Republic of the Philippines

Supreme Court
Manila

EN BANC


THE SECRETARY OF THE G.R. No. 167707
DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, THE
REGIONAL EXECUTIVE Present:
DIRECTOR, DENR-REGION VI,
REGIONAL TECHNICAL PUNO, C.J.,
DIRECTOR FOR LANDS, QUISUMBING,
LANDS MANAGEMENT BUREAU, YNARES-SANTIAGO,
REGION VI PROVINCIAL CARPIO,
ENVIRONMENT AND NATURAL AUSTRIA-MARTINEZ,
RESOURCES OFFICER OF KALIBO, CORONA,
*

AKLAN, REGISTER OF DEEDS, CARPIO MORALES,
DIRECTOR OF LAND AZCUNA,
REGISTRATION AUTHORITY, TINGA,
DEPARTMENT OF TOURISM CHICO-NAZARIO,
SECRETARY, DIRECTOR OF VELASCO, JR.,
PHILIPPINE TOURISM NACHURA,
**

AUTHORITY, REYES,
Petitioners, LEONARDO-DE CASTRO, and
BRION, JJ.

- versus -


MAYOR JOSE S. YAP, LIBERTAD
TALAPIAN, MILA Y. SUMNDAD, and
ANICETO YAP, in their behalf and Promulgated:
in behalf of all those similarly situated,
Respondents. October 8, 2008

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DR. ORLANDO SACAY and G.R. No. 173775
WILFREDO GELITO, joined by
THE LANDOWNERS OF
BORACAY SIMILARLY
SITUATED NAMED IN A LIST,
ANNEX A OF THIS PETITION,
Petitioners,


- versus -


THE SECRETARY OF THE
DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, THE
REGIONAL TECHNICAL
DIRECTOR FOR LANDS, LANDS
MANAGEMENT BUREAU,
REGION VI, PROVINCIAL
ENVIRONMENT AND NATURAL
RESOURCES OFFICER, KALIBO,
AKLAN,
Respondents.

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N


REYES, R.T., J.:


AT stake in these consolidated cases is the right of the present occupants
of Boracay Island to secure titles over their occupied lands.

There are two consolidated petitions. The first is G.R. No. 167707, a petition for review
oncertiorari of the Decision
[1]
of the Court of Appeals (CA) affirming that
[2]
of the
Regional Trial Court (RTC) in Kalibo, Aklan, which granted the petition for declaratory
relief filed by respondents-claimants Mayor Jose Yap, et al. and ordered the survey of
Boracay for titling purposes. The second is G.R. No. 173775, a petition for prohibition,
mandamus, and nullification of Proclamation No. 1064
[3]
issued by President Gloria
Macapagal-Arroyo classifying Boracay into reserved forest and agricultural land.

The Antecedents

G.R. No. 167707

Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand
beaches and warm crystalline waters, is reputedly a premier Philippine tourist
destination. The island is also home to 12,003 inhabitants
[4]
who live in the bone-
shaped islands three barangays.
[5]


On April 14, 1976, the Department of Environment and Natural Resources (DENR)
approved the National Reservation Survey of Boracay
Island,
[6]
which identified several lots as being occupied or claimed by named
persons.
[7]


On November 10, 1978, then President Ferdinand Marcos issued Proclamation
No. 1801
[8]
declaring Boracay Island, among other islands, caves and peninsulas in
the Philippines, as tourist zones and marine reserves under the administration of
the Philippine Tourism Authority (PTA). President Marcos later approved the issuance
of PTA Circular 3-82
[9]
dated September 3, 1982, to implement Proclamation No.
1801.

Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from
filing an application for judicial confirmation of imperfect title or survey of land for
titling purposes, respondents-claimants Mayor Jose S. Yap, Jr., Libertad Talapian,
Mila Y. Sumndad, and Aniceto Yap filed a petition for declaratory relief with the RTC in
Kalibo, Aklan.

In their petition, respondents-claimants alleged that Proclamation No. 1801
and PTA Circular No. 3-82 raised doubts on their right to secure titles over their
occupied lands. They declared that they themselves, or through their predecessors-in-
interest, had been in open, continuous, exclusive, and notorious possession and
occupation in Boracay since June 12, 1945, or earlier since time immemorial. They
declared their lands for tax purposes and paid realty taxes on them.
[10]


Respondents-claimants posited that Proclamation No. 1801 and its implementing
Circular did not place Boracay beyond the commerce of man. Since the Island was
classified as a tourist zone, it was susceptible of private ownership. Under Section
48(b) of Commonwealth Act (CA) No. 141, otherwise known as the Public Land Act,
they had the right to have the lots registered in their names through judicial
confirmation of imperfect titles.

The Republic, through the Office of the Solicitor General (OSG), opposed the petition
for declaratory relief. The OSG countered that Boracay Island was an unclassified
land of the public domain. It formed part of the mass of lands classified as public
forest, which was not available for disposition pursuant to Section 3(a) of Presidential
Decree (PD) No. 705 or the Revised Forestry Code,
[11]
as amended.

The OSG maintained that respondents-claimants reliance on PD No. 1801
and PTA Circular No. 3-82 was misplaced. Their right to judicial confirmation of title
was governed by CA No. 141 and PD No. 705. Since Boracay Island had not been
classified as alienable and disposable, whatever possession they had cannot ripen into
ownership.

During pre-trial, respondents-claimants and the OSG stipulated on the following
facts: (1) respondents-claimants were presently in possession of parcels of land in
Boracay Island; (2) these parcels of land were planted with coconut trees and other
natural growing trees; (3) the coconut trees had heights of more or less twenty (20)
meters and were planted more or less fifty (50) years ago; and (4) respondents-
claimants declared the land they were occupying for tax purposes.
[12]


The parties also agreed that the principal issue for resolution was purely legal: whether
Proclamation No. 1801 posed any legal hindrance or impediment to the titling of the
lands in Boracay. They decided to forego with the trial and to submit the case for
resolution upon submission of their respective memoranda.
[13]


The RTC took judicial notice
[14]
that certain parcels of land in Boracay Island, more
particularly Lots 1 and 30, Plan PSU-5344, were covered by Original Certificate of Title
No. 19502 (RO 2222) in the name of the Heirs of Ciriaco S. Tirol. These lots were
involved in Civil Case Nos. 5222 and 5262 filed before
the RTC of Kalibo, Aklan.
[15]
The titles were issued on
August 7, 1933.
[16]


RTC and CA Dispositions

On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, with
a falloreading:

WHEREFORE, in view of the foregoing, the Court declares that Proclamation No. 1801
and PTACircular No. 3-82 pose no legal obstacle to the petitioners and those similarly
situated to acquire title to their lands in Boracay, in accordance with the applicable
laws and in the manner prescribed therein; and to have their lands surveyed and
approved by respondent Regional Technical Director of Lands as the approved survey
does not in itself constitute a title to the land.

SO ORDERED.
[17]


The RTC upheld respondents-claimants right to have their occupied lands titled in
their name. It ruled that neither Proclamation No. 1801 nor PTA Circular No. 3-82
mentioned that lands in Boracay were inalienable or could not be the subject of
disposition.
[18]
The Circular itself recognized private ownership of lands.
[19]
The trial
court cited Sections 87
[20]
and 53
[21]
of the Public Land Act as basis for acknowledging
private ownership of lands in Boracay and that only those forested areas in public
lands were declared as part of the forest reserve.
[22]


The OSG moved for reconsideration but its motion was denied.
[23]
The Republic then
appealed to the CA.

On December 9, 2004, the appellate court affirmed in toto the RTC decision, disposing
as follows:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us
DENYING the appeal filed in this case and AFFIRMING the decision of the lower
court.
[24]



The CA held that respondents-claimants could not be prejudiced by a declaration that
the lands they occupied since time immemorial were part of a forest reserve.

Again, the OSG sought reconsideration but it was similarly denied.
[25]
Hence, the
present petition under Rule 45.

G.R. No. 173775

On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria
Macapagal-Arroyo issued Proclamation No. 1064
[26]
classifying Boracay Island into four
hundred (400) hectares of reserved forest land (protection purposes) and six hundred
twenty-eight and 96/100 (628.96) hectares of agricultural land (alienable and
disposable). The Proclamation likewise provided for a fifteen-meter buffer zone on each
side of the centerline of roads and trails, reserved for right-of-way and which shall form
part of the area reserved for forest land protection purposes.

On August 10, 2006, petitioners-claimants Dr. Orlando Sacay,
[27]
Wilfredo
Gelito,
[28]
and other landowners
[29]
in Boracay filed with this Court an original petition
for prohibition, mandamus, and nullification of Proclamation No. 1064.
[30]
They
allege that the Proclamation infringed on their prior vested rights over portions of
Boracay. They have been in continued possession of their respective lots in Boracay
since time immemorial. They have also invested billions of pesos in developing their
lands and building internationally renowned first class resorts on their lots.
[31]



Petitioners-claimants contended that there is no need for a proclamation reclassifying
Boracay into agricultural land. Being classified as neither mineral nor timber land, the
island is deemed agricultural pursuant to the Philippine Bill of 1902 and Act No.
926, known as the first Public Land Act.
[32]
Thus, their possession in the concept of
owner for the required period entitled them to judicial confirmation of imperfect title.

Opposing the petition, the OSG argued that petitioners-claimants do not have a vested
right over their occupied portions in the island. Boracay is an unclassified public
forest land pursuant to Section 3(a) of PD No. 705. Being public forest, the claimed
portions of the island are inalienable and cannot be the subject of judicial confirmation
of imperfect title. It is only the executive department, not the courts, which has
authority to reclassify lands of the public domain into alienable and disposable
lands. There is a need for a positive government act in order to release the lots for
disposition.

On November 21, 2006, this Court ordered the consolidation of the two petitions as
they principally involve the same issues on the land classification of Boracay Island.
[33]


Issues

G.R. No. 167707

The OSG raises the lone issue of whether Proclamation No. 1801 and PTA Circular No.
3-82 pose any legal obstacle for respondents, and all those similarly situated, to
acquire title to their occupied lands in Boracay Island.
[34]




G.R. No. 173775

Petitioners-claimants hoist five (5) issues, namely:

I.
AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN CONCEPT
OF OWNER OVER THEIR RESPECTIVE AREAS IN BORACAY, SINCE TIME
IMMEMORIAL OR AT THE LATEST SINCE 30 YRS. PRIOR TO THE FILING OF THE
PETITION FOR DECLARATORY RELIEF ON NOV. 19, 1997, WERE THE AREAS
OCCUPIED BY THEM PUBLIC AGRICULTURAL LANDS AS DEFINED
BY LAWS THEN ON JUDICIAL CONFIRMATION OF IMPERFECT TITLES OR PUBLIC
FOREST AS DEFINED BY SEC. 3a, PD 705?

II.
HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF PRIVATE
OWNERSHIPOVER THEIR OCCUPIED PORTIONS OF BORACAY LAND, DESPITE
THE FACT THAT THEY HAVE NOT APPLIED YET FOR JUDICIAL CONFIRMATION OF
IMPERFECT TITLE?

III.
IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS
ALIENABLE AND DISPOSABLE UNDERSEC 6, CA 141 [AN] INDISPENSABLE PRE-
REQUISITE FOR PETITIONERS TO OBTAIN TITLEUNDER THE TORRENS SYSTEM?

IV.
IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006, VIOLATIVE OF THE
PRIOR VESTED RIGHTS TO PRIVATE OWNERSHIP OF PETITIONERS OVER THEIR
LANDS IN BORACAY, PROTECTED BY THE DUE PROCESS CLAUSE OF THE
CONSTITUTION OR IS PROCLAMATION 1064 CONTRARY TO SEC. 8, CA 141,
OR SEC. 4(a) OF RA 6657.

V.
CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE
SURVEY AND TO APPROVE THE SURVEY PLANS FOR PURPOSES OF THE
APPLICATION FOR TITLING OF THE LANDS OF PETITIONERS IN
BORACAY?
[35]
(Underscoring supplied)

In capsule, the main issue is whether private claimants (respondents-claimants in G.R.
No. 167707 and petitioners-claimants in G.R. No. 173775) have a right to secure titles
over their occupied portions in Boracay. The twin petitions pertain to their right, if
any, to judicial confirmation of imperfect title under CA No. 141, as amended. They do
not involve their right to secure title under other pertinent laws.

Our Ruling

Regalian Doctrine and power of the executive
to reclassify lands of the public domain

Private claimants rely on three (3) laws and executive acts in their bid for judicial
confirmation of imperfect title, namely: (a) Philippine Bill of 1902
[36]
in relation to Act
No. 926, later amended and/or superseded by Act No. 2874 and CA No. 141;
[37]
(b)
Proclamation No. 1801
[38]
issued by then President Marcos; and (c) Proclamation No.
1064
[39]
issued by President Gloria Macapagal-Arroyo. We shall proceed to determine
their rights to apply for judicial confirmation of imperfect title under these laws and
executive acts.

But first, a peek at the Regalian principle and the power of the executive to reclassify
lands of the public domain.

The 1935 Constitution classified lands of the public domain into agricultural, forest or
timber.
[40]
Meanwhile, the 1973 Constitution provided the following divisions:
agricultural, industrial or commercial, residential, resettlement, mineral, timber or
forest and grazing lands, and such other classes as may be provided by law,
[41]
giving
the government great leeway for classification.
[42]
Then the 1987 Constitution reverted
to the 1935 Constitution classification with one addition: national parks.
[43]
Of
these, only agricultural lands may be alienated.
[44]
Prior to Proclamation No. 1064
of May 22, 2006,Boracay Island had never been expressly and administratively
classified under any of these grand divisions. Boracay was an unclassified land of the
public domain.

The Regalian Doctrine dictates that all lands of the public domain belong to the State,
that the State is the source of any asserted right to ownership of land and charged
with the conservation of such patrimony.
[45]
The doctrine has been consistently
adopted under the 1935, 1973, and 1987 Constitutions.
[46]


All lands not otherwise appearing to be clearly within private ownership are presumed
to belong to the State.
[47]
Thus, all lands that have not been acquired from the
government, either by purchase or by grant, belong to the State as part of the
inalienable public domain.
[48]
Necessarily, it is up to the State to determine if lands of
the public domain will be disposed of for private ownership. The government, as the
agent of the state, is possessed of the plenary power as the persona in law to determine
who shall be the favored recipients of public lands, as well as under what terms they
may be granted such privilege, not excluding the placing of obstacles in the way of
their exercise of what otherwise would be ordinary acts of ownership.
[49]


Our present land law traces its roots to the Regalian Doctrine. Upon the Spanish
conquest of thePhilippines, ownership of all lands, territories and possessions in
the Philippines passed to the Spanish Crown.
[50]
The Regalian doctrine was first
introduced in the Philippines through the Laws of the Indies and the Royal Cedulas,
which laid the foundation that all lands that were not acquired from the Government,
either by purchase or by grant, belong to the public domain.
[51]


The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage Law of
1893. The Spanish Mortgage Law provided for the systematic registration of titles and
deeds as well as possessory claims.
[52]


The Royal Decree of 1894 or the Maura Law
[53]
partly amended the Spanish Mortgage
Law and the Laws of the Indies. It established possessory information as the method
of legalizing possession of vacant Crown land, under certain conditions which were set
forth in said decree.
[54]
Under Section 393 of the Maura Law, an informacion
posesoria or possessory information title,
[55]
when duly inscribed in the Registry of
Property, is converted into a title of ownership only after the lapse of twenty (20) years
of uninterrupted possession which must be actual, public, and adverse,
[56]
from the
date of its inscription.
[57]
However, possessory information title had to be perfected one
year after the promulgation of the Maura Law, or until April 17, 1895. Otherwise, the
lands would revert to the State.
[58]


In sum, private ownership of land under the Spanish regime could only be founded on
royal concessions which took various forms, namely: (1) titulo real or royal grant;
(2) concesion especial or special grant; (3) composicion con el estado or
adjustment title; (4) titulo de compra or title by purchase; and (5) informacion
posesoria or possessory information title.
[59]


The first law governing the disposition of public lands in the Philippines under
American rule was embodied in the Philippine Bill of 1902.
[60]
By this law, lands of the
public domain in the Philippine Islands were classified into three (3) grand divisions, to
wit: agricultural, mineral, and timber or forest lands.
[61]
The act provided for, among
others, the disposal of mineral lands by means of absolute grant (freehold system) and
by lease (leasehold system).
[62]
It also provided the definition by exclusion of
agricultural public lands.
[63]
Interpreting the meaning of agricultural lands under
the Philippine Bill of 1902, the Court declared in Mapa v. Insular Government:
[64]



x x x In other words, that the phrase agricultural land as used in Act No. 926
means those public lands acquired from Spain which are not timber or mineral
lands. x x x
[65]
(Emphasis Ours)

On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise known
as the Land Registration Act. The act established a system of registration by which
recorded title becomes absolute, indefeasible, and imprescriptible. This is known as
the Torrens system.
[66]


Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926,
which was the first Public Land Act. The Act introduced the homestead system and
made provisions for judicial and administrative confirmation of imperfect titles and for
the sale or lease of public lands. It permitted corporations regardless of the nationality
of persons owning the controlling stock to lease or purchase lands of the public
domain.
[67]
Under the Act, open, continuous, exclusive, and notorious possession and
occupation of agricultural lands for the next ten (10) years preceding July 26,
1904 was sufficient for judicial confirmation of imperfect title.
[68]


On November 29, 1919, Act No. 926 was superseded by Act No. 2874, otherwise
known as the second Public Land Act. This new, more comprehensive law limited the
exploitation of agricultural lands to Filipinos and Americans and citizens of other
countries which gave Filipinos the same privileges. For judicial confirmation of title,
possession and occupation en concepto dueo since time immemorial, or since July 26,
1894, was required.
[69]


After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874
on December 1, 1936. To this day, CA No. 141, as amended, remains as the existing
general law governing the classification and disposition of lands of the public domain
other than timber and mineral lands,
[70]
and privately owned lands which reverted to
the State.
[71]


Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of possession
and occupation of lands of the public domain since time immemorial or since July 26,
1894. However, this provision was superseded by Republic Act (RA) No. 1942,
[72]
which
provided for a simple thirty-year prescriptive period for judicial confirmation of
imperfect title. The provision was last amended by PD No. 1073,
[73]
which now
provides for possession and occupation of the land applied for since June 12, 1945,
or earlier.
[74]


The issuance of PD No. 892
[75]
on February 16, 1976 discontinued the use of Spanish
titles as evidence in land registration proceedings.
[76]
Under the decree, all holders of
Spanish titles or grants should apply for registration of their lands under Act No. 496
within six (6) months from the effectivity of the decree on February 16,
1976. Thereafter, the recording of all unregistered lands
[77]
shall be governed by
Section 194 of the Revised Administrative Code, as amended by Act No. 3344.

On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, known as
the Property Registration Decree. It was enacted to codify the various laws relative to
registration of property.
[78]
It governs registration of lands under the Torrens system as
well as unregistered lands, including chattel mortgages.
[79]


A positive act declaring land as alienable and disposable is required. In keeping
with the presumption of State ownership, the Court has time and again emphasized
that there must be a positive act of the government, such as an official
proclamation,
[80]
declassifying inalienable public land into disposable land for
agricultural or other purposes.
[81]
In fact, Section 8 of CA No. 141 limits alienable or
disposable lands only to those lands which have been officially delimited and
classified.
[82]


The burden of proof in overcoming the presumption of State ownership of the lands of
the public domain is on the person applying for registration (or claiming ownership),
who must prove that the land subject of the application is alienable or
disposable.
[83]
To overcome this presumption, incontrovertible evidence must be
established that the land subject of the application (or claim) is alienable or
disposable.
[84]
There must still be a positive act declaring land of the public domain as
alienable and disposable. To prove that the land subject of an application for
registration is alienable, the 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.
[85]
The applicant may also secure a certification from the
government that the land claimed to have been possessed for the required number of
years is alienable and disposable.
[86]


In the case at bar, no such proclamation, executive order, administrative action,
report, statute, or certification was presented to the Court. The records are bereft of
evidence showing that, prior to 2006, the portions of Boracay occupied by private
claimants were subject of a government proclamation that the land is alienable and
disposable. Absent such well-nigh incontrovertible evidence, the Court cannot accept
the submission that lands occupied by private claimants were already open to
disposition before 2006. Matters of land classification or reclassification cannot be
assumed. They call for proof.
[87]


Ankron and De Aldecoa did not make the whole of Boracay Island, or portions
of it, agricultural lands. Private claimants posit that Boracay was already an
agricultural land pursuant to the old casesAnkron v. Government of the
Philippine Islands (1919)
[88]
and De Aldecoa v. The Insular Government (1909).
[89]
These
cases were decided under the provisions of the Philippine Bill of 1902 and Act No.
926. There is a statement in these old cases that in the absence of evidence to the
contrary, that in each case the lands are agricultural lands until the contrary is
shown.
[90]


Private claimants reliance on Ankron and De Aldecoa is misplaced. These cases did
not have the effect of converting the whole of Boracay Island or portions of it into
agricultural lands. It should be stressed that the Philippine Bill of 1902 and Act No.
926 merely provided the manner through which land registration courts would classify
lands of the public domain. Whether the land would be classified as timber, mineral,
or agricultural depended on proof presented in each case.

Ankron and De Aldecoa were decided at a time when the President of the Philippines
had no power to classify lands of the public domain into mineral, timber, and
agricultural. At that time, the courts were free to make corresponding classifications
in justiciable cases, or were vested with implicit power to do so, depending upon the
preponderance of the evidence.
[91]
This was the Courts ruling in Heirs of the Late
Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic,
[92]
in
which it stated, through Justice Adolfo Azcuna, viz.:

x x x Petitioners furthermore insist that a particular land need not be formally
released by an act of the Executive before it can be deemed open to private ownership,
citing the cases of Ramos v. Director of Landsand Ankron v. Government of the
Philippine Islands.

x x x x

Petitioners reliance upon Ramos v. Director of Lands and Ankron v. Government is
misplaced. These cases were decided under the Philippine Bill of 1902 and the first
Public Land Act No. 926 enacted by the Philippine Commission on October 7, 1926,
under which there was no legal provision vesting in the Chief Executive or President of
the Philippines the power to classify lands of the public domain into mineral, timber
and agricultural so that the courts then were free to make corresponding
classifications in justiciable cases, or were vested with implicit power to do so,
depending upon the preponderance of the evidence.
[93]


To aid the courts in resolving land registration cases under Act No. 926, it was then
necessary to devise a presumption on land classification. Thus evolved the dictum
in Ankron that the courts have a right to presume, in the absence of evidence to the
contrary, that in each case the lands are agricultural lands until the contrary is
shown.
[94]




But We cannot unduly expand the presumption in Ankron and De Aldecoa to an
argument that all lands of the public domain had been automatically reclassified as
disposable and alienable agricultural lands. By no stretch of imagination did the
presumption convert all lands of the public domain into agricultural lands.

