')$4, Spouses Paulino filed the special civilaction for certiorari under Rule ;9, doc<eted as :.R. No.')9);9,see<in- to annul the #* resolutions, hich -ranted thepreli&inar/ in0unction, citin- the co&&ission of a -rave abuse of discretion.

On March 9, ')$4, the #* pro&ul-ated its decision on the&erits of the petition for annul&ent of 0ud-&ent, -rantin- 7R*=spetition, thereb/ annullin- and settin- aside the RT# decisions,dated 1ul/ '), ')$) and Dece&ber ', ')$$. The fallo reads@

H"R"?OR", pre&ises considered, the instant Petition for *nnul&ent of 1ud-&ent is hereb/ :R*NT"D. The assailedDecisions dated 1ul/ '), ')$) and Dece&ber ', ')$$ of theRe-ional Trial #ourt, 2ranch 34, 5ue6on #it/ are *NNC77"Dand S"T *SID". *ccordin-l/, the Petition for Reconstitution of Ori-inal #op/ of T#T No. 4)$;$> and the Petition for Indirect#onte&pt filed b/ private respondent spouses Ver-el Paulinoand #ire&ia :. Paulino are DISMISS"D.

SO ORD"R"D.$$

The #* ruled that the RT# lac<ed 0urisdiction to order thereconstitution of the ori-inal cop/ of T#T No. 4)$;$>, therebein- no lost or destro/ed title. In fact, on the basis of the 7R*Report and other evidence on record, the sub0ect lot specifiedon T#T No. 4)$;$> had the sa&e technical description and asidentical to 7ot B4B, Piedad "state covered b/ T#T No. RT!993;B +(994' in the na&e of *ntonino, hich title as alread/cancelled b/ T#T Nos. 'B;>'9 to 'B;>'3 in the na&e of Ma-nolia *ntonino. Morever, T#T No. 4)$;$> eisted but it asre-istered in the na&e of a different oner, ?lorendo, andpertained to a different real propert/ located in 5uirino District,5ue6on #it/, re-istered in the /ear $B)>. The records further reveal that T#T No. 4)$;$> as previousl/ the sub0ect of

another petition for reconstitution filed b/ one 7olita 1avier hichas also dis&issed b/ the RT#, 2ranch >>, 5ue6on #it/.$'

Spouses Paulino filed a &otion for reconsideration, but it asdenied b/ the #* in its 1une ; ')$4 Resolution #onseAuentl/

constitute collateral attac< on the fa<e and spurious T#TNo. RT!993;B +('94' in the na&e of Ma-nolia *ntonino.

(. hether the #ourt of *ppeals co&&itted -rave error of la in rulin- that T#T NO 4)$;$> in the na&e of 7olita











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denied b/ the #* in its 1une ;, ')$4 Resolution. #onseAuentl/,the/ filed a petition for revie on certiorari ith this #ourt under Rule (9, doc<eted as :.R. No. ')>944.

"ventuall/, the #ourt issued a resolution orderin- theconsolidation of :.R. No. ')>944 ith :.R. No. ')9);9, as bothcases essentiall/ involve the sa&e set of facts, parties andissues.

Issues and *r-u&ents@

:.R. No. ')9);9

$. hether the #ourt of *ppeals co&&itted an error of la and -rave abuse of discretion a&ountin- to lac< or ecess of 0urisdiction.$4

:.R. No. ')>944

$. hether the #ourt of *ppeals co&&itted -rave error of la in not dis&issin- the petition for annul&ent of 0ud-&ent notithstandin- the fact that the respondentfailed to resort to the ordinar/ re&edies of ne trial,appeal, petition for relief or other appropriate re&ediesdespite opportunit/ to do so.

'. hether the #ourt of *ppeals co&&itted -rave error of la hen it disre-arded the rule on evidence in -ivin-credence to the Report that as latel/ sub&itted b/ the7and Re-istration *uthorit/ and obviousl/ eecuted for the interest of other persons and to protect a fa<e andspurious title.

4. hether the #ourt of *ppeals co&&itted -rave error of la in rulin- that reconstitution of T#T No. 4)$;$> ould

la in rulin- that T#T NO. 4)$;$> in the na&e of 7olita1avier cannot be reconstituted because T#T No. 4)$;$>eisted in the na&e of "&&a ?lorendo and pertained to adifferent propert/.

9. The #ourt of *ppeals co&&itted -raver error of lahen it annulled the 1ul/ '), ')$) Decision of theRe-ional Trial #ourt based on factual issues despite thefact that the Re-ional Trial #ourt of 5ue6on #it/ has 0urisdiction over the reconstitution and that it as proventhat T#T No. 4)$;$> eisted and the sa&e as lost.$(

#onsiderin- that the annul&ent case in the #* as alread/decided and the petitions ere consolidated, the #ourt ill 0usttreat the cases as one case as the/ essentiall/ involve the sa&eissues.

?ro& the fore-oin-, it appears that the rulin- of the #ourt hin-eson the resolution of these to <e/ issues@ first, hether #*properl/ availed of Rule (> of the $BB> Rules of #ivil Procedureto assail the final RT# decision8 and second, hether the RT#lac<ed 0urisdiction over the petition for reconstitution.

Procedural Issue@ Propriet/ of Petitionfor *nnul&ent of 1ud-&ent

Spouses Paulino ar-ue that under Rule (> of the $BB> Rules of #ivil

Procedure, it is cr/stal clear that annul&ent of 0ud-&ents &a/onl/ be availed of hen the ordinar/ re&edies of ne trial,appeal, petition for relief, or other appropriate re&edies are nolon-er available throu-h no fault of the petitioner. The/ insist onthe dis&issal of the petition for annul&ent on the -round that the7R* is alread/ in estoppel and not entitled to the relief pra/ed

for because the 1ul/'), ')$) and Dece&ber ', ')$$ RT#decisions beca&e final and eecutor/ throu-h their fault as the/failed to resort to other re&edies despite opportunities to do so.

In support thereof Spouses Paulino cite Republic vs

0ud-&ent cannot constitute a bar to another case b/ reason of res 0udicata.$>

*ccordin-l/, the #ourt a-rees ith the #* that 7R* as notestopped fro& assailin- the 1ul/ ') ')$$ RT# Decision







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In support thereof, Spouses Paulino cite Republic vs.#astro,$9 here the #ourt ruled that annul&ent of 0ud-&ent isnever resorted to as a substitute for a part/=s on ne-lect in notpro&ptl/ availin- of the ordinar/ or other appropriate re&edies.In Republic vs. T*?P* Inc.,$; it as held that, hether throu-hinadvertence or ne-li-ence of its deputi6ed counsel or the OS:itself, the decision had alread/ beco&e final and eecutor/ andcould not be annulled. To conclude otherise ould run counter to the basic principles of fair pla/. 2esides, there ould be noend to liti-ations if the parties, ho unsuccessfull/ availedthe&selves of an/ of the appropriate re&edies or lost the&throu-h their fault or inadvertence, could have unfavorabledecisions annulled b/ si&pl/ brin-in- an action for annul&ent of 0ud-&ent.

The #ourt finds the petitions devoid of &erit.

Cnder Section ' of Rule (>, the onl/ -rounds for annul&ent of 0ud-&ent are etrinsic fraud and lac< of 0urisdiction. 7ac< of 0urisdiction as a -round for annul&ent of 0ud-&ent refers toeither lac< of 0urisdiction over the person of the defendin- part/or over the sub0ect &atter of the clai&. In case of absence, or lac<, of 0urisdiction, a court should not ta<e co-ni6ance of thecase.

In these cases, the petition for annul&ent as based on lac< of 0urisdiction over the sub0ect &atter. The rule is that here thereis ant of 0urisdiction over a sub0ect &atter, the 0ud-&ent isrendered null and void. * void 0ud-&ent is in le-al effect no 0ud-&ent, b/ hich no ri-hts are divested, fro& hich no ri-htcan be obtained, hich neither binds nor bars an/ one, andunder hich all acts perfor&ed and all clai&s floin- out arevoid. It is not a decision in conte&plation of la and, hence, itcan never beco&e eecutor/. It also follos that such a void

estopped fro& assailin- the 1ul/ '), ')$$ RT# Decisionbecause it never attained finalit/ for bein- null and void, havin-been rendered b/ a court ithout 0urisdiction over thereconstitution proceedin-s.

*s earl/ as the case of Strait Ti&es, Inc. v. #*,$3 the #ourt hasheld that hen the oner=s duplicate certificate of title has notbeen lost, but is, in fact, in the possession of another person,then the reconstituted certificate is void, because the court thatrendered the decision had no 0urisdiction. Reconstitution can bevalidl/ &ade onl/ in case of loss of the ori-inal certificate.$B Thisrule as reiterated in the cases of Villa&a/or v. *rante,') RelonRealt/ :roup, Inc. v. #ourt of *ppeals,'$ "astorld Motor Industries #orporation v. S<unac #orporation,'' Rodri-ue6 v.7i&,'4Villanueva v. Viloria,'( and #a&itan v. ?idelit/ Invest&ent#orporation.'9 Thus, ith evidence that the ori-inal cop/ of theT#T as not lost durin- the confla-ration that hit the 5ue6on#it/ Hall and that the oner=s duplicate cop/ of the title asactuall/ in the possession of another, the RT# decision as nulland void for lac< of 0urisdiction.

?or the aforecited reason, the #ourt a-rees that the publicrespondent correctl/ availed of the re&ed/ of petition for annul&ent of 0ud-&ent under Rule (> ithout need of ehaustin- other ordinar/ re&edies of ne trial, appeal, petitionfor relief, or other appropriate re&edies because the RT# 0ud-&ent as null and void.

Indeed, here a petition for annul&ent of a 0ud-&ent or a finalorder of the RT# filed under Rule (> of the Rules of #ourt is-rounded on lac< of 0urisdiction over the person of therespondent or over the nature or sub0ect of the action, thepetitioner need not alle-e in the petition that the ordinar/re&ed/ of ne trial or reconsideration of the final order or 0ud-&ent or appeal therefro& is no lon-er available throu-h no

fault of his on, precisel/ because the 0ud-&ent rendered or thefinal order issued b/ the RT# ithout 0urisdiction is null and voidand &a/ be assailed an/ ti&e either collaterall/ or in a directaction or b/ resistin- such 0ud-&ent or final order in an/ actionor proceedin- henever it is invo<ed unless barred b/ laches ';

destro/ed8 and +e that the description, area and boundaries of the propert/ are substantiall/ the sa&e as those contained inthe lost or destro/ed certificate of title.'>

In reconstitution proceedin-s the #ourt has repeatedl/ ruled

























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or proceedin- henever it is invo<ed, unless barred b/ laches.

Substantive Issue@ 1urisdiction of RT#in the Reconstitution Proceedin-s

The -overnin- la for 0udicial reconstitution of title is R.*. No.';. Sec. $9 thereof provides hen an order for reconstitutionshould issue, as follos@

Section $9. If the court, after hearin-, finds that the docu&entspresented, as supported b/ parole evidence or otherise, aresufficient and proper to arrant the reconstitution of the lost or destro/ed certificate of title, and that petitioner is the re-isteredoner of the propert/ or has an interest therein, that the saidcertificate of title as in force at the ti&e it as lost or destro/ed, and that the description, area and boundaries of thepropert/ are substantiall/ the sa&e as those contained in thelost or destro/ed certificate of title, an order of reconstitutionshall be issued. The cler< of court shall forard to the re-ister of deeds a certified cop/ of said order and all the docu&entshich, pursuant to said order, are to be sued as the basis of thereconstitution. If the court finds that there is no sufficientevidence or basis to 0ustif/ the reconstitution, the petition shallbe dis&issed, but such dis&issal shall not preclude the ri-ht of the part/ or parties entitled thereto to file an application for confir&ation of his or their title under the provisions of the 7andRe-istration *ct. +"&phasis and underscorin- supplied

?ro& the fore-oin-, the folloin- &ust be present for an order for reconstitution to issue@ +a that the certificate of title had beenlost or destro/ed8 +b that the docu&ents presented b/ petitioner are sufficient and proper to arrant the reconstitution of the lostor destro/ed certificate of title8 +c that the petitioner is there-istered oner of the propert/ or had an interest therein8 +dthat the certificate of title as in force at the ti&e it as lost and

In reconstitution proceedin-s, the #ourt has repeatedl/ ruledthat before 0urisdiction over the case can be validl/ acAuired, itis a condition sine Auo non that the certificate of title has notbeen issued to another person. If a certificate of title has notbeen lost but is in fact in the possession of another person, thereconstituted title is void and the court renderin- the decisionhas not acAuired 0urisdiction over the petition for issuance of ne title. The courts si&pl/ have no 0urisdiction over petitions b/+such third parties for reconstitution of alle-edl/ lost or destro/ed titles over lands that are alread/ covered b/ dul/issued subsistin- titles in the na&es of their dul/ re-isteredoners. The eistence of a prior title ipso facto nullifies thereconstitution proceedin-s. The proper recourse is to assaildirectl/ in a proceedin- before the re-ional trial court the validit/of the Torrens title alread/ issued to the other person.'3

In the case at bench, the #* found that the RT# lac<ed 0urisdiction to order the reconstitution of the ori-inal cop/ of T#TNo. 4)$;$>, there bein- no lost or destro/ed title over thesub0ect real propert/, the respondent havin- dul/ proved thatT#T No. 4)$;$> as in the na&e of a different oner, ?lorendo,and the technical description appearin- on that T#T No. 4)$;$>as si&ilar to the technical description appearin- in 7ot B4B,Piedad "state covered b/ T#T No. RT!993;B +('94' in thena&e of *ntonino. In fact, T#T No. RT!993;B +('94' as

alread/ cancelled b/ T#T Nos. 'B;>'9 to 'B;>'3 also in thena&e of *ntonino.

