LAND TITLES AND DEEDS

I. Torrens System A. Concept and Background 1. Purpose Republic v. Umali The Torrens system was adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized. If a person purchases a piece of land on the assurance that the sellers title thereto is valid, he should not run the risk of being told later that his acquisition was ineffectual after all. This would not only be unfair to him. What is worse is that if this were permitted, public confidence in the system would be eroded and land transactions would have to be attended by complicated and not necessarily conclusive investigations and proof of ownership. The further consequence would be that land conflicts could even be more numerous and complex than they are now and possibly more abrasive if not even violent. Pino v. CA The main purpose of the Torrens System is to avoid possible conflicts of title to real estate and to facilitate transactions relative thereto by giving the public the right to rely upon the face of a Torrens Certificate of Title and to dispense with the need of inquiring further, except when the party concerned had actual knowledge of facts and circumstances that should impel a reasonably cautious man to make such further inquiry. Thus, where innocent third parties relying on the correctness of the certificate thus issued, acquire rights over the property, the court cannot disregard such rights. He is protected.

2. Nature of Proceedings Laburada v. LRA Court has no jurisdiction to decree again the registration of land already decreed in an earlier land registration case and a second decree for the same land is void. This is so, because when once decreed by a court of competent jurisdiction, the title to the land thus determined is already a res judicata binding on the whole world, the proceedings being in rem. The court has no power in a subsequent proceeding (not based on fraud nor within the statutory period) to adjudicate the same title in favor of another person. Furthermore, the registration of the property in the name of the first registered owner in the Registration Book is a standing notice to the world that said property is already registered in his name. Hence, the latter applicant is chargeable with notice that the land he applied for is already covered by a title so he has no right whatsoever. In other words, the first proceedings are in rem which binds the second proceedings.

Heirs of Pedro Lopez v. De Castro A proceeding in rem, such as land registration proceedings, requires constructive seizure of the land as against all persons, including the State, who have rights to or interests in the property. Constructive seizure of the land for registration is effected through publication of the application for registration and service of notice to affected parties. Consequently, when respondents De Castro filed their own application for registration of the same parcel of land in the Tagaytay CFI branch, strictly speaking, it could no longer entertain the application for registration as the res involved had been constructively seized by the Cavite CFI branch. Be that as it may, the Court is not persuaded that the registration proceedings instituted by private respondents should be nullified by reason of the fact that the Cavite City branch of the same court was already proceeding with another registration case for the same piece of land. In land registration proceedings, all interested parties are obliged to take care of their interests and to zealously pursue their objective of registration on account of the rule that whoever first acquires title to a piece of land shall prevail. To illustrate, where more than one certificate of title is issued over the land, the person holding a prior certificate is entitled to the land as against a person who relies on a subsequent certificate. It should be stressed that said rule refers to the date of the certificate of title and not to the date of filing of the application for registration of title. Hence, even though an applicant precedes another, he may not be deemed to have priority of right to register title. As such, while his application is being processed, an applicant is duty-bound to observe vigilance and to take care that his right or interest is duly protected. (Note: De Castro application filed in 1967 but entry of decree 1968, CFI tagaytay; While Lopez application earlier filed in 1956 but entry of decree only on 1979, CFI Cavite.) 3. In Relation to the Public Land Act Republic v. Herbieto The CA overlooked the difference between the Property Registration Decree and the Public Land Act. Under the PRD, there already exists a title which is confirmed by the Court; while under the PLA, the presumption always is that the land applied for pertains to the State, and that the occupants and possessors only a claim an interest in the same by virtue of their imperfect title or continous, open and notorious possession [since June 12, 1945 or earlier]. Since the subject lands are alienable and disposable lands of the public domain, the applicants may acquire title thereto only under the PLA. Applicants could not acquire land through adverse possession since the land was only classified as alienable in 1963 AND their possession only started in 1950. (Note: Substantial requirements for public lands are in the PLA but the procedural requirements are in the PRD.) Civil Code provisions on prescription, which is subject to confirmation under the PRD, in general applies to all types of land. However, excluded therefrom are lands of the public domain which are covered by the PLA [special law v. general law]

Secretary of DENR v. Yap CA 141, PLA, remains as the existing general law governing the classification and disposition of lands of the public domain other than timber and mineral lands, and privately owned lands which reverted to the State. PD 1529, PRD, governs the registration of lands under the Torrens System as well as unregistered lands, including chattel mortgages. Boracay Island is land of the public domain, considered as Reserved Forest Land. Only part of it is alienable and disposable agricultural land as recently reclassified as such by President GMA. There are two requisites for judicial confirmation of imperfect title under PLA: (1) OCEN possession and occupation under a bona fide claim of ownership since time immemorial or from June 12, 1945 and (2) Classification of the land as alienable and disposable land of the public domain. B. Certificate of Title P.D. 1529. SECTION 39. Preparation of Decree and Certificate of Title. After the judgment directing the registration of title to land has become final, the court shall, within fifteen days from entry of judgment, issue an order directing the Commissioner to issue the corresponding decree of registration and certificate of title. The clerk of court shall send, within fifteen days from entry of judgment, certified copies of the judgment and of the order of the court directing the Commissioner to issue the corresponding decree of registration and certificate of title, and a certificate stating that the decision has not been amended, reconsidered, nor appealed, and has become final. Thereupon, the Commissioner shall cause to be prepared the decree of registration as well as the original and duplicate of the corresponding original certificate of title. The original certificate of title shall be a true copy of the decree of registration. The decree of registration shall be signed by the Commissioner, entered and filed in the Land Registration Commission. The original of the original certificate of title shall also be signed by the Commissioner and shall be sent, together with the owner's duplicate certificate, to the Register of Deeds of the city or province where the property is situated for entry in his registration book.

Reyes v. Raval Reyes The registered owner of the land has a more preferential right to the possession of the owners duplicate than one whose name does not appear in the certificate of title and yet has to establish his right to the possession thereto. National Grains v. IAC Persons dealing with property covered by a Torrens certificate of title are not required to go beyond what appears on the face of the title. When there is nothing on the certificate of title to indiciate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore further than what the Torrens upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. Cajuyon v. Batuyong Petitioners are not builders in good faith. Good faith consists in the belief of the builder that the land he is building on is his and his ignorance of any defect or flaw in his title. In the instant case, when the verification survey report came to petitioners

knowledge their good faith ceased. The survey report is a professionals field confirmation of petitioners encroachment of respondents titled property. It is doctrinal in land registration that the possession of titled property adverse to the registered owner is necessarily tainted with bad faith. Thus, proceeding with the construction works on the disputed lot despite knowledge of respondents ownership put petitioners in bad faith. Spouses Valenzuela v. Spouses Mano A person, whose certificate of title included by mistake or oversight land owned by another, does not become owner of such land by virtue of the certificate alone. The Torrens System is intended to guarantee the integrity and conclusiveness of the certificate of registration but it not intended to perpetrate fraud against the real owner of the land. The certificate of title cannot be used to protect a usurper from the true owner. Title to the property merely confirms and registers ownership. 2. Indefeasibility After the lapse of one year from the entry of the decree of registration, said the decree of registration and the certificate of title issued shall become incontrovertible. (Sec 32, P.D. 1529) Heirs of Maximo Labanon v. Heirs of Constancio Labanon The principle of indefeasibility does not totally deprive a party of any remedy to recover the property fraudulently registered in the name of another. Section 32, PD1529 merely precludes the reopening of the registration proceedings for titles covered by the Torrens System, but does not foreclose other remedies for the reconveyance of the property to its rightful owner. The remedy of the land owner whose property has been wrongfully or erroneously registered in anothers name is, after one year form the date of the decree, not to set aside the decree, but, respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action for reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for damages. An unrepudiated express trust, as proved by the Deed of Assignment and the Affidavit, does not prescribe. De Guzman v. Agbagala An action is deemed an attack on a title when the object of the action is to nullify the title and thus challenge the judgment pursuant to which the title was decreed. The attack is direct when the object of the action is to annul or set aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment is nevertheless made an incident thereof. Here, attack was indirect because the principal relief was to declare the donation and transfers void. However, the principle of indefeasibility does not apply when the patent and title based thereon are void. An action to declare the nullity of a void title does not prescribe and is susceptible to direct, as well as collateral, attack.