If We accept the position of private claimants, the Philippine Bill of 1902 and Act No.
926 would have automatically made all lands in the Philippines, except those already
classified as timber or mineral land, alienable and disposable lands. That would
take these lands out of State ownership and worse, would be utterly inconsistent with
and totally repugnant to the long-entrenched Regalian doctrine.

The presumption in Ankron and De Aldecoa attaches only to land registration cases
brought under the provisions of Act No. 926, or more specifically those cases dealing
with judicial and administrative confirmation of imperfect titles. The presumption
applies to an applicant for judicial or administrative conformation of imperfect title
under Act No. 926. It certainly cannot apply to landowners, such as private claimants
or their predecessors-in-interest, who failed to avail themselves of the benefits of Act
No. 926. As to them, their land remained unclassified and, by virtue of the Regalian
doctrine, continued to be owned by the State.

In any case, the assumption in Ankron and De Aldecoa was not absolute. Land
classification was, in the end, dependent on proof. If there was proof that the land was
better suited for non-agricultural uses, the courts could adjudge it as a mineral or
timber land despite the presumption. In Ankron, this Court stated:

In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in
effect that whether the particular land in question belongs to one class or another is a
question of fact. The mere fact that a tract of land has trees upon it or has mineral
within it is not of itself sufficient to declare that one is forestry land and the other,
mineral land. There must be some proof of the extent and present or future value of
the forestry and of the minerals. While, as we have just said, many definitions have
been given for agriculture, forestry, and mineral lands, and that in each case it is
a question of fact, we think it is safe to say that in order to be forestry or mineral land
the proof must show that it is more valuable for the forestry or the mineral which it
contains than it is for agricultural purposes. (Sec. 7, Act No. 1148.) It is not sufficient
to show that there exists some trees upon the land or that it bears some mineral. Land
may be classified as forestry or mineral today, and, by reason of the exhaustion of the
timber or mineral, be classified as agricultural land tomorrow. And vice-versa, by
reason of the rapid growth of timber or the discovery of valuable minerals, lands
classified as agricultural today may be differently classified tomorrow. Each case
must be decided upon the proof in that particular case, having regard for its
present or future value for one or the other purposes. We believe, however,
considering the fact that it is a matter of public knowledge that a majority of the lands
in the Philippine Islands are agricultural lands that the courts have a right to presume,
in the absence of evidence to the contrary, that in each case the lands are agricultural
lands until the contrary is shown. Whatever the land involved in a particular land
registration case is forestry or mineral land must, therefore, be a matter of
proof. Its superior value for one purpose or the other is a question of fact to be
settled by the proof in each particular case. The fact that the land is a manglar
[mangrove swamp] is not sufficient for the courts to decide whether it is agricultural,
forestry, or mineral land. It may perchance belong to one or the other of said classes
of land. The Government, in the first instance, under the provisions of Act No. 1148,
may, by reservation, decide for itself what portions of public land shall be considered
forestry land, unless private interests have intervened before such reservation is
made. In the latter case, whether the land is agricultural, forestry, or mineral, is a
question of proof. Until private interests have intervened, the Government, by virtue of
the terms of said Act (No. 1148), may decide for itself what portions of the public
domain shall be set aside and reserved as forestry or mineral land. (Ramos vs. Director
of Lands, 39 Phil. 175; Jocson vs. Director of Forestry, supra)
[95]
(Emphasis ours)

Since 1919, courts were no longer free to determine the classification of lands from the
facts of each case, except those that have already became private lands.
[96]
Act
No. 2874, promulgated in 1919 and reproduced in Section 6 of CA No. 141, gave the
Executive Department, through the President, theexclusive prerogative to classify or
reclassify public lands into alienable or disposable, mineral or forest.
96-a
Since then,
courts no longer had the authority, whether express or implied, to determine the
classification of lands of the public domain.
[97]


Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in
1933,
[98]
did not present a justiciable case for determination by the land registration
court of the propertys land classification. Simply put, there was no opportunity for
the courts then to resolve if the land the Boracay occupants are now claiming were
agricultural lands. When Act No. 926 was supplanted by Act No. 2874 in 1919,
without an application for judicial confirmation having been filed by private claimants
or their predecessors-in-interest, the courts were no longer authorized to
determine the propertys land classification. Hence, private claimants cannot bank on
Act No. 926.

We note that the RTC decision
[99]
in G.R. No. 167707 mentioned Krivenko v. Register of
Deeds of Manila,
[100]
which was decided in 1947 when CA No. 141, vesting the
Executive with the sole power to classify lands of the public domain was already in
effect. Krivenko cited the old cases Mapa v. Insular Government,
[101]
De Aldecoa v. The
Insular Government,
[102]
and Ankron v. Government of the Philippine Islands.
[103]


Krivenko, however, is not controlling here because it involved a totally different issue.
The pertinent issue in Krivenko was whether residential lots were included in the
general classification of agricultural lands; and if so, whether an alien could acquire a
residential lot. This Court ruled that as an alien, Krivenko was prohibited by the 1935
Constitution
[104]
from acquiring agricultural land, which included residential
lots. Here, the issue is whether unclassified lands of the public domain are
automatically deemed agricultural.


Notably, the definition of agricultural public lands mentioned in Krivenko relied on
the old cases decided prior to the enactment of Act No. 2874, including Ankron and De
Aldecoa.
[105]
As We have already stated, those cases cannot apply here, since they were
decided when the Executive did not have the authority to classify lands as agricultural,
timber, or mineral.

Private claimants continued possession under Act No. 926 does not create a
presumption that the land is alienable. Private claimants also contend that their
continued possession of portions of BoracayIsland for the requisite period of ten (10)
years under Act No. 926
[106]
ipso facto converted the island into private
ownership. Hence, they may apply for a title in their name.

A similar argument was squarely rejected by the Court in Collado v. Court of
Appeals.
[107]
Collado, citing the separate opinion of now Chief Justice Reynato S. Puno
in Cruz v. Secretary of Environment and Natural Resources,
107-a
ruled:

Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of
the Philippine Bill of 1902. The law governed the disposition of lands of the public
domain. It prescribed rules and regulations for the homesteading, selling and leasing
of portions of the public domain of the Philippine Islands, and prescribed the terms
and conditions to enable persons to perfect their titles to public lands in the Islands. It
also provided for the issuance of patents to certain native settlers upon public lands,
for the establishment of town sites and sale of lots therein, for the completion of
imperfect titles, and for the cancellation or confirmation of Spanish concessions and
grants in the Islands. In short, the Public Land Act operated on the assumption that title
to public lands in the Philippine Islands remained in the government; and that the
governments title to public land sprung from the Treaty of Paris and other subsequent
treaties between Spain and the United States. The term public land referred to all
lands of the public domain whose title still remained in the government and are thrown
open to private appropriation and settlement, and excluded the patrimonial property of
the government and the friar lands.

Thus, it is plain error for petitioners to argue that under the Philippine Bill of
1902 and Public Land Act No. 926, mere possession by private individuals of
lands creates the legal presumption that the lands are alienable and
disposable.
[108]
(Emphasis Ours)

Except for lands already covered by existing titles, Boracay was an unclassified
land of the public domain prior to Proclamation No. 1064. Such unclassified
lands are considered public forest under PD No. 705. The DENR
[109]
and the
National Mapping and Resource Information Authority
[110]
certify that Boracay Island is
an unclassified land of the public domain.

PD No. 705 issued by President Marcos categorized all unclassified lands of the public
domain as public forest. Section 3(a) of PD No. 705 defines a public forest as a mass
of lands of the public domain which has not been the subject of the present system of
classification for the determination of which lands are needed for forest purpose and
which are not. Applying PD No. 705, all unclassified lands, including those
in Boracay Island, are ipso facto considered public forests. PD No. 705, however,
respects titles already existing prior to its effectivity.

The Court notes that the classification of Boracay as a forest land under PD No. 705
may seem to be out of touch with the present realities in the island. Boracay, no
doubt, has been partly stripped of its forest cover to pave the way for commercial
developments. As a premier tourist destination for local and foreign tourists, Boracay
appears more of a commercial island resort, rather than a forest land.

Nevertheless, that the occupants of Boracay have built multi-million peso beach
resorts on the island;
[111]
that the island has already been stripped of its forest cover; or
that the implementation of Proclamation No. 1064 will destroy the islands tourism
industry, do not negate its character as public forest.

Forests, in the context of both the Public Land Act and the Constitution
[112]
classifying
lands of the public domain into agricultural, forest or timber, mineral lands, and
national parks, do not necessarily refer to large tracts of wooded land or expanses
covered by dense growths of trees and underbrushes.
[113]
The discussion in Heirs of
Amunategui v. Director of Forestry
[114]
is particularly instructive:

A forested area classified as forest land of the public domain does not lose such
classification simply because loggers or settlers may have stripped it of its forest
cover. Parcels of land classified as forest land may actually be covered with grass or
planted to crops by kaingin cultivators or other farmers. Forestlands do not have to
be on mountains or in out of the way places. Swampy areas covered by mangrove
trees, nipa palms, and other trees growing in brackish or sea water may also be
classified as forest land. The classification is descriptive of its legal nature or
status and does not have to be descriptive of what the land actually looks
like. Unless and until the land classified as forest is released in an official
proclamation to that effect so that it may form part of the disposable agricultural lands
of the public domain, the rules on confirmation of imperfect title do not
apply.
[115]
(Emphasis supplied)

There is a big difference between forest as defined in a dictionary and forest or
timber land as a classification of lands of the public domain as appearing in our
statutes. One is descriptive of what appears on the land while the other is a legal
status, a classification for legal purposes.
[116]
At any rate, the Court is tasked to
determine the legal status of Boracay Island, and not look into its physical
layout. Hence, even if its forest cover has been replaced by beach resorts, restaurants
and other commercial establishments, it has not been automatically converted from
public forest to alienable agricultural land.

Private claimants cannot rely on Proclamation No. 1801 as basis for judicial
confirmation of imperfect title. The proclamation did not convert Boracay into
an agricultural land. However, private claimants argue that Proclamation No. 1801
issued by then President Marcos in 1978 entitles them to judicial confirmation of
imperfect title. The Proclamation classified Boracay, among other islands, as a tourist
zone. Private claimants assert that, as a tourist spot, the island is susceptible of
private ownership.

Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay
into an agricultural land. There is nothing in the law or the Circular which
made Boracay Island an agricultural land. The reference in Circular No. 3-82 to
private lands
[117]
and areas declared as alienable and disposable
[118]
does not by
itself classify the entire island as agricultural. Notably, Circular No. 3-82 makes
reference not only to private lands and areas but also to public forested lands. Rule
VIII, Section 3 provides:

No trees in forested private lands may be cut without prior authority from the PTA. All
forested areas in public lands are declared forest reserves. (Emphasis supplied)

Clearly, the reference in the Circular to both private and public lands merely
recognizes that the island can be classified by the Executive department pursuant to
its powers under CA No. 141. In fact, Section 5 of the Circular recognizes the then
Bureau of Forest Developments authority to declare areas in the island as alienable
and disposable when it provides:

Subsistence farming, in areas declared as alienable and disposable by the Bureau of
Forest Development.

Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to
classify BoracayIsland as alienable and disposable land. If President Marcos intended
to classify the island as alienable and disposable or forest, or both, he would have
identified the specific limits of each, as President Arroyo did in Proclamation No.
1064. This was not done in Proclamation No. 1801.

The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the
declaration of Boracay Island, together with other islands, caves and peninsulas in the
Philippines, as a tourist zone and marine reserve to be administered by the PTA to
ensure the concentrated efforts of the public and private sectors in the development of
the areas tourism potential with due regard for ecological balance in the marine
environment. Simply put, the proclamation is aimed at administering the islands
for tourism and ecological purposes. It does not address the areas alienability.
[119]


More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-
four (64) other islands, coves, and peninsulas in the Philippines, such as Fortune and
Verde Islands in Batangas, Port Galera in Oriental Mindoro, Panglao and Balicasag
Islands in Bohol, Coron Island, Puerto Princesa and surrounding areas in Palawan,
Camiguin Island in Cagayan de Oro, and Misamis Oriental, to name a few. If the
designation of Boracay Island as tourist zone makes it alienable and disposable by
virtue of Proclamation No. 1801, all the other areas mentioned would likewise be
declared wide open for private disposition. That could not have been, and is clearly
beyond, the intent of the proclamation.

It was Proclamation No. 1064 of 2006 which positively declared part of Boracay
as alienable and opened the same to private ownership. Sections 6 and 7 of CA
No. 141
[120]
provide that it is only the President, upon the recommendation of the
proper department head, who has the authority to classify the lands of the public
domain into alienable or disposable, timber and mineral lands.
[121]


In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised
the authority granted to her to classify lands of the public domain, presumably subject
to existing vested rights. Classification of public lands is the exclusive prerogative of
the Executive Department, through the Office of the President. Courts have no
authority to do so.
[122]
Absent such classification, the land remains unclassified until
released and rendered open to disposition.
[123]


Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and
628.96 hectares of agricultural land. The Proclamation likewise provides for a 15-meter
buffer zone on each side of the center line of roads and trails, which are reserved for
right of way and which shall form part of the area reserved for forest land protection
purposes.
Contrary to private claimants argument, there was nothing invalid or irregular, much
less unconstitutional, about the classification of Boracay Island made by the President
through Proclamation No. 1064. It was within her authority to make such
classification, subject to existing vested rights.

Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform
Law. Private claimants further assert that Proclamation No. 1064 violates the
provision of the Comprehensive Agrarian Reform Law (CARL) or RA No. 6657 barring
conversion of public forests into agricultural lands. They claim that since Boracay is a
public forest under PD No. 705, President Arroyo can no longer convert it into an
agricultural land without running afoul of Section 4(a) of RA No. 6657, thus:

SEC. 4. Scope. The Comprehensive Agrarian Reform Law of 1988 shall cover,
regardless of tenurial arrangement and commodity produced, all public and private
agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229,
including other lands of the public domain suitable for agriculture.

More specifically, the following lands are covered by the Comprehensive Agrarian
Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassification of forest or mineral lands to agricultural lands shall be
undertaken after the approval of this Act until Congress, taking into account
ecological, developmental and equity considerations, shall have determined by law, the
specific limits of the public domain.

That Boracay Island was classified as a public forest under PD No. 705 did not bar the
Executive from later converting it into agricultural land. Boracay Island still remained
an unclassified land of the public domain despite PD No. 705.

In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic,
[124]
the
Court stated that unclassified lands are public forests.


While it is true that the land classification map does not categorically state that
the islands are public forests, the fact that they were unclassified lands leads to
the same result. In the absence of the classification as mineral or timber land, the
land remains unclassified land until released and rendered open to
disposition.
[125]
(Emphasis supplied)

Moreover, the prohibition under the CARL applies only to a reclassification of land. If
the land had never been previously classified, as in the case of Boracay, there can be
no prohibited reclassification under the agrarian law. We agree with the opinion of the
Department of Justice
[126]
on this point:

Indeed, the key word to the correct application of the prohibition in Section 4(a) is the
word reclassification. Where there has been no previous classification of public forest
[referring, we repeat, to the mass of the public domain which has not been the subject of
the present system of classification for purposes of determining which are needed for
forest purposes and which are not] into permanent forest or forest reserves or some other
forest uses under the Revised Forestry Code, there can be no reclassification of forest
lands to speak of within the meaning of Section 4(a).

Thus, obviously, the prohibition in Section 4(a) of the CARL against the reclassification
of forest lands to agricultural lands without a prior law delimiting the limits of the
public domain, does not, and cannot, apply to those lands of the public domain,
denominated as public forest under the Revised Forestry Code, which have not been
previously determined, or classified, as needed for forest purposes in accordance with
the provisions of the Revised Forestry Code.
[127]


Private claimants are not entitled to apply for judicial confirmation of
imperfect title under CA No. 141. Neither do they have vested rights over the
occupied lands under the said law. There are two requisites for judicial
confirmation of imperfect or incomplete title under CA No. 141, namely: (1) open,
continuous, exclusive, and notorious possession and occupation of the subject land by
himself or through his predecessors-in-interest under a bona fide claim of ownership
since time immemorial or from June 12, 1945; and (2) the classification of the land as
alienable and disposable land of the public domain.
[128]


As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801 did
not convert portions of Boracay Island into an agricultural land. The island remained
an unclassified land of the public domain and, applying the Regalian doctrine, is
considered State property.

Private claimants bid for judicial confirmation of imperfect title, relying on the
Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801, must fail because of
the absence of the second element of alienable and disposable land. Their entitlement
to a government grant under our present Public Land Act presupposes that the land
possessed and applied for is already alienable and disposable. This is clear from the
wording of the law itself.
[129]
Where the land is not alienable and disposable,
possession of the land, no matter how long, cannot confer ownership or possessory
rights.
[130]


Neither may private claimants apply for judicial confirmation of imperfect title under
Proclamation No. 1064, with respect to those lands which were classified as
agricultural lands. Private claimants failed to prove the first element of open,
continuous, exclusive, and notorious possession of their lands in Boracay since June
12, 1945.

We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that
private claimants complied with the requisite period of possession.

The tax declarations in the name of private claimants are insufficient to prove the first
element of possession. We note that the earliest of the tax declarations in the name of
private claimants were issued in 1993. Being of recent dates, the tax declarations are
not sufficient to convince this Court that the period of possession and occupation
commenced on June 12, 1945.

Private claimants insist that they have a vested right in Boracay, having been in
possession of the island for a long time. They have invested millions of pesos in
developing the island into a tourist spot. They say their continued possession and
investments give them a vested right which cannot be unilaterally rescinded by
Proclamation No. 1064.

The continued possession and considerable investment of private claimants do not
automatically give them a vested right in Boracay. Nor do these give them a right to
apply for a title to the land they are presently occupying. This Court is constitutionally
bound to decide cases based on the evidence presented and the laws applicable. As
the law and jurisprudence stand, private claimants are ineligible to apply for a judicial
confirmation of title over their occupied portions in Boracay even with their continued
possession and considerable investment in the island.

One Last Note

The Court is aware that millions of pesos have been invested for the development
of BoracayIsland, making it a by-word in the local and international tourism
industry. The Court also notes that for a number of years, thousands of people have
called the island their home. While the Court commiserates with private claimants
plight, We are bound to apply the law strictly and judiciously. This is the law and it
should prevail. Ito ang batas at ito ang dapat umiral.

All is not lost, however, for private claimants. While they may not be eligible to apply
for judicial confirmation of imperfect title under Section 48(b) of CA No. 141, as
amended, this does not denote their automatic ouster from the residential,
commercial, and other areas they possess now classified as agricultural. Neither will
this mean the loss of their substantial investments on their occupied alienable
lands. Lack of title does not necessarily mean lack of right to possess.

For one thing, those with lawful possession may claim good faith as builders of
improvements. They can take steps to preserve or protect their possession. For
another, they may look into other modes of applying for original registration of title,
such as by homestead
[131]
or sales patent,
[132]
subject to the conditions imposed by law.

More realistically, Congress may enact a law to entitle private claimants to acquire title
to their occupied lots or to exempt them from certain requirements under the present
land laws. There is one such bill
[133]
now pending in the House of
Representatives. Whether that bill or a similar bill will become a law is for Congress to
decide.

In issuing Proclamation No. 1064, the government has taken the step necessary to
open up the island to private ownership. This gesture may not be sufficient to appease
some sectors which view the classification of the island partially into a forest reserve as
absurd. That the island is no longer overrun by trees, however, does not becloud the
vision to protect its remaining forest cover and to strike a healthy balance between
progress and ecology. Ecological conservation is as important as economic progress.

To be sure, forest lands are fundamental to our nations survival. Their promotion and
protection are not just fancy rhetoric for politicians and activists. These are
needs that become more urgent as destruction of our environment gets prevalent and
difficult to control. As aptly observed by Justice Conrado Sanchez in 1968 in Director
of Forestry v. Munoz:
[134]


The view this Court takes of the cases at bar is but in adherence to public policy that
should be followed with respect to forest lands. Many have written much, and many
more have spoken, and quite often, about the pressing need for forest preservation,
conservation, protection, development and reforestation. Not without
justification. For, forests constitute a vital segment of any country's natural
resources. It is of common knowledge by now that absence of the necessary green
cover on our lands produces a number of adverse or ill effects of serious
proportions. Without the trees, watersheds dry up; rivers and lakes which they supply
are emptied of their contents. The fish disappear. Denuded areas become dust bowls.
As waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile
topsoil is washed away; geological erosion results. With erosion come the dreaded
floods that wreak havoc and destruction to property crops, livestock, houses, and
highways not to mention precious human lives. Indeed, the foregoing observations
should be written down in a lumbermans decalogue.
[135]


WHEREFORE, judgment is rendered as follows:

1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of Appeals
Decision in CA-G.R. CV No. 71118 REVERSED AND SET ASIDE.

2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit.

SO ORDERED.




FIRST DIVISION


REPUBLIC OF THE PHILIPPINES, G.R. No. 151910
Petitioner,
Present:

PUNO, C.J., Chairperson,
- versus - SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.
LUDOLFO V. MUOZ,
Respondent. Promulgated:

October 15, 2007
x ---------------------------------------------------------------------------------------- x

DECISION

AZCUNA, J.:

Before this Court is a Petition for Review on Certiorari, under Rule 45 of the 1997 Rules
of Civil Procedure, seeking to set aside the August 29, 2001 Decision
[1]
of the Court of
Appeals (CA) in CA-G.R. CV No. 58170, as well as its January 29, 2002 Resolution,
which affirmed the October 3, 1997 Decision
[2]
of the Regional Trial Court (RTC) of
Ligao, Albay, Branch 13, granting the application for land registration of respondent
Ludolfo V. Muoz.