Pertinent portions of the 7R* Report, hich the RT# did not aitfor, read@

'.$ hen the technical description of 7ot No. 3)(!Ne!2, Psd!'4($, appearin- on the reproduction of Transfer #ertificate of

Title No. 4)$;$>, as plotted on the Municipal Inde Map No.9>)3, it appears that the aforesaid lot is identical to 7ot B4B,Piedad "state covered b/ T#T No. RT!993;B +('94' in thena&e of Ma-nolia . *ntonino, hich title is alread/ totall/cancelled and issuin- in lieu thereof T#T Nos 'B;>'9 to

reproduced in eactl/ the sa&e a/ it has been hen the lossor destruction occurred.'B Reconstitution apparentl/presupposes the eistence of an ori-inal certificate of title hichas lost or destro/ed. If there as no loss or destruction li<e inthe case at bench there is actuall/ nothin- to reconstitute The






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cancelled and issuin- in lieu thereof T#T Nos. 'B;>'9 to'B;>'3inclusive all in the na&e of Ma-nolia *ntonino, coverin-7ots B4B!* to B4B!D of subdivision plan Psd!))!);93B3.

'.4. T#T No. 4)$;$> as previousl/ the sub0ect of a petition for 0udicial reconstitution under 7R# #ase No. 5!4>B; +B) inRe-ional Trail #ourt, 2ranch >>, herein this *uthorit/ rendereda Report dated *u-ust '), $BB$. The said petition asdis&issed on Septe&ber '4, $BB> b/ then Presidin- 1ud-eNor&andie 2. Pi6arro, on the -rounds that the sub&itted basisfor reconstitution are fabricated and that an earlier title asissued coverin- the sa&e propert/.

'.( The real T#T No. 4)$;$> covers 7ot $>, 2l<. 34 of thesubdivision plan Psd!9>B>), containin- an area of $3'.3)sAuare &eters, in the na&e of "&&a 2. ?lorendo. The sa&eas applied for ad&inistrative reconstitution but it as foundthat the ori-inal cop/ of title on file in the Re-istr/ of Deeds, isa&on- the saved titles fro& the fire that -utted the re-istr/ on1une $$, $B33, reproduction of hich is hereto attached.

The #ourt, thus, finds no reversible error in the findin-s of the#*.1âwphi1 It is clear fro& the records that the sub0ect T#T No.4)$;$> is in the na&e of a different oner, ?lorendo, and thetechnical description appearin- therein pertains to a parcel of land covered b/ T#T No. RT!993;B +('94' in the na&e of one *ntonino.

It &ust be re&e&bered that the reconstitution of a certificate of title denotes restoration in the ori-inal for& and condition of alost or destro/ed instru&ent attestin- the title of a person to apiece of land. The purpose of the reconstitution of title is tohave, after observin- the procedures prescribed b/ la, the title

the case at bench, there is actuall/ nothin- to reconstitute. Thesa&e rule applies if in fact there is an earlier valid certificate of title in the na&e and in the possession of another person andsaid title is eistin-. *ccordin-l/, the RT# never acAuired 0urisdiction over the sa&e, and its 0ud-&ent rendered thereafter is null and void, hich &a/ be attac<ed an/ti&e.

ith respect to the contention of Spouses Paulino that the 7R*Report is inad&issible because it as not presented andidentified in open court and ad&itted in evidence, suffice it is tosa/ that the/ are estopped fro& Auestionin- it. The ad&issibilit/of the 7R* report as not challen-ed durin- the proceedin-s of the petition for annul&ent in the #*. Its ad&issibilit/ as onl/Auestioned in these petitions. The/ are dee&ed to have aivedtheir ri-ht to Auestion its -enuineness and authenticit/.

?urther, records sho that the #* -ave credence to the 7R*Report, hich as sub&itted in co&pliance to its resolution,dated 1ul/ ';, ')$'. The 7R* Report is a certified photocop/fro& the records dul/ si-ned b/ the 2ranch #ler< of #ourt. *ccordin-l/, the 7R* report is dee&ed to for& part of therecords hich &a/ be used in resolvin- the present controvers/.It need not be e&phasi6ed that the RT# hastil/ acted on thepetition for reconstitution because it did not ait for the 7R*Report. If there as no haste, the 7R* Report ould have

shon that the RT# had no 0urisdiction over the case becausethere as alread/ an eistin- title.

In addition, Spouses Paulino also raised the irre-ularit/ in theissuance of T#T No. RT!993B;B +('94', ar-uin- that areconstitution ould not constitute a collateral attac< on a titlethat as irre-ularl/ and ille-all/ issued in the first place. The/ar-ued that it as an error on the part of the #* to den/ their ri-ht to have their title reconstituted based on the fa<e title of *ntonino. The/ assert that the rule, that a title issued under the

Torrens S/ste& is presu&ed valid and, hence, is the best proof of onership of a piece of land, does not appl/ here thecertificate itself is fault/ as to its purported ori-in.

The #ourt hoever finds the ar-u&ent of Spouses Paulino

JOSE CATRAL MENDO/A *ssociate 1ustice

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The #ourt, hoever, finds the ar-u&ent of Spouses Paulinospecious and &isplaced.1âwphi1 It is a ell settled rule that acertificate of title, once re-istered, cannot be i&pu-ned, altered,chan-ed, &odified, enlar-ed or di&inished ecept in a directproceedin- per&itted b/ la.4) The validit/ of the certificate of title can be threshed out onl/ in a direct proceedin- filed for thepurpose. * Torrens title cannot be attac<ed collaterall/.

It is also a ell!<non doctrine that the issue as to hether thetitle as procured b/ falsification or fraud as advanced b/Spouses Paulino can onl/ be raised in an action epressl/instituted for the purpose. * Torrens title can be attac<ed onl/ for fraud, ithin one /ear after the date of the issuance of thedecree of re-istration. Such attac< &ust be direct, and not b/ acollateral proceedin-. The title represented b/ the certificatecannot be chan-ed, altered, &odified, enlar-ed, or di&inished ina collateral proceedin-.4$

Indeed, the reconstitution proceedin- constituted a collateralattac< on the Torrens title of *ntonino. The proper recourse of the Spouses Paulino to contest the validit/ of the certificate of title is not throu-h the sub0ect petition for reconstitution, but in aproper proceedin- instituted for such purpose. "ven if their ar-u&ents of fraud surroundin- the issuance of the title of *ntonino is correct, such alle-ation &ust be raised & a proper

proceedin- hich is epressl/ instituted for that purpose.

Needless to state, the #* did not co&&it an/ -rave abuse of discretion in issuin- the rit of preli&inar/ in0unction Auestionedin :.R. No. ')9);9.

H"R"?OR", the petitions in both cases are D"NI"D.

SO ORD"R"D.

G.R. No. 194066. June 4, 2014.*

REPUBLIC OF THE PHILIPPINES,

petitioner,vs.FRANKLIN M. MILLADO, respondent.

Civil Law; Property; Reconstitution of Titles; Judicial

Reconstitution; The nature of judicial reconstitution

proceedings is the restoration of an instrument which is

supposed to have been lost or destroyed in its original form

and condition.—The nature of judicial reconstitution

proceedings is the restoration of an instrument which is

supposed to have been lost or destroyed in its original form

and condition. The purpose of the reconstitution of title orany document is to have the same reproduced, after proper

proceedings in the same form they were when the loss or

destruction occurred.

_______________

* FIRST DIVISION.26

2

6


Republic vs. Millado

Same; Same; Same; Same; Notice of Hearing; It is settled

that the actual notice requirement in Section 13 in relation to

Section 12 of Republic Act (R.A.) No. 26 is mandatory and

jurisdictional.—The registered owners appearing in the title

sought to be reconstituted, or in this case, their surviving

heirs, are certainly interested parties who should be notified

of reconstitution proceeding under Section 12 in relation to

Section 13 of R.A. 26. Indeed, for petitions based on sources

enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e) and

3(f), Section 13 adds another requirement aside from

publicationandpostingofnoticeofhearing:thatthenotice

authority to proceed is conferred by a statute and the manner

of obtaining jurisdiction is mandatory, the same must be

strictly complied with, or the proceedings will be void. As

such,thecourtuponwhichthepetitionforreconstitutionof



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publication and posting of notice of hearing: that the notice

bemailed to occupants, owners of adjoining lots, andall

other persons who may have an interest in the property.

Notwithstanding the sale supposedly effected by vendors

claiming to be heirs of the registered owners, they remain as

interested parties entitled to notice of judicial reconstitution

proceedings. It is settled that the actual notice requirement

in Section 13 in relation to Section 12 of R.A. 26 is

mandatory and jurisdictional. In the early case of Manila

Railroad Company v. Hon. Moya, et al., 14 SCRA 358

(1965), this Court categorically declared: It is clear from

section 13 of Republic Act No. 26 that notice by publication is

not sufficient under the circumstances.Notice must be

actually sent or delivered to parties affected by the

petition for reconstitution. The order of

reconstitution, therefore, having been issued without

compliance with the said requirement, has never

become final as it was null and void. The Manila

Railroad cannot then complain that the motion to set aside

was filed beyond the reglementary period.Same; Same; Same; Same; Same; Notwithstanding

compliance with the notice publication, the requirement of

actual notice to the occupants and the owners of the adjoining

property under Sections 12 and 13 of Republic Act (R.A.) No.

26 is itself mandatory to vest jurisdiction upon the court in a

petition for reconstitution of title and essential in order to

allow said court to take the case on its merits.—Where the

such, the court upon which the petition for reconstitution of

title is filed is duty-bound to examine thoroughly the petition

for reconstitution of title and review the record and the legal

provisions laying down the germane jurisdictional

requirements. Thus, we have held that notwithstanding

compliance with the notice publication, the require-27

VOL. 752, JUNE 4, 2014 2

7


ment of actual notice to the occupants and the owners of

the adjoining property under Sections 12 and 13 of R.A. 26 is

itself mandatory to vest jurisdiction upon the court in apetition for reconstitution of title and essential in order to

allow said court to take the case on its merits. The

nonobservance of the requirement invalidates the whole

reconstitution proceedings in the trial court.

PETITION for review on certiorari of a decision of the Court

of Appeals.


The Solicitor General for petitioner. Jose Torres Pacis for respondent.

VILLARAMA, JR., J.:

Before the Court is a petition for review under Rule

45which seeks to reverse and set aside the Decision[1] dated

October 13, 2010 of the Court of Appeals (CA) in C.A.-G.R.

CV No. 93056. The CA affirmed the Decision[2] dated

January 14, 2009 of the Regional Trial Court (RTC) of Iba,

Zambales, Branch 71 granting the petition for reconstitution

in L.R.A. Case No. RTC-237-I.

On February 7, 2007, Franklin M. Millado (respondent)

filedapetition[3]forreconstitutionofOriginalCertificateof

files of said office, as per the certification[5]issued by the

Register of Deeds for the Province of Zambales stating that

said title was “declared missing as per Inventory dated Dec.

17,1981andthatdespited[i]ligentefforttolocateit,the









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filed a petition[3] for reconstitution of Original Certificate of

Title (OCT) No. 2108 issued in favor of the following, in

undivided equal shares: Isabel Bautista, single; Sixto

Bautista, married to Elena Ela; and Apolonia Bautista,single. Respondent alleged that he and his wife are the

vendees of the prop-

_______________

[1] Rollo, pp. 21-34. Penned by Associate Justice Josefina

Guevara-Salonga with Associate Justices Mariflor P.

Punzalan Castillo and Franchito N. Diamante, concurring.

[2] Records, pp. 98-101. Penned by Presiding Judge

Consuelo Amog-Bocar.[3] Id., at pp. 2-4.28



erty covered by the said title, by virtue of a Deed of Extra-

Judicial Settlement of Estate with Sale[4] executed by the

heirs of spouses Sixto and Elena Bautista on December 29,

2006. He further averred that the owner’s duplicate of OCT

No. 2108 was in his possession while he was securing

clearances for the transfer of title in their names but he

either left or misplaced the same.

Respondent claimed that despite efforts he exerted to

locate the owner’s duplicate of OCT No. 2108, he was unable

to find it. Upon verification with the Registry of Deeds, the

original copy of OCT No. 2108 was likewise not found in the

17, 1981 and that despite d[i]ligent effort to locate it, the

same could not be found.”