Here, the Director of Lands did not have the jurisdiction to issue the free patent since the land was private. Hence, the patent and the title issued thereon are void. Lepanto Consolidated v. Dumyung A certificate of title is void when it covers property of the public domain classified as forest or timber and mineral lands. Any title issued on non-disposable lots even in the hands of alleged innocent purchaser for value, shall be cancelled. Caraan v. CA A certificate of title serves as evidence of an indefeasible title to the property in favor of the registered owner. In an action for recovery of possession, the defense of the possessor that the plaintiffs certificate of title is void is a collateral attack which is prohibited under PD 1529. Thus, the defense of prescription of Caraan cannot stand against the Certificate of Title of Cosme because under section 47, PD 1529, no title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession. Republic v. Guerrero A petition for review of the decree of registration must be filed within one year from the date of entry of the decree. And in case of public lands, the one-year period commences from the date of issuance of the patent by the Government. Here, the sales patent was issued on 1982 and this action to amend the certificate was filed only in 1989. Moreover, an administrative claim, although filed within the 1year prescriptive period, does not serve to toll the 1-year period. A petition for review of the decree of registration refers to a review of the decree of registration in the Regular Courts and not in the Bureau of Lands. 3. Prescription No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession. (Sec. 47, P.D. 1529)

Javier v. Concepcion The defense of prescription of the cause of action for recovery of possession by the registered owner is without merit. The established rule is that one cannot acquire title to a registered land by prescription or adverse possession. Laches is likewise not available because there are no intervening rights of third persons which may be affected or prejudiced by a decision ordering the return of the lots. Hence, the equitable defense of laches will not apply against the registered owners. 4. 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. (Sec. 48, P.D. 1529)

Madrid v. Bonifacio Accion Publiciana, also known as accion plenaria de posesion, is an ordinary civil proceeding to determine the better right of possession of realty independent of title. It refers to an ejectment suit filed after the expiry of one year from the accrual of the cause of action or from the unlawful withholding of possession of the realty. The objective of the plaintiffs in an accion publiciana is to recover possession only, and not ownership. However, where the question of ownership is raised, the courts may pass upon the issue to determine who has the better right of possession. Such determination is merely provisional and not conclusive on the question of ownership. Here, both parties claim ownership of the property. Petitioners through oral sale and respondents as represented by a TCT in their names. More weight is given to the TCT because it is evidence of indefeasible title to property. The title holder is entitled to all the attributes of ownership, including possession. The petitioner-defendants attack on the validity of respondent-plaintiffs title, by claiming that fraud attended its acquisition, is a [prohibited] collateral attack on the title. It is an attack incidental to the quest to defend their possession of the properties in an accion publiciana not in a direct action whose main objective is to impugn the validity of the judgment granting the title. Halili v. CIR Here, the union seeks to recover the property from the buyer of the land [MMPCI]. The objective of such claim is to nullify the title of the buyer to the property, which thereby challenges the judgment pursuant to which the title was decreed. This is apparently a collateral attack which is not permitted under the principle of indefeasibility of a Torrens Title. A Torrens Title cannot be collaterally attacked. Hence, whether or not petitioners have the right to claim ownership of the property is beyond the province of the instant proceeding. Here, the action came from the NLRC. 4. Right of Possession Arising From Title Carbonilla v. Abiera The registered owner is entitled to possession. However, the owner cannot simply wrest possession thereof from whoever is in actual occupation of the property. To recover possession, the registered owner must resort to the proper judicial remedy. Here, the petitioner-registered owner opted to file an ejectment case. Ejectment cases [forcible entry and unlawful detainer] are summary proceedings designed to provide expeditious means to protect actual possession or the right to possession of the property involved. The only question that the courts resolve is who is entitled to possession de facto and not to possession de jure. It does not even matter if a party has title to the property. An ejectment case will not necessarily be decided in favor of one who has presented proof of ownership of the subject property. Key jurisdictional facts must be pleaded and proved.

Here, petitioners failed to prove that the possession of respondents was by mere tolerance. Petitioners must file either an action reivindicatoria, a suit to recover ownership to property or file an accion publiciana, a plenary action to recover based on the better right to possess.

II. Regalian Doctrine A. Concept and Effects 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. (Sec. 2, Article XII, Constitution) Aranda v. Republic (August 24, 2011) Under the Regalian doctrine which is embodied in Section 2, Article XII of the 1987 Constitution, all lands of the public domain belong to the State, which is the source of any asserted right to ownership of land. All lands not appearing to be clearly within private ownership are presumed to belong to the State. Unless public land is shown to have been reclassified or alienated to a private person by the State, it remains part of the inalienable public domain. To overcome this presumption, incontrovertible evidence must be established that the land subject of the application is alienable or disposable. To prove that the land subject of an application for registration is alienable, an applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute. The applicant may also secure a certification from the Government that the lands applied for are alienable and disposable. Chavez v. PEA Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only with proper permission from the State. Private parties could own the reclaimed land only if not otherwise provided by the terms of the grant of authority. This clearly meant that no one could reclaim from the sea without permission from the State because the sea is property of public dominion. It also meant that the State could grant or withhold ownership of the reclaimed land because any reclaimed land, like the sea from which it emerged, belonged to the State. Thus, a private person reclaiming from the sea without permission from the State could not acquire ownership of the reclaimed land which would remain property of public dominion like the sea it replaced. Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of land ownership that all lands that were not acquired from the government, either by purchase or by grant, belong to the public domain. Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the disposition of public lands. In particular, CA No. 141 requires that lands of the public domain must first be classified as alienable or disposable before the government can alienate them.

The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares which are still submerged and forming part of Manila Bay. There is no legislative or Presidential act classifying these submerged areas as alienable or disposable lands of the public domain open to disposition. These submerged areas are not covered by any patent or certificate of title. There can be no dispute that these submerged areas form part of the public domain, and in their present state are inalienable and outside the commerce of man. Until reclaimed from the sea, these submerged areas are, under the Constitution, waters x x x owned by the State, forming part of the public domain and consequently inalienable. Only when actually reclaimed from the sea can these submerged areas be classified as public agricultural lands, which under the Constitution are the only natural resources that the State may alienate. Once reclaimed and transformed into public agricultural lands, the government may then officially classify these lands as alienable or disposable lands open to disposition. Thereafter, the government may declare these lands no longer needed for public service. Only then can these reclaimed lands be considered alienable or disposable lands of the public domain and within the commerce of man. 2. Native Title and Time Immemorial Possession Native Title - refers to pre-conquest rights to lands and domains which, as far back as memory reaches, have been held under a claim of private ownership by ICCs/IPs, have never been public lands and are thus indisputably presumed to have been held that way since before the Spanish Conquest; (Sec. 3(l), IPRA) Time Immemorial - refers to a period of time when as far back as memory can go, certain ICCs/IPs are known to have occupied, possessed in the concept of owner, and utilized a defined territory devolved to them, by operation of customary law or inherited from their ancestors, in accordance with their customs and traditions. (Sec. 3(p), IPRA) III. Citizenship Requirement A. Individuals 1. Filipino Citizens Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares of the alienable lands of the public domain, by purchase, homestead, or grant. (Sec. 3, Article XII, Constitution) Citizens may acquire private lands. (As much as they can?) 2. Former Natural-Born Citizens A natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law. (Sec. 8, Article XII, Constitution) Any natural born citizen who has lost his Philippine citizenship and who has the legal capacity to enter into a contract under Philippine laws may be a transferee of a private land up to a maximum area of five thousand (5,000) square meters in the case of urban land or three (3) hectares in the case of rural land to be used by him for business or other purposes. In the case of married couples, one of them may avail of the privilege herein granted: Provided, That if both shall avail of the same, the total area acquired shall not exceed the maximum herein fixed.

In case the transferee already owns urban or rural land for business or other purposes, he shall still be entitled to be a transferee of additional urban or rural land for business or other purposes which when added to those already owned by him shall not exceed the maximum areas herein authorized. A transferee under this Act may acquire not more than two (2) lots which should be situated in different municipalities or cities anywhere in the Philippines: Provided, That the total land area thereof shall not exceed five thousand (5,000) hectares in the case of rural land for use by him for business or other purposes. A transferee who has already acquired urban land shall be disqualified from acquiring rural land area and vice versa. (Section 10, Foreign Investments Act) 3. Aliens Alien Individuals may be transferees of private lands only in cases of hereditary succession. (Sec. 7, Article XII, Constitution) PBCom v. Lui She Taken singly, the lease contracts show nothing that is necessarily illegal, but considered collectively, they reveal an insidious pattern to subvert by indirection the Constitutional prohibition of Alien ownership of land. To be sure, a lease to an alien for a reasonable period is valid. So is the option giving an alien the right to buy real property on condition that he is granted Philippine citizenship. But if an alien is given not only a lease, but also an option to buy, a piece of land, by virtue of which the Filipino owner cannot sell or otherwise dispose of his property, this is to last for 50 years, then it becomes clear that the arrangement is a virtual transfer of ownership whereby the owner divests himself in stages not only of the right to enjoy the land but also of the right to dispose of it rights the sum total of which make up ownership. Court held all lease contracts void because of the intent surrounding the execution. Ramirez v. Vda. de Ramirez The device [testamentary succession] of a usufruct to an alien who is not a legal heir does not vest title to the land in the usufructuary. It is not prohibited by the Constitution because it is the vesting of title to land in favor of aliens which is proscribed by the Constitution. The Constitutional provision which enables aliens to acquire private lands does not extend to testamentary succession otherwise any alien would be able to circumvent the prohibition by paying money to a Philippine landowner in exchange for a devise of a piece of land. Cheesman v. IAC Constitution prohibits the sale to aliens of residential land. Cheesman was charged with knowledge of this prohibition. Thus, assuming that it was his intention that the lot in question be purchased by him and his wife, he acquired no right whatever over the property by virtue of that purchase; and in attempting to acquire a right or interest in land, vicariously and clandestinely, he knowingly violated the Constitution; the sale as to him was void. In any event, he had and has no capacity or personality to question the subsequent sale of the same property by his wife on the theory that in so doing he is merely exercising the prerogative of a husband in respect of conjugal property.