The following facts prompted the present controversy.

On June 14, 1996, respondent filed an Application for Registration of Title of a parcel
of residential land before the RTC of Ligao, Albay containing an area of 1,986 square
meters situated, bounded, and described as follows:

A PARCEL OF LAND (Lot No. 2276 of the Cadastral Survey of Ligao) with the building
and improvements thereon, situated in the Barrio of Bagonbayan, Municipality of
Ligao, Province of Albay. Bounded on the S., along line 1-2, by Lot No. 2277, Ligao
Cadastre; on the W., along Line 2-3, by Mabini Street; on the N., and E., along lines 3-
4-5-6-4-7, by Lot 2284; and on the S., along line 7-8, by Lot 2281; and along line 8-1,
by Lot 2278 all of Ligao Cadastre, containing an area of ONE THOUSAND NINE
HUNDRED EIGHTY SIX (1,986) square meters.
[3]



In his application for registration, respondent averred that no mortgage or
encumbrance of any kind affects his property and that no other person has an
interest, legal or equitable, on the subject lot. Respondent further declared that the
property was acquired by donation inter vivos, executed by the spouses Apolonio R.
Muoz and Anastacia Vitero on November 18, 1956, and that the spouses and their
predecessors-in-interest have been in possession thereof since time immemorial for
more than 70 years.

On November 7, 1996, petitioner Republic of the Philippines, through the Office of the
Solicitor General (OSG), opposed the application on the following grounds:

(1) That neither the applicant nor his predecessors-in-interest have been in
open, continuous, exclusive and notorious possession and occupation of the land in
question since June 12, 1945 or prior thereto (Sec. 48[b], C.A. 141 as amended by P.D.
1073).

(2) That the muniment/s of title and/or the tax payment/s receipt/s of
application/s, if any, attached to or alleged in the application, do not constitute
competent and sufficient evidence of a bona fideacquisition of the lands acquired for
or his open, continuous, exclusive and notorious possession and occupation thereof in
the concept of owner since June 12, 1945 or prior thereto. Said muniment/s of title as
well as the title do not appear to be genuine and that the tax declaration/s and/or tax
payment receipt/s indicate the pretended possession of application to be of recent
vintage.

(3) That the claim of ownership in fee simple on the basis of Spanish title or
grant can no longer be availed of by the applicant who has failed to file an appropriate
application for registration within the period of six (6) months from February 16, 1976
as required by P.D. No. 892. From the records, it appears that the instant application
was recently filed.

(4) That the parcel applied for is part of the public domain belonging to the
Republic of thePhilippines not subject to private appropriation.

(5) That this application was filed beyond December 31, 1987, the period set
forth under Sec. 2, P.D. No. 1073 and therefore, is filed out of time.
[4]



In respondents Answer to Opposition, he professed that the land in question is
a residential lot originally owned and possessed by Paulino Pulvinar and Geronimo
Lozada. Sometime in April 1917, Pulvinar sold his share of the unregistered land to the
spouses Muoz and Vitero, respondents parents. In June 1920, Lozada likewise sold
his remaining part to the parents of respondent. Thereafter, the ownership and
possession of the property were consolidated by the spouses and declared for taxation
purposes in the name of Muoz in 1920. Furthermore, it was stated that during the
cadastral survey conducted in Ligao, Albay in 1928, the land was designated as Lot
No. 2276, as per Survey Notification Card issued to Muoz dated October 2, 1928.
Finally, respondent contended that from 1920 up to 1996, the time of application, the
land taxes for the property had been fully paid.

On February 6, 1997, an Order of General Default
[5]
was entered by the trial court
against the whole world except for the government and a certain Alex Vasquez, who
appeared during the scheduled initial hearing stating that he would file an opposition
to the application.
In the Opposition
[6]
filed by Vasquez dated February 19, 1997, he declared that he
owns parcels of land, Lot Nos. 2284-A-2 and 2275, adjoining that of the subject matter
of the application. He added that certain portions of his lands are included in the
application as respondents concrete fence is found within the area of his lots.

Respondent, in his answer to the opposition,
[7]
alleged that his property, Lot No.
2276, is covered by a technical description, duly certified correct by the Bureau of
Lands and approved for registration by the Land Registration Authority (LRA), which
specified the exact areas and boundaries of Lot No. 2276. Granting that there is an
encroachment to the oppositors adjoining land, respondent reasoned that it is not for
the court a quo, sitting as a Land Registration Court, to entertain the opposition
because the case should be ventilated in a separate proceeding as an ordinary civil
case.

During the trial, respondent was presented as the sole witness. Respondent, who was
81 years old at that time, testified that he acquired the property in 1956 when his
parents donated the same to him.
[8]
He presented as Exhibit H
[9]
Tax Declaration No.
048-0267, evidencing the payment of realty taxes for Lot No. 2276 in 1997. A
Certification from the Office of the Municipal Treasurer
[10]
was likewise introduced by
the respondent showing the payment of real estate taxes from 1956 up to the year
1997. He further declared that the property is a residential land with improvements
such as a house made of solid materials and fruit-bearing trees. In 1957, respondent
told the court that he constructed a concrete wall surrounding the entire property.
Respondent also narrated that he grew up on the subject lot and spent his childhood
days in the area.
[11]


On cross-examination, respondent claimed that he has six brothers and sisters, none
of whom are claiming any interest over the property.
[12]


On June 16, 1997, the trial court noted
[13]
a Report
[14]
submitted by the Director of
Lands, which informed the court that as per records of the Land Management Bureau
in Manila, Lot No. 2276, CAD-239 is covered by Free Patent Application No. 10-2-664
of Anastacia Vitero.

The RTC rendered a Decision dated October 3, 1997 granting the application for
registration. The dispositive portion of the decision reads:

WHEREFORE, decision is hereby rendered finding the petitioner entitled to
registration. Accordingly, after the finality of this decision, let a decree and, thereafter
the corresponding certificate of title over Lot No. 2276 of the Ligao Cadastre as
delimited by the Technical Description, Annex A-2 of the application, together with the
improvements thereon, issue in the name of LUDOLFO Y. MUOZ, of legal age, Filipino
citizen, married to JOSEFINA PALENCIA, of Mabini Street, Barangay Tinago,
Municipality of Ligao, Province of Albay.

Conformably with the above findings, as prayed for by the Director, Department of
Registration, Land Registration Authority in his Report dated March 6, 1997, the
application, if any, in Cad. Case No. 53, Cadastral Record No. 1404 is hereby ordered
dismissed.

The opposition of Alex Vasquez for lack of merit is hereby ordered dismissed.

Let copy of this Decision be furnished the Office of the Solicitor General, Provincial
Prosecutor of Albay, Oppositor Alez Vasquez and Petitioner.

SO ORDERED.
[15]



On appeal, petitioner argued that the trial court did not acquire jurisdiction over the
subject lot because: (1) the notice of initial hearing was not timely filed; (2) the
applicant failed to present the original tracing cloth plan of the property sought to be
registered during the trial; and (3) the applicant failed to present evidence that the land
is alienable and disposable.

Subsequently, the CA affirmed the decision of the court a quo. The appellate court
explained that there was conclusive proof that the jurisdictional requirement of due
notice had been complied with as mandated under Section 24 of Presidential Decree
No. 1529. Furthermore, the failure to present in evidence the tracing cloth plan of the
subject property did not deprive the lower court of its jurisdiction to act on the
application in question. Lastly, the CA ruled that respondent need not adduce
documentary proof that the disputed property had been declared alienable and
disposable for the simple reason that the lot had once been covered by free patent
application; hence, this alone is conclusive evidence that the property was already
declared by the government as open for public disposition.

The petitioner, through the OSG, raises the following grounds for the petition:

I.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE TRIAL COURT HAS
NOT ACQUIRED JURISDICTION OVER THE CASE.

II.
PRIVATE RESPONDENT HAS NOT PROVEN BY COMPETENT EVIDENCE THAT THE
PROPERTY IS ALIENABLE AND DISPOSABLE PROPERTY OF THE PUBLIC DOMAIN.
[16]


Anent the first issue, petitioner maintains that the failure to present the original
tracing cloth plan is a fatal omission which necessarily affected the trial courts
jurisdiction to proceed with the case.

It bears stressing that the constructive seizure of land accomplished by posting
of notices and processes upon all persons mentioned in notices by means of
publication and sending copies to said persons by registered mail in effect gives the
court jurisdiction over the lands sought to be registered.
[17]


While petitioner correctly contends that the submission in evidence of the
original tracing cloth plan is a mandatory and even a jurisdictional requirement, this
Court has recognized instances of substantial compliance with this rule.
[18]
It is true
that the best evidence to identify a piece of land for registration purposes is the original
tracing cloth plan from the Bureau of Lands, but blueprint copies and other evidence
could also provide sufficient identification.
[19]
In the present application
for registration, respondent submitted, among other things, the following supporting
documents: (1) a blueprint copy of the survey plan
[20]
approved by the Bureau of Lands;
and (2) the technical descriptions
[21]
duly verified and approved by the Director of
Lands.

The Court held in Recto v. Republic
[22]
that the blueprint copy of the cloth plan
together with the lots technical description duly certified as to their correctness by the
Bureau of Lands are adequate to identify the land applied for registration, thus

On the first challenge, the petitioner invokes the case of Director of Lands v.
Reyes, where it was held that the original tracing cloth plan of the land applied for
which must be approved by the Director of Lands was a statutory requirement of
mandatory character for the identification of the land sought to be registered. As what
was submitted was not the tracing cloth plan but only the blueprint copy of the survey
plan, the respondent court should have rejected the same as insufficient.

We disagree with this contention. The Court of Appeals was correct when it
observed that in that case the applicant in effect had not submitted anything at all to
identify the subject property because the blueprint presented lacked the approval of
the Director of Lands. By contrast

In the present case, there was considerable compliance with the requirement of
the law as the subject property was sufficiently identified with the presentation of
blueprint copy of Plan AS-06-000002 (San Pedro v. Director of Lands, CA-G.R. No.
65332-R, May 28, 1981). It should be noted in this connection that the Bureau of Lands
has certified to the correctness of the blueprint copy of the plan including the technical
description that go with it. Hence, we cannot ignore the fact, absent in the Reyes case,
that applicant has provided ample evidence to establish the identity of the subject
property. (Emphasis supplied)

x x x.
[23]


Moreover, if the survey plan is approved by the Director of Lands and its
correctness has not been overcome by clear, strong and convincing evidence, the
presentation of the tracing cloth plan may be dispensed with.
[24]
All the evidence on
record sufficiently identified the property as the one applied for by respondent, and
containing the corresponding metes and bounds as well as area. Consequently, the
original tracing cloth plan need not be presented in evidence.
[25]


Anent the second issue, petitioner stresses that in proving the alienable and
disposable nature of the property, there has to be a certification from the Department
of Environment and Natural Resources and Community Environment and Natural
Resources Office (CENRO).

The CA is of the opinion that respondent need not adduce documentary proofs
that the disputed property has been declared alienable and disposable because of the
fact that it had once been covered by Free Patent Application No. 10-2-664 in the name
of respondents mother, which was unfortunately not acted upon by the proper
authorities. The CA declares that this is proof enough that the property was declared
by the government as open for public disposition. This contention was adopted by the
respondent both in his Comment and Memorandum filed before the Court.

Notwithstanding all the foregoing, the Court cannot sustain the argument of
respondent that the subject property was already declared alienable and disposable
land.

Petitioner is correct when it remarked that it was erroneous for the appellate
court to assume that the property in question is alienable and disposable based only
on the Report dated May 21, 1997 of the Director of Lands indicating that the land
involved in said case described as Lot 2276, CAD-239 is covered by Free Patent
Application No. 10-2-664 of Anastacia Vitero.

It must be pointed out that in its Report
[26]
dated March 6, 1997, the LRA stated
that:

3. This Authority is not in a position to verify whether or not the
parcel of land subject of registration is already covered by land patent, previously
approved isolated survey and is within forest zone.

WHEREFORE, to avoid duplication in the issuance of titles covering the same parcel of
land and the issuance of titles for lands within the forest zone which have not been
released and classified as alienable, the foregoing is respectfully submitted to the
Honorable Court with the recommendation that the Lands Management Bureau,
Manila, Community Environment and Natural Resources Office, Lands
Management Sector and Forest Management Bureau, all in Legazpi City, be
ordered to submit a report to the Court on the status of the land applied for, to
determine whether or not said land or any portion thereof, is already covered by
land patent, previously approved isolated survey and is within the forest
zone and that should the instant application be given due course, the application in
Cad. Case No. 53, Cadastral Record No. 1404 with respect to Lot 2276 be dismissed.
[27]


Noteworthy is the fact that neither the Director of Lands nor the LRA attested that the
land subject of this proceeding is alienable or disposable.

For clarity, applications for confirmation of imperfect title must be able to prove the
following: (1) that the land forms part of the alienable and disposable agricultural lands
of the public domain; and (2) that they have been in open, continuous, exclusive and
notorious possession and occupation of the same under a bona fide claim of ownership
either since time immemorial or since June 12, 1945.
[28]


Commonwealth Act No. 141, also known as the Public Land Act, remains to this day
the existing general law governing the classification and disposition of lands of the
public domain, other than timber and mineral lands.
[29]
Section 6 of CA No.
141 empowers the President to classify lands of the public domain into alienable and
disposable lands of the public domain, which prior to such classification are
inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the
President to declare what lands are open to disposition or concession. Section 8 of CA
No. 141 states that the government can declare open for disposition or concession only
lands that are officially delimited and classified.

Under the Regalian doctrine embodied in our Constitution, all lands of the public
domain belong to the State, which is the source of any asserted right to ownership of
land. Therefore, all lands not appearing to be clearly within private ownership are
presumed to belong to the State. Accordingly, public lands not shown to have been
reclassified or released as alienable agricultural land or alienated to a private
person by the State remain part of the alienable public domain.
[30]


As already well-settled in jurisprudence, no public land can be acquired by private
persons without any grant, express or implied, from the government; and it
is indispensable that the person claiming title to public land should show that his title
was acquired from the State or any other mode of acquisition recognized by law.
[31]
To
prove that the land subject of an application for registration is alienable, the 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.
[32]
The applicant may
also secure a certification from the Government that the land applied for is alienable
and disposable.
[33]


In the present case, respondent failed to submit a certification from the proper
government agency to prove that the land subject for registration is indeed alienable
and disposable. A CENRO certificate, which respondent failed to secure, could have
evidenced the alienability of the land involved.

Considering that respondent has failed to convince this Court of the alienable and
disposable character of the land applied for, the Court cannot approve the application
for registration.

WHEREFORE, the instant petition is GRANTED. Accordingly,
the decision dated August 29, 2001 of the Court of Appeals in CA-G.R. CV No.
58170, as reiterated in its resolution of January 29, 2002,
is REVERSED and SET ASIDE, and the application for registration filed by res
pondent Ludolfo V. Muoz is DENIED.

No costs.

SO ORDERED.


SECOND DIVISION

RURAL BANK OF ANDA, INC.,
Petitioner,





- versus -





ROMAN CATHOLIC
ARCHBISHOP OF LINGAYEN-
DAGUPAN,
Respondent.
G.R. No. 155051

Present:

QUISUMBING, J.,
Chairperson,
CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.



Promulgated:


May 29, 2007
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N

CARPIO, J.:

The Case

This is a petition for review
[1]
of the Decision
[2]
dated 15 October 2001 and the
Resolution dated 23 August 2002 of the Court of Appeals in CA-G.R. CV No. 66478.



The Facts

The lot in dispute, Cadastral Lot 736 (Lot 736), is located in the Poblacion of
Binmaley, Pangasinan. Lot 736 has a total area of about 1,300 square meters and is
part of Lot 3. Cadastral Lot 737 and Lot 739 also form part of Lot 3. Cadastral Lot 737
is known as Imeldas Park, while on Lot 739 is a waiting shed for commuters. Lot 3 is
bounded on the north by Lot 1 of Plan II-5201-A and on the south by the national
road. In front of Lot 736 is the building of Mary Help of Christians Seminary (seminary)
which is on Lot 1.

Lot 1 of Plan II-5201-A, which adjoins Lot 3 on the north, is titled in the name of
respondent Roman Catholic Archbishop of Lingayen (respondent) under Transfer
Certificate of Title No. 6375 (TCT 6375). An annotation on TCT 6375 states that the
ownership of Lot 3 is being claimed by both respondent and the Municipality of
Binmaley.

In 1958, the Rector of the seminary ordered the construction of the fence
separating Lot 736 from the national road to prevent the caretelas from parking
because the smell of horse manure was already bothering the priests living in the
seminary.
[3]
The concrete fence enclosing Lot 736 has openings in the east, west, and
center and has no gate. People can pass through Lot 736 at any time of the day.
[4]


On 22 December 1997, the Sangguniang Bayan of Binmaley, Pangasinan,
passed and approved Resolution Nos. 104
[5]
and 105.
[6]
Resolution No. 104 converted
Lot 736 from an institutional lot to a commercial lot. Resolution No. 105 authorized
the municipal mayor to enter into a contract of lease for 25 years with the Rural Bank
of Anda over a portion of Lot 736 with an area of 252 square meters.
[7]


In December 1997, Fr. Arenos, the director of the seminary, discovered that a
sawali fence was being constructed enclosing a portion of Lot 736. In January 1998,
the Municipal Mayor of Binmaley, Rolando Domalanta (Mayor Domalanta), came to the
seminary to discuss the situation. Mayor Domalanta and Fr. Arenos agreed that the
construction of the building for the Rural Bank of Anda should be stopped.

On 24 March 1998, respondent requested Mayor Domalanta to remove the
sawali fence and restore the concrete fence. On 20 May 1998, Mayor Domalanta
informed respondent that the construction of the building of the Rural Bank of Anda
would resume but that he was willing to discuss with respondent to resolve the
problem concerning Lot 736.

On 1 June 1998, respondent filed a complaint for Abatement of Illegal
Constructions, Injunction and Damages with Writ of Preliminary Injunction in the
Regional Trial Court of Lingayen, Pangasinan. On 24 August 1998, the trial court
ordered the issuance of a writ of preliminary injunction.

On 4 January 2000, the trial court rendered a decision, the dispositive portion
of which reads:

WHEREFORE, in the light of the foregoing, judgment is hereby rendered in favor
of the plaintiff [Roman Catholic Archbishop of Lingayen-Dagupan]:

1. Making the writ of preliminary injunction permanent;


2. Ordering the defendants to cause to be restored the concrete wall with iron
railings, to cause to be removed the sawali fence, both at the expense of the
defendants, jointly and severally, and

3. Condemning the defendants to pay jointly and severally, to the plaintiff the
amount of P25,000.00 as litigation expenses, attorneys fees in the amount
of P50,000.00 and the costs of this suit.

SO ORDERED.
[8]




On appeal, the Court of Appeals affirmed the decision with the modification that
the awards of litigation expenses, attorneys fees, and costs should be deleted. The
Court of Appeals subsequently denied the motion for reconsideration of
the Municipality of Binmaley and the Rural Bank of Anda.


The Ruling of the Trial Court

The trial court found that Lot 736 is not covered by any Torrens title either in
the name of respondent or in the name of the Municipality of Binmaley. The trial court
held that Lot 736 is public in nature. Since Lot 736 is property of public dominion, it is
outside the commerce of man. Thus, the Sangguniang Bayan of Binmaley, Pangasinan
exceeded its authority when it adopted Resolution Nos. 104 and 105
converting Lot 736 from an institutional lot to a commercial lot and authorizing the
municipal mayor to enter into a contract of lease for 25 years with the Rural Bank of
Anda over a 252 square meter portion of Lot 736 .



The Ruling of the Court of Appeals

The Court of Appeals agreed with the trial court that Lot 736 is property of
public dominion and is used by the public as a pathway. Respondent and the
Municipality of Binmaley are mere claimants with no sufficient evidence to prove their
ownership of Lot 736. The Court of Appeals held that property of public dominion is
intended for the common welfare and cannot be the object of appropriation either by
the state or by private persons. Since Lot 736 is for public use, it is a property of
public dominion and it is not susceptible of private ownership. Thus, Resolution Nos.
104 and 105 are void for being enacted beyond the powers of the Sangguniang Bayan
of Binmaley. The contract of lease between theMunicipality of Binmaley and the Rural
Bank of Anda is therefore void.

The Court of Appeals also ruled that since neither the respondent nor
the Municipality of Binmaleyowns Lot 736, there is no basis for the monetary awards
granted by the trial court.


The Issue

The issue in this case is whether Resolution Nos. 104 and 105 of
the Sangguniang Bayan of Binmaley are valid.


The Ruling of the Court

The petition has no merit.

Both respondent and the Municipality of Binmaley admit that they do not have
title over Lot 736. The Assistant Chief of the Aggregate Survey Section of the Land
Management Services in Region I testified that no document of ownership for Lot 736
was ever presented to their office.
[9]


Respondent claims Lot 736 based on its alleged open, continuous, adverse, and
uninterrupted possession of Lot 736. However, the records reveal otherwise. Even the
witnesses for respondent testified that Lot 736 was used by the people as pathway,
parking space, and playground.
[10]


On the other hand, the Municipality of Binmaley alleged that it is the sole
claimant of Lot 736 based on the Property Identification Map, Tax Mapping Control
Roll of the Municipality of Binmaley, and the Lot Data Computation in the name of the
Municipality of Binmaley. However, these documents merely show that
the Municipality of Binmaley is a mere claimant of Lot 736. In fact, the chief of
Survey Division of the Department of Environment and Natural Resources, San
Fernando City, La Union testified that the cadastral survey
[11]
of Lot 736, which was
surveyed for the Municipality of Binmaley in 1989, had not been approved.
[12]
The
cadastral survey was based on the Lot Data Computation
[13]
of Lot 736 which was
likewise contracted by the Municipality of Binmaley in 1989.

The records show that Lot 736 is used as a pathway going to the school, the
seminary, or the church, which are all located on lots adjoined to Lot 736.
[14]
Lot 736
was also used for parking and playground.
[15]
In other words, Lot 736 was used by the
public in general.