On March 13, 2007, the trial court ordered respondent to

submit the names and addresses of the occupants or persons

in possession of the property, the owners of the adjoining

properties and all persons who may have any interest in the

property. In compliance, respondent submitted only the

names and addresses of the owners/actual occupants of the

adjoining lots. Thereupon, the trial court issued an Order

setting the hearing of the petition on September 11, 2007.[6]

Considering that the National Printing Office could no

longer accommodate the publication of the notice for the

scheduled hearing date,[7] the trial court issued an Amended

Order[8] on August 28, 2007 setting a new hearing date for

the petition, December 13, 2007, and directing that (a) the

notice/order be published twice in the successive issues of the

______________

[4] Id., at pp. 7-8.

[5] Id., at p. 9.

[6] Id., at pp. 11-12, 14.

[7] Id., at p. 22.

[8] Id., at p. 24.29

VOL. 752, JUNE 4, 2014 29


Official Gazette, posted in the premises of the subject

property, the main entrance of the Provincial Capitol and at

the entrance of the municipal building of San Narciso,

Zambales; (b) copies of the notice/order together with the

petition be sent to the Office of the Solicitor General (Makati

City), the Provincial Prosecutor (Iba, Zambales), the Register

of Deeds for the Province of Zambales, the Land Registration

Respondent also took the witness stand and confirmed the

loss of the owner’s duplicate copy of OCT No. 2108 sometime

_______________

[9] Id., at pp. 50, 52; TSN, April 8, 2008, pp. 2-8 (Records,






























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, g

Authority (National Land Titles and Deeds, LRA), Atty. Jose

T. Pacis (Palanginan, Iba, Zambales), Engr. Franklin M.

Millado and the adjoining lot owners, namely; Remedios

Fernandez and Pascual Fernandez (San Vicente, San

Narciso, Zambales), Letecia Mariano (San Juan, San Narciso,

Zambales) and Harris Fogata (Candelaria, San Narciso,

Zambales); (c) the LRA thru its Records Section submit its

report within 30 days from receipt of the order/notice,

pursuant to Sections 10 and 12 of LRC Circular No. 35; and

(d) the Register of Deeds to submit her verification in

accordance with the aforesaid rule, within 30 days from

receipt of notice/order.

At the hearing, Jovito Calimlim, Jr., Records Officer of the

Registry of Deeds of Zambales, testified that based on the

inventory files of titles in their office, OCT No. 2108 was

declared missing as of December 17, 1981, with no pending

transaction, per verification from the Primary Entry Book.

Upon being notified that the owner’s duplicate copy of said

title was likewise lost, they advised respondent to file a

petition for reconstitution with the court. No opposition to the

petition was filed by their office and the LRA. As to the basis

of the existence of OCT No. 2108, he said that their office

relied on the decree of registration issued by the LRA.

However, he is not aware of the circumstances of the loss of

said title in their office.[9]

[] , pp , ; , p , ,pp ( ,

pp. 56-62).30


Republic vs. Milladoin February or March 2007 while he was securing clearances

from the Bureau of Internal Revenue for the payment of

capital gains tax. He said that at that time he had a bunch of

documents in an envelope but he forgot about it. He went

back to the said office looking for the envelope but there were

many people going in and out of said office. He secured a

certification from the Register of Deeds on the lost or missing

original OCT No. 2108 in their files, and also a certificationfrom the LRA regarding the issuance of the decree of

registration.[10]

After the formal offer of documentary evidence showing

compliance with publication and posting of notice

requirements, and receipt of the Report from the LRA, the

case was submitted for decision. The LRA Report stated that:

(1) based on the “Record Book of Cadastral Lots” on file at the

Cadastral Decree Section, it appears that Decree No. 295110was issued for Lot No. 4616, San Narciso Cadastre on

October 8, 1927 in Cadastral Case No. 9, GLRO Cad. Rec. No.

371, and as per copy of said decree on file at the Vault

Section, Docket Division, the decree was issued in favor of

Isabel, Sixto and Apolonia, all surnamed Bautista, in

undivided equal shares; (2) the technical description of the

property does not appear to overlap previously

plotted/decreed properties in the area; and (3) an

authenticated copy of Decree No. 295110 which can be

secured from the LRA may be used as a source of

reconstitution pursuant to Section 2(d) of Republic Act No. 26

By Decision dated October 13, 2010, the CA dismissed

petitioner’s appeal and affirmed the trial court’s ruling. It

held that the respondent had satisfactorily complied with the

statutory notice requirements so that the adjoining owners







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p () p

(R.A. 26).[11]

On January 14, 2009, the trial court rendered its decision

granting the petition for reconstitution, as follows:

WHEREFORE, the Register of Deeds of Zambales is

directed to reconstitute Original Certificate of Title No. 2108.

_______________

[10] Id., at p. 64; TSN, May 22, 2008, pp. 3-13 (id., at pp.

70-A to 80).

[11] Id., at pp. 82-90, 94-97.31

VOL. 752, JUNE 4, 2014 31


Let copies of this decision be furnished the Register of

Deeds of Zambales, the Land Registration Authority, Quezon

City, the Solicitor General, Makati City, the Provincial

Prosecutor, Iba, Zambales, Atty. Jose T. Pacis and the

petitioner.

SO ORDERED.[12]

The Republic of the Philippines (petitioner) thru theSolicitor General, appealed to the CA, arguing that the trial

court gravely erred in granting the petition for reconstitution

despite noncompliance with all the jurisdictional requisites.

It pointed out that respondent failed to notify all the

interested parties, particularly the heirs of the registered

owners.[13]

y q j g

and any other persons who may have an interest in the

property may be duly notified of the proceedings and given

the opportunity to oppose the petition.

Petitioner is now before this Court assailing the CA in not

ruling that respondent failed to comply withallthe

jurisdictional requisites for reconstitution of title.

The appeal is meritorious.

The nature of judicial reconstitution proceedings is the

restoration of an instrument which is supposed to have been

lost or destroyed in its original form and condition.[14]The

purpose of the reconstitution of title or any document is tohave the same reproduced, after proper proceedings in the

same form they were when the loss or destruction occurred.

[15]

_______________

[12] Id., at pp. 100-101.

[13] CA Rollo, pp. 25-29.

[14] Heirs of Susana De Guzman Tuazon v. Court of

Appeals, 465 Phil. 114, 126; 420 SCRA 219, 228 (2004).[15] Puzon v. Sta. Lucia Realty and Development, Inc., 406

Phil. 263, 277; 353 SCRA 699, 710 (2001).32



R.A. 26 provides for the special procedure and requirements

for the reconstitution of Torrens certificates of title.

Section 2 of R.A. 26, which governs reconstitution

oforiginal certificates of title, provides:

SEC.2.Original certificates of title shall be

state or contain, among other things, the following: (a) that

the owner’s duplicate of the certificate of title had been lost

or destroyed; (b) that no co-33
























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g

reconstituted from such of the sources hereunder enumerated

as may be available, in the following order:

(a) The owner’s duplicate of the certificate of title;

(b) The co-owner’s, mortgagee’s, or lessee’s duplicate of

the certificate of title;

(c)A certified copy of the certificate of title, previously

issued by the register of deeds or by a legal custodian thereof;

(d) An authenticated copy of the decree of registration or

patent, as the case may be, pursuant to which the original

certificate of title was issued;

(e)A document, on file in the registry of deeds, by which

the property, the description of which is given in said

document, is mortgaged, leased or encumbered, or an

authenticated copy of said document showing that its original

had been registered; and

(f) Any other document which, in the judgment of the

court, is sufficient and proper basis for reconstituting the lost

or destroyed certificate of title.

In order for the court to acquire jurisdiction over the

petition for reconstitution, the following provisions must be

observed, to wit:

SEC.12.Petitions for reconstitution from sources

enumerated in Sections 2(c),2(d), 2(e), 2(f), 3(c), 3(d), 3(e),

and/or 3(f) of this Act, shall be filed with the proper Court of

First Instance, by the registered owner, his assigns, or any

person having an interest in the property. The petition shall

VOL. 752, JUNE 4, 2014 33


owner’s, mortgagee’s or lessee’s duplicate had been issued, or,

if any had been issued, the same had been lost or destroyed;(c) the location, area and boundaries of the property; (d) the

nature and description of the buildings or improvements, if

any, which do not belong to the owner of the land, and the

names and addresses of the owners of such buildings or

improvements; (e)the names and addresses of the

occupants or persons in possession of the property, of the

owners of the adjoining properties andof all persons who

may have any interest in the property; (f) a detaileddescription of the encumbrances, if any, affecting the

property; and (g) a statement that no deeds or other

instruments affecting the property have been presented for

registration, or, if there be any, the registration thereof has

not been accomplished, as yet. All the documents, or

authenticated copies thereof, to be introduced in evidence in

support of the petition for reconstitution shall be attached

thereto and filed with the same: Provided, That in case thereconstitution is to be made exclusively from sources

enumerated in Section 2(f) or 3(f) of this Act, the petition

shall be further accompanied with a plan and technical

description of the property duly approved by the Chief of the

General Land Registration Office, [now Commission of Land

Registration] or with a certified copy of the description taken

from a prior certificate of title covering the same property.

SEC.13. The court shall cause a notice of the petition,

filed under the preceding section, to be published, at the

in favor of Isabel, Sixto and Apolonia, all surnamed Bautista,

covering Lot 4616, San Narciso Cadastre in Cad. Case No. 9,

GLRO Cad. Record No. 371. The said co-owners pro

indiviso are supposedly the registered owners named in OCT

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expense of the petitioner, twice in successive issues of the

Official Gazette, and to be posted on the main entrance of the

provincial building and of the municipal building of the

municipality or city in which the land is situated, at least

thirty days prior to the date of hearing.The court shall

likewise cause a copy of the notice to be sent, by

registered mail or otherwise, at the expense of the

petitioner, to every person named therein whose address is

known, at least thirty days prior to the date of hearing.Said

notice shall state, among other things, the number of the

lost or destroyed Certificate of Title, if known, the name ofthe registered owner,the

34



names of the occupants or persons in possession of the

property, the owners of the adjoining properties andall

other interested parties, the location, area and boundaries

of the property, and the date on which all persons having any

interest therein must appear and file their claim or objections

to the petition. The petitioner shall, at the hearing, submit

proof of the publication, posting and service of the notice as

directed by the court.[16](Emphasis supplied)

In this case, the source of reconstitution is an

authenticated copy of Decree No. 295110 under Section 2(d),

which as certified by the LRA, was issued on October 8, 1927

No. 2108. The Deed of Extra-Judicial Settlement of Estate

with Sale stated that Apolonia and Isabel died single and

without any children and only the alleged heirs of spouses

Sixto and Elena Bautista executed the said document

conveying the 7,594-square meter lot to respondent. These

supposed vendors claiming to be heirs of one of the registered

owners were not notified of the judicial reconstitution

proceedings.

The registered owners appearing in the title sought to be

reconstituted, or in this case, their surviving heirs, are

certainly interested parties who should be notified of

reconstitution proceeding under Section 12 in relation to

Section 13 of R.A. 26. Indeed, for petitions based on sources

enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d), 3(e) and

3(f), Section 13 adds another requirement aside from

publication and posting of notice of hearing: that the notice

bemailed to occupants, owners of adjoining lots, andall

other persons who may have

_______________

[16] Cited in Republic of the Phil. v. Court of Appeals, 368

Phil. 412, 422-423; 309 SCRA 110, 120-121 (1999).35

VOL. 752, JUNE 4, 2014 35


an interest in the property.[17] Notwithstanding the sale

supposedly effected by vendors claiming to be heirs of the

registered owners, they remain as interested parties entitled

to notice of judicial reconstitution proceedings.

It is settled that the actual notice requirement in Section

13 in relation to Section 12 of R.A. 26 is mandatory and

311, 369; 102 SCRA 370, 438 (1981). See alsoOrtigas &

Company Limited Partnership v. Velasco, G.R. Nos. 109645 &

112564, July 25, 1994, 234 SCRA 455, 482 andSubido

v. Republic of the Philippines, 522 Phil. 155, 165; 488 SCRA







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jurisdictional.[18] In the early case of Manila Railroad

Company v. Hon. Moya, et al.,[19] this Court categorically

declared:

It is clear from Section 13 of Republic Act No. 26 thatnotice by publication is not sufficient under the

circumstances.Notice must be actually sent or

delivered to parties affected by the petition for

reconstitution. The order of reconstitution, therefore,

having been issued without compliance with the said

requirement, has never become final as it was null and

void. The Manila Railroad cannot then complain that themotion to set aside was filed beyond the reglementary period.

(Emphasis and underscoring supplied)

Where the authority to proceed is conferred by a statute

and the manner of obtaining jurisdiction is mandatory, the

same must be strictly complied with, or the proceedings will

be void. As such, the court upon which the petition for

reconstitution of title is filed is duty-bound to examine

thoroughly the petition for reconstitution of title and reviewthe record

_______________

[17] Puzon v. Sta. Lucia Realty and Development,

Inc., supra note 15 at p. 275; p. 709; Republic of the Phils. v.

Sps. Sanchez, 527 Phil. 571, 588; 495 SCRA 248, 264 (2006).

[18] Republic of the Phils. v. Sps. Sanchez,id., at p. 595; p.