To sustain such a theory would permit indirect violation of the Constitution. If the property were to be declared conjugal, this would accord to the alien husband a substantial interest and right over the land, as he would then have a decisive vote as to its transfer or disposition. This is a right which the Constitution does not permit him to have. As already observed, the finding that his wife had used her own money to purchase the property cannot, and will not, at this stage of the proceedings be reviewed and overturned. But even if it were a fact that said wife had used conjugal funds to make the acquisition, the considerations just set out militate, on high constitutional grounds, against his recovering and holding the property so acquired or any part thereof. And whether in such an event, he may recover from his wife any share of the money used for the purchase or charge her with unauthorized disposition or expenditure of conjugal funds is not now inquired into; that would be, in the premises, a purely academic exercise Muller v. Muller (Note: academic in cheesman was realized here] Mr. Muller was aware of the Constitutional prohibition when he purchased the property. He declared the property in the name of Mrs. Muller because of said prohibition. His attempt at subsequently asserting or claiming a right on the said property cannot be sustained. There was no implied trust created. Save for hereditary succession, an aliens disqualification is absolute. Not even an ownership in trust is allowed. Besides, no trust can result in favor of the party who is guilty of the fraud. To hold otherwise would allow a circumvention of the constitutional prohibition. He who seeks equity must do equity, and he who comes into equity must come with clean hands. Mr. Muller cannot seek reimbursement of the funds he used to purchase the property on the ground of equity where it is clear that he willingly and knowingly bought the property despite the constitutional prohibition. Ting Ho v. Teng Gui The subject lot does not form part of the Estate of the deceased alien who was absolutely prohibited from owning land. By virtue of the miscellaneous sales patent and the corresponding OCT issued in his name Teng Gui is considered the owner of the land. Moreover, the prohibition against an alien owning lands of the public domain is absolute and not even an implied trust can be permitted to arise on equity considerations. However, the properties erected on the land owned by Teng Gui form part of the estate of respondents deceased father. (Note: ownership over the land separated from the building/improvement.)

B. Corporations Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. (Sec. 3, Article XII, Constitution)

Corporations or associations whether citizens or of citizens and aliens may not own, but may only hold by lease lands of the public domain. (DOJ Opinion, 1973) However, only corporations or associations at least 60% of the capital stock of which is owned by Filipinos, and the remainder by foreigners, may own private lands. RD v. Ung Siu Temple The fact that the religious corporation has no capital stock does not suffice to escape the Constitutional inhibition, since it is admitted that its members are of foreign nationality. The purpose of the 60% requirement is to ensure that corporations or associations allowed to acquire agricultural land or to exploit natural resources shall be controlled by Filipinos; and the spirit of the Constitution demands that in the absence of capital stock, the controlling membership should be composed of Filipino citizens. Roman Catholic Apostolic Adm. of Davao v. LRC Bishops or archbishops of corporation soles are merely administrators of the church properties that to their possession, and which they hold in trust for the church. Moreover, upon the death of the administrator, the properties pass on to his successor in office and not to his legal heirs. The framers of the Constitution did not have in mind the religious corporation when they provided for the 60% capital requirement. Thus, if this constitutional provision were not intended for corporation sole, it is obvious that the corporation sole could not be regulated or restricted by said provision. Being mere administrator of the temporalities or properties titled in his name, the constitutional provision requiring 60% Filipino ownership is not applicable. The said constitutional provision is limited by its terms to ownership alone and does not extend to control unless the control over the property affected has been devised to circumvent the real purpose of the Constitution. Even if the question of nationality be considered, the 60% constitutional requirement is fully met considering that the constituents of the Corporation Sole is composed of an overwhelming majority of Filipinos. It is the nationality of the constituents and not that of the administrator that should be taken into consideration. J.G. Summit v. CA A mutual agreement of right of first refusal between two parties in JVA, one party being the Filipino owning 60% and the other the alien owning 40%, does not constitute a violation of the Constitution limiting land ownership to Filipinos and Filipino corporations. It can be said that if the foreign shareholdings of a landholding corporation exceeds 40%, it is not the foreign stockholders ownership of the shares which is adversely affected but the capacity of the corporation to own land that is the corporation becomes disqualified to own land. No law disqualifies a person from purchasing shares in a landholding corporation even if the latter will exceed the allowed foreign equity in the Constitution. What the law disqualifies is the corporation owning land this is the effect of more than 40% foreign equity.

The constitutional prohibition applies only to LAND. It does not extend to real property as defined under Article 415 of the civil code. Republic v. T.A.N. Properties Inc. The 1987 Constitution absolutely prohibits private corporations from acquiring any kind of alienable land of the public domain. Under the 1973 Constitution, private corporations, even if wholly owned by Filipino citizens, were no longer allowed to acquire alienable lands of the public domain. The present 1987 Constitution continues the prohibition and only allows private corporations to hold alienable lands of the public domain through lease. This case is different from Director of Lands v. IAC [146 SCRA 509 (19860], because the corporation in that case acquired the land when it was already private land. The OCEN possession of alienable land for the period prescribed by law ipso jure transformed the land from public land to private land. The Director of Lands doctrine is not applicable to this case because it has not been proven that when TAN acquired the property, its predecessors had already satisfied the PLA of OCEN and adverse possession of the land for 30 years since June 12, 1945 or earlier. Therefore, when TAN acquired the property it was still public land. For Director of Lands to apply and enable a corporation to file for registration of alienable and disposable land, the corporation must have acquired the land when its transferor had already a vested right to a judicial confirmation of title to the land by virtue of his OCEN and adverse possession in the concept of an owner for at least 30 years since June 12, 1945 or earlier. Moreover, the length of possession of the Corporation cannot be tacked on to complete the statutory 30 year acquisitive prescriptive period. RA 9176 extended the period for filing judicial applications for judicial confirmation of imperfect and incomplete titles to alienable and disposable lands of the public domain until December 31, 2020. C. Condominiums 1. Condominium Corporation Owns the Land Transfers to aliens of a condominium unit may be made only up to the point where the concomitant transfer of membership or stockholding in the condominium corporation would not cause the alien interest in such corporation to exceed 40% of its entire capital stock. (Sec 5, Condominium Act) 2. Corporation Leases the Land Any corporation which is owned 100% by a foreign firm may establish a "condominium corporation" under R.A. No. 4726 and set up a condominium project on land leased for a period not to exceed (50) years. (DOJ Opinion 1973) Foreign Investors may lease private lands for a period not exceeding fifty (50) years, renewable once for a period of not more than twenty- five (25) years, provided that the the leased area shall be used solely for the purpose of the investment, and provided further that the leased premises shall comprise such area as may reasonably be required for the purpose of the investment subject however to the Comprehensive Agrarian Reform Law and the Local Government Code. (Sec. 4, Investors Lease Act)

3. Land is Co-owned by the Unit Owners Where the common areas in the condominium project are owned by the owners of separate units as coowners thereof, no condominium unit therein shall be conveyed or transferred to persons other than Filipino citizens, or corporations at least 60% of the capital stock of which belong to Filipino citizens, except in cases of hereditary succession. (Sec. 5, Condominium Act) Only citizens of the Philippines, as individuals, may acquire both private lands and lands of the public domain. Therefore, there can be no joint ownership of such lands between Filipinos and foreign investors as individuals.

IV. Original Registration A. Possession Applicants 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. These persons 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 this chapter. (Sec. 14(1), P.D. 1529 and Sec. 48(b), C.A. 141) Republic v. Hanover An applicant for judicial confirmation of imperfect title under PD 1529, sec 14(1) in relation to CA 141, sec 48(b) must prove that the land forms part of the alienable and disposable lands of the public domain AND that they have been in OCEN possession and occupation of the same under a bona fide claim of ownership since June 12, 1945 or earlier. Here, the applicant is not entitled to registration because it had not proven possession since 1945, but had only proven such since 1965. Martinez v. CA When the conditions under 48(b) of CA 141 are complied with, the possessor is deemed to have acquired, by operation of law, a right to a grant, without the necessity of a certificate of title being issued. The land, therefore ceases to be of the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens Title. Aranda v. Republic (Aug 2011) The Property Registration Decree (P.D. No. 1529) provides for original registration of land in an ordinary registration proceeding. Under Section 14(1) thereof, a petition may be granted upon compliance with the following requisites: (a) that the property in question is alienable and disposable land of the public domain; (b) that the applicants by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation; and (c) that such possession is under a bona fide claim of ownership since June 12, 1945 or earlier. Heirs of Malabanan v. Republic***

Applicants under 14(1) of PD 1529 in relation to sec 48(b) of CA 141 acquire ownership of, and registrable title to, such lands based on the length and quality of their possession. It is sufficient that the land be declared alienable and disposable at the time of the filing for the application for judicial confirmation of imperfect title and the land need not be alienable and disposable during the entire period of possession. B. Prescription Applicants who have acquired ownership of private lands by prescription under the provisions of the Civil Code. (Sec. 14(2), P.D. 1529) Possession has to be in the concept of an owner, public, peaceful and uninterrupted. (Article 1118, NCC). Ownership is acquired through uninterrupted adverse possession for thirty years, without need of title or of good faith. (Article 1137, NCC) Lands of the Public Domain are outside the commerce of man and consequently cannot be acquired through prescription. Heirs of Malabanan v. Republic*** Under 14(2) of PD 1529, applicants acquire ownership of the lands through prescription in the Civil Code. However, the applicants may only acquire patrimonial lands of the public domain, which only become such after they have been declared alienable and disposable and there must also be an express government manifestation that the property is already patrimonial or no longer retained for public service or the development of national wealth under Article 422 of the Civil Code. Only when the land has become patrimonial property can the prescriptive period for the acquisition of property of the public dominion begin to run. Other Notes: 1. Where the land is owned in common, all the co-owners shall file the application jointly. 2. If the applicant is not a resident of the Philippines, he shall file with his application an instrument in due form appointing an agent upon whom service shall be made. 3. Applications for judicial confirmation of imperfect through possession shall not extend beyond December 31, 2020. C. Indigenous Cultural Communities or Indigenous Peoples Members of the national cultural minorities who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of lands of the public domain suitable to agriculture under a bona fide claim of ownership for at least 30 years prior to October 29, 1997 (approval of the IPRA) shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title (Sec. 48(c), C.A. 141 and Sec. 12, IPRA). Said individually-owned ancestral lands, which are agricultural in character and actually used for agricultural, residential, pasture, and tree farming purposes, including those with a slope of eighteen percent (18%) or more, are hereby classified as alienable and disposable agricultural lands. The option to register granted under the IPRA must be exercised within twenty (20) years from October 29, 1997. (Sec. 12, IPRA) D. Registration Process and Requirements 1. Jurisdiction