Both respondent and the Municipality of Binmaley failed to prove their right
over Lot 736. Since Lot 736 has never been acquired by anyone through purchase or
grant or any other mode of acquisition, Lot 736 remains part of the public domain and
is owned by the state. As held in Hong Hok v. David:
[16]


There being no evidence whatever that the property in question was ever acquired by
the applicants or their ancestors either by composition title from the Spanish
Government or by possessory information title or by any other means for the
acquisition of public lands, the property must be held to be public domain. For it is
well settled that no public land can be acquired by private persons without any grant,
express or implied, from the government. It is indispensable then that there be a
showing of a title from the state or any other mode of acquisition recognized by law.
The most recent restatement of the doctrine, found in an opinion of Justice J.B.L.
Reyes follows: The applicant, having failed to establish his right or title over the
northern portion of Lot No. 463 involved in the present controversy, and there being no
showing that the same has been acquired by any private person from the Government,
either by purchase or by grant, the property is and remains part of the public domain.


This is in accordance with the Regalian doctrine which holds that the state owns
all lands and waters of the public domain.
[17]
Thus, under Article XII, Section 2 of the
Constitution: 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.

Municipal corporations cannot appropriate to themselves public or government
lands without prior grant from the government.
[18]
Since Lot 736 is owned by the state,
the Sangguniang Bayan of Binmaley exceeded its authority in passing Resolution Nos.
104 and 105. Thus, Resolution Nos. 104 and 105 are void and consequently, the
contract of lease between the Municipality of Binmaley and the Rural Bank of Anda
over a portion of Lot 736 is also void.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 15
October 2001 and the Resolution dated 23 August 2002 of the Court of Appeals.

SO ORDERED.
G.R. No. L-30389 December 27, 1972
PEDRO LEE HONG HOK, SIMEON LEE HONG HOK, ROSITA LEE HONG HOK and
LEONCIO LEE HONG HOK,petitioners,
vs.
ANIANO DAVID, THE HON. SECRETARY OF AGRICULTURE AND NATURAL
RESOURCES, THE DIRECTOR OF LANDS and COURT OF APPEALS, respondents.
Augusto A. Pardalis for petitioners.
Luis General, Jr. for respondent Aniano David.
Office of the Solicitor General for other respondents.

FERNANDO, J.:p
Petitioners
1
in this appeal by certiorari would have us reverse a decision of respondent
Court of Appeals affirming a lower court judgment dismissing their complaint to have
the Torrens Title
2
of respondent Aniano David declared null and void. What makes the
task for petitioners quite difficult is that their factual support for their pretension to
ownership of such disputed lot through accretion was rejected by respondent Court of
Appeals. Without such underpinning, they must perforce rely on a legal theory, which,
to put it mildly, is distinguished by unorthodoxy and is therefore far from persuasive.
A grant by the government through the appropriate public officials
3
exercising the
competence duly vested in them by law is not to be set at naught on the premise,
unexpressed but implied, that land not otherwise passing into private ownership may
not be disposed of by the state. Such an assumption is at war with settled principles of
constitutional law. It cannot receive our assent. We affirm.
The decision of respondent Court of Appeals following that of the lower court makes
clear that there is no legal justification for nullifying the right of respondent Aniano
David to the disputed lot arising from the grant made in his favor by respondent
officials. As noted in the decision under review, he "acquired lawful title thereby
pursuant to his miscellaneous sales application in accordance with which an order of
award and for issuance of a sales patent was made by the Director of Lands on June
18, 1958, covering Lot 2892 containing an area of 226 square meters, which is a
portion of Lot 2863 of the Naga Cadastre. On the basis of the order of award of the
Director of Lands the Undersecretary of Agriculture and Natural Resources issued on
August 26, 1959, Miscellaneous Sales Patent No. V-1209 pursuant to which OCT No.
510 was issued by the Register of Deeds of Naga City to defendant-appellee Aniano
David on October 21, 1959. According to the Stipulation of Facts, since the filing of the
sales application of Aniano David and during all the proceedings in connection with
said application, up to the actual issuance of the sales patent in his favor, the
plaintiffs-appellants did not put up any opposition or adverse claim thereto. This is
fatal to them because after the registration and issuance of the certificate and
duplicate certificate of title based on a public land patent, the land covered thereby
automatically comes under the operation of Republic Act 496 subject to all the
safeguards provided therein.... Under Section 38 of Act 496 any question concerning
the validity of the certificate of title based on fraud should be raised within one year
from the date of the issuance of the patent. Thereafter the certificate of title based
thereon becomes indefeasible.... In this case the land in question is not a private
property as the Director of Lands and the Secretary of Agriculture and Natural
Resources have always sustained the public character thereof for having been formed
by reclamation.... The only remedy therefore, available to the appellants is an action
for reconveyance on the ground of fraud. In this case we do not see any fraud
committed by defendant-appellant Aniano David in applying for the purchase of the
land involved through his Miscellaneous Sales Application No. MSA-V-26747, entered
in the records of the Bureau of Lands [Miscellaneous Sales] Entry No. V-9033, because
everything was done in the open. The notices regarding the auction sale of the land
were published, the actual sale and award thereof to Aniano David were not
clandestine but open and public official acts of an officer of the Government. The
application was merely a renewal of his deceased wife's application, and the said
deceased occupied the land since 1938."
4

On such finding of facts, the attempt of petitioners to elicit a different conclusion is
likely to be attended with frustration. The first error assigned predicated an accretion
having taken place, notwithstanding its rejection by respondent Court of Appeals,
would seek to disregard what was accepted by respondent Court as to how the
disputed lot came into being, namely by reclamation. It does not therefore call for any
further consideration. Neither of the other two errors imputed to respondent Court, as
to its holding that authoritative doctrines preclude a party other than the government
to dispute the validity of a grant and the recognition of the indefeasible character of a
public land patent after one year, is possessed of merit. Consequently, as set forth at
the outset, there is no justification for reversal.
1. More specifically, the shaft of criticism was let loose by petitioner aimed at this legal
proposition set forth in the exhaustive opinion of then Justice Salvador Esguerra of the
Court of Appeals, now a member of this Court: "There is, furthermore, a fatal defect of
parties to this action. Only the Government, represented by the Director of Lands, or
the Secretary of Agriculture and Natural Resources, can bring an action to cancel a
void certificate of title issued pursuant to a void patent (Lucas vs. Durian, 102 Phil.
1157; Director of Lands vs. Heirs of Ciriaco Carlo, G.R. No. L-12485, July 31, 1959).
This was not done by said officers but by private parties like the plaintiffs, who cannot
claim that the patent and title issued for the land involved are void since they are not
the registered owners thereof nor had they been declared as owners in the cadastral
proceedings of Naga Cadastre after claiming it as their private property. The cases cited
by appellants are not in point as they refer to private registered lands or public lands
over which vested rights have been acquired but notwithstanding such fact the Land
Department subsequently granted patents to public land applicants."
5
Petitioner ought
to have known better. The above excerpt is invulnerable to attack. It is a restatement of
a principle that dates back to Maninang v. Consolacion,
6
a 1908 decision. As was there
categorically stated: "The fact that the grant was made by the government is
undisputed. Whether the grant was in conformity with the law or not is a question
which the government may raise, but until it is raised by the government and set
aside, the defendant can not question it. The legality of the grant is a question between
the grantee and the government."
7
The above citation was repeated ipsissimis
verbis in Salazar v. Court of Appeals.
8
Bereft as petitioners were of the right of
ownership in accordance with the findings of the Court of Appeals, they cannot, in the
language of Reyes v. Rodriguez,
9
"question the [title] legally issued."
10
The second
assignment of error is thus disposed of.
2. As there are overtones indicative of skepticism, if not of outright rejection, of the
well-known distinction in public law between the government authority possessed by
the state which is appropriately embraced in the concept of sovereignty, and its
capacity to own or acquire property, it is not inappropriate to pursue the matter
further. The former comes under the heading of imperium and the latter of dominium.
The use of this term is appropriate with reference to lands held by the state in its
proprietary character. In such capacity, it may provide for the exploitation and use of
lands and other natural resources, including their disposition, except as limited by the
Constitution. Dean Pound did speak of the confusion that existed during the medieval
era between such two concepts, but did note the existence of res publicae as a corollary
to dominium."
11
As far as the Philippines was concerned, there was a recognition by
Justice Holmes in Cario v. Insular Government,
12
a case of Philippine origin, that
"Spain in its earlier decrees embodied the universal feudal theory that all lands were
held from the Crown...."
13
That was a manifestation of the concept of jura
regalia,
14
which was adopted by the present Constitution, ownership however being
vested in the state as such rather than the head thereof. What was stated by Holmes
served to confirm a much more extensive discussion of the matter in the leading case
of Valenton v. Murciano,
15
decided in 1904. One of the royal decrees cited was
incorporated in the Recopilacion de Leyes de las Indias
16
in these words: "We having
acquired full sovereignty over the Indies and all lands, territories, and possessions not
heretofore ceded away by our royal predecessors, or by us, or in our name, still
pertaining to the royal crown and patrimony, it is our will that all lands which are held
without proper and true deeds of grant be restored to us according as they belong to
us, in order that after reserving before all what to us or to our viceroys audiences, and
governors may seem necessary for public squares, ways, pastures, and commons in
those places which are peopled, taking into consideration not only their present
condition, but also their future and their probable increase, and after distributing to
the natives what may be necessary for tillage and pasturage, confirming them in what
they now have and giving them more if necessary, all the rest of said lands may remain
free and unencumbered for us to dispose of as we may wish."
17

It could therefore be affirmed in Montano v. Insular Government"
18
that "as to the
unappropriated public lands constituting the public domain the sole power of
legislation is vested in Congress, ..."
19
They continue to possess that character until
severed therefrom by state grant.
20
Where, as in this case, it was found by the Court
of Appeals that the disputed lot was the result of reclamation, its being correctly
categorized as public land is undeniable.
21
What was held in Heirs of Datu Pendatun v.
Director of Lands
22
finds application. Thus: "There being no evidence whatever that the
property in question was ever acquired by the applicants or their ancestors either by
composition title from the Spanish Government or by possessory information title or by
any other means for the acquisition of public lands, the property must be held to be
public domain."
23
For it is well-settled "that no public land can be acquired by private
persons without any grant, express or implied, from the government."
24
It is
indispensable then that there be a showing of a title from the state or any other mode
of acquisition recognized by law.
25
The most recent restatement of the doctrine, found
in an opinion of Justice J.B.L. Reyes, follows:
26
"The applicant, having failed to
establish his right or title over the northern portion of Lot No. 463 involved in the
present controversy, and there being no showing that the same has been acquired by
any private person from the Government, either by purchase or by grant, the property
is and remains part of the public domain."
27
To repeat, the second assignment of error
is devoid of merit.
3. The last error assigned would take issue with this portion of the opinion of Justice
Esguerra: "According to the Stipulation of Facts, since the filing of the sales application
of Aniano David and during all the proceedings in connection with said application, up
to the actual issuance of the sales patent in his favor, the
plaintiffs-appellants did not put up any opposition or adverse claim thereto. This is
fatal to them because after the registration and issuance of the certificate and
duplicate certificate of title based on a public land patent, the land covered thereby
automatically comes under the operation of Republic Act 496 subject to all the
safeguards provided therein ... Under Section 38 of Act 496 any question concerning
the validity of the certificate of title based on fraud should be raised within one year
from the date of the issuance of the patent. Thereafter the certificate of title based
thereon becomes indefeasible ..."
28
Petitioners cannot reconcile themselves to the view
that respondent David's title is impressed with the quality of indefeasibility. In thus
manifesting such an attitude, they railed to accord deference to controlling precedents.
As far back as 1919, in Aquino v. Director of
Lands,
29
Justice Malcolm, speaking for the Court, stated: "The proceedings under the
Land Registration Law and under the provisions of Chapter VI of the Public Land Law
are the same in that both are against the whole world, both take the nature of judicial
proceedings, and for both the decree of registration issued is conclusive and
final."
30
Such a view has been followed since then.
31
The latest case in point
is Cabacug v. Lao.
32
There is this revealing excerpt appearing in that decision: "It is
said, and with reason, that a holder of a land acquired under a free patent is more
favorably situated than that of an owner of registered property. Not only does a free
patent have a force and effect of a Torrens Title, but in addition the person to whom it
is granted has likewise in his favor the right to repurchase within a period of five
years."
33
It is quite apparent, therefore, that petitioners' stand is legally indefensible.
WHEREFORE, the decision of respondent Court of Appeals of January 31, 1969 and
its resolution of March 14, 1969 are affirmed. With costs against petitioners-
appellants.



EN BANC
[G.R. No. 135385. December 6, 2000]
ISAGANI CRUZ and CESAR EUROPA, petitioners, vs. SECRETARY OF
ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF BUDGET
AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE
NATIONAL COMMISSION ON INDIGENOUS PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA,
EDTAMI MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM
TUGAS, ALFREMO CARPIANO, LIBERATO A. GABIN, MATERNIDAD M.
COLAS, NARCISA M. DALUPINES, BAI KIRAM-CONNIE SATURNO, BAE
MLOMO-BEATRIZ T. ABASALA, DATU BALITUNGTUNG-ANTONIO D.
LUMANDONG, DATU MANTUMUKAW TEOFISTO SABASALES, DATU
EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN, TIMUAY
JOSE ANOY, TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B.
ENDING, DATU SAHAMPONG MALANAW VI, DATU BEN PENDAO
CABIGON, BAI NANAPNAY-LIZA SAWAY, BAY INAY DAYA-MELINDA S.
REYMUNDO, BAI TINANGHAGA HELINITA T. PANGAN, DATU
MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY,
VICKY MAKAY, LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA
GASPAR, MANUEL S. ONALAN, MIA GRACE L. GIRON, ROSEMARIE G. PE,
BENITO CARINO, JOSEPH JUDE CARANTES, LYNETTE CARANTES-
VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING DOMULOT,
ANDRES MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO CAYETANO,
CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ,
RODOLFO C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T.
DAVI, PERFECTO B. GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN,
OSCAR DALUNHAY, RICO O. SULATAN, RAFFY MALINDA, ALFREDO
ABILLANOS, JESSIE ANDILAB, MIRLANDO H. MANGKULINTAS, SAMIE
SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO
S. LIESES, FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY,
LEONARDA SAWAY, JIMMY UGYUB, SALVADOR TIONGSON, VENANCIO
APANG, MADION MALID, SUKIM MALID, NENENG MALID,
MANGKATADONG AUGUSTO DIANO, JOSEPHINE M. ALBESO, MORENO
MALID, MARIO MANGCAL, FELAY DIAMILING, SALOME P. SARZA,
FELIPE P. BAGON, SAMMY SALNUNGAN, ANTONIO D. EMBA, NORMA
MAPANSAGONOS, ROMEO SALIGA, SR., JERSON P. GERADA, RENATO T.
BAGON, JR., SARING MASALONG, SOLEDAD M. GERARDA, ELIZABETH
L. MENDI, MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS
MARICEL MALID, represented by her father CORNELIO MALID,
MARCELINO M. LADRA, represented by her father MONICO D. LADRA,
JENNYLYN MALID, represented by her father TONY MALID, ARIEL M.
EVANGELISTA, represented by her mother LINAY BALBUENA, EDWARD
M. EMUY, SR., SUSAN BOLANIO, OND, PULA BATO BLAAN TRIBAL
FARMERS ASSOCIATION, INTER-PEOPLES EXCHANGE, INC. and
GREEN FORUM-WESTERN VISAYAS, intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE
CONSERVATION OF NATURAL RESOURCES, INC., intervenor.
R E S O L U T I O N
PER CURIAM:
Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and
mandamus as citizens and taxpayers, assailing the constitutionality of certain
provisions of Republic Act No. 8371 (R.A. 8371), otherwise known as the Indigenous
Peoples Rights Act of 1997 (IPRA), and its Implementing Rules and Regulations
(Implementing Rules).
In its resolution of September 29, 1998, the Court required respondents to
comment.
[1]
In compliance, respondents Chairperson and Commissioners of the
National Commission on Indigenous Peoples (NCIP), the government agency created
under the IPRA to implement its provisions, filed on October 13, 1998 their Comment
to the Petition, in which they defend the constitutionality of the IPRA and pray that the
petition be dismissed for lack of merit.
On October 19, 1998, respondents Secretary of the Department of Environment
and Natural Resources (DENR) and Secretary of the Department of Budget and
Management (DBM) filed through the Solicitor General a consolidated Comment. The
Solicitor General is of the view that the IPRA is partly unconstitutional on the ground
that it grants ownership over natural resources to indigenous peoples and prays that
the petition be granted in part.
On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier,
one of the authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986
Constitutional Commission, and the leaders and members of 112 groups of indigenous
peoples (Flavier, et. al), filed their Motion for Leave to Intervene. They join the NCIP in
defending the constitutionality of IPRA and praying for the dismissal of the petition.
On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a
Motion to Intervene and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is
an expression of the principle of parens patriae and that the State has the
responsibility to protect and guarantee the rights of those who are at a serious
disadvantage like indigenous peoples. For this reason it prays that the petition be
dismissed.
On March 23, 1999, another group, composed of the Ikalahan Indigenous People
and the Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon,
et al.), filed a motion to Intervene with attached Comment-in-Intervention. They agree
with the NCIP and Flavier, et al. that IPRA is consistent with the Constitution and pray
that the petition for prohibition and mandamus be dismissed.
The motions for intervention of the aforesaid groups and organizations were
granted.
Oral arguments were heard on April 13, 1999. Thereafter, the parties and
intervenors filed their respective memoranda in which they reiterate the arguments
adduced in their earlier pleadings and during the hearing.
Petitioners assail the constitutionality of the following provisions of the IPRA and
its Implementing Rules on the ground that they amount to an unlawful deprivation of
the States ownership over lands of the public domain as well as minerals and other
natural resources therein, in violation of the regalian doctrine embodied in Section 2,
Article XII of the Constitution:
(1) Section 3(a) which defines the extent and coverage of ancestral
domains, and Section 3(b) which, in turn, defines ancestral lands;
(2) Section 5, in relation to section 3(a), which provides that ancestral
domains including inalienable public lands, bodies of water, mineral
and other resources found within ancestral domains are private but
community property of the indigenous peoples;
(3) Section 6 in relation to section 3(a) and 3(b) which defines the
composition of ancestral domains and ancestral lands;
(4) Section 7 which recognizes and enumerates the rights of the indigenous
peoples over the ancestral domains;
(5) Section 8 which recognizes and enumerates the rights of the indigenous
peoples over the ancestral lands;
(6) Section 57 which provides for priority rights of the indigenous peoples
in the harvesting, extraction, development or exploration of minerals
and other natural resources within the areas claimed to be their
ancestral domains, and the right to enter into agreements with
nonindigenous peoples for the development and utilization of natural
resources therein for a period not exceeding 25 years, renewable for not
more than 25 years; and
(7) Section 58 which gives the indigenous peoples the responsibility to
maintain, develop, protect and conserve the ancestral domains and
portions thereof which are found to be necessary for critical watersheds,
mangroves, wildlife sanctuaries, wilderness, protected areas, forest
cover or reforestation.
[2]

Petitioners also content that, by providing for an all-encompassing definition of
ancestral domains and ancestral lands which might even include private lands
found within said areas, Sections 3(a) and 3(b) violate the rights of private
landowners.
[3]

In addition, petitioners question the provisions of the IPRA defining the powers
and jurisdiction of the NCIP and making customary law applicable to the settlement of
disputes involving ancestral domains and ancestral lands on the ground that these
provisions violate the due process clause of the Constitution.
[4]

These provisions are:
(1) sections 51 to 53 and 59 which detail the process of delineation and
recognition of ancestral domains and which vest on the NCIP the sole
authority to delineate ancestral domains and ancestral lands;
(2) Section 52[i] which provides that upon certification by the NCIP that a
particular area is an ancestral domain and upon notification to the
following officials, namely, the Secretary of Environment and Natural
Resources, Secretary of Interior and Local Governments, Secretary of
Justice and Commissioner of the National Development Corporation, the
jurisdiction of said officials over said area terminates;
(3) Section 63 which provides the customary law, traditions and practices
of indigenous peoples shall be applied first with respect to property
rights, claims of ownership, hereditary succession and settlement of
land disputes, and that any doubt or ambiguity in the interpretation
thereof shall be resolved in favor of the indigenous peoples;
(4) Section 65 which states that customary laws and practices shall be
used to resolve disputes involving indigenous peoples; and
(5) Section 66 which vests on the NCIP the jurisdiction over all claims and
disputes involving rights of the indigenous peoples.
[5]

Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP
Administrative Order No. 1, series of 1998, which provides that the administrative
relationship of the NCIP to the Office of the President is characterized as a lateral but
autonomous relationship for purposes of policy and program coordination. They
contend that said Rule infringes upon the Presidents power of control over executive
departments under Section 17, Article VII of the Constitution.
[6]

Petitioners pray for the following:
(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66
and other related provisions of R.A. 8371 are unconstitutional and
invalid;
(2) The issuance of a writ of prohibition directing the Chairperson and
Commissioners of the NCIP to cease and desist from implementing the
assailed provisions of R.A. 8371 and its Implementing Rules;
(3) The issuance of a writ of prohibition directing the Secretary of the
Department of Environment and Natural Resources to cease and desist
from implementing Department of Environment and Natural Resources
Circular No. 2, series of 1998;
(4) The issuance of a writ of prohibition directing the Secretary of Budget
and Management to cease and desist from disbursing public funds for
the implementation of the assailed provisions of R.A. 8371; and
(5) The issuance of a writ of mandamus commanding the Secretary of
Environment and Natural Resources to comply with his duty of carrying
out the States constitutional mandate to control and supervise the
exploration, development, utilization and conservation of Philippine
natural resources.
[7]