264, citing Director of Lands v. Court of Appeals, 190 Phil.

178, 187 (2006).

[19] 121 Phil. 1122, 1128; 14 SCRA 358, 363-364 (1965).36

36 SUPREME COURT REPORTS ANNOTATED Republic vs. Millado

and the legal provisions laying down the germane

jurisdictional requirements.[20] Thus, we have held that

notwithstanding compliance with the notice publication, the

requirement of actual notice to the occupants and the owners

of the adjoining property under Sections 12 and 13 of R.A. 26

is itself mandatory to vest jurisdiction upon the court in a

petition for reconstitution of title and essential in order toallow said court to take the case on its merits. The

nonobservance of the requirement invalidates the whole

reconstitution proceedings in the trial court.[21]

For noncompliance with the actual notice requirement to

all other persons who may have interest in the property, in

this case the registered owners and/or their heirs, in

accordance with Section 13 in relation to Section 12 of R.A.

26, the trial court did not acquire jurisdiction over L.R.A.Case No. RTC-237-I. The proceedings therein were therefore

a nullity and the January 14, 2009 Decision was void.

WHEREFORE, the petition for review

oncertiorari isGRANTED. The Decision dated October 13,

2010 of the Court of Appeals in C.A.-G.R. CV No. 93056 is

herebySET ASIDE. WeENTER a new judgment declaring

the reconstitution proceedings in L.R.A. Case No. RTC-237-I,

as well as the January 14, 2009 Decision of the Regional

Trial Court of Iba, Zambales, Branch 71 granting the petition

for reconstitution,NULL and VOID.

certificates of title depending on the source of the petition for

reconstitution. ( Republic vs. Domingo, 683 SCRA 604 [2012])

——o0o——















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Let a copy of this Decision be served on the Register of

Deeds for the Province of Zambales.

No pronouncement as to costs.

_______________

[20] Heirs of Marcela Navarro v. Go, 577 Phil. 523, 532;

554 SCRA 658, 667 (2008), citingThe Government of the

Philippines v. Aballe, 520 Phil. 181, 191-192; 485 SCRA 308,

319 (2006).

[21] Republic of the Phil. v. Court of Appeals, supra note 16

at p. 424; pp. 121-122.37

VOL. 752, JUNE 4, 2014 37


SO ORDERED.

Sereno (CJ., Chairperson), Leonardo-De Castro,

Bersaminand Reyes, JJ., concur.

Petition granted, judgment set aside.

Notes.—A tax declaration can only be prima facieevidence

of claim of ownership, which, however, is not the issue in a

reconstitution proceeding — a reconstitution of title does notpass upon the ownership of land covered by the lost or

destroyed title but merely determines whether a re-issuance

of such title is proper. ( Republic of the Phils. vs. Heirs of Julio

Ramos, 613 SCRA 314 [2010])

Republic Act No. 26 provides two procedures and sets of

requirements in the reconstitution of lost or destroyed


G.R. No. 184148.June 9, 2014.*

NORA B. CALALANG-PARULAN and ELVIRA B.

CALALANG, petitioners,vs. ROSARIO CALALANG-

GARCIA, LEONORA CALALANG-SABILE, and CARLITO

S. CALALANG, respondents.

Remedial Law; Civil Procedure; Question of Fact; What is

involved is indeed a question of fact which is generally beyond

the jurisdiction of the Supreme Court (SC) to resolve in a

petition for review on certiorari. However, a recognized

exception to the rule is when the Regional Trial Court (RTC)

and Court of Appeals (CA) have conflicting findings of fact.—

Preliminarily, we note that the resolution of the issue in this

case requires a reevaluation of the probative value of the

evidence presented by the parties in order to trace the title of

the disputed property. What is involved is indeed a question

of fact which is generally beyond the jurisdiction of this Court

to resolve in a petition for review oncertiorari. However, a

recognized exception to the rule is when the RTC and CA

have conflicting findings of fact as in this case. Here, while

the trial court ruled that the disputed property belonged to

the conjugal partnership of the first marriage of Pedro

Calalang with Encarnacion Silverio, the courta quodeclared

that the evidence proved the sole and exclusive ownership of

the disputed property of Pedro Calalang.

CivilLaw;Thephrase“PedroCalalang married to

Rivera, the registered owner of the properties covered by said

titles.

Same; Succession; It is hornbook doctrine that

successionalrightsarevestedonlyatthetimeofdeath Itis



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Civil Law; The phrase Pedro Calalang, married to

Elvira Berba [Calalang]” merely describes the civil status and

identifies the spouse of the registered owner Pedro Calalang.—

A plain reading of the above provision would clearly revealthat the phrase “Pedro Calalang, married to Elvira Berba

[Calalang]” merely describes the civil status and identifies

the spouse of the registered owner Pedro Calalang. Evidently,

this does not mean that the property is conjugal. In Litam v.

Rivera, 100 Phil. 364 (1956), we declared: Further strong

proofs that the properties in question are the paraphernal

properties of Marcosa Rivera, are the very Torrens Titles

covering said properties. All the said properties areregistered in the name of “Marcosa Rivera, married to Rafael

Litam.” This circumstance indicates that the properties in

question belong to the registered owner,

_______________

* FIRST DIVISION.403

VOL. 725, JUNE 9, 2014 403

Calalang-Parulan vs. Calalang-Garcia

Marcosa Rivera, as her paraphernal properties, for if

they were conjugal, the titles covering the same should have

been issued in the names of Rafael Litam and Marcosa

Rivera. The words “married to Rafael Litam” written after

the name of Marcosa Rivera, in each of the abovementioned

titles are merely descriptive of the civil status of Marcosa

successional rights are vested only at the time of death.—It is

hornbook doctrine that successional rights are vested only at

the time of death. Article 777 of the New Civil Code provides

that “[t]he rights to the succession are transmitted from themoment of the death of the decedent.” In Butte v. Manuel Uy

and Sons, Inc., 4 SCRA 526 (1962), we proclaimed the

fundamental tenets of succession: The principle of

transmission as of the time of the predecessor’s death is basic

in our Civil Code, and is supported by other related articles.

Thus, the capacity of the heir is determined as of the time the

decedent died (Art. 1034); the legitime is to be computed as of

the same moment (Art. 908), and so is the inofficiousness ofthe donationinter vivos(Art. 771). Similarly, the legacies of

credit and remission are valid only in the amount due and

outstanding at the death of the testator (Art. 935), and the

fruits accruing after that instant are deemed to pertain to

the legatee (Art. 948).

Remedial Law; Evidence; Clear and Convincing

Evidence; Fraud; Fraud must be established by clear and

convincing evidence. Mere preponderance of evidence is not

even adequate to prove fraud.—It is only upon the death of

Pedro Calalang on December 27, 1989 that his heirs acquired

their respective inheritances, entitling them to their pro

indivisoshares to his whole estate. At the time of the sale of

the disputed property, the rights to the succession were not

yet bestowed upon the heirs of Pedro Calalang. And absent

clear and convincing evidence that the sale was fraudulent or

not duly supported by valuable consideration (in effect an

inofficious donationinter vivos), the respondents have no

right to question the sale of the disputed property on the

asserted their ownership over a certain parcel of land against

the petitioners Nora B. Calalang-Parulan and Elvira B.

Calalang. The said lot with an area of 1,266 square meters

and specifically identified as Lot 1132, Cad. 333, Bigaa



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ground that their father deprived them of their respective

shares. Well to remember, fraud must be established by clear

and convincing evidence. Mere preponderance of evidence is

not even adequate to prove fraud. The Complaint for Annulment of Sale and Reconveyance of Property must

therefore be dismissed.404




resolution of the Court of Appeals, Thirteenth Division.

The facts are stated in the opinion of the Court. Arceo Law Officefor petitioners.

Macarius S. Galutera for respondents.

VILLARAMA, JR., J.:

Before us is a petition for review oncertiorari assailing the

Decision[1] dated December 21, 2007 and Resolution[2]dated

July 25, 2008 of the Thirteenth Division of the Court of

Appeals (CA) in C.A.-G.R. CV No. 72531. The CA modified

the Decision[3] dated July 10, 2001 of the Regional TrialCourt (RTC), Branch 21, of Malolos, Bulacan, in Civil Case

No. 370-M-91.

The facts, as culled from the records, follow:

In a Complaint[4] for Annulment of Sale and

Reconveyance of Property filed with the RTC of Malolos,

Bulacan on June 10, 1991, the respondents Rosario Calalang-

Garcia, Leonora Calalang-Sabile, and Carlito S. Calalang

Cadastre situated in Brgy. Burol 2nd, Municipality of

Balagtas, Province of Bulacan, was allegedly acquired by the

respondents from their mother Encarnacion Silverio, through

succession as the latter’s compulsory heirs._______________

[1] Rollo, pp. 25-34. Penned by Associate Justice Marlene

Gonzales-Sison, with Associate Justices Juan Q. Enriquez,

Jr. and Vicente S. E. Veloso, concurring.

[2] Id., at pp. 35-37.

[3] Id., at pp. 54-60. Penned by Judge Cesar M. Solis.

[4] Records, pp. 3-7.405

VOL. 725, JUNE 9, 2014 405


According to the respondents, their father, Pedro Calalang

contracted two marriages during his lifetime. The first

marriage was with their mother Encarnacion Silverio.

During the subsistence of this marriage, their parents

acquired the abovementioned parcel of land from their

maternal grandmother Francisca Silverio. Despite enjoyingcontinuous possession of the land, however, their parents

failed to register the same. On June 7, 1942, the first

marriage was dissolved with the death of Encarnacion

Silverio.

On November 6, 1967, Pedro Calalang entered into a

second marriage with Elvira B. Calalang who then gave birth

to Nora B. Calalang-Parulan and Rolando Calalang.

According to the respondents, it was only during this time

that Pedro Calalang filed an application for free patent over

the parcel of land with the Bureau of Lands. Pedro Calalang

committed fraud in such application by claiming sole and

their pro indiviso share in the property.Second, the

respondents claimed that the sale was absolutely simulated

as Nora B. Calalang-Parulan did not have the capacity to pay

for the consideration stated in the Deed of Sale.





















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exclusive ownership over the land since 1935 and concealing

the fact that he had three children with his first spouse. As a

result, on September 22, 1974, the Register of Deeds of

Bulacan issued Original Certificate of Title (OCT) No. P-2871[5] in favor of Pedro Calalang only.

On February 17, 1984, Pedro Calalang sold the said parcel

of land to Nora B. Calalang-Parulan as evidenced by a Deed

of Sale[6] executed by both Pedro Calalang and Elvira B.

Calalang. Accordingly, the Register of Deeds of Bulacan

cancelled OCT No. P-2871 and issued Transfer Certificate of

Title (TCT) No. 283321 in the name of Nora B. Calalang-

Parulan. On December 27, 1989,[7] Pedro Calalang died.

The respondents assailed the validity of TCT No. 283321

on two grounds. First, the respondents argued that the sale of

the land was void because Pedro Calalang failed to obtain the

consent of the respondents who were co-owners of the same.

_______________

[5] Id., at p. 8.

[6] Id., at p. 9.

[7] 1990 in the Complaint but see Records, pp. 32 and 648.406



As compulsory heirs upon the death of Encarnacion Silverio,

the respondents claimed that they acquired successional

rights over the land. Thus, in alienating the land without

their consent, Pedro Calalang allegedly deprived them of

In their Answer,[8] the petitioners argued that the parcel

of land was acquired during the second marriage of Pedro

Calalang with Elvira B. Calalang. They stressed that OCT

No. P-2871 itself stated that it was issued in the name of“Pedro Calalang, married to Elvira Berba [Calalang].” Thus,

the property belonged to the conjugal partnership of the

spouses Pedro Calalang and Elvira B. Calalang. The

petitioners likewise denied the allegation that the sale of the

land was absolutely simulated as Nora B. Calalang-Parulan

was gainfully employed in Spain at the time of the sale.

Moreover, they alleged that the respondents did not have a

valid cause of action against them and that their cause of

action, if any, was already barred by laches, estoppel and

prescription. By way of counterclaim, the petitioners also

sought the payment to them of moral and exemplary

damages plus costs of suit for the filing of the clearly

unfounded suit.

On July 10, 2001, the trial court rendered decision in favor

of the respondents. The dispositive portion of the RTC

decision reads as follows:

WHEREFORE, judgment is hereby rendered in favor of

the plaintiffs and against the defendants in the following

manner:

1.Ordering the defendants to reconvey in favor of the

plaintiffs, their rightful share to three-fourth (3/4) of one-half

(1/2) or a total of 474.75 square meters at 158.25 square

meters for each of the three plaintiffs, namely:

_______________

[8] Records, pp. 32-34.0

The trial court also ruled that because the application for

free patent filed by Pedro Calalang was attended by fraud

and misrepresentation, Pedro Calalang should be considered

as a trustee of an implied trust.


