The RTC of the province or city where the land is situated shall have exclusive jurisdiction over all applications for original registration of title to lands. An application may include two or more parcels of land belonging to the applicant/s provided they are situated within the same province or city. (Sec. 17 and 18, P.D. 1529). The MTC exercises delegated jurisdiction only over original cadastral or land registration cases where either the subject matter is an uncontested lot or if contested the value of the lot should not exceed P100,000.00. (Sec. 34, B.P. 129). Matters subsequent to the original registration by the MTC are to be determined by RTC. (OCA Circular No. 38-97) 2. Evidence The applicant shall file together with the application all original muniments of titles or copies thereof and a survey plan of the land approved by the Land Registration Authority. (Sec. 17, P.D. 1529) Republic v. Guinto-Aldana Section 17 denotes that it is imperative in an application for original registration that the applicant submit to the court, aside from the original or duplicate copies of the muniments of title, a copy of the duly approved survey plan of the land sought to be registered. The survey plan is indispensible as it provides a reference on the exact identity of the land. The submission of a duly executed blueprint of the survey plan and a duly executed technical description of the property, operates as substantial compliance with the legal requirement of ascertaining the identity of the lots. Submission of the original tracing cloth plan is no longer mandatory in original registration of title. Director of Lands v. Rivas The Spanish titles informacion possessoria and composicion gratuita can no longer be used as bases for application for registration because PD 892 discontinued their use as titles of ownership. Evangelista v. Santiago Petitioners failed to establish legal or equitable title to the land. Spanish ti tles can no longer be presented as proof of ownership whether in a land registration proceeding or in an action to remove a cloud on or to quiet title. Republic v. Feliciano There is no showing in the case at bar that the informacion possessoria held by respondent had been converted into a record of ownership. Such title, therefore, remained at best mere prima facie evidence of possession. Director of Lands v. CA The classification, delimitation and survey of lands of the public domain are vested in the President upon recommendation of the Secretary of the DENR. (Sec. 6, C.A. 141) The assignment of forest land for agricultural purposes is vested in the Secretary of the DENR. Court erred in disregarding the certification of the Bureau of Foresty that the land became alienable and disposable only in 1961.

Tottoc v. IAC The mere classification or certification made by the Bureau of Forestry that a part of the public domain is timberland is not controlling in all cases especially when no actual verification was made prior to the issuance of the certification. As opposed to onthe-spot relocation surveys. De Vera-Cruz v. Miguel Tax declarations are not proofs of ownership. It is merely an indicium of a claim of ownership or an indicium of possession in the concept of ownership. Neither tax receipts nor declarations of ownership for taxation purposes are evidence of ownership or of the right to possess realty when not supported by other effective proofs. Vda. De Raz v. CA Tax declarations are not incontrovertible evidence of ownership unless they are supported by other effective proof. A belated declaration is, furthermore, indicative that the applicant had no real claim of ownership of the subject land prior to the declaration and where there are serious discrepancies in the tax declarations, as in this case, registration should be denied. Republic v. Guinto-Aldana In relation to PD 1529, Section 14(1) - The law speaks of possession and occupation. Possession is broader than occupation because it includes constructive possession. When, therefore, the law adds the word occupation, it seeks to delimit the allencompassing effect of constructive possession. Taken together with the words OCEN, the word occupation 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. Tax declarations are a good indication of possession in the concept of an owner. These documents at least constitute proof that the holder has a claim of title over the property. And a tax declaration also announces his adverse claim over the land South City Homes v. Republic Tacking of possession is allowed only when there is privity of contract or relationship between the previous and present possessor. In the absence of such privity, the possession of the new occupant should be counted only from the time it actually began and cannot be lengthened by tacking it to the possession of the former possessors. South City cannot and could not tack the possession of his predecessors to its own for the simple reason that the lands sold to it did not include the unregistered land. Hence there was no privity with regard to the unregistered land. The Court also mentioned that the manner of possession of the predecessors of South City was insufficient to claim title to the land because it was not exclusive but shared by the neighbors. Palali v. Awisan

A person occupying a parcel of land, by himself and through his predecessors, enjoys the presumption of ownership. Respondent failed to prove possession of the property, her claim rests merely on her tax declaration. But tax declarations, by themselves, are not conclusive evidence of ownership of real property. In the absence of actual, public, and adverse possession, the declaration of the land for tax purposes does not prove ownership. Respondents tax declaration, therefore, cannot serve as basis to oust petitioner who has been in possession of the subject property since before the war. Possession coupled with a tax declaration is a weighty evidence of ownership and is certainly more weighty and preponderant than a mere tax declaration alone. 3. Publication, Mailing, Posting The notice of initial hearing shall be published once in the Official Gazette and once in a newspaper of general circulation in the Philippines: Provided, however, that the publication in the Official Gazette shall be sufficient to confer jurisdiction upon the court. The notice of initial hearing shall also be posted in a conspicuous place on each parcel of land included in the application and also in a conspicuous place on the bulletin board of the municipal building of the municipality or city. (Sec. 24) Republic v. Herbieto The misjoinder of causes of action and parties does not affect the jurisdiction of the courts to hear and proceed with the application for registration of the two respondents who applied for registration on two separate lands. The late publication of the Notice of Initial Hearing in the newspaper of general circulation is tantamount to no publication at all, having the same ultimate result. Owing to such defect, the MTC failed to constructively seize the lands and acquire jurisdiction over the applications for registration. Therefore, the orders of the court were void for having been issued by the MTC without jurisdiction. 4. Opposition and Default The opposition shall state all the objections to the application and shall set forth the interest claimed by the party filing the same and apply for the remedy desired, and shall be signed and sworn to by him or by some other duly authorized person. (Sec. 25) If no person appears and answers within the time allowed, the court shall, upon motion of the applicant, no reason to the contrary appearing, order a default to be recorded and require the applicant to present evidence. Where an appearance has been entered and an answer filed, a default order shall be entered against persons who did not appear and answer. (Sec. 26)

Heirs of Lopez v. Enriquez Failure to move to lift the default order does not give a party standing in the case. As long as the court does not life the order of general default, petitioners have no legal standing to file the motion to declare void the decrees of registration issued to the applicant.

Movants as mere interested parties, under sec 22 of PD 1529 are persons to whom the property subject of registration had been transferred to. Movants as intervenors-oppositors who seek to question the application for registration must move to lift the general order of default. Vergel v. CA In order to have the general order of default lifted, the movant as intervenoroppositor must show that his failure to timely file an opposition is due to fraud, accident, mistake or excusable neglect. There must be an express finding of fact of the FAME by the trial court or court of appeals. Failure to read the publication in the official gazette or in the newspaper may in itself not be considered as excusable neglect.

5. Decree and Title Within fifteen days from entry of judgment, the court shall issue an order directing the LRC to issue the corresponding decree of registration and certificate of title. Upon receipt of the order, the LRC shall cause to be prepared the decree of registration as well as the original and duplicate of the corresponding original certificate of title. The original certificate of title shall be a true copy of the decree of registration. The decree of registration shall be signed by the Commissioner, entered and filed in the Land Registration Commission. The original of the original certificate of title shall also be signed by the Commissioner and shall be sent, together with the owner's duplicate certificate, to the Register of Deeds of the city or province where the property is situated for entry in his registration book. (Sec. 39, P.D. 1529) E. Remedies 1. New Trial/ Reconsideration 2. Petition for Relief from Judgment 3. Appeal 4. Petition for Review of the Decree of Registration Only a person, including the government and its branches, deprived of land, any estate or interest therein by such decree of registration obtained by actual fraud, may file in the proper RTC a petition for reopening and review of the decree of registration not later than one year from and after the date of the entry of such decree of registration. Upon the expiration of said period of one year, the decree of registration and the certificate of title issued shall become incontrovertible. Any person aggrieved by such decree of registration in any case may pursue his remedy by action for damages against the applicant or any other persons responsible for the fraud. In no case shall such petition be entertained by the court where an innocent purchaser for value has acquired the land or an interest therein, whose rights may be prejudiced. Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in this Decree, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value. (Sec. 32, P.D. 1529)