After due deliberation on the petition, the members of the Court voted as follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which
the Chief Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining
the validity of the challenged provisions of R.A. 8371. Justice Puno also filed a
separate opinion sustaining all challenged provisions of the law with the exception of
Section 1, Part II, Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules
and Regulations Implementing the IPRA, and Section 57 of the IPRA which he
contends should be interpreted as dealing with the large-scale exploitation of natural
resources and should be read in conjunction with Section 2, Article XII of the 1987
Constitution. On the other hand, Justice Mendoza voted to dismiss the petition solely
on the ground that it does not raise a justiciable controversy and petitioners do not
have standing to question the constitutionality of R.A. 8371.
Seven (7) other members of the Court voted to grant the petition. Justice
Panganiban filed a separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7
(a)(b), 8, and related provisions of R.A. 8371 are unconstitutional. He reserves
judgment on the constitutionality of Sections 58, 59, 65, and 66 of the law, which he
believes must await the filing of specific cases by those whose rights may have been
violated by the IPRA. Justice Vitug also filed a separate opinion expressing the view
that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo,
Buena, Gonzaga-Reyes, and De Leon join in the separate opinions of Justices
Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary majority was not
obtained, the case was redeliberated upon. However, after redeliberation, the voting
remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil
Procedure, the petition is DISMISSED.
Attached hereto and made integral parts thereof are the separate opinions of
Justices Puno, Vitug, Kapunan, Mendoza, and Panganiban. SO ORDERED.
Carino v. Insular Government, 212 U.S. 449 (1909)
Carino v. Insular Government of the Philippine Islands
No. 72
Argued January 13, 1909
Decided February 23, 1909
212 U.S. 449
ERROR TO THE SUPREME COURT
OF THE PHILIPPINE ISLANDS
Syllabus
Writ of error is the general, and appeal the exceptional, method of bringing Cases to
this Court. The latter method is in the main confined to equity cases, and the former is
proper to bring up a judgment of the Supreme Court of the Philippine Islands affirming
a judgment of the Court of Land Registration dismissing an application for registration
of land.
Although a province may be excepted from the operation of Act No. 926 of 1903 of the
Philippine Commission which provides for the registration and perfecting of new titles,
one who actually owns property in such province is entitled to registration under Act
No. 496 of 1902, which applies to the whole archipelago.
While, in legal theory and as against foreign nations, sovereignty is absolute,
practically it is a question of strength and of varying degree, and it is for a new
sovereign to decide how far it will insist upon theoretical relations of the subject to the
former sovereign and how far it will recognize actual facts.
Page 212 U. S. 450
The acquisition of the Philippines was not for the purpose of acquiring the lands
occupied by the inhabitants, and under the Organic Act of July 1, 1902, c. 1369, 32
Stat. 691, providing that property rights are to be administered for the benefit of the
inhabitants, one who actually owned land for many years cannot be deprived of it for
failure to comply with certain ceremonies prescribed either by the acts of the Philippine
Commission or by Spanish law.
The Organic Act of the Philippines made a bill of rights embodying safeguards of the
Constitution, and, like the Constitution, extends those safeguards to all.
Every presumption of ownership is in favor of one actually occupying land for many
years, and against the government which seeks to deprive him of it, for failure to
comply with provisions of a subsequently enacted registration act.
Title by prescription against the crown existed under Spanish law in force in the
Philippine Islands prior to their acquisition by the United States, and one occupying
land in the Province of Benguet for more than fifty years before the Treaty of Paris is
entitled to the continued possession thereof.
7 Phil. 132 reversed.
The facts are stated in the opinion.
Page 212 U. S. 455
MR. JUSTICE HOLMES delivered the opinion of the Court.
This was an application to the Philippine Court of Land Registration for the registration
of certain land. The application was granted by the court on March 4, 1904. An appeal
was taken to the Court of First Instance of the Province of Benguet on behalf of the
government of the Philippines, and also on behalf of the United States, those
governments having taken possession of the property for public and military purposes.
The Court of First Instance found the facts and dismissed the application upon
grounds of law. This judgment was affirmed by the supreme court, 7 Phil. 132, and the
case then was brought here by writ of error.
The material facts found are very few. The applicant and plaintiff in error is an Igorot of
the Province of Benguet, where the land lies. For more than fifty years before the
Treaty of
Page 212 U. S. 456
Paris, April 11, 1899, as far back as the findings go, the plaintiff and his ancestors had
held the land as owners. His grandfather had lived upon it, and had maintained fences
sufficient for the holding of cattle, according to the custom of the country, some of the
fences, it seems, having been of much earlier date. His father had cultivated parts and
had used parts for pasturing cattle, and he had used it for pasture in his turn. They all
had been recognized as owners by the Igorots, and he had inherited or received the
land from his father in accordance with Igorot custom. No document of title, however,
had issued from the Spanish Crown, and although, in 1893-1894 and again in 1896-
1897, he made application for one under the royal decrees then in force, nothing
seems to have come of it, unless, perhaps, information that lands in Benguet could not
be conceded until those to be occupied for a sanatorium, etc., had been designated -- a
purpose that has been carried out by the Philippine government and the United States.
In 1901, the plaintiff filed a petition, alleging ownership, under the mortgage law, and
the lands were registered to him, that process, however, establishing only a possessory
title, it is said.
Before we deal with the merits, we must dispose of a technical point. The government
has spent some energy in maintaining that this case should have been brought up by
appeal, and not by writ of error. We are of opinion, however, that the mode adopted
was right. The proceeding for registration is likened to bills in equity to quiet title, but
it is different in principle. It is a proceeding in rem under a statute of the type of the
Torrens Act, such as was discussed in Tyler v. Court of Registration, 175 Mass. 71. It is
nearer to law than to equity, and is an assertion of legal title; but we think it
unnecessary to put it into either pigeon hole. A writ of error is the general method of
bringing cases to this Court, an appeal the exception, confined to equity in the main.
There is no reason for not applying the general rule to this case. Ormsby v. Webb, 134
U. S. 47, 134 U. S. 65; Campbell v. Porter, 162 U. S. 478; Metropolitan R. Co. v. District
of Columbia, 195 U. S. 322.
Page 212 U. S. 457
Another preliminary matter may as well be disposed of here. It is suggested that, even
if the applicant have title, he cannot have it registered, because the Philippine
Commission's Act No. 926, of 1903, excepts the Province of Benguet among others
from its operation. But that act deals with the acquisition of new titles by homestead
entries, purchase, etc., and the perfecting of titles begun under the Spanish law. The
applicant's claim is that he now owns the land, and is entitled to registration under the
Philippine Commission's Act No. 496, of 1902, which established a court for that
purpose with jurisdiction "throughout the Philippine Archipelago," 2, and authorized
in general terms applications to be made by persons claiming to own the legal estate in
fee simple, as the applicant does. He is entitled to registration if his claim of ownership
can be maintained.
We come, then, to the question on which the case was decided below -- namely,
whether the plaintiff owns the land. The position of the government, shortly stated, is
that Spain assumed, asserted, and had title to all the land in the Philippines except so
far as it saw fit to permit private titles to be acquired; that there was no prescription
against the Crown, and that, if there was, a decree of June 25, 1880, required
registration within a limited time to make the title good; that the plaintiff's land was
not registered, and therefore became, if it was not always, public land; that the United
States succeeded to the title of Spain, and so that the plaintiff has no rights that the
Philippine government is bound to respect.
If we suppose for the moment that the government's contention is so far correct that
the Crown of Spain in form asserted a title to this land at the date of the Treaty of
Paris, to which the United States succeeded, it is not to be assumed without argument
that the plaintiff's case is at an end. It is true that Spain, in its earlier decrees,
embodied the universal feudal theory that all lands were held from the Crown, and
perhaps the general attitude of conquering nations toward people not recognized as
entitled to the treatment accorded to those
Page 212 U. S. 458
in the same zone of civilization with themselves. It is true also that, in legal theory,
sovereignty is absolute, and that, as against foreign nations, the United States may
assert, as Spain asserted, absolute power. But it does not follow that, as against the
inhabitants of the Philippines, the United States asserts that Spain had such power.
When theory is left on one side, sovereignty is a question of strength, and may vary in
degree. How far a new sovereign shall insist upon the theoretical relation of the
subjects to the head in the past, and how far it shall recognize actual facts, are
matters for it to decide.
The Province of Benguet was inhabited by a tribe that the Solicitor General, in his
argument, characterized as a savage tribe that never was brought under the civil or
military government of the Spanish Crown. It seems probable, if not certain, that the
Spanish officials would not have granted to anyone in that province the registration to
which formerly the plaintiff was entitled by the Spanish laws, and which would have
made his title beyond question good. Whatever may have been the technical position of
Spain, it does not follow that, in the view of the United States, he had lost all rights
and was a mere trespasser when the present government seized his land. The
argument to that effect seems to amount to a denial of native titles throughout an
important part of the island of Luzon, at least, for the want of ceremonies which the
Spaniards would not have permitted and had not the power to enforce.
The acquisition of the Philippines was not like the settlement of the white race in the
United States. Whatever consideration may have been shown to the North American
Indians, the dominant purpose of the whites in America was to occupy the land. It is
obvious that, however stated, the reason for our taking over the Philippines was
different. No one, we suppose, would deny that, so far as consistent with paramount
necessities, our first object in the internal administration of the islands is to do justice
to the natives, not to exploit their country for private gain. By the Organic Act of July
1, 1902, c. 1369, 12, 32 Stat. 691, all the property and rights acquired there by the
Page 212 U. S. 459
United States are to be administered "for the benefit of the inhabitants thereof." It is
reasonable to suppose that the attitude thus assumed by the United States with regard
to what was unquestionably its own is also its attitude in deciding what it will claim for
its own. The same statute made a bill of rights, embodying the safeguards of the
Constitution, and, like the Constitution, extends those safeguards to all. It provides
that
"no law shall be enacted in said islands which shall deprive any person of life, liberty,
or property without due process of law, or deny to any person therein the equal
protection of the laws."
5. In the light of the declaration that we have quoted from 12, it is hard to believe
that the United States was ready to declare in the next breath that "any person" did
not embrace the inhabitants of Benguet, or that it meant by "property" only that which
had become such by ceremonies of which presumably a large part of the inhabitants
never had heard, and that it proposed to treat as public land what they, by native
custom and by long association -- one of the profoundest factors in human thought --
regarded as their own.
It is true that, by 14, the government of the Philippines is empowered to enact rules
and prescribe terms for perfecting titles to public lands where some, but not all,
Spanish conditions had been fulfilled, and to issue patents to natives for not more
than sixteen hectares of public lands actually occupied by the native or his ancestors
before August 13, 1898. But this section perhaps might be satisfied if confined to
cases where the occupation was of land admitted to be public land, and had not
continued for such a length of time and under such circumstances as to give rise to
the understanding that the occupants were owners at that date. We hesitate to
suppose that it was intended to declare every native who had not a paper title a
trespasser, and to set the claims of all the wilder tribes afloat. It is true again that
there is excepted from the provision that we have quoted as to the administration of
the property and rights acquired by the United States such land and property as shall
be designated by the President for military or other reservations,
Page 212 U. S. 460
as this land since has been. But there still remains the question what property and
rights the United States asserted itself to have acquired.
Whatever the law upon these points may be, and we mean to go no further than the
necessities of decision demand, every presumption is and ought to be against the
government in a case like the present. It might, perhaps, be proper and sufficient to
say that when, as far back as testimony or memory goes, the land has been held by
individuals under a claim of private ownership, it will be presumed to have been held
in the same way from before the Spanish conquest, and never to have been public
land. Certainly, in a case like this, if there is doubt or ambiguity in the Spanish law,
we ought to give the applicant the benefit of the doubt. Whether justice to the natives
and the import of the organic act ought not to carry us beyond a subtle examination of
ancient texts, or perhaps even beyond the attitude of Spanish law, humane though it
was, it is unnecessary to decide. If, in a tacit way, it was assumed that the wild tribes
of the Philippines were to be dealt with as the power and inclination of the conqueror
might dictate, Congress has not yet sanctioned the same course as the proper one "for
the benefit of the inhabitants thereof."
If the applicant's case is to be tried by the law of Spain, we do not discover such clear
proof that it was bad by that law as to satisfy us that he does not own the land. To
begin with, the older decrees and laws cited by the counsel for the plaintiff in error
seem to indicate pretty clearly that the natives were recognized as owning some lands,
irrespective of any royal grant. In other words, Spain did not assume to convert all the
native inhabitants of the Philippines into trespassers, or even into tenants at will. For
instance, Book 4, Title 12, Law 14 of the Recopilacion de Leyes de las Indias, cited for
a contrary conclusion in Valenton v. Murciano, 3 Phil. 537, while it commands viceroys
and others, when it seems proper, to call for the exhibition of grants, directs them to
confirm those who hold by good grants or justa prescripcion. It is true that it
Page 212 U. S. 461
begins by the characteristic assertion of feudal overlordship and the origin of all titles
in the King or his predecessors. That was theory and discourse. The fact was that titles
were admitted to exist that owed nothing to the powers of Spain beyond this
recognition in their books.
Prescription is mentioned again in the royal cedula of October 15, 1754, cited in 3 Phil.
546:
"Where such possessors shall not be able to produce title deeds, it shall be sufficient if
they shall show that ancient possession, as a valid title by prescription."
It may be that this means possession from before 1700; but, at all events, the principle
is admitted. As prescription, even against Crown lands, was recognized by the laws of
Spain, we see no sufficient reason for hesitating to admit that it was recognized in the
Philippines in regard to lands over which Spain had only a paper sovereignty.
The question comes, however, on the decree of June 25, 1880, for the adjustment of
royal lands wrongfully occupied by private individuals in the Philippine Islands. This
begins with the usual theoretic assertion that, for private ownership, there must have
been a grant by competent authority; but instantly descends to fact by providing that,
for all legal effects, those who have been in possession for certain times shall be
deemed owners. For cultivated land, twenty years, uninterrupted, is enough. For
uncultivated, thirty. Art. 5. So that, when this decree went into effect, the applicant's
father was owner of the land by the very terms of the decree. But, it is said, the object
of this law was to require the adjustment or registration proceedings that it described,
and in that way to require everyone to get a document of title or lose his land. That
purpose may have been entertained, but it does not appear clearly to have been
applicable to all. The regulations purport to have been made "for the adjustment of
royal lands wrongfully occupied by private individuals." (We follow the translation in
the government's brief.) It does not appear that this land ever was royal land or
wrongfully occupied. In Article 6, it is provided that
"interested parties not included within the two preceding
Page 212 U. S. 462
articles [the articles recognizing prescription of twenty and thirty years] may legalize
their possession, and thereby acquire the full ownership of the said lands, by means of
adjustment proceedings, to be conducted in the following manner."
This seems, by its very terms, not to apply to those declared already to be owners by
lapse of time. Article 8 provides for the case of parties not asking an adjustment of the
lands of which they are unlawfully enjoying the possession, within one year, and
threatens that the treasury "will reassert the ownership of the state over the lands,"
and will sell at auction such part as it does not reserve. The applicant's possession was
not unlawful, and no attempt at any such proceedings against him or his father ever
was made. Finally, it should be noted that the natural construction of the decree is
confirmed by the report of the council of state. That report puts forward as a reason for
the regulations that, in view of the condition of almost all property in the Philippines, it
is important to fix its status by general rules on the principle that the lapse of a fixed
period legalizes completely all possession, recommends in two articles twenty and
thirty years, as adopted in the decree, and then suggests that interested parties not
included in those articles may legalize their possession and acquire ownership by
adjustment at a certain price.
It is true that the language of Articles 4 and 5 attributes title to those "who may prove"
possession for the necessary time, and we do not overlook the argument that this
means may prove in registration proceedings. It may be that an English conveyancer
would have recommended an application under the foregoing decree, but certainly it
was not calculated to convey to the mind of an Igorot chief the notion that ancient
family possessions were in danger, if he had read every word of it. The words "may
prove" (acrediten), as well, or better, in view of the other provisions, might be taken to
mean when called upon to do so in any litigation. There are indications that
registration was expected from all, but none sufficient to show that, for want of it,
ownership actually gained would be lost.
Page 212 U. S. 463
The effect of the proof, wherever made, was not to confer title, but simply to establish
it, as already conferred by the decree, if not by earlier law. The royal decree of February
13, 1894, declaring forfeited titles that were capable of adjustment under the decree of
1880, for which adjustment had not been sought, should not be construed as a
confiscation, but as the withdrawal of a privilege. As a matter of fact, the applicant
never was disturbed. This same decree is quoted by the Court of Land Registration for
another recognition of the common law prescription of thirty years as still running
against alienable Crown land.
It will be perceived that the rights of the applicant under the Spanish law present a
problem not without difficulties for courts of a different legal tradition. We have
deemed it proper on that account to notice the possible effect of the change of
sovereignty and the act of Congress establishing the fundamental principles now to be
observed. Upon a consideration of the whole case, we are of opinion that law and
justice require that the applicant should be granted what he seeks, and should not be
deprived of what, by the practice and belief of those among whom he lived, was his
property, through a refined interpretation of an almost forgotten law of Spain.
Judgment reversed.