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407

VOL. 725, JUNE 9, 2014 407


Rosario, Leonora, and Juanito all surname[d] Calalang, ofthe real property covered by TCT No. 283321 of the Registry

of Deeds of Bulacan corresponding to their shares in the

conjugal estate of the late Encarnacion S. Calalang [ sic];

2.Ordering defendants to pay plaintiffs the amount of

P50,000.00 for moral damages; P50,000.00 for attorney’s fees

and another P50,000.00 for litigation expenses.

3. Dismissing the defendants’ counterclaims.

With costs against the defendants.SO ORDERED.[9]

The trial court declared that the parcel of land was jointly

acquired by the spouses Pedro Calalang and Encarnacion

Silverio from the parents of the latter. Thus, it was part of

the conjugal property of the first marriage of Pedro Calalang.

When this marriage was dissolved upon the death of

Encarnacion Silverio on June 7, 1942, the corresponding

shares to the disputed property were acquired by the heirs ofthe decedent according to the laws of succession. In

particular, the trial court allocated half of the disputed

property to Pedro Calalang as his share in the conjugal

partnership and allocated the other half to the three

respondents and Pedro Calalang to be divided equally among

them. The trial court then ordered all of Pedro’s share to be

given to Nora B. Calalang-Parulan on account of the sale.

Aggrieved by the adverse ruling, the petitioners appealed

the case to the CA which rendered the assailed Decision on

_______________

[9] Rollo, pp. 59-60.408



December 21, 2007. The dispositive portion of the CA decision

reads,

WHEREFORE, in light of the foregoing premises,

theDecision datedJuly 10, 2001 of the Regional Trial Court

of Malolos, Bulacan is herebyMODIFIED to read as follows:

“WHEREFORE, judgment is hereby

rendered in favor of the plaintiffs, and

against the defendants in the following

manner:

1.Ordering the defendants to reconvey

in favor of the plaintiffs, their rightful share

to the property owned by their common

father Pedro Calalang, equivalent toone-

half (1/2) portion of the whole area or633

square metersto be divided equally by the

three plaintiffs, namely: Rosario, Leonora

and Carlito, all surnamed Calalang, each

getting an area of 211 square meters of the

property covered by TCT No. 2883321 of the

Registry of Deeds of Bulacan corresponding

to their shares in the property of their late

father Pedro Calalang;

2.Ordering defendants to pay plaintiffs

successional rights to the parcel of land which was

exclusively owned by Pedro Calalang. However, applying the

rules of succession, Pedro’s heirs namely, Rosario Calalang-

Garcia, Leonora Calalang-Sabile, Carlito Calalang, Nora B.





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the amount of P50,000.00 for moral

damages; P50,000.00 for attorney’s fees and

another P50,000.00 for litigation expenses;

3.Dismissing the defendants’

counterclaims.

With costs against the defendants.

SO ORDERED.”

SO ORDERED.[10]

The CA reversed the factual findings of the trial court and

held that Pedro Calalang was the sole and exclusive owner of

_______________[10] Id., at p. 33.

409

VOL. 725, JUNE 9, 2014 409


the subject parcel of land. Firstly, it held that there was

insufficient evidence to prove that the disputed property was

indeed jointly acquired from the parents of Encarnacion

Silverio during the first marriage.Secondly, the CA upheldthe indefeasibility of OCT No. P-2871. It held that although

the free patent was issued in the name of “Pedro Calalang,

married to Elvira Berba [Calalang]” this phrase was merely

descriptive of the civil status of Pedro Calalang at the time of

the registration of the disputed property. Thus, contrary to

the ruling of the trial court, upon the death of Encarnacion

Silverio on June 7, 1942, the respondents did not acquire any

Calalang-Parulan, Elvira B. Calalang, and Rolando Calalang,

succeeded Pedro to the land in equal shares upon his death.

Thus, the CA ordered the petitioners to reconvey in favor of

the respondents their rightful shares to the land. The CAruled that the sale by Pedro Calalang to Nora B. Calalang-

Parulan was fraudulent and fictitious as the vendee was in

bad faith and the respondents were unlawfully deprived of

their pro indiviso shares over the disputed property. As

regards the issue of prescription, the CA ruled that the

prescriptive period for reconveyance of fraudulently

registered real property is ten years. Since the property was

registered in the name of Nora in 1984 and the action for

reconveyance was filed in 1991, the action has not yet

prescribed.

On January 23, 2008, petitioners filed their Motion for

Reconsideration. The CA, however, denied their motion in its

Resolution dated July 25, 2008.

Hence, this petition raising the sole issue:

Whether or not the courta quo gravely erred in rendering

its December 21, 2007 Decision modifying the July 10, 2001

Decision of thetrial court, and in issuing410



its July 25, 2008 Resolution denying petitioners’ Motion for

Reconsideration dated January 23, 2008.[11]

Essentially, the only issue in this case is whether Pedro

Calalang was the exclusive owner of the disputed property

prior to its transfer to his daughter Nora B. Calalang-

Parulan.

Th h h d d bl d

[12] See Latorre v. Latorre, G.R. No. 183926, March 29,

2010, 617 SCRA 88, 98-99.

[13] Canadian Opportunities Unlimited, Inc. v. Dalangin,

Jr., G.R. No. 172223, February 6, 2012, 665 SCRA 21, 31.411











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The petitioners argue that the disputed property belonged

to the conjugal partnership of the second marriage of Pedro

Calalang with Elvira B. Calalang as evidenced by OCT No. P-

2871 which was issued to Pedro Calalang during thesubsistence of his marriage to Elvira B. Calalang. On the

other hand, the respondents claim that the disputed property

was transferred by their maternal grandmother, Francisca

Silverio, to their parents, Pedro Calalang and Encarnacion

Silverio, during the latter’s marriage. Thus, the respondents

argue that it belonged to the conjugal partnership of the first

marriage of Pedro Calalang with Encarnacion Silverio.

The petition is meritorious.

Preliminarily, we note that the resolution of the issue in

this case requires a reevaluation of the probative value of the

evidence presented by the parties in order to trace the title of

the disputed property. What is involved is indeed a question

of fact which is generally beyond the jurisdiction of this Court

to resolve in a petition for review oncertiorari.[12] However, a

recognized exception to the rule is when the RTC and CA

have conflicting findings of fact as in this case.[13] Here,

while the trial court ruled that the disputed property

belonged to the conjugal partnership of the first marriage of

Pedro Calalang with Encarnacion Silverio, the courta

quodeclared that

_______________

[11] Id., at p. 16.

411

VOL. 725, JUNE 9, 2014 411


the evidence proved the sole and exclusive ownership of thedisputed property of Pedro Calalang.

We have carefully reviewed the records of this case and

sustain the finding of the CA that Pedro Calalang is the sole

and exclusive owner of the disputed property.

The trial court ruled that the respondents were able to

establish that Lot 1132, Cad. 333 originated from the parents

of Encarnacion, and therefore said property “either became

property of Encarnacion in her own right or jointly with herhusband Pedro Calalang in 1936.” In so ruling, the trial

court relied on the testimony of Rosario Calalang-Garcia that

her parents built a nipa house on the subject lot and lived

there before and after World War II. The trial court further

noted that Rosario’s testimony was corroborated by her

cousin and adjacent neighbor Manolo Calalang.[14]

However, as correctly pointed out by the CA, a close

perusal of the records of this case would show that therecords are bereft of any concrete proof to show that the

subject property indeed belonged to respondents’ maternal

grandparents. The evidence respondents adduced merely

consisted of testimonial evidence such as the declaration of

Rosario Calalang-Garcia that they have been staying on the

property as far as she can remember and that the property

was acquired by her parents through purchase from her

maternal grandparents. However, she was unable to produce

any document to evidence the said sale, nor was she able to

present any documentary evidence such as the tax

declaration issued in the name of either of her parents.

M tthtth f t t i d lli

their citizenship, residence and postal address. If the

property covered belongs to the conjugal partnership, it shall

be issued in the names of both spouses.

A plain reading of the above provision would clearly reveal

thtth h “Pd Cll idt Eli B b









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Moreover, we note that the free patent was issued solely in

the name of Pedro Calalang and that it was issued more than

30 years after the death of Encarnacion and the dissolution of

the conjugal partnership of gains of the first marriage. Thus,we cannot subscribe to respondents’ submission that the

subject property originally belonged to

_______________

[14] Rollo, p. 57.412



the parents of Encarnacion and was acquired by PedroCalalang and Encarnacion.

We likewise cannot sustain the argument of the petitioners

that the disputed property belongs to the conjugal

partnership of the second marriage of Pedro Calalang with

Elvira B. Calalang on the ground that the title was issued in

the name of “Pedro Calalang, married to Elvira Berba

[Calalang].”

The contents of a certificate of title are enumerated bySection 45 of Presidential Decree No. 1529, otherwise known

as the Property Registration Decree:

SEC.45. Statement of personal circumstances in the

certificate.—Every certificate of title shall set forth the full

names of all persons whose interests make up the full

ownership in the whole land, including their civil status, and

the names of their respective spouses, if married, as well as

that the phrase “Pedro Calalang, married to Elvira Berba

[Calalang]” merely describes the civil status and identifies

the spouse of the registered owner Pedro Calalang. Evidently,

this does not mean that the property is conjugal. In Litam v.

Rivera,[15] we declared:

Further strong proofs that the properties in question are

the paraphernal properties of Marcosa Rivera, are the very

Torrens Titles covering said properties. All the said

properties are registered in the name of “Marcosa Rivera,

married to Rafael Litam.” This circumstance indicates that

the properties in question belong to the registered owner,

Marcosa Rivera, as her paraphernal properties, for if they

were conjugal, the titles covering

_______________

[15] 100 Phil. 364, 376 (1956).413

VOL. 725, JUNE 9, 2014 413


the same should have been issued in the names of Rafael

Litam and Marcosa Rivera. The words “married to RafaelLitam” written after the name of Marcosa Rivera, in each of

the abovementioned titles are merely descriptive of the civil

status of Marcosa Rivera, the registered owner of the

properties covered by said titles.

It must likewise be noted that in his application for free

patent,[16] applicant Pedro Calalang averred that the land

was first occupied and cultivated by him since 1935 and that

he had planted mango trees, coconut plants, caimito trees,

banana plants and seasonal crops and built his house on the

subject lot. But he applied for free patent only in 1974 and

was issued a free patent while already married to Elvira B.

Cll Th h i dth bjtl di th

The principle of transmission as of the time of the

predecessor’s death is basic in our Civil Code, and is

supported by other related articles. Thus, the capacity of the

heir is determined as of the time the decedent died (Art.

1034)th l iti itb td fth t









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Calalang. Thus, having possessed the subject land in the

manner and for the period required by law after the

dissolution of the first marriage and before the second

marriage, the subject propertyipso jure became privateproperty and formed part of Pedro Calalang’s exclusive

property.[17] It was therefore excluded from the conjugal

partnership of gains of the second marriage.[18]

As the sole and exclusive owner, Pedro Calalang had the

right to convey his property in favor of Nora B. Calalang-

Parulan by executing a Deed of Sale on February 17, 1984.

The CA therefore erred in ruling that Pedro Calalang

deprived his heirs of their respective shares over the disputed

property when he alienated the same.

It is hornbook doctrine that successional rights are vested

only at the time of death. Article 777 of the New Civil

Code provides that “[t]he rights to the succession are

transmitted from the moment of the death of the decedent.”

In Butte v.

_______________

[16] Records, p. 209.

[17] SeeSusi v. Razon, 48 Phil. 424, 428 (1925).

[18] NEW CIVIL CODE, Art. 148.414



Manuel Uy and Sons, Inc.,[19] we proclaimed the

fundamental tenets of succession:

1034); the legitime is to be computed as of the same moment

(Art. 908), and so is the inofficiousness of the donationinter

vivos(Art. 771). Similarly, the legacies of credit and

remission are valid only in the amount due and outstandingat the death of the testator (Art. 935), and the fruits accruing

after that instant are deemed to pertain to the legatee (Art.

948).

Thus, it is only upon the death of Pedro Calalang on

December 27, 1989 that his heirs acquired their respective

inheritances, entitling them to their pro indivisoshares to

his whole estate. At the time of the sale of the disputed

property, the rights to the succession were not yet bestowed

upon the heirs of Pedro Calalang. And absent clear and

convincing evidence that the sale was fraudulent or not duly

supported by valuable consideration (in effect an inofficious

donationinter vivos), the respondents have no right to

question the sale of the disputed property on the ground that

their father deprived them of their respective shares. Well to

remember, fraud must be established by clear and convincing

evidence. Mere preponderance of evidence is not even

adequate to prove fraud.[20] The Complaint for Annulment of

Sale and Reconveyance of Property must therefore be

dismissed.

WHEREFORE, the petition for review

oncertiorari isGRANTED. The Decision dated December 21,

2007 and Resolution dated July 25, 2008 of the Thirteenth

Division of the Court of Appeals in C.A.-G.R. CV No. 72531

areRE-

_______________

[19] 114 Phil. 443, 448-449; 4 SCRA 526, 530 (1962).