Baldoz v. Papa A final decree of registration issued pursuant to registration proceedings is reviewable only within one year from the entry of the decree of registration and upon the ground of actual fraud. Further, any petition to set aside the decree of registration and reopen the registration proceedings must be filed in the form of a motion in the same registration proceeding where the decree was issued, and not in the form of a separate action like the present. Crisolo v. CA An oppositor who abandoned his opposition during the land registration proceedings is not entitled to a reopening of the proceedings by virtue of a petition for review of the decree of registration. Such remedy is available only to persons who were fraudulently deprived of their opportunity to be heard. Moreover, there must be actual or extrinsic fraud and not intrinsic fraud to entitle one to reopen the proceedings. Cal v. Zosa Fraud may be actual or constructive. Actual or positive fraud proceeds from an intentional deception practiced by means of misrepresentation or concealment of a material fact. Constructive fraud is construed as fraud because of its detrimental effect upon public interests and public confidence, even though the act is not done with actual design to commit positive fraud or injury upon other persons. Fraud may also either be extrinsic or intrinsic. Fraud is regarded as intrinsic where the fraudulent acts pertain to an issue involved in the original action, or where the acts constituting the fraud could have been litigated therein. Fraud is regarded as extrinsic where it prevents a party from having a trial or from presenting his entire case to the court or where it operates upon matters pertaining not to the judgment itself but to the manner in which it is procured, so that there is not a fair submission of the controversy. Extrinsic fraud is also actual fraud, but collateral to the transaction. For fraud to justify a petition for review, it must be extrinsic or collateral, and the facts upon which it is based have not been controverted or resolved in the case where the judgment sought to be annulled was rendered. The overriding consideration is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court. The fraud is one that affects and goes into the jurisdiction of the court. However, a petition for review cannot be based on alleged fraud that goes into the merits of the case and is intrinsic and not collateral, and has been controverted and decided. Fil-Estate Management v. Trono An application for registration of a parcel of land already covered by a Torrens Title is actually a collateral attack against the Title not permitted under the principle of indefeasibility of a Torrens Title.

A Torrens Title cannot be collaterally attacked; the issue on the validity of title can only be raised in an action expressly instituted for the purpose. It is too late to question petitioners titles considering that the Certificates of Title issued have become incontrovertible after the lapse of one year from the decree of registration. 5. Action for Reconveyance If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. (Article 1456, NCC)

Lopez v. CA There are two kinds of implied trusts: resulting trusts and constructive trusts. A resulting trust is presumed to have been contemplated by the parties, the intention as to which is to be found in the nature of their transaction but not expressed in the deed itself. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. A constructive trust is created, not by any word evincing a direct intention to create a trust, by operation of law in order to satisfy the demands of justice and to prevent unjust enrichment. It is raised by equity in respect of property, which has been acquired by fraud or where although acquired without fraud, it is against equity that it should be retained by the person holding it. Salao v. Salao Implied trusts are those which, without being expressed, are deducible from the nature of the transaction as matters of intent, or which are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the parties. A resulting trust is broadly defined as a trust which is raised or created by the act or construction of law, but in its more restricted sense it is a trust raised by implication of law and presumed always to have been contemplated by the parties, the intention as to which is to be found in the nature of their transaction, but not expressed in the deed or instrument of conveyance. A constructive trust is a trust raised by construction of law or by operation of law. In a more restricted sense, a constructive trust is a trust not created by any words, either expressly or impliedly evincing a direct intention to create a trust, but by the construction of equity in order to satisfy the demands of justice. It does not arise by agreement or intention but by operation of law. No resulting trust was created in this case because there was never any intention to create one. Neither was there a constructive trust because the registration of the land was not procured through fraud or mistake. Marcopper Mining v. Garcia

There is nothing to support Marcoppers contention that an implied or constructive trust was created in its favor. An implied or constructive trust presupposes the existence of a defrauded party who is the rightful owner of the disputed property. Here, aside from the fact that petitioners predecessor never applied for a free patent, it does not allege any relationship, fiduciary or otherwise, with the respondent to justify the creation of a trust. Municipality of Victorias v. CA When respondent obtained a new TCT in her name, she had no legal right to do so of the disputed portion of land because she did not own such property since it had been previously sold by her grandmother to the Municipality. Thus, where the land is decreed in the name of a person through fraud or mistake, such person is by operation of law considered a trustee of an implied trust for the benefit of the persons from whom the property comes. The beneficiary shall have the right to enforce the trust, notwithstanding the irrevocability of the Torrens Title and the trustee and his successors-in-interest are bound to execute a deed of reconveyance. Esconde v. Barlongay An action for reconveyance is a legal and equitable remedy granted to the rightful owner of land which has been wrongfully or erroneously registered in the name of another for the purpose of compelling the latter to transfer or reconvey the land to him. An action for reconveyance does not seek to reopen the proceedings and set aside the decree of registration, but only to show that the registered owner is not the real owner thereof. Reconveyance here is not the proper remedy because there was no proof of irregularity in the issuance of the title, nor in the proceedings. Petitioner was had knowledge of the proceedings but opted not to participate therein. Alamarza v. Arguelles The remedy of the landowner whose property has been wrongfully or erroneously registered in the anothers name is, after one year from the date of the decree, is not to set aside the decree, but respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice for reconveyance of the property or if the property had passed into the hands of an innocent purchaser for value, for damages. Joaquin v. Cojuangco It seems that the action is for reconveyance, on the theory that the original registered owners were administrators of the lands and hence held them in a fiduciary capacity. And assuming this was the case, the disabilities imposed by such relationship did not extend to the transferees of said administrators, who acquired the land for value and claimed adverse title in themselves. The action for reconveyance on the theory of trust might prosper against the trustees and provided they still hold the property, but not as against third persons who do not occupy the same fiduciary position. Naval v. CA

Notwithstanding the indefeasibility of the Torrens Title, the registered owner may still be compelled to reconvey the registered property to its true owners. The rationale for the rule is that reconveyance does not set aside or re-subject to review the findings of fact of the Bureau of Lands. In an action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the property or its title which has been wrongfully or erroneously registered in another persons name, to its rightful or legal owner, or to the one with a better right. An action for reconveyance does not prescribe when the plaintiff is in possession of the land to be reconveyed. Khemani v. Heirs of Trinidad Action for reconveyance applies to a patent issued by the Director of Lands, approved by Secretary of Natural Resources, and signed by the President. The date of issuance of the patent corresponds to the date of entry of the decree of registration in ordinary cases. Bautista-Borja v. Bautista An action for reconveyance based on a void contract does not prescribe. However, if the court finds that the contract is merely voidable, then the action is subject to prescription. Labiste v. Labiste Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly or impliedly evincing an intention to create a trust. Prescription will only run from the time the express trust is repudiated. For acquisitive prescription to bar the action of the beneficiary against the trustee in an express trust for the recovery of property held in trust it must be shown that: 1. The trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust 2. Such positive acts have been made known to the cesui que trust 3. The evidence is clear and conclusive. A trustee who obtains a Torrens title over property held in trust by him for another cannot repudiate the trust by relying on the registration. The rule requires a repudiation to be duly communicated to the beneficiary. The only act that can be construed as repudiation is the petition for reconstitution of title. Santo v. Heirs of Lustre The action for reconveyance on the ground that the certificate of title was obtained by means of a fictitious deed of sale is virtually an action for the declaration of its [deed of sale] nullity, which does not prescribe. Moreover, a person acquiring property through fraud becomes, by operation of law, a trustee of an implied trust for the benefit of the real owner of the property. An action for reconveyance based on an implied trust prescribes in ten years. And in such

case, the prescriptive period applies only when there is an actual need to reconvey the property as when the plaintiff is not in possession of the property. Otherwise, if plaintiff is in possession of the property, prescription does not commence to run against him. Thus, when an action for reconveyance is nonetheless filed, it would be in the nature of a suit for quieting of title, an action that is imprescriptible. Rementizo v Heirs of Pelagia The right to seek reconveyance of registered property is not absolute because it is subject to extinctive prescription of a period of 10 years [obligation created by law]. And the 10 year period is reckoned from the date of issuance of the Certificate of Title. The title to the land was registered in 1987 and the complaint was filed only in 1998 hence the action is barred by prescription. In some cases the Court had used as starting point the date of the actual discovery of the fraud, instead of the date of issuance of the certificate of title. In those cases, however, there were evident bad faith, misrepresentation, and fraudulent machinations employed by the registered owners in securing titles over the disputed lots. Prescription of Action for Reconveyance: 1. 2. 3. 4. Four years from knowledge if registration through fraud. Ten years from issuance of title if registration through mistake. Imprescriptible if trustee is in possession (Quieting of Title) Imprescriptible if registration based on an express trust unless repudiated. 6. Action for Damages When the decree of registration and the certificate of title issued shall become incontrovertible, the person aggrieved by such decree of registration may pursue his remedy by action for damages against the applicant or any other persons responsible for the fraud. Pino v. CA Where the certificate of title is in the name of the vendor when the land is sold, the vendee for value has the right to rely on what appears on the certificate of title. In the absence of anything to excite or arouse suspicion, said vendee is under no obligation to look beyond the certificate and investigate the title of the vendor appearing on the face of said certificate. If an action for reconveyance cannot reach an innocent purchaser for value, the remedy of the defrauded party is to bring an action for damages against those who caused the fraud or were instrumental in depriving him of the property. And such action prescribes in 10 years from the issuance of the Torrens Title over the property. 7. Action against the Assurance Fund 8. Quieting of Title Realty Sales v. IAC The action filed by Carpo against Realty is in the nature of an action to remove clouds from title to real property. By asserting its own title to the property in question and asking that Carpos title be declared null and void instead, and by filing the third-party