G.R. No. 5246 September 16, 1910
MANUELA GREY ALBA, ET AL., petitioners-appellants,
vs.
ANACLETO R. DE LA CRUZ, objector-appellee.
Ramon Salinas, for appellants.
Aniceto G. Reyes, for appellee.
TRENT, J.:
These petitioners, Manuela, Jose, Juan, and Francisco, surnamed Grey y Alba, are the
only heirs of Doa Segunda Alba Clemente and Honorato Grey, deceased. Remedios
Grey y Alba, a sister of the petitioners, was married on the 21st day of March, 1903, to
Vicente Reyes and died on the 13th of July, 1905, without leaving any heirs except her
husband. The four petitioners, as coowners, sought to have registered the following-
described property:
A parcel of land situated in the barrio of Talampas, municipality of Baliuag,
Province of Bulacan, upon which are situated three houses and one camarin
of light material, having a superficial area of 52 hectares, 51 ares, and 22
centares; bounded on the north by the highway (calzada) of Talampas and
the lands of Rita Ruiz Mateo; on the east by the lands of the said Rita Ruiz
Mateo, Hermenegildo Prado, Policarpo de Jesus, and a stream called Sapang
Buslut; on the south by the same stream and the lands of the capellania; and
on the west by the stream called Sapang Buslut, and the lands of Vicente de
la Cruz, Jose Camacho and Domingo Ruiz Mateo.
This parcel of agricultural land is used for the raising of rice and sugar cane and is
assessed at $1,000 United States currency. The petition, which was filed on the 18th
of December, 1906, was accompanied by a plan and technical description of the above-
described parcel of land.
After hearing the proofs presented, the court entered, on the 12th of February, 1908, a
decree in accordance with the provisions of paragraph 6 of section 54 of Act No. 926,
directing that the land described in the petitioner be registered in the names of the
four petitioners, as coowners, subject to the usufructuary right of Vicente Reyes,
widower of Remedios Grey.
On the 16th of June, 1908, Anacleto Ratilla de la Cruz filed a motion in the Court of
Land Registration asking for a revision of the case, including the decision, upon the
ground that he is the absolute owner of the two parcels of land which are described in
said motion, and which, according to his allegations, are included in the lands decreed
to the petitioners. He alleged that the decree of February 12, 1908, was obtained
maliciously and fraudulently by the petitioners, thereby depriving him of said two
parcels of land. He further alleged that he was the absolute owner of the two parcels of
land, having inherited them from his father, Baldomero R. de la Cruz, who had a state
grant for the same. He therefore asked, under the provisions of section 38 of the Land
Registration Act (No. 496), a revision of the case, and that the said decree be modified
so as to exclude the two parcels of land described in said motion. The Land Court upon
this motion reopened the case, and after hearing the additional evidence presented by
both parties, rendered, on the 23rd of November, 1908, its decision modifying the
former decree by excluding from the same the two parcels of land claimed by Anacleto
Ratilla de la Cruz. From this decision and judgment the petitioners appealed and now
insist, first, that the trial court erred in reopening the case and modifying its decree
dated the 12th of February, 1908, for the reason that said decree was not obtained by
means of fraud; and, second, that the court erred in holding that the two parcels of
land described in the appellee's motion are not their property.
It was agreed by counsel that the two small parcels now in dispute forma part of the
land described in the petition and were included in the decree of February 12, 1908,
and that the petitioners are the owners of the remainder of the land described in the
said decree.
The petitioners inherited this land from their parents, who acquired the same,
including the two small parcels in question, by purchase, as is evidenced by a public
document dated the 26th of November, 1864, duly executed before Francisco
Iriarte, alcalde mayor and judge of the Court of First Instance of the Province of
Bulacan.
Baldomero R. de la Cruz, father of the appellee, obtained in march, 1895, a state grant
for several parcels of land, including the two parcels in question. This grant was duly
inscribed in the old register of property in Bulacan on the 6th of April of the same year.
It is admitted that at the time the appellants presented their petition in this case the
appellee was occupying the two parcels of land now in question. It is also admitted that
the name of the appellee does not appear in the said petition as an occupant of the
said two parcels. The petitioners insist that the appellee was occupying these parcels
as their tenant and for this reason they did not include his name in their petition, as
an occupant, while the appellee contends that he was occupying the said parcels as
the absolute owner under the estate grant by inheritance.
The court below held that the failure on the part of the petitioners to include the name
of the appellee in their petition, as an occupant of these two parcels of land, was a
violation of section 21 of Act No. 496, and that this constituted fraud within the
meaning of section 38 of said Land Registration Act. The trial court further held that
the grant from the estate should prevail over the public document of purchase of 1864.
The mother of the petitioners died on November 15, 1881; their father died prior to
that time. Manuela, the oldest of the petitioners, was about six years of age when their
mother died. So these children were minors when the father of the appellee obtained
the estate grant.
On the 13th of June, 1882, Jose Grey, uncle and representative of the petitioners, who
were then minors, rented the land owned by the petitioners' deceased parents to one
Irineo Jose for a period of three years. On the 23d of March, 1895, the said Jose Grey,
as the representative of the petitioners, rented the same land for a period of six years
to Baldomero R. de la Cruz, father of the appellee. This rental contract was duly
executed in writing. This land was cultivated during these six years by Baldomero R.
de la Cruz and his children, one of whom is the appellee. On the 14th of December,
1905, Jose Grey, for himself and the other petitioners, rented the same land to
Estanislao R. de la Cruz for a period of two years. Estanislao de la Cruz on entering
into this rental contract with Jose Grey did so for himself and his brothers, one of
whom is the appellee. While the appellee admits that his father and brother entered
into these rental contracts and did, in fact, cultivate the petitioners' land, nevertheless
he insists that the two small parcels in question were not included in these contracts.
In the rental contract between the uncle of the petitioners and he father of the appellee
the land is not described. In the rental contract between Jose Grey, one of the
petitioners, and Estanislao R. de la Cruz, brother of the appellee, the two small parcels
of land in question are included, according to the description given therein. This was
found to be true by the court below, but the said court held that as this contract was
made by Estanislao R. de la Cruz it was not binding upon Anacleto R. de la Cruz, the
appellee.
The two small parcels of land in question were purchased by the parents of the
petitioners in 1864, as is evidenced by the public document of purchase and sale of
that year. The same two parcels of land are included in the state grant issued in favor
of Baldomero Ratilla de la Cruz in 1895. This grant was obtained after the death of the
petitioners' parents and while they were minors. So it is clear that the petitioners
honestly believed that the appellee was occupying the said parcels as their lessee at
the time they presented their application for registration. They did not act in bad faith,
nor with any fraudulent intent, when they omitted to include in their application the
name of the appellee as one of the occupants of the land. They believed that it was not
necessary nor required that they include in their application the names of their
tenants. Under these circumstances, did the court below commit an error in reopening
this case in June, 1908, after its decree had been entered in February of the same
year?
The application for the registration is to be in writing, signed and sworn to by the
applicant, or by some person duly authorized in his behalf. It is to contain an accurate
description of the land. It shall contain the name in full and the address of the
applicant, and also the names and addresses of all occupants of land and of all
adjoining owners, if known; and, if not known, it shall state what search has been
made to find them. In the form of notice given by statute, which shall be sworn to, the
applicant is required to state and set forth clearly all mortgages or encumbrances
affecting said land, if any, the rights and interests, legal or equitable, in the
possession, remainder, reversion, or expectancy of all persons, with their names in
full, together with their place of residence and post office addresses. Upon receipt of
the application the clerk shall cause notice of the filling to be published twice in the
Official Gazette. This published notice shall be directed to all persons appearing to
have an interest in the land sought to be registered and to the adjoining owners, and
also "to all whom it may concern." In addition to the notice in the Official Gazette the
Land Court shall, within seven days after said publication, cause a copy of the notice,
in Spanish, to be mailed by the clerk to every person named in the application whose
address is known; to cause a duly attested copy of the notice, in Spanish, to be posted
in a conspicuous place on every parcel of land included in the application, and in a
conspicuous place on the chief municipal building of the town in which the land is
situated. The court may also cause other or further notice of the application to be given
in such manner and to such persons as it may deem proper. The certificate of the clerk
that he has served the notice as directed by the court by publication or mailing shall
be conclusive proof of such service. Within the time allowed in the notices, if no person
appears and answers, the court may at once, upon motion of the applicant, no reason
to the contrary appearing, order a general default. By the description in the published
notice "to all whom it may concern," and by express provisions of law "all the word are
made parties defendant and shall be concluded by the default an order." If the court,
after hearing, finds that the applicant has title, as stated in his application, a decree or
registration shall be entered.
Every decree of registration shall bind the land and quiet title thereto, subject
only to the exceptions stated in the following section. It shall be conclusive
upon and against all persons, including the Insular Government, and all the
branches thereof, whether mentioned by name in the application, notice, or
citation, or included in the general description "to all whom it may
concern." Such decree shall not be opened by reason of the absence, infancy,
or other disability of any person affected thereby, nor by any proceedings in
any court for reversing judgments or decrees; subject, however, to the right of
any person deprived of land or of any estate or interest therein by decree of
registration obtained by fraud to file in the Court of Land Registration a
petition for review within one year. . . . (Sec. 38 of Act No. 496.)
The appellee is not included in any of the exceptions named in section 38 referred to
above.
It will be seen that the applicant is required to mention not only the outstanding
interest which he admits but also all claims of interest, though denied by him. By
express provision of law the world are made parties defendant by the description in the
notice "to all whom it may concern."
Although the appellee, occupying the two small parcels of land in question under the
circumstances as we have set forth, was not served with notice, he was made a party
defendant by publication; and the entering of a decree on the 12th of February, 1908,
must be held to be conclusive against all persons, including the appellee, whether his
(appellee's) name is mentioned in the application, notice, or citation.
The said decree of February 12, 1908, should not have been opened on account of the
absence, infancy, or other disability of any person affected thereby, and could have
been opened only on the ground that the said decree had been obtained by fraud. That
decree was not obtained by fraud on the part of the applicants, inasmuch as they
honestly believed that the appellee was occupying these two small parcels of land as
their tenant. One of the petitioner went upon the premises with the surveyor when the
original plan was made.
Proof of constructive fraud is not sufficient to authorize the Court of Land Registration
to reopen a case and modify its decree. Specific, intentional acts to deceive and deprive
anther of his right, or in some manner injure him, must be alleged and proved; that is,
there must be actual or positive fraud as distinguished from constructive fraud.
The question as to the meaning of the word "fraud" in the Australian statutes has been
frequently raised. Two distinctions have been noted by the Australian courts; the first
is the distinction between the meaning of the word "fraud" in the sections relating to
the conclusive effect of certificates of title, and its meaning in the sections relating to
the protection of bona fide purchasers from registered proprietors. The second is the
distinction between "legal," "equitable," or "constructive" fraud, and "actual" or "moral"
fraud. In none of the groups of the sections of the Australian statutes relating to the
conclusive effect of certificates of title, and in which fraud is referred to, is there any
express indication of the meaning of "fraud," with the sole exception of that of the
South Australian group. (Hogg on Australian Torrens System, p. 834.)
With regard to decisions on the sections relating to the conclusive effect of
certificates of title, it has been held in some cases that the "fraud" there
mentioned means actual or moral fraud, not merely constructive or legal
fraud. In other cases "fraud" has been said to include constructive, legal, and
every kind of fraud. In other cases, against, knowledge of other persons' right,
and the deliberate acquisition of registered title in the face of such knowledge,
has been held to be "fraud" which rendered voidable the certificates of title so
obtained; and voluntary ignorance is, for this purpose, the same as
knowledge. But in none of these three classes of cases was there absent the
element of intention to deprive another of just rights, which constitutes the
essential characteristics of actual as distinguished from legal-fraud. (Id., p.
835, and cases cited in notes Nos. 85, 86, 87, 88, and 89 at bottom of pages
835 and 836.)
By "fraud" is meant actual fraud-dishonesty of some sort. (Judgment of Privy Council
in Assets Co. vs. Mere Roihi, and Assets Co. vs. Panapa Waihopi, decided in March,
1905, cited by Hogg in his Supplementary Addendum to his work on Australian
Torrens System, supra.) The same meaning should be given to the word "fraud" used in
section 38 of our statutes (Act No. 496).
The question as to whether any particular transaction shows fraud, within the
meaning of the word as used in our statutes, will in each case be a question of fact. We
will not attempt to say what acts would constitutes this kind of fraud in other cases.
This must be determined from the fact an circumstances in each particular case. The
only question we are called upon to determine, and have determined, is whether or
not, under the facts and circumstances in this case, the petitioners did obtain the
decree of February 12, 1908, by means of fraud.
It might be urged that the appellee has been deprived of his property without due
process of law, in violation of section 5 of the Act of Congress of July 1, 1902, known
as the Philippine Bill," which provides "that no law shall be enacted in the said Islands
which shall deprive any person of life, liberty, or property without due process of law."
The Land Registration Act requires that all occupants be named in the petition and
given notice by registered mail. This did not do the appellee any good, as he was not
notified; but he was made a party defendant, as we have said, by means of the
publication "to all whom it may concern." If this section of the Act is to be upheld this
must be declared to be due process of law.
Before examining the validity of this part of the Act it might be well to note the history
and purpose of what is known as the "Torrens Land Registration System." This system
was introduced in South Australia by Sir Robert Torrens in 1857 and was there
worked out in its practicable form.
The main principle of registration is to make registered titles indefeasible. As we have
said, upon the presentation in the Court of Land Registration of an application for the
registration of the title to lands, under this system, the theory of the law is that all
occupants, adjoining owners, adverse claimants, and other interested persons are
notified of the proceedings, and have have a right to appear in opposition to such
application. In other words, the proceeding is against the whole word. This system was
evidently considered by the Legislature to be a public project when it passed Act No.
496. The interest of the community at large was considered to be preferred to that of
private individuals.
At the close of this nineteenth century, all civilized nations are coming to
registration of title to land, because immovable property is becoming more
and more a matter of commercial dealing, and there can be no trade without
security. (Dumas's Lectures, p. 23.)
The registered proprietor will no longer have reasons to fear that he may
evicted because his vendor had, unknown to him, already sold the and to a
third person. . . The registered proprietor may feel himself protected against
any defect in his vendor's title. (Id., p. 21.)
The following summary of benefits of the system of registration of titles, made
by Sir Robert Torrens, has been fully justified in its use:
First. It has substituted security for insecurity.
Second. It has reduced the costs of conveyances from pounds to shillings,
and the time occupied from months to days.
Third. It has exchanged brevity and clearness for obscurity and verbiage.
Fourth. It has so simplified ordinary dealings that he who has mastered the
"three R's" can transact his own conveyancing.
Fifth. It affords protection against fraud.
Sixth. It has restored to their just value many estates held under good
holding titles, but depreciated in consequence of some blur or technical
defect, and has barred the reoccurrence of any similar faults. (Sheldon on
Land Registration, pp. 75, 76.)
The boldest effort to grapple with the problem of simplification of title to land
was made by Mr. (afterwards Sir Robert) Torrens, a layman, in South
Australia in 1857. . . . In the Torrens system title by registrationtakes the
place of "title by deeds" of the system under the "general" law. A sale of land,
for example, is effected by a registered transfer, upon which a certificate of
title is issued. The certificate is guaranteed by statute, and, with certain
exceptions, constitutes indefeasible title to the land mentioned therein. Under
the old system the same sale would be effected by a conveyance, depending
for its validity, apart from intrinsic flaws, on the correctness of a long series of
prior deeds, wills, etc. . . . The object of the Torrens system, them, is to do
away with the delay, uncertainty, and expense of the old conveyancing
system. (Duffy & Eagleson on The Transfer of Land Act, 1890, pp. 2, 3, 5, 7.)
By "Torrens" system generally are meant those systems of registration of
transactions with interest in land whose declared object . . . is, under
governmental authority, to establish and certify to the ownership of an
absolute and indefeasible title to realty, and to simplify its transfer. (Hogg on
Australian Torrens system,supra, pp. 1, 2.)
Compensation for errors from assurance funds is provided in all countries in which the
Torrens system has been enacted. Cases of error no doubt will always occur. The
percentage of errors, as compared with the number of registered dealings in Australia,
is very small. In New South Wales there were, in 1889, 209, 894 registered dealings,
the average risk of error being only 2 cents for each dealing. In Queensland the risk
of error was only 1 cents, the number of registered dealings being 233,309. In
Tasmania and in Western Australia not a cent was paid for compensation for errors
during the whole time of operation, (Dumas's Lectures, supra, p. 96.) This system has
been adopted in various countries of the civilized world, including some of the States of
the American Union, and practical experience has demonstrated that it has been
successful as a public project.
The validity of some of the provisions of the statutes adopting the Torrens system has
been the subject of judicial decision in the courts of the United States. (People vs.
Chase, 165 Ill., 527; State vs. Guilbert, 56 Ohio St., 575; People vs. Simon, 176 Ill.,
165; Tyler vs. Judges, 175 Mass., 71.)
Act No. 496 of the Philippine Commission, known as the "Land Registration Act," was
copied substantially from the Massachussetts law of 1898.
The Illinois and Massachusetts statutes were upheld by the supreme courts of those
States.
It is not enough to show a procedure to be unconstitutional to say that we
never heard of it before. (Tyler vs. Judges, supra; Hurtado vs. California, 110
U. S., 516.)
Looked at either from the point of view of history or of the necessary
requirements of justice, a proceedingin rem dealing with a tangible res may be
instituted and carried to judgment without personal service upon claimants
within the State or notice by name to those outside of it, and not encounter
any provision of either constitution. Jurisdiction is secured by the power of
the court over the res. As we have said, such a proceeding would be
impossible, were this not so, for it hardly would do to make a distinction
between the constitutional rights of claimants who were known and those
who were not known to the plaintiff, when the proceeding is to bar all.
(Tyler vs. Judges, supra.)
This same doctrine is annunciated in Pennoyer vs. Neff (95 U. S., 714); The Mary (9
Cranch, 126); Mankin vs. Chandler (2 Brock., 125); Brown vs. Levee Commission (50
Miss., 468); 2 Freeman, Judgments, 4th ed., secs. 606, 611.
If the technical object of the suit is to establish a claim against some
particular person, with a judgment which generally, in theory at least, binds
his body, or to bar some individual claim or objection, so that only certain
persons are entitled to be heard in defense, the action is in personam,
although it may concern the right to or possession of a tangible thing. If, on
the other hand, the object is to bar indifferently all who might be minded to
make an objection of any sort against the right sought to be established, and
if anyone in the world has a right to be heard on the strenght of alleging facts
which, if true, show an inconsistent interest, the proceeding is in rem.
(Tyler vs. Judges, supra.)
In the case of Hamilton vs. Brown (161 U. S., 256) a judgment of escheat was held
conclusive upon persons notified by advertisement to all persons interested. In this
jurisdiction, by the provisions of the Code of Civil Procedure, Act No. 190, a decree
allowing or disallowing a will binds everybody, although the only notice of the
proceedings given is by general notice to all persons interested.
The supreme court Massachusetts, in the case of Tyler vs. Judges (supra), did not rest
its judgment as to the conclusive effect of the decree upon the ground that the State
has absolute power to determine the persons to whom a man's property shall go at his
death, but upon the characteristics of a proceeding in rem. So we conclude that the
proceedings had in the case at bar, under all the facts and circumstances, especially
the absolute lack on the part of the petitioners of any dishonest intent to deprive the
appellee of any right, or in any way injure him, constitute due process of law.
As to whether or not the appellee can succesfully maintain an action under the
provisions of sections 101 and 102 of the Land Registration Act (secs. 2365, 2366,
Compilation) we do not decide.
For these reasons we are of the opinion, and so hold, that the judgment appealed from
should be, and the same is hereby reversed and judgment entered in favor of the
petitioners in conformity with the decree of the lower court of February 12, 1908,
without special ruling as to costs. It is so ordered.

G.R. No. L-8936 October 2, 1915
CONSUELO LEGARDA, with her husband MAURO PRIETO, plaintiffs-appellants,
vs.
N.M. SALEEBY, defendant-appellee.
Singson, Ledesma and Lim for appellants.
D.R. Williams for appellee.