[20]M t d C tfA l 384Phil418435327

accrued thereto since the opening of the succession. ( Balus

vs. Balus, 610 SCRA 178 [2010])

——o0o——




















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[20] Maestrado v. Court of Appeals, 384 Phil. 418, 435; 327

SCRA 678, 694 (2000).415

VOL. 725, JUNE 9, 2014 415Calalang-Parulan vs. Calalang-Garcia

VERSED andSET ASIDE. Civil Case No. 370-M-91, or the

Complaint for Annulment of Sale and Reconveyance of

Property filed by the respondents with the Regional Trial

Court, Branch 21 of Malolos, Bulacan, on June 10, 1991, is

herebyDISMISSED for lack of merit.

No pronouncement as to costs.

SO ORDERED.Sereno (CJ., Chairperson), Leonardo-De Castro,

Bersaminand Reyes, JJ., concur.

Petition granted, judgment and resolution reversed and set

aside.

Notes.—It is well-settled that in order for an action for

reconveyance based on fraud to succeed, the party seeking

reconveyance must prove by clear and convincing evidence his

title to the property and the fact of fraud. ( Heirs of Bernardo

Ulep vs. Ducat, 577 SCRA 6 [2009])

The rights to a person’s succession are transmitted from

the moment of his death; The inheritance of a person consists

of the property and transmissible rights and obligations

existing at the time of his death as well as those which have

Republic of the PhilippinesSUPREME COURT

Manila

?IRST DIVISION

G.R. No. 1-44 June -0, 2014

SPOUSES DOMINADOR PERALTA AND OFELIAPERALTA, Petitioners,vs.!EIRS OF ERNARDINA AALON, "e#"e$en%e& '(

MANSUETO AALON, Respondents.

! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

G.R. No. 1-464

!EIRS OF ERNARDINA AALON, "e#"e$en%e& '(MANSUETO AALON, Petitioners,vs.MARISSA ANDAL, LEONIL AND AL, ARNEL AND AL,

SPOUSES DOMINDOR PERALTA AND OFELIA PERALTA,n& !EIRS o* RESTITUTO RELLAMA, "e#"e$en%e& '( )$3)&"en ALE, IMMANUEL, JULIUS n& S+LVIA, $u"ne& RELLAMA.

D " # I S I O N

SERENO, CJ:

2efore us are the consolidated Petitions for Revie on #ertiorariunder Rule (9 of the Rules of #ourt assailin- the 4) Ma/ '))>Decision$ of the #ourt of *ppeals +#* Seventeenth Division in#*!:.R. #V No. 399('. The #* had reversed the $( *pril '))9Decision' of the Re-ional Trial #ourt +RT#, ?ifth 1udicialRe-ion of 7e-aspi #it/ 2ranch 9 in #ivil #ase No B'(4

7ot $;>B!*, 7ot $;>B!2, 7ot $;>B!#. 7ot $;>B!* as sold toSpouses Do&inador P. Peralta, 1r. and Ofelia M. Peralta+Spouses Peralta for hich reason T#T No. (''9( as issuedin their na&es. 7ot $;>B!2, on the other hand, as first sold to"duardo 7otivio +7otivio ho thereafter transferred hisonership thereto to Marissa *ndal *rnel *ndal and 7eonil







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Re-ion of 7e-aspi #it/, 2ranch 9, in #ivil #ase No. B'(4.

The civil case before the RT# of 7e-aspi #it/ involved a parcelof land re-istered under the na&e of 2ernardina *balon and

fraudulentl/ transferred to Restituto Rella&a and ho, in turn,subdivided the sub0ect propert/ and sold it separatel/ to theother parties to this case F Spouses Do&inador and OfeliaPeralta8 and Marissa, 7eonil and *rnel, all surna&ed *ndal.Thereafter, Spouses Peralta and the *ndals individuall/re-istered the respective portions of the land the/ had bou-htunder their na&es. The heirs of 2ernardina ere clai&in- bac<the land, alle-in- that since it as sold under fraudulentcircu&stances, no valid title passed to the bu/ers. On the other hand, the bu/ers, ho ere no title holders of the sub0ect

parcel of land, averred that the/ ere bu/ers in -ood faith andsou-ht the protection accorded to the& under the la.

TH" ?*#TS

The RT# and the #* have the sa&e findin-s of fact, but differ intheir le-al conclusions. There bein- no factual issues raised inthe Petitions, e adopt the findin-s of fact of the #* in #*!:.R.No. 399(', as follos@

The sub0ect parcel of land, described as 7ot $;>B of the#adastral Surve/ of 7e-aspi, consistin- of 3,9>$ sAuare &eters,as ori-inall/ covered b/ Ori-inal #ertificate of Title +O#T No.+O $; and re-istered in the na&e of 2ernardina *balon+*balon. It appears that a Deed of *bsolute Sale as eecutedover the sub0ect propert/ in favor of Restituto M. Rella&a+Rella&a on 1une $), $B>9. 2/ virtue of such conve/ance O#TNo. +O $; as cancelled and in lieu thereof Transfer #ertificateof Title +T#T No. ('$)3 as issued in the na&e of Rella&a.The sub0ect propert/ as then subdivided into three +4 portions@

onership thereto to Marissa *ndal, *rnel *ndal, and 7eonil *ndal +the *ndals throu-h a Deed of *bsolute Sale datedOctober B, $BB9. On even date, T#T No. ('(3' as issued inthe na&e of the *ndals. The *ndals li<eise acAuired 7ot $;>B!

# as evidenced b/ the issuance of T#T No. ('3'$ in their favor on Dece&ber '>, $BB9.

#lai&in- that the Deed of *bsolute Sale eecuted b/ *balon infavor of Rella&a as a for-ed docu&ent, and clai&in- further that the/ acAuired the sub0ect propert/ b/ succession, the/bein- the nephe and niece of *balon ho died ithout issue,plaintiff!appellees Mansueta *balon and *&elia *balon filed thecase belo a-ainst Rella&a, Spouses Peralta, and the *ndals,the herein defendants!appellants and the 2an< of the

Philippines Gsic% Islands hich as later dropped as a part/defendant.

It as alle-ed in their #o&plaint and subseAuent *&ended#o&plaint, under five separate causes of action, that Rella&aas able to cause the cancellation of O#T No. +O $;, and inlieu thereof the issuance of T#T No. ('$)3 in his on na&efro& hich the defendants!appellants derived their on titles,upon presentation of a ero cop/ of the alle-ed for-ed deed of absolute sale and the order -rantin- the issuance of a second

oner=s duplicate cop/ of O#T No. +O $; in his favor inMiscellaneous #adastral #ase No. $);(3, hich he had filed onthe pretet that 7ot $;>B covered b/ O#T No. +O $; as soldto hi& and that the oner=s duplicate cop/ of the said title -otlost in $B>; after the sa&e as delivered to hi&. The/ averredthat the oner=s duplicate cop/ of Oct NO. +O $; had ala/sbeen ith *balon and that upon her death, it as delivered tothe&. 7i<eise, the/ alle-ed that *balon had ala/s been inpossession of the sub0ect propert/ throu-h her tenant Pedro2ellen ho as thereafter succeeded b/ his ife, Ruperta

2ellen, and then his son, :odofredo 2ellen. On the other hand,the/ said that Rella&a had never set foot on the land he asclai&in-. The/ further alle-ed that after the onership over thesub0ect propert/ as transferred to the& upon the death of *balon, the/ too< possession thereof and retained :odofredoas their on tenant. Hoever, the/ averred that in $BB9 the

as a &ere for-er/. On the other hand, the court a Auo notedthat the duplicate cop/ of O#T No. +O $; in the hands of theplaintiffs!appellees bears Gsic% the perforated serial nu&ber 2''$4>>, hich it held is a convincin- proof of its authenticit/ and-enuineness. It thus stated that Miscellaneous #adastral #aseNo. $);(3 is a +&ere strate-e& Gsic% fraudulentl/ concocted ...

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as their on tenant. Hoever, the/ averred that in $BB9 thedefendants!appellants ere able to rest possession of thesub0ect propert/ fro& :odofredo 2ellen. The/ alle-ed that thedefendants!appellants are not bu/ers in -ood faith as the/ ere

aare that the sub0ect land as in the possession of theplaintiffs!appellees at the ti&e the/ &ade the purchase. The/thus clai& that the titles issued to the defendants!appellants arenull and void.

In his anser, Rella&a alle-ed that the deed of absolute saleeecuted b/ *balon is -enuine and that the duplicate cop/ of O#T No. +O $; had been delivered to hi& upon the eecutionof the said deed of transfer.

*s for Spouses Peralta and the *ndals, ho filed their separateansers to the co&plaint, the/ &ainl/ alle-ed that the/ arebu/ers in -ood faith and for value.

Durin- the trial, Rella&a passed aa/. He as substituted b/his heirs.

*fter the plaintiffs!appellees rested their case, instead of presentin- their on evidence, the defendants!appellants andthe Heirs of Restituto Rella&a, on different occasions, filed a

de&urrer to evidence.

On *pril $(, '))9, the court a Auo rendered 0ud-&ent in favor of the plaintiffs!appellees and ordered the restoration of O#T No.+O $; in the na&e of *balon and the cancellation of the titlesissued to the defendants!appellants. The fact that onl/ a erocop/ of the purported deed of sale beteen Rella&a and *balonas presented before the Re-ister of Deeds for re-istration andthe absence of such ero cop/ on the official files of the saidOffice &ade the court a Auo conclude that the said docu&ent

No. $);(3 is a +&ere strate-e& Gsic% fraudulentl/ concocted ...for the issuance of a fabricated +second oner=s duplicatecertificate of Oct No. +O $; since the oner=s duplicate cop/ of O#T No. +O $; has not been lost at all. It said that an/

subseAuent re-istration procured b/ the presentation of suchfor-ed instru&ent is null and void. The dispositive portion of thecourt a Auo=s decision reads@ H"R"?OR", Gp%re&isesGc%onsidered, 0ud-&ent is rendered as follos, to it@

$. Orderin- the restoration of Ori-inal #ertificate of TitleNo. +O $; e&bracin- 7ot $;>B in the na&e of 2ernardina *balon into the official files of the Re-istr/ of Deeds of 7e-aspi #it/ F a cop/ of the oner=s duplicatecertificate e&bod/in- the technical description of 7ot

$;>B for&in- official part of the record as "hibit D F asell as orderin- the cancellation of an/ and all transfer certificates of title succeedin- Ori-inal #ertificate of titleNo. +O $; F includin- Transfer #ertificates +sic of TitleNos. ('$)3, (''9(, (''99, (''9;, ('3'$ G,% and ('(3'8

'. Orderin- the defendants Marissa *ndal, 7eonil *ndal, *rnel *ndalG,% and the spouses Do&inador and OfeliaPeralta to vacate 7ot $;>B and to peacefull/ surrender such lot to the plaintiffs8

4. Orderin- the defendants to pa/ the plaintiffs thea&ount of P9),))).)) as liti-ation epenses8 and

(. Orderin- the defendants to pa/ the costs of suit.

The counterclai&s b/ Gsic% the defendants are all dis&issed.

SO ORD"R"D.

Spouses Peralta and the *ndals filed their separate Notices of *ppeal and thereafter, upon approval, filed their respectiveDefendants!*ppellants= 2riefs. The Heirs of Rella&a, on theother hand, opted not to challen-e the rulin- of the loer court. 4

The *ndals and Spouses Peralta F appellants in #*!:.R. #V

cause the annotation of the Deed of Sale, hich he hadeecuted ith *balon, on O#T No. +O $;. It observed thathen the ori-inal cop/ of O#T No. +O $; as alle-edl/ lost in$B>;, hile Rella&a as on his a/ to 7e-aspi #it/ to re-ister the title to his na&e, it too< hi& al&ost ') /ears to ta<e steps to0udiciall/ reconstitute a cop/ thereof. To the appellate court,



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The *ndals and Spouses Peralta appellants in #* :.R. #VNo. 399(' F raised several issues, hich the #* su&&ari6ed asfollos@

$. hether the Deed of *bsolute Sale eecuted b/ *balon in favor of Rella&a as spurious

'. hether the *ndals and Spouses Peralta ere bu/ersin -ood faith and for value

4. ho a&on- the parties ere entitled to their clai&s for da&a-es.(

TH" RC7IN: O? TH" #OCRT O? *PP"*7S

On 4) Ma/ '))>, the Seventeenth Division of the #ourt of *ppeals pro&ul-ated its assailed 0ud-&ent settin- aside theRT# Decision. The #* ruled that the circu&stances surroundin-the sale of the sub0ect propert/ shoed bad-es of fraud or for-er/ a-ainst Rella&a. It found that *balon had not parted ithher onership over the sub0ect propert/ despite the clai& of Rella&a that the/ both eecuted a Deed of *bsolute Sale. *sproof, the #* pointed out the eistence of a notari6ed contract of leasehold eecuted b/ *balon ith Ruperta 2ellen on $$ 1une

$B>;. The -enuineness and due eecution of the said leaseholda-ree&ent as uncontroverted b/ the parties. On this basis, theappellate court concluded that *balon could not have leased thesub0ect parcel of land to 2ellen if the for&er had parted ith her onership thereof.9

The #* also found no evidence to sho that Rella&a eerciseddo&inion over the sub0ect propert/, because he had notintroduced i&prove&ents on the propert/, despite clai&in- tohave acAuired it in $B>9.; ?urther, the #* noted that he did not

0udiciall/ reconstitute a cop/ thereof. To the appellate court,these circu&stances cast doubt on the veracit/ of Rella&a=sclai& of onership over such a si-nificant propert/, hich asal&ost a hectare.>

The #* also ruled that the heirs of 2ernardina *balon had thele-al standin- to Auestion the sale transaction beteen Rella&aand their predecessor!in!interest. It concluded that the heirs of *balon had acAuired the sub0ect propert/ b/ ordinar/ acAuisitiveprescription and thus had ever/ ri-ht to attac< ever/ docu&entthat intended to divest the& of onership thereof,3 hich in thiscase as the Deed of Sale that 2ernardina eecuted in favor of Rella&a. 7astl/, the appellate court considered the SpousesPeralta as bu/ers in bad faith for rel/in- on a &ere photocop/ of

T#T No. ('$)3 hen the/ bou-ht the propert/ fro&Rella&a.B On the other hand, it accorded the *ndals thepresu&ption of -ood faith, findin- no evidence that ould rebutthis presu&ption.$)

The dispositive portion of the assailed #* Decision in #*!:.R.#V No. 399(' is as follos@

H"R"?OR", the assailed decision is S"T *SID" and a ne 0ud-&ent is rendered as follos@

$. Transfer #ertificate of Title No. ('(3' and Transfer #ertificate of Title No. ('3'$, both in the na&es of *ndals, are held le-al and valid.