complaint against QCDFC, Realty was similarly asking the court to remove clouds from its own title. Suits to quiet title are not technically suits in rem, nor are they, strictly, in personam, but being against the person in respect of the res, these proceedings are characterized as quasi in rem. The judgment in such proceedings is conclusive only between the parties. Mamadsual v. Moson An action to quiet title is imprescriptible if plaintiffs are in possession of the property. In an action to quiet title, the plaintiff must have legal or equitable title. It is not necessary that the plaintiff be the registered owner of the property in question. One who has an equitable right or interest in the property may also file an action to quiet title under the law. Thus title can connote acquisitive prescription by possession in the concept of an owner. Previously, the Court considered the action to be one for quieting of title where the plaintiffs alleged ownership and actual possession since time immemorial of the property in question by themselves and through their predecessors-in-interest, while defendants secured a certificate of title through fraud, misrepresentation, and deceit. Faja v. CA The counterclaim of Faja for reconveyance of the property has not prescribed. An action to quiet title to property in the possession of plaintiff is imprescriptible. Here, since Faja claims in her answer with counterclaim that she with her predecessors had been in possession for more than 30 years, her action for reconveyance in effects seeks to quiet her title to property, hence imprescriptible. 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 can be claimed only by one who is in possession. Court held here that the right to quiet title, seek reconveyance and annul any certificate of title covering the property accrues only when the possessor is made aware of the adverse claim and only then does the prescriptive period begin to run. The existence of a Certificate of title is not conclusive on the question of ownership of the land in controversy, because the validity of such a certificate is put in issue by allegations of fraud and misrepresentation. Rumarate v. Hernandez For an action to quiet title to prosper, two indispensible requisites must concur, namely: 1. The plaintiff has a legal or an equitable title to or interest in the real property subject of the action; and 2. The deed, claim, encumbrance or proceeding claimed to be casting a cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.

Title to property is that upon which ownership is based. It is the evidence of the right of the owner or the extent of his interest, by which means he can maintain control and, as a rule, assert a right to exclusive possession and enjoyment of the property. Considering that Rumarate was in possession, the action to quiet title cannot prescribe. Notwithstanding that the land should be awarded to Rumarate, their title is imperfect and is still subject to the filing of the proper application for confirmation of title. Its premature to issue a certificate of title in the name of Rumarate. Caero v. UP The petitioners action to quiet title had already prescribed because he was never [or was not able to show] in possession over the disputed lot. On the other hand, UP was able to prove possession through the buildings and structures which it controls and maintains. 9. Cancellation involving Double Title Pajomayo v. Manipon It is the settled rule in this jurisdiction that where two certificates of title are issued to different persons covering the same parcel of land in whole or in part, the earlier in date must prevail as between the original parties, and in case of successive registration where more than one certificate is issued over the land, the person holding under the prior certificate is entitled to the land as against the person who relies on the second certificate. Here, Pajomayo OCT was issued in 1931 and Manipon OCT only in 1957, hence Pajomayo OCT, and TCT thereafter prevails. 10. Action for Reversion Republic v. CA If a person is able to register land which cannot be registered under the Torrens System, or when the Director of Lands did not have jurisdiction over the land because it is timber land, the grantee does not, by virtue of the certificate of title alone, become the owner of the land illegally registered. The patent or title issued is void since the officer who issued it had no authority to do so. Under these circumstances, the certificate of title may be ordered cancelled and the cancellation may be pursued through an ordinary action therefore. The action cannot be barred by prior judgment of the land registration court since the said court had no jurisdiction over the subject matter. Even granting that the Director of Lands was negligent in failing to oppose the registration, it is a well-settled rule that the Republic is usually not estopped by mistake or error on the part of its officials or agents. Consequently, the State may still seek cancellation of the title issued as such has not become indefeasible, for prescription cannot be invoked against the State.

F. Cadastral Registration

1. Nature and Purpose Republic vs. Vera A Cadastral proceeding is in rem. Parties are precluded from re-litigating the same issues already determined by final judgment. One of the main purposes of a cadastral proceeding is to settle titles to lands. Anyone claiming ownership of any land so affected should lay claim. Failure to do so authorizes the court to declare the land public. Heirs of Luzuriaga vs. Republic Publication is a condition sine qua non for the RTC acting as a cadastral court to acquire jurisdiction. Due publication is required to give notice to all interested parties of the claim and identity of the property to be surveyed. And any additional territory or change in the area cannot be included by amendment without new publication. But where the identity of the land and area of the claimed property is not the subject of the amendment but other collateral matters, new publication is not needed. Veranga vs. Republic No publication, then the decision is void for having been rendered without jurisdiction. 2. Jurisdiction Duran vs. Olivia A piece of land, registered through a homestead patent under the land registration act cannot be the subject matter of a cadastral proceeding and any title issued thereon is null and void. Cadastral court has no jurisdiction over registered land. Manotok Realty vs. CLT Realty Jurisdiction of Cadastral Court is limited to: 1. Technical errors in the description of the lands provided they do not impair the substantial rights of the registered owner and cannot operate to deprive the registered owner of his title. 2. Determine between 2 parties who has a better right over the property or which of the conflicting titles should prevail 3. Upon request of the registered owner, the cadastral court can issue new title. What is prohibited in a cadastral proceeding is the registration of land, already issued in the name of a person, in the name of another, divesting the registered owner of the title already issued in his favor, or the making of such changes in the title as to impair his substantial rights. 3. When Filed?

When in the opinion of the President of the Philippines public interest so requires that title to any unregistered lands be settled and adjudicated, he may order the Director of Lands to cause to be made a cadastral survey of the lands. (Sec. 35(a), P.D. 1529) When the lands have been surveyed or plotted, the Director of Lands, represented by the SolGen, shall institute original registration proceedings by filing the necessary petition in the RTC of the place where the land is situated against the holders, claimants, possessors, or occupants of such lands or any part thereof, stating in substance that public interest requires that the title to such lands be settled and adjudicated and praying that such titles be so settled and adjudicated. (Sec. 36, P.D. 1529) 4. Judgment and Decree All conflicting interests shall be adjudicated by the court and decrees awarded in favor of the persons entitled to the lands or to parts thereof and such decrees shall be the basis for issuance of original certificates of title in favor of said persons and shall have the same effect as certificates of title granted on application for registration of land under ordinary land registration proceedings. (Sec. 38, P.D. 1529)

V. Subsequent Registration A. Nature and Effects The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, and in all cases under this Decree, the registration shall be made in the office of the Register of Deeds for the province or city where the land lies. (Sec. 51) Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering. (Sec. 52) Primary Entry Book. Each RD shall keep a primary entry book in which, upon payment of the entry fee, he shall enter, in the order of their reception, all instruments including copies of writs and processes filed with him relating to registered land. He shall, as a preliminary process in registration, note in such book the date, hour and minute of reception of all instruments, in the order in which they were received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument, when made on the certificate of title to which it refers, shall bear the same date. (Sec. 56) Carry-Over. If, at the time of any transfer, subsisting encumbrances or annotations appear in the registration book, they shall be carried over and stated in the new certificate or certificates, except so far as they may be simultaneously released or discharged. (Sec. 59) Campillo v. CA A sale of real estate, whether made as a result of a private transaction or of a foreclosure or execution sale, becomes legally effective against third persons only from the date of its registration. Under the Torrens System, registration is the operative act that gives validity to the transfer or creates a lien upon the land. A bona fide purchaser for value of such property at an auction sale acquires good title as against a prior transferee of same property if such prior transfer was unrecorded at the time of the auction sale. Heirs of Marasigan v. IAC

A prior deed of sale registered only after the annotation of a notice of lis pendens will not defeat the right of the plaintiff, who caused the annotation of the annotation of the notice, who subsequently obtains a favorable judgment. The first buyer who is late in registering the sale is bound by the outcome of the litigation since registration is operative act which creates constructive notice to the whole world. Prior to the registration of the sale, it did not bind third persons. Garcia v. CA The general rule is that in case of two certificates of title, purporting to include the same land, the earlier in date prevails, whether the land comprised in the later certificate be wholly, or only in part, comprised in the earlier certificate. And in successive registration, the person claiming under the prior certificate is entitled to the estate or interest. The maxim prior est in tempore, potior est in jure (he who is first in time is preferred in rights) is followed in land registration matters. In cases of involuntary registration, an entry in the day book [primary entry book] is a sufficient notice to all persons even if the owners duplicate certificate of title is not presented. In case of voluntary registration of documents, an innocent purchaser for value of registered land becomes the registered owner and the holder of the certificate of title, the moment he presents a notarized and valid deed of sale and the same is entered in the day book and at the same time the owners duplicate certificate of title is presented or surrendered, and pays the fees. Mingoa v. Land Registration Administrator The date of mailing, as shown by the post office stamp or registry receipt, of an instrument to the RD for purposes of registration should be considered the date of filing and receipt thereof by the RD. It is this date that should be entered in the primary entry book of the RD, which shall be regarded as the date of its registration. Rodriguez v. CA The deed of sale with assumption of mortgage is a voluntary instrument and as such registration is the operative act to convey and affect the land. Section 55 of PD 1529 requires the presentation of the owners duplicate certificate of title for the registration of any deed or voluntary instrument. The reason for requiring the production of the owners duplicate is that, being a willful act of the registered owner, it is to be presumed that he is interested in registering the instrument and would willingly surrender his duplicate in order to accomplish such registration. However, where the owner refuses to surrender the duplicate, the grantee may file an adverse claim in the RD. The annotation of an adverse claim is a measure designed to protect the interest of a person over real property where the registration of such interest or right is not otherwise provided for by the law, and serves notice and warning to third parties.