JOHNSON, J.:
From the record the following facts appear:
First. That the plaintiffs and the defendant occupy, as owners, adjoining lots in the
district of Ermita in the city of Manila.
Second. That there exists and has existed a number of years a stone wall between the
said lots. Said wall is located on the lot of the plaintiffs.
Third. That the plaintiffs, on the 2d day of March, 1906, presented a petition in the
Court of Land Registration for the registration of their lot. After a consideration of said
petition the court, on the 25th day of October, 1906, decreed that the title of the
plaintiffs should be registered and issued to them the original certificate provided for
under the torrens system. Said registration and certificate included the wall.
Fourth. Later the predecessor of the defendant presented a petition in the Court of
Land Registration for the registration of the lot now occupied by him. On the 25th day
of March, 1912, the court decreed the registration of said title and issued the original
certificate provided for under the torrens system. The description of the lot given in the
petition of the defendant also included said wall.
Fifth. Several months later (the 13th day of December, 1912) the plaintiffs discovered
that the wall which had been included in the certificate granted to them had also been
included in the certificate granted to the defendant .They immediately presented a
petition in the Court of Land Registration for an adjustment and correction of the error
committed by including said wall in the registered title of each of said parties. The
lower court however, without notice to the defendant, denied said petition upon the
theory that, during the pendency of the petition for the registration of the defendant's
land, they failed to make any objection to the registration of said lot, including the
wall, in the name of the defendant.
Sixth. That the land occupied by t he wall is registered in the name of each of the
owners of the adjoining lots. The wall is not a joint wall.
Under these facts, who is the owner of the wall and the land occupied by it?
The decision of the lower court is based upon the theory that the action for the
registration of the lot of the defendant was a judicial proceeding and that the judgment
or decree was binding upon all parties who did not appear and oppose it. In other
words, by reason of the fact that the plaintiffs had not opposed the registration of that
part of the lot on which the wall was situate they had lost it, even though it had been
theretofore registered in their name. Granting that theory to be correct one, and
granting even that the wall and the land occupied by it, in fact, belonged to the
defendant and his predecessors, then the same theory should be applied to the
defendant himself. Applying that theory to him, he had already lost whatever right he
had therein, by permitting the plaintiffs to have the same registered in their name,
more than six years before. Having thus lost hid right, may he be permitted to regain it
by simply including it in a petition for registration? The plaintiffs having secured the
registration of their lot, including the wall, were they obliged to constantly be on the
alert and to watch all the proceedings in the land court to see that some one else was
not having all, or a portion of the same, registered? If that question is to be answered
in the affirmative, then the whole scheme and purpose of the torrens system of land
registration must fail. The real purpose of that system is to quiet title to land; to put a
stop forever to any question of the legality of the title, except claims which were noted
at the time of registration, in the certificate, or which may arise subsequent thereto.
That being the purpose of the law, it would seem that once a title is registered the
owner may rest secure, without the necessity of waiting in the portals of the court, or
sitting in the "mirador de su casa," to avoid the possibility of losing his land. Of course,
it can not be denied that the proceeding for the registration of land under the torrens
system is judicial (Escueta vs. .Director of Lands, 16 Phil. Rep., 482). It is clothed with
all the forms of an action and the result is final and binding upon all the world. It is an
action in rem. (Escueta vs. Director of Lands (supra); Grey Alba vs. De la Cruz, 17 Phil.
rep., 49 Roxas vs. Enriquez, 29 Phil. Rep., 31; Tyler vs. Judges, 175 Mass., 51
American Land Co. vs. Zeiss, 219 U.S., 47.)
While the proceeding is judicial, it involves more in its consequences than does an
ordinary action. All the world are parties, including the government. After the
registration is complete and final and there exists no fraud, there are no innocent third
parties who may claim an interest. The rights of all the world are foreclosed by the
decree of registration. The government itself assumes the burden of giving notice to all
parties. To permit persons who are parties in the registration proceeding (and they are
all the world) to again litigate the same questions, and to again cast doubt upon the
validity of the registered title, would destroy the very purpose and intent of the law.
The registration, under the torrens system, does not give the owner any better title
than he had. If he does not already have a perfect title, he can not have it registered.
Fee simple titles only may be registered. The certificate of registration accumulates in
open document a precise and correct statement of the exact status of the fee held by
its owner. The certificate, in the absence of fraud, is the evidence of title and shows
exactly the real interest of its owner. The title once registered, with very few exceptions,
should not thereafter be impugned, altered, changed, modified, enlarged, or
diminished, except in some direct proceeding permitted by law. Otherwise all security
in registered titles would be lost. A registered title can not be altered, modified,
enlarged, or diminished in a collateralproceeding and not even by a direct proceeding,
after the lapse of the period prescribed by law.
For the difficulty involved in the present case the Act (No. 496) providing for the
registration of titles under the torrens system affords us no remedy. There is no
provision in said Act giving the parties relief under conditions like the present. There is
nothing in the Act which indicates who should be the owner of land which has been
registered in the name of two different persons.
The rule, we think, is well settled that the decree ordering the registration of a
particular parcel of land is a bar to future litigation over the same between the same
parties .In view of the fact that all the world are parties, it must follow that future
litigation over the title is forever barred; there can be no persons who are not parties to
the action. This, we think, is the rule, except as to rights which are noted in the
certificate or which arise subsequently, and with certain other exceptions which need
not be dismissed at present. A title once registered can not be defeated, even by an
adverse, open, and notorious possession. Registered title under the torrens system can
not be defeated by prescription (section 46, Act No. 496). The title, once registered, is
notice to the world. All persons must take notice. No one can plead ignorance of the
registration.
The question, who is the owner of land registered in the name of two different persons,
has been presented to the courts in other jurisdictions. In some jurisdictions, where
the "torrens" system has been adopted, the difficulty has been settled by express
statutory provision. In others it has been settled by the courts. Hogg, in his excellent
discussion of the "Australian Torrens System," at page 823, says: "The general rule is
that in the case of two certificates of title, purporting to include the same land, the
earlier in date prevails, whether the land comprised in the latter certificate be wholly,
or only in part, comprised in the earlier certificate. (Oelkers vs. Merry, 2 Q.S.C.R., 193;
Miller vs. Davy, 7 N.Z.R., 155; Lloyd vs. Myfield, 7 A.L.T. (V.) 48; Stevens vs. Williams,
12 V.L. R., 152; Register of Titles, vs. Esperance Land Co., 1 W.A.R., 118.)" Hogg adds
however that, "if it can be very clearly ascertained by the ordinary rules of construction
relating to written documents, that the inclusion of the land in the certificate of title of
prior date is a mistake, the mistake may be rectified by holding the latter of the two
certificates of title to be conclusive." (See Hogg on the "Australian torrens
System," supra, and cases cited. See also the excellent work of Niblack in his "Analysis
of the Torrens System," page 99.) Niblack, in discussing the general question, said:
"Where two certificates purport to include the same land the earlier in date prevails. ...
In successive registrations, where more than one certificate is issued in respect of a
particular estate or interest in land, the person claiming under the prior certificates is
entitled to the estate or interest; and that person is deemed to hold under the prior
certificate who is the holder of, or whose claim is derived directly or indirectly from the
person who was the holder of the earliest certificate issued in respect thereof. While
the acts in this country do not expressly cover the case of the issue of two certificates
for the same land, they provide that a registered owner shall hold the title, and the
effect of this undoubtedly is that where two certificates purport to include the same
registered land, the holder of the earlier one continues to hold the title" (p. 237).
Section 38 of Act No. 496, provides that; "It (the decree of registration) shall be
conclusive upon and against all persons, including the Insular Government and all the
branches thereof, whether mentioned by name in the application, notice, or citation, or
included in the general description "To all whom it may concern." Such decree shall
not be opened by reason of the absence, infancy, or other disability of any person
affected thereby, nor by any proceeding in any court for reversing judgments or
decrees; subject, however, to the right of any person deprived of land or of any estate
or interest therein by decree of registration obtained by fraud to file in the Court of
Land Registration a petition for review within one year after entry of the decree (of
registration), provided no innocent purchaser for value has acquired an interest.
It will be noted, from said section, that the "decree of registration" shall not be opened,
for any reason, in any court, except for fraud, and not even for fraud, after the lapse
of one year. If then the decree of registration can not be opened for any reason, except
for fraud, in a direct proceeding for that purpose, may such decree be opened or set
aside in a collateral proceeding by including a portion of the land in a subsequent
certificate or decree of registration? We do not believe the law contemplated that a
person could be deprived of his registered title in that way.
We have in this jurisdiction a general statutory provision which governs the right of the
ownership of land when the same is registered in the ordinary registry in the name of
two persons. Article 1473 of the Civil Code provides, among other things, that when
one piece of real property had been sold to two different persons it shall belong to the
person acquiring it, who first inscribes it in the registry. This rule, of course,
presupposes that each of the vendees or purchasers has acquired title to the land. The
real ownership in such a case depends upon priority of registration. While we do not
now decide that the general provisions of the Civil Code are applicable to the Land
Registration Act, even though we see no objection thereto, yet we think, in the absence
of other express provisions, they should have a persuasive influence in adopting a rule
for governing the effect of a double registration under said Act. Adopting the rule which
we believe to be more in consonance with the purposes and the real intent of the
torrens system, we are of the opinion and so decree that in case land has been
registered under the Land Registration Act in the name of two different persons, the
earlier in date shall prevail.
In reaching the above conclusion, we have not overlooked the forceful argument of the
appellee. He says, among other things; "When Prieto et al. were served with notice of
the application of Teus (the predecessor of the defendant) they became defendants in a
proceeding wherein he, Teus, was seeking to foreclose their right, and that of orders, to
the parcel of land described in his application. Through their failure to appear and
contest his right thereto, and the subsequent entry of a default judgment against
them, they became irrevocably bound by the decree adjudicating such land to Teus.
They had their day in court and can not set up their own omission as ground for
impugning the validity of a judgment duly entered by a court of competent jurisdiction.
To decide otherwise would be to hold that lands with torrens titles are above the law
and beyond the jurisdiction of the courts".
As was said above, the primary and fundamental purpose of the torrens system is to
quiet title. If the holder of a certificate cannot rest secure in this registered title then
the purpose of the law is defeated. If those dealing with registered land cannot rely
upon the certificate, then nothing has been gained by the registration and the expense
incurred thereby has been in vain. If the holder may lose a strip of his registered land
by the method adopted in the present case, he may lose it all. Suppose within the six
years which elapsed after the plaintiff had secured their title, they had mortgaged or
sold their right, what would be the position or right of the mortgagee or vendee? That
mistakes are bound to occur cannot be denied, and sometimes the damage done
thereby is irreparable. It is the duty of the courts to adjust the rights of the parties
under such circumstances so as to minimize such damages, taking into consideration
al of the conditions and the diligence of the respective parties to avoid them. In the
present case, the appellee was the first negligent (granting that he was the real owner,
and if he was not the real owner he can not complain) in not opposing the registration
in the name of the appellants. He was a party-defendant in an action for the
registration of the lot in question, in the name of the appellants, in 1906. "Through his
failure to appear and to oppose such registration, and the subsequent entry of a
default judgment against him, he became irrevocably bound by the decree adjudicating
such land to the appellants. He had his day in court and should not be permitted to
set up his own omissions as the ground for impugning the validity of a judgment duly
entered by a court of competent jurisdiction." Granting that he was the owner of the
land upon which the wall is located, his failure to oppose the registration of the same
in the name of the appellants, in the absence of fraud, forever closes his mouth against
impugning the validity of that judgment. There is no more reason why the doctrine
invoked by the appellee should be applied to the appellants than to him.
We have decided, in case of double registration under the Land Registration Act, that
the owner of the earliest certificate is the owner of the land. That is the rule between
original parties. May this rule be applied to successive vendees of the owners of such
certificates? Suppose that one or the other of the parties, before the error is discovered,
transfers his original certificate to an "innocent purchaser." The general rule is that the
vendee of land has no greater right, title, or interest than his vendor; that he acquires
the right which his vendor had, only. Under that rule the vendee of the earlier
certificate would be the owner as against the vendee of the owner of the later
certificate.
We find statutory provisions which, upon first reading, seem to cast some doubt upon
the rule that the vendee acquires the interest of the vendor only. Sections 38, 55, and
112 of Act No. 496 indicate that the vendee may acquire rights and be protected
against defenses which the vendor would not. Said sections speak of available rights in
favor of third parties which are cut off by virtue of the sale of the land to an "innocent
purchaser." That is to say, persons who had had a right or interest in land wrongfully
included in an original certificate would be unable to enforce such rights against an
"innocent purchaser," by virtue of the provisions of said sections. In the present case
Teus had his land, including the wall, registered in his name. He subsequently sold the
same to the appellee. Is the appellee an "innocent purchaser," as that phrase is used in
said sections? May those who have been deprived of their land by reason of a mistake
in the original certificate in favor of Teus be deprived of their right to the same, by
virtue of the sale by him to the appellee? Suppose the appellants had sold their lot,
including the wall, to an "innocent purchaser," would such purchaser be included in
the phrase "innocent purchaser," as the same is used in said sections? Under these
examples there would be two innocent purchasers of the same land, is said sections
are to be applied .Which of the two innocent purchasers, if they are both to be
regarded as innocent purchasers, should be protected under the provisions of said
sections? These questions indicate the difficulty with which we are met in giving
meaning and effect to the phrase "innocent purchaser," in said sections.
May the purchaser of land which has been included in a "second original certificate"
ever be regarded as an "innocent purchaser," as against the rights or interest of the
owner of the first original certificate, his heirs, assigns, or vendee? The first original
certificate is recorded in the public registry. It is never issued until it is recorded. The
record notice to all the world. All persons are charged with the knowledge of what it
contains. All persons dealing with the land so recorded, or any portion of it, must be
charged with notice of whatever it contains. The purchaser is charged with notice of
every fact shown by the record and is presumed to know every fact which the record
discloses .This rule is so well established that it is scarcely necessary to cite
authorities in its support (Northwestern National Bank vs. Freeman, 171 U.S., 620,
629; Delvin on Real Estate, sections 710, 710 [a]).
When a conveyance has been properly recorded such record is constructive notice of
its contents and all interests, legal and equitable, included therein.
(Grandin vs. Anderson, 15 Ohio State, 286, 289; Orvis vs. Newell, 17 Conn., 97;
Buchanan vs. Intentional Bank, 78 Ill., 500; Youngs vs. Wilson, 27 N.Y., 351;
McCabe vs. Grey, 20 Cal., 509; Montefiore vs. Browne, 7 House of Lords Cases, 341.)
Under the rule of notice, it is presumed that the purchaser has examined every
instrument of record affecting the title. Such presumption is irrebutable. He is charged
with notice of every fact shown by the record and is presumed to know every fact
which an examination of the record would have disclosed. This presumption cannot be
overcome by proof of innocence or good faith. Otherwise the very purpose and object of
the law requiring a record would be destroyed. Such presumption cannot be defeated
by proof of want of knowledge of what the record contains any more than one may be
permitted to show that he was ignorant of the provisions of the law. The rule that all
persons must take notice of the facts which the public record contains is a rule of law.
The rule must be absolute. Any variation would lead to endless confusion and useless
litigation.
While there is no statutory provision in force here requiring that original deeds of
conveyance of real property be recorded, yet there is a rule requiring mortgages to be
recorded. (Arts. 1875 and 606 of the Civil Code.) The record of a mortgage is
indispensable to its validity. (Art .1875.) In the face of that statute would the courts
allow a mortgage to be valid which had not been recorded, upon the plea of ignorance
of the statutory provision, when third parties were interested? May a purchaser of
land, subsequent to the recorded mortgage, plead ignorance of its existence, and by
reason of such ignorance have the land released from such lien? Could a purchaser of
land, after the recorded mortgage, be relieved from the mortgage lien by the plea that
he was a bona fide purchaser? May there be a bona fide purchaser of said land, bona
fide in the sense that he had no knowledge of the existence of the mortgage? We
believe the rule that all persons must take notice of what the public record contains in
just as obligatory upon all persons as the rule that all men must know the law; that no
one can plead ignorance of the law. The fact that all men know the law is contrary to
the presumption. The conduct of men, at times, shows clearly that they do not know
the law. The rule, however, is mandatory and obligatory, notwithstanding. It would be
just as logical to allow the defense of ignorance of the existence and contents of a
public record.
In view, therefore, of the foregoing rules of law, may the purchaser of land from the
owner of the second original certificate be an "innocent purchaser," when a part or all
of such land had theretofore been registered in the name of another, not the vendor?
We are of the opinion that said sections 38, 55, and 112 should not be applied to such
purchasers. We do not believe that the phrase "innocent purchaser should be applied
to such a purchaser. He cannot be regarded as an "innocent purchaser" because of the
facts contained in the record of the first original certificate. The rule should not be
applied to the purchaser of a parcel of land the vendor of which is not the owner of the
original certificate, or his successors. He, in nonsense, can be an "innocent purchaser"
of the portion of the land included in another earlier original certificate. The rule of
notice of what the record contains precludes the idea of innocence. By reason of the
prior registry there cannot be an innocent purchaser of land included in a prior
original certificate and in a name other than that of the vendor, or his successors. In
order to minimize the difficulties we think this is the safe rule to establish. We believe
the phrase "innocent purchaser," used in said sections, should be limited only to cases
where unregistered land has been wrongfully included in a certificate under the
torrens system. When land is once brought under the torrens system, the record of the
original certificate and all subsequent transfers thereof is notice to all the world. That
being the rule, could Teus even regarded as the holder in good fifth of that part of the
land included in his certificate of the appellants? We think not. Suppose, for example,
that Teus had never had his lot registered under the torrens system. Suppose he had
sold his lot to the appellee and had included in his deed of transfer the very strip of
land now in question. Could his vendee be regarded as an "innocent purchaser" of said
strip? Would his vendee be an "innocent purchaser" of said strip? Certainly not. The
record of the original certificate of the appellants precludes the possibility. Has the
appellee gained any right by reason of the registration of the strip of land in the name
of his vendor? Applying the rule of notice resulting from the record of the title of the
appellants, the question must be answered in the negative. We are of the opinion that
these rules are more in harmony with the purpose of Act No. 496 than the rule
contended for by the appellee. We believe that the purchaser from the owner of the
later certificate, and his successors, should be required to resort to his vendor for
damages, in case of a mistake like the present, rather than to molest the holder of the
first certificate who has been guilty of no negligence. The holder of the first original
certificate and his successors should be permitted to rest secure in their title, against
one who had acquired rights in conflict therewith and who had full and complete
knowledge of their rights. The purchaser of land included in the second original
certificate, by reason of the facts contained in the public record and the knowledge
with which he is charged and by reason of his negligence, should suffer the loss, if any,
resulting from such purchase, rather than he who has obtained the first certificate and
who was innocent of any act of negligence.
The foregoing decision does not solve, nor pretend to solve, all the difficulties resulting
from double registration under the torrens system and the subsequent transfer of the
land. Neither do we now attempt to decide the effect of the former registration in the
ordinary registry upon the registration under the torrens system. We are inclined to
the view, without deciding it, that the record under the torrens system, supersede all
other registries. If that view is correct then it will be sufficient, in dealing with land
registered and recorded alone. Once land is registered and recorded under the torrens
system, that record alone can be examined for the purpose of ascertaining the real
status of the title to the land.
It would be seen to a just and equitable rule, when two persons have acquired equal
rights in the same thing, to hold that the one who acquired it first and who has
complied with all the requirements of the law should be protected.
In view of our conclusions, above stated, the judgment of the lower court should be
and is hereby revoked. The record is hereby returned to the court now having and
exercising the jurisdiction heretofore exercised by the land court, with direction to
make such orders and decrees in the premises as may correct the error heretofore
made in including the land in the second original certificate issued in favor of the
predecessor of the appellee, as well as in all other duplicate certificates issued.
Without any findings as to costs, it is so ordered.
Arellano, C.J., Torrens, and Araullo, JJ., concur.

FIRST DIVISION
[G.R. No. 114299. September 24, 1999]
TRADERS ROYAL BANK, petitioner, vs. HON. COURT OF APPEALS, PATRIA,
RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA JOY, all surnamed
CAPAY and RAMON A. GONZALES, respondents.
[G.R. No. 118862. September 24, 1999]
PATRIA, RUBY ANN, MARGARITA, ROSARIO, CYNTHIA, LINDA JOY, all surnamed
CAPAY, and RAMON A. GONZALES, petitioners, vs. SPS. HONORATO D.
SANTOS and MARIA CRISTINA S. SANTOS, SPS. CECILIO L. PE and
JOSEFINA L. PE, FLORA LARON WESCOMBE, SPS. TELESFORO P.
ALFELOR II and LIZA R. ALFELOR, SPS. DEAN RODERICK FERNANDO
and LAARNI MAGDAMO FERNANDO, REMEDIOS OCA, DEVELOPMENT
BANK OF THE PHILIPPINES and TRADERS ROYAL BANK,respondents.
D E C I S I O N
KAPUNAN, J.:
The present controversy has its roots in a mortgage executed by the spouses
Maximo and Patria Capay in favor of Traders Royal Bank (TRB) pursuant to a loan
extended by the latter to the former. The mortgage covered several properties,
including a parcel of land, the subject of the present dispute.
[1]
The loan became due
on January 8, 1964 and the same having remained unpaid, TRB instituted extra-
judicial foreclosure proceedings upon the mortgaged property.
To prevent the propertys sale by public auction, the Capays, on September 22,
1966, filed a petition for prohibition with preliminary injunction (Civil Case No. Q-
10453) before the Court of First Instance (CFI) of Rizal, alleging that the mortgage was
void since they did not receive the proceeds of the loan. The trial court initially granted
the Capays' prayer for preliminary injunction.
On March 17, 1967, the Capays caused to be filed in the Register of Deeds of
Baguio City a notice of lis pendens over the disputed property. Said notice was entered
in the Day Book, as well as in the Capays certificate of title.
Subsequently, the injunction issued by the trial court was lifted thus allowing the
foreclosure sale to proceed. Foreclosure proceedings were initiated and on October 17,
1968, the property was sold to TRB which was the highest bidder at the auction
sale. A sheriff certificate of sale was issued in its name on the same day. On February
25, 1970, the property was consolidated in the name of TRB, the sole bidder in the
sale. TCT No. T-6595 in the name of the Capay spouses was then cancelled and a new
one, TCT No. T-16272,
[2]
was entered in the banks name. The notice of lis pendens,
however, was not carried over in the certificate of title issued in the name of TRB.
Thereafter, the Capays filed with the CFI a supplemental complaint praying for
the recovery of the property with damages and attorneys fees. Trial in Civil Case No.
Q-10453 proceeded and, on October 3, 1977, the CFI rendered its decision declaring
the mortgage void for want of consideration. The CFI ordered, among other things, the
cancellation of TCT No. T-16272 in the name of TRB and the issuance of new
certificates of title in the name of the Capay spouses.
TRB appealed to the Court of Appeals. While the case was pending in the Court
of Appeals, TRB on March 17, 1982 sold the land to Emelita Santiago in whose name a
new certificate of title, TCT No. 33774,
[3]
was issued, also, without any notice of lis
pendens annotated thereon. Santiago in turn divided the land into six (6) lots and sold
these to Marcial Alcantara, Armando Cruz and Artemio Sanchez, who became co-
owners thereof.
[4]
Alcantara and his co-owners developed the property and thereafter
sold the six (6) lots to separate buyers who were issued separate titles, again, bearing
no notice oflis pendens.
[5]

On July 30, 1982, the Court of Appeals rendered its decision modifying the
decision of the trial court as to the award of damages but affirming the same in all
other respects.
For having been filed out of time and for lack of merit, the petition
for certiorari filed by TRB before this Court
[6]
was denied in a Resolution dated
September 12,1983. TRBs motion for reconsideration was similarly denied in a
Resolution dated October 12, 1983. The Courts September 12, 1983 Resolution
having become final and executory on November 9, 1983, the trial court issued a writ
of execution directing the Register of Deeds of Baguio City to cancel TCT No. T-16272
in the name of TRB, and to issue a new one in the name of the Capay spouses.
Said writ, however, could not be implemented because of the successive
subsequent transfers of the subdivided property to buyers who obtained separate titles
thereto. Thus, a complaint for recovery of possession/ownership dated 8 June 1985
was filed before the Quezon City Regional Trial Court against TRB and the subsequent
transferees of the property, the respondents in G.R. No. 118862 (hereinafter, the non-
bank respondents). Plaintiffs in said case were Patria Capay, her children by
Maximo
[7]
who succeeded him upon his death on August 25, 1976, and Ramon
Gonzales, counsel of the spouses in Civil Case No. Q-10453 who became co-owner of
the property to the extent of 35% thereof as his attorneys fees (collectively, the
Capays). On March 27, 1991, the trial court rendered its decision, the dispositive
portion of which states:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs against the
defendants and ordering the Register of Deeds for Baguio to cancel TCT No. T-36177,
Books 198, Page 177 in the names of defendants Spouses Honorato D. Santos and
Maria Cristina Santos; to cancel TCT No. 36707, Book 201, Page 107 in the names of
defendant Spouses Cecilio Pe and Josefina L. Pe; to cancel TCT No. T-36051, Book
198, Page 51 in the name of Flora Laron Wescombe, married to Kevin Lind Wescombe
(now deceased); to cancel TCT No. T-36147, Book 198, page 147 in the names of
Spouses Telesforo P. Alfelor II and Liza R. Alfelor; to cancel TCT No. T-36730, Book
201, Page 130 in the names of Spouses Dean Roderick Fernando and Laarni Magdamo
Fernando; to cancel TCT No. 37437, Book 205, Page 37 in the name of Remedios Oca,
and issue new ones free from all liens and encumbrances, together with all the
improvements therein in the names of plaintiffs sharing pro indiviso as follows: 35% to
Ramon A. Gonzales, married to Lilia Y. Gonzales, of legal age, with postal address at 23
Sunrise Hill, New Manila, Quezon City; 37.92% to Patria B. Capay, of legal age, widow,
Filipino; 5.41% each to Ruby Ann Capay, of legal age, Filipino, married to Pokka
Vainio, Finnish citizen; Chona Margarita Capay, of legal age, Filipino, married to Waldo
Flores; Rosario Capay, of legal age, Filipino, married to Jose Cuaycong, Jr.; Cynthia
Capay, of legal age, Filipino, married to Raul Flores; Linda Joy Capay, of legal age,
Filipino, married to Pedro Duran, all with postal address at 37 Sampaguita St.,
Capitolville Subd., Bacolod City, ordering said defendants to vacate the premises in
question and restoring plaintiffs thereto and for defendant Traders Royal Bank to pay
each of the plaintiffs moral damages in the amount of P100,000.00,P40,000.00 in
exemplary damages and P40,000.00 as attorneys fees, all with legal interest from the
filing of the complaint, with costs against defendants.
SO ORDERED.
[8]

TRB and the non-bank respondents appealed to the Court of Appeals. In a
Decision promulgated on February 24, 1994 in CA-G.R. CV No. 33920, the appellate
court affirmed the decision of the trial court in toto.
[9]
It ruled that the non-bank
respondents cannot be considered as purchasers for value and in good faith, having
purchased the property subsequent to the action in Civil Case No. Q-10453 and that
while the notice of lis pendens was not carried over to TRBs certificate of title, as well
as to the subsequent transferees titles, it was entered in the Day Book which is
sufficient to constitute registration and notice to all persons of such adverse claim,
citing the cases of Villasor vs. Camon,
[10]
Levin vs. Bass
[11]
and Director of Lands vs.
Reyes.
[12]

As regard TRB, the Court of Appeals said that the bank was in bad faith when it
sold the property knowing that it was under litigation and without informing the buyer
of that fact.
On April 26, 1994, TRB filed with this Court a petition for review to set aside the
CA decision, docketed herein as G.R. No. 114299, invoking the following grounds:
I.
THE RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE AND
SERIOUS ERROR OF LAW IN PROMULGATING THE DISPUTED DECISION AND
THEREBY DECIDED A QUESTION OF SUBSTANCE WHOLLY CONTRARY TO
SETTLED JURISPRUDENCE AND TOTALLY NOT IN ACCORD WITH APPLICABLE
DECISION OF THIS HONORABLE SUPREME COURT.
II.
THE RESPONDENT HONORABLE COURT OF APPEALS HAS COMMITTED SO GRAVE
AND SERIOUS ERRORS OF LAW IN SANCTIONING A DEPARTURE FROM THE USUAL
AND ACCEPTED COURSE OF JUDICIAL PROCEEDING AS TO CALL FOR THE
EXERCISE OF THE POWER OF REVIEW BY THIS HONORABLE SUPREME COURT.
a) The public respondent has plainly and manifestly acted whimsically, arbitrarily,
capriciously, with grave abuse of discretion, in excess of jurisdiction tantamount to
lack of jurisdiction.
x x x
b) The public respondent erred in not finding that it was not the fault of petitioner
when the notice of lis pendens was not carried over to its new title.
x x x
c) The public respondent erred in not finding that PD No. 1271 had legally caused the
invalidation of the Capays property and the subsequent validation of TRBs title over
the same property was effective even as against the Capays.
[13]

Meanwhile, the non-bank respondents moved for a reconsideration of the Court
of Appeals decision. Convinced of the movants arguments, the Court of Appeals in a
Resolution promulgated on August 10, 1994 granted the motion for reconsideration
and dismissed the complaint as against them. The dispositive portion of the resolution
states:
ACCORDINGLY, in view of the foregoing disquisitions and finding merit in the motion
for reconsideration, the same is hereby GRANTED. Consequently, the decision of this
Court, promulgated on February 24, 1994, is hereby RECONSIDERED. The complaint
filed against defendants-appellants with the court a quo is hereby ordered DISMISSED,
and the certificate of titles originally issued to them in their individual names are
hereby ordered restored and duly respected. We make no pronouncement as to costs.
SO ORDERED.
[14]