'. Transfer #ertificate of Title No. (''9( re-istered in thena&es of Spouses Peralta is cancelled for bein- null andvoid. Hence, the/ are ordered to vacate the land coveredthereb/ and to surrender possession thereof in favor of the plaintiffs!appellees.

SO ORD"R"D.$$

The heirs of *balon filed a Motion for Reconsideration of the 4)Ma/ '))> Decision, insofar as the #* declared the *ndals to bebu/ers in -ood faith of the sub0ect propert/ and, thus, that theland title issued in their favor as valid. Spouses Peralta, for

d Spouses Peralta are bu/ers in -ood faith and, thus titleto their portion of the sub0ect propert/ &ust be upheld$9

*s for the heirs of *balon, their Petition, doc<eted as :.R. No.$34(;(, raises the folloin- issues@



















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p ,their part, filed a Motion for Partial Reconsideration of the said#* Decision pertainin- to the portion that declared the& asbu/ers in bad faith hich accordin-l/ nullified the title issued to

the&.

On $) 1une '))3, the #* denied the Motions for PartialReconsideration of the &ovants for lac< of &erit.$'

On $$ *u-ust '))3, Spouses Peralta filed ith this #ourt aPetition for Revie under Rule (9 of the Rules of #ourt assailin-the 4) Ma/ '))> Decision in #*!:.R. #V No. 399('. $4 On thesa&e da/, the heirs of 2ernardina *balon, represented b/Mansueto *balon, filed a si&ilar Petition Auestionin- the portion

of the &entioned #* Decision declarin- the validit/ of the titleissued to the *ndals, ho ere ad0ud-ed b/ the appellate courtas bu/ers in -ood faith.$( TH" ISSC"S

The Petition filed b/ Spouses Peralta, doc<eted as :.R. No.$34((3, lists the folloin- issues@

a The case for annul&ent should have been dis&issedbecause the purported Deed of Sale eecuted b/ *balonand Rella&a as not introduced in evidence and thus,

for-er/ as not proven.

b The heirs of *balon are notforced heirs of 2ernardina *balon8 hence, the/ do not have the le-al personalit/ tofile the action to annul the sub0ect Deed of Sale.

c The heirs of *balon failed to prove that the/ hadinherited the sub0ect propert/.

a The *ndals cannot be considered as bu/ers in -oodfaith b/ si&pl/ appl/in- the ordinar/ presu&ption in theabsence of evidence shoin- the contrar/.

b The #* erred in appl/in- in favor of the *ndals, thedoctrine that a for-ed instru&ent &a/ beco&e the root of a valid title in the hands of an innocent purchaser for value, because *balon never parted ith her possessionof the valid and uncancelled title over the sub0ect propert/

c The #* erred in declarin- the validit/ of the title issuedin the na&es of the *ndals, because Rella&a as bereftof an/ trans&issible ri-ht over the portion of the propert/

he had sold to the&.$;

TH" #OCRT=S RC7IN:

e den/ the Petitions and affir& the rulin- of the #*.

The &ain issue to be resolved in this case is hether a for-edinstru&ent &a/ beco&e the root of a valid title in the hands of an innocent purchaser for value, even if the true oner thereof has been in possession of the -enuine title, hich is valid and

has not been cancelled.

It is ell!settled that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the propert/ in favor of the person hose na&e appears therein. The real purpose of the Torrens s/ste& of land re-istration is to Auiet title to landand put a stop forever to an/ Auestion as to the le-alit/ of thetitle.$>

In Tenio!ObseAuio v. #ourt of *ppeals,$3 e eplained thepurpose of the Torrens s/ste& and its le-al i&plications to thirdpersons dealin- ith re-istered land, as follos@

The &ain purpose of the Torrens s/ste& is to avoid possibleconflicts of title to real estate and to facilitate transactions

accept the validit/ of titles issued thereunder once theconditions laid don b/ the la are satisfied.

The Torrens s/ste& as intended to -uarantee the inte-rit/ andconclusiveness of the certificate of re-istration, but the s/ste&cannot be used for the perpetration of fraud a-ainst the real













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relative thereto b/ -ivin- the public the ri-ht to rel/ upon theface of a Torrens certificate of title and to dispense ith the needof inAuirin- further, ecept hen the part/ concerned has actual

<noled-e of facts and circu&stances that should i&pel areasonabl/ cautious &an to &a<e such further inAuir/. hereinnocent third persons, rel/in- on the correctness of thecertificate of title thus issued, acAuire ri-hts over the propert/,the court cannot disre-ard such ri-hts and order the totalcancellation of the certificate. The effect of such an outri-htcancellation ould be to i&pair public confidence in thecertificate of title, for ever/one dealin- ith propert/ re-isteredunder the Torrens s/ste& ould have to inAuire in ever/instance as to hether the title has been re-ularl/ or irre-ularl/

issued b/ the court. "ver/ person dealin- ith re-istered land&a/ safel/ rel/ on the correctness of the certificate of titleissued therefor and the la ill in no a/ obli-e hi& to -obe/ond the certificate to deter&ine the condition of the propert/.

The Torrens s/ste& as adopted in this countr/ because it asbelieved to be the &ost effective &easure to -uarantee theinte-rit/ of land titles and to protect their indefeasibilit/ once theclai& of onership is established and reco-ni6ed. If a personpurchases a piece of land on the assurance that the sellers title

thereto is valid, he should not run the ris< of bein- told later thathis acAuisition as ineffectual after all. This ould not onl/ beunfair to hi&. hat is orse is that if this ere per&itted, publicconfidence in the s/ste& ould be eroded and land transactionsould have to be attended b/ co&plicated and not necessaril/conclusive investi-ations and proof of onership. The further conseAuence ould be that land conflicts could be even &orenu&erous and co&ple than the/ are no and possibl/ also&ore abrasive, if not even violent. The :overn&ent, reco-ni6in-the orth/ purposes of the Torrens s/ste&, should be the first to

p p -oner of the re-istered land. The s/ste& &erel/ confir&sonership and does not create it. It cannot be used to divestlaful oners of their title for the purpose of transferrin- it to

another one ho has not acAuired it b/ an/ of the &odesalloed or reco-ni6ed b/ la. Thus, the Torrens s/ste& cannotbe used to protect a usurper fro& the true oner or to shield theco&&ission of fraud or to enrich oneself at the epense of another.$B

It is ell!established in our las and 0urisprudence that a personho is dealin- ith a re-istered parcel of land need not -obe/ond the face of the title. * person is onl/ char-ed ith noticeof the burdens and clai&s that are annotated on the title. ') This

rule, hoever, ad&its of eceptions, hich e eplained in#le&ente v. Ra6o@'$

*n/ bu/er or &ort-a-ee of realt/ covered b/ a Torrenscertificate of title, in the absence of an/ suspicion, is notobli-ated to loo< be/ond the certificate to investi-ate the titles of the seller appearin- on the face of the certificate. *nd, he ischar-ed ith notice onl/ of such burdens and clai&s as areannotated on the title.

e do ac<noled-e that the rule thus enunciated is not cast instone. ?or, indeed, there are eceptions thereto. Thus, inSandoval vs. #*, e &ade clear the folloin-@

The aforesaid principle ad&its of an unchallen-ed eception@that a person dealin- ith re-istered land has a ri-ht to rel/ onthe Torrens certificate of title and to dispense ith the need of inAuirin- further ecept hen the part/ has actual <noled-e of facts and circu&stances that ould i&pel a reasonabl/ cautious&an to &a<e such inAuir/ or hen the purchaser has

<noled-e ofa defect or the lac< of title in his vendor or of sufficient facts to induce a reasonabl/ prudent &an to inAuireinto the status of the title of the propert/ in liti-ation. Thepresence of an/thin- hich ecites or arouses suspicion shouldthen pro&pt the vendee to loo< be/ond the certificate andinvesti-ate the title of the vendor appearin- on the face of said

thus considered valid.'9 The #* concluded that this as thecase for the *ndals.

The appellate court cited ?ule v. 7e-are'; as basis for its rulin-.In the said case, the #ourt &ade an eception to the -eneralrule that a for-ed or fraudulent deed is a nullit/ and conve/s no











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- pp -certificate. One ho falls ithin the eception can neither bedeno&inated an innocent purchaser for value nor a purchaser in-ood faith8 and hence does not &erit the protection of the la.''

Thus, the deter&ination hether one is a bu/er in -ood faith or can be considered an innocent purchaser for value beco&esi&perative. Section 99 of the 7and Re-istration *ct providesprotection to an innocent purchaser for value'4 b/ alloin- hi&to retain the parcel of land bou-ht and his title is consideredvalid. Otherise, the title ould be cancelled and the ori-inaloner of the parcel of land is alloed to repossess it.

1urisprudence has defined an innocent purchaser for value as

one ho bu/s the propert/ of another ithout notice that so&eother person has a ri-ht to or interest therein and ho then pa/sa full and fair price for it at the ti&e of the purchase or beforereceivin- a notice of the clai& or interest of so&e other personsin the propert/. 2u/ers in -ood faith bu/ a propert/ ith thebelief that the person fro& ho& the/ receive the thin- is theoner ho can conve/ title to the propert/. Such bu/ers do notclose their e/es to facts that should put a reasonable person on-uard and still clai& that the/ are actin- in -ood faith. '(

The assailed Decision of the #* held that the *ndals erebu/ers in -ood faith, hile Spouses Peralta ere not. Despite itsdeter&ination that fraud &arred the sale beteen 2ernardina *balon and Rella&a, a fraudulent or for-ed docu&ent of sale&a/ still -ive rise to a valid title. The appellate court reasonedthat if the certificate of title had alread/ been transferred fro&the na&e of the true oner to that hich as indicated b/ thefor-er and re&ained as such, the land is considered to havebeen subseAuentl/ sold to an innocent purchaser, hose title is

- / /title. * fraudulent docu&ent &a/ then beco&e the root of a validtitle, as it held in ?ule@

*lthou-h the deed of sale in favor of 1ohn . 7e-are asfraudulent, the fact re&ains that he as able to secure are-istered title to the house and lot. It as this title hich hesubseAuentl/ conve/ed to the herein petitioners. e haveindeed ruled that a for-ed or fraudulent deed is a nullit/ andconve/s no title +Director of 7ands vs. *ddison, (B Phil., $B.Hoever, e have also laid don the doctrine that there areinstances hen such a fraudulent docu&ent &a/ beco&e theroot of a valid title. One such instance is here the certificate of title as alread/ transferred fro& the na&e of the true oner to

the for-er, and hile it re&ained that a/, the land assubseAuentl/ sold to an innocent purchaser. ?or then, thevendee had the ri-ht to rel/ upon hat appeared in thecertificate +InAui&bo/ vs. #ru6, :.R. No. 7!$4B94, 1ul/ '3,$B;).

e have been constrained to adopt the conclusion here setforth because under the Torrens s/ste&, re-istration is theoperative act that -ives validit/ to the transfer or creates a lienupon the land +Secs. 9) and 9$, 7and Re-istration *ct.

#onseAuentl/, here there as nothin- in the certificate of titleto indicate an/ cloud or vice in the onership of the propert/, or an/ encu&brance thereon, the purchaser is not reAuired toeplore farther than hat the Torrens title upon its face indicatesin Auest for an/ hidden defect or inchoate ri-ht that &a/subseAuentl/ defeat his ri-ht thereto. If the rule ere otherise,the efficac/ and conclusiveness of the certificate of title hichthe Torrens s/ste& see<s to insure ould entirel/ be futile andnu-ator/. +Re/nes vs. 2arrera, ;3 Phil., ;9;8 De 7ara and De:u6&an vs. */roso, 9) O.:. No $), (343. The public shall then

be denied of its fore&ost &otivation for respectin- andobservin- the 7and Re-istration *ct. In the end, the businessco&&unit/ stands to be inconvenienced and pre0udicedi&&easurabl/.