Here, no effort was made to secure the duplicate from the mortgagee who was in possession of the TCT. And moreover since the instrument is a registerable instrument and no justifiable reason was shown why the deed could not be registered, the remedy of adverse claim cannot substitute for registration. B. Voluntary Dealings No voluntary instrument shall be registered by the Register of Deeds, unless the owner's duplicate certificate is presented with such instrument, except in cases expressly provided for in this Decree or upon order of the court, for cause shown. (Sec. 53) C. Involuntary Dealings 1. Attachments 2. Suits, Judgments, Decrees 3. Foreclosure 4. Adverse Claim Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in this Decree for registering the same, make a statement under oath setting forth fully his alleged right or interest, and how or under whom acquired, a reference to the number of the certificate of title of the registered owner, the name of the registered owner, and a description of the land in which the right or interest is claimed. The adverse claim shall be effective for a period of thirty days from the date of registration. Before or after the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the party in interest: Provided, however, that after cancellation, no second adverse claim based on the same ground shall be registered by the same claimant. Before the lapse of thirty days, the claimant may withdraw his adverse claim by filing with the Register of Deeds a sworn petition to that effect. (Sec. 70) Arrazola v. Bernas An adverse claimant must be one who claims any right or interest in registered land adverse to the registered owner, arising subsequent ot the original registration. That interest is registerable as an adverse claim if no other provision is made for its registration. The claim of a person that she has hereditary rights in the land fraudulently registered in her sisters name because the land belonged to their mother, whose estate is pending settlement in a special proceeding, is a registerable as an adverse claim. And even though the will is yet pending probate. The purpose of annotating the adverse claim on the title to the disputed land is to apprise third persons that there is a controversy over the ownership of the land and to preserve and protect the right of the adverse claimant during the pendency of the controversy. It is a notice to third persons that any transaction regarding the disputed land is subject to the outcome of the dispute. Alfredo v. Borras When ownership or title passes to the buyer, the seller ceases to have any title to transfer to any third person. If the seller sells the same land to another, the second buyer

who has actual or constructive knowledge of the prior sale cannot be a registrant in Good Faith. Such second buyer in BF cannot defeat the first buyers title. In case a title is issued to the second buyer, the first buyer may seek reconveyance of the property subject of the sale. Here, the adverse claim on the land was registered on Feb 8. And the sale, as shown on the deeds of sale, was dated Feb 22. Hence the 2nd buyers are charged with constructive notice of the adverse claim and the defect in the title of the sellers. Leonardo v. Maravilla An adverse claim does toll the running of the prescriptive period to demand for specific performance based on a contract of sale. The procedure for registration of voluntary instruments is provided for by law. But where the vendor refuses to deliver to the vendee the owners duplicate certificate of title, which title must be presented in order that the deed of conveyance may be registered and the corresponding TCT may be issued, the vendee may file an adverse claim. The adverse claim here was ineffective because for an adverse claim to be valid it must be shown that a demand was made on the vendor and that he refused to surrender the owners duplicate certificate of title. Sajonas v. CA The cancellation of the adverse claim is still necessary to render it ineffective, otherwise, the inscription will remain annotated and continue as a lien on the property. The reason why the law provides for a hearing where the validity of the adverse claim is to be threshed out is to afford the adverse claimant an opportunity to be heard, providing a venue where the propriety of his claimed interest can be established or revoked, all for the purpose of determine the existence of any encumbrance on the title arising from such adverse claim. This is in line with the effect that no second adverse claim shall be registered by the same claimant after cancellation. Ching v. Enrile An adverse claim remains effective even after the lapse of the 30-day period as long as it isnt cancelled. Where a party has knowledge of a prior existing interest, which is unregistered at the time he acquired a right to the same land, his knowledge of that prior interest has the effect of registration as to him. Here, petitioners adverse claim is annotated at the back of the title coupled with the fact that they are in possession of the disputed property. These circumstances should have put Enrile on guard and required him to ascertain the property being offered to hem has already been sold to another to prevent injury to prior innocent buyers. A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. Moreover, regardless of the non-registration of the deed of sale and the 30-day effectivity of the adverse claim, Enrile was constructively notified of the prior sale

because the adverse claim was readily perceivable as an annotation on the dorsal part on Memorandum of Encumbrances. 5. Lis Pendens VI. Non-Registrable Properties A. Inalienable Lands of the Public Domain B. Lands already registered under the Torrens System. VII. Innocent Purchaser For Value The RTC shall not entertain a petition for review of the decree of registration where an innocent purchaser for value has acquired the land or an interest therein, whose rights may be prejudiced. Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in this Decree, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value. (Sec. 32, P.D. 1529) Guaranteed Homes v. Heirs of Valdez [577 SCRA 441] It is basic that a person dealing with registered property need not go beyond, but only has to rely on, the title of his predecessor-in-interest. Since "the act of registration is the operative act to convey or affect the land insofar as third persons are concerned, it follows that where there is nothing in the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore farther than what the Torrens title upon its face indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. It is enough that petitioner had examined the latest certificate of title which in this case was issued in the name of the immediate transferor, the spouses Rodolfo. The purchaser is not bound by the original certificate but only by the certificate of title of the person from whom he had purchased the property. Even assuming arguendo that the extrajudicial settlement was a forgery, the Court still has to uphold the title of petitioner. The case law is that although generally a forged or fraudulent deed is a nullity and conveys no title, there are instances when such a fraudulent document may become the root of a valid title. And one such instance is where the certificate of title was already transferred from the name of the true owner to the forger, and while it remained that way, the land was subsequently sold to an innocent purchaser. For then, the vendee had the right to rely upon what appeared in the certificate. Clemente v. Razo [452 SCRA 769] Any buyer or mortgagee of realty covered by a Torrens certificate of title, in the absence of any suspicion, is not obligated to look beyond the certificate to investigate the titles of the seller appearing on the face of the certificate. And, he is charged with notice only of such burdens and claims as are annotated on the title. However, when the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation. The presence of anything which excites or arouses suspicion should then prompt the vendee to look beyond the certificate and investigate the title of the vendor appearing on

the face of said certificate. One who falls within the exception can neither be denominated an innocent purchaser for value nor a purchaser in good faith; and hence does not merit the protection of the law. Cabuhat v. CA [366 SCRA 176] Just as an innocent purchaser for value, a mortgagee may rely on what appears on the face of the Torrens title. And when an innocent mortgagee acquires rights over the mortgaged property, the court cannot disregard such rights which must be respected and protected. A mortgagee has a right to rely in good faith on the certificate of title of the mortgagor of the property given as security and in the absence of any sign that might arouse suspicion, has no obligation to undertake further investigation. Hence, even if the mortgagor is not the rightful owner of, or does not have a valid title to, the mortgaged property, the mortgagee in good faith is nonetheless entitled to protection. San Roque v. Republic [532 SCRA 493] The adverse claim of the Republic by virtue of the expropriation proceedings will not defeat the rights of San Roque which acquired the subject lot for value and free from any lien and without knowledge of the Republics adverse claim. The Republics claim may have given San Roques predecessors-in-interest, the sellers, voidable title to the subject properties. However, prior to the acquisition by San Roque, the lot had been subdivided and covered by separate titles of the subsequent transferees. These titles, which includes the subject properties, have not been voided at the time of the sale to San Roque. As such San Roque acquired good title, having purchased them in good faith and for value and without notice of the sellers defect of title, if any. Estate of Yujuico v. Republic [537 SCRA 513] Equitable estoppel may be invoked against public authorities when as in this case, the lot was already alienated to innocent purchasers for value and the government did not undertake any act to contest the title for an unreasonable length of time. Where the title of an innocent purchaser for value who relied on the clean certificates of the title was sought to be cancelled and the excess land to be reverted to the Government, we ruled that it is only fair and reasonable to apply the equitable principle of estoppel by laches against the government to avoid an injustice to innocent purchasers for value. While the general rule is that an action to recover lands of the public domain is imprescriptible, said right can be barred by laches or estoppel. Section 32, PD 1529 recognizes rights of innocent purchasers over and above the interests of the government. Estate of Olaguer v. Ongjoco [563 SCRA 373] According to the provisions of Art. 1874 of the civil code, when the sale of a piece of land or any interest therein is made through an agent, the authority of the latter shall be in writing. Absent this requirement, the sale shall be void. Also under Art 1878, a SPA is necessary in order for an agent to enter into a contract by which ownership of an immovable is transmitted or acquired, either gratuitously or for value.