The Capays thus filed with this Court a petition for review, docketed as G.R. No.
118862, to set aside the resolution of the Court of Appeals raising the following errors:
I
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW
HOLDING THAT TUAZON VS. REYES, 48 PHIL. 814 AND RIVERA VS. MORAN, 48
PHIL. 836 ARE NOT APPLICABLE HEREOF, WHILE PINO VS. COURT OF APPEALS,
198 SCRA 436, IS APPLICABLE.
II
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW
HOLDING THAT ATUN VS. MUNOZ, 97 PHIL. 762 AND LAROZA VS. GUIA, 134 SCRA
34, ARE NOT APPLICABLE.
III
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW
HOLDING THAT LEVIN VS. BASS, 91 PHIL. 419 VILLASOR VS. CAMON, 89 PHIL. 404
AND DIRECTOR OF LANDS VS. REYES, 68 SCRA 73, ARE NOT APPLICABLE
HEREOF.
IV
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW
HOLDING THAT PETITIONERS ARE GUILTY OF LACHES.
V
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW
HOLDING THAT THERE IS NO DISTINCTION IN THE REGISTRATION OF VOLUNTARY
INSTRUMENTS VIS--VIS INVOLUNTARY INSTRUMENTS.
VI
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF BY NOW
HOLDING THAT RESPONDENTS WHO ARE LAWYERS, RESPONSIBLE CITIZENS AND
WELL-RESPECTED RESIDENTS IN THE COMMUNITY, ARE EXEMPTED FROM THE
EFFECTS OF THE CONSTRUCTIVE NOTICE ARISING FROM REGISTRATION.
VII
THE COURT OF APPEALS PALPABLY ERRED IN REVERSING ITSELF WITH REGARDS
TO TRADERS ROYAL BANK, AFTER THE LATTER HAS PERFECTED ITS APPEAL TO
THE SUPREME COURT.
VIII
THE COURT OF APPEALS PALPABLY ERRED IN NOT RULING ON THE COUNTER-
ASSIGNMENT OF ERROR THAT:
B) THE LOWER COURT ERRED IN NOT HOLDING THAT DEFENDANTS ARE BOUND
BY THE DECISION IN CIVIL CASE NO. Q-10453.
Subsequently, G.R. No. 118862 was consolidated with G. R. No. 114299,
pursuant to this Courts Resolution dated July 3, 1996.
[15]

The consolidated cases primarily involve two issues: (1) who, as between the
Capays and the non-bank respondents, has a better right to the disputed property,
and (2) whether or not TRB is liable to the Capays for damages.
On the first issue, we rule for the non-bank respondents.
I
First, when TRB purchased the property at the foreclosure sale, the notice of lis
pendens that the Capays caused to be annotated on their certificate of title was not
carried over to the new one issued to TRB. Neither did the certificate of title of Emelita
Santiago, who purchased the property from TRB, contain any such notice. When
Santiago caused the property to be divided, six (6) new certificates of title were issued,
none of which contained any notice of lis pendens. Santiago then sold the lots to
Marcial Alcantara and his co-owners who next sold each of these to the non-bank
respondents. The non-bank respondents, therefore, could not have been aware that
the property in question was the subject of litigation when they acquired their
respective portions of said property. There was nothing in the certificates of title of
their respective predecessors-in-interest that could have aroused their suspicion. The
non-bank respondents had a right to rely on what appeared on the face of the title of
their respective predecessors-in-interest, and were not bound to go beyond the
same. To hold otherwise would defeat one of the principal objects of the Torrens
system of land registration, that is, to facilitate transactions involving lands.
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 has actual knowledge of facts and
circumstances that should impel a reasonably cautious man to make such further
inquiry. Where innocent third persons, relying on the correctness of the certificate of
title thus issued, acquire rights over the property, the court cannot disregard such
rights and order the total cancellation of the certificate. The effect of such an outright
cancellation would be to impair public confidence in the certificate of title, for everyone
dealing with property registered under the Torrens system would have to inquire in
every instance as to whether the title has been regularly or irregularly issued by the
court. 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.
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 be even more
numerous and complex than they are now and possibly also more abrasive, if not even
violent. The Government, recognizing the worthy purposes of the Torrens system,
should be the first to accept the validity of titles issued thereunder once the conditions
laid down by the law are satisfied.
[16]

Second, the foregoing rule notwithstanding, the non-bank respondents
nevertheless physically inspected the properties and inquired from the Register of
Deeds to ascertain the absence of any defect in the title of the property they were
purchasing-an exercise of diligence above that required by law.
Thus, respondent Aida Fernando Meeks, who bought Lot 5 for her son Dean,
testified:
Q How did you come to live in Baguio City, particularly in Km. 2.5 San Luis,
Baguio City?
A In one of my visits to my sister who has been residing here for twelve (12)
years now, I got interested in buying a property here.
Q How did you come to know of this property at Asin Road where you now
reside?
A My sister, Ruth Ann Valdez, sir.
Q When this particular property was bought by you, when was that?
A I do not remember the exact date, but it was in early 1984, sir.
Q At the time when you went to see the place where you now reside, how did it
look?
A This particular property that I bought was then a small one (1)-room
structure, it is a two (2)-storey one (1) bedroom structure.
Q What kind of structure with regards to material?
A It is a semi-concrete structure, sir.
Q And aside from this two (2)-storey one (1)-room structure, how did the
surrounding area look like at the time you visited?
A There were stone walls from the road and there were stone walls in front of the
property and beside the property.
Q At the time you went to see the property with your agent, rather, your sister
Ruth Ann Valdez, did you come to know the owner?
A We did because at the time we went there, Mr. Alcantara was there
supervising the workers.
Q And who?
A Amado Cruz, sir.
Q After you saw this property, what else did you do?
A My first concern then was am I buying a property with a clean title.
Q In regards to this concern of yours, did you find an answer to this concern of
yours?
A At first, I asked Mr. Alcantara and I was answered by him.
Q What was his answer?
A That it was a property with a clean title, that he has shown me the mother title
and it is a clean title.
Q Aside from being informed that it is a property with a clean title, did you do
anything to answer your question?
A Yes, sir.
Q What did you do?
A Well, the first step I did was to go to the Land Registration Office.
Q Are you referring to the City Hall of Baguio?
A Yes, the City Hall of Baguio.
Q And what did you do in the Registry of Deeds?
A We looked for the title, the original title, sir.
Q When you say we, who was your companion?
A Mr. Alcantara and my present husband, sir.
Q The three (3) of you?
A Yes, sir.
Q What title did you see there?
A We saw the title that was made up in favor of Amado Cruz, sir.
Q And what was the result of your looking up for this title in the name of Amado
Cruz?
A We had to be reassured that it was a genuine one, so we asked Atty.
Diomampo who heads the office. We showed him a copy of that title and we
were also reassured by him that anything that was signed by him was as
good as it is.
Q Did this Atty. Diomampo reassure you that the title was good?
A He did.
Q After your conversation with the Register of Deeds, what did you do?
A The second step we did was to confer with our lawyer, a friend from RCBC
Binondo, Manila, this is Atty. Nelson Waje.
Q What is your purpose in going to this lawyer?
A We wanted an assurance that we were getting a valid title just in case we think
of buying the property.
Q What was the result of your conference with this lawyer?
A He was absolutely certain that that was a valid title.
Q Mrs. Meeks, after looking at the place, going to the Register of Deeds, looking
at the title and seeing your lawyer friend, what decision did you finally make
regarding the property?
A We wanted more reassurances, so we proceeded to Banaue, as advised by that
same lawyer, there is another office of the Bureau of Lands. I cannot recall
the office but it has something to do with registration of the old.
Q What is your purpose in going to this Office in Banaue?
A I wanted more reassurances that I was getting a valid title.
Q What was the result of your visit to the Banaue Office?
A We found the title of this property and there was reassurance that it was a
clean title and we saw the mother title under the Hilario family.
Q Mrs. Meeks, when you say Banaue, what particular place is this Banaue?
A It is in Banaue Street in Quezon City, sir.
Q And when you saw the title to this property and the mother title, what was the
result of your investigation, the investigation that you made?
A We were reassured that we were purchasing a valid title, we had a genuine
title.
Q When you were able to determine that you had a valid, authentic or genuine
title, what did you do?
A That is when I finally thought of purchasing the property.
[17]

Telesforo Alfelor II, the purchaser of Lot 4, narrated going through a similar
routine:
Q How did you come to know of this place as Asin Road where you are presently
residing?
A It was actually through Mrs. Flory Recto who is presently the Branch Manager
of CocoBank. She informed my wife that there is a property for sale at Asin
road, and she was the one who introduced to us Mr. Alcantara, sir.
Q When you were informed by Mrs. Recto and when you met with Mr. Alcantara,
did you see the property that was being offered for sale?
A Yes, sir.
Q When did you specifically see the property, if you can recall?
A I would say it is around the third quarter of 1983, sir.
Q When you went to see the place, could you please describe what you saw at
that time?
A When we went there the area is still being developed by Mr. Alcantara. As a
matter of fact the road leading to the property is still not passable considering
that during that time it was rainy season and it was muddy, we fell on our
way going to the property and walked to have an ocular inspection and
physical check on the area, sir.
x x x
Q What was the improvement, if any, that was in that parcel which you are
going to purchase?
A During that time, the riprap of the property is already there, the one-half of
the riprap sir.
Q Do you know who was making this improvement at the time that you went
there?
A I would understand that it was Marcial Alcantara, sir.
Q After you saw the place and you saw the riprap and you were in the course of
deciding to purchase this property, what else did you do?
A First, I have to consider that the property is clean.
Q How did you go about determining whether the title of the property is clean?
A Considering that Marcial Alcantara is a real estate broker, I went to his office
and checked the documents he has regarding the property.
Q And what was the result of your checking as to whether the title of the
property is clean?
A He showed me the copy of the title and it was clean, sir.
Q Aside from going to Mr. Alcantara to check up the title of the property, what
else did you do?
A Well, the next thing is I requested his wife to accompany me to the Bureau of
Lands or rather the Registry of Deeds, sir.
Q What registry of Deeds are you referring to?
A The Registry of Deeds of Baguio City, sir.
Q And were you able to see the Register of Deeds regarding what you would like
to know?
A Yes, and we were given a certification regarding this particular area that it was
clean, sir.
Q What Certification are you referring to?
A It is a Certification duly signed by the employee of the Registry of Deeds
Adelina Tabangin, sir.
Q Do you have a copy of that Certification?
A Yes, I have, sir.
[18]

The testimonies of Honorato Santos
[19]
and Josefina Pe
[20]
were to the same effect.
The non-bank respondents predecessor-in-interest, Marcial Alcantara, was no
less thorough:
Q And will you give a brief description of what you do?
A I normally acquire land, quite big tract of land and subdivide it into smaller
lots and sold it to some interested parties.
Q Specifically, Mr. Alcantara, will you please inform the Court in what place in
Baguio have you acquired and subdivided and sold lots?
A Dominican Hill, Leonila Hill, Crystal Cave and Asin Road, sir.
Q You mentioned Asin Road, what particular place in Asin Road are you
referring?
A That property I bought from Emelita Santiago, sir.
Q When you say you bought it from Emelita Santiago, how did you come to
know that Emelita Santiago is disposing of the property?
A Because of the father, he is the one who offered me the property, sir, Armando
Gabriel.
Q Is he also a resident of Baguio?
A He is from Buyagan, La Trinidad, sir.
Q How did you come to know of this Armando Gabriel wanting to sell a property
in Asin?
A He approached me in the house, sir. He has acquired a title from the Traders
Royal Bank.
Q Can you inform the Honorable Court when you had this conversation with
Armando Gabriel on the sale of the property at Asin Road?
A Later part of March, 1983, sir.
Q Now, when this Armando Gabriel informed you that he wants his property to
be sold, what did you do?
A I went to the place with the agent, sir.
Q When you say you went to the place with the agent, what place?
A Kilometer 2, Asin Road, sir.
Q And when you went there to see the place, did you actually go there to see the
place?
A By walking, I parked my car a kilometer away, sir.
Q Is it my understanding that when you went to see the property there were no
roads?
A None, sir.
x x x
Q Mr. Alcantara, when you went to see this place at Asin Road last week of
March, 1983, will you please briefly describe how this place looked like at
that time?
A The place was mountainous, grassy, there were cogon trees, some of the roads
were eroding already, so we cannot possibly enter the property, sir.
Q At the time you entered the place, was there any visible sign of claim by
anyone?
A None, sir.
Q In terms of fence in the area?
A There is no such, sir.
x x x
Q Aside from looking or going to the property, what else did you do to this
property prior to your purchase?
A I investigated it with the Register of Deeds, sir.
Q What is your purpose in investigating it with the Register of Deeds?
A To see if the paper is clean and there are no encumbrances, sir.
Q To whom did you talk?
A To Atty. Ernesto Diomampo, sir.
Q And when you went to the Registry of Deeds to investigate and check, did you
have occasion to talk with Atty. Diomampo?
A Yes, sir.
Q And what was the result of your talk with Atty. Diomampo?
A The papers are clean except to the annotation at the back with the road right
of way, sir.
Q After making this investigation with the Register of Deeds and talking with
Atty. Diomampo, what else transpired?
A We bought the property, sir.
Q After purchasing the property from Emelita Santiago, could you please tell the
Honorable Court what you did with that deed of sale?
A We registered it with the Register of Deeds for the Certificate of Title because
at that time when we bought the property, Emelita Santiago had it subdivided
into six (6) lots, sir.
Q Is it our understanding that prior to your purchase the property was
subdivided into six (6) parcels?
A Yes, sir.
Q Could you please inform the Honorable Court if you have any buyers in the
subdivision of this property prior to your purchase?
A Yes, I have.
Q This subdivision of this property, to what office was it brought for action?
A Bureau of Lands, San Fernando, La Union, sir.
Q Now, Mr. Alcantara, at the time that you had this property subdivided by the
owner, could you please inform the Court if there was any claim by any other
party opposing the subdivision or claiming the property?
A None, sir.
Q When the Deed of Sale was executed and you said that you presented it to the
Register of Deeds and after the subdivision already, what action did the
Register of Deeds have regarding the matter?
A They approved it and registered it already in six (6) titles, sir.
Q In whose names?
A One (1) title under my name, Amado Cruz and Dr. Sanchez, sir.
Q Initially, Mr. Alcantara, you said that you are the sole purchaser of this entire
area of One Thousand Five Hundred Ninety One (1,591) Square Meters. Now,
you are informing this Honorable Court that one Amado Cruz and one Dr.
Sanchez were also issued two (2) titles. Could you explain how these titles
came into their possession?
A Actually, two (2) are our co-owners, sir.
Q So, is it our understanding that the Deed of Sale from Emelita Santiago is in
favor of these two (2) Atty. Cruz and Dr. Sanchez?
A Yes, sir.
[21]

Third, between two innocent persons, the one who made it possible for the wrong
to be done should be the one to bear the resulting loss.
[22]
The Capays filed the notice
of lis pendens way back on March 17, 1967 but the same was not annotated in TRBs
title. The Capays and their counsel Atty. Ramon A. Gonzales knew in 1968 of the
extra-judicial foreclosure sale of the property to TRB and the consolidation of title in
the banks name following the lapse of the one-year period of redemption. But in the
next fifteen (15) years or so, they did not bother to find out the status of their title or
whether the liens noted on the original certificate of title were still existing considering
that the property had already been foreclosed. In the meantime, the subject property
had undergone a series of transfers to buyers in good faith and for value. It was not
until after the land was subdivided and developed with the buyers building their
houses on the other lots when the Capays suddenly appeared and questioned the
occupants titles. At the very least, the Capays are guilty of laches. Laches has been
defined as the failure or neglect, for an unreasonable and unexplained length of time,
to do that which by exercising due diligence could nor should have been done earlier; it
is negligence or omission to assert a right within a reasonable time, warranting
presumption that the party entitled to it either has abandoned it or declined to assert
it.
[23]

Verily, the principle on prescription of actions is designed to cover situations such as
the case at bar, where there have been a series of transfers to innocent purchasers for
value. To set aside these transactions only to accommodate a party who has slept on
his rights is anathema to good order.
Independently of the principle of prescription of actions working against petitioners,
the doctrine of laches may further be counted against them, which latter tenet finds
application even to imprescriptible actions. x x x.
[24]

In De La Calzada-Cierras vs. Court of Appeals,
[25]
we held:
While it is true that under the law it is the act of registration of the deed of conveyance
that serves as the operative act to convey the land registered under the Torrens System
(Davao Grains, Inc. vs. Intermediate Appellate Court, 171 SCRA 612), the petitioners
cannot invoke said dictum because their action to recover Lot 4362 is barred by the
equitable doctrine of laches.
The act of registering the conveyance to Rosendo was constructive notice to the whole
world of the fact of such conveyance (Heirs of Maria Marasigan vs. Intermediate
Appellate Court, 152 SCRA 253).
But the petitioners complaint to recover the title and possession of Lot 4362 was filed
only on July 21, 1981, twelve (12) years after the registration of the sale to
Rosendo. The petitioners failed and neglected for an unreasonably long time to assert
their right, if any, to the property in Rosendos possession.
Being guilty of laches, the Capays cannot invoke the ruling in Villasor vs. Camon,
Levin vs. Bass and Director of Lands vs. Reyes
[26]
to the effect that entry of the notice
of lis pendens in the day book (primary entry book) is sufficient to constitute
registration and such entry is notice to all persons of such adverse claim. Certainly, it
is most iniquitous for the Capays who, after sleeping on their rights for fifteen years, to
assert ownership over the property that has undergone several transfers made in good
faith and for value and already subdivided into several lots with improvements
introduced thereon by their owners.
In the same vein, the cases cited by the Capays in their first two (2) assignment
of errors do not help them any, as the transferees In said cases were not innocent
purchasers for value and in good faith. In Tuazon vs. Reyes and Siochi,
[27]
where the
land involved therein was sold by Petronilo David to Vicente Tuazon, it was with a deed
containing the recital that the land was in dispute between the vendor and Roberto
Siochi. Tuazon, who was merely subrogated to the rights of the vendor was aware of
the dispute and, furthermore, David did not warrant the title to the same. In Rivera
vs. Moran,
[28]
Rivera acquired interest in the land before the final decree was entered in
the cadastral proceedings. Rivera, the transferee, was aware of the pending litigation
and, consequently, could not have been considered a purchaser in good
faith. Similarly, in Atun, et al. vs. Nunez, et al.
[29]
and Laroza vs. Guia,
[30]
the buyers of
the property at the time of their acquisition knew of the existence of the notice of lis
pendens. In contrast to the cited cases, the non-bank respondents in the case at bar
acquired their respective portions of the land with clean title from their predecessors-
in-interest.
II
We come now to TRBs liability towards the Capays.
The Bank unconvincingly tries to wash its hands off the present controversy, and
attempts to shift the blame on the Capays, thus:
x x x
23. The petitioner Bank, during all the time that it was holding the title for over
fourteen (14) years that there was no legal impediment for it to sell said property,
Central Bank regulations require that real properties of banks should not be held for
more than five (5) years;
24. The fault of the Register of Deeds in not carrying over the Notice of Lis Pendens to
the new title of the petitioner Bank should not be absorbed by the latter considering
that in all good faith, it was not aware of the existence of said annotation during all the
time that said title was in its possession for almost fourteen (14) years before the
property was sold to Emelita G. Santiago xxx.
[31]

TRB concludes that (t)he inaction and negligence of private respondents,
allowing ownership to pass for almost 15 years constitute prescription of action and/or
laches.
[32]

Section 25 of the General Banking Act,
[33]
provides that no bank shall hold the
possession of any real estate under mortgage or trust, deed, or the title and possession
of any real estate purchased to secure any debt due to it, for a longer period than five
years. TRB, however, admits holding on to the foreclosed property for twelve (12) years
after consolidating title in its name. The bank is, therefore, estopped from invoking
banking laws and regulations to justify its belated disposition of the property. It
cannot be allowed to hide behind the law which it itself violated.
TRB cannot feign ignorance of the existence of the lis pendens because when the
property was foreclosed by it, the notice of lis pendens was annotated on the title. But
when TCT No. T-6595 in the name of the Capay spouses was cancelled after the
foreclosure, TCT No. T-16272 which was issued in place thereof in the name of TRB
did not carry over the notice of lis pendens.
We do not find the Capays guilty of inaction and negligence as against TRB. It
may be recalled that upon the commencement of foreclosure proceedings by TRB, the
Capays filed an action for prohibition on September 22, 1966 against the TRB before
the CFI to stop the foreclosure sale. Failing in that attempt, the Capays filed a
supplemental complaint for the recovery of the property. The case reached this
Court. Prescription or laches could not have worked against the Capays because they
had persistently pursued their suit against TRB to recover their property.
On the other hand, it is difficult to believe TRBs assertion that after holding on to
the property for more than ten (10) years, it suddenly realized that it was acting in
violation of the General Bank Act. What is apparent is that TRB took advantage of the
absence of the notice of lis pendens at the back of their certificate of title and sold the
property to an unwary purchaser. This notwithstanding the adverse decision of the
trial court and the pendency of its appeal. TRB, whose timing indeed smacks of bad
faith, thus transferred caused the property without the lis pendens annotated on its
title to put it beyond the Capays' reach. Clearly, the bank acted in a manner contrary
to morals, good customs and public policy, and should be held liable for damages.
[34]

Considering, however, that the mortgage in favor of TRB had been declared null
and void for want of consideration and, consequently, the foreclosure proceedings did
not have a valid effect, the Capays would ordinarily be entitled to the recovery of their
property. Nevertheless, this remedy is not now available to the Capays inasmuch as
title to said property has passed into the hands of third parties who acquired the same
in good faith and for value. Such being the case, TRB is duty bound to pay the Capays
the fair market value of the property at the time it was sold to Emelita Santiago, the
transferee of TRB.
WHEREFORE, the decision of the Court of Appeals dated February 24, 1994 in
CA-G.R. CV No. 33920, as modified by its Resolution dated August 10, 1994 is hereby
AFFIRMED. In addition, Traders Royal Bank is ordered to pay the Capays the fair
market value of the property at the time it was sold to Emelita Santiago.
This Decision is without prejudice to whatever criminal, civil or administrative
action against the Register of Deeds and/or his assistants that may be taken by the
party or parties prejudiced by the failure of the former to carry over the notice of lis
pendens to the certificate of title in the name of TRB. SO ORDERED.