?urther&ore, hen the Re-ister of Deeds issued a certificate of

learnin- of the fraud co&&itted b/ ?ernande6, Torres causedthe annotation of an adverse clai& on the for&er=s cop/ andsucceeded in havin- ?ernande6=s title declared null and void.Meanhile, Mota as able to foreclose on ?ernande6=s realestate &ort-a-e, as ell as to cause the cancellation of T#TNo. 3;)$3 and the issuance of a ne oneF T#T No. $)9B94 F







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title in the na&e of 1ohn . 7e-are, and thereafter re-isteredthe sa&e, 1ohn . 7e-are, insofar as third parties ereconcerned, acAuired valid title to the house and lot here

disputed. hen, therefore, he transferred this title to the hereinpetitioners, third persons, the entire transaction fell ithin thepurvie of *rticle $(4( of the #ivil #ode. The re-istration in1ohn . 7e-ares na&e effectivel/ operated to conve/ theproperties to hi&.

*fter eecutin- the Deed of Sale ith 2ernardina *balon under fraudulent circu&stances, Rella&a succeeded in obtainin- a titlein his na&e and sellin- a portion of the propert/ to the *ndals,ho had no <noled-e of the fraudulent circu&stances

involvin- the transfer fro& *balon to Rella&a. In fact, theDecisions of the RT# and the #* sho no factual findin-s or proof that ould rebut the presu&ption in favor of the *ndals asbu/ers in -ood faith. Thus, the #* correctl/ considered the& asbu/ers in -ood faith and upheld their title.

The *balons counter this rulin- and alle-e that the #* erred inrel/in- on ?uleto 0ustif/ its assailed Decision. The/ ar-ue thatTorres v. #ourt of *ppeals'> is the applicable rulin-, because thefacts therein are on all fours ith the instant case.'3

In Torres, the sub0ect propert/ as covered b/ T#T No. 94;'3re-istered in the na&e of Mariano Torres. His brother!in!la?rancisco ?ernande6, &isrepresentin- that the cop/ of the titlehad been lost, succeeded in obtainin- a court Order for theissuance of another cop/ of T#T No. 94;'3. He then for-ed asi&ulated deed of sale purportedl/ shoin- that Torres had soldthe propert/ to hi& and caused the cancellation of T#T No.94;'3, as ell as the issuance of T#T No. 3;)$3 in his na&e.Soon, ?ernande6 &ort-a-ed the propert/ to Mota. Cpon

in her na&e. The issue to be resolved in Torres as hether Mota can be considered an innocent &ort-a-ee for value, andhether her title can be dee&ed valid. Rulin- in the ne-ative,

the #ourt eplained@

There is nothin- on the records hich shos that Torresperfor&ed an/ act or o&ission hich could have 0eopardi6ed hispeaceful do&inion over his realties. The decision under revie,hoever, in considerin- Mota an innocent &ort-a-ee protectedunder Section ;9 of the 7and Re-istration 7a, held that Torresas bound b/ the &ort-a-e. Inevitabl/, it pronounced that theforeclosure sale, here Mota as the hi-hest bidder, also boundTorres and concluded that the certificate of title issued in the

na&e of Mota prevails over that of Torres. *s correctl/ pointedout b/ Torres, hoever, his properties ere sold on eecution,and not on foreclosure sale, and hence, the purchaser thereof as bound b/ his notice of adverse clai& and lis pendensannotated at the bac< of ?ernande6 T#T. Moreover, even if e-rant Mota the status of an innocent &ort-a-ee, the doctrinerelied upon b/ the appellate court that a for-ed instru&ent &a/beco&e the root of a valid title, cannot be applied here theoner still holds a valid and eistin- certificate of title coverin-the sa&e interest in a realt/. The doctrine ould appl/ rather

hen, as in the cases for ea&ple of De la #ru6 v. ?abie, 49Phil. $(( G$B$;%, ?ule v. De 7e-are, No. 7!$>B9$, ?ebruar/ '3,$B;4, > S#R* 49$, and Republic v. C&ali, :.R. No. 3);3>, *pril$), $B3B, the for-er thru insidious &eans obtains the oner=sduplicate certificate of title, converts it in his na&e, andsubseAuentl/ sells or otherise encu&bers it to an innocentholder for value, for in such a case the ne certificate is bindin-upon the oner +Sec.99, *ct (B;8 Sec. 94, P.D. No. $9'B. 2ut if the oner holds a valid and eistin- certificate of title, his ouldbe indefeasible as a-ainst the hole orld, and not that of the

innocent holders. Prior te&pore potior 0ure as e have said inRe-ister of Deeds v. Philippine National 2an<, No. 7!$>;($,1anuar/ 4), $B;9, $4 S#R* (;, citin- 7e-arda v. Saleeb/, 4$Phil.9B), Ro&an #atholic 2ishop v. Philippine Raila/, (B Phil.9(;, Re/es v. 2orbon, 9) Phil. >B$.'B +"&phasis andunderscorin- supplied

relinAuished ph/sical possession of her title and thus enabledthe perpetrator to co&&it the fraud, hich resulted in thecancellation of her title and the issuance of a ne one. Thefor-ed instru&ent eventuall/ beca&e the root of a valid title inthe hands of an innocent purchaser for value. The ne titleunder the na&e of the for-er as re-istered and relied upon b/







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e do not a-ree ith the contention of the *balons that therulin- in Torresis controllin- in this case. The/ Auoted a portion

in the said case that is clearl/ an obiter. In Torres, it as shonthat Mariano had annotated an adverse clai& on the titleprocured b/ ?ernande6 prior to the eecution sale, in hichMota as the hi-hest bidder. This #ourt declared her as a&ort-a-ee in bad faith because, at the bac< of ?ernande6=s title,Torres &ade an annotation of the adverse clai& and the noticeof lis pendens. The annotation of the adverse clai& as &adehile the for-ed docu&ent as still in the na&e of the for-er,ho in this case is ?ernande6. That situation does not obtain inthe instant case.

The records of the RT# and the #* have a findin- that henRella&a sold the properties to the *ndals, it as still in hisna&e8 and there as no annotation that ould bli-ht his cleantitle. To the *ndals, there as no doubt that Rella&a as theoner of the propert/ bein- sold to the&, and that he hadtrans&issible ri-hts of onership over the said propert/. Thus,the/ had ever/ ri-ht to rel/ on the face of his title alone.

The established rule is that a for-ed deed is -enerall/ null and

cannot conve/ title, the eception thereto, pursuant to Section99 of the 7and Re-istration *ct, denotes the re-istration of titlesfro& the for-er to the innocent purchaser for value. Thus, theAualif/in- point here is that there &ust be a co&plete chain of re-istered titles.4) This &eans that all the transfers startin- fro&the ori-inal ri-htful oner to the innocent holder for value F andthat includes the transfer to the for-er F &ust be dul/ re-istered,and the title &ust be properl/ issued to the transferee. #ontrar/to hat the *balons ould li<e to i&press on us, ?uleandTorresdo not present clashin- vies. In ?ule, the ori-inal oner

the innocent purchaser for value. Hence, it as clear that thereas a co&plete chain of re-istered titles.

On the other hand in Torres, the ori-inal oner retainedpossession of the title, but throu-h fraud, his brother!in!lasecured a court order for the issuance of a cop/ thereof. hilethe title as in the na&e of the for-er, the ori-inal oner annotated the adverse clai& on the for-ed instru&ent. Thus,before the ne title in the na&e of the for-er could betransferred to a third person, a lien had alread/ been annotatedon its bac<. The chain of re-istered titles as bro<en and sulliedb/ the ori-inal oner=s annotation of the adverse clai&. 2/ thisact, the &ort-a-ee as shon to be in bad faith.

In the instant case, there is no evidence that the chain of re-istered titles as bro<en in the case of the *ndals. Neither ere the/ proven to have <noled-e of an/thin- that ould&a<e the& suspicious of the nature of Rella&a=s onershipover the sub0ect parcel of land. Hence, e sustain the #*=srulin- that the *ndals ere bu/ers in -ood faith. #onseAuentl/,the validit/ of their title to the parcel of the land bou-ht fro&Rella&a &ust be upheld.

*s for Spouses Peralta, e sustain the rulin- of the #* that the/are indeed bu/ers in bad faith. The appellate court &ade afactual findin- that in purchasin- the sub0ect propert/, the/&erel/ relied on the photocop/ of the title provided b/ Rella&a.The #* concluded that a &ere photocop/ of the title shouldhave &ade Spouses Peralta suspicious that there as so&efla in the title of Rella&a, because he as not in possession of the ori-inal cop/. This factual findin- as supported b/evidence.

The #* pointed out Spouses Peralta=s *nser to the #o&plaintof the *balons in #ase No. B'(4 in the RT# of 7e-aspi #it/,2ranch 9. In their *nser, the/ specificall/ alle-ed as follos@

'! These defendants GSpouses Peralta% acAuired lot No.$;>B!* b/ purchase in -ood faith and for value fro&

RT# and those of the #*, both of hich found the& to bebu/ers in bad faith. The fact that the/ did not participate in theproceedin-s before the loer court does not help their caseeither.

On the issue of the le-al standin- of the *balons to file this



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Restituto Rella&a under Doc. No. $$'$', pa-e No. ';,2oo< No. ;), Series of $BB; of Notar/ Public *tt/. Otilio2on-on, 7e-aspi #it/ on March ', $BB9 cop/ of hich is

attached as and &ade part of this anser as "hibit $8

4! That these defendants ere handed over b/ Rella&aero Gsic% cop/ of the Transfer #ertificate of Title No.('$)4 issued b/ the Re-ister of Deed of 7e-aspi #it/ onthe 'nd da/ of *u-ust $BB9 cop/ attached and &adeinte-ral part as "hibit $!* and also Ori-inal #ertificateof Title No. +O $; as "hibit $!24$

e have no reason to disturb this factual findin- of the #*

because it is supported b/ the evidence on record. SpousesPeralta filed a Petition for Revie on #ertiorari under Rule (9,hich allos onl/ Auestions of la to be raised. It is a settledrule that Auestions of fact are not revieable in this <ind of appeal. Cnder Rule (9, Section $, petitions for revie oncertiorari shall raise onl/ Auestions of la hich &ust bedistinctl/ set forth.4' * Auestion of fact arises hen there is asto the truth or falsehood of facts or hen there is a need tocalibrate the hole evidence considerin- &ainl/ the credibilit/ of the itnesses, the eistence and relevanc/ of specific

surroundin- circu&stances, as ell as their relation to eachother and to the hole, and the probabilit/ of the situation.44 It isfurther pointed out that the deter&ination of hether one is abu/er in -ood faith is a factual issue, hich -enerall/ is outsidethe province of this #ourt to deter&ine in a petition for revie.4(

hether or not Spouses Peralta are bu/ers in -ood faith, isithout a doubt, a factual issue. *lthou-h this rule ad&its of eceptions,49 none of these applies to their case. There is noconflict beteen the factual findin-s and le-al conclusions of the

case, e find that the #* correctl/ upheld their standin- as heirsof the deceased 2ernardina *balon. The appellate court ruledthat durin- her lifeti&e, 2ernardina *balon had pro&ised her

heirs ! siblin-s Mansueto and *&elia ! that she ould -ive the&the sub0ect propert/. * duplicate cop/ of O#T No. +) $; asdelivered to the& upon her death. Thus, the #* concluded thatthe to siblin-s acAuired the sub0ect propert/ b/ ordinar/prescription. ?urther, it deduced that the &ode of trans&issionof the propert/ fro& 2ernardina to her nephe and niece as afor& of donation &ortis causa, thou-h ithout the benefit of aill.4; Despite this o&ission, it still held that Mansueto and *&elia acAuired the sub0ect propert/ throu-h ordinar/acAuisitive prescription because, since the death of their aunt

2ernardina, the/ had been in possession of the propert/ for &ore than $) /ears that ripened into full onership.4>

Cnder *rticle B>943 of the #ivil #ode, siblin-s Mansueto and *&elia *balon are the le-al heirs of 2ernardina, the latter havin- had no issue durin- her &arria-e. *s such, the/succeeded to her estate hen she passed aa/. hile ea-ree ith the #* that the donation &ortis causa as invalid inthe absence of a ill, it erred in concludin- that the heirsacAuired the sub0ect propert/ throu-h ordinar/ acAuisitive

prescription. The sub0ect parcel of land is a titled propert/8 thus,acAuisitive prescription is not applicable.4B Cpon the death of 2ernardina, Mansueto and *&elia, bein- her le-al heirs,acAuired the sub0ect propert/ b/ virtue of succession, and not b/ordinar/ acAuisitive prescription.

H"R"?OR", the petitions in :.R. Nos. $34((3 and $34(;(are D"NI"D for lac< of &erit. The Decision in #*!:.R. #V No.399(' is hereb/ *??IRM"D.

SO ORD"R"D.

MARIA LOURDES P. A. SERENO#hief 1ustice, #hairperson



















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