Here, the good faith of Ongjoco hinges on the existence of the written power of attorney. While the law requires a SPA, the GPA was sufficient as the agent was expressly empowered to sell any of the principals properties. Even if a document is designated as GPA, the requirement of SPA is met if there is a clear mandate from the principal specifically authorizing the performance of the act. The SPA can be included in the general power when the act or transaction for which the special power is required is specified therein. Exceptions to the IPV: Sanchez v. Quinio [463 SCRA 471] It is a settled rule that when two certificates of title are issued to different persons covering the same land in whole or in part, the earlier in date must prevail, and, in case of successive registrations where more than one certificate is issued over the land, the person holding a prior certificate is entitled to the land as against a person who relies on a subsequent certificate. As between two persons both of whom are in good faith and both innocent of any negligence, the law must protect and prefer the lawful holder of registered title over the transferee of a vendor bereft of any transmissible rights. Torres v. CA Moreover, even if we grant Mota the status of an innocent mortgagee, the doctrine relied upon by the appellate court that a forged instrument may become the root of a valid title, cannot be applied where the owner still holds a valid and existing certificate of title covering the same interest in a realty. The doctrine would apply rather when the forger thru insidious means obtains the owner's duplicate certificate of title, converts it in his name, and subsequently sells or otherwise encumbers it to an innocent holder for value, for in such a case the new certificate is binding upon the owner (Sec. 55, Act 496; Sec. 53, P.D. No. 1529). But if the owner holds a valid and existing certificate of title, his would be indefeasible as against the whole world, and not that of the innocent holder's. Prior tempore potior jure Spouses Abrigo v. De Vera Between two buyers of the same immovable property registered under the Torrens system, the law gives ownership priority to (1) the first registrant in good faith; (2) then, the first possessor in good faith; and (3) finally, the buyer who in good faith presents the oldest title. This provision, however, does not apply if the property is not registered under the Torrens system. Since the land was already registered under the Torrens System, the registration of the sale to Abrigo under Act 3344 was not effective to bind the land for purposes of Double Sales. Registration must be done in the proper registry to bing the land. On the other hand, the registration of De Vera under the Torrens system should prevail over that of Abrigo considering the registration was done in good faith. Double Sales requires the second buyer to acquired the immovable in good faith and to register it in good faith.

Constructive notice to the second buyer through registration under Act 3344 [which governs the registration of all instruments of land neither covered by the Spanish Mortgage Law nor the Torrens System] does not apply if the property is registered under the Torrens. Coronel v. IAC [155 SCRA 270 The simple possession of a certificate of title, under the Torrens System, does not necessarily make the possessor a true owner of all the property described therein. If a person obtains a title, under the Torrens system, which includes by mistake or oversight land which cannot be registered under the Torrens systems, he does not, by virtue of said certificate alone, become the owner of the lands illegally included. The buyer does not own the land mistakenly included in the TCT issued to him. Private Development v. CA [475 SCRA 591] Concededly, a person, be he a buyer or mortgagee, dealing with a titled property, as the exterior lot is, is not required to go beyond what appears on the face of the covering title itself. Unfortunately for petitioner PDCP, however, the aforementioned rule does not apply to banks. Banks, indeed, should exercise more care and prudence in dealing even with registered lands, than private individuals, for their business is one affected with public interest, keeping in trust money belonging to their depositors, which they should guard against loss by not committing any act of negligence which amounts to lack of good faith by which they would be denied the protective mantle of land registration statute, Act 496, extended only to purchasers for value and in good faith, as well as to mortgagees of the same character and description. Tio v. Abayata [556 SCRA 175] The rule has always been that every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the condition of the property. However, where the land sold is in the possession of a person other than the vendor, the purchaser must go beyond the certificate of title and make inquiries concerning the actual possessor. A buyer of real property which is in possession of another must be wary and investigate the rights of the latter. Otherwise, without such inquiry, the buyer cannot be said to be in good faith and cannot have any right over the property. Tio were without actual knowledge of the claim of Abayata, which was not discoverable by them, after examining the title, its annotations and after an inspection of the property. The Bank led them to believe that the possessors were mere squatters on the land. Tio is entitled to the status as innocent purchasers for value. Expresscredit Financing v. Velasco [473 SCRA 570] To fulfill the requirement of good faith, it is imperative for a mortgagee of the land, in the possession of persons not the mortgagor, to inquire and investigate into the rights or title of those in possession. It is true that a person dealing with the owner of registered land is not bound to go beyond the certificate of title. He may rely on the

notices of the encumbrances on the property annotated on the certificate of title or absence of any annotation. However, we note that the Garcia spouses are unlike other mortgagors. They are in the business of constructing and selling townhouses and are past masters in real estate transactions. Further, petitioner is in the business of extending credit to the public, including real estate loans. In both these businesses, it devolves upon both, greater charge than ordinary buyers or encumbrancers for value, who are not in such venture. It is standard in their business, as a matter of due diligence required of banks and financing companies, to ascertain whether the property being offered as security for the debt has already been sold to another to prevent injury to prior innocent buyers. They also have the resources to ascertain any encumbrances over the properties they are dealing with. Here, EFC through its agents who made an ocular inspection were already informed of the previous sale of the land to Velascos but despite knowledge of the unregistered sale still accepted the mortgage. EFC was a mortgagee and purchaser in bad faith. Francisco v. CA [153 SCRA 330] There were in a word sufficiently strong indications to impel a closer inquiry into the location, boundaries and condition of the two (2) smaller lots embraced in the purchase on the part of Casimiro Espiritu and his co-vendees. That inquiry is in truth dictated by common sense, expected of a man of ordinary prudence. "The earth," it has been said, is "that universal manuscript open to the eyes of all. When a man proposes to buy or deal with realty his first duty is to read this public manuscript, that is, to look and see who is there upon it, and what are his rights. Had that inquiry been made, the adverse claim of Candido Francisco over the two (2) small lots would have immediately come to light, and the controversy would have died a-borning The Espiritus failure to undertake such an inquiry precludes their successful invocation of the character of purchasers in good faith. "A want to caution and diligence which an honest man of ordinary prudence is accustomed to exercise in making purchases is, in contemplation of law, a want of good faith." The buyer who could not have failed to know or discover that the land sold to him was in the adverse possession of another, is a buyer in bad faith, such knowledge being equivalent to registration. Sarmiento v. CA [470 SCRA 99] Thus, the general rule is that a purchaser may be considered a purchaser in good faith when he has examined the latest certificate of title. An exception to this rule is when there exist important facts that would create suspicion in an otherwise reasonable man to go beyond the present title and to investigate those that preceded it. Thus, it has been said that a person who deliberately ignores a significant fact which would create suspicion in an otherwise reasonable man is not an innocent purchaser for value. Where, as in this case, the land sold is in the possession of a person other than the vendor, the purchaser is required to go beyond the certificate of title to make inquiries concerning the rights of the actual possessor. Failure to do so would make him a purchaser in bad faith. Lepanto Consolidated v. Dumyung [89 SCRA 532]

A certificate of title is void when covers property of the public domain classified as forest or timber and mineral lands. And any title issued on non-disposable lots even in the hands of alleged innocent purchaser for value, shall be cancelled. A transferee can set up the defense of IPV but the applicant himself cannot. Abad v. Guimba [465 SCRA 356] The law requires a higher degree of prudence from one who buys from a person who is not the registered owner, although the land object of the transaction is registered. While one who buys from the registered owner does not need to look behind the certificate of title, one who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for one to determine if there are any flaws in the title of the transferor, or in the capacity to transfer the land. The same rule applies to mortgagees. Here, Abad the mortgagee failed to inquire into the authority of dela Cruz to mortgage the property. And even if dela Cruz pretended to be Guimba, Abad failed to inquire into the identity of the person he was dealing with. Abad is in Bad Faith. (Note: To be considered as an IPV, the seller must be the registered owner himself.) Orduna v. Fuentebella [June 29, 2010] Basic is the rule that a buyer of a piece of land which is in the actual possession of persons other than the seller must be wary and should investigate the rights of those in possession. Otherwise, without such inquiry, the buyer can hardly be regarded as a buyer in good faith. When a man proposes to buy or deal with realty, his duty is to read the public manuscript, i.e., to look and see who is there upon it and what his rights are. A want of caution and diligence which an honest man of ordinary prudence is accustomed to exercise in making purchases is, in contemplation of law, a want of good faith. The buyer who has failed to know or discover that the land sold to him is in adverse possession of another is a buyer in bad faith. Here, the subsequent purchasers failed to make any inquiries into the possession of Orduna, which if they did they would have discovered the adverse claim of Orduna. They cannot be considered purchasers in good faith. Erena v. Querrer-Kauffman [492 SCRA 298] Indeed, a mortgagee has a right to rely in good faith on the certificate of title of the mortgagor of the property given as security and in the absence of any sign that might arouse suspicion, has no obligation to undertake further investigation. Hence, even if the mortgagor is not the rightful owner of, or does not have a valid title to, the mortgaged property, the mortgagee in good faith is nonetheless entitled to protection. This doctrine presupposes, however, that the mortgagor, who is not the rightful owner of the property, has already succeeded in obtaining a Torrens title over the property in his name and that, after obtaining the said title, he succeeds in mortgaging the property to another who relies on what appears on the said title. The innocent purchaser (mortgagee in this case) for value protected by law is one who purchases a titled land by virtue of a deed executed by the registered owner himself, not by a forged deed, as the law expressly states.

Such is not the situation of petitioner, who has been the victim of impostors pretending to be the registered owners but who are not said owners. The doctrine of mortgagee in good faith does not apply to a situation where the title is still in the name of the rightful owner and the mortgagor is a different person pretending to be the owner. In such a case, the mortgagee is not an innocent mortgagee for value and the registered owner will generally not lose his title.